12.4 and 12.5 percent, which is in line with our previous guidance.” Exelis  indicated that approximately $25 million of its anticipated free cash flow for 2014  shifted into 2015 due to some delayed collections, but that its estimate for 2015  free cash flow is being increased to approximately $275 million. Exelis also  expects depreciation and amortization of approximately $106 million in 2014, net  debt of $139 million and a net unfunded pension liability of approximately $1.9  billion at the end of 2014. Exelis ended the year with an estimated $2.8 billion in  funded backlog.   Financial highlights   Based on an expected June 2015 closing, the transaction is expected to be slightly  accretive to Harris in the first full year and a significant contributor thereafter.  Harris has identified estimated net pre-tax cost synergies from the combination in  a range of $100 million to $120 million, with savings expected to achieve annual  run-rate in year three. Savings are expected from consolidating headquarters and  eliminating public company costs and from operational and functional  efficiencies.   Harris has secured $3.4 billion of fully committed bridge financing from Morgan  Stanley Senior Funding, Inc. and expects to put in place permanent financing in  11  the form of term loans and unsecured bonds prior to closing. Following the  transaction, Harris expects to continue to have a solid balance sheet supported by  strong free cash flow from the combined business, enabling it to pay down debt  rapidly.   Integration plan   Harris has developed a detailed execution plan to ensure seamless integration and  achieve identified cost synergies. The dedicated integration team will have  executive leadership and be comprised of senior members of both organizations.  Harris is confident in its ability to effectively combine these two companies and  provide the organizational alignment to achieve full strategic value.   Advisors   Morgan Stanley & Co. LLC is acting as financial advisor to Harris Corporation  and Sullivan & Cromwell LLP is serving as principal legal counsel. J.P. Morgan  Securities LLC is acting as financial advisor to Exelis, and Jones Day is serving  as legal counsel.    31.  Plaintiff brings this action on his own behalf and as a class action pursuant to  Federal Rules of Civil Procedure Rule 23, on behalf of all holders of Exelis common stock who  are being and will be harmed by Defendants’ actions described below (the “Class”).  Excluded  from the Class are Defendants herein and any person, firm, trust, corporation, or other entity  related to or affiliated with any of the Defendants.   32.  This action is properly maintainable as a class action because:  a.  The Class is so numerous that joinder of all members is impracticable.  As of  October 28, 2014 there were over 186 million shares of Exelis common stock  outstanding.  The holders of these shares are believed to be geographically  dispersed through the United States;  b.  There are questions of law and fact which are common to the Class and which  predominate over questions affecting individual Class members.  The common  questions include, inter alia, the following:  i.  Whether the Individual Defendants have breached their fiduciary duties of  loyalty, independence, or due care with respect to Plaintiff and the other  members of the Class in connection with the Proposed Transaction;  ii.  Whether the Individual Defendants have breached their fiduciary duty to  secure and obtain the best price reasonable under the circumstances for the  benefit of Plaintiff and the other members of the Class in connection with  the Proposed Transaction;  iii.  Whether Harris and Merger Sub aided and abetted the Individual  Defendants’ breaches of fiduciary duty;  9  iv.  Whether the Individual Defendants, in bad faith and for improper motives,  have impeded or erected barriers to discourage other offers for the  Company or its assets; and  v.  Whether Plaintiff and the other members of the Class would suffer  irreparable injury were the Proposed Transaction consummated.  c.  Plaintiff is an adequate representative of the Class, has retained competent  counsel experienced in litigation of this nature, and will fairly and adequately  protect the interests of the Class;  d.  Plaintiff’s claims are typical of the claims of the other members of the Class and  Plaintiff does not have any interests adverse to the Class;  e.  The prosecution of separate actions by individual members of the Class would  create a risk of inconsistent or varying adjudications with respect to individual  members of the Class which would establish incompatible standards of conduct  for the party opposing the Class; and  f.  Defendants have acted on grounds generally applicable to the Class with respect  to the matters complained of herein, thereby making appropriate the relief sought  herein with respect to the Class as a whole.  33.  On February 6, 2015 Exelis and  Harris issued a press release announcing the  Proposed Transaction, which states in relevant part:  MELBOURNE, Fla. & MCLEAN, Va.