-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GZem8Uadb97nwVSKP6uF0foQtWQqO376j0VaunsBlLgKeXWDsELLB8c6PbXyOvUt gCL+1giyFbRjX8DKK89uSw== 0000950152-94-001168.txt : 19941121 0000950152-94-001168.hdr.sgml : 19941121 ACCESSION NUMBER: 0000950152-94-001168 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 DATE AS OF CHANGE: 19941114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARRIS CORP /DE/ CENTRAL INDEX KEY: 0000202058 STANDARD INDUSTRIAL CLASSIFICATION: 3663 IRS NUMBER: 340276860 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03863 FILM NUMBER: 94560230 BUSINESS ADDRESS: STREET 1: 1025 W NASA BLVD CITY: MELBOURNE STATE: FL ZIP: 32919 BUSINESS PHONE: 4077279100 MAIL ADDRESS: STREET 1: 1025 W NASA BLVD CITY: MELBOURNE STATE: FL ZIP: 32919 FORMER COMPANY: FORMER CONFORMED NAME: HARRIS SEYBOLD CO DATE OF NAME CHANGE: 19600201 10-Q 1 HARRIS CORP 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended September 30, 1994 Commission File Number 1-3863 HARRIS CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 34-0276860 ------------------------ --------------------------------- (State of Incorporation) (IRS Employer Identification No.) 1025 West NASA Boulevard Melbourne, Florida 32919 ---------------------------------------- (Address of principal executive offices) (407) 727-9100 ------------------------------- (Registrant's telephone number) ------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. 39,416,250 Shares ---------- 2 PART I. FINANCIAL INFORMATION - - - - - ------------------------------ HARRIS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME The following information for the quarters ended September 30, 1994 and 1993 has not been audited by independent accountants, but in the opinion of management reflects all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results for the indicated periods. The results of operations for the quarter ended September 30, 1994 are not necessarily indicative of the results for the full fiscal year.
Quarter Ended --------------------------- September 30, September 30, 1994 1993 ------------ ------------ (In millions, except per share amounts) Revenue Revenue from sales, rentals and services $807.3 $769.1 Interest 8.8 8.2 ------ ------ 816.1 777.3 Costs and Expenses Cost of sales, rentals and services 561.5 520.5 Engineering, selling and administrative expenses 195.9 203.5 Interest 14.8 14.2 Other - net (.4) (.7) ------ ------ Income before income taxes 44.3 39.8 Income taxes 15.5 15.1 ------ ------ Income before cumulative effect of change in accounting principle 28.8 24.7 Cumulative effect of change in accounting principle (Postretirement Benefits Other Than Pensions) - (10.1) ------ ------ Net Income $ 28.8 $ 14.6 ====== ====== Income per share before cumulative effect of change in accounting principle $.73 $.62 Cumulative effect of change in accounting principle - (.25) ---- ---- Net Income Per Common Share (Primary) $.73 $.37 ==== ==== Cash Dividends Paid Per Common Share $.31 $.28 ==== ====
3 HARRIS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET
September 30, June 30, 1994 1994 ------------ ------------ ASSETS (In millions) Current Assets Cash and cash equivalents $ 86.7 $ 139.1 Marketable securities 29.9 - Trade accounts and notes receivable - net, less allowance for collection losses of $28,700,000 at September 30, 1994 and $29,500,000 at June 30, 1994 608.4 647.2 Unbilled costs and accrued earnings on fixed price contracts based on percentage-of-completion accounting, less progress payments of $225,700,000 at September 30, 1994 and $206,400,000 at June 30, 1994 370.6 369.7 Inventories: Work in process and finished products 387.2 385.6 Raw materials and supplies 78.1 77.5 ------- ------- 465.3 463.1 Deferred income taxes 68.3 79.2 ------- ------- Total Current Assets 1,629.2 1,698.3 Plant and equipment, less allowances for depreciation of $1,170,500,000 at September 30, 1994 and $1,167,500,000 at June 30, 1994 568.3 551.3 Notes receivable - net 151.3 151.1 Intangibles resulting from acquisitions 163.1 166.0 Other assets 94.3 110.4 -------- -------- $2,602.2 $2,677.1 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term debt $ 24.9 $ 19.8 Trade accounts payable 132.0 184.5 Compensation and benefits 161.7 188.5 Other accrued items 176.6 164.9 Advance payments and unearned income 193.8 189.0 Income taxes 58.3 57.0 Current portion of long-term debt 1.9 1.0 -------- -------- Total Current Liabilities 749.2 804.7 Deferred income taxes 22.4 22.7 Long-term debt 662.2 661.7 Shareholders' Equity Capital stock: Preferred Stock, without par value: Authorized - 1,000,000 shares; issued - none - - Common Stock, par value $1 per share: Authorized - 100,000,000 shares; issued 39,416,250 shares at September 30, 1994 and 39,298,118 at June 30, 1994 39.4 39.3 Other capital 241.6 230.3 Retained earnings 902.2 943.1 Net unrealized gain on securities available-for-sale (net of taxes) 11.4 - Unearned compensation (10.0) (3.2) Cumulative translation adjustments (12.2) (21.5) -------- -------- Total Shareholders' Equity 1,172.4 1,188.0 -------- -------- $2,602.2 $2,677.1 ======== ========
