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| PROXY SUMMARY | | | | | | | |
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| Our Nominees as a Group | | | | | 7 | | |
| Voting Standard for Directors | | | | | 8 | | |
| Criteria for Board Membership | | | | | 8 | | |
| Nominee Biographies | | | | | 9 | | |
| Director Nomination Process | | | | | 16 | | |
| Board Refreshment Policy | | | | | 17 | | |
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| Our Board’s Role and Responsibilities | | | | | 18 | | |
| Stock Ownership Guidelines for Non-Employee Directors | | | | | 22 | | |
| Board Leadership Structure | | | | | 22 | | |
| Board Committees | | | | | 25 | | |
| Other Governance Matters | | | | | 28 | | |
| Director Compensation and Benefits | | | | | 29 | | |
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| Background on our Board Size Provisions | | | | | 32 | | |
| Why We Propose to Increase the Maximum Number of Board Seats | | | | | 32 | | |
| What Happens if Shareholders Approve this Proposal | | | | | 33 | | |
| PROPOSAL 3:TO APPROVE, IN AN ADVISORY VOTE, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS | | | | | | ||
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| Executive Summary | | | | 36 | | | |
| Our Executive Compensation Philosophy and Practices | | | | | 40 | | |
| Overview of Our Main Executive Compensation Elements | | | | 44 | | | |
| Executive Compensation Decisions for Fiscal 2021 | | | | 48 | | | |
| Employment Agreements | | | | 54 | | | |
| Other Compensation Elements | | | | 57 | | | |
| Other Compensation Policies | | | | 60 | | | |
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CEO PAY RATIO | | | | | | |||
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| Fees Paid to Independent Registered Public Accounting Firm | | | | 94 | | | |
| Pre-Approval of Audit and Non-Audit Services | | | | 94 | | | |
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| Shares Owned By Directors, Nominees and Executive Officers | | | | 95 | | | |
| Principal Shareholders | | | | 96 | | | |
| Delinquent Section 16(a) Reports | | | | 96 | | | |
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| VOTING MATTERS | | | For more information | | | Board’s recommendation | | |||
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| Proposal 1 | | | Elect our Board’s | | | Page 7 | | | FOR each nominee | |
| Proposal 2 | | | Amend our Restated Certificate of Incorporation to increase the maximum number of Board seats | | | Page 32 | | | FOR the proposal | |
| Proposal 3 | | | Approve, in an advisory vote, the compensation of our named executive officers as disclosed in this proxy statement | | | Page | | | FOR the proposal | |
| Proposal | | | Ratify appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year | | | Page | | | FOR the proposal | |
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PROXY SUMMARY BOARD AND GOVERNANCE HIGHLIGHTS | |
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| Director nominee | | | Age | | | Director Since* | | | Principal Occupation/Experience | | | Audit | | | Compensation | | | Finance | | | Innovation and Cyber | | | Nominating and Governance | | |||
| Sallie B. Bailey | | | 62 | | | 2018 | | | Former EVP and CFO of Louisiana-Pacific Corporation | | | 2 | | | | | | | | | | | | | | | ||
| William M. Brown | | | 59 | | | 2011 | | | Executive Chair of L3Harris | | | 2 | | | | | | | | | | | | | | | | |
| Peter W. Chiarelli | | | 71 | | | 2012 | | | General, U.S. Army (Retired) | | | — | | | | | | | | | | | | | | | ||
| Thomas A. Corcoran | | | 77 | | | 1997 | | | President of Corcoran Enterprises, LLC; former Senior Advisor for The Carlyle Group | | | 1 | | | | | | | | | | | | | | | ||
| Thomas A. Dattilo | | | 70 | | | 2001 | | | Advisor for private investment firms; former Chairman and CEO of Cooper Tire & Rubber Company | | | 1 | | | | | | | | | | | | | | | ||
| Roger B. Fradin | | | 68 | | | 2016 | | | Consultant for The Carlyle Group; former Vice Chairman of Honeywell International Inc. | | | 3 | | | | | | | | | | | | | | | ||
| Harry B. Harris, Jr. | | | 65 | | | 2021 | | | Admiral, U.S. Navy (Retired); former U.S. Ambassador to the Republic of Korea | | | — | | | | | | | | | | | | | | | | |
| Lewis Hay III | | | 66 | | | 2002 | | | Operating Advisor for Clayton Dubilier & Rice, LLC; former Chairman and CEO of NextEra Energy, Inc. | | | 1 | | | | | | | | | | | | | | | ||
| Lewis Kramer | | | 74 | | | 2009 | | | Former Global Client Service Partner and National Director of Audit Services of Ernst & Young LLP | | | 1 | | | | | | | | | | | | | | | ||
| Christopher E. Kubasik | | | 60 | | | 2018 | | | Vice Chair and CEO of L3Harris | | | — | | | | | | | | | | | | | | | | |
| Rita S. Lane | | | 59 | | | 2018 | | | Former VP, Operations of Apple Inc. | | | 3 | | | | | | | | | | | | | | | ||
| Robert B. Millard Lead Independent Director | | | 71 | | | 1997 | | | Retired Chairman of Massachusetts Institute of Technology Corporation | | | 1 | | | | | | | | | | | | | | | ||
| Lloyd W. Newton | | | 79 | | | 2012 | | | General, U.S. Air Force (Retired); former EVP of Pratt & Whitney Military Engines | | | — | | | | | | | | | | | | | | |
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2 L3HARRIS2022 PROXY STATEMENT
Nominee Skills and Attributes Our Board believes that these The Nominee Skills and Background Matrix below does not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not mean that a director does not possess it. In addition, the absence of a particular knowledge, skill, experience or attribute with respect to any of our directors does not mean the director in question is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill and experience listed below may vary among the members of the Board. In addition, as shown in the Tenure of Director Nominees section below, our nominees represent a healthy balance of shorter and longer tenures. Additional information about each nominee’s background, skills and experience is set forth in each nominee’s biography beginning on page 9. Nominee Skills and Background Matrix
Tenure of Director Nominees As shown below, our nominees represent a healthy balance of shorter and longer Consideration of Diversity Our Board values diversity as a factor in selecting nominees to serve on our Board. Although we have no specific policy on diversity, our Nominating and Governance Committee considers our Board membership criteria in selecting a pool of nominees, including diversity of viewpoints, background, experience and personal characteristics, including age, gender and racial and ethnic minority status. However, nomination of a candidate is not based solely on these factors. This process has been successful as we do have a very diverse board. Four of our eleven (36%) independent directors are diverse. L3HARRIS 2022 PROXY STATEMENT 3
Key Governance Practices Below are some key practices and policies that demonstrate our Board’s commitment to responsible and effective corporate governance to enhance the creation of sustainable, long-term shareholder value and to be accountable and responsive to our shareholders: BOARD STRUCTURE AND POLICIES > Independent directors make up approximately 85% of the Board and 100% of each committee. > All directors elected annually; majority voting standard in uncontested elections. > Lead Independent Director broadly empowered with defined responsibilities and authority. > Independent directors regularly hold executive sessions led by Lead Independent Director. > Our Board and all standing committees conduct annual self-evaluations for continuous improvement in performance and effectiveness. > Our Board membership criteria take into account diversity of viewpoints, background, experience and personal characteristics, including age, gender and racial and ethnic > Policy requiring directors to retire at age 75 (exception for three years for directors designated pursuant to Merger-related provisions of our governing documents). >
Meaningful stock ownership guidelines for non-employee directors. > Prohibition on short sales, hedging, other derivative transactions and pledging of our common stock by directors and executive officers. > Robust proxy access By-Law provision allowing eligible shareholders to nominate and include in our proxy materials candidates for election to our Board. > Shareholders holding at least 25% of our common stock can call a special meeting. > Annual “say-on-pay” advisory vote. > Engagement with large shareholders on key aspects of our executive compensation program and on environmental, social and governance matters. 4 L3HARRIS2022 PROXY STATEMENT
Key Fiscal 2021 Financial Results * Strategic Achievements Our > Growing revenue through a well-aligned business portfolio and investments in innovation; > Executing seamless integration of L3 and Harris, including achieving in excess of $600 million in gross cost synergies from the Merger by the end of 2021 which exceeded the original $500 million target; > Driving flawless execution and margin expansion through our e3 (excellence everywhere every day) operational excellence program; > Reshaping our portfolio to focus on high margin, high growth businesses; and > Maximizing cash flow with shareholder-friendly capital deployment. EXECUTIVE COMPENSATION HIGHLIGHTS Our basic executive compensation philosophy is as follows:
L3HARRIS2022 PROXY STATEMENT 5
Target Pay Mix for Fiscal 2021 Consistent with our goals of aligning pay with performance and with the interests of our shareholders, a high percentage of fiscal For the calculations CEO Overview of Compensation Decisions for Fiscal
6 L3HARRIS2022 PROXY STATEMENT ELECTION OF DIRECTORS
Our entire Board is elected annually by our shareholders. Our Restated Certificate of Incorporation provides that our Board shall consist of not less than 8 or more than 13 directors, the exact number of directors to be determined from time to time by our Board. Each director holds office until the Annual Meeting of Shareholders for the year in which that director’s term expires, and until that director’s successor is elected and qualified, except in the case of death, resignation, retirement or removal from office. Vacancies may be filled by a majority of the remaining directors. Our Board currently consists of the following > Christopher E. Kubasik, Vice Chair and Chief Executive Officer; > William M. Brown, Executive Chair; and > Based on the recommendation of our Nominating and Governance Committee, our Board has nominated the No nominee is related to any other nominee or to any executive officer of L3Harris or its subsidiaries, by blood, marriage or adoption. Below we provide information on each nominee’s experience, qualifications, attributes and skills that our Board has determined support the nominee’s nomination and service as a L3Harris director. Data with respect to the number of shares of our common stock beneficially owned by each of our directors as of February L3HARRIS 2022 PROXY STATEMENT 7
Under our By-Laws and Corporate Governance Guidelines, the voting standard for the election of our directors is a majority voting standard in uncontested elections and a plurality voting standard in contested elections. The election of directors at the To be elected under a majority voting standard, a director nominee must receive more “For” votes than “Against” votes. Abstentions and any broker non-votes will have no effect on the election of directors because only votes cast “For” or “Against” a nominee will be counted. Any incumbent director nominee who does not receive more “For” votes than “Against” votes must promptly offer to tender If our Board does not accept the resignation, the nominee will continue to serve as a director until the next Annual Meeting of Shareholders and until Proxies will be voted for the election of each of General Criteria Under our Corporate Governance Guidelines, our Board selects director nominees based on the recommendation of our Nominating and Governance Committee and the following criteria: > Demonstrated ability and sound judgment; > Personal qualities and characteristics, accomplishments and reputation in the business community or in the individual’s profession, professional integrity, educational background, business experience and related experience; > Willingness to objectively appraise management performance; > Current knowledge and contacts in the markets in which we do business and in our industry or other relevant industries, giving due consideration to potential conflicts of interest; > Ability and willingness to commit adequate time to Board and committee matters, including attendance at Board, committee and annual shareholder meetings; and the number of other boards of which the individual nominee is a member; > Diversity of viewpoints, background, experience and personal characteristics, including age, gender and racial and ethnic minority status; and > Compatibility of the individual’s experience, qualifications, attributes or skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of L3Harris and the interests of our shareholders. 8 L3HARRIS2022 PROXY STATEMENT
Incumbent Nominees Our Nominating and Governance Committee’s process for considering, reviewing and evaluating incumbent directors as potential nominees for re-election typically is as follows: > Prior to each annual meeting of shareholders, each current director discusses the individual’s participation on our Board and its committees and other relevant matters with our Board Chair and Lead Independent Director. > Each current director also is requested to discuss any concerns or issues regarding continued membership on our Board with the Chair of our Nominating and Governance Committee. > In addition, our Nominating and Governance Committee reviews each current director’s experience, qualifications, attributes, skills, tenure, contributions, other directorships, meeting attendance record, any changes in employment status and other information it deems helpful in considering and evaluating the director for nomination. Our Nominating and Governance Committee followed this process with respect to nominees for election at the Consideration of Diversity Our Board values diversity as a factor in selecting nominees to serve on our Board. Although we have This process has been successful as we do have a very diverse board.Each of the nominees has consented to stand for election. If any nominee becomes unavailable for election, which we do not currently anticipate, proxies instructing a vote for that nominee may be voted for a substitute nominee selected by our Board or, alternatively, our Board may determine to leave the vacancy temporarily unfilled or reduce the number of directors in accordance with our By-Laws. L3HARRIS 2022 PROXY STATEMENT 9
NOMINEES FOR ELECTION
Position, Principal Occupation and Professional Experience > > > > >
Other Current/Recent Public Company Directorships > NVR, Inc. (since 2020) > The AZEK Company Inc. (since 2020) > General Cable Corporation (2013-2018)
Position, Principal Occupation and Professional Experience > > > > > 14-year career in U.S. and international roles at United Technologies Corporation (“UTC” and now known as Raytheon Technologies Corporation), a diversified global building and aerospace company (1997-2011), including Senior Vice President, Corporate Strategy and Development; 5 years as President of UTC’s Fire & Security Division; and President of Asia Pacific Operations of UTC’s Carrier Corporation > Previously with McKinsey & Company as senior engagement manager and with Air Products and Chemicals, Inc. as project engineer Other Current/Recent Public Company Directorships > Becton, Dickinson and Company (since 2022) > Celanese Corporation (since 2016) 10 L3HARRIS2022 PROXY STATEMENT
Position, Principal Occupation and Professional Experience > Chief Executive Officer, 1560 LLC, a company engaged in public policy and electoral research and analysis (2018-2019) > Chief Executive Officer of One Mind, a non-profit organization bringing together healthcare providers, researchers and academics to cure brain disorders (April 2012-Jan. 2018) > General, U.S. Army (Retired), retired in March 2012 after nearly 40 years of service with U.S. Army, commanding troops at all levels from platoon to Multi-National Corps and holding various senior officer positions, including: ■ Vice Chief of Staff (Army’s second-highest-ranking officer), with responsibility for oversight of day-to-day operations and for leading budget planning and execution and efforts to modernize equipment, procedures and formations ■ Senior Military Assistant, Secretary of Defense ■ Commander of Multi-National Corps — Iraq ■ Division Commander, Fort Hood, Texas and Baghdad, Iraq ■ U.S. Army Chief of Operations, Training and Mobilization ■ Executive Officer, Supreme Allied Commander, Europe
Position, Principal Occupation and Professional Experience >
> > > > >
Other Current/Recent Public Company Directorships > Aerojet Rocketdyne Holdings, Inc. (since 2008) > L3 Technologies, Inc. (1997-June 28, 2019) L3HARRIS 2022 PROXY STATEMENT 11
Position, Principal Occupation and Professional Experience >
> > > > >
Other Current/Recent Public Company Directorships > Canoo Inc. (since 2020) > Solera Holdings, Inc. (2013-2016)
Position, Principal Occupation and Professional Experience > Chairman of Resideo Technologies, Inc., a residential comfort, thermal and security solutions provider (since 2018) > Chief Executive Officer of Juniper Industrial Holdings, Inc., a special purpose acquisition company focused on industrial and aerospace acquisitions (Oct. 2019-Jan. 2020) > Consultant (since 2020) and Operating Executive (Feb. 2017-2020) for The Carlyle Group, a global alternative asset manager > 17-year career in senior positions with Honeywell International Inc., a diversified technology and manufacturing company (2000-2017), including: ■ ■ ■ Other Current/Recent Public Company Directorships > Chairman of Juniper II Corp. (since 2021) > Resideo Technologies, Inc. (since 2018) > Vertiv Holdings Co (formerly GS Acquisition Holdings Corp) (since 2018) > Juniper Industrial Holdings, Inc. (2019-2021) > Pitney Bowes Inc. (2012-2019) > MSC Industrial Direct Co., Inc. (1998-2019) 12 L3HARRIS2022 PROXY STATEMENT
Position, Principal Occupation and Professional Experience > U.S. Ambassador to the Republic of Korea (2018-2021) > Admiral, U.S. Navy (Retired), retired in 2018 after 40 years of military service, holding various senior officer positions and commanding the: ■ U.S. Pacific Command (USPACOM) ■ U.S. Pacific Fleet ■ U.S. 6th Fleet ■ NATO Striking and Support Forces ■ Joint Task Force in Guantanamo, Cuba
Position, Principal Occupation and Professional Experience > Operating Advisor for Clayton, Dubilier & Rice, LLC, a private equity investment firm (since Jan. 2014) > 14-year career in senior positions with NextEra Energy, Inc. (formerly FPL Group, Inc.) (“NextEra”), one of the nation’s leading electricity-related services companies and the largest renewable energy generator in North America (1999-2013), including:
■ Chairman of NextEra (Jan. 2002-Dec. 2013) Other Current/Recent Public Company Directorships > Anthem, Inc. (since 2013) > Capital One Financial Corporation (2003-2019) L3HARRIS 2022 PROXY STATEMENT 13
Position, Principal Occupation and Professional Experience > Retired from Ernst & Young LLP, a multinational professional services firm, in June 2009 after a nearly 40-year career during which he served on the firm’s U.S. Executive Board and held various senior positions including:
■ National Director of Audit Services Other Current/Recent Public Company Directorships > Las Vegas Sands Corp. (since 2017) > L3 Technologies, Inc. (2009-June 28, 2019)
Position, Principal Occupation and Professional Experience > > > > > > 13-year career in various senior executive positions with Lockheed Martin Corporation, a global aerospace, defense, security and advanced technologies company, including 3 years as Vice Chairman, President and Chief Operating Officer > 17-year career with Ernst & Young LLP, where he was named partner in 1996 Other Current/Recent Public Company Directorships > L3 Technologies, Inc. (2018-June 28, 2019) > Spirit AeroSystems Holdings, Inc. (2013-2016) 14 L3HARRIS2022 PROXY STATEMENT
Position, Principal Occupation and Professional Experience > > > > Served for 5 years in the U.S. Air Force, ultimately as a Captain Other Current/Recent Public Company Directorships > Amphenol Corporation (since 2020) > Sanmina Corporation (since 2016) > Signify N.V. (since 2016) > L3 Technologies, Inc. (2018-June 28, 2019)
Position, Principal Occupation and Professional Experience > Chairman of the Massachusetts Institute of Technology Corporation (2014-2020; now Chairman Emeritus) > Held various positions in business, including:
■ Chairman of Realm Partners L.L.C. (2009-2014) Other Current/Recent Public Company Directorships > Evercore Inc. (since 2012) > L3 Technologies, Inc. (1997-June 28, 2019) L3HARRIS 2022 PROXY STATEMENT 15
Position, Principal Occupation and Professional Experience > Executive Vice President, Pratt & Whitney Military Engines, an aerospace manufacturer (Sept. 2000-March 2006) > Four-Star General and Commander, U.S. Air Force (Retired), retired in August 2000, after 34 years of service. Responsible for the recruiting, training and education of all Air Force personnel from 1997 until his retirement. Also served as an Air Force congressional liaison officer with the U.S. House of Representatives and was a member of the Air Force’s Air Demonstration Squadron, the Thunderbirds Other Current/Recent Public Company Directorships > L3 Technologies, Inc. (2012-June 28, 2019) > Our Board is responsible for approving nominees to stand for election as directors. Our Nominating and Governance Committee assists in this process, identifying individuals it determines are qualified to become Board members and recommending nominees. Our Board has a long-standing policy to consider director nominees recommended by shareholders. A shareholder who wishes to recommend a nominee may do so by following the process discussed on page In addition, the “proxy access” provision of our By-Laws allows an individual eligible shareholder, or a group of no more than 20 eligible shareholders, to nominate and include in our proxy materials candidates for election to our Board under terms that include the following: > The shareholder or shareholder group must have owned 3% or more of the outstanding shares of our common stock continuously for at least three years. > The maximum number of proxy access nominees permitted is the greater of two or 20% of our Board (rounded down to the nearest whole number). > The shareholder(s) and the nominee(s) must satisfy additional eligibility and procedural requirements set forth in Article II, Section 11 of our By-Laws, including that a proxy access nomination notice must be delivered to us within a prescribed time period in advance of our Annual Meeting of Shareholders (see page 97 for the specific timeframe that applies to nominations for our 2023 Annual Meeting of Shareholders) and that all nominees and nominating shareholder(s) provide certain information, representations and agreements to us. Our Board believes that the proxy access provision of our By-Laws strikes an appropriate balance between providing our shareholders with broad and meaningful access to our proxy materials, on one hand, and requiring sufficient transparency, protecting the interests of all shareholders and ensuring effective governance, on the other hand, and reflects best practices by being broadly consistent with other Standard & Poor’s 500 (“S&P 500”) companies’ proxy access by-laws. Our Nominating and Governance 16 L3HARRIS2022 PROXY STATEMENT
As noted above, upon completion of the Merger on June 29, 2019, our Board was reconstituted to consist of twelve directors: > Christopher E. Kubasik, Vice Chair and Chief Executive Officer (formerly L3’s Chairman, Chief Executive Officer and President); > William M. Brown, Executive Chair (formerly Harris’ Chairman, President and Chief Executive Officer); > Five independent directors from the Harris Board (Sallie B. Bailey, Peter W. Chiarelli, Thomas A. Dattilo, Roger B. Fradin and Lewis Hay III); and > Five independent directors from the L3 Board (Thomas A. Corcoran, Lewis Kramer, Rita S. Lane, Robert B. Millard and Lloyd W. Newton). On December 9, 2021, we added an additional seat to our Board, as permitted by our Restated Certificate of Incorporation, and our Board elected Harry B. Harris, Jr. to fill the vacancy created by the addition of such Board seat. Our Board believes that these Pursuant to the Merger Agreement and Mr. Brown’s and Mr. Kubasik’s respective employment arrangements: on June 29, 2021, Mr. Brown ceased being Chief Executive Officer of L3Harris, but remained Executive Chair, and Mr. Kubasik succeeded him as Chief Executive Officer, becoming Vice Chair and Chief Executive Officer, and ceased being Chief Operating Officer; and on June 29, 2022, Mr. Brown will retire as an officer and employee of L3Harris and resign as a member of the Board, and Mr. Kubasik will succeed Mr. Brown, becoming Chair of L3Harris. We do not impose term limits for directors. Under our retirement policy, a director who reaches age 75 may not be appointed, re-appointed, nominated or stand for election or re-election, but may serve out the remainder of A director also is expected to offer to tender L3HARRIS 2022 PROXY STATEMENT 17 We have long been focused on and committed to responsible and effective corporate governance in order to enhance the creation of sustainable, long-term shareholder value and to be accountable and responsive to our shareholders. In support of those goals, we have Corporate Governance Guidelines that trace their history to 1960. Our Board regularly reviews our Corporate Governance Guidelines and updates them from time to time as regulatory requirements change and governance practices evolve. Our Nominating and Governance Committee is responsible for overseeing our Corporate Governance Guidelines and reporting and making recommendations to our Board concerning corporate governance matters. Our Corporate Governance Guidelines address a broad set of issues that our Board believes are integral to sound governance practices: > Board composition >
