<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION l3 or l5(d)
OF THE SECURITIES EXCHANGE ACT OF l934
For the quarterly period ended October 3, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number l-3863
HARRIS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-0276860
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
l025 West NASA Boulevard
Melbourne, Florida 329l9
--------------------------------------------------
(Address of principal executive offices)(Zip Code)
(407) 727-9l00
----------------------------------
(Registrant's telephone number, including area code)
----------------------------------
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5 (d) of the Securities Exchange Act of l934
during the preceding l2 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of shares outstanding of the registrant's common stock, as of October
31, 1997 was 79,826,777 shares.
<PAGE> 2
PART I. FINANCIAL INFORMATION
-----------------------------
Item 1. Financial Statements.
- ------------------------------
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
The following information for the quarters ended October 3, 1997 and September
30, 1996 has not been audited by independent accountants, but in the opinion of
management reflects all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the results for the indicated
periods. The results of operations for the quarter ended October 3, 1997 are not
necessarily indicative of the results for the full fiscal year.
<TABLE>
<CAPTION>
Quarter Ended
----------------------------
October 3, September 30,
1997 1996
----------- -------------
(In millions, except per
share amounts)
<S> <C> <C>
Revenue
Revenue from sales, rentals
and services $ 979.6 $ 883.4
Interest 9.8 9.1
------- -------
989.4 892.5
Costs and Expenses
Cost of sales, rentals and services 655.8 585.7
Engineering, selling and administrative
expenses 250.9 230.9
Interest 16.9 14.8
Other - net (.3) 2.9
------- -------
Income before income taxes 66.1 58.2
Income taxes 22.5 20.1
------- -------
Net Income $ 43.6 $ 38.1
======= =======
Net Income Per Common Share (Primary) $ .55 $ .49
======= =======
Cash Dividends Paid Per Common Share $ .22 $ .19
======= =======
Primary Average Shares Outstanding 79.7 77.9
======= =======
</TABLE>
See Notes to Financial Statements
(2)
<PAGE> 3
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 27,
October 3, 1997
1997 (audited)
---------- ----------
<S> <C> <C>
ASSETS (In millions)
Current Assets
Cash and cash equivalents $ 66.4 $ 70.7
Marketable securities 118.4 91.3
Accounts and notes receivable - net, less allowance
for collection losses of $27,100,000 at October 3, 1997
and $28,300,000 at June 27, 1997 796.9 820.6
Unbilled costs and accrued earnings on fixed price contracts
based on percentage-of-completion accounting, less progress
payments of $198,400,000 at October 3, 1997 and
$187,800,000 at June 27, 1997 295.9 324.8
Inventories:
Work in process and finished products 506.3 493.1
Raw materials and supplies 122.8 118.0
-------- --------
629.1 611.1
Deferred income taxes 122.4 145.0
-------- --------
Total Current Assets 2,029.1 2,063.5
Plant and equipment, less allowances for depreciation of
$1,294,500,000 at October 3, 1997 and $1,282,300,000 at
June 27, 1997 903.6 878.3
Notes receivable - net 218.5 217.7
Intangibles resulting from acquisitions 223.8 227.5
Other assets 278.4 250.9
-------- --------
$3,653.4 $3,637.9
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 367.5 $ 296.3
Accounts payable 167.4 196.8
Compensation and benefits 181.9 216.9
Other accrued items 188.3 191.7
Advance payments and unearned income 272.3 290.9
Income taxes 88.1 96.0
-------- --------
Total Current Liabilities 1,265.5 1,288.6
Deferred income taxes 84.0 84.4
Long-term debt 686.2 686.7
Shareholders' Equity
Capital stock:
Preferred Stock, without par value:
Authorized - 1,000,000 shares; issued - none - -
Common Stock, par value $1 per share:
Authorized - 250,000,000 shares; issued 79,812,147 shares
at October 3, 1997 and 77,743,206 at June 27, 1997 79.8 39.8
(shares adjusted to reflect September 1997 two-for-one
stock split)
Other capital 264.8 289.9
Retained earnings 1,246.0 1,219.9
Net unrealized gain on securities available-for-sale (net of
taxes) 70.9 53.8
Unearned compensation (9.3) 4.4
Cumulative translation adjustments (34.5) (29.6)
-------- --------
Total Shareholders' Equity 1,617.7 1,578.2
-------- --------
$3,653.4 $3,637.9
======== ========
</TABLE>
See Notes to Financial Statements
(3)
<PAGE> 4
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Quarter Ended
-------------------------
October 3, September 30,
1997 1996
---------- ----------
(In millions)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 43.6 $ 38.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of plant and equipment 47.3 41.8
Non-current deferred income tax (.4) (1.7)
(Increase) decrease in:
Accounts and notes receivable 24.6 13.4
Unbilled costs and inventories 11.9 (53.5)
Other assets (20.4) (37.1)
Increase (decrease) in:
Trade payables and accrued expenses (69.0) (3.2)
Advance payments and unearned income (18.6) 7.5
Income taxes 14.7 3.9
Other (13.1) 5.3
------ ------
Net cash provided by operating activities 20.6 14.5
INVESTING ACTIVITIES
Cash paid for acquired businesses (8.9) -
Additions of plant and equipment (72.6) (101.6)
------ ------
Net cash used in investing activities (81.5) (101.6)
FINANCING ACTIVITIES
Increase (decrease) in short-term debt 71.2 (7.1)
Increase (decrease) in long-term debt (.5) 100.3
Proceeds from sale of Common Stock 4.0 2.4
Cash dividends (17.6) (14.7)
------ ------
Net cash provided by financing activities 57.1 80.9
------ ------
Effect of exchange rate changes on cash and cash
equivalents (.5) (.7)
------ ------
Net decrease in cash and cash
equivalents (4.3) (6.9)
Cash and cash equivalents, beginning of year 70.7 74.6
------ ------
Cash and cash equivalents, end of quarter $ 66.4 $ 67.7
====== ======
</TABLE>
See Notes to Financial Statements
(4)
<PAGE> 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 3, 1997
Note A -- Basis of Presentation
- -------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, and changes in cash flows in conformity with generally accepted
accounting principles. For further information refer to the financial statements
and notes to financial statements included in the Corporation's Annual Report on
Form 10-K/A for the fiscal year ended June 27, 1997.
Note B -- Stock Split
- ---------------------
On August 23, 1997, the Board of Directors authorized a two-for-one stock split
to shareholders of record on September 4, 1997. All reference in the financial
statements and exhibits to number of shares and per share amounts of the
Corporation's Common Stock have been restated to reflect the increased number of
shares outstanding.
Note C -- Reclassification
- --------------------------
Certain prior year amounts have been reclassified to conform with current year
classifications.
Note D -- Credit Arrangements
- -----------------------------
In October 1997, the Corporation extended the 364-Day $300 million portion of
the $800 million syndicated credit facility for an additional 364-Day period.
The $800 facility provides for drawings at interest rates determined by a
pricing matrix based upon the Corporation's long-term debt rating.
(5)
<PAGE> 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations.
- --------------
RESULTS OF OPERATIONS
Net sales, operating profit and net income for the first quarter of fiscal 1998
were higher than the same period last year by 10.9 percent, 13.6 percent and
14.4 percent, respectively.
Segment net sales, operating profit and net income were as follows:
<TABLE>
<CAPTION>
Quarter Ended
---------------------------
October 3, September 30, Percent
1997 1996 Inc./(Dec.)
---------- ------------- -----------
(In Millions)
<S> <C> <C> <C>
NET SALES
Electronic Systems $261.4 $254.4 3
Semiconductor 180.7 161.5 12
Communications 240.3 208.1 15
Lanier Worldwide 297.2 259.4 15
------ ------
Total $979.6 $883.4 11
====== ======
OPERATING PROFIT
Electronic Systems $ 20.6 $ 19.3 7
Semiconductor 22.0 20.7 6
Communications 24.2 19.6 23
Lanier Worldwide 28.1 22.7 24
Corporate Expense (11.9) (9.3) (28)
Interest Expense (16.9) (14.8) (14)
------ ------
Total $ 66.1 $ 58.2 14
====== ======
NET INCOME
Electronic Systems $ 8.4 $ 8.0 5
Semiconductor 10.7 10.0 7
Communications 12.3 9.6 28
Lanier Worldwide 12.2 10.5 16
------ ------
Total $ 43.6 $ 38.1 14
====== ======
</TABLE>
The Electronic Systems segment reported higher sales, operating profit and net
income over last year's first quarter. Results for the segment were led by
increased demand for information systems products and services. Revenue for the
remainder of fiscal 1998 is expected to be flat with moderately lower earnings
due to reduced margins from the segment's core defense products.
Semiconductor segment sales were up strongly, while operating profit and net
income were moderately higher in this year's first quarter compared to the
prior year period. While significantly lower industry-wide product pricing
continues for commodity semiconductors, the segment is shipping products at a
record volume. Royalty income included in earnings was significant and was at
the same level as the prior year. The expectation of a recovery in product
prices and increased manufacturing capacity is expected to result in increased
sales and earnings for fiscal 1998.
Sales, operating profit and net income in the Communications segment were
significantly higher than last year's first quarter. Growth in all but one of
the segment's major product lines, plus gains from the sale of investment
securities contributed to the first quarter earnings increase. Improvement in
the segment's digital switch business, coupled with growth in the segment's
microwave systems, broadcast products, and telephone test equipment businesses,
is expected to result in higher sales and earnings in fiscal 1998.
Lanier Worldwide segment sales, operating profit and net income were
significantly higher than the first quarter of last year. A significant increase
in domestic sales and improved performance in the segment's international
operations contributed to the
(6)
<PAGE> 7
increases in sales and earnings. Strength in both domestic and international
markets is expected to result in improved sales and earnings for the current
fiscal year.
Cost of sales as a percentage of net sales increased to 66.9 percent versus 66.3
percent in last year's first quarter. Cost ratios were higher for the
Communications and Lanier segments.
Engineering, selling, and administrative expenses as a percentage of net sales
decreased from 26.1 percent last year to 25.6 percent in this year's first
quarter due to lower operating expense ratios for the Lanier Worldwide and
Electronic Systems segments. Company funded research and development increased
$3.2 million from the prior year's first quarter to $46.5 million. Total
research and development, which includes both Company funded and customer
sponsored research and development, increased $29.8 million to $185.9 million
for the current year's first quarter.
Interest expense in the first quarter increased from the prior year due to
higher average borrowings. The decrease in "Other-net" expense was due to gains
resulting from the sale of investment securities.
The provision for income taxes as a percentage of pretax income was 34.0 percent
in the first quarter, compared to 34.5 percent in the prior year's first
quarter. The reduction from the statutory federal tax rate of 35.0 percent for
both years was due to tax rates on foreign source income and export sales.
Income as a percentage of sales was 4.5 percent in the first quarter, compared
to 4.3 percent in the same period last year for the previously stated reasons.
LIQUIDITY AND FINANCIAL POSITION
Working capital decreased from $774.9 million at June 27, 1997, to $763.6
million at the end of the first quarter due to lower receivables and unbilled
costs on fixed price contracts. The Company continues to invest in the capital
expansion of its semiconductor business. Total capital expenditures in fiscal
1998, including expenditures for customer rental equipment, are expected to be
approximately $300 million. The requirement for funds to finance this
investment and other operational requirements are expected to be met by cash
flow from operations and unused borrowing capacity.
FORWARD-LOOKING STATEMENTS
This report contains, and certain of the Company's other public documents and
statements contain and will contain, forward-looking statements that reflect
management's current assumptions and estimates of future performance and
economic conditions. Such statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The Company
cautions investors that any forward-looking statements are subject to risks and
uncertainties that may cause actual results and future trends to differ
materially from those projected, stated, or implied by the forward-looking
statements.
The Company's consolidated results and the forward-looking statements could be
affected by, among other things, general economic conditions in the markets in
which the Company operates; economic developments that have a particularly
adverse effect on one or more of the markets served by the Company; ability to
execute management's internal operating plans; fluctuations in foreign currency
exchange rates; worldwide demand for integrated semiconductor circuits,
particularly power products; reductions in the U.S. and worldwide defense and
space budgets; effect of continuing consolidation in the U.S. defense industry
on the Company's direct and indirect business with the U.S. government; the
Company's ability to recover costs incurred on fixed price contracts;
termination of customer contracts; continued development and market acceptance
of new products, especially digital television broadcast products and
semiconductor wireless and multi-media products; continued success of the
Company's patent licensing programs, particularly as it relates to the
Semiconductor segment; and the successful resolution of patent infringement and
other general litigation.
(7)
<PAGE> 8
PART II. OTHER INFORMATION
--------------------------
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits:
(10) Material Contracts
(i) Harris Corporation 1997 Directors' Deferred Compensation and
Annual Stock Unit Award Plan (Amended and Restated Effective
October 24, 1997).
(ii) Amendment to Directors' Retirement Plan.
(iii) Amendment No. 1 to 364-Day Credit Agreement, dated as of
October 21, 1997.
(iv) Amendment No. 1 to 5-Year Credit Agreement, dated as of
October 21, 1997.
(v) Forms of Stock Option Agreements and Performance Share
Agreements under the Harris Corporation Stock Incentive Plan.
(11) Statement re: Computation of Per Share Earnings.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
(i) The Registrant filed with the Commission a Current Report on
Form 8-K on July 18, 1997 relating to forward-looking
statements.
(ii) The Registrant filed with the Commission a Current Report on
Form 8-K on August 25, 1997 relating to the declaration of a
two-for-one stock split and the increase in the indicated
annual dividend rate.
(iii) The Registrant filed with the Commission a Current Report on Form
8-K on September 29, 1997 relating to the number of additional
Common Stock shares issued in connection with the two-for-one
stock split and the impact of the stock split on the Company's
Stockholder Protection Rights Agreement.
Items 1, 2, 3, 4, and 5 of Part II are not applicable and have been
omitted.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HARRIS CORPORATION
---------------------------------------
(Registrant)
Date: November 10, 1997 By:/s/Bryan R. Roub
----------------
Bryan R. Roub
Senior Vice President & Chief
Financial Officer (principal
financial officer and duly
authorized officer)
(8)
<PAGE> 9
EXHIBIT INDEX
Exhibit No.
Under Reg.
S-K, Item 601 Description
------------- -----------
(10) Material Contracts
10(i) Harris Corporation 1997 Directors'
Deferred Compensation and Annual
Stock Unit Award Plan (Amended and
Restated Effective October 24, 1997).
10(ii) Amendment to Directors' Retirement
Plan.
10(iii) Amendment No. 1 to 364-Day Credit
Agreement, dated as of October 21,
1997.