4 HARRIS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quarter Ended ---------------------------- September 30, September 30, 1994 1993 ------------- ------------- (In millions) Cash flows from operating activities Income before cumulative effect of change in accounting principle $ 28.8 $ 24.7 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of plant and equipment 41.5 38.3 Non-current deferred income tax (.4) 3.3 (Increase) decrease in: Accounts and notes receivable 14.5 (4.8) Unbilled costs and inventories (19.5) (42.7) Other assets (2.6) (1.7) Increase (decrease) in: Trade payables and accrued expenses (59.9) (63.8) Advance payments and unearned income 5.9 (8.8) Income taxes 6.3 (36.9) Other (.2) (3.5) ----- ----- Net cash provided by (used in) operating activities 14.4 (95.9) ----- ----- Cash flows from investing activities Additions of plant and equipment-net of normal disposals (56.1) (37.5) ----- ----- Net cash used in investing activities (56.1) (37.5) ----- ----- Cash flows from financing activities Increase in short-term debt 6.0 55.9 Increase (decrease) in long-term debt .4 (.2) Proceeds from sale of Common Stock 6.6 5.0 Purchase of Common Stock for treasury (4.3) - Cash dividends (12.1) (11.1) Dividend-in-kind (8.4) - ----- ----- Net cash provided by (used in) financing activities (11.8) 49.6 ----- ----- Effect of exchange rate changes on cash and cash equivalents 1.1 1.4 ----- ----- Net decrease in cash and cash equivalents $(52.4) $(82.4) ====== ======
5 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 1994 Note A -- Basis of Presentation - - - - - ------------------------------- The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, and changes in cash flows in conformity with generally accepted accounting principles. For further information refer to the financial statements and notes to financial statements included in the Corporation's Form 10K for the fiscal year ended June 30, 1994. Note B -- Accounting Standards - - - - - ------------------------------ For the quarter ended September 30, 1994, the Corporation adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Under the provisions of this standard, the Corporation's marketable securities, all of which are classified as available-for-sale, are reported at fair value, with unrealized gains and losses excluded from net income and reported as a net after-tax amount as a separate component of stockholders' equity until realized. The cost basis of marketable securities at September 30, 1994, was $11.1 million. Realized gains or losses are determined using the specific identification method. Gross realized gains included in net income for the first quarter of fiscal 1995 were not material. Note C -- Dividend-in-kind - - - - - -------------------------- During the quarter ended September 30, 1994, the Corporation spun off as a tax free dividend its computer systems business by distributing one share of Harris Computer Systems Corporation common stock for every twenty shares of the Corporation's Common Stock. The distribution ($55.2 million) is included as a charge to retained earnings in the Condensed Consolidated Balance Sheet. In the Condensed Consolidated Statement of Cash Flows, the dividend is presented as a noncash transaction except for $8.4 million which was the cash balance of Harris Computer Systems Corporation at the time of the spin-off. Note D -- Litigation - - - - - -------------------- In 1993, a California state court awarded damages against the Corporation in the amount of $66.9 million, together with interest and costs of suit, to a California software company. The suit arose from a contract between the plaintiff and a discontinued operation of the Corporation. The Corporation believes the judgment is unjustified and has filed an appeal with the California Court of Appeals. The ultimate outcome of this litigation is unknown. Accordingly, no provisions, beyond those already provided as part of prior discontinued operation charges, have been made in the accompanying consolidated financial statements. Prior discontinued operations charges included legal costs the Corporation expects to incur in defending itself in this matter. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS - - - - - ------------------------------------ Sales and income before cumulative effect of change in accounting principle for the first quarter were higher than the same period last year by 5.0 percent and 16.6 percent, respectively. The Semiconductor segment reported strong growth in earnings and modestly higher sales for the first quarter. A slightly higher cost of sales ratio was more than offset by lower administrative and general expenses resulting from prior year cost reduction efforts. The segment recognized a $12.1 million charge for cost reduction actions in last year's fourth quarter. Approximately 25 percent of these reserves were used in this year's first quarter primarily for severance payments, with the remaining reserves to be used in the second and third quarters of this year. Segment net income also included gains from the ongoing sales of investment securities in both the current and prior year. Net income was up moderately in the Electronic Systems segment, while sales were relatively flat compared to the prior year. A higher cost of sales ratio resulting from increased bid and proposal costs were more than offset by significantly lower administrative and general expenses. In the first quarter, this segment's Computer Systems business was spun off to shareholders as an independent public company. The computer systems business was not material to the segment and its operating results. Communications segment sales and net income were significantly higher than last year's first quarter. Sales were higher at all operating units, while the increase in earnings was led by the segment's broadcast-equipment and microwave-systems businesses. A higher cost of sales ratio due to changes in product mix and markets was offset by a lower operating expense ratio. Net income at the Lanier Worldwide segment was significantly higher on a slight increase in sales. An increase in the cost of sales ratio resulting from the negative effect of changes in foreign currency was more than offset by reduced operating expenses. Operating expenses continue to decline as the segment benefits from prior year cost reduction efforts. These efforts were most notable in Europe where operating margins improved significantly. Cost of sales as a percentage of net sales increased to 69.6 percent versus 67.7 percent in last year's first quarter. Cost ratios were up in all segments. The more significant increases were in the Electronic Systems and Communications segments for the above discussed reasons. Engineering, selling, and administrative expenses as a percentage of net sales decreased from 26.5 percent last year to 24.3 percent in this year's first quarter. The operating expense ratio was lower for all segments. For the Corporation, operating expenditures were lower for all expense categories. These reductions reflect continuing cost reduction initiatives in all segments of the Corporation. Interest expense in the first quarter increased from the prior year due to higher rates. "Other-net", which includes gains from the sale of investment securities in both the current and prior year, was comparable to last year's first quarter. The provision for income taxes as a percentage of pre-tax income was 35.0 percent, compared to 38.0 percent in the prior year. The statutory federal tax rate for both periods was 35.0 percent. The decrease in the effective tax rate from the prior year is due to increased foreign tax benefits. Income before cumulative effect of change in accounting principle as a percentage of sales was 3.6 percent in the first quarter, compared to 3.2 percent in the same period last year for the previously stated reasons. Working capital decreased slightly from $893.6 million at June 30, 1994 to $880.0 million at the end of the first quarter due to the spin-off of the computer systems business which had working capital of $38.7 million. The Corporation anticipates that the requirement for funds to finance operations during fiscal 1995 will be met by cash flow from operations. 7 PART II OTHER INFORMATION - - - - - ------------------------- Item 5. Other information ----------------- On November 11, 1994 -- the Corporation announced that, in order to maintain its price competitiveness, the Electronic Systems Sector is streamlining operations and reducing employment by approximately 700 people as part of a major reduction in costs and expenses. The sector employs some 7,500, primarily people in Palm Bay and Melbourne, Florida. The cost-reduction actions include a flattening of the sector's management structure, eliminating approximately 35 percent of executive positions, and consolidation of sector and division functions. The sector also plans reductions in other fixed and variable costs and expenses. An early return from these actions is expected, which will be achieved within present operating plans and without the need for a one-time charge. Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) Exhibits: (10)(a) Harris Corporation Master Trust dated as of August 1, 1994 between Harris Corporation and Bankers Trust Company, as Trustee. (b) Harris Corporation Master Rabbi Trust Agreement dated as of August 1, 1994 between Harris Corporation and Bankers Trust Company, as Trustee. (11) Statement re: computation of per share earnings. (27) Financial Data Schedule. (b) Reports on Form 8-K. No reports on Form 8-K have been filed during the quarter for which this report is filed. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HARRIS CORPORATION -------------------------------- (Registrant) Date: November 11, 1994 By:/s/Bryan R. Roub ----------------------------- Bryan R. Roub Senior Vice President - Finance (Chief Financial Officer) EX-10.A 2 HARRIS CORP 10-Q EXHIBIT 10(A) 1 EXHIBIT 10(a) HARRIS CORPORATION MASTER TRUST August 1, 1994 2 TABLE OF CONTENTS ARTICLE I Title-Purpose-Policy-Effect 1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.4 Exclusive Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.5 Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.6 Domestic Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1.7 Trustee Not Responsible for Enforcing Contributions or for Sufficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ARTICLE II Participation 2.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.2 Effect on Adopting Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.3 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.4 Valuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.5 Participant Records and Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE III Administration of Participating Plans 3.1 Payment of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
- i - 3 3.2 Reliance on Corporation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.3 Trustee Not Responsible for Plan Administration . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE IV Investment of Trust Assets 4.1 Asset Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.2 Investment Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.3 Limitations on Investment Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4.4 Responsibility for Diversification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE V Investment Funds Within the Master Fund 5.1 Participating Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.2 The Company Stock Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ARTICLE VI Responsibility for Directed Funds 6.1 Responsibility for Selection of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 16 6.2 Trustee Not Responsible for Investments in Directed Funds . . . . . . . . . . . . . . . . 16 6.3 Investment Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 6.4 Reliance on Asset Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 6.5 Merger of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.6 Notification of Named Fiduciary in Event of Breach . . . . . . . . . . . . . . . . . . . . 19 6.7 Definition of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
- ii - 4 6.8 Duty to Enforce Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 6.9 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 ARTICLE VII Powers of Asset Managers 7.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 7.2 Additional Powers of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7.3 Limitation of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 ARTICLE VIII Records and Accounts of Trustee 8.1 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 8.2 Annual Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 8.3 Periodic Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 8.4 Account Stated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 8.5 Judicial Accountings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 8.6 Necessary Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 ARTICLE IX Compensation, Taxes and Expenses 9.1 Compensation and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 9.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 9.3 Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
- iii - 5 ARTICLE X Resignation or Removal of Trustee 10.1 Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 10.2 Designation of a Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 10.3 Reserve for Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 ARTICLE XI Withdrawal of Participating Plans 11.1 Event of Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 11.2 Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 11.3 Approval of Appropriate Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 ARTICLE XII Amendment or Termination 12.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 12.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 12.3 Trustee's Authority to Survive Termination . . . . . . . . . . . . . . . . . . . . . . . . 34 ARTICLE XIII Tender Offers 13.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 13.2 Trustee's Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