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> > Director compensation > Stock ownership guidelines > Prohibitions on hedging > Prohibition on margin accounts and pledging transactions > Meeting schedules and agenda > Executive sessions of independent directors > Access to management > Board committees and membership > Board and director responsibilities > Director orientation and continuing education > CEO performance evaluation and compensation > Succession planning > Board and committee self-evaluations A copy of our Corporate Governance Guidelines is available on the Corporate Governance section of our website atwww.l3harris.com/company/environmental-social-and-governance. Overview Our Board is responsible for overseeing the management of our business, property and affairs and is focused on the creation of sustainable, long-term shareholder value. In addition to participating in Board and committee meetings held at our corporate headquarters or other offices or locations and reviewing relevant materials, Board members inform themselves about our business through discussions with our Chief Executive Officer (“CEO”) Our Board’s major responsibilities include: > overseeing the conduct of our business and reviewing and approving our long-term strategy, key strategic and financial objectives and operating plans and other strategic actions; > overseeing the management of our business and other enterprise risks and our enterprise risk management process; > establishing and maintaining an effective governance structure, including appropriate board composition; > planning for board succession and appointing directors to fill Board vacancies between annual meetings of shareholders; > selecting our CEO, electing our corporate officers, evaluating the performance of our CEO and other executive officers, planning for CEO succession and monitoring management’s succession planning for other executive officers; > determining CEO compensation and overseeing the determination of other executive officer compensation; 18 L3HARRIS2022 PROXY STATEMENT
> overseeing our ethics and compliance programs and periodically assessing our culture; > overseeing our systems of control which promote accurate and timely reporting of financial information to shareholders and our processes for maintaining the integrity of our financial statements and other public disclosures; and > overseeing our environmental, health and safety programs and monitoring and taking appropriate action regarding strategic issues and trends relating to environmental and corporate citizenship and responsibility. Strategy Oversight Our Board plays an active role in overseeing the formulation and implementation of our overall business strategy. As part of our annual strategic planning process, toward the end of each fiscal year, our senior leadership team and other executives present to our Board Company-wide and business unit annual operating plans and three-year strategic plans for the upcoming fiscal year(s). Our Board thoroughly reviews and provides substantive insight and guidance on these plans and, after further review sessions, approves them. Our Board then receives regular updates throughout the year on the progress, challenges and risks with respect to execution of the plans. Our Board also routinely receives updates on and discusses topics of strategic importance to us, such as technology, cybersecurity, enterprise risk management and merger, acquisition and portfolio shaping opportunities. Our Board holds executive sessions solely for independent directors Risk Oversight In fulfilling its responsibility of overseeing the management of our business and other enterprise risks, our Board has approved our use of an enterprise risk management (“ERM”) process administered by management, as described below, and considers risks and related mitigation identified through the ERM process or raised in the context of a range of matters on which management reports to our Board or one of its committees. ENTERPRISE RISK MANAGEMENT PROCESS Our ERM process, among other things, is designed to identify material risks across L3Harris with input from each business segment and function. This process has been reviewed by our Board and is the subject of oversight and regular review by our Audit Committee. However, the responsibility for the day-to-day management of risk lies with our management, which continually monitors the material risks facing L3Harris, including strategic risk, financial risk, operational risk and legal and compliance risk. Under our ERM process, which is coordinated through a cross-functional management committee, various material business risks are regularly identified, assessed and prioritized. The top risks to L3Harris, which are reflected in an enterprise risk “heat map,” and any mitigation plans associated with those risks, are reported to our Board. In addition, our management ERM committee regularly provides reports to our senior executives to ensure dissemination of information about identified risks to management and throughout L3Harris. We also manage risk through numerous controls and processes embedded in our operations, which are reviewed from time to time with our Board and/or its relevant committees. ALLOCATION OF RISK OVERSIGHT RESPONSIBILITIES As noted above, our Board also considers risks that are raised in the context of various matters that management may bring to the attention of our Board or one of its committees. When a committee considers risks, it provides reports regarding such risks to our full Board. Examples of risks considered by our Board and its committees are shown below: > Full Board — elements of risk related to Company-wide and business unit annual operating plans, three-year strategic plans, cybersecurity, merger, acquisition and portfolio shaping opportunities, market environment updates, regular financial and operations updates and other strategic discussions. > Audit Committee — elements of risk related to financial reporting, internal audit, internal control over financial reporting, auditor independence and related areas of accounting, taxation, law and regulation. > Compensation Committee — elements of risk related to compensation policies and practices and talent management and succession planning. > Finance Committee — elements of risk related to liquidity, financial arrangements, capital structure, ability to access capital markets and the financial and investment aspects of our defined contribution and defined benefit plans. > Innovation and Cyber Committee — elements of risk related to innovation of technology, new product development, disruptive trends and other risks of gaps in innovation and technology, cybersecurity and related matters and our business activities which involve matters that are designated as classified for purposes of national security. > Nominating and Governance Committee — elements of risk related to corporate governance issues and various aspects of U.S. and international regulatory compliance, ethics, business conduct, social responsibility, environmental, health and safety matters and export/import controls. L3HARRIS 2022 PROXY STATEMENT 19
Management Succession Planning As part of its oversight responsibility for management succession planning, our Board dedicates at least one meeting each year to a comprehensive review of our management succession strategy and our leadership pipeline for key roles, including the CEO, based on our long-term strategy. Our Board’s Compensation Committee facilitates the review session, which includes: > consideration and assessment of key leadership talent throughout our Company; > our talent strategy for critical positions, including roles for which it may be necessary to consider external candidates; and > contingency plans in the event the CEO or another executive officer unexpectedly is unable to serve for any reason, including death or disability. As noted above, the Merger Agreement provided that there Pursuant to the Merger Agreement and Mr. Brown’s and Mr. Kubasik’s respective employment arrangements: on June 29, 2021, Mr. Brown ceased being CEO of L3Harris, but remained Executive Chair, and Mr. Kubasik succeeded him as CEO, becoming Vice Chair and CEO, and ceased being Chief Operating Officer; and on June 29, 2022, Mr. Brown will retire as an officer and employee of L3Harris and resign as a member of the Board, and Mr. Kubasik will succeed Mr. Brown, becoming Chair of L3Harris. In addition, management conducts periodic talent reviews of all of our business segments and corporate functional areas, including discussion of the succession plans for key positions and identification of top talent for development in future leadership roles. These reviews inform and support our Board’s review session. Our Board also receives regular updates on key talent indicators for our overall workforce, including employee engagement, attrition, diversity and inclusion, recruiting and development programs and our broader human capital management strategy, and has regular opportunities to observe key leaders and high-potential talent through presentations, meetings and other events. On occasion, individual Board members may serve in a mentoring capacity for one or more of our executives. Ethics, Compliance and Sustainability Oversight Our Board has responsibility for overseeing our ethics and compliance programs and our activities related to corporate citizenship and responsibility and sustainability. This oversight is carried out largely through our Board’s Nominating and Governance Committee, which assists our Board in overseeing our ethics and business conduct program, our environmental, health and safety programs and our charitable, civic, educational and philanthropic activities, and also monitors and takes appropriate action regarding strategic issues and trends relating to environmental, social and governance efforts and corporate citizenship and responsibility that could affect our operations, financial performance or public image. For additional details on the role of our Nominating and Governance Committee, see page 27. CODE OF CONDUCT All L3Harris employees, officers and directors are required to abide by our Code of Conduct to help ensure that we consistently conduct our business in an ethical and legal manner. Our Code of Conduct is an important component of a comprehensive ethics and compliance program that includes compliance with all laws and corporate policies and procedures, an open relationship among employees that contributes to good business conduct, and an abiding belief that we should conduct all business dealings with integrity, honesty and responsibility. Our Nominating and Governance Committee assists our Board in fulfilling its oversight responsibility as to our compliance with the goals and objectives in our Code of Conduct by reviewing and taking action regarding compliance processes, standards and controls and reviewing results of relevant audits and investigations. Our Code of Conduct covers a broad range of topics, including: > Promoting diversity, inclusion and respect in the workplace > Health and safety > Privacy of personally identifiable information > Avoiding conflicts of interest > Working with governments > Commitment to quality > Bribery, corruption and kickbacks > Business courtesies > Fair competition > Exports, imports and trade compliance > Confidential information and intellectual property > Material non-public information and insider trading > Communicating L3Harris information > Social media > Business records and record management > Protecting L3Harris and customer assets > Political activities and lobbying > Human rights > Corporate responsibility > Avoiding harassment and preventing discrimination 20 L3HARRIS2022 PROXY STATEMENT
Employees are required to report any conduct they believe in good faith to be a violation of our Code of Conduct or policies. Our Code of Conduct is posted on our website at www.l3harris.com/company/environmental-social-and-governance and also is available by written request to our Corporate Ethics Office, L3Harris Technologies, Inc., 1025 West NASA Boulevard, Melbourne, Florida 32919. Any amendment to, or waiver from, our Code of Conduct that is required to be disclosed to shareholders will be posted on our website within four business days following such amendment or waiver. SUSTAINABILITY We have a strong commitment to creating a more sustainable future for our society, which we have demonstrated by establishing our values of integrity, respect and We also are committed to serving all of our Communicating With Our Board of Directors GENERAL COMMUNICATIONS Shareholders and other persons who wish to communicate with a member or members of our Board, including our Chair, our Vice Chair, our Lead Independent Director, the chair of any standing committee of our Board or the independent directors as a group, may send an e-mail to the intended recipient(s) c/o our Secretary at corporate.secretary@l3harris.com or may write to the intended recipient(s) c/o Our Board has instructed our Secretary not to forward communications that our Secretary deems unduly hostile, threatening, illegal or otherwise inappropriate (such as surveys, spam, junk mail, resumes, service or product inquiries or complaints, solicitations or advertisements). Our Secretary will periodically provide our Board a summary of all communications (other than surveys, spam, etc.) that were not forwarded to the intended recipient(s) and will make those communications available to any director upon request. ACCOUNTING, INTERNAL CONTROL, AUDITING AND OTHER MATTERS Our Audit Committee has established procedures for the receipt, retention and treatment of complaints and concerns regarding accounting, internal accounting controls or auditing matters, financial reporting or disclosure matters and other matters relating to actual, alleged or potential violations of any law, rule or regulation relating to securities or to fraud against shareholders. Upon receipt of a complaint or concern, a determination will be made whether it pertains to any of these matters, and if it does, it will be handled in accordance with these procedures. A copy of the procedures is available on the Corporate Governance section of our website at www.l3harris.com/company/environmental-social-and-governance. Employees may communicate concerns about such matters to their supervisor, manager or ethics advisor, or to the Vice President, Internal Audit or the Director, Ethics and Compliance or certain other individuals. Alternatively, they may communicate their concerns on a confidential, anonymous basis by way of e-mail or toll-free hotline numbers listed on our website and in our Code of Conduct. Other persons with such complaints or concerns may contact our Vice President, Internal Audit or Director, Ethics and Compliance at 1025 West NASA Boulevard, Melbourne, Florida 32919. L3HARRIS 2022 PROXY STATEMENT 21
To further align the interests of our non-employee directors and shareholders, our Board has adopted stock ownership guidelines for our non-employee directors, as follows: > Our non-employee directors are expected to own L3Harris stock or stock equivalent units having a minimum value equal to five times the annual cash retainer for service as a member of our Board. > Directors are expected to meet these levels within five years after election or appointment to our Board (or five years from the closing of the Merger, in the case of non-employee directors designated by Harris or L3 in connection with the Merger). Shares owned outright or jointly by the non-employee director and deferred equity awards (on an after-tax basis) credited for the non-employee director under any deferred compensation plan maintained by L3Harris count toward the guidelines. Directors who are retiring and will not be standing for re-election at the next Annual Meeting of Shareholders are no longer subject to the guidelines. As of February Our Board’s leadership is currently structured as follows: > a Chair of the Board (“Chair”), currently an Executive Chair; > a combined position of Vice Chair of the Board (“Vice Chair”) and CEO; > a Lead Independent Director with well-defined duties that support our Board’s oversight responsibilities; > a robust committee structure comprised solely of independent directors; and > engaged Board members who are independent (other than our current Executive Chair and our current Vice Chair and CEO) and who conduct candid and constructive discussions and deliberations. Board Policy on Chair and CEO Roles Our Board elects a Chair from among the directors and also may appoint a Vice Chair, as it has done in connection with the Merger. Our Board combines or separates the positions of Chair and CEO based on what our Board believes best serves the needs of L3Harris and our shareholders at any particular time based on then-existing facts and circumstances. 22 L3HARRIS2022 PROXY STATEMENT
Current Board Leadership Our Board believes the following factors are key to providing it with appropriate opportunities for oversight, discussion and evaluation of L3Harris’ decisions and direction: > the Lead Independent Director structure; > the independence of each director, other than Messrs. Kubasik and Brown; > the ability of independent directors to participate in the agenda-setting process for our Board and committee meetings; > regularly scheduled executive sessions of independent directors; and > our directors’ access to management. Our Lead Independent Director currently is Mr. Millard, whom our Board designated on June 29, 2019 and re-designated 2020 and April 2021. As noted elsewhere, under the terms of the Merger Agreement and the related employment agreements with Mr. > Mr. Kubasik served as Vice Chair, President and Chief Operating Officer through the second anniversary of the Merger (June 29, 2021), at which point he became our Vice Chair and CEO. On the third anniversary of the Merger (June 29, 2022), Mr. Kubasik will become our Chair. > Mr. Brown served as our Chair and CEO through the second anniversary of the Merger (June 29, 2021), then stepped down as CEO and continues to serve for one additional year as Executive Chair. On the third anniversary of the Merger (June 29, 2022), he will retire as an officer and employee of L3Harris and resign as a member of our Board. The employment agreements with Mr. 54. Our Board believes that its current leadership structure provides independent board leadership and oversight while also benefiting from having Mr. Brown serve as Executive Chair, Executive Sessions of Independent Directors Our Corporate Governance Guidelines require that at least two-thirds of the directors on our Board be independent directors. The agenda for each regularly scheduled Board meeting includes an executive (private) session of independent directors, which is chaired by our Lead Independent Director. The agenda for each regularly scheduled standing committee meeting (other than quarterly earnings review meetings of our Audit Committee) likewise includes an executive session of independent directors. An important part of the executive sessions of independent directors of our Board and its standing committees is the discussion of results from the annual self-evaluations undertaken by our Board and its standing committees, which are described below. Self-Evaluations by our Board and Committees Our Board and its standing committees undertake annual self-evaluations designed to foster continuous improvement in performance and effectiveness. Our Nominating and Governance Committee facilitates our Board’s annual self-evaluation. Directors are asked to consider areas such as our Board’s role, relations with management, composition and meetings, and committee members are asked to consider areas such as the committee’s role and the responsibilities articulated in its charter, its composition and its operation. Self-evaluations may be undertaken utilizing written questionnaires, facilitated discussions or other means, as determined by our Board or the applicable committee. As noted above, review and discussion of the L3HARRIS 2022 PROXY STATEMENT 23
Director Independence Standards Our Board assesses the independence of our directors and examines the nature and extent of any relationships between us and our directors, their families and their affiliates. Our Board is guided in this assessment by our Director Independence Standards, available on the Corporate Governance section of our website at www.l3harris.com/company/environmental-social-and-governance. For a director to be considered independent, our Board must affirmatively determine that the director does not have any direct or indirect material relationship with us, other than as a director. When assessing the materiality of a director’s relationship with us, our Board will consider the issue not merely from the standpoint of the director, but also from the standpoint of persons or organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others. Pursuant to our Corporate Governance Guidelines, our Board undertook a review of director independence in February 24 L3HARRIS2022 PROXY STATEMENT
Our Board currently has Each committee regularly reports its activities and actions to our full Board, generally at the next Board meeting following the committee meeting. Our Board has adopted a written charter for each standing committee. The charters of our Audit Committee, Compensation Committee and Nominating and Governance Committee comply with the NYSE corporate governance requirements. There are no NYSE requirements with respect to our Finance Committee charter or Innovation and Cyber Committee charter. Copies of all standing committee charters and our Corporate Governance Guidelines are available on the Corporate Governance section of our website at www.l3harris.com/company/environmental-social-and-governance and also are available to shareholders upon written request to our Secretary at L3Harris Technologies, Inc., 1025 West NASA Boulevard, Melbourne, Florida 32919. Each standing committee’s principal functions are summarized below, with a more detailed description of purposes and responsibilities contained in its charter (and also in our Corporate Governance Guidelines, in the case of our Nominating and Governance Committee).
Key responsibilities > > > Pre-approving all audit services, internal control-related services and non-audit services to be provided by our independent registered public accounting firm. > Reviewing and discussing with our independent registered public accounting firm, our internal audit department and our management any major issues regarding accounting principles and financial statement presentations, the effect of regulatory and accounting initiatives or actions, as well as off-balance sheet structures, on our financial statements and any major issues concerning the adequacy of our internal controls or special steps adopted in light of any material control deficiencies. > > Reviewing and discussing our earnings press releases, the types of financial information and earnings guidance we provide and the types of presentations made by us to analysts and rating agencies. > Reviewing and discussing quarterly and year-end operating results with our independent registered public accounting firm, our internal audit department and our management; reviewing our interim financial statements prior to their inclusion in our Form 10-Q filings; and recommending to our Board the inclusion of our annual financial statements in our Annual Reports on Form 10-K. Our Board has determined that each member of our Audit Committee: >
> satisfies the “financial literacy” requirements of NYSE listing standards and has “accounting or related financial management expertise.” Our Board also has determined that Mr. Kramer and Ms. Bailey each satisfy the “audit committee financial expert” criteria, as that term is defined by Securities and Exchange Commission (“SEC”) rules.