10(iv) Amendment No. 1 to 5-Year Credit
Agreement, dated as of October 21,
1997.
10(v) Forms of Stock Option Agreements and
Performance Share Agreements under
the Harris Corporation Stock
Incentive Plan.
(11) Statement re: Computation of Per
Share Earnings.
(27) Financial Data Schedule.
<PAGE> 1
Exhibit 10(i)
HARRIS CORPORATION
1997 DIRECTORS' DEFERRED COMPENSATION
AND ANNUAL STOCK UNIT AWARD PLAN
(AMENDED AND RESTATED EFFECTIVE OCTOBER 24, 1997)
1. PURPOSE. The purpose of this 1997 Directors' Deferred Compensation
and Annual Stock Unit Award Plan (the "Plan") is (a) to establish a method of
deferring Directors' compensation which will aid Harris Corporation in
attracting and retaining as members of its Board persons whose abilities,
experience and judgment can contribute to the continued progress of the
Corporation and (b) to further align the interests of Directors with the
interests of the shareholders of the Corporation through the annual grant of
Harris Stock Equivalents. Prior to the amendment and restatement of the Plan,
the Plan was known as the "1997 Directors' Deferred Compensation Plan," which
replaced and superseded the Harris Corporation Deferred Compensation Plan for
Directors, Amended as of December 2, 1994 (the "Predecessor Plan").
2. DEFINITIONS. For the purposes of this Plan, the following words and
phrases shall have the meanings indicated, unless the context clearly indicates
otherwise:
"Account" shall have the meaning set forth in Paragraph 4(a).
"Annual Units" shall have the meaning set forth in Paragraph 5(a).
"Board" shall mean the Board of Directors of the Corporation.
"Change of Control" shall mean any of the following events:
(i) any "person" (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 (the "Exchange Act") and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), is or becomes a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined voting
power of the Corporation's then outstanding securities eligible to vote for the
election of the Board (the "Corporation
1
<PAGE> 2
Voting Securities"); provided, however, that the event described in this
paragraph (i) shall not be deemed to be a Change of Control by virtue of any of
the following acquisitions: (a) by the Corporation or any subsidiary, (b) by any
employee benefit plan sponsored or maintained by the Corporation or any
subsidiary, (c) by any underwriter temporarily holding securities pursuant to an
offering of such securities, (d) pursuant to a Non-Control Transaction (as
defined in paragraph (iii)), or (e) pursuant to any acquisition by a corporate
officer of the Corporation or any group of persons including a corporate
officer;
(ii) individuals who, on July 1, 1996, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to July 1,
1996, whose election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors who remain on the Board (either by a
specific vote or by approval of the proxy statement of the Corporation in which
such person is named as a nominee for director, without objection to such
nomination) shall also be deemed to be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the
Corporation as a result of an actual or threatened election contest with respect
to directors or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share exchange
or similar form of corporate reorganization of the Corporation or any such type
of transaction involving the Corporation or any of its subsidiaries that
requires the approval of the Corporation's stockholders (whether for such
transaction or the issuance of securities in the transaction or otherwise), or
the consummation of the direct or indirect sale or other disposition of all or
substantially all of the assets, of the Corporation and its subsidiaries (a
"Business Combination"), unless immediately following such Business Combination:
(a) more than 80% of the total voting power of the corporation resulting from
such Business Combination (including, without limitation, any corporation which
directly or indirectly has beneficial ownership of 100% of the Corporation
Voting Securities) eligible to elect directors of such corporation is
represented by shares that were Corporation Voting Securities immediately prior
to such Business Combination (either by remaining outstanding or being
converted), and such voting power is in substantially the same proportion as the
voting power of such Corporation Voting Securities immediately prior to the
Business Combination, (b) no person (other than any publicly traded holding
company resulting from such Business Combination, any employee benefit plan
sponsored or maintained by the Corporation (or the corporation resulting from
such Business Combination)), becomes the beneficial owner, directly or
indirectly, of 20% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the corporation resulting from such
Business Combination, and (c) at least a majority of the members of the board of
the corporation resulting from such Business Combination were Incumbent
Directors at the time of the Board's approval of the execution of the initial
agreement providing for such Business Combination (any Business Combination
which satisfies the conditions specified in (a), (b) and (c) shall be deemed to
be a "Non-Control Transaction"); or
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<PAGE> 3
(iv) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or the direct or indirect
sale or other disposition of all or substantially all of the assets of the
Corporation and its subsidiaries.
Notwithstanding the foregoing, a Change of Control of the
Corporation shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 20% of the Corporation Voting Securities as a
result of the acquisition of Corporation Voting Securities by the Corporation
which reduces the number of Corporation Voting Securities outstanding; provided,
that, if after such acquisition by the Corporation such person becomes the
beneficial owner of additional Corporation Voting Securities that increases the
percentage of outstanding Corporation Voting Securities beneficially owned by
such person, a Change of Control of the Corporation shall then occur.
"Common Stock" shall mean the common stock of Harris Corporation, par
value $1.00 per share.
"Corporation" means Harris Corporation, its successors, and any
organization into which or with Harris Corporation may merge or consolidate or
to which all or substantially all of its assets may be transferred.
"Deferred Stock Units" shall have the meaning set forth in Paragraph
4(b)(ii).
"Director" shall mean a member of the Board.
"Director Compensation" shall mean: (i) the annual retainer fee payable
to a Director as compensation for services in that capacity, (ii) fees payable
for service on any committee of the Board, (iii) fees payable for serving as a
chairperson of any committee; and (iv) the fees payable to a Director for
attendance at Board and committee meetings.
"Exchange Act" shall have the meaning set forth in the definition of
"Change of Control".
3
<PAGE> 4
"Fair Market Value" shall mean, as of any date, the closing price of
the Common Stock as reported by the New York Stock Exchange, Inc. for the date
which is the nearest trading date preceding the date on which such value is to
be determined.
"Harris Stock Equivalent" shall mean a unit of value equal to one share
of Common Stock.
"Harris Stock Equivalents Subaccount" shall have the meaning set forth
in Paragraph 4(a).
"Investment Funds" shall have the meaning set forth in Paragraph 4(a).
"Plan" shall mean this 1997 Directors' Deferred Compensation and Annual
Stock Unit Award Plan, as amended from time to time.
"Predecessor Plan" shall have the meaning set forth in Paragraph 1.
"Retirement Plan" shall mean the Harris Corporation Retirement Plan, as
amended from time to time.
"Secretary" shall mean the Secretary of the Corporation.
"Section 16(b)" shall have the meaning set forth in Paragraph 4(b)(iv).
"Units" shall have the meaning set forth in Paragraph 4(b)(ii).
3. RIGHT TO DEFER COMPENSATION. (a) (i) Any Director who is not an
employee of the Corporation or one of its subsidiaries and who has not made an
election under the Predecessor Plan to defer all or any specified part of the
Director Compensation with respect to calendar year 1997 may at any time prior
to August 1, 1997, elect to defer
4
<PAGE> 5
under this Plan all or any specified part of the Director Compensation to which
the Director may thereafter be entitled with respect to the remainder of
calendar year 1997; provided, however, that such amounts may only be credited to
the Director's Harris Stock Equivalents Subaccount.
(ii) Any Director who is not an employee of the Corporation or one
of its subsidiaries and who has made an election under the Predecessor Plan to
defer all or any specified part of the Director Compensation with respect to
calendar year 1997 may at any time prior to August 1, 1997, elect to defer all
or a specified part of, the Director Compensation to which the Director may
thereafter be entitled with respect to the remainder of calendar year 1997;
provided, however, that such amounts may only be credited to the Director's
Harris Stock Equivalents Subaccount. Prior to August 1, 1997, such Director may
also elect to have all or any specified part of any existing balances in her/his
Account credited to the Harris Stock Equivalents Subaccount. Elections to have
existing balances credited into the Harris Stock Equivalents Subaccount (x) made
on or prior to June 30, 1997, will be effective on June 30, 1997, and (y) made
on or after July 1, but prior to July 31, 1997, will be effective on July 31,
1997. Amounts credited to a Director's Harris Stock Equivalents Subaccount shall
be converted into Deferred Stock Units pursuant to Paragraph 4(b)(ii).
(iii) Each of the foregoing elections under this Plan for calendar
year 1997 shall specify (x) in the case of an election under Paragraph 3(a)(i),
the amount or part of Director Compensation to be deferred for the remainder of
1997 and (y) in the case of an election under Paragraph 3(a)(ii), the amount or
part of Director Compensation and existing balances to be credited to the Harris
Stock Equivalents Subaccount. Any deferral elections made under the Predecessor
Plan or made in accordance with Paragraph 3(a)(i) or 3(a)(ii) shall be
irrevocable for 1997.
(b) For calendar years subsequent to 1997, any Director who is not an
employee of the Corporation or one of its subsidiaries may at any time prior to
the
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commencement of a calendar year elect to defer under this Plan all or any
specified part of the Director Compensation to which the Director may be
entitled with respect to such subsequent calendar year. Any person who is not an
employee of the Corporation or one of its subsidiaries who is elected as a
Director and who was not a Director on the last day of the calendar year
immediately prior to her/his election may, within thirty days of the
commencement of her/his term, elect to defer all or any specified part of the
Director Compensation to which she/he may thereafter be entitled with respect to
the year in which she/he is so elected.
(c) Each of the foregoing deferral elections under this Plan shall
be made by written notice delivered to the Secretary, specifying the year or
years with respect to which the election shall apply and the amount or part of
Director Compensation to be deferred for such year or years (and in the case of
an election under Paragraph 3(a)(ii) the portion of existing balances to be
credited to the Director's Harris Stock Equivalents Subaccount). A deferral
election under this Plan with respect to any calendar year shall be irrevocable
after commencement of such calendar year or, in the case of a person who was not
a Director on the last day of the calendar year immediately prior to her/his
election, within thirty days after the commencement of her/his term.
4. ACCOUNTS. (a) GENERAL. On the last day of each calendar month in
which Director Compensation deferred under this Plan would have become payable
to a Director, the amount of such Director Compensation shall be credited to an
account ("Account") which shall be established and maintained for such Director
as a special ledger account on the Corporation's books. A Director's Account
shall consist of a Harris Stock Equivalents subaccount ("Harris Stock
Equivalents Subaccount") and a number of other subaccounts (sometimes referred
to as retirement investment subaccounts) equal to the number of investment funds
available from time to time under the Retirement Plan (as set forth on EXHIBIT A
hereto, as such exhibit may be amended from time to time). Amounts of Director
Compensation credited to the Account of a Director shall be invested in
accordance with the investment election of such Director
6
<PAGE> 7
among the investment funds of the Retirement Plan identified on EXHIBIT A hereto
(other than the Harris Stock Fund), and Harris Stock Equivalents. The investment
funds set forth on EXHIBIT A, as amended from time to time (other than the
Harris Stock Fund), and Harris Stock Equivalents are sometimes referred to as
the "Investment Funds". Subject to the provisions of Section 4(b) below for
investments credited to the Harris Stock Equivalents Subaccount and the
crediting of Annual Units, a Director may invest her/his account balance or
future Director Compensation in 1.0% increments in any of the Investment Funds
(or in such other increments as are permitted under the Retirement Plan) and,
may change her/his investment elections in a manner consistent with the changing
of investment elections as set forth in the Retirement Plan. A Director's
account balance and future deferred Director Compensation shall be invested in
the Balanced Fund described on EXHIBIT A until the Director makes a valid
investment election pursuant to this Paragraph 4. Earnings and losses with
respect to a Director's Account shall be allocated to such Account with the same
frequency and in the same manner as allocations under the Retirement Plan.
(b) SPECIAL RULES CONCERNING HARRIS STOCK EQUIVALENTS SUBACCOUNTS.
Notwithstanding any other provisions of this Plan to the contrary, the following
rules shall apply to investments credited to the Harris Stock Equivalents
Subaccounts (including, as appropriate, Annual Units credited to the Harris
Stock Equivalents Subaccount of a Director's Account).
(i) NO INTRA-PLAN TRANSFERS INTO OR OUT OF THE HARRIS STOCK
EQUIVALENTS SUBACCOUNTS. Except for a reallocation of a Director's Account
balance as set forth in Paragraph 3(a)(ii), a Director may not make an election
to transfer or reallocate amounts invested in any of the Director's retirement
investment subaccounts into the Director's Harris Stock Equivalents Subaccount.
In addition, amounts invested in the Harris Stock Equivalents Subaccount,
including Annual Units, may not thereafter be reallocated in any other
retirement investment subaccounts.
7
<PAGE> 8
(ii) VALUE OF HARRIS STOCK EQUIVALENTS. Amounts of Director's
Compensation deferred by a Director hereunder which the Director elects to be
invested in Harris Stock Equivalents shall be credited to the Director's Harris
Stock Equivalents Subaccount on the last day of each calendar month in which
such amount would be payable. The Corporation shall credit a Director's Harris
Stock Equivalents Subaccount with that number of units (including fractions)
obtained by dividing such amounts by the Fair Market Value of a share of Common
Stock on the date such amounts are credited to the Director's Harris Stock
Equivalents Subaccount (such Harris Stock Equivalents are sometimes referred to
herein as "Deferred Stock Units"). In the case of Annual Units, each Director's
Harris Stock Equivalents Subaccount shall be credited with a number of Annual
Units on January 1 of each year as set forth in Paragraph 5(a). Deferred Stock
Units and Annual Units are sometimes referred to collectively as "Units."
(iii) EARNINGS ON HARRIS STOCK EQUIVALENTS. A Director's Harris
Stock Equivalents Subaccount shall be credited with the amount of cash dividends
payable with respect to that number of shares of Common Stock equal to the
number of Units (including fractions) credited to such subaccount on the
dividend payment date. The amount of cash dividends so credited shall then be
converted into Units in the manner described above using the Fair Market Value
on the same day, and in a manner consistent with the Retirement Plan.
(iv) REALLOCATIONS OF FUTURE INVESTMENTS INTO HARRIS STOCK
EQUIVALENTS SUBACCOUNT. Subject to any restrictions imposed by Section 16(b) of
the Exchange Act ("Section 16(b)"), changes in investment elections with respect
to future crediting of Director's Compensation into the Harris Stock Equivalents
Subaccount may be made at the Director's discretion, except that a Director
shall have no investment discretion with respect to the crediting of Annual
Units.