- iv - 6 ARTICLE XIV Authorities 14.1 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 14.2 Subsidiary or Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 14.3 Named Fiduciary and Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 14.4 Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 14.5 Form of Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 14.6 Continuation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 14.7 No Obligation to Act on Unsatisfactory Notice . . . . . . . . . . . . . . . . . . . . . . 38 ARTICLE XV General Provisions 15.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 15.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 15.3 Reliance on Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 15.4 Successor to the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 15.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 15.6 Plan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 15.7 No Waiver; Reservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 15.8 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 15.9 Spendthrift Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
- v - 7 ARTICLE XVI Undertaking by Company 16.1 Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 16.2 Limitation on Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 16.3 Waiver of Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 16.4 Survival of Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
- vi - 8 Agreement and Declaration of Trust made as of this 1st day of AUGUST, 1994, by and between HARRIS CORPORATION, a Delaware corporation, and BANKERS TRUST COMPANY, a New York banking corporation. W I T N E S S E T H: - - - - - - - - - - WHEREAS, Harris Corporation wishes to establish a master trust to serve as a funding medium for eligible employee benefit plans of Harris Corporation and its subsidiaries and affiliates; and WHEREAS, Bankers Trust Company is willing to act as trustee of such trust upon all of the terms and conditions hereinafter set forth. NOW, THEREFORE, Harris Corporation and Bankers Trust Company declare and agree that Bankers Trust Company will receive, hold and administer all sums of money and such other property acceptable to Bankers Trust Company as shall from time to time be contributed, paid or delivered to it hereunder, together with any and all increments thereto, proceeds and reinvestment thereof and income therefrom, IN TRUST, upon all of the following terms and conditions: ARTICLE I Title-Purpose-Policy-Effect --------------------------- 1.1. NAME. The master trust established hereunder shall be known as the Harris Corporation Master Trust and is sometimes hereinafter referred to as the "Trust". 9 1.2. DEFINITIONS. Where used in this Agreement and Declaration of Trust, unless the context otherwise requires or unless otherwise expressly provided: (a) "Account Party" shall mean the Named Fiduciary and any Person to whom the Trustee shall be instructed by the Named Fiduciary to deliver its annual or other periodic account under Section 8.2 or Section 8.3,EXCEPT, THAT with respect to any filings, notices, reports or accountings required to be given under the General Trust, "Account Party" shall be limited to that officer designated herein to represent the Company. (b) "Accounting Period" shall mean either the twelve consecutive month period ending on June 30 or for the first year in which the Trustee acts as Trustee hereunder or ceases to act as Trustee with respect to any Participating Plan, the twelve-consecutive month period or shorter period ending on June 30. (c) "Agreement" shall mean all of the provisions of this instrument and of all other written instruments amendatory hereof. (d) "Asset Manager" shall mean the Trustee (other than for purposes of Article VI), Named Fiduciary or Investment Manager, individually or collectively as the context shall require, with respect to those assets held in any Investment Fund established hereunder over which it exercises, or to the extent it is authorized to exercise, discretionary investment authority or control. (e) "Bankers" shall mean Bankers Trust Company. - 2 - 10 (f) "Board of Directors" shall mean the board of directors of the Company. (g) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the Regulations issued thereunder. (h) "Common Stock Fund" shall mean an Investment Fund consisting of common stock of the Company. (i) "Company" shall mean Harris Corporation or any successor thereto. (j) "Company Stock" shall mean the common stock of the Company and securities convertible into common stock of the Company. (k) "Corporation Committee" shall mean, with respect to each Participating Plan, the Committee or other Person responsible for benefit administration under such Participating Plan, including any representative (designated in writing as such) or designee thereof authorized to act on behalf of such Committee. (l) "Directed Fund" shall mean any Investment Fund, or part thereof, subject to the discretionary management and control of the Named Fiduciary or any Investment Manager, other than the Trustee. (m) "Discretionary Fund" shall mean any Investment Fund, or part thereof, subject to the discretionary management and control of the Trustee. - 3 - 11 (n) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the Regulations issued thereunder. (o) "General Trust" shall mean the BT Pyramid Trust created by Bankers Trust Company under Declaration of Trust effective June 30, 1991, as heretofore or hereafter amended. (p) "Insurance Contract" shall