--(BUSINESS WIRE)--Feb. 6, 2015--  Harris Corporation (NYSE:HRS) and Exelis, Inc. (NYSE:XLS) today announced  a definitive agreement under which Harris will acquire Exelis in a cash and stock  transaction valued at $23.75 per share, or an approximately $4.75 billion  enterprise value. The agreement has been unanimously approved by the Boards of  Directors of both companies. The transaction is expected to close in June 2015  and is subject to customary closing conditions, including regulatory and Exelis  shareholder approval.   10  Under the terms of the transaction, Exelis shareholders will receive $16.625 in  cash and 0.1025 of a share of Harris common stock, based on Harris' closing price  as of February 5, 2015, for each share of Exelis common stock. Upon closing,  Harris shareholders will own approximately 85 percent of the combined company,  and Exelis shareholders will own approximately 15 percent. On a pro forma basis  for the latest twelve months ended December 31, 2014, the combined company  would have had more than $8 billion in revenue and about 23,000 employees  globally, including 9,000 engineers and scientists.   “Acquiring Exelis is transformational for Harris,” said William M. Brown,  chairman, president and chief executive officer of Harris. “The combination of the  two companies’ highly complementary core franchises creates a competitively  stronger company with significantly greater scale. We are expanding in a market  where we have decades of success and a workforce dedicated to providing our  customers with innovative and cost-effective solutions for some of their most  complex challenges.”   “This agreement to become part of Harris Corporation represents an exciting new  chapter for Exelis,” said David F. Melcher, chief executive officer and president  of Exelis. “Combining the companies not only creates shareholder value, but the  commitment to excellence and innovation that both companies share will  significantly benefit customers and provide new opportunities for employees.”   Melcher also noted, “Our 2014 was another strong year, and we expect to report  revenue of approximately $3.25 billion and adjusted operating margin between   34.  As discussed below, the $23.75 per share implied value of the Merger  Consideration Exelis’ public shareholders stand to receive is insufficient, as it fails to account for  the Company’s significant future earning potential and falls below the premium other defense  contractors have recently sold for.   B.  The Merger Consideration Is Inadequate In Light Of Exelis’ Strong Background &  Promising Financial Prospects   35.  Exelis provides command, control, communications, computers, intelligence, and  surveillance and reconnaissance (C4ISR) related products and systems in the United States and  internationally. The Company’s C4ISR Electronics and Systems segment offers intelligence,  surveillance, and reconnaissance systems; integrated electronic warfare systems; electronic  attack and release systems, including aircraft-armament suspension and release equipment,  weapons interface systems, and surveillance aircraft and unmanned aerial vehicles.  This  segment also provides radio frequency and acoustic surveillance sensors, integrated radar and  precision air traffic control surveillance systems, electronic warfare and signals intelligence  12  systems, and mine sweeping systems; and tactical, mobile satellite, wireless, special mission,  mobile ad hoc networking systems, as well as integrated command, control, and communications  solutions.  In addition, it offers night vision products; positioning, navigation, and timing  systems; and aerospace assembly structures, and sub-assemblies and components.  The  Company’s Information and Technical Services segment provides systems integration, network  design and development, air traffic management, cyber, intelligence, operations, sustainment,  engineering, and space launch and range-support solutions.  Exelis serves the U.S. Department of  Defense and its prime contractors, U.S. Government intelligence agencies, NASA, the Federal  Aviation Administration, the U.S. Army, Navy, Marines and Air Force, and allied foreign  governments, and commercial customers.     36.  The Company was formerly known as ITT DCO, Inc. (“ITT”).  In 2011 ITT  announced that it planned to separate into three independent publicly traded companies by the  end of the year.  On October 31, 2011 Exelis became a publicly traded company incorporated  under the laws of Indiana and headquartered in McLean, Virginia.   37.  On September 27, 2014, Exelis completed the spin-off of its former Mission  Systems business division into a separate, publicly traded company (the “Spin-Off”), Vectrus,  Inc. (“Vectrus”). Vectrus was launched as a provider of infrastructure asset management,  information technology and network communication services, and logistics and supply chain  management.  At the time of the Spin-Off, existing Exelis shareholders owned all of the common  shares of Vectrus, with each Exelis shareholder receiving one share of Vectrus common stock for  every eighteen shares of Exelis stock held as of September 18, 2014, the Spin-Off record date.   38.  