(v) ADJUSTMENTS TO AVOID DILUTION. In the event of any stock
dividend or split, recapitalization, merger, consolidation, spin-off,
extraordinary dividends,
8
<PAGE> 9
combination or exchange of shares or other similar event, the value and
attributes of each Unit shall be appropriately adjusted consistent with such
change to the same extent as if such Units were issued and outstanding shares of
Common Stock. Such adjustments shall be made by the Board and shall be
conclusive and binding for all purposes of the Plan.
(vi) CASH DISTRIBUTIONS. Distributions from a Director's Harris
Stock Equivalents Subaccount shall be made in cash with the amount of cash to be
paid on account of each Unit being determined by reference to the Fair Market
Value on the last day of the month preceding the date of distribution.
(vii) NO RIGHTS AS SHAREHOLDER. A Director shall not have any
rights as a shareholder of the Corporation with respect to any Units credited to
the Director's Harris Stock Equivalents Subaccount.
5. ANNUAL AWARDS OF DEFERRED STOCK UNITS; CONVERSION AWARD.
(a) ANNUAL UNIT AWARDS. On January 1 of each year, commencing with
January 1, 1998, the Corporation shall credit the Harris Stock Equivalents
Subaccount of each Director who is not an employee of the Corporation or one of
its subsidiaries with 500 Harris Stock Equivalents. The number of Annual Units
to be credited on each January 1 may be changed from time to time by a
resolution adopted by the Board. All such annually awarded units shall be
referred to herein as the "Annual Units."
(b) CONVERSION AWARD. On January 1, 1998 a Director's Harris Stock
Equivalents Subaccount shall be credited with a number of Harris Stock
Equivalents equal to the actuarial present value of the Director's annual
retirement benefit (assuming retirement at age 72) under the Directors'
Retirement Plan if, as of January 1, 1998; either (i) the Director had less than
ten years of service under such Plan or (ii) the Director had ten or more years
of service under such Plan and elected to have such actuarial present value
transferred to the Plan. The number of Harris Stock Equivalents to be credited
to such a Director's Harris Stock Equivalents Subaccount shall be determined in
the manner
9
<PAGE> 10
described in Paragraph 4(b)(ii) as of January 1, 1998, except that the fair
market value shall be equal to the average daily closing price for the Common
Stock for the period from October 1, 1997 through December 31, 1997.
6. PAYMENT OF DEFERRED DIRECTOR COMPENSATION AND ANNUAL UNITS. In
accordance with the forms of payment permissible under this Paragraph 6, a
Director shall elect the time or times in which the amounts credited to her/his
Account, including Annual Units credited to the Harris Stock Equivalents
Subaccount, shall be paid by a written election delivered to the Secretary at
the time such Director elects to participate in this Plan. A Director may modify
his or her election at any time before the beginning of the 120-day period
immediately preceding the effective date of the Director's resignation or
retirement, at which time the election shall become irrevocable; provided,
however, that if a Director has Units credited to his/her Harris Stock
Equivalents Subaccount, no such modification shall be made without the prior
approval of the Board or a committee comprised solely of "non-employee
directors" as defined in Rule 16b-3(b)(3) under the Exchange Act, as amended
from time to time. Payments must commence no later than age 72. A Director's
payout election shall apply to all amounts credited to a Director's Account and
all earnings thereon regardless of the year in which the amounts were deferred
or credited. Upon a Director's resignation or retirement, amounts credited to
the Director's Account shall be payable to her/him at her/his election in (i) a
cash lump sum on a date certain within five (5) years of resignation or
retirement or (ii) in annual payments over a designated number of years provided
the Account is fully paid within ten (10) years of resignation or retirement.
Annual payments shall be made on or before January 15. Until a Director's
Account has been completely distributed, earnings and losses on the unpaid
balance thereof shall be allocated as provided in Paragraph 4 above.
7. PAYMENTS IN CONNECTION WITH CHANGE OF CONTROL. Notwithstanding
anything contained in this Plan to the contrary, within 90 days following a
Change of Control, the Corporation shall pay to each Director (or former
Director) a cash lump sum
10
<PAGE> 11
payment equal to the then remaining balance in his/her Account. This Paragraph
may not be amended, altered or modified following a Change of Control.
8. MODIFICATION OF PAYMENT TERMS IN CERTAIN CIRCUMSTANCES. If after a
person shall have ceased to be a Director, but prior to full payment to such
person of the entire amount of her or his Account, the Director shall, after
reasonable warning from the Board, persist in an affiliation with any business
that is a principal competitor with a significant portion of the business
conducted by the Corporation, the entire balance of such Account may, if
directed by the Board in its sole discretion, be paid immediately to such person
in a lump sum.
9. PAYMENT IN THE EVENT OF DEATH. In the event a Director or former
Director dies prior to receiving payment of the entire amount of her or his
Account, the unpaid balance shall be paid to such beneficiary as the Director
may have designated in a written notice delivered to the Secretary as the
person, firm or trust to receive any such post-death distribution under this
Plan or, in the absence of such written designation, to the former Director's
legal representative or any person, firm or organization designated in her or
his last will to receive such distributions. Distributions subsequent to the
death of a Director or former Director shall be made in a lump sum.
10. NON-ASSIGNABILITY. None of the rights or interests of any Director
or former Director in amounts of compensation deferred under this Plan or Annual
Units shall be assignable or transferable in whole or in part, either
voluntarily or by operation of law or otherwise, and shall not be subject to
payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy
or in any other manner.
11. PLAN TO BE UNFUNDED. The Corporation shall be under no obligation
to acquire, segregate, or reserve any funds or other assets for purposes
relating to this Plan and no Director or former Director shall have any rights
whatsoever in or with respect to any funds or other assets held by the
Corporation for purposes of this Plan or otherwise.
11
<PAGE> 12
Accounts maintained for purposes of this Plan shall merely constitute
bookkeeping records of the Corporation and shall not constitute any allocation
whatsoever of any assets of the Corporation or be deemed to create any trust or
special deposit with respect to any of the Corporation's assets.
12. MISCELLANEOUS. The Board, any committee of the Board, and any
officer of the Corporation charged with responsibility for the administration
and operation of this Plan may rely upon information supplied to them by the
officers of the Corporation and by the Corporation's independent certified
public accountants. No member of the Board nor any officer of the Corporation
charged with responsibility for the administration and operation of this Plan
shall be liable, except in circumstances involving his or her bad faith, for any
act or action, whether of commission or omission, taken by any other member or
by any other officer, agent, or employee, for anything done or omitted to be
done. The Board may from time to time amend, suspend, terminate or reinstate any
or all of the provisions of this Plan, except that no such amendment, suspension
or termination shall adversely affect the Account of any Director or former
Director as it existed immediately before such amendment, suspension or
termination or the manner of distribution thereof, unless such Director or
former Director shall have consented thereto in writing. This Plan shall be
construed and governed by the laws of Delaware.
12
<PAGE> 13
IN WITNESS WHEREOF, Harris Corporation does hereby amend and restate
this 1997 Directors' Deferred Compensation and Annual Stock Unit Award Plan as
of October 24, 1997.
HARRIS CORPORATION
By /s/ Phillip W. Farmer
----------------------
Phillip W. Farmer
Chairman of the Board, President
and Chief Executive Officer
ATTEST
/s/ Richard L. Ballantyne
- ---------------------------------
Corporate Secretary
13
<PAGE> 1
Exhibit 10(ii)
AMENDMENT
TO
DIRECTORS RETIREMENT PLAN
WHEREAS, Harris Corporation, a Delaware corporation (the "Company"),
has heretofore adopted and maintains the Directors Retirement Plan, which was
last amended as of June 28, 1996 (the "Plan"), to provide retirement benefits to
the members of the Company's Board of Directors who are not employees of the
Company ("Outside Directors") (capitalized terms not defined in this amendment
have the meanings ascribed to them in the Plan); and
WHEREAS, the Company desires to amend the Plan to provide that the only
Participants in the Plan on and after January 1, 1998 will be (i) those former
Outside Directors who are then receiving benefits under the Plan and (ii) those
Outside Directors with at least ten years of Service as of January 1, 1998 who
elect to continue to participate in the Plan; and
WHEREAS, the Company desires to amend the Plan in certain other
respects.
NOW THEREFORE, pursuant to the power of amendment contained, in Section
6.01 of the Plan, the Plan is hereby amended, effective as of the date set forth
below, as follows:
1. Section 3.01 of the Plan is amended to add the following sentence to
the end thereof:
Notwithstanding the previous sentence, no member of the Board shall
become a Participant on or after January 1, 1998.
1
<PAGE> 2
2. Section 4.01(a) of the Plan is amended to add the phrase "before
January 1, 1998" immediately after the words "a member of the Board".
3. Section 4.01 is amended to add the following subsections (c), (d) and
(e) immediately following subsection (b) thereof:
(c) Each Participant who is serving as a member of the Board on
January 1, 1998 and who has at least ten years of Service as
of such date may elect, prior to December 31, 1997, in the
manner prescribed by the Committee, any one of the following:
(i) an annual retirement benefit payable in accordance
with Section 4.01(b) that is equal to the annual
retainer, excluding attendance fees and committee
retainers and attendance fees, payable to a member of
the Board who is not an employee of the Company for
services performed as a member of the Board for 1997
(the "1997 Retainer"); or
(ii) that the Participant's account under the Harris
Corporation 1997 Directors' Deferred Compensation and
Annual Stock Unit Award Plan (the "Unit Award Plan")
be credited as of January 1, 1998 with the number of
Harris Stock Equivalents (as defined in the Unit
Award Plan) on such date that is equal to the
actuarial present value of the annual retirement
benefit (assuming retirement at age 72) described in
clause (i) of this Section 4.01(c). For these
purposes (and for purposes of subsection (d) hereof),
the actuarial present value of a Participant's annual
retirement benefit (assuming retirement at age 72)
shall be computed using an interest rate of 6.5%
compounded annually and the 1983 Group Annuity
Mortality Table, based upon a fixed blend of 50% male
mortality rates and 50% female mortality rates.
(d) In lieu of any benefit under this Plan, each Participant who
is not receiving payments under the Plan as of January 1, 1998
and who has fewer than ten years of Service as of such date
shall have credited to his or her account under the Unit Award
Plan, the number of Harris Stock Equivalents that is equal on
such date to the actuarial present value (as determined under
Section 4.01(c)(ii)) of an annual retirement benefit
(assuming retirement at age 72) equal to the Applicable
Percentage of the Participant's 1997
2
<PAGE> 3
Retainer, provided that the Participant completes any consent
or other forms requested by the Committee. Each member of the
Board who is not an employee of the Company and who is not a
Participant in the Plan because he or she has not completed
at least five years of Service shall have credited to his or
her account under the Unit Award Plan the number of Harris
Stock Equivalents that is equal on such date to the actuarial
present value (as determined under Section 4.01(c)(ii)) of
an annual retirement benefit (assuming retirement at age 72)
equal to the Applicable Percentage of such member's 1997
Retainer. For purposes of this Section 4.01(d), the
"Applicable Percentage" shall be equal to 10% for each year of
Service determined as of January 1, 1998 of such a Participant
or member.
(e) Participants described in clause (ii) Section 4.01(c) or in
Section 4.01(d) shall cease participation in the Plan at 12:01
a.m. on January 2, 1998 and shall no longer be a Participant
under the Plan for any purpose.
4. Section 4.02(a) is amended to add the phrase "before January 1, 1998
and" immediately after the words "a member of the Board".
5. Section 4.02 is amended to add the following subsection (c) immediately
following subsection (b) thereof:
(c) A Participant who made an election described in Section
4.01(c)(i) and who ceases to be a member of the Board prior to
his or her Retirement Date by reason of Disability shall be
entitled to receive a disability benefit payable in accordance
with Section 4.02(b) that is equal to the annual retirement
benefit to which the Participant is entitled.
6. Section 4.03 is amended to add the words "who either (i) ceases to be a
member of the Board prior to January 1, 1998 or (ii) has at least ten years of
service as of January 1, 1998 and elects to receive an annual retirement benefit
under Section 4.01(c)(i)" immediately after the word "Participant" in the
first sentence thereof.
3
<PAGE> 4
7. Subsections (a) and (b) of Section 4.04 are amended to add the words
"occurring before January 1, 1998" immediately after the words "the event of a
Change of Control".
8. Section 4.04(b) is amended to delete the last sentence thereto.
9. Section 4.04 is amended to add the following subsections (c) and (d)
immediately after subsection (b) thereof:
(c) In the event of a Change of Control occurring on or after
January 1, 1998, in lieu of the benefits payable under
Sections 4.01 through 4.03, (i) each Participant or
beneficiary who is then receiving a retirement benefit or a
disability benefit shall be paid immediately upon such Change
of Control a lump sum cash payment equal to the Actuarial
Equivalent of such benefit measured as of the date of the
Change of Control; (ii) each other Participant who does not
continue as a member of the Board shall receive an immediate
lump sum cash payment equal to the Actuarial Equivalent of the
retirement benefit to which the Participant would be entitled
commencing at the Participant's Retirement Date; and (iii)
each other Participant who continues as a member of the Board
shall receive a lump sum payment, at the time he or she ceases
to be a member of the Board, equal to the Actuarial Equivalent
of either (x) the retirement benefit to which the Participant
would be entitled commencing on the Participant's Retirement
Date, or (y) in the case of the Participant's Disability prior
to his or her Retirement Date, the disability benefit to
which the Participant would be entitled.
(d) The reasonable legal fees and expenses incurred by any
Participant to enforce his or her valid rights under Section
4.04 shall be paid by the Company in addition to any amounts
payable under the Plan.
10. Section 4.05 is amended to substitute the following sentences for the
first sentence thereof:
4
<PAGE> 5
In lieu of the benefits payable under Section 4.01, 4.02 or 4.03, a
Participant who ceased being a member of the Board prior to January 1,
1998 may elect to receive a cash-out distribution of such benefit. The
spouse of a deceased Participant who ceased being a member of the
Board prior to January 1, 1998 and who had elected the joint and
survivor form of payment may elect to receive a cash-out distribution
of his or her survivor benefit.
11. Section 6.02 is amended to add the phrase "prior to January 1, 1998"
immediately after the words "any such termination" appearing in the second
sentence thereof.
12. Section 6.02 is further amended to add the following sentence to the
end thereof:
Upon any such termination on or after January 1, 1998, (x) each
Participant who is then receiving a retirement benefit or disability
benefit shall receive an immediate lump sum cash payment equal to the
Actuarial Equivalent of such benefit as of the date of termination,
and (y) each other Participant shall receive a lump sum cash payment
equal to the actuarial present value of the annual retirement benefit
payable in accordance with Section 4.01(b) that is equal to the 1997
Retainer.
APPROVED AND AUTHORIZED BY THE BOARD OF DIRECTORS this 24th day of October,
1997.
