Performance Unit Award Agreement



 






EXHIBIT 10(i)




HARRIS CORPORATION

2005 EQUITY INCENTIVE PLAN

PERFORMANCE UNIT AWARD AGREEMENT

TERMS AND CONDITIONS

(AS OF 10/28/05)




     1. Performance Unit Award – Terms and Conditions. Under and subject to the provisions
of the Harris Corporation 2005 Equity Incentive Plan (as amended from time to time the “Plan”),
Harris Corporation (the “Corporation”) has granted to the employee receiving these Terms and
Conditions (the “Employee”) a Performance Unit Award (the “Award”) of such number of Performance
Units as set forth and designated in writing by the Corporation to the Employee. At all times, each
Performance Unit shall be equal in value to one share of common stock, $1.00 par value, of the
Corporation (a “Share”). Such Award is subject to the following Terms and Conditions (which
together with the Corporation’s letter to the Employee specifying the number of Performance Units
subject to the Award, the Performance Period and the form of payment of the Award (the “Award
Letter”) and the Statement of Performance Goals (as defined below) related thereto is referred to
as the “Agreement”).



          (a) Performance Period. For purposes of the Agreement, the “Performance Period” shall
be the Performance Period set forth and designated as such in the Award Letter.



          (b) Payout of Award. Provided the Award has not previously been forfeited, within two
and one-half months of the expiration of the Performance Period and upon the satisfaction of the
applicable withholding obligations (i) if the Award Letter specifies that the Award is to be paid
in Shares, the Corporation shall issue to the Employee the Shares to which the Employee is entitled
pursuant to Section 1(c) hereof; or (ii) if the Award Letter specifies that the Award is to be
paid in cash, the Corporation shall pay to the Employee a single lump sum cash payment equal to the
Fair Market Value (as defined in the Plan) of the Shares underlying the Award to which the Employee
is entitled pursuant to Section 1(c) hereof. If the Award is to be paid in Shares, upon payout the
Corporation shall at its option, cause such Shares as to which the Employee is entitled pursuant
hereto (i) to be released without restriction on transfer by delivery of a stock certificate in
the name of the Employee or his or her designee, and the certificate shall be released to the
custody of the Employee, or (ii) to be credited without restriction on transfer to a book-entry
account for the benefit of the Employee or his or her designee maintained by the Corporation’s
stock transfer agent or its designee.



          (c) Satisfaction of Performance Objectives.



               (i) The payout of the Award shall be contingent upon the attainment during the Performance
Period of the performance objectives set forth in the Statement of Performance Goals delivered to
the Employee at the time of the making of the Award (the “Statement of Performance Goals”). The
payout of the Award shall be determined upon the expiration of the Performance Period in accordance
with the Statement of Performance Goals. The final payout determination of the Award will be
authorized by the Harris Board of Directors, the Board Committee, or its designee. Performance
Units will be forfeited if they are not earned at the end of the Performance Period and, except as
otherwise provided herein, if the Employee



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ceases to be employed by the Corporation at any time prior to the termination of the
Performance Period.



               (ii) 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 payout 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 payout, the pro-ration pursuant to this Section
will not otherwise impact the Award.



          (d) Rights During the Performance Period. During the Performance Period, the Employee
shall not have any rights as a shareholder with respect to the Shares underlying the Performance
Units. During the Performance Period, the Employee shall be entitled to receive dividend
equivalents in cash paid with respect to the number of Shares underlying the Performance Units.
Such dividend equivalents will be paid to the Employee as soon as is practicable following payment
of the dividend to shareholders of the Shares, but no later than the end of the calendar year in
which the corresponding actual cash dividends are paid to shareholders of the Shares. If any such
dividends or distributions are paid in securities of the Corporation (including Shares), such
dividend equivalents relating to the Performance Units shall be subject to the same restrictions
and conditions as the Performance Units in respect of which such dividend or distribution was made
and shall be paid to the Employee in the manner and at the time the Performance Units are paid in
accordance with Section 1(b). If the number of outstanding Shares is changed as a result of a
stock dividend, stock split or the like, without additional consideration to the Corporation, the
number of Performance Units subject to this Award shall be adjusted to correspond to the change in
the Corporation’s outstanding Shares. If the Award Letter specifies that the Performance Units are
to be paid in Shares, upon the expiration of the Performance Period and payout of the Award, 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) Adjustment to Award. The number of Performance Units subject to 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 Performance Units may be reduced or increased
by the Board of Directors or the Board Committee or its designee without formal amendment of the
Agreement to reflect a change in duties during the Performance Period.