Key responsibilities > > Overseeing and reviewing our overall compensation philosophy, establishing the compensation and benefits of our executive officers and administering our equity-based compensation plans. > Reviewing and approving corporate goals and objectives relevant to the compensation of our CEO, evaluating our CEO’s performance against those goals and objectives and, together with all independent directors of our Board, determining and approving annual salary, cash and equity incentives and other executive benefits for our CEO based on this evaluation. > Reviewing and approving the annual salary, cash and equity incentives and other benefits for our other executive officers. > Reviewing and approving employment, separation, severance and change in control agreements and plans and terms and any special arrangements in the event of termination of employment, death or retirement of executive officers. > Determining stock ownership guidelines for our CEO, executive officers and other corporate officers and overseeing compliance with such guidelines. > > Reviewing management’s assessment of the effect on our business of risks from our compensation policies and practices and periodically discussing such matters with management. > Reviewing our diversity and inclusion efforts. > Reviewing and discussing the “Compensation Discussion and Analysis” section of our proxy statement with management and making a recommendation to our Board on the inclusion of such section in our proxy statement. > Retaining and terminating independent executive compensation consultants, including approving such consultants’ fees and other retention terms. Our Board has determined that each member of our Compensation Committee is independent within the meaning of the NYSE listing standards, applicable laws and rules and our Director Independence Standards. Our Compensation Committee has delegated to our CEO the authority to grant equity awards to employees who are not executive officers, subject to an annual maximum number of shares underlying the awards that may be granted, and annually reviews these awards. For additional information regarding the role of our Compensation Committee and our executive compensation process and procedures, including the role of executive officers and compensation consultants in recommending the amount or form of executive compensation, see the “Compensation Discussion and Analysis” section of this proxy statement beginning on page
Key responsibilities
Periodically reviewing our financial position, capital structure, working capital, capital transactions, equity investments, debt ratings and other matters relating to our financial condition. > Reviewing our dividend policy, capital asset plan and share repurchase policy and making recommendations to our Board relating to such policies. > Overseeing the financial and investment policies and objectives applicable to our material benefit plans. 26 L3HARRIS2022 PROXY STATEMENT
Key responsibilities > Overseeing cyber risks and related matters that may affect our and the management’s efforts to monitor and mitigate those risks. > > Reviewing our progress against innovation and technology program objectives, including new product development. > Reviewing potentially disruptive trends or external market conditions or other risks, gaps or opportunities in innovation and technology. Our Board has determined that each member of our Innovation and Cyber Committee is independent within the meaning of the NYSE listing standards and our Director Independence Standards. All of the members of our Innovation and Cyber Committee currently possess security clearance credentials.
Key responsibilities > Identifying and recommending qualified individuals for election or re-election to our Board and filling vacancies on our Board and periodically planning for Board succession. > Adopting a policy and procedures for considering director candidates recommended by our shareholders. > Developing, reviewing and recommending to our Board our Corporate Governance Guidelines and monitoring trends and evolving practices in corporate governance. > Periodically assessing the adequacy of our corporate governance framework, including our Restated Certificate of Incorporation and By-Laws, and recommending changes to our Board for approval, as appropriate. > Developing, reviewing and recommending to our Board director compensation and benefit plans. > Reviewing, and making recommendations to our Board concerning, the structure, size, composition and operation of our Board and its committees, including recommending committee assignments. > Developing, reviewing and recommending to our Board the meeting schedule for our Board and its committees, in consultation with our Lead Independent Director and each committee chair. > Reviewing, and approving or ratifying, related person transactions in accordance with relevant policies. > Reviewing and making recommendations to our Board regarding shareholder proposals and a process for shareholder communications with our Board. > Facilitating our Board’s annual self-evaluation of its performance and effectiveness. > Retaining and terminating independent director compensation consultants, including approving such consultants’ fees and other retention terms. > Assisting our Board in overseeing our ethics and business conduct program consistent with sound, ethical business practices and legal requirements. > Assisting our Board in overseeing our environmental, health and safety programs and charitable, civic, educational and philanthropic activities. > Reviewing and taking appropriate action concerning strategic issues and trends relating to corporate citizenship and responsibility, including social and political trends and public policy issues that may have an impact on our operations, financial performance or public image. Our Board has determined that each member of our Nominating and Governance Committee is independent within the meaning of the NYSE listing standards and our Director Independence Standards. For additional information regarding the role of our Nominating and Governance Committee and our director compensation process and procedures, including the role of compensation consultants relating to director compensation, see the “Director Compensation and Benefits” section of this proxy statement beginning on page 29. L3HARRIS 2022 PROXY STATEMENT 27
OTHER GOVERNANCE MATTERS |
Board / Committee | Number of Meetings Held | Average Meeting Attendance |
Board of Directors | 10 | 100% |
Audit Committee | 8 | 100% |
Compensation Committee | 6 | 100% |
Finance Committee | 2 | 100% |
Nominating and Governance Committee | 5 | 100% |
Ad Hoc Technology Committee | 2 | 100% |
| Board / Committee | | | Number of Meetings Held | | | Average Meeting Attendance | | ||||||||
| Board of Directors | | | | | 8 | | | | | | | 100 | % | | |
| Audit Committee | | | | | 8 | | | | | | | 100 | % | | |
| Compensation Committee | | | | | 5 | | | | | | | 100 | % | | |
| Finance Committee | | | | | 2 | | | | | | | 100 | % | | |
| Innovation and Cyber Committee (formerly the Ad Hoc Technology Committee) | | | | | 2 | | | | | | | 100 | % | | |
| Nominating and Governance Committee | | | | | 6 | | | | | | | 100 | % | | |
| CORPORATE GOVERNANCE DIRECTOR COMPENSATION AND BENEFITS | |
| CORPORATE GOVERNANCE DIRECTOR COMPENSATION AND BENEFITS | |
| CORPORATE GOVERNANCE DIRECTOR COMPENSATION AND BENEFITS | |
| Non-Employee Director | | | Fees Earned or Paid in Cash $(1) | | | Stock Awards $(2) | | | All Other Compensation $(3) | | | Total $ | | ||||||||||||||||
| Sallie B. Bailey | | | | $ | 130,000 | | | | | | $ | 164,807 | | | | | | $ | 0 | | | | | | $ | 294,807 | | | |
| Peter W. Chiarelli | | | | $ | 150,000 | | | | | | $ | 164,807 | | | | | | $ | 0 | | | | | | $ | 314,807 | | | |
| Thomas A. Corcoran | | | | $ | 130,000 | | | | | | $ | 164,807 | | | | | | $ | 0 | | | | | | $ | 294,807 | | | |
| Thomas A. Dattilo | | | | $ | 130,000 | | | | | | $ | 164,807 | | | | | | $ | 10,000 | | | | | | $ | 304,807 | | | |
| Roger B. Fradin | | | | $ | 150,000 | | | | | | $ | 164,807 | | | | | | $ | 10,000 | | | | | | $ | 324,807 | | | |
| Harry B. Harris, Jr.* | | | | $ | 7,418 | | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 7,418 | | | |
| Lewis Hay III | | | | $ | 150,000 | | | | | | $ | 164,807 | | | | | | $ | 0 | | | | | | $ | 314,807 | | | |
| Lewis Kramer | | | | $ | 160,000 | | | | | | $ | 164,807 | | | | | | $ | 0 | | | | | | $ | 324,807 | | | |
| Rita S. Lane | | | | $ | 130,000 | | | | | | $ | 164,807 | | | | | | $ | 10,000 | | | | | | $ | 304,807 | | | |
| Robert B. Millard | | | | $ | 165,000 | | | | | | $ | 164,807 | | | | | | $ | 10,000 | | | | | | $ | 339,807 | | | |
| Lloyd W. Newton | | | | $ | 150,000 | | | | | | $ | 164,807 | | | | | | $ | 10,000 | | | | | | $ | 324,807 | | | |
Non-Employee Director | Fees Earned or Paid in Cash $(1) | Stock Awards $(2) | Option Awards $(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings $(4) | All Other Compensation $(5) | Total $ | ||||||||||||||||||
Sallie B. Bailey | $ | 130,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 7,500 | $ | 302,480 | ||||||||||||
Peter W. Chiarelli | $ | 150,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 0 | $ | 314,980 | ||||||||||||
Thomas A. Corcoran | $ | 130,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 0 | $ | 294,980 | ||||||||||||
Thomas A. Dattilo | $ | 130,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 10,000 | $ | 304,980 | ||||||||||||
Roger B. Fradin | $ | 150,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 10,000 | $ | 324,980 | ||||||||||||
Lewis Hay III | $ | 150,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 0 | $ | 314,980 | ||||||||||||
Lewis Kramer | $ | 160,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 0 | $ | 324,980 | ||||||||||||
Rita S. Lane | $ | 130,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 10,000 | $ | 304,980 | ||||||||||||
Robert B. Millard | $ | 165,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 0 | $ | 329,980 | ||||||||||||
Lloyd W. Newton | $ | 150,000 | $ | 164,980 | $ | 0 | $ | 0 | $ | 10,000 | $ | 324,980 |
| Our Board unanimously recommends voting FOR the amendments to our Restated Certificate of Incorporation to increase the maximum number of Board seats from 13 to 15. | | | > Increasing the maximum number of Board seats will provide greater flexibility for our Board to effectively navigate upcoming changes following the end of the Specified Post-Merger Period (as defined below), which will in turn ensure a more orderly transition of directors. > Increasing the maximum number of Board seats will enable us to add to the mix of skills, qualifications, experience and diversity of our Board members when a strong candidate is identified, while retaining the skills, qualifications, experience, diversity and institutional knowledge of the Company possessed by our current Board members. | |
| PROPOSAL 2: TO AMEND OUR RESTATED CERTIFICATEOF INCORPORATION TO INCREASE THEMAXIMUM NUMBER OF BOARD SEATS | ||
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Our Board unanimously recommends voting FOR approval of the compensation of our named executive officers as disclosed in this proxy statement. | | | > Executive compensation decisions were made by independent members of our Board and Compensation Committee. > Executive compensation for fiscal | ||
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PROPOSAL | |
| Executive Summary | | | | | 36 | | |
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Our Executive Compensation Philosophy and Practices | | | | | 40 | | | |
| Overview of Our Main Executive Compensation Elements | | | | | 44 | | |
| Executive Compensation Decisions for Fiscal | | | | 48 | | | |
| Employment Agreements | | | | | 54 | | |
| Other Compensation Elements | | | | | 57 | | |
| Other Compensation Policies | | | | | 60 | | |
| | William M. Brown | | | Jesus Malave, Jr. | | | Todd W. Gautier | | | Sean J. Stackley | | | Edward J. Zoiss | | |
Vice Chair and Chief Executive Officer | | | Executive Chair | | | Former Senior Vice President and Chief Financial Officer | | | Former President, Aviation Systems | | | President, Integrated Mission Systems | | | President, Space and Airborne Systems | |
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COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY | |
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COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY |
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| (in millions, except per share amounts) | | | Fiscal 2021 ($) | | | Fiscal 2020 ($) | | | Pro Forma 2019 ($)*** | | ||||||||||||
| Revenue | | | | $ | 17,814 | | | | | | $ | 18,194 | | | | | | $ | 18,097 | | | |
| Net income | | | | $ | 1,842 | | | | | | $ | 1,086 | | | | | | $ | 1,650 | | | |
| Adjusted EBIT* | | | | $ | 3,397 | | | | | | $ | 3,280 | | | | | | $ | 3,039 | | | |
| Operating cash flow | | | | $ | 2,687 | | | | | | $ | 2,790 | | | | | | $ | 1,655 | | | |
| Adjusted free cash flow* | | | | $ | 2,746 | | | | | | $ | 2,686 | | | | | | $ | 2,095 | | | |
| Cash used to repurchase shares of our common stock | | | | $ | 3,675 | | | | | | $ | 2,290 | | | | | | $ | 1,500 | | | |
| Annualized cash dividend rate per share** | | | | $ | 4.08 | | | | | | $ | 3.40 | | | | | | $ | 2.87 | | | |
(in millions, except per share amounts) | Fiscal 2020 ($) | Pro Forma 2019 ($)*** | Fiscal Transition Period ($) | |||||||||
Revenue | $ | 18,194 | $ | 18,097 | $ | 9,263 | ||||||
Net income | $ | 1,086 | $ | 1,650 | $ | 834 | ||||||
Adjusted EBIT* | $ | 3,280 | $ | 3,039 | $ | 1,601 | ||||||
Operating cash flow | $ | 2,790 | $ | 1,655 | $ | 939 | ||||||
Adjusted free cash flow* | $ | 2,686 | $ | 2,095 | $ | 1,449 | ||||||
Cash used to repurchase shares of our common stock | $ | 2,290 | $ | 1,500 | $ | 1,500 | ||||||
Annualized cash dividend rate per share** | $ | 3.40 | $ | 2.87 | $ | 3.00 |
See Appendix A for reconciliations of GAAP to non-GAAP financial measures. |
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| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY | |
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Align with Shareholders’ Interests | | |||||
| We believe an executive’s interests are directly aligned with our shareholders’ interests when our compensation programs appropriately balance | |
| Be Competitive at Target Performance Level | | ||
| We believe an executive’s total compensation should be competitive at the target performance level to motivate performance and to attract, retain, develop and reward executives who possess the abilities and skills to build | |
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Motivate Achievement of Financial Goals and Strategic Objectives | | |||||
| We believe an effective way to incentivize an executive to create long-term shareholder value is to make a significant portion of overall compensation dependent on the achievement of our short- and long-term financial goals and strategic objectives and on the value of our stock. | |
| Align Realized Pay with Performance | | ||||
| We believe that although an executive’s total compensation should be tied to achievement of financial goals and strategic objectives and should be competitive at the target performance level, above-target performance should be appropriately rewarded and there should be downside risk of below-target compensation if we do not achieve our financial goals and strategic objectives. | |||||
| COMPENSATION DISCUSSION AND ANALYSIS OUR EXECUTIVE COMPENSATION PHILOSOPHY AND PRACTICES | |
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| WHAT WE DO | | |||||
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> Place executive compensation decisions in the hands of independent directors > Retain an independent executive compensation consulting firm > Regularly review and evaluate plans for management development, succession and diversity > Periodically review and change composition of compensation comparison peer group, as appropriate > Make a significant portion of each executive’s overall compensation opportunity equity-based to establish a strong link between compensation and our stock price performance and to provide rewards in alignment with shareholder returns > Align performance share unit award payouts with our stock price performance through a relative TSR adjustment metric > Have meaningful stock ownership guidelines to maintain alignment of executives’ interests with those of our shareholders > Hold annual “say-on-pay” advisory vote and seek input of large shareholders on key aspects of our executive compensation program > Pay cash severance under executive change in control severance agreements or plans only on a “double trigger” basis > Have a “clawback” policy to recover cash and equity incentive payments from executives if our financial statements are restated due to errors, omissions or fraud > Provide for accelerated vesting of equity-based compensation granted after fiscal 2019 only on a “double trigger” basis > Maintain a 12-month minimum vesting period for annual cycle awards of equity-based compensation, except in the case of death, disability or a qualifying termination after a change in control > Require executives to agree to non-competition, non-solicitation, customer non-interference and other covenants as part of equity-based compensation awards > Annually assess whether our compensation strategies, plans, programs, policies or procedures encourage undertaking unnecessary or excessive risks reasonably likely to have a material adverse effect on us | > Annually conduct a pay equity analysis, as part of our commitment to fair and equitable compensation practices, including engaging with an external firm to generate a detailed analysis to identify any potential statistically significant pay gaps that could be due to race and gender across substantially similar employee groups when controlled for such things as job function, work location, performance rating and tenure and taking remediation actions as necessary | |
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| WHAT WE DON’T DO | |
| > Provide excessive perquisites > Permit repricing or back-dating of options > Provide excise tax gross-ups under executive change in control severance agreements or plans > Pay dividend equivalents to executive officers on performance share unit and restricted stock unit awards (except to extent earned at end of the applicable period) > Permit directors, executives or other employees to engage in short sales or enter into hedging, puts, calls or other “derivative” transactions with respect to our securities > Permit directors or executives to hold or purchase our stock on margin or in a margin account or otherwise pledge our stock as collateral for margin accounts, loans or any other purpose > Provide guaranteed incentive payouts over multi-year periods | |
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| COMPENSATION DISCUSSION AND ANALYSIS OUR EXECUTIVE COMPENSATION PHILOSOPHY AND PRACTICES | |
| COMPENSATION DISCUSSION AND ANALYSIS OUR EXECUTIVE COMPENSATION PHILOSOPHY AND PRACTICES | |
| WHAT WE DO PRIOR TO OR EARLY IN A NEW FISCAL YEAR | | |||||
| Consider program design changes | | Determine what changes, if any, should be made to the executive compensation program for the new fiscal year (after receiving input from our CEO and independent compensation consultant, and an assessment of compensation trends and competitive market data). | | |||
| Set target compensation values | | | The process for setting target compensation values includes a review of: > > the types and levels of other benefits available to the executive, such as change in control severance > compensation comparison peer group data or broad compensation market data, including surveys. | | ||
| Establish performance measures and targets and individual performance objectives | | | Establish: > > individual performance objectives for each executive and for These measures, weightings and targets and performance objectives are intended to align with our Board-approved annual operating plan and long-term strategic plan and create a “pay for profitable growth environment” and thereby encourage and reward the creation of sustainable, long-term value for our shareholders. | | ||
| Make equity grants | | | Annual equity award grants to executive officers are made at Board or Compensation Committee meetings, the dates for which usually are set one year or more in advance, and annual equity award grants to our other eligible employees typically are made on the same date. We do not time equity grants to take advantage of information, either positive or negative, about us that has not been publicly disclosed. In special circumstances, such as new hires or promotions or for retention or recognition, grants may occur outside of the typical cycle. | |
| WHAT WE DO AFTER THAT FISCAL YEAR ENDS | | ||||
| Conduct performance reviews | | | > For our CEO and > For our other executive officers, our CEO, with input from our | | |