/s/ Phillip W. Farmer
-------------------------------------
Phillip W. Farmer
Chairman of the Board, President and
Chief Executive Officer
Harris Corporation
ATTEST:
/s/ Richard L. Ballantyne
- -------------------------------------
Corporate Secretary
5
<PAGE> 1
Exhibit
10(iii)
AMENDMENT NO. 1 TO
364-DAY CREDIT AGREEMENT
------------------------
THIS AMENDMENT NO. 1 TO 364-DAY CREDIT AGREEMENT (this "Amendment")
dated as of October 21, 1997, by and among HARRIS CORPORATION, a Delaware
corporation (the "Borrower"), each of the banks and other lending institutions
listed on the signature pages hereof (the "Lenders"), THE CHASE MANHATTAN BANK,
as administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), SUNTRUST BANK, ATLANTA, as documentation agent for the Lenders (in such
capacity, the "Documentation Agent") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Managing Agent for the Lenders (in such capacity, a
"Managing Agent" and collectively with the Administrative Agent and
Documentation Agent, the "Managing Agents");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, the Lenders, the Managing Agents, the Syndication
Agent and the Co-Agents are parties to a certain 364-Day Credit Agreement dated
as of November 6, 1996 (the "Credit Agreement"; defined terms used herein
without definition shall have the meanings ascribed to such terms in the Credit
Agreement);
WHEREAS, Borrower has requested, and the Lenders have agreed, that the
Credit Agreement be amended to (i) extend the term thereof for 364 days, (ii)
restate the amount of the commitments of the Lenders and (iii) make certain
modifications to the covenants and events of default set forth therein and the
related definitions, all as more specifically set forth below;
WHEREAS, the parties wish to amend the Credit Agreement to reflect this
agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction
of the conditions precedent set forth in SECTION 2 hereof, and effective as of
the Effective Date (as hereinafter defined), the Credit Agreement is hereby
amended as follows:
1. Section 1.1 of the Credit Agreement is hereby amended by adding
the following new defined terms in the appropriate alphabetical order, as
follows:
"Hostile Acquisition" means any acquisition which has not been approved
in advance by the board of directors of the target company.
"Non-Recourse Debt" means Debt: (i) as to which neither the Borrower
nor any of its Subsidiaries (a) provides credit support of any kind
(including any undertaking,
<PAGE> 2
agreement or instrument that would constitute Debt) except to the extent of
any collateral pledged therefor, (b) is directly or indirectly liable (as a
guarantor or otherwise) except to the extent of any collateral pledged
therefor or (c) constitutes the lender, and (ii) as to which the lender's
sole remedy for a default thereunder is foreclosure upon specific assets of
the Borrower or its Subsidiaries pledged as security therefor, with no
liability on the part of the Borrower or any of its Subsidiaries for any
deficiency thereafter.
2. Section 1.1 of the Credit Agreement is hereby further amended by
deleting the existing definitions of "Commitment" and "Maturity Date" and
substituting the following in lieu thereof:
"Commitment" means, with respect to any Lender, the amount set
opposite its name on Schedule 1.1a attached hereto, or if such Lender has
entered into any Assignment and Acceptance or is an Augmenting Lender, the
amount set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.5(c), as such Commitment may be
extended pursuant to Section 2.13, reduced pursuant to Section 2.12 or
Section 8.5(a) or increased pursuant to Section 2.14 or Section 8.5(a).
"Maturity Date" means the earlier of (a) October 20, 1998 or, if
extended as described in Section 2.13, then the date as so extended, and
(b) the date of termination in whole of the Commitments pursuant to Section
2.12 or Section 6.1.
3. Section 4.1(g) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting the following in lieu
thereof:
"(g) The Borrower is not engaged in the business of extending credit
or in the business of purchasing or carrying Margin Stock, and the
borrowings hereunder will not be used for the purpose of purchasing or
carrying Margin Stock in a manner which (x) would violate or result in a
violation of Regulation G, T, U or X, or (y) would constitute a Hostile
Acquisition involving Margin Stock."
4. Section 5.2(b) of the Credit Agreement is hereby amended by
deleting the first clause of subsection (b) thereof in its entirety and
substituting the following in lieu thereof:
"(b) LIENS. Create, assume, incur or suffer to exist, or allow any
Material Subsidiary to create, assume, incur or suffer to exist, except by
a Material Subsidiary in favor of the Borrower or another Material
Subsidiary, any Lien on any of its property or assets or any shares of
capital stock or indebtedness of any Material Subsidiary, whether now owned
or hereafter acquired, or assigned, except:"
5. Section 5.2(b) of the Credit Agreement is hereby further amended
by (a) deleting the "and" in the eleventh line of subsection (xii), (b)
renumbering subsection "(xiii)" as
2
<PAGE> 3
"(xv)" and (c) adding the following subsections (xiii) and (xiv) immediately
following subsection (xii):
"(xiii) any Lien securing Debt of a Subsidiary outstanding at the time
it became a Subsidiary (provided that such Lien was not
created in connection with or in contemplation of the
acquisition of such Subsidiary), and any other Lien created in
connection with the refunding, renewal or extension of such
Debt which is limited to the same property, provided that the
amount of the Debt secured by such refunding, renewal or
extended Lien does not exceed the amount of Debt secured by
the Lien to be refunded, renewed or extended and outstanding
at the time of such refunding, renewal or extension;
(xiv) any Lien created in connection with the refunding, renewal or
extension of any obligations, indebtedness or claims secured
by a Lien mentioned in the foregoing clauses (iii), (iv), (v)
and (xii) which is limited to the same property; provided that
the aggregate amount of the Debt or claims secured by such
refunding, renewal or extended Lien does not exceed the
aggregate amount thereof secured by the Lien so refunded,
renewed or extended and outstanding at the time of such
refunding, renewal or extension; and"
6. Section 5.2(b) of the Credit Agreement is hereby further
amended by deleting the reference to "clause (xiii)" in the second line of the
newly renumbered clause (xv) and replacing the same with a reference to "clause
(xv)".
7. Section 5.2(c) of the Credit Agreement is hereby amended by
deleting the reference to "Section 5.2(b)(xiii)" in the ninth and tenth lines of
such Section 5.2(c) and replacing the same with a reference to "Section
5.2(b)(xv)".
8. Section 6.1(e) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting the following in lieu
thereof
"(e) The Borrower or any of its Subsidiaries shall (i) fail to
make any payment on account of any Debt (excluding Debt evidenced by
the Notes) or Hedging Arrangement having an outstanding principal
amount (or notional amount in the case of a Hedging Arrangement) of
$25,000,000 or more (or, in the case of Non-Recourse Debt, of
$50,000,000 or more) of the Borrower or such Subsidiary (as the case
may be), or any interest or premium thereon, when due (whether at
scheduled maturity, upon required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Debt or Hedging Arrangement, or (ii) fail to perform or observe
any term, covenant, condition on its part to be
3
<PAGE> 4
performed or observed under any agreement or instrument relating to any
such Debt (but not including Hedging Arrangements) when required to be
performed or observed, and such failure shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, the maturity of such
Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment and other than as a consequence of the sale, pledge or other
disposition by the Borrower of Margin Stock), prior to the stated
maturity thereof; or"
9. Section 8.5(a)(iii) of the Credit Agreement is hereby amended by
adding the following parenthetical immediately following the first reference to
$5,000,000 in such clause (iii): "(except in the case of an assignment to an
existing Lender in which event the amount of the Commitment subject to such
assignment shall not be less than $2,500,000)".
10. The Credit Agreement is hereby further amended by the addition of
Schedule 1.1A in the form attached hereto.
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of October 21, 1997 (the "Effective Date") on the first day when
all of the foregoing shall have occurred:
1. This Amendment shall have been executed and delivered by Borrower
and the Lenders to the Managing Agents; and
2. The Borrower shall have delivered to the Administrative Agent
evidence of its good standing in the States of Delaware and Florida.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower,
without limiting the representations and warranties provided in the Credit
Agreement, represents and warrants as follows:
1. The execution, delivery and performance by Borrower of this
Amendment are within Borrower's corporate powers, have been duly authorized by
all necessary corporate action and do not contravene (i) Borrower's charter or
by-laws, (ii) applicable law or (iii) any material contractual restriction
binding on or affecting the Borrower.
2. The Agreement as amended by this Amendment constitutes the legal,
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.
3. No Default or Event of Default has occurred and is continuing as
of the
4
<PAGE> 5
Effective Date.
SECTION 4. SURVIVAL. Each of the foregoing representations and
warranties shall be made at and as of the Effective Date. Each of the foregoing
representations and warranties shall constitute a representation and warranty of
Borrower under the Credit Agreement, and it shall be an Event of Default if any
such representation and warranty shall prove to have been incorrect or false in
any material respect at the time when made. Each of the representations and
warranties made under the Credit Agreement (including those made herein) shall
survive and not be waived by the execution and delivery of this Amendment or any
investigation by the Lenders or the Managing Agents or the Co-Agents.
SECTION 5. NO WAIVER, ETC. Borrower hereby agrees that nothing herein
shall constitute a waiver by the Lenders of any Default or Event of Default,
whether known or unknown, which may exist under the Credit Agreement. Borrower
hereby further agrees that no action, inaction or agreement by the Lenders,
including without limitation, any indulgence, waiver, consent or agreement
altering the provisions of the Credit Agreement which may have occurred with
respect to the non-payment of any obligation during the terms of the Credit
Agreement or any portion thereof, or any other matter relating to the Credit
Agreement, shall require or imply any future indulgence, waiver, or agreement by
the Lenders.
SECTION 6. RATIFICATION OF CREDIT AGREEMENT. Except as expressly
amended herein, all terms, covenants and conditions of the Credit Agreement and
the Notes shall remain in full force and effect, and the parties hereto do
expressly ratify and confirm the Credit Agreement as amended herein. All
references to the Credit Agreement (whether as "this Agreement" or otherwise)
shall after the Effective Date be deemed to refer to the Credit Agreement as
amended hereby.
SECTION 7. BINDING NATURE. This Amendment shall be binding upon and
inure to the benefit of the parties hereto, their respective heirs, successors,
successors-in-title, and assigns.
SECTION 8. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand
the reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder, and
with respect to advising the Administrative Agent as to its rights and
responsibilities hereunder and thereunder. In addition, Borrower shall pay any
and all stamp and other taxes payable or determined to be payable in connection
with the execution and delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and agrees to save the Managing Agents, the
Co-Agents and each Lender harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
5
<PAGE> 6
SECTION 10. ENTIRE UNDERSTANDING. This Amendment sets forth the entire
understanding of the parties with respect to the matters set forth herein and
shall supersede any prior negotiations or agreements, whether written or oral,
with respect thereto.
SECTION 11. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts and may
be delivered by telecopier. Each counterpart so executed and delivered shall be
deemed an original and all of which taken together shall constitute but one and
the same instrument.
[Signatures Set Forth on Next Page]
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
through their authorized officers as of the date first above written.
BORROWER:
HARRIS CORPORATION
By: /s/ D. S. Wasserman
--------------------------------------
David S. Wasserman
Vice President-Treasurer
MANAGING AGENTS:
THE CHASE MANHATTAN BANK,
By: /s/ John J. Huber
--------------------------------------
Name: John J. Huber III
Title: Managing Director
SUNTRUST BANK, ATLANTA,
AS DOCUMENTATION AGENT AND MANAGING AGENT
By: /s/ Thomas R. Banks
--------------------------------------
Name: Thomas R. Banks
Title: Assistant Vice President
By: /s/ R. B. KING
--------------------------------------
Name: Raymond B. King
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS
By: /s/ Laurens F. Schaad, Jr.
--------------------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 8
LENDERS:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Laurens F. Schaad, Jr.
--------------------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ John J. Huber III
--------------------------------------
Name: John J. Huber III
Title: Managing Director
SUNTRUST BANK, ATLANTA
By: /s/ Thomas R. Banks
--------------------------------------
Name: Thomas R. Banks
Title: Assistant Vice President
ABN AMRO BANK N.V., ATLANTA AGENCY
By: /s/ Patrick A. Thom
--------------------------------------
Name: Patrick A. Thom
Title: Vice President
By: /s/ Linda K. Davis
--------------------------------------
Name: Linda K. Davis
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION
By: /s/ Tammy F. Hughes
--------------------------------------
Name: Tammy F. Hughes
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 9
MELLON BANK, N.A.
By: /s/ Charles H. Staub
--------------------------------------
Name: Charles H. Staub
Title: First Vice President
NATIONAL CITY BANK
By: /s/ Frank F. Pagura, Jr.
--------------------------------------
Name: Frank F. Pagura, Jr.
Title: Vice President
ROYAL BANK OF CANADA
By: /s/ Thomas M. Byrne
--------------------------------------
Name: Thomas M. Byrne
Title: Senior Manager
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
By: /s/ K. Loughlin
--------------------------------------
Name: K. Loughlin
Title: Vice President
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH
By: /s/ Charles Dougherty
--------------------------------------
Name: C. Dougherty
Title: Vice President
By: /s/ T. Gallonetto
--------------------------------------
Name: T. Gallonetto
Title: Assistant Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 10
BANCA NAZIONALE DEL LAVORO
S.P.A., NEW YORK BRANCH
By: /s/ Giuliano Violetta
--------------------------------------
Name: Giuliano Violetta
Title: First Vice President
By: /s/ Miguel J. Medida
--------------------------------------
Name: Miguel J. Medida
Title: Vice President
BANK OF MONTREAL
By: /s/ R. J. McClorey
--------------------------------------
Name: R. J. McClorey
Title: Director
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ G. Stewart
--------------------------------------
Name: G. Stewart
Title: Sr. VP & Manager
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By: /s/ John L. Stacy
--------------------------------------
Name: John L. Stacy
Title: Vice President
CITIBANK, N.A.
By: /s/ David L. Harris
--------------------------------------
Name: David L. Harris
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 11
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By: /s/ Eric R. Kagerer
--------------------------------------
Name: Eric R. Kagerer
Title: Vice President
By: /s/ Mark Wortmann
--------------------------------------
Name: Mark Wortmann
Title: Assistant Vice President
CORESTATES BANK, N.A.
By: /s/ Karen R. Leaf
--------------------------------------
Name: Karen R. Leaf
Title: Vice President
THE DAI-ICHI KANGYO BANK, LIMITED,
ATLANTA AGENCY
By: /s/ Tatsuji Noguchi
--------------------------------------
Name: Tatsuji Noguchi
Title: Joint General Manager
FIRST UNION NATIONAL BANK
By: /s/ Charlie S. Beverly, Jr.