     2. Forfeiture; Termination of Employment. Other than in the event of a Change of
Control covered in Section 5 herein or as otherwise provided in the Award Letter, if the Employee
ceases to be an employee of the Corporation or of one of its Subsidiaries or Affiliates prior to
the expiration of the Performance Period: (i) for any reason other than (a) death, (b)
disability, (c) retirement after age 55 with ten or more years full-time service, or (d)
involuntary termination of employment of the Employee by the Corporation other than for Misconduct,
all Performance Units awarded to the Employee hereunder shall be automatically forfeited upon such
termination of employment; or (ii) due to (a) death, (b) disability, (c) retirement after the
Employee has reached age 55 and has ten or more years of full-time



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service, or (d) involuntary termination of employment by the Corporation other than for
Misconduct, the Employee shall be eligible to receive a pro-rata portion of the payout of the
Performance Units which would have been made to the Employee under the Award at the end of the
Performance Period under Section 1(b) determined in accordance with the provisions of Section 1(c)
hereof, such pro-rata portion to be measured by a fraction, of which the numerator is the number of
full 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 this Section
2, only employment for 15 days or more of a month shall be deemed employment for a full month.
Termination of employment of the Employee by the Corporation for deliberate, willful or gross
misconduct, as determined by the Corporation, shall constitute “Misconduct.” The pro-rata portion
of the Performance Units required to be paid under this Section 2 shall be paid to the Employee, in
Shares or in cash as specified in the Award Letter, within two and one-half months of the
expiration of the Performance Period.



     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, the Employee shall be eligible to receive the number of Performance Units determined by the
Board of Directors or the Board Committee based upon such factors as the Board of Directors or the
Board Committee, as the case may be, in its sole discretion may deem appropriate.



     4. Prohibition Against Transfer. Until the expiration of the Performance Period and
payout of the Award pursuant to Section 1(b), the Award, the Performance Units subject to the
Award, any interest in Shares (in the case of a payout to be made in Shares as specified in the
Award Letter) or cash to be paid, as applicable, related thereto, and the rights granted under
these Terms and Conditions and the Agreement are nontransferable except to family members or trust
by will or by the laws of descent and distribution, provided that the Award, the Performance Units
subject to the Award, and, any interest in Shares or cash to be paid, as applicable, related
thereto, may not be so transferred to family members or trust except as permitted by applicable law
or regulations. Without limiting the generality of the foregoing except as aforesaid, until the
expiration of the Performance Period and payout of the award pursuant to Section 1(b), the Award,
the Performance Units and any interest in Shares (in the case of a payout to be made in Shares as
specified in the Award Letter) or cash to be paid, as applicable, related thereto, may not be sold,
exchanged, assigned, transferred, pledged, hypothecated, encumbered 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, change, alienation or similar process. Any attempt to
effect any of the foregoing shall be null and void and without effect.



     5. Change of Control. (a) Upon a Change of 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 upon the occurrence of such a Change of Control.
The Award shall be paid to the Employee at the end of the Performance Period; provided,
however, that, following such Change of Control: (i) in the event of death, disability,
retirement, or involuntary termination other than for Cause, the Award shall be paid in Shares or
in a single cash lump sum as specified in the Award Letter 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,” if the Award Letter specifies that the Award



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is to be paid in Shares, at the election of the Employee the Award shall be paid in Shares or
converted and paid in cash otherwise such Award shall be paid in cash. The amount of any cash
payment made under this Section 5 will be an amount equal to the number of shares subject to the
Award multiplied by the highest price per share paid in any transaction reported on the New York
Stock Exchange Composite Index: (A) during the sixty (60) day period preceding and including the
date of a “change in the Corporation’s capital structure;” or (B) during the sixty (60) day period
preceding and including the date of the Change of Control. An Award in Shares or cash shall be
paid as soon as practicable following a “change in the Corporation’s capital structure.”