| Determine payouts | |||||
| | Payouts of performance-based, at-risk elements of compensation to executives are determined based on performance reviews relative to pre-determined objectives and formulaic calculations of our financial results for the fiscal year against pre-determined targets, typically after audited financial statements become available after the fiscal year end. |
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COMPENSATION DISCUSSION AND ANALYSIS OVERVIEW OF OUR MAIN EXECUTIVE COMPENSATION ELEMENTS | |
| Eaton Corporation plc | | | Lockheed Martin Corporation | | | Rockwell Automation, Inc. | |
| Emerson Electric Co. | | | Motorola Solutions, Inc. | | | Spirit AeroSystems Holdings, Inc. | |
| General Dynamics Corporation | | | Northrop Grumman Corporation | | | Textron Inc. | |
| Honeywell International Inc. | | | Parker Hannifin Corporation | | | ||
| Leidos Holdings, Inc. | | | Raytheon Technologies Corporation | | | | |
base salary; |
| COMPENSATION DISCUSSION AND ANALYSIS OVERVIEW OF OUR MAIN EXECUTIVE COMPENSATION ELEMENTS | |
our performance against specific pre-determined financial performance measures; and |
the upside potential of above-target payouts if our financial performance is above target; and |
| COMPENSATION DISCUSSION AND ANALYSIS OVERVIEW OF OUR MAIN EXECUTIVE COMPENSATION ELEMENTS | |
| COMPENSATION DISCUSSION AND ANALYSIS OVERVIEW OF OUR MAIN EXECUTIVE COMPENSATION ELEMENTS | |
Exercise price equal to the closing price of our common stock on the grant date; |
| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2021 | |
Fiscal Transition Period Annual Base Salary Level | Fiscal 2020 Annual Base Salary Level | % Change | Reason for Change | ||||||||||
Mr. Brown | $ | 1,450,000 | $ | 1,500,000 | 3.4% | merit | |||||||
Mr. Kubasik | $ | 1,450,000 | $ | 1,500,000 | 3.4% | merit | |||||||
Mr. Malave | $ | 625,000 | $ | 700,000 | 12% | merit/market | |||||||
Mr. Gautier | $ | 600,000 | $ | 620,000 | 3.3% | merit | |||||||
Mr. Zoiss | $ | 600,000 | $ | 620,000 | 3.3% | merit |
| | | | Fiscal 2020 Annual Base Salary Level | | | Fiscal 2021 Annual Base Salary Level | | | % Change | | | Reason for Change | | ||||||||||||||||
| Mr. Kubasik | | | | $ | 1,500,000 | | | | | | $ | 1,500,000 | | | | | | | 0.0 | % | | | | | | n/a | | | |
| Mr. Brown | | | | $ | 1,500,000 | | | | | | $ | 1,500,000 | | | | | | | 0.0 | % | | | | | | n/a | | | |
| Mr. Malave | | | | $ | 700,000 | | | | | | $ | 760,000 | | | | | | | 8.6 | % | | | | | | merit/market | | | |
| Mr. Gautier | | | | $ | 620,000 | | | | | | $ | 650,000 | | | | | | | 4.8 | % | | | | | | merit | | | |
| Mr. Stackley | | | | $ | 620,000 | | | | | | $ | 650,000 | | | | | | | 4.8 | % | | | | | | merit | | | |
| Mr. Zoiss | | | | $ | 620,000 | | | | | | $ | 650,000 | | | | | | | 4.8 | % | | | | | | merit | | | |
| | | | Fiscal 2021 Cash Incentive Target Value | | | Fiscal 2021 Cash Incentive Target Value (as % of Base Salary) | | | Fiscal 2020 Cash Incentive Target Value (as % of Base Salary) | | | % Change | | | Reason for Change | | ||||||||||||||||||||
| Mr. Kubasik | | | | $ | 2,580,000 | | | | | | | 172 | % | | | | | | 172 | % | | | | | | — | | | | | | | n/a | | | |
| Mr. Brown | | | | $ | 2,580,000 | | | | | | | 172 | % | | | | | | 172 | % | | | | | | — | | | | | | | n/a | | | |
| Mr. Malave | | | | $ | 760,000 | | | | | | | 100 | % | | | | | | 100 | % | | | | | | — | | | | | | | n/a | | | |
| Mr. Gautier | | | | $ | 650,000 | | | | | | | 100 | % | | | | | | 100 | % | | | | | | — | | | | | | | n/a | | | |
| Mr. Stackley | | | | $ | 650,000 | | | | | | | 100 | % | | | | | | 100 | % | | | | | | — | | | | | | | n/a | | | |
| Mr. Zoiss | | | | $ | 650,000 | | | | | | | 100 | % | | | | | | 100 | % | | | | | | — | | | | | | | n/a | | | |
| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION DECISIONS FOR FISCAL | |
Fiscal 2020 Cash Incentive Target Value | Fiscal Transition Period Cash Incentive Target Value (as % of Base Salary) | Fiscal 2020 Cash Incentive Target Value (as % of Base Salary) | % Change | Reason for Change | ||||||||||||||||
Mr. Brown | $ | 2,580,000 | 172% | 172% | — | n/a | ||||||||||||||
Mr. Kubasik | $ | 2,580,000 | 172% | 172% | — | n/a | ||||||||||||||
Mr. Malave | $ | 700,000 | 100% | 100% | — | n/a | ||||||||||||||
Mr. Gautier | $ | 620,000 | 100% | 100% | — | n/a | ||||||||||||||
Mr. Zoiss | $ | 620,000 | 100% | 100% | — | n/a |
| 40% | | | 40% | | | 20% | |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | | | FREE CASH FLOW (FCF) | | | REVENUE | |
| Our ability to generate profits from revenue: can be increased by efficient management and operation of our business, including reducing costs, improving procurement and sourcing practices and achieving operational excellence. | | | The free cash flow (or cash flow from operations less net capital expenditures) we generate can be increased by accelerating cash receipts, improving payment terms, reducing inventory, increasing prices and reducing expenses. | | | What we generate from normal business activities: can be increased by improving market share, introducing new products, entering new markets, enhancing execution and pricing effectively. | |
| | | | L3Harris | | | Aviation Systems | | | Integrated Mission Systems | | | Space & Airborne Systems | | ||||||||||||||||
| EBIT | | | | $ | 3,440 | | | | | | $ | 494 | | | | | | $ | 934 | | | | | | $ | 1,000 | | | |
| FCF | | | | $ | 2,850 | | | | | | $ | 430 | | | | | | $ | 915 | | | | | | $ | 940 | | | |
| Revenue | | | | $ | 19,100 | | | | | | $ | 3,478 | | | | | | $ | 5,950 | | | | | | $ | 5,285 | | | |
L3Harris | Aviation Systems | Space & Airborne Systems | ||||||||||
EBIT | $ | 3,305 | $ | 616 | $ | 946 | ||||||
FCF | $ | 2,650 | $ | 583 | $ | 897 | ||||||
Revenue | $ | 19,250 | $ | 4,209 | $ | 5,032 |
| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2021 | |
| Financial Performance Measure | | | Adjusted Target(1) (in millions) | | | Result (in millions) | | | Adjusted Result(2) (in millions) | | | Adjusted Result Relative to Adjusted Target | | | Resulting Payout % | | | | | | Weighted Payout % | | |||||||||||||||||||||||||||
| L3HARRIS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| EBIT | | | | | – 40 | % | | | | | $ | 3,347 | | | | | | $ | 2,548 | | | | | | $ | 3,397 | | | | | | | 101.5 | % | | | | | | 103.0 | % | | | | | | | | |
| FCF | | | | | – 40 | % | | | | | $ | 2,738 | | | | | | $ | 2,352 | | | | | | $ | 2,746 | | | | | | | 100.3 | % | | | | | | 100.6 | % | | | | 99.8% | | |||
| Revenue | | | | | – 20 | % | | | | | $ | 18,558 | | | | | | $ | 17,814 | | | | | | $ | 17,814 | | | | | | | 96.0 | % | | | | | | 92.0 | % | | | | | | |||
| AVIATION SYSTEMS SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| EBIT | | | | | – 40 | % | | | | | $ | 395 | | | | | | $ | 330 | | | | | | $ | 412 | | | | | | | 104.3 | % | | | | | | 108.6 | % | | | | | | | | |
| FCF | | | | | – 40 | % | | | | | $ | 318 | | | | | | $ | 338 | | | | | | $ | 338 | | | | | | | 106.3 | % | | | | | | 117.8 | % | | | | 108.5% | | |||
| Revenue | | | | | – 20 | % | | | | | $ | 2,936 | | | | | | $ | 2,783 | | | | | | $ | 2,783 | | | | | | | 94.8 | % | | | | | | 89.5 | % | | | | | | |||
| INTEGRATED MISSION SYSTEMS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| EBIT | | | | | – 40 | % | | | | | | 934 | | | | | | $ | 950 | | | | | | $ | 950 | | | | | | | 101.7 | % | | | | | | 103.4 | % | | | | | | | | |
| FCF | | | | | – 40 | % | | | | | | 915 | | | | | | $ | 948 | | | | | | $ | 948 | | | | | | | 103.6 | % | | | | | | 107.2 | % | | | | 103.5% | | |||
| Revenue | | | | | – 20 | % | | | | | | 5,950 | | | | | | $ | 5,839 | | | | | | $ | 5,839 | | | | | | | 98.1 | % | | | | | | 96.2 | % | | | | | | |||
| SPACE & AIRBORNE SYSTEMS SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| EBIT | | | | | – 40 | % | | | | | $ | 1,000 | | | | | | $ | 970 | | | | | | $ | 970 | | | | | | | 97.0 | % | | | | | | 94.0 | % | | | | | | | | |
| FCF | | | | | – 40 | % | | | | | $ | 940 | | | | | | $ | 924 | | | | | | $ | 924 | | | | | | | 98.3 | % | | | | | | 96.6 | % | | | | 94.8% | | |||
| Revenue | | | | | – 20 | % | | | | | $ | 5,285 | | | | | | $ | 5,093 | | | | | | $ | 5,093 | | | | | | | 96.4 | % | | | | | | 92.8 | % | | | | | |
Financial Performance Measure | Adjusted Target1 (in millions) | Result (in millions) | Adjusted Result2 (in millions) | Adjusted Result Relative to Adjusted Target | Resulting Payout % | Weighted Payout % | ||||||||||||||||||||
L3HARRIS | ||||||||||||||||||||||||||
EBIT | — 40 | % | $ | 3,240 | $ | 1,576.1 | $ | 3,280.1 | 101.2 | % | 102.4 | % | 103.5% | |||||||||||||
FCF | — 40 | % | $ | 2,564 | $ | 2,513.1 | $ | 2,686.1 | 104.8 | % | 109.6 | % | ||||||||||||||
Revenue | — 20 | % | $ | 18,804 | $ | 18,194.5 | $ | 18,194.5 | 96.8 | % | 93.6 | % | ||||||||||||||
AVIATION SYSTEMS SEGMENT | ||||||||||||||||||||||||||
EBIT | — 40 | % | $ | 561 | $ | (176.6 | ) | $ | 476.4 | 84.9 | % | 63.1 | % | 69.7% | ||||||||||||
FCF | — 40 | % | $ | 508 | $ | 430.6 | $ | 448.6 | 88.3 | % | 72.1 | % | ||||||||||||||
Revenue | — 20 | % | $ | 3,807 | $ | 3,447.7 | $ | 3,447.7 | 90.6 | % | 78.3 | % | ||||||||||||||
SPACE & AIRBORNE SYSTEMS SEGMENT | ||||||||||||||||||||||||||
EBIT | — 40 | % | $ | 942 | $ | 931.7 | $ | 931.7 | 98.9 | % | 97.8 | % | 125.1% | |||||||||||||
FCF | — 40 | % | $ | 893 | $ | 1,021.2 | $ | 1,021.2 | 114.4 | % | 166.4 | % | ||||||||||||||
Revenue | — 20 | % | $ | 5,022 | $ | 4,945.9 | $ | 4,945.9 | 98.5 | % | 97.0 | % |
| | | | Annual Incentive Plan Target Granted | | | Weighted Payout % Under Annual Incentive Plan | | | | | | Actual Payout (in $) | | | Actual Payout (as % of Target) | | ||||||||||||||||
| Mr. Brown | | | | $ | 2,580,000 | | | | | | | 99.8 | % | | | | | | | $ | 2,750,000 | | | | | | | 106.6 | % | | | |
| Mr. Kubasik | | | | $ | 2,580,000 | | | | | | | 99.8 | % | | | | | $ | 2,750,000 | | | | | | | 106.6 | % | | | |||
| Mr. Malave | | | | $ | 760,000 | | | | | | | 99.8 | % | | | | | $ | 0 | | | | | | | 0 | % | | | |||
| Mr. Gautier | | | | $ | 650,000 | | | | | | | 104.2 | %* | | | | | $ | 580,000 | | | | | | | 89.2 | % | | | |||
| Mr. Stackley | | | | $ | 650,000 | | | | | | | 101.7 | %* | | | | | $ | 700,000 | | | | | | | 107.7 | % | | | |||
| Mr. Zoiss | | | | $ | 650,000 | | | | | | | 97.3 | %* | | | | | $ | 610,000 | | | | | | | 93.8 | % | | |
Annual Incentive Plan Target Granted | Weighted Payout % Under Annual Incentive Plan | Actual Payout (in $) | Actual Payout (as % of Target) | |||||||||||||
Mr. Brown | $ | 2,580,000 | 103.5% | | $ | 2,850,000 | 110.5% | |||||||||
Mr. Kubasik | $ | 2,580,000 | 103.5% | $ | 2,850,000 | 110.5% | ||||||||||
Mr. Malave | $ | 700,000 | 103.5% | $ | 775,000 | 110.7% | ||||||||||
Mr. Gautier | $ | 620,000 | 86.6%* | $ | 575,000 | 92.7% | ||||||||||
Mr. Zoiss | $ | 620,000 | 114.3%* | $ | 720,000 | 116.1% |
| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2021 | |
Fiscal 2020 Target Value | ||||
Mr. Brown | $ | 10,250,000 | ||
Mr. Kubasik | $ | 10,250,000 | ||
Mr. Malave | $ | 2,100,000 | ||
Mr. Gautier | $ | 1,600,000 | ||
Mr. Zoiss | $ | 1,600,000 |
| | | | Fiscal 2020 Target Value | | | Fiscal 2021 Target Value | | | % Change | | | Reason for Change | | ||||||||||||||||
| Mr. Brown | | | | $ | 10,250,000 | | | | | | $ | 11,000,000 | | | | | | | 7.3 | % | | | | | | merit | | | |
| Mr. Kubasik | | | | $ | 10,250,000 | | | | | | $ | 11,000,000 | | | | | | | 7.3 | % | | | | | | merit | | | |
| Mr. Malave | | | | $ | 2,100,000 | | | | | | $ | 2,400,000 | | | | | | | 14 | % | | | | | | merit/market | | | |
| Mr. Gautier | | | | $ | 1,600,000 | | | | | | $ | 1,750,000 | | | | | | | 9 | % | | | | | | merit | | | |
| Mr. Stackley | | | | $ | 1,600,000 | | | | | | $ | 1,750,000 | | | | | | | 9 | % | | | | | | merit | | | |
| Mr. Zoiss | | | | $ | 1,600,000 | | | | | | $ | 1,750,000 | | | | | | | 9 | % | | | | | | merit | | | |
| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2021 | |
| 50% | | | 50% | |
| CUMULATIVE EPS | | | 3-YEAR ENDURING TARGET ROIC | |
| EPS (Earnings Per Share) is an indicator of profitability, often considered an important factor in determining a share’s price; impacted by our operating income, our tax rate and the number of shares outstanding. Calculated as follows: | | | ROIC (Return on Invested Capital) is an indicator of efficiency in using capital to generate returns (allocating capital to profitable investments). Calculated for the 3 year performance period as follows: | |
| net income (after tax)/diluted weighted-average shares of common stock outstanding | | | net operating profit (after tax)/(debt + equity + minority interest — cash) | |
RELATIVE TSR PAYOUT ADJUSTMENT | | |
| Payouts are subject to adjustment of up to +/- 33% based on relative TSR. | |
| TSR (Total Shareholder Return) measures cumulative value to shareholders through stock price appreciation and dividends. Relative TSR compares our TSR percentile ranking with the ranking of other companies in the S&P 500 (a broad market index of companies with which we compete for shareholder investment). | |
| Cumulative EPS | | | 3-Year Enduring Target ROIC | |
| | | |
| Relative TSR Payout Adjustment | | | | ||||
| | | The graphic at left shows how the potential relative TSR performance payout adjustment (up to +/-33%) is dependent on our percentile ranking for TSR performance over the fiscal | | | | |
| COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2021 | |
vest ratably over 3 years. |
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COMPENSATION DISCUSSION AND ANALYSIS EMPLOYMENT AGREEMENTS | |
During the Initial Period, Mr. Brown’s annual base salary would be $1,450,000, his target annual cash bonus award would be $2,500,000, the target value of his annual long-term incentive awards would be $10,250,000 and in no case would any such compensation element be less than that paid or granted to Mr. Kubasik. (The Board would maintain discretion to increase these amounts.) > After the closing of the Merger, L3Harris would grant Mr. Brown a one-time integration-related award composed of performance share units with a target value of $2,500,000 (subject to certain performance-based multipliers) and performance-based non-qualified stock options with a grant date value of $5,000,000 and a ten-year term. Both components of the integration-related award are subject to three-year cliff vesting and will vest (if at all) subject to continued employment and achievement of performance conditions established by the L3Harris Compensation Committee. (This award was granted in August 2019; for further information related to the terms and conditions, see the Outstanding Equity Awards at 2021 Fiscal Year End Table on page 69 and related notes.) > If during the Initial Period there was a qualifying termination of Mr. Brown (as defined in his Executive Change in Control Severance Agreement entered into with Harris), or if during the Subsequent Period Mr. Brown’s employment is terminated by us without “cause” or by him as a result of a “constructive termination” (as such terms are defined in the Brown Original Agreement), then Mr. Brown would be eligible for the compensation, benefits and other rights provided under that Executive Change in Control Severance Agreement, with such amounts determined using a “3X” multiple. In addition, his outstanding stock options (other than those granted as part of the integration award) and restricted stock units would become fully vested, exercisable, issuable and payable (as applicable), and options would remain exercisable for their full remaining term. Outstanding performance share units (other than those granted as part of the integration award) would remain outstanding and eligible to vest for the remainder of the applicable performance period based on the attainment of performance goals. Mr. Brown would also receive benefit continuation payments in lieu of providing in-kind medical and prescription drug coverage after the end of the three year benefit continuation period until he reaches the age of 65 (or, if earlier, the date he becomes eligible to receive comparable benefits from another employer). If such qualifying termination occurs during the Subsequent Period, the integration award components would remain outstanding and eligible to vest based on the greater of target performance and the actual attainment of applicable performance goals. The integration award options that vest would remain exercisable for their full remaining term. > Upon his retirement at the end of the Subsequent Period, Mr. Brown will not receive any cash severance, but his equity awards (other than those comprising the integration award) will be treated as described above regarding a qualifying termination, and his integration award will pay or vest, as applicable, based on actual performance. In addition, Mr. Brown |
COMPENSATION DISCUSSION AND ANALYSIS EMPLOYMENT AGREEMENTS | |
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| COMPENSATION DISCUSSION AND ANALYSIS EMPLOYMENT AGREEMENTS | |
| COMPENSATION DISCUSSION AND ANALYSIS OTHER COMPENSATION ELEMENTS | |
COMPENSATION DISCUSSION AND ANALYSIS OTHER COMPENSATION ELEMENTS | |
| COMPENSATION DISCUSSION AND ANALYSIS OTHER COMPENSATION ELEMENTS | |
|
COMPENSATION DISCUSSION AND ANALYSIS OTHER COMPENSATION POLICIES | |
| COMPENSATION DISCUSSION AND ANALYSIS OTHER COMPENSATION POLICIES | |
| Name and Principal Position* | | | Year | | | Salary $(1) | | | Bonus $(2) | | | Stock Awards $(3) | | | Option Awards $(4) | | | Non-Equity Incentive Plan Compensation $(5) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings $(6) | | | All Other Compensation $(7) | | | Total $ | | |||||||||||||||||||||||||||
| Christopher E. Kubasik(8) Vice Chair and Chief Executive Officer | | | | | 2021 | | | | | $ | 1,500,000 | | | | | $ | 0 | | | | | $ | 8,287,958 | | | | | $ | 2,750,012 | | | | | $ | 2,750,000 | | | | | $ | 0 | | | | | $ | 409,779 | | | | | $ | 15,697,749 | | |
| | | 2020 | | | | | $ | 1,492,308 | | | | | $ | 0 | | | | | $ | 8,232,063 | | | | | $ | 2,562,504 | | | | | $ | 2,850,000 | | | | | $ | 0 | | | | | $ | 2,511,221 | | | | | $ | 17,648,096 | | | |||
| | | FTP | | | | | $ | 752,885 | | | | | $ | 0 | | | | | $ | 2,500,194 | | | | | $ | 5,000,034 | | | | | $ | 1,467,500 | | | | | $ | 0 | | | | | $ | 5,495,406 | | | | | $ | 15,216,019 | | | |||
| William M. Brown Executive Chair | | | | | 2021 | | | | | $ | 1,500,000 | | | | | $ | 0 | | | | | $ | 8,287,958 | | | | | $ | 2,750,012 | | | | | $ | 2,750,000 | | | | | $ | 0 | | | | | $ | 419,785 | | | | | $ | 15,707,755 | | |
| | | 2020 | | | | | $ | 1,492,308 | | | | | $ | 0 | | | | | $ | 8,232,063 | | | | | $ | 2,562,504 | | | | | $ | 2,850,000 | | | | | $ | 0 | | | | | $ | 315,778 | | | | | $ | 15,452,653 | | | |||
| | | FTP | | | | | $ | 752,885 | | | | | $ | 0 | | | | | $ | 7,625,336 | | | | | $ | 5,000,034 | | | | | $ | 1,467,500 | | | | | $ | 0 | | | | | $ | 899,875 | | | | | $ | 15,745,630 | | | |||
| | | 2019 | | | | | $ | 1,388,462 | | | | | $ | 0 | | | | | $ | 7,491,095 | | | | | $ | 2,269,511 | | | | | $ | 3,735,000 | | | | | $ | 0 | | | | | $ | 889,464 | | | | | $ | 15,723,532 | | | |||
| Jesus Malave, Jr.(9) Former Senior Vice President and Chief Financial Officer | | | | | 2021 | | | | | $ | 750,769 | | | | | $ | 0 | | | | | $ | 1,808,428 | | | | | $ | 600,021 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 114,987 | | | | | $ | 3,274,205 | | |
| | | 2020 | | | | | $ | 688,462 | | | | | $ | 0 | | | | | $ | 1,686,846 | | | | | $ | 525,007 | | | | | $ | 775,000 | | | | | $ | 0 | | | | | $ | 45,002 | | | | | $ | 3,720,317 | | | |||
| | | FTP | | | | | $ | 324,519 | | | | | $ | 200,000 | | | | | $ | 1,610,121 | | | | | $ | 1,340,037 | | | | | $ | 367,000 | | | | | $ | 0 | | | | | $ | 140,008 | | | | | $ | 3,981,685 | | | |||
| Todd W. Gautier(10) Former President, Aviation Systems | | | | | 2021 | | | | | $ | 645,385 | | | | | $ | 0 | | | | | $ | 1,318,858 | | | | | $ | 437,536 | | | | | $ | 580,000 | | | | | $ | 0 | | | | | $ | 352,950 | | | | | $ | 3,334,729 | | |
| | | 2020 | | | | | $ | 616,923 | | | | | $ | 0 | | | | | $ | 1,284,990 | | | | | $ | 400,015 | | | | | $ | 575,000 | | | | | $ | 490,349 | | | | | $ | 590,516 | | | | | $ | 3,957,793 | | | |||
| | | FTP | | | | | $ | 311,538 | | | | | $ | 0 | | | | | $ | 660,027 | | | | | $ | 1,340,037 | | | | | $ | 283,000 | | | | | $ | 174,750 | | | | | $ | 2,753,809 | | | | | $ | 5,523,161 | | | |||
| Sean J. Stackley(11) President, Integrated Mission Systems | | | | | 2021 | | | | | $ | 645,385 | | | | | $ | 0 | | | | | $ | 1,318,858 | | | | | $ | 437,536 | | | | | $ | 700,000 | | | | | $ | 0 | | | | | $ | 101,650 | | | | | $ | 3,203,429 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| Edward J. Zoiss(12) President, Space and Airborne Systems | | | | | 2021 | | | | | $ | 645,385 | | | | | $ | 0 | | | | | $ | 1,318,858 | | | | | $ | 437,536 | | | | | $ | 610,000 | | | | | $ | 0 | | | | | $ | 104,635 | | | | | $ | 3,116,414 | | |
| | | 2020 | | | | | $ | 616,923 | | | | | $ | 0 | | | | | $ | 1,284,990 | | | | | $ | 400,015 | | | | | $ | 720,000 | | | | | $ | 0 | | | | | $ | 84,217 | | | | | $ | 3,106,145 | | | |||