--------------------------------------
Name: Charlie S. Beverly, Jr.
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Frank Benesh
--------------------------------------
Name: Frank Benesh
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 12
THE FUJI BANK LIMITED,
NEW YORK BRANCH
By: /s/ Toshiaki Yakura
--------------------------------------
Name: Toshiaki Yakura
Title: Senior Vice President
GULF INTERNATIONAL BANK B.S.C.
By: /s/ Thomas E. Fitzherbert
--------------------------------------
Name: Thomas E. Fitzherbert
Title: Vice President
By: /s/ Abdel-Fattah Tahoun
--------------------------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice President
MARINE MIDLAND BANK
By: /s/ William M. Holland
--------------------------------------
Name: William M. Holland
Title: Vice President
THE SAKURA BANK, LIMITED,
ATLANTA AGENCY
By: /s/ Hiroyasu Imanishi
--------------------------------------
Name: Hiroyasu Imanishi
Title: VP & Senior Manager
ISTITUTO BANCARIO SAN PAOLO DI
TORINO SPA
By: /s/ Robert Wurster
--------------------------------------
Name: Robert Wurster
Title: Vice President
By: /s/ Glen Binder
--------------------------------------
Name: Glen Binder
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 13
THE SANWA BANK, LIMITED,
ATLANTA AGENCY
By: /s/ P. J. Pawlak
--------------------------------------
Name: P. J. Pawlak
Title: VP & Senior Manager
THE SUMITOMO BANK, LIMITED
By: /s/ Masayuki Fukushima
--------------------------------------
Name: Masayuki Fukushima
Title: Joint General Manager
THE TOKAI BANK LIMITED,
NEW YORK BRANCH
By: /s/ Kaoru Oda
--------------------------------------
Name: Kaoru Oda
Title: Assistant General Manager
THE YASUDA TRUST & BANKING CO.,
LTD., NEW YORK BRANCH
By: /s/ Rohn Laudenschlager
--------------------------------------
Name: Rohn Laudenschlager
Title: Senior Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 364-DAY CREDIT AGREEMENT]
<PAGE> 14
SCHEDULE 1.1A
-------------
<TABLE>
<CAPTION>
Lender Commitment
------ ----------
<S> <C>
Bank of America National Trust
and Savings Association $19,850,000.00
The Chase Manhattan Bank $19,850,000.00
SunTrust Bank, Atlanta $19,850,000.00
ABN Amro Bank N.V., Atlanta Agency $19,850,000.00
Wachovia Bank, National Association $19,850,000.00
Mellon Bank, N.A. $12,000,000.00
Royal Bank of Canada $12,000,000.00
National City Bank $11,250,000.00
Australia and New Zealand Banking
Group Limited $8,000,000.00
Banca Commerciale Italiana -
New York Branch $8,000,000.00
Banca Nazionale Del Lavoro
S.P.A., New York Branch $8,000,000.00
Bank of Montreal $8,000,000.00
Bank of Tokyo-Mitsubishi Trust Company $8,000,000.00
Banque Nationale De Paris,
Houston Agency $8,000,000.00
Citibank, N.A. $8,000,000.00
Commerzbank Aktiengesellschaft,
Atlanta Agency $8,000,000.00
</TABLE>
<PAGE> 15
SCHEDULE 1.1A (cont'd)
<TABLE>
<CAPTION>
Lender Commitment
------ ----------
<S> <C>
The Dai-Ichi Kangyo Bank, Limited,
Atlanta Agency $8,000,000.00
First Union National Bank $8,000,000.00
Fleet National Bank $8,000,000.00
The Fuji Bank Limited, New York Branch $8,000,000.00
Gulf International Bank B.S.C. $8,000,000.00
The Sanwa Bank, Limited, Atlanta Agency $8,000,000.00
The Sumitomo Bank, Limited $8,000,000.00
Marine Midland Bank $8,000,000.00
Corestates Bank, N.A. $7,500,000.00
The Sakura Bank, Limited, Atlanta Agency $7,500,000.00
Istituto Bancario San Paolo Di Torino SPA $7,500,000.00
The Tokai Bank Limited, New York Branch $7,500,000.00
The Yasuda Trust & Banking Co.,
Ltd., New York Branch $7,500,000.00
-------------
TOTAL: $300,000,000.00
</TABLE>
<PAGE> 1
Exhibit 10(iv)
AMENDMENT NO. 1 TO
5-YEAR CREDIT AGREEMENT
-----------------------
THIS AMENDMENT NO. 1 TO 5-YEAR CREDIT AGREEMENT (this "Amendment")
dated as of October 21, 1997, by and among HARRIS CORPORATION, a Delaware
corporation (the "Borrower"), each of the banks and other lending institutions
listed on the signature pages hereof (the "Lenders"), THE CHASE MANHATTAN BANK,
as administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), SUNTRUST BANK, ATLANTA, as documentation agent for the Lenders (in such
capacity, the "Documentation Agent") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Managing Agent for the Lenders (in such capacity, a
"Managing Agent" and collectively with the Administrative Agent and
Documentation Agent, the "Managing Agents");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, the Lenders, the Managing Agents, the Syndication
Agent and the Co-Agents are parties to a certain 5-Year Credit Agreement dated
as of November 6, 1996 (the "Credit Agreement"; defined terms used herein
without definition shall have the meanings ascribed to such terms in the Credit
Agreement);
WHEREAS, Borrower has requested, and the Required Lenders have agreed,
that the Credit Agreement be amended to make certain modifications to the
covenants and events of default set forth therein and the related definitions,
all as more specifically set forth below;
WHEREAS, the parties wish to amend the Credit Agreement to reflect this
agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction
of the conditions precedent set forth in SECTION 2 hereof, and effective as of
the Effective Date (as hereinafter defined), the Credit Agreement is hereby
amended as follows:
1. Section 1.1 of the Credit Agreement is hereby amended by adding
the following new defined terms in the appropriate alphabetical order, as
follows:
"Hostile Acquisition" means any acquisition which has not been
approved in advance by the board of directors of the target company.
"Non-Recourse Debt" means Debt: (i) as to which neither the Borrower
nor any of its Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Debt) except to the extent of any collateral
<PAGE> 2
pledged therefor, (b) is directly or indirectly liable (as a guarantor or
otherwise) except to the extent of any collateral pledged therefor or (c)
constitutes the lender, and (ii) as to which the lender's sole remedy for a
default thereunder is foreclosure upon specific assets of the Borrower or
its Subsidiaries pledged as security therefor, with no liability on the
part of the Borrower or any of its Subsidiaries for any deficiency
thereafter.
2. Section 4.1(g) of the Credit Agreement is hereby amended by deleting
such subsection in its entirety and substituting the following in lieu thereof:
"(g) The Borrower is not engaged in the business of extending credit
or in the business of purchasing or carrying Margin Stock, and the
borrowings hereunder will not be used for the purpose of purchasing or
carrying Margin Stock in a manner which (x) would violate or result in a
violation of Regulation G, T, U or X, or (y) would constitute a Hostile
Acquisition involving Margin Stock."
3. Section 5.2(b) of the Credit Agreement is hereby amended by deleting
the first clause of subsection (b) thereof in its entirety and substituting the
following in lieu thereof:
"(b) LIENS. Create, assume, incur or suffer to exist, or allow any
Material Subsidiary to create, assume, incur or suffer to exist, except by
a Material Subsidiary in favor of the Borrower or another Material
Subsidiary, any Lien on any of its property or assets or any shares of
capital stock or indebtedness of any Material Subsidiary, whether now owned
or hereafter acquired, or assigned, except:"
4. Section 5.2(b) of the Credit Agreement is hereby further amended by
(a) deleting the "and" in the eleventh line of subsection (xii), (b) renumbering
subsection "(xiii)" as "(xv)" and (c) adding the following subsections (xiii)
and (xiv) immediately following subsection (xii):
"(xiii) any Lien securing Debt of a Subsidiary outstanding at the time
it became a Subsidiary (provided that such Lien was not
created in connection with or in contemplation of the
acquisition of such Subsidiary), and any other Lien created in
connection with the refunding, renewal or extension of such
Debt which is limited to the same property, provided that the
amount of the Debt secured by such refunding, renewal or
extended Lien does not exceed the amount of Debt secured by
the Lien to be refunded, renewed or extended and outstanding
at the time of such refunding, renewal or extension;
(xiv) any Lien created in connection with the refunding, renewal or
extension of any obligations, indebtedness or claims secured
by a Lien mentioned in the foregoing clauses (iii), (iv), (v)
and (xii) which is limited to the same
2
<PAGE> 3
property; provided that the aggregate amount of the Debt or
claims secured by such refunding, renewal or extended Lien
does not exceed the aggregate amount thereof secured by the
Lien so refunded, renewed or extended and outstanding at the
time of such refunding, renewal or extension; and"
5. Section 5.2(b) of the Credit Agreement is hereby further
amended by deleting the reference to "clause (xiii)" in the second line of the
newly renumbered clause (xv) and replacing the same with a reference to "clause
(xv)".
6. Section 5.2(c) of the Credit Agreement is hereby amended by
deleting the reference to "Section 5.2(b)(xiii)" in the ninth and tenth lines of
such Section 5.2(c) and replacing the same with a reference to "Section
5.2(b)(xv)".
7. Section 6.1(e) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting the following in lieu
thereof
"(e) The Borrower or any of its Subsidiaries shall (i) fail to
make any payment on account of any Debt (excluding Debt evidenced by
the Notes) or Hedging Arrangement having an outstanding principal
amount (or notional amount in the case of a Hedging Arrangement) of
$25,000,000 or more (or, in the case of Non-Recourse Debt, of
$50,000,000 or more) of the Borrower or such Subsidiary (as the case
may be), or any interest or premium thereon, when due (whether at
scheduled maturity, upon required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Debt or Hedging Arrangement, or (ii) fail to perform or observe
any term, covenant, condition on its part to be performed or observed
under any agreement or instrument relating to any such Debt (but not
including Hedging Arrangements) when required to be performed or
observed, and such failure shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the
effect of such failure to perform or observe is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt
shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment and other than
as a consequence of the sale, pledge or other disposition by the
Borrower of Margin Stock), prior to the stated maturity thereof; or"
8. Section 8.5(a)(iii) of the Credit Agreement is hereby amended by
adding the following parenthetical immediately following the first reference to
$5,000,000 in such clause (iii): "(except in the case of an assignment to an
existing Lender in which event the amount of the Commitment subject to such
assignment shall not be less than $2,500,000)".
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
3
<PAGE> 4
effective as of October 21, 1997 (the "Effective Date") on the first day when
all of the foregoing shall have occurred:
1. This Amendment shall have been executed and delivered by Borrower
and the Lenders constituting Required Lenders to the Managing Agents; and
2. The Borrower shall have delivered to the Administrative Agent
evidence of its good standing in the States of Delaware and Florida.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower,
without limiting the representations and warranties provided in the Credit
Agreement, represents and warrants as follows:
1. The execution, delivery and performance by Borrower of this
Amendment are within Borrower's corporate powers, have been duly authorized by
all necessary corporate action and do not contravene (i) Borrower's charter or
by-laws, (ii) applicable law or (iii) any material contractual restriction
binding on or affecting the Borrower.
2. The Agreement as amended by this Amendment constitutes the legal,
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.
3. No Default or Event of Default has occurred and is continuing as
of the Effective Date.
SECTION 4. SURVIVAL. Each of the foregoing representations and
warranties shall be made at and as of the Effective Date. Each of the foregoing
representations and warranties shall constitute a representation and warranty of
Borrower under the Credit Agreement, and it shall be an Event of Default if any
such representation and warranty shall prove to have been incorrect or false in
any material respect at the time when made. Each of the representations and
warranties made under the Credit Agreement (including those made herein) shall
survive and not be waived by the execution and delivery of this Amendment or any
investigation by the Lenders or the Managing Agents or the Co-Agents.
SECTION 5. NO WAIVER, ETC. Borrower hereby agrees that nothing herein
shall constitute a waiver by the Lenders of any Default or Event of Default,
whether known or unknown, which may exist under the Credit Agreement. Borrower
hereby further agrees that no action, inaction or agreement by the Lenders,
including without limitation, any indulgence, waiver, consent or agreement
altering the provisions of the Credit Agreement which may have occurred with
respect to the non-payment of any obligation during the terms of the Credit
Agreement or any portion thereof, or any other matter relating to the Credit
Agreement, shall require or imply any future indulgence, waiver, or agreement by
the Lenders.
4
<PAGE> 5
SECTION 6. RATIFICATION OF CREDIT AGREEMENT. Except as expressly
amended herein, all terms, covenants and conditions of the Credit Agreement and
the Notes shall remain in full force and effect, and the parties hereto do
expressly ratify and confirm the Credit Agreement as amended herein. All
references to the Credit Agreement (whether as "this Agreement" or otherwise)
shall after the Effective Date be deemed to refer to the Credit Agreement as
amended hereby.
SECTION 7. BINDING NATURE. This Amendment shall be binding upon and
inure to the benefit of the parties hereto, their respective heirs, successors,
successors-in-title, and assigns.
SECTION 8. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand
the reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder, and
with respect to advising the Administrative Agent as to its rights and
responsibilities hereunder and thereunder. In addition, Borrower shall pay any
and all stamp and other taxes payable or determined to be payable in connection
with the execution and delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and agrees to save the Managing Agents, the
Co-Agents and each Lender harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 10. ENTIRE UNDERSTANDING. This Amendment sets forth the entire
understanding of the parties with respect to the matters set forth herein and
shall supersede any prior negotiations or agreements, whether written or oral,
with respect thereto.
SECTION 11. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts and may
be delivered by telecopier. Each counterpart so executed and delivered shall be
deemed an original and all of which taken together shall constitute but one and
the same instrument.
[Signatures Set Forth on Next Page]
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
through their authorized officers as of the date first above written.
BORROWER:
HARRIS CORPORATION
By: /s/ D. S. Wasserman
--------------------------------------
David S. Wasserman
Vice President -Treasurer
MANAGING AGENTS:
THE CHASE MANHATTAN BANK,
By: /s/ John J. Huber
--------------------------------------
Name: John J. Huber III
Title: Managing Director
SUNTRUST BANK, ATLANTA,
AS DOCUMENTATION AGENT AND MANAGING AGENT
By: /s/ Thomas R. Banks
--------------------------------------
Name: Thomas R. Banks
Title: Assistant Vice President
By: /s/ R. B. King
--------------------------------------
Name: Raymond B. King
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS
By: /s/ Laurens F. Schaad, Jr.