          (b) For purposes hereof, a “change in the Corporation’s capital structure” shall be deemed to
have occurred if:



               (i) the Shares are no longer the only class of the Corporation’s common stock;



               (ii) the Shares cease to be, or are 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 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 (i) 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 (A) demonstrably willful, continued and deliberate on the Employee’s part, (B)
committed in bad faith or without reasonable belief that such breach is in the best interests of
the Corporation and (C) 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 (ii)
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. 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 Employee in good faith and in the best interests of the Corporation. Cause shall
not exist unless and until the Corporation has delivered to the Employee a copy of a resolution
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 the Employee and an opportunity for the
Employee, 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 (i) or (ii) has occurred and specifying the
particulars thereof in detail. The Corporation must notify the Employee of any event constituting
Cause within ninety (90) days following the Corporation’s



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knowledge of its existence or such event shall not constitute Cause under these Terms and
Conditions.



     6. Miscellaneous. These Terms and Conditions and the other portions of the Agreement
(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 Delaware and any applicable laws of the United States, and
(c) except as permitted under Sections 3.2, 12 and 13.6 of the Plan, may not be amended without the
written consent of both the Corporation and the Employee. The Agreement shall not in any way
interfere with or limit the rights of the Corporation to terminate the Employee’s employment or
service with the Corporation at any time and 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.



     7. Securities Law Requirements. If the Award Letter specifies that the Performance
Units are to be paid in Shares, the Corporation shall not be required to issue Shares pursuant to
the Award, to the extent required, 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. Board Committee Administration. The Board Committee 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 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 Board Committee
necessary or desirable for the administration of the Plan. The Board Committee may correct any
defect or supply any omission or reconcile any inconsistency in these Terms and Conditions and the
Agreement 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 Board 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. Impact of Restatement of Financial Statements upon Awards. If any of the
Corporation’s financial statements are restated, as a result of errors, omissions, or fraud, the
Board Committee may (in its sole discretion, but acting in good faith) direct that the Corporation
recover all or a portion of any Award or payment made to the Employee with respect to any fiscal
year of the Corporation the financial results of which are negatively affected by such restatement.
The amount to be recovered shall be the amount by which the affected Award or payment exceeded the
amount that would have been payable had the financial statements been



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initially filed as restated, or any greater or lesser amount (including, but not limited to,
the entire Award) that the Board Committee shall determine. The Board Committee shall determine
whether the Corporation shall effect any such recovery (i) by seeking repayment from the Employee,
(ii) by reducing (subject to applicable law and the terms and conditions of the applicable plan,
program or arrangement) the amount that would otherwise be payable to the Employee under any
compensatory plan, program or arrangement maintained by the Corporation, a Subsidiary or any of its
Affiliates, (iii) by withholding payment of future increases in compensation (including the payment
of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been
made in accordance with the Corporation’s otherwise applicable compensation practices, or (iv) by
any combination of the foregoing or otherwise.



     11. Incorporation of Plan Provisions. These Terms and Conditions and the other
portions of the Agreement are made pursuant to the Plan, the provisions of which are hereby
incorporated by reference. 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 and the Plan, the terms of the Plan shall govern.



     12. Compliance with Section 409A of the Code. (a) To the extent applicable, it is
intended that the Agreement and the Plan comply with the provisions of Section 409A of the Code, so
that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the
Employee. The Agreement and the Plan shall be administered in a manner consistent with this
intent, and any provision that would cause the Agreement or the Plan to fail to satisfy Section
409A of the Code shall have no force and effect until amended to comply with Section 409A of the
Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and
may be made by the Corporation without the consent of the Employee).



          (b) To the extent the Employee has a right to receive payment pursuant to Sections 1, 2 or 5,
the payment is subject to Section 409A, and the event triggering the right to payment does not
constitute a permitted distribution event under Section 409A(a)(2) of the Code, then
notwithstanding anything to the contrary in Sections 1, 2 or 5 above, issuance of the payment of
the Award will be made, to the extent necessary to comply with Section 409A of the Code, to the
Employee on the earlier of (a) the Employee’s “separation from service” with the Corporation
(determined in accordance with Section 409A); provided, however, that if the
Employee is a “specified employee” (within the meaning of Section 409A), the Employee’s date of
payment of the Award shall be the date that is six months after the date of the Employee’s
separation of service with the Corporation; (b) the date of the end of the Performance Period; (c)
the Employee’s death; or (d) the Employee’s disability (within the meaning of Section 409A(a)(2)(C)
of the Code).



          (c) Reference to Section 409A of the Code will also include any proposed, temporary or final
regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service.




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