| | | FTP | | | | | $ | 311,538 | | | | | $ | 0 | | | | | $ | 1,460,171 | | | | | $ | 1,340,037 | | | | | $ | 388,000 | | | | | $ | 0 | | | | | $ | 116,455 | | | | | $ | 3,616,201 | | |
Name and Principal Position | Year | Salary $(1) | Bonus $(2) | Stock Awards $(3) | Option Awards $(4) | Non-Equity Incentive Plan Compensation $(5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings $(6) | All Other Compensation $(7) | Total $ | |||||||||||||||||
William | 2020 | $ | 1,492,308 | $0 | $ | 8,232,063 | $ | 2,562,504 | $ | 2,850,000 | $0 | $ | 315,778 | $ | 15,452,653 | |||||||||||
M. Brown | FTP | $ | 752,885 | $0 | $ | 7,625,336 | $ | 5,000,034 | $ | 1,467,500 | $0 | $ | 899,875 | $ | 15,745,630 | |||||||||||
Chair and | 2019 | $ | 1,338,462 | $0 | $ | 7,491,095 | $ | 2,269,511 | $ | 3,735,000 | $0 | $ | 889,464 | $ | 15,723,532 | |||||||||||
Chief Executive | 2018 | $ | 1,287,500 | $0 | $ | 6,974,118 | $ | 2,201,394 | $ | 2,640,000 | $0 | $ | 913,101 | $ | 14,016,113 | |||||||||||
Officer | ||||||||||||||||||||||||||
Christopher | 2020 | $ | 1,492,308 | $0 | $ | 8,232,063 | $ | 2,562,504 | $ | 2,850,000 | $0 | $ | 2,511,221 | $ | 17,648,096 | |||||||||||
E. Kubasik(8) | FTP | $ | 752,885 | $0 | $ | 2,500,194 | $ | 5,000,034 | $ | 1,467,500 | $0 | $ | 5,495,406 | $ | 15,216,019 | |||||||||||
Vice Chair, | �� | |||||||||||||||||||||||||
President and Chief | ||||||||||||||||||||||||||
Operating Officer | ||||||||||||||||||||||||||
Jesus | 2020 | $ | 688,462 | $0 | $ | 1,686,846 | $ | 525,007 | $ | 775,000 | $0 | $ | 45,002 | $ | 3,720,317 | |||||||||||
Malave, Jr.(9) | FTP | $ | 324,519 | $200,000 | $ | 1,610,121 | $ | 1,340,037 | $ | 367,000 | $0 | $ | 140,008 | $ | 3,981,685 | |||||||||||
Senior Vice President | ||||||||||||||||||||||||||
and Chief Financial | ||||||||||||||||||||||||||
Officer | ||||||||||||||||||||||||||
Todd | 2020 | $ | 616,923 | $0 | $ | 1,284,990 | $ | 400,015 | $ | 575,000 | $ 490,349 | $ | 590,516 | $ | 3,957,793 | |||||||||||
W. Gautier(10) | FTP | $ | 311,538 | $0 | $ | 660,027 | $ | 1,340,037 | $ | 283,000 | $ 174,750 | $ | 2,753,809 | $ | 5,523,161 | |||||||||||
President, | ||||||||||||||||||||||||||
Aviation Systems | ||||||||||||||||||||||||||
Edward | 2020 | $ | 616,923 | $0 | $ | 1,284,990 | $ | 400,015 | $ | 720,000 | $0 | $ | 84,217 | $ | 3,106,145 | |||||||||||
J. Zoiss(11) | FTP | $ | 311,538 | $0 | $ | 1,460,171 | $ | 1,340,037 | $ | 388,000 | $0 | $ | 116,455 | $ | 3,616,201 | |||||||||||
President, | ||||||||||||||||||||||||||
Space and Airborne | ||||||||||||||||||||||||||
Systems | ||||||||||||||||||||||||||
| COMPENSATION TABLES FISCAL |
Life Insurance Premiums | Company Contributions to RSP | Company Credits to ERSP (nonqualified) | Perquisites and Other Personal Benefits | Tax Reimbursement Payments | Other Payments | |||||||||||||||||||||||
Name | (a) | (b) | (c) | (d) | (e) | (f) | Total | |||||||||||||||||||||
William M. Brown | $ | 4,707 | $ | 6,808 | $ | 170,781 | $ | 125,482 | $ | 0 | $ | 8,000 | $ | 315,778 | ||||||||||||||
Christopher E. Kubasik | $ | 4,842 | $ | 17,215 | $ | 145,760 | $ | 376,168 | $ | 47,236 | $ | 1,920,000 | $ | 2,511,221 | ||||||||||||||
Jesus Malave, Jr. | $ | 2,124 | $ | 1,615 | $ | 21,000 | $ | 20,262 | $ | 0 | $ | 0 | $ | 45,002 | ||||||||||||||
Todd W. Gautier | $ | 1,788 | $ | 17,146 | $ | 291,582 | $ | 20,000 | $ | 0 | $ | 260,000 | $ | 590,516 | ||||||||||||||
Edward J. Zoiss | $ | 1,788 | $ | 6,623 | $ | 53,672 | $ | 22,134 | $ | 0 | $ | 0 | $ | 84,217 |
COMPENSATION TABLES FISCAL |
| Name | | | Life Insurance Premiums (a) | | | Company Contributions to RSP (b) | | | Company Credits to ERSP (nonqualified) (c) | | | Perquisites and Other Personal Benefits and Other Payments (d) | | | Total | | ||||||||||||||||||||
| Christopher E. Kubasik | | | | $ | 4,856 | | | | | | $ | 14,885 | | | | | | $ | 246,115 | | | | | | $ | 143,923 | | | | | | $ | 409,779 | | | |
| William M. Brown | | | | $ | 4,856 | | | | | | $ | 6,923 | | | | | | $ | 254,077 | | | | | | $ | 153,929 | | | | | | $ | 419,785 | | | |
| Jesus Malave, Jr. | | | | $ | 2,241 | | | | | | $ | 16,000 | | | | | | $ | 75,946 | | | | | | $ | 20,800 | | | | | | $ | 114,987 | | | |
| Todd W. Gautier | | | | $ | 1,927 | | | | | | $ | 17,469 | | | | | | $ | 312,754 | | | | | | $ | 20,800 | | | | | | $ | 352,950 | | | |
| Sean J. Stackley | | | | $ | 1,927 | | | | | | $ | 14,800 | | | | | | $ | 64,123 | | | | | | $ | 20,800 | | | | | | $ | 101,650 | | | |
| Edward J. Zoiss | | | | $ | 1,927 | | | | | | $ | 6,215 | | | | | | $ | 75,708 | | | | | | $ | 20,785 | | | | | | $ | 104,635 | | | |
(a) |
(b) |
| Name | | | Salary and Bonus as Proportion of Fiscal | | ||||
| Christopher E. Kubasik | | | | | 9.6 | % | | |
| William M. Brown | | | | 9.5 | % | | | |
Jesus Malave, Jr. | | | | | 22.9 | % | | | |
| Todd W. Gautier | | | | | 19.4 | % | | |
| Sean J. Stackley | | | | | 20.1 | % | | |
| Edward J. Zoiss | | | | 20.7 | % | | |
| COMPENSATION TABLES GRANTS OF PLAN-BASED AWARDS IN FISCAL | |
| | | | Grant Date | | | Approval Date | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | | | All Other Option Awards: Number of Securities Underlying Options (#) (4) | | | Exercise or Base Price of Option Awards ($/Share)(5) | | | Grant Date Fair Value of Stock and Option Awards ($)(6) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name/Type of Award | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Christopher E. Kubasik | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| Annual Incentive Plan | | | | | — | | | | | | | — | | | | | | $ | 258,000 | | | | | | $ | 2,580,000 | | | | | | $ | 5,160,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Performance share units | | | | | 2/26/21 | | | | | | | 2/26/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,064 | | | | | | | 30,235 | | | | | | | 60,470 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 5,537,843 | | | |
| Restricted stock units | | | | | 2/26/21 | | | | | | | 2/26/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | �� | | | | | — | | | | | | | 15,118 | | | | | | | — | | | | | | | — | | | | | | $ | 2,750,115 | | | |
| Stock options | | | | | 2/26/21 | | | | | | | 2/26/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 65,228 | | | | | | $ | 181.91 | | | | | | $ | 2,750,012 | | | |
| William M. Brown | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Incentive Plan | | | | | — | | | | | | | — | | | | | | $ | 258,000 | | | | | | $ | 2,580,000 | | | | | | $ | 5,160,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Performance share units | | | | | 2/26/21 | | | | | | | 2/26/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,064 | | | | | | | 30,235 | | | | | | | 60,470 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 5,537,843 | | | |
| Restricted stock units | | | | | 2/26/21 | | | | | | | 2/26/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 15,118 | | | | | | | — | | | | | | | — | | | | | | $ | 2,750,115 | | | |
| Stock options | | | | | 2/26/21 | | | | | | | 2/26/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 65,228 | | | | | | $ | 181.91 | | | | | | $ | 2,750,012 | | | |
| Jesus Malave, Jr. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Incentive Plan | | | | | — | | | | | | | — | | | | | | $ | 76,000 | | | | | | $ | 760,000 | | | | | | $ | 1,520,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Performance share units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,105 | | | | | | | 6,597 | | | | | | | 13,194 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 1,208,307 | | | |
| Restricted stock units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,299 | | | | | | | — | | | | | | | — | | | | | | $ | 600,121 | | | |
| Stock options | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 14,232 | | | | | | $ | 181.91 | | | | | | $ | 600,021 | | | |
| Todd W. Gautier | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Incentive Plan | | | | | — | | | | | | | — | | | | | | $ | 32,500 | | | | | | $ | 650,000 | | | | | | $ | 1,300,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Performance share units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 806 | | | | | | | 4,811 | | | | | | | 9,622 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 881,183 | | | |
| Restricted stock units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,406 | | | | | | | — | | | | | | | — | | | | | | $ | 437,675 | | | |
| Stock options | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 10,378 | | | | | | $ | 181.91 | | | | | | $ | 437,536 | | | |
| Sean J. Stackley | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Incentive Plan | | | | | — | | | | | | | — | | | | | | $ | 32,500 | | | | | | $ | 650,000 | | | | | | $ | 1,300,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Performance share units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 806 | | | | | | | 4,811 | | | | | | | 9,622 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 881,183 | | | |
| Restricted stock units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,406 | | | | | | | — | | | | | | | — | | | | | | $ | 437,675 | | | |
| Stock options | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 10,378 | | | | | | $ | 181.91 | | | | | | $ | 437,536 | | | |
| Edward J. Zoiss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Incentive Plan | | | | | — | | | | | | | — | | | | | | $ | 32,500 | | | | | | $ | 650,000 | | | | | | $ | 1,300,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Performance share units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 806 | | | | | | | 4,811 | | | | | | | 9,622 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | $ | 881,183 | | | |
| Restricted stock units | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,406 | | | | | | | — | | | | | | | — | | | | | | $ | 437,675 | | | |
| Stock options | | | | | 2/26/21 | | | | | | | 2/25/21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 10,378 | | | | | | $ | 181.91 | | | | | | $ | 437,536 | | | |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other | All Other Option | Exercise | Grant Date | ||||||||||||||||||||||||||||||
Name/Type of Award | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Stock or Units (#)(3) | Options (#)(4) | Awards ($/Share)(5) | Awards ($)(6) | |||||||||||||||||||||||
William M. Brown | |||||||||||||||||||||||||||||||||||
Annual Incentive Plan | — | — | $ | 258,000 | $ | 2,250,000 | $ | 5,160,000 | — | — | — | — | — | — | — | ||||||||||||||||||||
Performance share units | 2/28/20 | 2/28/20 | 4,342 | 25,920 | 51,840 | — | — | — | $ | 5,669,482 | |||||||||||||||||||||||||
Restricted stock units | 2/28/20 | 2/28/20 | — | — | — | 12,960 | — | — | $ | 2,562,581 | |||||||||||||||||||||||||
Stock options | 2/28/20 | 2/28/20 | — | — | — | — | 74,297 | $ | 197,73 | $ | 2,562,504 | ||||||||||||||||||||||||
Christopher E. Kubasik | |||||||||||||||||||||||||||||||||||
Annual Incentive Plan | — | — | $ | 258,000 | $ | 2,580,000 | $ | 5,160,000 | — | — | — | — | — | — | — | ||||||||||||||||||||
Performance share units | 2/28/20 | 2/28/20 | 4,342 | 25,920 | 51,840 | — | — | — | $ | 5,669,482 | |||||||||||||||||||||||||
Restricted stock units | 2/28/20 | 2/28/20 | — | — | — | 12,960 | — | — | $ | 2,562,581 | |||||||||||||||||||||||||
Stock options | 2/28/20 | 2/28/20 | — | — | — | — | 74,297 | $ | 197,73 | $ | 2,562,504 | ||||||||||||||||||||||||
Jesus Malave, Jr. | |||||||||||||||||||||||||||||||||||
Annual Incentive Plan | — | — | $ | 70,000 | $ | 700,000 | $ | 1,400,000 | — | — | — | — | — | — | — | ||||||||||||||||||||
Performance share units | 2/28/20 | 2/27/20 | 890 | 5,311 | 10,622 | — | — | — | $ | 1,161,675 | |||||||||||||||||||||||||
Restricted stock units | 2/28/20 | 2/27/20 | — | — | — | 2,656 | — | — | $ | 525,171 | |||||||||||||||||||||||||
Stock options | 2/28/20 | 2/27/20 | — | — | — | — | 15,222 | $ | 197,73 | $ | 525,007 | ||||||||||||||||||||||||
Todd W. Gautier | |||||||||||||||||||||||||||||||||||
Annual Incentive Plan | — | — | $ | 31,000 | $ | 620,000 | $ | 1,240,000 | — | — | — | — | — | — | — | ||||||||||||||||||||
Performance share units | 2/28/20 | 2/27/20 | 678 | 4,046 | 8,092 | — | — | — | $ | 884,982 | |||||||||||||||||||||||||
Restricted stock units | 2/28/20 | 2/27/20 | — | — | — | 2,023 | — | — | $ | 400,008 | |||||||||||||||||||||||||
Stock options | 2/28/20 | 2/27/20 | — | — | — | — | 11,598 | $ | 197,73 | $ | 400,015 | ||||||||||||||||||||||||
Edward J. Zoiss | |||||||||||||||||||||||||||||||||||
Annual Incentive Plan | — | — | $ | 31,000 | $ | 620,000 | $ | 1,240,000 | — | — | — | — | — | — | — | ||||||||||||||||||||
Performance share units | 2/28/20 | 2/27/20 | 678 | 4,046 | 8,092 | — | — | — | $ | 884,982 | |||||||||||||||||||||||||
Restricted stock units | 2/28/20 | 2/27/20 | — | — | — | 2,023 | — | — | $ | 400,008 | |||||||||||||||||||||||||
Stock options | 2/28/20 | 2/27/20 | — | — | — | — | 11,598 | $ | 197,73 | $ | 400,015 |
COMPENSATION TABLES GRANTS OF PLAN-BASED AWARDS IN FISCAL | |
| COMPENSATION TABLES OUTSTANDING EQUITY AWARDS AT | |
| | | | Option Awards | | | | | | Stock Awards | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable(2)(3) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | | | | Number of Shares or Units of Stock That Have Not Vested (#)(4) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | | | Equity Incentive Plan Awards: | | |||||||||||||||||||||||||||||||||||||||
| Name/Option Grant Date(1) | | | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | | | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(7) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Christopher E. Kubasik | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| 10/30/2015 | | | | | 66,258 | | | | | | | 0 | | | | | | | — | | | | | | $ | 97.24 | | | | | | | 10/30/2025 | | | | | | | | | | 15,118 | | | | | | $ | 3,223,762 | | | | | | | 25,920 | | | | | | $ | 5,527,181 | | | |
| 2/16/2016 | | | | | 76,190 | | | | | | | 0 | | | | | | | — | | | | | | $ | 89.39 | | | | | | | 2/16/2026 | | | | | | | | | | 12,960 | | | | | | $ | 2,763,590 | | | | | | | 60,470 | | | | | | $ | 12,894,623 | | | |
| 2/21/2017 | | | | | 56,624 | | | | | | | 0 | | | | | | | — | | | | | | $ | 129.85 | | | | | | | 2/21/2027 | | | | | | | | | | 48,820 | | | | | | $ | 10,410,377 | | | | | | | 86,390 | | | | | | $ | 18,421,804 | | | |
| 12/20/2017 | | | | | 112,138 | | | | | | | 0 | | | | | | | — | | | | | | $ | 149.31 | | | | | | | 12/20/2027 | | | | | | | | | | 76,898 | | | | | | $ | 16,397,730 | | | | | | ||||||||||||
| 2/20/2018 | | | | | 97,171 | | | | | | | 0 | | | | | | | — | | | | | | $ | 162.30 | | | | | | | 2/20/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 8/1/2019 | | | | | 0 | | | | | | | 129,501 | | | | | | | — | | | | | | $ | 204.85 | | | | | | | 8/1/2029 | | | | | | | | | | | | | | | | | ||||||||||||||||||
| 2/28/2020 | | | | | 24,765 | | | | | | | 49,532 | | | | | | | — | | | | | | $ | 197.73 | | | | | | | 2/28/2030 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2/26/2021 | | | | | 0 | | | | | | | 65,228 | | | | | | | — | | | | | | $ | 181.91 | | | | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | 433,146 | | | | | | | 244,261 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| William M. Brown | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| 8/27/2016 | | | | | 303,820 | | | | | | | 0 | | | | | | | — | | | | | | $ | 90.84 | | | | | | | 8/27/2026 | | | | | | | | | | 15,118 | | | | | | $ | 3,223,762 | | | | | | | 25,920 | | | | | | $ | 5,527,181 | | | |
| 8/25/2017 | | | | | 118,429 | | | | | | | 0 | | | | | | | — | | | | | | $ | 119.66 | | | | | | | 8/25/2027 | | | | | | | | | | 12,960 | | | | | | $ | 2,763,590 | | | | | | | 60,470 | | | | | | $ | 12,894,623 | | | |
| 8/25/2018 | | | | | 75,524 | | | | | | | 0 | | | | | | | — | | | | | | $ | 163.23 | | | | | | | 8/25/2028 | | | | | | | | | | 48,820 | | | | | | $ | 10,410,377 | | | | | | | 86,390 | | | | | | $ | 18,421,804 | | | |
| 8/1/2019 | | | | | 0 | | | | | | | 129,501 | | | | | | | — | | | | | | $ | 204.85 | | | | | | | 8/1/2029 | | | | | | | | | | 25,019 | | | | | | $ | 5,335,052 | | | | | | | | | | | | | | | | | |
| 2/28/2020 | | | | | 24,765 | | | | | | | 49,532 | | | | | | | — | | | | | | $ | 197.73 | | | | | | | 2/28/2030 | | | | | | | | | | 101,917 | | | | | | $ | 21,732,781 | | | | | | ||||||||||||
| 2/26/2021 | | | | | 0 | | | | | | | 65,228 | | | | | | | — | | | | | | $ | 181.91 | | | | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | | | | | 522,538 | | | | | | | 244,261 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Jesus Malave, Jr.(8) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| 8/1/2019 | | | | | 0 | | | | | | | 34,707 | | | | | | | — | | | | | | $ | 204.85 | | | | | | | 8/1/2029 | | | | | | | | | | 3,299 | | | | | | $ | 703,479 | | | | | | | 5,311 | | | | | | $ | 1,132,518 | | | |
| 2/28/2020 | | | | | 5,074 | | | | | | | 10,148 | | | | | | | — | | | | | | $ | 197.73 | | | | | | | 2/28/2030 | | | | | | | | | | 2,656 | | | | | | $ | 566,365 | | | | | | | 13,194 | | | | | | $ | 2,813,489 | | | |
| 2/26/2021 | | | | | 0 | | | | | | | 14,232 | | | | | | | — | | | | | | $ | 181.91 | | | | | | | 2,26/2031 | | | | | | | | | | 12,888 | | | | | | $ | 2,748,237 | | | | | | | 18,505 | | | | | | $ | 3,946,006 | | | |
| | | | | | 5,074 | | | | | | | 59,087 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,546 | | | | | | $ | 329,669 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,389 | | | | | | $ | 4,347,750 | | | | | | | | | | | | | | | | | |
| Todd W. Gautier | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| 2/20/2018 | | | | | 13,158 | | | | | | | 0 | | | | | | | — | | | | | | $ | 162.30 | | | | | | | 2/20/2028 | | | | | | | | | | 2,406 | | | | | | $ | 513,055 | | | | | | | 4,046 | | | | | | $ | 862,769 | | | |
| 8/1/2019 | | | | | 0 | | | | | | | 34,707 | | | | | | | — | | | | | | $ | 204.85 | | | | | | | 8/1/2029 | | | | | | | | | | 2,023 | | | | | | $ | 431,385 | | | | | | | 9,622 | | | | | | $ | 2,051,795 | | | |
| 2/28/2020 | | | | | 3,866 | | | | | | | 7,732 | | | | | | | — | | | | | | $ | 197.73 | | | | | | | 2/28/2030 | | | | | | | | | | 12,888 | | | | | | $ | 2,748,237 | | | | | | | 13,668 | | | | | | $ | 2,914,564 | | | |
| 2/26/2021 | | | | | 0 | | | | | | | 10,378 | | | | | | | — | | | | | | $ | 181.91 | | | | | | | 2/26/2031 | | | | | | | | | | 8,181 | | | | | | $ | 1,744,516 | | | | | | | | | | | | | | | | | |
| | | | | | 17,024 | | | | | | | 52,817 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,498 | | | | | | $ | 5,437,194 | | | | | | | | | | | | | | | | | |
| Sean J. Stackley | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| 2/20/2018 | | | | | 2,210 | | | | | | | 0 | | | | | | | — | | | | | | $ | 162.30 | | | | | | | 2/28/2028 | | | | | | | | | | 2,406 | | | | | | $ | 513,055 | | | | | | | 4,046 | | | | | | $ | 862,769 | | | |
| 8/1/2019 | | | | | 0 | | | | | | | 34,707 | | | | | | | — | | | | | | $ | 204.85 | | | | | | | 8/1/2029 | | | | | | | | | | 2,023 | | | | | | $ | 431,385 | | | | | | | 9,622 | | | | | | $ | 2,051,795 | | | |
| 2/28/2020 | | | | | 3,866 | | | | | | | 7,732 | | | | | | | — | | | | | | $ | 197.73 | | | | | | | 2/28/2030 | | | | | | | | | | 12,888 | | | | | | $ | 2,748,237 | | | | | | | 13,668 | | | | | | $ | 2,914,564 | | | |
| 2/26/2021 | | | | | 0 | | | | | | | 10,378 | | | | | | | — | | | | | | $ | 181.91 | | | | | | | 2/26/2031 | | | | | | | | | | 6,293 | | | | | | $ | 1,341,919 | | | | | | | | | | | | | | | | | |
| | | | | | 6,076 | | | | | | | 52,817 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,610 | | | | | | $ | 5,034,596 | | | | | | | | | | | | | | | | | |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities UnderlyingUnexercised Options (#) Unexercisable(2) | Equity Incentive Plan Awards: Number ofUnderlying Unexercised Unearned Options (#)(3) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | Equity Incentive Plan Awards: | ||||||||||||||||||||||||||
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(7) | ||||||||||||||||||||||||||||||||
Name/Option Grant Date(1) | |||||||||||||||||||||||||||||||||
William M. Brown 8/23/2013 | 177,900 | 0 | — | $ | 56.97 | 8/23/2023 | 25,019 | $ | 4,729,091 | 48,820 | $ | 9,227,956 | |||||||||||||||||||||
8/23/2014 | 138,000 | 0 | — | $ | 71.02 | 8/23/2024 | 12,960 | $ | 2,449,699 | 25,920 | $ | 4,899,398 | |||||||||||||||||||||
8/28/2015 | 390,290 | 0 | — | $ | 77.54 | 8/28/2025 | 37,979 | $ | 7,178,791 | 74,740 | $ | 14,127,355 | |||||||||||||||||||||
8/27/2016 | 303,820 | 0 | — | $ | 90.84 | 8/27/2026 | |||||||||||||||||||||||||||
8/25/2017 | 118,429 | 0 | — | $ | 119.66 | 8/25/2027 | |||||||||||||||||||||||||||
8/25/2018 | 75,524 | 0 | — | $ | 163.23 | 8/25/2028 | |||||||||||||||||||||||||||
2/28/2020 | 0 | 74,297 | — | $ | 197.73 | 2/28/2030 | |||||||||||||||||||||||||||
8/1/2019 | 1,203,963 — | 74,297 — | 129,501 | $ | 204.85 | 8/1/2029 | |||||||||||||||||||||||||||
Christopher E. Kubasik 10/30/2015 | 66,258 | 0 | — | $ | 97.24 | 10/30/2025 | 31,792 | $ | 6,009,324 | 48,820 | $ | 9,227,956 | |||||||||||||||||||||