--------------------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 7
LENDERS:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Laurens F. Schaad, Jr.
--------------------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ John J. Huber III
--------------------------------------
Name: John J. Huber III
Title: Managing Director
SUNTRUST BANK, ATLANTA
By: /s/ Thomas R. Banks
--------------------------------------
Name: Thomas R. Banks
Title: Assistant Vice President
ABN AMRO BANK N.V., ATLANTA AGENCY
By: /s/ Patrick A. Thom
--------------------------------------
Name: Patrick A. Thom
Title: Vice President
By: /s/ Linda K. Davis
--------------------------------------
Name: Linda K. Davis
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION
By: /s/ Tammy F. Hughes
--------------------------------------
Name: Tammy F. Hughes
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 8
MELLON BANK, N.A.
By: /s/ Charles H. Staub
--------------------------------------
Name: Charles H. Staub
Title: First Vice President
NATIONAL CITY BANK
By: /s/ Frank F. Pagura, Jr.
--------------------------------------
Name: Frank F. Pagura, Jr.
Title: Vice President
ROYAL BANK OF CANADA
By: /s/ Thomas M. Byrne
--------------------------------------
Name: Thomas M. Byrne
Title: Senior Manager
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
By: /s/ K. Loughlin
--------------------------------------
Name: K. Loughlin
Title: Vice President
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH
By: /s/ Charles Dougherty
--------------------------------------
Name: C. Dougherty
Title: Vice President
By: /s/ T. Gallonetto
--------------------------------------
Name: T. Gallonetto
Title: Assistant Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 9
BANCA NAZIONALE DEL LAVORO
S.P.A., NEW YORK BRANCH
By: /s/ Giuliano Violetta
--------------------------------------
Name: Giuliano Violetta
Title: First Vice President
By: /s/ Miguel J. Medida
--------------------------------------
Name: Miguel J. Medida
Title: Vice President
BANK OF MONTREAL
By: /s/ R. J. McClorey
--------------------------------------
Name: R. J. McClorey
Title: Director
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ G. Stewart
--------------------------------------
Name: G. Stewart
Title: Sr. VP & Manager
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By: /s/ John L. Stacy
--------------------------------------
Name: John L. Stacy
Title: Vice President
CITIBANK, N.A.
By: /s/ David L. Harris
--------------------------------------
Name: David L. Harris
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 10
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By: /s/ Eric R. Kagerer
--------------------------------------
Name: Eric R. Kagerer
Title: Vice President
By: /s/ Mark Wortmann
--------------------------------------
Name: Mark Wortmann
Title: Assistant Vice President
CORESTATES BANK, N.A.
By: /s/ Karen R. Leaf
--------------------------------------
Name: Karen R. Leaf
Title: Vice President
THE DAI-ICHI KANGYO BANK, LIMITED,
ATLANTA AGENCY
By: /s/ Tatsuji Noguchi
--------------------------------------
Name: Tatsuji Noguchi
Title: Joint General Manager
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Robert H. Wolohan
--------------------------------------
Name: Robert H. Wolohan
Title: Assistant Vice President
and Authorized Agent
FIRST UNION NATIONAL BANK
By: /s/ Charlie S. Beverly, Jr.
--------------------------------------
Name: Charlie S. Beverly, Jr.
Title: Senior Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 11
FLEET NATIONAL BANK
By: /s/ Frank Benesh
--------------------------------------
Name: Frank Benesh
Title: Vice President
THE FUJI BANK LIMITED,
NEW YORK BRANCH
By: /s/ Toshiaki Yakura
--------------------------------------
Name: Toshiaki Yakura
Title: Senior Vice President
GULF INTERNATIONAL BANK B.S.C.
By: /s/ Thomas E. Fitzherbert
--------------------------------------
Name: Thomas E. Fitzherbert
Title: Vice President
By: /s/ Abdel-Fattah Tahoun
--------------------------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice President
MARINE MIDLAND BANK
By: /s/ William M. Holland
--------------------------------------
Name: William M. Holland
Title: Vice President
THE SAKURA BANK, LIMITED,
ATLANTA AGENCY
By: /s/ Hiroyasu Imanishi
--------------------------------------
Name: Hiroyasu Imanishi
Title: VP & Senior Manager
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 12
ISTITUTO BANCARIO SAN PAOLO DI
TORINO SPA
By: /s/ Robert Wurster
--------------------------------------
Name: Robert Wurster
Title: Vice President
By: /s/ Glen Binder
--------------------------------------
Name: Glen Binder
Title: Vice President
THE SANWA BANK, LIMITED,
ATLANTA AGENCY
By: /s/ P. J. Pawlak
--------------------------------------
Name: P. J. Pawlak
Title: VP & Senior Manager
THE SUMITOMO BANK, LIMITED
By: /s/ Masayuki Fukushima
--------------------------------------
Name: Masayuki Fukushima
Title: Joint General Manager
THE TOKAI BANK LIMITED,
NEW YORK BRANCH
By: /s/ Kaoru Oda
--------------------------------------
Name: Kaoru Oda
Title: Assistant General Manager
THE YASUDA TRUST & BANKING CO.,
LTD., NEW YORK BRANCH
By: /s/ Rohn Laudenschlager
--------------------------------------
Name: Rohn Laudenschlager
Title: Senior Vice President
[SIGNATURE PAGE TO AMENDMENT NO. 1
TO 5-YEAR CREDIT AGREEMENT]
<PAGE> 1
Exhibit 10(v)
HARRIS CORPORATION
STOCK OPTION AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/22/97)
1. THE OPTION - TERMS AND CONDITIONS. Under and subject to the
provisions of the Corporation's Stock Incentive Plan as in effect from time to
time (the "Plan"), the Corporation has granted to the Employee a non-statutory
option (the "Option") to purchase such number of shares of Common Stock of the
Corporation as set forth and designated in writing by the Corporation to the
Employee at the designated price per share. Such grant is subject to the
following Terms and Conditions:
(a) The Option shall not be exercisable to any extent until
and unless the Employee shall have remained continuously in the employ
of the Corporation for one year from the grant date. The grant of the
Option shall not limit or restrict the Corporation's rights to
terminate the Employee's employment.
(b) During the lifetime of the Employee, the Option shall be
exercisable only by the Employee, and (except when Section 2 is
applicable) only while the Employee continues as an Employee of the
Corporation.
(c) Notwithstanding any other provision of these Terms and
Conditions and the Agreement of which they form a part, the Option
shall expire no later than ten years from the grant date (the
"Expiration Date"), and shall not be exercisable thereafter.
(d) The Option is exercisable as follows:
(i) After the end of one year and prior to the end
of two years from the grant date, not more than fifty percent
of the grant;
(ii) After the end of two years and prior to the end
of three years from the grant date, not more than seventy-five
percent of the grant; and
(iii) After the end of three years from the grant
date, one-hundred percent of the grant.
(e) Upon a "change of control" of the Corporation (as defined
in Section 11.1 of the Plan) any outstanding Option shall immediately
become fully exercisable, provided that if the Employee is an officer
of the Corporation and a stock appreciation right has been granted with
respect to a portion or all of the shares covered by these Terms and
Conditions, the Option granted as to such shares may not in any event
be exercised prior to the end of six months from the grant date, but
the time set forth in Paragraph 2(d) shall be extended accordingly.
2. TERMINATION OF EMPLOYMENT.
(a) DEATH. In the event of the death of the Employee, the
Option shall be exercisable only within the twelve (12) months
following the date of death, but no later than the Expiration Date and
then only (i) by the executor or administrator of the Employee's estate
or by the person or persons to whom the Employee's rights under the
<PAGE> 2
Option shall pass by the Employee's will or the laws of descent and
distribution, and (ii) if and to the extent that the Option was
exercisable at the date of the Employee's death.
(b) DISABILITY. In the event of disability of the Employee,
the Option shall be exercisable by the Employee only within the twelve
(12) months following such cessation of employment but no later than
the Expiration Date and to the extent that the Option was exercisable
at the date of such cessation of employment, and no more.
(c) RETIREMENT. In the event of retirement of the Employee,
the Option shall, if the retirement occurs after the Employee has
reached age 55 and has ten or more years of full-time service, be
exercisable by the Employee within thirty six (36) months following
such retirement, but no later than the Expiration Date and to the
extent that the Option was exercisable at the date of such retirement,
and no more.
(d) TERMINATION OF EMPLOYMENT. In the event of termination of
employment for reasons other than death, disability or retirement at
age 55 with ten or more years of full-time service, the Option shall be
exercisable only by the Employee within three (3) months following such
cessation of employment but no later than the Expiration Date and to
the extent that it was exercisable at the date of such cessation of
employment, and no more. The three month period shall be increased to
such greater period up to six months as may be necessary to permit
exercise by an Employee who is an officer under the conditions set
forth in Section 1(e).
3. EXERCISE OF OPTION. The Option may be exercised by delivering to the
Corporation at the office of the Corporate Secretary (i) a written notice,
signed by the person entitled to exercise the Option, stating the number of
shares such person then elects to purchase, (ii) payment in an amount equal to
the full purchase price of the shares then to be purchased, and (iii) in the
event the Option is exercised by any person other than the Employee, evidence
satisfactory to the Corporation that such person has the right to exercise the
Option. Payment shall be made (a) in cash, (b) in previously acquired shares of
Common Stock of the Corporation, or (c) in any combination of cash and such
shares. Shares tendered in payment of the purchase price which have been
acquired through an exercise of a stock option shall have been held at least six
months prior to exercise of the Option and shall be valued at the closing price
as reported in the consolidated transaction system for the day preceding the
date of exercise of the Option. Upon the exercise of the Option, the Corporation
shall issue and deliver to the Employee, one or more certificates for the shares
in respect of which the Option shall have been so exercised. The Employee does
not have any rights as a shareholder in respect of any shares as to which the
Option shall not have been duly exercised and no rights as a shareholder shall
exist prior to the proper exercise of such Option.
4. PROHIBITION AGAINST TRANSFER. The Option and rights granted by the
Corporation under these Terms and Conditions and the Agreement of which they
form a part are not transferable except to family members or trust, by will or
by the laws of descent and distribution, provided that the Option may not be
transferred to family members or trusts except as permitted by applicable law or
regulations. Without limiting the generality of the foregoing, the Option may
not be assigned, transferred except as aforesaid, pledged or hypothecated, shall
not be assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, or the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect.
2
<PAGE> 3
5. EMPLOYMENT BY PARENT, SUBSIDIARY OR SUCCESSOR. For the purpose of
these Terms and Conditions and the Agreement of which they form a part,
employment by a parent or subsidiary of or a successor to the Corporation shall
be considered employment by the Corporation. "Parent" and "subsidiary" as used
herein shall have the meaning of "parent" and "subsidiary corporation,"
respectively, as defined in Section 424 of the Internal Revenue Code of 1986, as
amended, or subsequent comparable statute.
6. COMMITTEE. The Committee administering the Plan shall have
authority, subject to the express provisions of the Plan as in effect from time
to time, to construe these Terms and Conditions and the Agreement of which they
form a part and the Plan, to establish, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations in the judgment of
the Committee necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in these Terms and Conditions and the Agreement of which they form
a part in the manner and to the extent it shall deem expedient to carry the Plan
into effect, and it shall be the sole and final judge of such expediency.
7. INCORPORATION OF PLAN PROVISIONS. These Terms and Conditions and the
Agreement of which they form a part are made pursuant to the Plan, the
provisions of which are hereby incorporated by reference. Capitalized terms not
otherwise defined herein have the meanings set forth in the Plan. In the event
of a conflict between the terms of these Terms and Conditions and the Agreement
of which they form a part and the Plan, the terms of the Plan shall govern.
3
<PAGE> 4
HARRIS CORPORATION
RESTORATION STOCK OPTION AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/22/97)
1. THE OPTION - TERMS AND CONDITIONS. Under and subject to the
provisions of the Corporation's Stock Incentive Plan as in effect from time to
time (the "Plan"), the Corporation has granted to the Employee a non-statutory
option (the "Option") to purchase such number of shares of Common Stock of the
Corporation as set forth and designated in writing by the Corporation to the
Employee at the designated price per share. Such grant is subject to the
following Terms and Conditions:
(a) The grant of the Option shall not limit or restrict the
Corporation's rights to terminate the Employee's employment.
(b) During the lifetime of the Employee, the Option shall be
exercisable only by the Employee, and (except when Section 2 is
applicable) only while the Employee continues as an Employee of the
Corporation.
(c) Notwithstanding any other provision of these Terms and
Conditions and the Agreement of which they form a part, the Option
shall expire no later than the date designated in writing to the
Employee by the Corporation (the "Expiration Date"), and shall not be
exercisable thereafter.
(d) The Option shall not be exercisable to any extent until
six months after the grant date, at which time the Option shall be
fully exercisable.
(e) Upon a "Change of Control" of the Corporation (as defined
in Section 11.1 of the Plan) any outstanding Option shall immediately
become fully exercisable, provided that if the Employee is an officer
of the Corporation and a stock appreciation right has been granted with
respect to a portion or all of the shares covered by these Terms and
Conditions, the Option granted hereby as to such shares may not in any
event be exercised prior to the end of six months from the grant date,
but the time set forth in Paragraph 2(d) shall be extended accordingly.
2. TERMINATION OF EMPLOYMENT.
(a) DEATH. In the event of the death of the Employee, the
Option shall be exercisable only within the twelve (12) months
following the date of death but no later than the Expiration Date, and
then only (i) by the executor or administrator of the Employee's estate
or by the person or persons to whom the Employee's rights under the
Option shall pass by the Employee's will or the laws of descent and
distribution, and (ii) if and to the extent that the Option was
exercisable at the date of the Employee's death.
1
<PAGE> 5
(b) DISABILITY. In the event of disability of the Employee,
the Option shall be exercisable by the Employee only within the twelve
(12) months following such cessation of employment but no later than
the Expiration Date and to the extent that the Option was exercisable
at the date of such cessation of employment, and no more.
(c) RETIREMENT. In the event of retirement of the Employee
subsequent to the date which is six months after the grant date, the
Option shall, if the retirement occurs after the Employee has reached
age 55 and has ten or more years of full-time service, be exercisable
by the Employee within thirty six (36) months following such
retirement, but no later than the Expiration Date and to the extent
that the Option was exercisable at the date of such retirement, and no
more.
(d) TERMINATION OF EMPLOYMENT. In the event of termination of
employment for reasons other than death, disability or retirement at
age 55 with ten or more years of full time service, the Option shall be
exercisable only by the Employee within three (3) months following such
cessation of employment but no later than the Expiration Date and to
the extent that it was exercisable at the date of such cessation of
employment, and no more. The three month period shall be increased to
such greater period up to six months as may be necessary to permit
exercise by an Employee who is an officer under the conditions set
forth in Section 1(e).