mean any contract or policy (including any annuity contract) of any kind issued by an insurance company, whether or not providing for the allocation of amounts received by the insurance company thereunder solely to the general account or solely to one or more separate accounts (including separate accounts maintained for the collective investment of qualified retirement plans), or a combination thereof, and whether or not any such allocation may be made in the discretion of the insurance company. (q) "Investment Fund" shall mean each pool of assets established for investment purposes pursuant to Section 5.1 in the Trust in which one or more Participating Plans has an interest during an Accounting Period. The term shall also include for all purposes hereof any sub-fund or account into which an Investment Fund shall be divided from time to time at the direction of the Named Fiduciary. (r) "Investment Manager" shall mean a bank, insurance company or investment adviser satisfying the requirements of Section 3(38) of ERISA. - 4 - 12 (s) "Investment Vehicle" shall mean any common, collective or commingled trust (other than the General Trust or an Investment Fund), investment company, corporation functioning as an investment intermediary, Insurance Contract, partnership, joint venture or other entity or arrangement to which, or pursuant to which, assets of an Investment Fund within the Trust may be transferred or in which the Trust has an interest, beneficial or otherwise (whether or not the underlying assets thereof are deemed to constitute "plan assets" for any purpose under ERISA). (t) "Master Fund" shall mean all cash and other property contributed, paid or delivered to the Trustee hereunder, all investments made therewith and proceeds thereof and all earnings and profits thereon, less payments, transfers or other distributions which, at the time of reference, shall have been made by the Trustee, as authorized herein. The Master Fund shall include each Investment Fund and all evidences of ownership, interest or participation in an Investment Vehicle, but shall not, solely by reason of the Master Fund's investment therein, be deemed to include any assets of such Investment Vehicle. (u) "Named Fiduciary" shall mean the Person or its designee with respect to a Participating Plan, who, within the meaning of Section 402(a)(2), 402(c)(3) or 403(a)(1) of ERISA, has the authority to perform the separate functions allocated to that "Named Fiduciary" under this - 5 - 13 Agreement. Unless otherwise specifically provided to the contrary, the Named Fiduciary shall mean the Company. (v) "Participating Plan" shall mean any employee benefit plan which meets the requirements for eligibility specified in Section 2.1. All Participating Plans are listed on Appendix A attached hereto. (w) "Person" shall mean a natural person, trust, estate, corporation, mutual company, joint-stock company, unincorporated organization, association, partnership, joint venture, employee organization, committee, board, participant, beneficiary, trustee, partner, or venturer acting in an individual, fiduciary or representative capacity, as the context may require. (x) "Share" shall mean the interest of any Participating Plan in the Master Fund, and where appropriate any Investment Fund, the accounting for which will be maintained by the Trustee in a manner agreed upon between the Company and the Trustee and may be expressed in "units". (y) "Trustee" shall mean Bankers Trust Company. (z) "Valuation Date" shall mean the last day of the Accounting Period, calendar quarter or any more frequent date for reporting and/or investment purposes agreed to by the Trustee. - 6 - 14 The plural of any term shall have a meaning corresponding to the singular thereof as so defined and any neuter pronoun used herein shall include the masculine or feminine, as the context may require. 1.3. PURPOSE. The Trust is established to fund the benefits payable to participants and their beneficiaries under each Participating Plan and to permit the collective investment of the assets of the Participating Plans. 1.4. EXCLUSIVE BENEFIT. Except as may otherwise be permitted by law and the terms of the Participating Plan, at no time prior to the satisfaction of all liabilities with respect to participants and their beneficiaries under the Participating Plans shall any part of the Master Fund be used for, or diverted to, any purposes other than for the exclusive benefit of such participants and their beneficiaries, and for defraying the reasonable expenses of administering the Participating Plans. No provision herein designed to provide for the pooling of assets of Participating Plans for investment purposes shall be deemed or construed to authorize the utilization of the assets of any Participating Plan to discharge the obligations and liabilities of any other Participating Plan. 1.5. EFFECT. All persons at any time interested in any Participating Plan shall be bound by the provisions of this Agreement and, in the event of any conflict between this Agreement and the provisions of a Participating Plan or any instrument or agreement forming part of such Plan other than this Agreement, the provisions of this Agreement shall control. - 7 - 15 1.6. DOMESTIC TRUST. The Trust shall at all times be maintained as a domestic trust in the United States. 