2/16/2016 | 76,190 | 0 | — | $ | 89.39 | 2/16/2026 | 12,960 | $ | 2,449,699 | 25,920 | $ | 4,899,398 | |||||||||||||||||||||
2/21/2017 | 56,624 | 0 | — | $ | 129.85 | 2/21/2027 | 44,752 | $ | 8,459,023 | 74,740 | $ | 14,127,355 | |||||||||||||||||||||
12/20/2017 | 112,138 | 0 | — | $ | 149.31 | 12/20/2027 | |||||||||||||||||||||||||||
2/20/2018 | 97,171 | 0 | — | $ | 162.30 | 2/20/2028 | |||||||||||||||||||||||||||
2/28/2020 | 0 | 74,297 | — | $ | 197.73 | 2/28/2030 | |||||||||||||||||||||||||||
8/1/2019 | 408,381 — | 74,297 — | 129,501 | $ | 204.85 | 8/1/2029 | |||||||||||||||||||||||||||
Jesus Malave, Jr. 2/28/2020 | 0 | 15,222 | — | $ | 197.73 | 2/28/2030 | 3,092 | $ | 584,450 | 12,888 | $ | 2,436,090 | |||||||||||||||||||||
8/1/2019 | — | — | 34,707 | $ | 204,85 | 8/1/2029 | 2,656 | $ | 502,037 | 5,311 | $ | 1,003,885 | |||||||||||||||||||||
5,748 | $ | 1,086,487 | 18,199 | $ | 3,439,975 | ||||||||||||||||||||||||||||
Todd W. Gautier 2/21/2017 | 15,571 | 0 | — | $ | 129,85 | 2/21/2027 | 8,181 | $ | 1,546,373 | 12,888 | $ | 2,436,090 | |||||||||||||||||||||
2/20/2018 | 13,158 | 0 | — | $ | 162,30 | 2/20/2028 | 2,023 | $ | 382,387 | 4,046 | $ | 764,775 | |||||||||||||||||||||
2/28/2020 | 0 | 11,598 | — | $ | 197.73 | 2/28/2030 | 10,204 | $ | 1,928,760 | 16,934 | $ | 3,200,865 | |||||||||||||||||||||
8/1/2019 | 28,729 — | 11,598 — | 34,707 | $ | 204.85 | 8/1/2029 | |||||||||||||||||||||||||||
Edward J. Zoiss 8/26/2016 | 27,800 | 0 | — | $ | 90.84 | 8/26/2026 | 3,906 | $ | 738,312 | 12,888 | $ | 2,436,090 | |||||||||||||||||||||
8/25/2017 | 12,277 | 0 | — | $ | 119.66 | 8/25/2027 | 2,023 | $ | 382,387 | 4,046 | $ | 764,775 | |||||||||||||||||||||
8/24/2018 | 9,012 | 0 | — | $ | 163.23 | 8/24/2028 | 5,929 | $ | 1,120,700 | 16,934 | $ | 3,200,865 | |||||||||||||||||||||
2/28/2020 | 0 | 11,598 | — | $ | 197.73 | 2/28/2030 | |||||||||||||||||||||||||||
8/1/2019 | 49,089 — | 11,598 — | 34,707 | $ | 204.85 | 8/1/2029 |
COMPENSATION TABLES OUTSTANDING EQUITY AWARDS AT | |
| | | | Option Awards | | | | | | Stock Awards | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable(2)(3) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | | | | Number of Shares or Units of Stock That Have Not Vested (#)(4) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | | | Equity Incentive Plan Awards: | | |||||||||||||||||||||||||||||||||||||||
| Name/Option Grant Date(1) | | | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | | | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(7) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Edward J. Zoiss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| 8/26/2016 | | | | | 27,800 | | | | | | | 0 | | | | | | | — | | | | | | $ | 90.84 | | | | | | | 8/26/2026 | | | | | | | | | | 2,406 | | | | | | $ | 513,055 | | | | | | | 4,046 | | | | | | $ | 862,769 | | | |
| 8/25/2017 | | | | | 12,277 | | | | | | | 0 | | | | | | | — | | | | | | $ | 119.66 | | | | | | | 8/25/2027 | | | | | | | | | | 2,023 | | | | | | $ | 431,385 | | | | | | | 9,622 | | | | | | $ | 2,051,795 | | | |
| 8/24/2018 | | | | | 9,012 | | | | | | | 0 | | | | | | | — | | | | | | $ | 163.23 | | | | | | | 8/24/2028 | | | | | | | | | | 12,888 | | | | | | $ | 2,748,237 | | | | | | | 13,668 | | | | | | $ | 2,914,564 | | | |
| 8/1/2019 | | | | | 0 | | | | | | | 34,707 | | | | | | | — | | | | | | $ | 204.85 | | | | | | | 8/1/2029 | | | | | | | | | | 3,906 | | | | | | $ | 832,915 | | | | | | ||||||||||||
| 2/28/2020 | | | | | 3,866 | | | | | | | 7,732 | | | | | | | — | | | | | | $ | 197.73 | | | | | | | 2/28/2030 | | | | | | | | | | 21,223 | | | | | | $ | 4,525,593 | | | | | | | | | | | | | | | | | |
| 2/26/2021 | | | | | 0 | | | | | | | 10,378 | | | | | | | — | | | | | | $ | 181.91 | | | | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | 52,955 | | | | | | | 52,817 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | | Grant Date | | | Option Vesting Date | | | Number of Shares Underlying Options | | ||||||||||
Christopher E. Kubasik | | | | | 8/1/2019 | | | | | | 6/29/2022 | | | | | | 129,501 | | | |
| | | | | | 2/28/2020 | | | ||||||||||||
| 2/28/2022 | | | | | | 24,766 | | | |||||||||||
| | | | | | | | | | | | 2/28/2023 | | | | | | 24,765 | | |
| | | | | 2/26/2021 | | | | | | 2/26/2022 | | | | | | 21,743 | | | |
| | | | | | | | | | | | 2/26/2023 | | | | | | 21,743 | | |
| | | | | | | | | | | | 2/26/2024 | | | | | | 21,742 | | |
| William M. Brown* | | | | | 8/1/2019 | | | | | | 6/29/2022 | | | | | 129,501 | | | |
| | | | | | 2/28/2020 | | | ||||||||||||
| 2/28/2022 | | | | | 24,766 | | | ||||||||||||
| | | | | | | | | | | | 2/28/2023 | | | | | | 24,765 | | |
| | | | | | 2/26/2021 | | | | | | 2/26/2022 | | | | | | 21,743 | | |
| | | | | | | | | | | | 2/26/2023 | | | | | | 21,743 | | |
| | | | | | | | | | | | 2/26/2024 | | | | | | 21,742 | | |
| Jesus Malave, Jr.** | | | | | 8/1/2019 | | | | | | 6/29/2022 | | | | | | 34,707 | | |
| | | | | | 2/28/2020 | �� | | | | | 2/28/2022 | | | | | | 5,074 | | |
| | | | | | | | | | | | 2/28/2023 | | | | | | 5,074 | | |
| | | | | | 2/26/2021 | | | | | | 2/26/2022 | | | | | | 4,744 | | |
| | | | | | | | | | | | 2/26/2023 | | | | | | 4,744 | | |
| | | | | | | | | | | | 2/26/2024 | | | | | | 4,744 | | |
| Todd W. Gautier | | | | | 8/1/2019 | | | | | | 6/29/2022 | | | | | | 34,707 | | |
| | | | | | 2/28/2020 | | | ||||||||||||
| 2/28/2022 | | | | | | 3,866 | | | |||||||||||
| | | | | | | | | | | | 2/28/2023 | | | | | | 3,866 | | |
| | | 2/26/2021 | | | | | | 2/26/2022 | | | | | 3,460 | | | ||||
| | | | | | | | | | | | 2/ | | | | 3,459 | | | ||
| | | | | | | | | | | | 2/ | | |||||||
| | | 3,459 |
| COMPENSATION TABLES | |
| Name | | | Grant Date | | | Option Vesting Date | | | Number of Shares Underlying Options | | |||||||||
| Sean J. Stackley | | | | | 8/1/2019 | | | | | | 6/29/2022 | | | | | | 34,707 | | |
| | | | | | 2/28/2020 | | | | | | 2/28/2022 | | | | | | 3,866 | | |
| | | | | | | | | | | | 2/28/2023 | | | | | | 3,866 | | |
| | | | | | 2/26/2021 | | | | | | 2/26/2022 | | | | | | 3,460 | | |
| | | | | | | | | | | | 2/26/2023 | | | | | | 3,459 | | |
| | | | | | | | | | | | 2/26/2024 | | | | | | 3,459 | | |
| Edward J. Zoiss | | | | | 8/1/2019 | | | | | | 6/29/2022 | | | | | | 34,707 | | |
| | | | | | 2/28/2020 | | | | | | 2/28/2022 | | | | | | 3,866 | | |
| | | | | | | | | | | | 2/28/2023 | | | | | | 3,866 | | |
| | | | | | 2/26/2021 | | | | | | 2/26/2022 | | | | | | 3,460 | | |
| | | | | | | | | | | | 2/26/2023 | | | | | | 3,459 | | |
| | | | | | | | | | | | 2/26/2024 | | | | | | 3,459 | | |
| | | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||
| Name | | | Number of Shares Acquired on Exercise (#)(1) | | | Value Realized on Exercise ($)(1) | | | Number of Shares Acquired on Vesting (#)(2) | | | Value Realized on Vesting ($)(2) | | ||||||||||||||||
| Christopher E. Kubasik | | | | | — | | | | | | | — | | | | | | | 31,792 | | | | | | $ | 6,771,696 | | | |
| William M. Brown | | | | | 706,190 | | | | | | $ | 110,239,214 | | | | | | | — | | | | | | | — | | | |
| Jesus Malave, Jr. | | | | | — | | | | | | | — | | | | | | | 1,546 | | | | | | $ | 350,540 | | | |
| Todd W. Gautier | | | | | 15,571 | | | | | | $ | 1,569,090 | | | | | | | — | | | | | | | — | | | |
| Sean J. Stackley | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| Edward J. Zoiss | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(2) | ||||||||||||
William M. Brown | 181,600 | $ | 32,991,211 | — | — | |||||||||||
Christopher E. Kubasik | — | — | 11,830 | $ | 2,236,107 | |||||||||||
Jesus Malave, Jr. | — | — | 1,546 | $ | 260,238 | |||||||||||
Todd W. Gautier | — | — | 1,602 | $ | 302,810 | |||||||||||
Edward J. Zoiss | 23,170 | $ | 3,625,188 | — | — |
| Name | | | Plan Name(1) | | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($)(2) | | | Payments During Fiscal 2021 ($) | | ||||||||||||
| Todd W. Gautier | | | Legacy L3 Link Pension Plan | | | | | 17.17 | | | | | | $ | 787,042 | | | | | | | — | | | |
| | | | Legacy L3 SERP Pension Plan | | | | | 17.17 | | | | | | $ | 407,055 | | | | | | | — | | | |
Name | Plan Name(1) | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(2) | Payments During Fiscal 2020 ($) | |||||||||
Todd W. Gautier | Legacy L3 Link Pension Plan | 17.17 | $ | $790,964 | — | ||||||||
Legacy L3 SERP Pension Plan | 17.17 | $ | $1,010,268 | — |
|
| COMPENSATION TABLES Nonqualified Deferred Compensation | |
| Name | | | Executive Contributions in Last Fiscal Year ($)(1) | | | Registrant Contributions in Last Fiscal Year ($)(2) | | | Aggregate Earnings in Last Fiscal Year ($)(3) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last Fiscal Year End ($)(4) | | ||||||||||||||||||||
| Christopher E. Kubasik | | | | $ | 271,500 | | | | | | $ | 248,515 | | | | | | $ | 104,487 | | | | | | $ | 0 | | | | | | $ | 1,124,041 | | | |
| William M. Brown | | | | $ | 850,500 | | | | | | $ | 254,077 | | | | | | $ | 395,326 | | | | | | $ | 0 | | | | | | $ | 3,380,866 | | | |
| Jesus Malave, Jr. | | | | $ | 102,112 | | | | | | $ | 75,946 | | | | | | $ | 18,547 | | | | | | $ | 0 | | | | | | $ | 266,168 | | | |
| Todd W. Gautier | | | | $ | 65,846 | | | | | | $ | 312,754 | | | | | | $ | 26,125 | | | | | | $ | 0 | | | | | | $ | 795,119 | | | |
| Sean J. Stackley | | | | $ | 111,923 | | | | | | $ | 64,123 | | | | | | $ | 20,250 | | | | | | $ | 0 | | | | | | $ | 361,943 | | | |
| Edward J. Zoiss | | | | $ | 253,346 | | | | | | $ | 75,708 | | | | | | $ | 251,845 | | | | | | $ | 0 | | | | | | $ | 1,770,356 | | | |
Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(4) | |||||||||||||||
William M. Brown | $ | 572,077 | $ | 170,781 | $ | 531,080 | $ | 0 | $ | 1,880,963 | ||||||||||
Christopher E. Kubasik | $ | 128,746 | $ | 178,215 | $ | 163,008 | $ | 0 | $ | 499,538 | ||||||||||
Jesus Malave, Jr. | $ | 39,577 | $ | 21,000 | $ | 8,987 | $ | 0 | $ | 69,564 | ||||||||||
Todd W. Gautier | $ | 40,723 | $ | 303,120 | $ | 31,018 | $ | 0 | $ | 390,394 | ||||||||||
Edward J. Zoiss | $ | 375,331 | $ | 53,672 | $ | 283,108 | $ | 0 | $ | 1,189,457 |
| COMPENSATION TABLES POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL | |
A substantial and continual failure or refusal by him to perform his material duties under his employment agreement (other than any failure resulting from illness or disability); |
COMPENSATION | |
Each performance share unit will remain outstanding and eligible to vest for the remainder of the applicable performance period if the termination date is prior to the end of the applicable performance period, with vesting subject to attainment of the applicable performance goals and to pro-ration based on the portion of the applicable performance period which has elapsed as of the termination date (with the remainder of the award forfeited); and |
|
Mr. Brown would serve as Chair and Chief Executive Officer of L3Harris through the two-year Initial Period following the Merger. For the one-year Subsequent Period, he will serve as Chair of L3Harris. On the third anniversary of the closing of the Merger (June 29, 2022), he will retire as an officer and employee of L3Harris and will resign as a member of L3Harris’ Board of Directors. |
During the Initial Period, Mr. Brown’s annual base salary would be $1,450,000, his target annual cash bonus award would be $2,500,000, the target value of his annual long-term incentive awards would be $10,250,000 and in no case would any such compensation element be less than that paid or granted to Mr. Kubasik. (Our Board would maintain discretion to increase those amounts.) |
After the closing of the Merger, L3Harris would grant Mr. Brown a one-time integration award composed of performance stock units with a target value of $2,500,000 (subject to certain performance-based multipliers) and performance-based non-qualified |
| COMPENSATION TABLES POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL | |
If during the Initial Period there was a qualifying termination of Mr. Brown (as defined in his Executive Change in Control Severance Agreement entered into with Harris), or if during the Subsequent Period Mr. Brown’s employment is terminated by us without “cause” or by him as a result of a “constructive termination” (such terms having the meanings outlined above under the Brown Original Agreement), then Mr. Brown would be eligible for the compensation, benefits and other rights provided under that Executive Change in Control Severance Agreement, with such amounts determined using a “3X” multiple. In addition, his outstanding stock options (other than those granted as part of the integration award) and restricted stock units would become fully vested, exercisable, issuable and payable (as applicable), and options would remain exercisable for their full remaining term. Outstanding performance stock units (other than those granted as part of the integration award) would remain outstanding and eligible to vest for the remainder of the applicable performance period based on the attainment of performance goals. Mr. Brown would also receive benefit continuation payments in lieu of providing in-kind medical and prescription drug coverage after the end of the three year benefit continuation period until he reaches the age of 65 (or, if earlier, the date he becomes eligible to receive comparable benefits from another employer). Additionally, if such qualifying termination occurred during the Initial Period, the integration award components would remain outstanding and eligible to vest as to a portion of the award based on the date of termination and attainment of applicable performance goals. If such qualifying termination occurs during the Subsequent Period, the integration award components would remain outstanding and eligible to vest based on the greater of target performance and the actual attainment of applicable performance goals. The integration award options that vest would remain exercisable for their full remaining term. |
During the Initial Period, Mr. Kubasik’s annual base salary would be $1,450,000, his target annual cash bonus award would be $2,500,000, the target value of his annual long-term incentive awards would be $10,250,000 and in no case would any such compensation element be less than that paid or granted to Mr. Brown. (Our Board would maintain discretion to increase those amounts.) > After the closing of the Merger, L3Harris would grant Mr. Kubasik a one-time integration award composed of performance stock units with a target value of $2,500,000 (subject to certain performance-based multipliers) and performance-based non-qualified stock options with a grant date value of $5,000,000 and a ten-year term. Both components of the integration award will be subject to three-year cliff vesting and will vest (if at all) subject to continued employment and achievement of performance conditions established by the L3Harris Compensation Committee. (This award was granted in August 2019.) > In the event that L3Harris terminates him without “cause” or he terminates his employment for “good reason,” Mr. Kubasik’s outstanding stock options (other than those granted as part of the integration award) and restricted stock units would become fully vested, exercisable, issuable and payable (as applicable), and options would remain exercisable for their full remaining term. Outstanding performance stock units (other than those granted as part of the integration award) would remain outstanding and eligible to vest for the remainder of the applicable performance |
| COMPENSATION TABLES POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL | |
> |
| COMPENSATION TABLES POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL | |
| COMPENSATION TABLES POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL | |
Any person becomes the beneficial owner of 20% or more of the combined voting power of our outstanding common stock; |
The conviction |
Unpaid base salary through the date of termination; > A pro-rated annual bonus (as determined under the change in control severance agreement); 80 L3HARRIS2022 PROXY STATEMENT
> To the extent permitted under Section 409A of the Internal Revenue Code, any other benefits or awards that have been earned or became payable pursuant to the terms of any compensation plan but that have not yet been paid to Mr. Brown; > Three times Mr. Brown’s highest annual rate of base salary during the 12-month period prior to the date of termination; and > Three times the greatest of Mr. Brown’s (1) highest annual bonus in the three years prior to the change in control, (2) target bonus for the year in which the change in control occurred or (3) target bonus for the year in which Mr. Brown’s employment is terminated. Other potential severance benefits.In addition, if triggered, severance benefits to > Receipt of the same level of medical, dental, accident, disability and life insurance and any similar benefits as are in effect on the date of termination (or the highest level of coverage provided to active executives immediately prior to the change in control, if more favorable), for the two years following the date of termination, but in no event later than age 65 (with benefit continuation payments in lieu of providing in-kind medical and prescription drug coverage, pursuant to the Brown Letter Agreement); > Reimbursement for any relocation expense related to the pursuit of other business opportunities incurred within two years following the date of termination; > Reimbursement for recruitment or placement services of up to $4,000; and > Reimbursement for professional financial or tax planning services of up to $5,000 per year for the calendar year in which the termination occurs and the next calendar year. Kubasik Legacy CIC Severance Arrangement As noted above, the Merger constituted a change in control transaction under the legacy “double trigger” L3 CIC Plan, which is still operative for > Mr. Kubasik terminates employment for “good reason”; or > Meaning of “change in control.”Under the L3 CIC Plan, a “change in control” generally means the occurrence of any one of the following events: > > the sale of all or substantially all of the assets of L3 and its subsidiaries taken as a whole; or > the election, including the filling of vacancies, during any period of 24 months or less, of 50% or more of the members of the board of directors of L3, without the approval of L3’s incumbent directors at the beginning of such period. Meaning of “good reason.”Under the L3 CIC Plan, “good reason” generally means, other than due to employee’s disability or death: > A reduction in Mr. Kubasik’s base salary or annual or long-term incentive opportunity (including target bonus, if applicable); > An adverse change to the calculation methodology for determining bonuses or long-term incentives which is reasonably likely to have an adverse impact on the amounts Mr. Kubasik has the potential to earn under such programs; > Any failure by the acquiror to continue to provide employee benefits that are substantially similar in the aggregate to those afforded to Mr. Kubasik immediately prior to the change in control; > A material adverse change in Mr. Kubasik’s duties or responsibilities; > A relocation of Mr. Kubasik’s principal place of business of 50 miles or more, provided that such relocation also increases his commute by at least 25 miles; > A failure to pay Mr. Kubasik’s base salary and other amounts earned by him within 10 days after the date such compensation is due; or L3HARRIS 2022 PROXY STATEMENT 81
> Meaning of “cause.”Under the L3 CIC Plan, the term “cause” generally means: > Intentional failure to perform reasonably assigned duties;
> Engaging in a transaction in connection with the performance of duties to L3 or its affiliates which transaction is adverse to the interests of L3 and is engaged in for personal profit; or > Willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses). In addition, the definition of “cause” was modified pursuant to the Kubasik Letter Agreement to include an act of misconduct in violation of certain L3Harris policies or federal or applicable state law regarding discrimination or sexual harassment of subordinate employees that creates a material risk of meaningful harm to Potential cash severance payment.If triggered, the lump-sum cash severance benefit payable to an executive under the L3 CIC Plan would consist of three times his current annual salary and average annual incentive plan awards for the prior three years for Mr. Kubasik. Other potential severance benefits.In addition, if triggered, severance benefits to > Receipt of continued medical and life insurance benefits at the same cost to Mr. Kubasik, or cash equal to any increased premiums, for the same period as the severance multiple described above;
Change in Control Severance Arrangements Reflect Sound Pay Practices Our executive change in control severance arrangements reflect sound practices because they: > Do not provide for a tax gross-up of excise taxes; > Do provide for a “best net after-tax” payment approach that reduces payments and benefits to an executive if the reduction would result in the executive receiving higher payments and benefits on a net after-tax basis; and > Do provide that we will reimburse the executive for any legal fees and costs with respect to any dispute arising under the arrangement.