3. EXERCISE OF OPTION. The Option may be exercised by delivering to the
Corporation at the office of the Corporate Secretary (i) a written notice,
signed by the person entitled to exercise the Option, stating the number of
shares such person then elects to purchase, (ii) payment in an amount equal to
the full purchase price of the shares then to be purchased, and (iii) in the
event the Option is exercised by any person other than the Employee, evidence
satisfactory to the Corporation that such person has the right to exercise the
Option. Payment shall be made (a) in cash, (b) in previously acquired shares of
Common Stock of the Corporation, or (c) in any combination of cash and such
shares. Shares tendered in payment of the purchase price which have been
acquired through the exercise of a stock option shall have been held at least
six months prior to exercise of the Option and shall be valued at the closing
price as reported in the consolidated transaction system for the day preceding
the date of exercise of the Option. Upon the exercise of the Option, the
Corporation shall issue and deliver to the Employee, one or more certificates
for the shares in respect of which the Option shall have been so exercised. The
Employee does not have any rights as a shareholder in respect of any shares as
to which the Option shall not have been duly exercised and no rights as a
shareholder shall exist prior to the proper exercise of such Option.
4. PROHIBITION AGAINST TRANSFER. The Option and rights granted by the
Corporation under these Terms and Conditions and the Agreement of which they
form a part are not transferable except to family members or trust, by will or
by the laws of descent and distribution, provided that the Option may not be
transferred to family members or trusts except as permitted by applicable law or
regulations. Without limiting the generality of the foregoing, the Option may
not be assigned, transferred except as aforesaid, pledged or hypothecated, shall
not be assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any
2
<PAGE> 6
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.
5. EMPLOYMENT BY PARENT, SUBSIDIARY OR SUCCESSOR. For the purpose of
these Terms and Conditions and the Agreement of which they form a part,
employment by a parent or subsidiary of or a successor to the Corporation shall
be considered employment by the Corporation. "Parent" and "subsidiary" as used
herein shall have the meaning of "parent" and "subsidiary corporation,"
respectively, as defined in Section 424 of the Internal Revenue Code of 1986, as
amended, or subsequent comparable statute.
6. COMMITTEE. The Committee administering the Plan shall have
authority, subject to the express provisions of the Plan as in effect from time
to time, to construe these Terms and Conditions and the Agreement of which they
form a part and the Plan, to establish, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations in the judgement of
the Committee necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in these Terms and Conditions and the Agreement of which they form
a part in the manner and to the extent it shall deem expedient to carry the Plan
into effect, and it shall be the sole and final judge of such expediency.
7. INCORPORATION OF PLAN PROVISIONS. These Terms and Conditions and the
Agreement of which they form a part are made pursuant to the Plan, the
provisions of which are hereby incorporated by reference. Capitalized terms not
otherwise defined herein have the meanings set forth in the Plan. In the event
of a conflict between the terms of these Terms and Conditions and the Agreement
of which they form a part and the Plan, the terms of the Plan shall govern.
3
<PAGE> 7
OUTSIDE DIRECTORS
STOCK OPTION AGREEMENT
HARRIS CORPORATION
STOCK INCENTIVE PLAN
Amended as of 10/24/97
This Stock Option Agreement ("Agreement") is entered into as of the 24th day of
October, 1997 between Harris Corporation (the "Corporation"), a Delaware
corporation having its principal office in Melbourne, Florida, and name (the
"Director"), an outside director of the Corporation.
1. THE OPTION: Under and subject to the provisions of the Corporation's
Stock Incentive Plan as in effect from time to time (the "Plan"), the
Corporation hereby grants to the Director the option to purchase an aggregate of
2,000 shares of Common Stock of the Corporation at the price of [$__] per share,
subject to the following conditions:
(a) During the lifetime of the Director, this option shall be
exercisable only by the Director, and (except when Section 2
is applicable) only while the Director continues to serve as a
Director of the Corporation.
(b) Notwithstanding any other provision of this Agreement,
this option shall expire no later than ten years from the date
of this Agreement, and shall not be exercisable thereafter.
(c) The number of shares of Common Stock with respect to which
the option may be exercised from time to time is limited to
the following percentages of the aggregate number of shares
optioned hereby:
(i) After the end of one year and prior to the end of
two years from the date hereof, not more than fifty
percent;
(ii) After the end of two years and prior to the end
of three years from the date hereof, not more than
seventy-five percent;
(iii) After the end of three years from the date
hereof, one-hundred percent.
(d) Upon a "Change of Control" of the Corporation any option
which has been outstanding for more than one year shall
immediately become exercisable. For purpose of this Agreement,
a "Change of Control" is defined in Section 11 of the Plan.
2. RETIREMENT. The option may be exercised by the Director and for a
period of three (3) years following retirement, provided that only those Options
exercisable at the date of the Director's retirement may be exercised during the
period following retirement.
1
<PAGE> 8
3. DEATH. In the event of the death of the Director, the Option shall
be exercisable only within the twelve (12) months next succeeding the date of
death, and then only (i) by the executor or administrator of the Director's
estate or by the person or persons to whom the Director's rights under the
Option shall pass by the Director's will or the laws of descent and
distribution, and (ii) if and to the extent that the Director was entitled to
exercise the Option at the date of the Director's death.
4. EXERCISE OF OPTION. This option may be exercised by delivering to
the Corporation at the office of its Secretary (i) a written notice, signed by
the person entitled to exercise the option, stating the number of shares such
person then elects to purchase hereunder, (ii) payment in an amount equal to the
full purchase price of the shares then to be purchased, and (iii) in the event
the option is exercised by any person other than the Director, evidence
satisfactory to the Corporation that such person has the right to exercise the
option. Payment shall be made in cash, shares of common stock, or any
combinations thereof. Upon the due exercise of the option, the Corporation shall
issue in the name of the person exercising the option, and deliver to the
Director, one or more certificates for the shares in respect of which the option
shall have been so exercised. The Director agrees that no holder of the option
shall have any rights as a shareholder in respect of any shares as to which the
option shall not have been duly exercised and that no rights as a shareholder
shall arise in respect of any shares as to which the option shall have been duly
exercised until and except to the extent that a certificate or certificates for
such shares shall have been issued.
5. PROHIBITION AGAINST TRANSFER. The option and rights granted by the
Corporation under this Agreement are not transferable except by will or the laws
of descent and distribution. Without limiting the generality of the foregoing,
the option may not be assigned, transferred except as aforesaid, pledged or
hypothecated, shall not be assignable by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the option contrary to
the provisions hereof, or the levy of any execution, attachment or similar
process upon the option, shall be null and void and without effect.
6. ADJUSTMENTS. In case there shall be a merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure such that shares of Common Stock are changed into or become
exchangeable for a larger or smaller number of shares, thereafter the number of
shares subject to outstanding Options granted to Directors and the number of
shares subject to Options to be granted to Directors under the Plan shall be
increased or decreased, as the case may be, in direct proportion to the increase
or decrease in the number of shares of Common Stock by reason of such change in
corporate structure, provided that the number of shares shall always be a whole
number, and the purchase price per share of any outstanding Options shall, in
the case of an increase in the number of shares, be proportionately reduced, and
in the case of a decrease in the number of shares, shall be proportionately
increased.
7. COMMITTEE. The Committee administering the Plan shall have
authority, subject to the express provisions of the Plan as in effect from time
to time, to construe this Agreement.
2
<PAGE> 9
8. INCORPORATION OF PLAN PROVISIONS. This Agreement is made pursuant to
the Plan, the provisions of which are hereby incorporated by reference.
Capitalized terms not otherwise defined herein have the meanings set forth in
the Plan. In the event of a conflict between the terms of this Agreement and the
Plan, the terms of the Plan shall govern.
HARRIS CORPORATION
By: __________________________
Chairman, President and
Chief Executive Officer
3
<PAGE> 10
HARRIS CORPORATION
EXECUTIVE PERFORMANCE SHARE AWARD AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/22/97)
1. DEFINITIONS. "Executive Officer" is any person so designated by the
Board of Directors of Harris Corporation. "Corporate Officers" are all officers
of the Corporation who have not been designated Executive Officers.
2. AWARD-TERMS AND CONDITIONS. Under and subject to the provisions of
the Corporation's Stock Incentive Plan, as in effect from time to time (the
"Plan"), the Corporation has granted to the Executive a Performance Share Award
(the "Award") of such number of shares of Common Stock, $1.00 par value, of the
Corporation as set forth and designated in writing by the Corporation to the
Executive (the "Stock"). Such Award subject to the following Terms and
Conditions:
(a) For purposes of this Agreement, the "Performance Period"
shall be the Performance Period set forth and designated as such in
writing by the Corporation to the Executive.
(b) Upon the expiration of the Performance Period and
satisfaction of the applicable withholding obligations, the Corporation
shall at its option, cause such shares as to which the Executive is
entitled pursuant to Section 2(c) hereof either (i) to be issued by
delivery of a stock certificate in the name of the Executive or his
designee, and the certificate shall be released to the custody of the
Executive, or (ii) to be credited to an account for the benefit of the
Executive maintained by the Corporation's stock transfer agent or its
designee.
(c) (i) For Executive Officers, the Award shall be contingent
upon the attainment during the Performance Period of the goals exhibit
delivered to the Executive at the time of the making of the Award (the
"Exhibit"). The payout shall be determined upon the expiration of the
Performance Period in accordance with the Exhibit. The final payout
determination will be authorized by the Harris Board of Directors, or
its designee.
(ii) For Corporate Officers, the Award shall be contingent
upon the attainment during the Performance Period of the goals
specified in the approved Strategic Plan covering the Performance
Period. The percentage attainment of the Shares subject of the Award
shall be determined upon the expiration of the Performance Period based
on an assessment of actual performance compared with the Strategic Plan
and other relevant market, competitive, economic and other factors
during the Performance Period. The final pay-out determination will be
authorized by the Harris Board of Directors, or its designee.
(iii) 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
1
<PAGE> 11
final pay-out to be made to the Executive determined in accordance with
the prior provisions of this Section 2(c) shall be reduced by 1/36th
for each month between July 1 of the first fiscal year or 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 pay-out, the pro-ration pursuant to this
Section will not otherwise impact the Award (e.g., the Executive will
have full voting rights and will be entitled to receive dividend
equivalent payments and other distributions with respect to all Award
shares).
(d) Subject to Section 8 hereof, during the Performance
Period, the Executive may exercise full voting rights with respect to
all shares of Stock subject of the Award and shall be entitled to
receive dividends and other distributions paid with respect to such
shares. Upon the expiration of the Performance Period, the Executive
may exercise voting rights and shall be entitled to receive dividends
and other distributions with respect to the number of shares to which
the Executive is entitled pursuant to Section 2(c) hereof.
(e) The number of shares subject of the Award is based upon
the assumption that the Executive shall continue to perform
substantially the same duties throughout the Performance Period, and
such number of shares may be reduced or increased by the Board of
Directors or its designee without formal amendment of this Agreement to
reflect a change in duties during the Performance Period.
3. TERMINATION OF EMPLOYMENT. Other than in the event of a "change in
control" covered in paragraph 6 herein, if the Executive ceases to be an
employee of the Corporation or of one of its affiliates prior to the expiration
of the Performance Period: (i) for any reason other than death, disability or
retirement after age 55 with ten or more years full-time service, all shares of
Stock awarded to the Executive hereunder shall be forfeited; or (ii) due to (a)
death, (b) disability or (c) retirement after the Executive has reached age 55
and has ten or more years of full-time service, the Executive shall be eligible
to receive a pro-rata proportion of the shares of Stock which would have been
issued to the Executive under the Award at the end of the Performance Period,
such pro-rata proportion to be measured by a fraction of which the numerator is
the number of months of the Performance Period during which the Executive's
employment continued, and the denominator is the full number of months of the
Performance Period. For purposes of Section 3, only employment for 15 days or
more of a month shall be deemed employment for a full month.
4. TRANSFER OF EMPLOYMENT. If the Executive transfers employment from
one business unit of the Corporation or an affiliate to another business unit or
affiliate during a Performance Period, such Executive shall be eligible to
receive the number of shares of Stock determined by the Board of Directors or
the Committee of the Board of Directors administering the Plan based upon such
factors as the Board of Directors or the Committee, as the case may be, in its
sole discretion may deem appropriate.
5. PROHIBITION AGAINST TRANSFER. Until the expiration of the
Performance Period, the Award and the shares of Stock subject of the Award are
nontransferable except by will or by the
2
<PAGE> 12
laws of descent and distribution. Without limiting the generality of the
foregoing, the Award and such shares may not be sold, exchanged, assigned,
transferred, pledged, hypothecated or otherwise disposed of until the expiration
of the Performance Period, shall not be assignable by operation of law, and
shall not be subject to execution, attachment or similar process. Any attempt to
effect any of the foregoing shall be null and void and without effect.
6. CHANGE IN CONTROL. (a) Upon a "change in control" of the Corporation
as defined in Section 11.1 of the Plan, the performance objectives shall be
conclusively deemed to have been attained. The Award shall be vested immediately
prior to the occurrence of a "Change in control." The Award shall be paid to the
Executive at the end of the Performance Period, provided however, (i) in the
event of death, disability, retirement, or involuntary termination other than
for Cause, the Award shall be paid in stock as soon as practicable; (ii) in the
event of resignation or termination for Cause, the Award shall be forfeited; and
(iii) in the event of a "change in the Corporation's capital structure," at the
election of the Executive, the Award shall be paid in stock or converted and
paid in cash. The amount of the cash payment will be an amount equal to the
number of shares in subject of the Award multiplied by the highest price per
share paid in any transaction reported on the New York Stock Exchange Composite
Index: (x) during the sixty (60) day period preceding and including the date of
a "change in the Corporation's capital structure;" or (y) during the sixty (60)
day period preceding and including the date of "change in control," whichever is
higher. An Award in Stock or cash shall be paid as soon as practicable.
(b) For purposes hereof, a "change in the Corporation's
capital structure" shall be deemed to have occurred if:
(i) the Stock is no longer the only class of the
Corporation's common stock;
(ii) the Stock ceases to be, or is not readily,
tradable on an established securities market (in the United States)
within the meaning of Section 409(1)(1) of the Internal Revenue Code of
1986, as amended;
(iii) the Corporation issues warrants, convertible
debt, or any other security that is exercisable or convertible into
common stock, except for rights granted under the Corporation's Stock
Incentive Plan; or
(iv) the ratio of total debt to total capitalization
exceeds 45 percent. Total debt is the total debt for borrowed money.