The Spin-Off is expected to free Exelis from the burden of the underinvested  Mission Systems Services business, which is experiencing severe declines in revenue due to  13  budget constraints and the drawdown of U.S. troops in the Middle East.  The Mission Systems  business had been weighing on the rest of Exelis and concealing the improved growth profile of  Exelis’ C4ISR and IT Systems business unit.6  Thus, the Proposed Transaction comes at a  particularly opportune time for Harris, as it has been able to acquire Exelis on the cheap as a  result of the fact that the Company’s revenues have been suppressed by the struggling Mission  Systems Services business segment.  However, as a result of the Spin-Off, Exelis is poised to  experience significant improvement in its financial results over the coming quarters, making the  Merger Consideration inadequate.       39.  In November 2014 Exelis also authorized a $350 million share buyback program  over the next two years, signaling that the Company believed its stock was undervalued.  While  the buyback program was initiated in response to third quarter results that missed expectations,  Company executives announced that they believe they can make up for a decrease in U.S.  government spending through gains in the private sector and international growth.7  The  Company also stated that its growing work backlog would carry it through in terms of revenue  and reputation as a solid contractor.    40.  While the entire defense industry has faced pressure to expand its customer base  amidst the Pentagon’s announced plan to reduce spending by $1 trillion over the next decade,  Exelis has nonetheless recently won several lucrative contracts with the U.S. military, which  stand to drive the Company’s financial performance in the coming months and years.   6   Aronson Capital Partners, Federal M&A Trends in Spin-Off and Divestiture  Transactions,  60.  Plaintiff incorporates by reference and realleges each and every allegation  contained above, as though fully set forth herein.   61.  The Individual Defendants have violated fiduciary duties of care, loyalty, and  good faith owed to Exelis shareholders.   62.  By the acts, transactions, and courses of conduct alleged herein, Defendants,  individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff  and other members of the Class of the true value of their investment in Exelis.   63.  As demonstrated by the allegations above, the Individual Defendants failed to  exercise the care required, and breached their duties of loyalty, good faith, and care owed to  Exelis shareholders because, among other reasons, they failed to take reasonable steps to obtain  and/or ensure that Exelis shareholders receive adequate consideration for their shares and agreed  to restrictive deal protection devices that deter other suitors from making a superior bid for the  Company.     20   64.  By reason of the foregoing acts, practices, and courses of conduct, the Individual  Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary  obligations toward Plaintiff and the other members of the Class.   65.  As a result of the actions of Defendants, Plaintiff and the Class will suffer  irreparable injury in that they have not and will not receive their fair portion of the value of  Exelis’ assets and businesses and have been and will be prevented from obtaining a fair price for  their Exelis common shares.   66.  Unless the Court enjoins Defendants, they will continue to breach their fiduciary  duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the members  of the Class.   67.  Plaintiff and the members of the Class have no adequate remedy at law.  Only  through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully  protected from the immediate and irreparable injury that Defendants’ actions threaten to inflict.  68.  Plaintiff incorporates by reference and realleges each and every allegation  contained above, as though fully set forth herein.   69.  Harris and Merger Sub have acted and are acting with knowledge of, or with  reckless disregard to, the fact that the Individual Defendants are in breach of their fiduciary  duties to Exelis shareholders, and have participated in such breaches of fiduciary duties.   70.  Harris and Merger Sub knowingly aided and abetted the Individual Defendants’  wrongdoing alleged herein.  In so doing, Harris and Merger Sub rendered substantial assistance  21  in order to effectuate the Individual Defendants’ plan to consummate the Proposed Transaction  in breach of their fiduciary duties.   71.  Plaintiff and the members of the Class have no adequate remedy at law.  Only  through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully  protected from the immediate and irreparable injury that Defendants’ actions threaten to inflict.  A.  The Proposed Transaction    On Behalf of Plaintiff and the Class Against the Individual Defendants  for Breach of Fiduciary Duties   On Behalf of Plaintiff and the Class Against Harris and Merger Sub for Aiding and  Abetting the Individual Defendants’ Breaches of Fiduciary Duty  