Termination Payments Generally Available to Salaried Employees Many of our salaried employees, including our named executive officers, are entitled to receive certain elements of compensation on a non-discretionary basis upon termination of employment for any reason. Subject to the exceptions noted below, these include: > > Earned but unpaid bonuses; > Distributions of vested plan balances under our RSP and ERSP (and the SSP-II, where applicable); and > Payments under the Legacy L3 Link Pension Plan and the Legacy L3 SERP Pension Plan that do not change as a result of termination of employment for any reason, as applicable. The amounts shown in the “Tables of Potential Payments Upon Termination or Change in Control” section of this proxy statement beginning on page Termination of Named Executive Officers Under Various Circumstances Termination for cause.A named executive officer whose employment is terminated by us for cause is not entitled to any compensation or benefits other than those generally paid to all of our salaried employees upon any termination of employment as described above. In addition, as noted under “Recovery of Executive Compensation (“Clawback”)” in the “Compensation Discussion and Analysis” section of this proxy statement, depending on the circumstances giving rise to such termination, we may be entitled to recover all or a portion of any performance-based compensation if our financial statements are restated as a result of errors, omissions or fraud. Annual incentive awards, vested and unvested options, including performance stock options, performance share units and restricted stock units and shares of restricted stock are automatically forfeited following a termination for cause or misconduct. Involuntary termination without cause.In the case of termination of employment by us without cause, each of Messrs. Under our Annual Incentive Plan, following an involuntary termination by us without cause, if the executive was employed a minimum of 180 days during the fiscal year, annual incentive compensation awards are paid pro-rata based on the period worked during such fiscal year, with payment made after the fiscal year end based on our performance. Except as otherwise provided for Messrs. Kubasik, Brown > Unvested options, as well as unvested performance stock options, are forfeited, although a pro-rata portion of unvested performance stock options (based on the period worked during the performance period) will remain outstanding and eligible to be earned and to vest based on satisfaction of the performance vesting condition and become exercisable upon expiration of the service period; > Vested options may be exercised for up to 90 days following such termination but not later than the regularly scheduled expiration date; > Vested performance stock options granted in our fiscal transition period may be exercised until the regularly scheduled expiration date; > Unvested performance share units are forfeited, although a pro-rata portion (based on the period worked during the performance period) will remain outstanding and eligible to be earned based on attainment of applicable performance targets, subject to a minimum one-year vesting period in the case of performance share units granted after our fiscal transition period; and provided that, in the case of performance share units granted in our fiscal transition period, if termination occurs on or after June 29, 2021 and through June 29, 2022, vesting shall be at not less than the target level; > Unvested restricted stock units granted in our fiscal transition period immediately fully vest and are paid as soon as practicable; and > Unvested restricted stock units granted after our fiscal transition period vest pro-rata based on the period worked during the restriction period, subject to a minimum one-year vesting period, with the vested portion generally paid out as soon as practicable and the unvested portion forfeited. L3HARRIS 2022 PROXY STATEMENT 83
Voluntary termination/resignation/good reason.In the case of voluntary termination or resignation of employment by a named executive officer (other than for good reason or due to retirement): > > Annual incentive awards, unvested stock options, unvested performance stock options, unvested performance share units, unvested restricted stock units and unvested shares of restricted stock are automatically forfeited; > Vested options, as well as vested performance stock options, in each case granted prior to the Merger may be exercised for up to 30 days following such termination or resignation but not later than the regularly scheduled expiration date; and > Vested options, as well as vested performance stock options, in each case granted after the Merger may be exercised for up to 90 days following such termination or resignation but not later than the regularly scheduled expiration date. Except as otherwise provided for Messrs. Kubasik, Brown >
> Vested performance stock options granted in our fiscal transition period may be exercised until the regularly scheduled expiration date; > Unvested performance share units granted in our fiscal transition period are forfeited, although a pro-rata portion (based on the period worked during the performance period) will remain outstanding and eligible to be earned based on attainment of applicable performance targets; provided that if termination occurs on or after June 29, 2021 and through June 29, 2022, vesting shall be at not less than the target level; and > Unvested restricted stock units granted in our fiscal transition period immediately fully vest and are paid as soon as practicable. Death or disability.If a named executive officer’s employment is terminated as a result of death, > Account balances in our RSP and ERSP become fully vested; If the executive was employed for a minimum of 180 days during the fiscal year, annual incentive compensation awards are paid pro-rata based on the period worked during such fiscal year, with payment made after the fiscal year end based on our performance; > Unvested options granted after our fiscal transition period immediately fully vest, and unvested performance stock options granted in our fiscal transition period immediately vest at target; > Vested options, as well as vested performance stock options, granted prior to the Merger may be exercised, in the case of death, for up to 12 months following the date of death but not later than the regularly scheduled expiration date (by the beneficiaries), and in the case of disability, until the regularly scheduled expiration date; > Vested options, as well as vested performance stock options, granted after the Merger may be exercised for up to 12 months following the date of death (by the beneficiaries) or disability but not later than the regularly scheduled expiration date; > Unvested performance share units immediately vest at target and are paid out as soon as administratively practicable following death and, in the case of disability, generally following expiration of the service period but may be paid out earlier in certain circumstances; and > Unvested restricted stock units immediately fully vest and are paid out as soon as administratively practicable, and subject to a minimum one-year holding period, unvested shares of restricted stock immediately fully vest. 84 L3HARRIS2022 PROXY STATEMENT
Retirement.Among our named executive officers, as of > Account balances in our RSP and ERSP become fully vested; > If the executive was employed a minimum of 180 days during the fiscal year, annual incentive compensation awards are paid pro-rata based on the period worked during such fiscal year, with payment made after the fiscal year end based on our performance; > > > > > > >
Change in control.Cash severance payments and other severance benefits under our Legacy CIC Severance Arrangements are discussed on pages > Whether or not a termination occurs, annual cash incentive compensation awards under our Annual Incentive Plan are fully earned and paid out promptly following the change in control or, in certain instances, following the end of the fiscal year, in each case at not less than the target level; > If the “double trigger” qualifying termination of employment also occurs, unvested options granted after our fiscal transition period immediately vest and may be exercised until the regularly scheduled expiration date; > Unvested performance stock options granted in our fiscal transition period vest at not less than the target level and become exercisable upon expiration of the service period, subject to accelerated exercisability if the “double trigger” qualifying termination of employment or death or disability also occurs and to forfeiture in certain other employment termination circumstances; > Unvested performance share units granted after the Merger are deemed fully earned at not less than the target level and will vest and be paid out as soon as administratively practicable following expiration of the service period, subject to accelerated vesting and payout if the “double trigger” qualifying termination of employment or certain other employment terminations also occur and to forfeiture in certain other employment termination circumstances; > Unvested shares of restricted stock immediately fully vest and will be paid out as soon as administratively practicable following the change in control; and > If the “double trigger” qualifying termination of employment also occurs, unvested restricted stock units granted after our fiscal transition period immediately fully vest and are paid out as soon as administratively practicable. L3HARRIS 2022 PROXY STATEMENT 85
Tables of Potential Payments Upon Termination or Change in Control The following tables show, on an executive-by-executive basis, the amounts of the estimated incremental compensation and benefits that would be provided to each of our named executive officers in a hypothetical termination as of Notwithstanding the required disclosure of a hypothetical termination as of December 31, 2021, Mr. Malave left L3Harris on January 21, 2022 pursuant to the terms of the Malave Separation Agreement, under which all of his outstanding vested options and unvested equity awards were immediately cancelled, terminated and forfeited. The estimated amounts in the tables also are based on the following: > The assumption that the hypothetical termination event occurred as of December 31, 2021, the last day of fiscal 2021, and that the value of our common stock was $213.24 per share based on the closing market price on December 31, 2021, the last trading day of fiscal 2021; > The applicable provisions as of December 31, 2021 in the agreements and other arrangements between the named executive officer and us, which are summarized on pages 75-82; > Cash severance includes multiples of salary and annual incentive compensation, but does not include paid or unpaid salary or annual incentive compensation or cash incentives earned for service through the end of fiscal 2021; > The value of any options that were vested prior to December 31, 2021 is not included; > The assumption that all unvested, in-the-money options that were not automatically forfeited on December 31, 2021 and that were entitled to vesting on such day vested and were exercised on such day; > The value of accelerated restricted stock units includes the dollar value of (a) dividend equivalents paid in cash with respect to such accelerated restricted stock units and (b) performance share units granted as part of the special, one-time integration-related awards in our fiscal transition period, which have been earned at 400% of target based on an award payout formula as of December 31, 2021 and an executive officer must remain employed with us through June 29, 2022 to earn the award (for further information, see the Outstanding Equity Awards at 2021 Fiscal Year End Table on page 69 and related notes); > The value of accelerated performance share units is based on the target number of performance share units previously granted and includes the dollar value of dividend equivalents paid in cash with respect to such accelerated performance share units; > Any payment of the aggregate balance shown in the Fiscal 2021 Nonqualified Deferred Compensation Table on page 74 of this proxy statement is not included; > Any payments under the Legacy L3 Link Pension Plan and the Legacy L3 SERP Pension Plan that do not change as a result of termination of employment for any reason or a change in control are not included; > The estimated value of continuation of health and welfare benefits and perquisites is included, where applicable; > For a termination by us without cause or by the named executive officer for good reason, including following a change in control, the “Other Benefits” line includes, in the case of Mr. Kubasik, $20,800 for financial planning services from a designated third-party provider for one year following separation (pursuant to current practice) and $18,000 for outplacement services (pursuant to the L3 CIC Plan); in the case of Mr. Brown, $6,595 for outplacement services, $10,000 ($5,000 per year for two years) for financial or tax planning services, $300,000 for estimated relocation assistance and an estimate of reimbursement for taxes associated with relocation assistance, pursuant to their executive change in control severance agreements; and in the case of Mr. Malave, following termination by us without cause, $20,800 for financial planning services from a designated third-party provider for one year and $18,000 for outplacement services (pursuant to current practice and the Severance Pay Plan), and following termination by us without cause or by Mr. Malave for good reason following a change in control, $20,800 for financial planning services from a designated third-party provider for two years (pursuant to the CIC Severance Plan); and > With respect to a named executive officer (a) over the age of 60 and who has completed at least 5 years of full-time service (Mr. Kubasik as of December 31, 2021) and who provides a written 6 month notice for equity awards made in fiscal 2020 or fiscal 2021, or (b) over the age of 55 and who has completed at least 10 years of full-time service (Messrs. Brown and Zoiss as of December 31, 2021) for retention restricted stock unit awards granted during our fiscal transition period, a termination of such executive’s employment with us that is within such executive’s control would be expected to be designated as retirement, as opposed to voluntary termination (resignation) or termination by such executive for good reason. There are no retirement provisions for the special performance equity grants during the fiscal transition period for unvested awards. 86 L3HARRIS2022 PROXY STATEMENT
Christopher E. Kubasik
William M. Brown
L3HARRIS 2022 PROXY STATEMENT 87
> received, reviewed and discussed the written disclosures and the letter from EY required by applicable requirements of the Public Company Accounting Oversight Board regarding EY’s communications with an audit committee concerning independence, and discussed with EY its independence; > reviewed the services provided by EY other than its audit services and considered whether the provision of such other services by EY is compatible with maintaining its independence, discussed with EY its independence and concluded that EY is independent from L3Harris and its management; and > reviewed the contents of SEC-required certification statements from the Chief Executive Officer and Chief Financial Officer and also discussed and reviewed the process and internal controls for providing reasonable assurances that the financial statements included in L3Harris’ Annual Report on Form 10-K for the fiscal year ended December 31, 2021 are true in all important respects, and that the report contains all appropriate material information of which they are aware. In reliance on the reports, reviews and discussions described in this Report, the Audit Committee has recommended to the Board, and the Board has approved, that the audited financial statements be included in L3Harris’ Annual Report on Form 10-K for the fiscal year ended Submitted on February Lewis Kramer, Chair Sallie B. Bailey Peter W. Chiarelli Thomas A. Corcoran 92 L3HARRIS2022 PROXY STATEMENT
Our Audit Committee has appointed Ernst & Young LLP As provided in our Audit Committee’s charter and as discussed above, our Audit Committee is responsible for directly appointing, compensating, retaining, terminating and overseeing our independent registered public accounting firm. Although we have a very long-standing relationship with EY, our Audit Committee frequently evaluates the independence and effectiveness of our independent registered public accounting firm and its personnel, as well as the cost and quality of its audit and audit-related services. Our Audit Committee retains the discretion at any time to appoint a different independent registered public accounting firm. In accordance with sound corporate governance practices and in order to ensure that our Audit Committee and our shareholders are receiving the best and most cost-effective audit services available, our Audit Committee periodically considers issuing a “request for proposal” to EY and other large nationally recognized accounting firms with regard to our audit engagement, which could result in a firm other than EY providing audit engagement services to us in later years. Our Audit Committee used this process in connection with its selection and appointment of EY as our independent registered public accounting firm for the fiscal year ending December L3HARRIS 2022 PROXY STATEMENT 93
EY served as our independent registered public accounting firm for fiscal
(1) (2) Audit-related services in fiscal 2021 and fiscal 2020 primarily related to audits of stand-alone financial statements of business within the consolidated group. (3) Tax fees for fiscal 2021 consisted of $1,541,123 related to tax compliance, including foreign and domestic return preparation and transfer pricing studies, and $317,773 related to tax planning and advisory services. Tax fees for fiscal 2020 consisted of $1,474,612 related to tax compliance, including foreign and domestic return preparation and transfer pricing studies, and $522,571 related to tax planning and tax advisory services. EY did not perform any professional services related to financial information systems design and implementation for us in fiscal 2020. Our Audit Committee has determined that the provision of the services described above is compatible with maintaining EY’s independence. Under our Audit Committee Pre-Approval Policy and Procedures, our Audit Committee must pre-approve all audit and non-audit services provided by our independent registered public accounting firm to ensure that the provision of such services does not impair the firm’s independence. The policy utilizes a framework of both general pre-approval for certain specified services and specific pre-approval for all other services. Early in each fiscal year, our Audit Committee reviews and, as it deems appropriate, pre-approves the audit services and any audit-related services, tax services and other services to be performed by our independent registered public accounting firm, together with specific details regarding such services anticipated to be required for such fiscal year including, when available, estimated fees. Our Audit Committee periodically reviews the services provided to date and the actual fees against the estimates, and such fee amounts may be updated to the extent appropriate at regularly scheduled meetings of our Audit Committee. Additional pre-approval is required before actual fees for any service can exceed the originally pre-approved amount. Our Audit Committee also may revise the list of pre-approved services and related fees from time to time. Our Audit Committee followed this same process for fiscal If we seek to engage our independent registered public accounting firm for other services that are not considered subject to general pre-approval as described above, then our Audit Committee must approve such specific engagement as well as the estimated fees. Such engagement will be presented to our Audit Committee for pre-approval at its next regularly scheduled meeting. If the timing of the project requires an expedited decision, then we may ask the Chair of our Audit Committee to pre-approve such engagement. Any such pre-approval by the Chair is then presented to our full Audit Committee for ratification at the next Audit Committee meeting. In any event, pre-approval of any engagement by our Audit Committee or the Chair of our Audit Committee is required before our independent registered public accounting firm may commence any engagement. Additional pre-approval is required before any fees can exceed approved fees for any such specifically approved services. 94 L3HARRIS2022 PROXY STATEMENT SHARES OWNED BY DIRECTORS, NOMINEES AND The following table shows beneficial ownership of shares of our common stock, as of February