Total capitalization is consolidated total assets of the Corporation
less consolidated total liabilities of the Corporation.
(c) "Cause" shall mean (1) a material breach by the Executive
of the duties and responsibilities of the Executive (other than as a
result of incapacity due to physical or mental illness) which is (x)
demonstrably willful, continued and deliberate on the employee's part,
(y) committed in bad faith or without reasonable belief that such
breach is in the best interests of the Corporation and (z) not remedied
within fifteen (15) days
3
<PAGE> 13
after receipt of written notice, from the Corporation which
specifically identifies the manner in which such breach has occurred or
(2) the Executive's conviction of, or plea of nolo contendere to, a
felony involving willful misconduct which is materially and
demonstrably injurious to the Corporation. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Corporation shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Corporation.
Cause shall not exist unless and until the Company has delivered to
Executive a copy of a revolution duly adopted by three-quarters (3/4)
of the entire Board at a meeting of the Board called and held for such
purpose (after thirty (30) days notice to Executive and an opportunity
for Executive, together with counsel, to be heard before the Board),
finding that in the good faith opinion of the Board an event set forth
in clauses (1) or (2) has occurred and specifying the particulars
thereof in detail. The Company must notify the Executive of any event
constituting Cause within ninety (90) days following the Company's
knowledge of its existence or such event shall not constitute Cause
under these Terms and Conditions.
7. MISCELLANEOUS. These Terms and Conditions and the Agreement of which
they form a part (a) shall be binding upon and inure to the benefit of any
successor of the Corporation, (b) shall be governed by the laws of the State of
Florida and any applicable laws of the United States, and (c) except as
permitted under Sections 4.1 and 13.6 of the Plan, may not be amended without
the written consent of both the Corporation and the Executive. No contract or
right of employment shall be implied by these Terms and Conditions and the
Agreement of which they form a part. If the Award is assumed or a new award is
substituted therefor in any corporate reorganization, (including, but not
limited to, any transaction of the type referred to in Section 424(a) of the
Internal Revenue Code of 1986, as amended), employment by such assuming or
substituting corporation or by a parent corporation or subsidiary thereof shall
be considered for all purposes of the Award to be employment by the Corporation.
8. SECURITIES LAW REQUIREMENTS. The Corporation shall not be required
to issue shares pursuant to the Award unless and until (a) such shares have been
duly listed upon each stock exchange on which the Corporation's Stock is then
registered; and (b) a registration statement under the Securities Act of 1933
with respect to such shares is then effective.
9. COMMITTEE. The Committee of the Board of Directors administering the
Plan shall have authority, subject to the express provisions of the Plan as in
effect from time to time, to construe these Terms and Conditions and the
Agreement of which they form a part and the Plan, to establish, amend and
rescind rules and regulations relating to the Plan, and to make all other
determinations in the judgment of the Committee necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in these Terms and Conditions and the
Agreement of which they form a part in the manner and to the extent it shall
deem expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
4
<PAGE> 14
10. ADJUSTMENTS. Non-recurring losses or charges which are separately
identified and quantified in the Corporation's audited financial statements and
notes thereto including, but not limited to, extraordinary items, changes in tax
laws, changes in generally accepted accounting principles, impact of
discontinued operations, restructuring charges, restatement of prior period
financial results, shall be excluded from the calculation of performance results
for purposes of the Plan. However, the Committee can choose to include any or
all such non-recurring items as long as inclusion of each such item causes the
Award to be reduced,
11. INCORPORATION OF PLAN PROVISIONS. These Terms and Conditions and
the Agreement of which they form a part are made pursuant to the Plan and are
subject to all of the provisions of the Plan as if the same were fully set forth
herein. Capitalized terms not otherwise defined herein shall have the meanings
set forth for such terms in the Plan. In the event of a conflict between the
terms of these Terms and Conditions and the Agreement of which they form a part
and the Plan, the terms of the Plan shall govern.
5
<PAGE> 15
HARRIS CORPORATION
PERFORMANCE SHARE AWARD AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/22/97)
1. AWARD - TERMS AND CONDITIONS. Under and subject to the provisions of
the Corporation's Stock Incentive Plan, as in effect from time to time (the
"Plan"), the Corporation has granted to the Employee a Performance Share Award
(the "Award") of such number of shares of Common Stock, $1.00 par value, of the
Corporation as set forth and designated in writing by the Corporation to the
Employee (the "Stock"). Such Award is subject to the following Terms and
Conditions:
(a) For purposes of this Agreement, the "Performance Period"
shall be the performance period set forth and designated as such in
writing by the Corporation to the Employee.
(b) Upon the expiration of the Performance Period and
satisfaction of applicable withholding obligations, the Corporation
shall at its option, cause such shares as to which the Employee is
entitled pursuant to Section 1(c) hereof either (i) to be issued by
delivery of a stock certificate in the name of the Employee or his
designee, and the certificate shall be released to the custody of the
Employee, or (ii) to be credited to an account for the benefit of the
Employee maintained by the Corporation's stock transfer agent or its
designee.
(c) The Award shall be contingent upon the attainment during
the Performance Period of the goals specified in the approved Strategic
Plan covering the Performance Period. The percentage attainment of the
Shares subject of the Award shall be determined upon the expiration of
the Performance Period based upon an assessment of actual performance
compared with the Strategic Plan and other relevant market,
competitive, economic and other factors during the Performance Period.
The final pay-out determination will be authorized by the Harris Board
of Directors, or its designee. 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
pay-out 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 pay-out, the pro-ration pursuant to this Section
will not otherwise impact the Award (e.g., the Employee will have full
voting rights and will be entitled to receive dividend equivalent
payments and other distributions with respect to all Award shares).
(d) Subject to Section 7 hereof, during the Performance
Period, the Employee may exercise full voting rights with respect to
all shares of Stock subject of the Award and shall be entitled to
receive dividends and other distributions paid with respect to such
1
<PAGE> 16
shares. Upon the expiration of the Performance Period, 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 to Section 1(c) hereof.
(e) The number of shares subject of 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 shares may be reduced or increased by the Board of
Directors or its designee without formal amendment of this Agreement to
reflect a change in duties during the Performance Period.
2. TERMINATION OF EMPLOYMENT. Other than in the event of a "change in
control" covered in paragraph 5 herein, if the Employee ceases to be an employee
of the Corporation or of one of its affiliates prior to the expiration of the
Performance Period: (i) for any reason other than death, disability or
retirement after age 55 with ten or more years full-time service, all shares of
Stock awarded to the Employee hereunder shall be forfeited; or (ii) due to (a)
death, (b) disability or (c) retirement after the Employee has reached age 55
and has ten or more years of full-time service, the Employee shall be eligible
to receive a pro-rata proportion of the shares of Stock which would have been
issued to the Employee under the Award at the end of the Performance Period,
such pro-rata proportion to be measured by a fraction of which the numerator is
the number of months of the Performance Period during which the Employee's
employment continued, and the denominator is the full number of months of the
Performance Period. For purposes of Section 2, only employment for 15 days or
more of a month shall be deemed employment for a full month.
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, such Employee shall be eligible to
receive the number of shares of Stock determined by the Board of Directors or
the Committee of the Board of Directors administering the Plan based upon such
factors as the Board of Directors or the Committee, as the case may be, in its
sole discretion may deem appropriate.
4. PROHIBITION AGAINST TRANSFER. Until the expiration of the
Performance Period, the Award and the shares of Stock subject of the Award are
nontransferable except by will or by the laws of descent and distribution.
Without limiting the generality of the foregoing, the Award and such shares may
not be sold, exchanged, assigned, transferred, pledged, hypothecated or
otherwise disposed of until the expiration of the Performance Period, shall not
be assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any attempt to effect any of the foregoing shall
be null and void and without effect.
5. CHANGE IN CONTROL. (a) Upon a "change in control" of the Corporation
as defined in Section 11.1 of the Plan, the performance objectives shall be
conclusively deemed to have been attained. The Award shall be vested immediately
prior to the occurrence of a "change in control." The Award shall be paid to the
Employee at the end of the Performance Period, provided however: (i) in the
event of death, disability, retirement, or involuntary termination other than
for Cause, the Award shall be paid in Stock as soon as practicable; (ii) in the
event of resignation or
2
<PAGE> 17
termination for cause, the Award shall be forfeited; and (iii) in the event of a
"change in the Corporation's capital structure," at the election of the
Employee, the Award shall be paid in stock or converted and paid in cash. The
amount of the cash payment will be an amount equal to the number of shares
subject of the Award multiplied by the highest price per share paid in any
transaction reported on the New York Stock Exchange Composite Index: (x) during
the sixty (60) day period preceding and including the date of a "change in the
Corporation's capital structure;" or (y) during the sixty (60) day period
preceding and including the date of "change in control," whichever is higher. An
Award in Stock or cash shall be paid as soon as practicable.
(b) For purposes hereof, a "change in the Corporation's
capital structure" shall be deemed to have occurred if:
(i) the Stock is no longer the only class of the
Corporation's common stock;
(ii) the Stock ceases to be, or is not readily,
tradable on an established securities market (in the United
States) within the meaning of Section 409 (l)(1) of the
Internal Revenue Code of 1986, as amended;
(iii) the Corporation issues warrants, convertible
debt, or any other security that is exercisable or convertible
into common stock, except for rights granted under the
Corporation's Stock Incentive Plan; or
(iv) the ratio of total debt to total capitalization
exceeds 45 percent. Total debt is the total debt for borrowed
money. Total capitalization is consolidated total assets of
the Corporation less consolidated total liabilities of the
Corporation.
(c) "Cause" shall mean (1) a material breach by the employee
of the duties and responsibilities of the employee (other than as a
result of incapacity due to physical or mental illness) which is (x)
demonstrably willful, continued and deliberate on the employee's part,
(y) committed in bad faith or without reasonable belief that such
breach is in the best interests of the Corporation and (z) not remedied
within fifteen (15) days after receipt of written notice from the
Corporation which specifically identifies the manner in which such
breach has occurred or (2) the employee's conviction of, or plea of
nolo contendere to, a felony involving willful misconduct which is
materially and demonstrably injurious to the Corporation.
6. MISCELLANEOUS. These Terms and Conditions and the Agreement of which
they form a part (a) shall be binding upon and inure to the benefit of any
successor of the Corporation, (b) shall be governed by the laws of the State of
Florida and any applicable laws of the United States, and (c) except as
permitted under Sections 4.1 and 13.6 of the Plan, may not be amended without
the written consent of both the Corporation and the Employee. No contract or
right of employment shall be implied by these Terms and Conditions and the
Agreement of which they form a part. If the Award is assumed or a new award is
substituted therefor in any corporate reorganization (including, but not limited
to, any transaction of the type referred to in Section
3
<PAGE> 18
424(a) of the Internal Revenue Code of 1986, as amended), employment by such
assuming or substituting corporation or by a parent corporation or subsidiary
thereof shall be considered for all purposes of the Award to be employment by
the Corporation.
7. SECURITIES LAW REQUIREMENTS. The Corporation shall not be required
to issue shares pursuant to the Award unless and until (a) such shares have been
duly listed upon each stock exchange on which the Corporation's Stock is then
registered; and (b) a registration statement under the Securities Act of 1933
with respect to such shares is then effective.
8. COMMITTEE. The Committee of the Board of Directors administering
the Plan shall have authority, subject to the express provisions of the Plan as
in effect from time to time, to construe these Terms and Conditions and the
Agreement of which they form a part and the Plan, to establish, amend and
rescind rules and regulations relating to the Plan, and to make all other
determinations in the judgment of the Committee necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in these Terms and Conditions and the
Agreement of which they form a part in the manner and to the extent it shall
deem expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
9. ADJUSTMENTS. Non-recurring losses or charges which are separately
identified and quantified in the Corporation's audited financial statements and
notes thereto including, but not limited to, extraordinary items, changes in tax
laws, changes in generally accepted accounting principles, impact of
discontinued operations, restructuring charges, restatement of prior period
financial results, shall be excluded from the calculation of performance results
for purposes of the Plan. However, the Committee can choose to include any or
all such non-recurring items as long as inclusion of each such item causes the
Award to be reduced.
10. INCORPORATION OF PLAN PROVISIONS. These Terms and Conditions and
the Agreement of which they form a part are made pursuant to the Plan and are
subject to all of the provisions of the Plan as if the same were fully set forth
herein. Capitalized terms not otherwise defined herein shall have the meanings
set forth for such terms in the Plan. In the event of a conflict between the
terms of these Terms and Conditions and the Agreement of which they form a part
and the Plan, the terms of the Plan shall govern.
4
<PAGE> 1
EXHIBIT 11 - COMPUTATION OF PER SHARE EARNINGS
----------
<TABLE>
<CAPTION>
Quarter Ended
--------------------------
October 3, September 30,
1997 1996
---------- -----------
(In millions except
per share amounts)
<S> <C> <C>
Primary:
Average shares outstanding 79.7 77.9
====== ======
Net income $ 43.6 $ 38.1
====== ======
Net income per share - primary $ .55 $ .49
====== ======
Fully diluted:
Total primary average shares outstanding 79.7 77.9
Dilutive stock options and employee stock
purchase plan shares - based on treasury
stock method using the greater of quarter-
end market price or average market price .4 .3
------ ------
Average fully diluted shares outstanding 80.1 78.2
====== ======
Net income per share - fully diluted $ .54 $ .49
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-03-1998
<PERIOD-START> JUN-28-1997
<PERIOD-END> OCT-03-1997
<CASH> 66,400
<SECURITIES> 118,400
<RECEIVABLES> 796,900
<ALLOWANCES> 27,100
<INVENTORY> 629,100
<CURRENT-ASSETS> 2,029,100
<PP&E> 2,198,100
<DEPRECIATION> 1,294,500
<TOTAL-ASSETS> 3,653,400
<CURRENT-LIABILITIES> 1,265,500
<BONDS> 686,200
79,800
0
<COMMON> 0
<OTHER-SE> 1,537,900
<TOTAL-LIABILITY-AND-EQUITY> 3,653,400
<SALES> 979,600
<TOTAL-REVENUES> 989,400
<CGS> 655,800
<TOTAL-COSTS> 250,900
<OTHER-EXPENSES> (300)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,900
<INCOME-PRETAX> 66,100
<INCOME-TAX> 22,400
<INCOME-CONTINUING> 43,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,600
<EPS-PRIMARY> .55
<EPS-DILUTED> .54
</TABLE>
