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Stock Options and Other Share-Based Compensation | 6 Months Ended
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Jul. 02, 2021
Share-based Payment Arrangement [Abstract] |
Stock Options and Other Share-Based Compensation | Note C — Stock Options and Other Share-Based Compensation As of July 2, 2021, we had options or other share-based compensation outstanding under two Harris shareholder-approved stock incentive plans (“SIPs”) , the Harris Corporation 2005 Equity Incentive Plan (As Amended and Restated Effective August 27, 2010) and the L3Harris Technologies, Inc. 2015 Equity Incentive Plan (As Amended and Restated Effective as of August 28, 2020) (the “2015 EIP”), as well as under employee stock incentive plans of L3 assumed by L3Harris (collectively, “L3Harris SIPs”). We believe that share-based awards more closely align the interests of participants with those of shareholders. The compensation cost related to our share-based awards that was charged against income was $34 million and $67 million for the quarter and two quarters ended July 2, 2021, respectively, and $24 million and $40 million for the quarter and two quarters ended July 3, 2020, respectively. The aggregate number of shares of our common stock issued under L3Harris SIPs, net of shares withheld for tax purposes, was 0.4 million and 0.5 million for the quarter and two quarters ended July 2, 2021, respectively, and 0.5 million for the two quarters ended July 3, 2020. Shares issued for the quarter ended July 3, 2020 were not material. Awards granted to participants under L3Harris SIPs during the quarter ended July 2, 2021 consisted of 0.1 million restricted stock units and no stock options or performance stock units. Awards granted to participants under L3Harris SIPs during the two quarters ended July 2, 2021 consisted of 0.5 million stock options, 0.2 million performance stock units and 0.2 million restricted stock units. The fair value as of the grant date of each stock option award was determined using the Black-Scholes-Merton option-pricing model and the following assumptions: expected dividend yield of 1.99 percent; expected volatility of 31.71 percent; risk-free interest rates averaging 0.75 percent; and expected term of 5.05 years. The fair value as of the grant date of each restricted stock unit award was based on the closing price of our common stock on the grant date. The fair value as of the grant date of each performance stock unit award was determined based on the fair value from a multifactor Monte Carlo valuation model that simulates our stock price and total shareholder return (“TSR”) relative to companies in our TSR peer group.

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