*
† Mr. (1) Includes shares over which the individual or the individual’s immediate family members hold or share voting and/or investment power and excludes shares listed under the “Shares Under Exercisable Options” column. For each non-employee director, other than Mr. Harris, also includes approximately 792 unvested director share units in respect of an award granted on April 22, 2021, under our Equity Incentive Plan (including accrued reinvested divided equivalents thereon), which generally will fully vest on the one-year anniversary of the grant date, subject to the non-employee director’s continued service and the terms and conditions of the non-employee director’s director share unit agreement. For our named executive officers and other executive officers, includes shares owned through our retirement plan. (2) Includes shares underlying options granted by us that are exercisable as of February 23, 2022 and shares underlying options that become exercisable within 60 days thereafter. (3) Represents the total of shares listed under the “Shares Owned” and “Shares Under Exercisable Options” columns. (4) No directors or executive officers have pledged any shares of our common stock, nor are any such persons permitted to make any such pledge under our policies. L3HARRIS2022 PROXY STATEMENT 95
Pursuant to SEC rules requiring disclosure regarding any persons known to us to be a beneficial owner of more than 5% of our common stock, the following table shows beneficial ownership of our common stock, as of February 15,
(1) (2) (3) Based on information contained in Amendment No. 2 to Schedule 13G filed with the SEC on February 1, 2022 by BlackRock, Inc. indicating that, as of December 31, 2021, BlackRock, Inc. had sole voting power over 11,039,389 shares, shared voting power over 0 shares, sole dispositive power over 12,280,012 shares and shared dispositive power over 0 shares. DELINQUENT SECTION 16(a) REPORTS Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, as well as persons who own more than 10% of our outstanding shares of common stock, to file reports of ownership and changes in ownership of our securities with the SEC. We have procedures in place to assist our directors and executive officers in preparing and filing these reports on a timely basis. Based solely on a review of the forms furnished to us, or written representations from certain persons that no Form 5 was required, we believe that all required forms were timely filed for fiscal 96 L3HARRIS2022 PROXY STATEMENT TABLE OF CONTENTS SHAREHOLDER NOMINATIONS AND PROPOSALS To nominate a person for election to our Board or to present a proposal for consideration at the A nomination or proposal submitted by a shareholder that does not supply the required information about a nominee or proposal and the shareholder submitting the nomination or proposal, or that does not comply with our By-Laws, will be disregarded. DIRECTOR NOMINATIONS BY PROXY ACCESS To submit a nomination for inclusion in L3Harris-sponsored proxy materials pursuant to the proxy access provision of our By-Laws, written notice must be received by our Secretary no earlier than October OTHER DIRECTOR NOMINATIONS To submit a nomination pursuant to our By-Laws, but not pursuant to the proxy access provision of our By-Laws, written notice must be received by our Secretary no earlier than December Shareholders should note that the applicable timeframes described above for director nominations will change if the number of directors to be elected to our Board of Directors at the In addition to satisfying the foregoing requirements under our By-Laws, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees other than L3Harris’ nominees must provide notice that sets forth the information required by SEC Rule 14a-19 no later than February 21, 2023. OTHER PROPOSALS BY SHAREHOLDERS To submit a proposal for inclusion in L3Harris-sponsored proxy materials pursuant to SEC Rule 14a-8, written notice must be received by our Secretary no later than November To submit a proposal pursuant to our By-Laws and not pursuant to SEC Rule 14a-8, written notice must be received by our Secretary no earlier than December A copy of our By-Laws is available on the Corporate Governance section of our website at www.l3harris.com/company/environmental-social-and-governance or may be obtained by written request to our Secretary at the address above. Further, any proxy granted with respect to the L3HARRIS 2022 PROXY STATEMENT 97 INFORMATION ABOUT THE ANNUAL MEETING ATTENDING THE VIRTUAL ANNUAL MEETING What are the procedures for attending and participating in the virtual Annual Meeting? All shareholders are welcome to attend the Annual Meeting. The To be admitted to the The Annual Meeting shareholder question and answer session will include questions submitted live during the meeting through www.virtualshareholdermeeting.com/ RECEIVING PROXY MATERIALS What is a proxy and what is a proxy statement? A proxy is your legal designation of another person to vote the shares you own. That other person is called a proxy. If you designate someone as your proxy, the document in which you make that designation also is called a proxy. A proxy statement is a document that we are required by law to provide to you when we ask you to name a proxy to vote your shares. This document you are reading is a proxy statement, and we encourage you to read it carefully. Why did I receive a Notice of Internet Availability of Proxy Materials instead of a paper copy of the proxy materials? SEC rules permit us to furnish proxy materials over the Internet. As a result, our practice is to mail to most of our shareholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy materials. All shareholders receiving the Notice of Internet Availability of Proxy Materials will have the ability to access our proxy materials over the Internet and also may request to receive a paper copy of our proxy materials by mail. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy materials over the Internet or to request a paper copy, as well as instructions on how you may elect to receive future proxy materials electronically on an ongoing basis. Why didn’t I receive a Notice of Internet Availability of Proxy Materials? If you previously requested to receive paper copies of our proxy materials, we do not send you a Notice of Internet Availability of Proxy Materials. If you previously elected to receive proxy materials electronically, we send you only an e-mail containing instructions and links to the website where our proxy materials are available and to the proxy voting website. 98 L3HARRIS2022 PROXY STATEMENT
What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials or more than one proxy/voting instruction card? If you receive more than one Notice of Internet Availability of Proxy Materials or more than one proxy/voting instruction card, you own shares of L3Harris common stock in multiple accounts with your brokers(s) and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker(s) and/or our transfer agent to consolidate as many accounts as possible under the same name and address. Our transfer agent is Computershare Shareowner What if I share the same address with another L3Harris shareholder? How can I receive electronic access to the proxy materials instead of receiving a paper copy by mail? Your Notice of Internet Availability of Proxy Materials or proxy/voting instruction card contains instructions for viewing our proxy materials for the Shareholders over the Internet and how to elect to receive future proxy materials electronically by e-mail. Our proxy materials also are available on our website at www.l3harris.com/company/environmental-social-and-governance. Electing to receive future proxy materials electronically will help us conserve natural resources and reduce printing and mailing costs. If you elect to receive future proxy materials electronically, you will receive an e-mail containing instructions and links to the website where our proxy materials are available and to the proxy voting website. Your election to receive proxy materials electronically by e-mail will remain in effect until you terminate it. How may I obtain a paper copy of the proxy materials? Instructions for obtaining a paper copy of our proxy materials are contained in the Notice of Internet Availability of Proxy Materials and the e-mail regarding the availability of our proxy materials. Shareholders who do not receive a Notice of Internet Availability of Proxy Materials or an e-mail regarding the availability of our proxy materials will receive a paper copy of our proxy materials by mail. VOTING YOUR SHARES What is a record date and who is entitled to vote at the meeting? A record date is the date, as of the close of business on which, shareholders of record are entitled to notice of and to vote at a meeting of shareholders. The record date for the How many shares can be voted and what is a quorum? You are entitled to one vote for each share of L3Harris common stock that you owned as of the close of business on February A quorum is the minimum number of shares that must be represented in person or by proxy for us to conduct the What methods can I use to vote my shares? You have a choice of voting your shares: >
Over the Internet at www.proxyvote.com, following the voting instructions on that website;
By telephone; or ■ > During the virtual Annual Meeting: ■ Over the Internet at www.virtualshareholdermeeting.com/LHX2022, following the voting instructions on that website. Even if you plan to attend the virtual Annual Meeting over the Internet, we encourage you to vote your shares before the Annual Meeting over the Internet, by telephone or by mail. Please carefully read the instructions below on how to vote L3HARRIS 2022 PROXY STATEMENT 99
your shares. Because the instructions vary depending on how you own your shares and the method you use to vote your shares, it is important to follow the instructions for your particular situation. If you vote your shares before the Annual Meeting over the Internet or by telephone, you should not return a proxy/voting instruction card. What is the difference between a “record holder” and a “beneficial owner” holding shares in “street name”? You are a “record holder” if your shares are registered in your name, in which case you either hold a stock certificate or have an account directly with our transfer agent, Computershare Shareowner Services. Your shares are held in “street name” if your shares are registered or held in the name of your broker, bank or other nominee, in which case you are considered the “beneficial owner” of such shares. How do I vote my shares if I am a “record holder” Voting before the Annual Meeting over the Internet Voting over the Internet before the Annual Meeting is easy, fast and available 24 hours a day. You may submit your proxy/voting instruction over the Internet by following the instructions sent to you in the mailed Notice of Internet Availability of Proxy Materials, the mailed proxy/voting instruction card or the email notifying you that the proxy materials were available (as applicable). You will be able to confirm that the Internet voting system has properly recorded your vote, which will be counted immediately, and there is no need to return a proxy/voting instruction card. Voting before the Annual Meeting by telephone Voting by telephone also is easy, fast and available 24 hours a day. If you live in the United States or Canada, you may vote by calling 1-800-690-6903 (toll-free). You will need the control number sent to you in the mailed Notice of Internet Availability of Proxy Materials, the mailed proxy/voting instruction card or the email notifying you that the proxy materials were available (as applicable). You will be able to confirm that the telephone voting system has properly recorded your vote, which will be counted immediately, and there is no need to return a proxy/voting instruction card. Voting before the Annual Meeting by mail If you received a proxy/voting instruction card by mail, you can vote by completing, signing, dating and promptly mailing your proxy/voting instruction card in the accompanying postage-paid return envelope. Voting during the Annual Meeting over the Internet If you plan to attend the virtual Annual Meeting, you can vote over the Internet by following the voting instructions on the virtual meeting website. How do I vote my shares if I am a “beneficial owner” (shares held in “street name”)? Voting before the Annual Meeting over the Internet, by telephone or by mail If your shares are registered or held in the name of your broker, bank or other nominee (“street name”), you have the right to direct your broker, bank or other nominee how to vote your shares using the method(s) specified by your broker, bank or other nominee. If your broker, bank or other nominee participates in an Internet or telephone voting program, then you may be able to use that method, in addition to voting by mail. These programs provide eligible “street name” shareholders the opportunity to vote over the Internet or by telephone. Voting forms will provide instructions for shareholders whose brokerage firms or banks are participating in these programs. Voting during the Annual Meeting over the Internet If your shares are registered or held in the name of your broker, bank or other nominee and you plan to attend the virtual Annual Meeting to vote, you should contact your broker, bank or other nominee to obtain a “broker’s proxy” and voting instructions. Can I revoke my proxy or change my vote? If your shares are registered in your name (“record holder”), you may revoke your proxy or change your vote at any time before your shares are voted at the Annual Meeting. There are several ways to do this: > By sending a written notice of revocation to our Secretary at L3Harris Technologies, Inc., Attention: Secretary, 1025 West NASA Boulevard, Melbourne, Florida 32919; > By duly signing and delivering a proxy/voting instruction card that bears a later date; > By subsequently voting over the Internet or by telephone as described above; or > By attending the virtual Annual Meeting and following the voting instructions on the virtual meeting website. If your shares are held in “street name,” you may revoke your proxy or change your vote by submitting new voting instructions to your broker, bank or other nominee. How do I vote my shares held in the L3Harris Stock Fund through the L3Harris Retirement Savings Plan or the Aviation Communications & Surveillance Systems 401(k) Plan? If you are a participant in the L3Harris Stock Fund through the L3Harris Retirement Savings Plan or the Aviation Communications & Surveillance Systems 401(k) Plan (the “ACSS Plan”), you may provide voting instructions for the shares of L3Harris common stock credited to your account in the L3Harris Stock Fund to the trustee of the applicable plan over the Internet, by telephone or by mail as described above. If you do not timely provide voting instructions for those shares, then as directed by the terms of those plans, those shares will be voted by the trustee in the same proportion as the shares for which other participants in the applicable plan have timely provided voting instructions, except as otherwise required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). How do I vote my shares held in the Company’s Dividend Reinvestment Plan? If you are a participant in the Company’s Dividend Reinvestment Plan (“DRIP”) administered by Computershare Trust Company, N.A., your voting instruction covers the shares 100 L3HARRIS2022 PROXY STATEMENT
of L3Harris common stock held in your DRIP account. Computershare Trust Company, N.A., as the DRIP administrator, is the shareholder of record of L3Harris common stock owned through the DRIP and will not vote those shares unless you provide it with voting instructions, which you may do over the Internet, by telephone or by mail as described above. What happens if I return an unmarked proxy/voting instruction card? If you properly execute and return a proxy/voting instruction card with no votes marked, your shares will be voted as recommended by our Board. Our Board’s recommendations, together with the description of each proposal, are included earlier in this proxy statement. In summary, our Board unanimously recommends you vote: FOR election of all 13 of the nominees for director named in this proxy statement for a one-year term expiring at the 2023 Annual Meeting of Shareholders (see Proposal 1); > FOR the amendments to our Restated Certificate of Incorporation to increase the maximum number of Board seats (see Proposal 2); > FOR approval, in an advisory vote, of the compensation of our named executive officers as disclosed in this proxy statement (see Proposal 3); and > FOR ratification of our Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year 2022 (see Proposal 4). Could other matters be decided at the meeting? At the date of this proxy statement, our Board did not know of any matters to be raised at the Annual Meeting other than those referred to in this proxy statement and did not intend to bring before the Annual Meeting any matter other than the proposals described in this proxy statement. The deadline under our By-Laws for any shareholder proposal not discussed in this proxy statement to be properly presented at the Annual Meeting has passed. If any other matters are properly brought before the Annual Meeting or any adjournments or postponements thereof, your shares will be voted at the discretion of the proxy holders. How will my shares be voted if I do not provide instructions to my broker? It is possible for a proxy to indicate that some of the shares represented are not being voted with respect to certain proposals. This occurs, for example, when a broker, bank or other nominee does not have discretion under NYSE rules to vote on a matter without instructions from the beneficial owner of the shares and has not received such instructions. In these cases, the unvoted shares will not be considered present and entitled to vote with respect to that matter, although they may be considered present and entitled to vote for other purposes and will be counted in determining the presence of a quorum. Under NYSE rules, only Proposal What is the required vote for each proposal?
Who pays for the solicitation of proxies? We actively solicit proxy participation by Internet, by telephone, by e-mail, by letter or in person. We will bear the cost of soliciting proxies, including the cost of preparation, assembly, printing and mailing of proxy and solicitation materials. In addition, we request and encourage brokers and other custodians, nominees and fiduciaries to make available, L3HARRIS 2022 PROXY STATEMENT 101
forward or supply proxy and solicitation materials to our shareholders, and, upon request, we will reimburse them for their expenses in accordance with the fee schedule approved by the NYSE, as applicable. Our officers, directors and employees may, by telephone, e-mail or letter, or in person, make additional requests for the return of proxies, although we do not reimburse our own officers, directors or employees for soliciting proxies. We also have engaged Georgeson LLC to assist in the solicitation of proxies for a fee not to exceed Who will tabulate and oversee the vote? Representatives of Broadridge Financial Solutions, Inc. will tabulate and oversee the vote. Where can I find the voting results of the Annual Meeting? We intend to announce the preliminary voting results at the Annual Meeting and to disclose final results in a Current Report on Form 8-K, which we will file with the SEC and make available through the Investors section of our website at www.l3harris.com/investors within four business days of the Annual Meeting (or, if final results are not available at that time, within four business days of the date on which final results become available). Annual Report on Form 10-K Our Annual Report on Form 10-K for our fiscal year ended L3Harris Technologies, Inc. 1025 West NASA Boulevard Melbourne, Florida 32919 Shareholder List A list of our shareholders of record as of the record date of February By Order of the Board of Directors Scott T. Mikuen Senior Vice President, General Counsel and Secretary Melbourne, Florida March 11, 102 L3HARRIS2022 PROXY STATEMENT To supplement our net income, net cash provided by operating activities and income from continuing operations per diluted common share ADJUSTED EBIT(a)
L3HARRIS2022 PROXY STATEMENT A-1
ADJUSTED FREE CASH FLOW(a)
NON-GAAP INCOME FROM CONTINUING OPERATIONS PER DILUTED COMMON SHARE(a)
(a) “Fiscal 2021” refers to our fiscal year ended December 31, 2021. “Fiscal 2020” refers to our fiscal year ended January 1, A-2 L3HARRIS2022 PROXY STATEMENT SCAN TOVIEW MATERIALS & VOTEL3HARRIS TECHNOLOGIES, INC. 1025 WEST NASA BOULEVARD MELBOURNE, FL 32919YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode aboveUse the Internet to submit your proxy/voting instructions and for electronic delivery of information YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. |