1.7. TRUSTEE NOT RESPONSIBLE FOR ENFORCING CONTRIBUTIONS OR FOR SUFFICIENCY. The Trustee shall have no responsibility hereunder for enforcing payment of any contribution to any Participating Plan, for the timing or amount thereof, or for the adequacy of the Master Fund or the funding standards adopted for any Participating Plan to meet or discharge any pension or other liabilities of such Plan. ARTICLE II Participation 2.1. ELIGIBILITY. Any employee benefit plan established by the Company, or a subsidiary or an affiliate of the Company, may be funded, in whole or in part, through the Trust if (i) the plan is qualified under Section 401(a) of the Code, (ii) the Trust is exempt from taxation under Section 501(a) of the Code, and (iii) this Agreement has been duly adopted as the trust under the plan by the Board of Directors or, in the case of such subsidiary or affiliate, the Company has consented thereto. 2.2. EFFECT ON ADOPTING COMPANY. When the Master Trust has been adopted by any subsidiary or affiliate of the Company, such subsidiary or affiliate shall be bound by the decisions, instructions, actions and directions of the Company, the Corporation Committee or the Named Fiduciary under or affecting - 8 - 16 this Agreement, and the Trustee shall be fully protected by the Company and such subsidiary or affiliate in relying upon the decisions, instructions, actions and directions of the Company, the Administrative Committee or the Named Fiduciary. Except as may be hereafter specifically provided, the Trustee shall not be required to give notice to or to obtain the consent of any subsidiary or affiliate with respect to any action to be taken by the Trustee pursuant to this Agreement, and the Company shall have the sole authority to enforce this Agreement on behalf of any subsidiary or affiliate. 2.3. SHARES. The Trustee shall maintain a separate account and such subaccounts as it and the Company shall deem advisable to reflect the Share of each Participating Plan, or part thereof. The Named Fiduciary shall provide the Trustee with current information in order that the Trustee may determine such Shares. An Investment Fund may be divided into one or more sub-funds or accounts or described in a different manner on any books kept or reports rendered by the Trustee without in any way affecting the duties or responsibilities of the Trustee under the provisions of this Agreement; PROVIDED, HOWEVER, the books and records of the Trustee shall at all times be maintained so that the interest of each Participating Plan may be determined. 2.4. VALUATIONS. The Trustee shall determine the value of the assets of the Master Fund and each Investment Fund as of each Valuation Date. Except in the case of an Investment Fund in which amortized cost is the valuation method designated, assets will be valued at their market values at the close of business on - 9 - 17 the Valuation Date, or, in the absence of readily ascertainable market values, at such values as the Trustee shall determine in accordance with methods consistently followed and uniformly applied. Anything in this Agreement to the contrary notwithstanding, with respect to assets constituting part of a Directed Fund, the Trustee may rely for all purposes of this Agreement on the latest valuation and transaction information submitted to it by the Person responsible for the investment of such assets even if such information predates the Valuation Date. The Named Fiduciary will cause such Person to provide the Trustee with all information needed by the Trustee to discharge its obligations to value such assets and to account under this Agreement. 2.5. PARTICIPANT RECORDS AND ACCOUNTS. Certain Participating Plans may be defined contribution plans with respect to which one or more participant accounts are maintained in accordance with the provisions of such Participating Plan. Except as the parties may otherwise agree in writing, the Trustee shall not be required to maintain any separate records or accounts with respect to any participant of any Participating Plan, and any records or accounts required to be maintained pursuant to the terms of any such Plan or to comply with ERISA or the Code shall be the responsibility of the Company. If the parties at any time agree that the Trustee shall maintain such records, a description of the services to be provided by the Trustee, if any, shall be attached hereto as Appendix B. - 10 - 18 ARTICLE III Administration of Participating Plans ------------------------------------- 3.1. PAYMENT OF BENEFITS. On the direction of the Corporation Committee, the Trustee shall pay moneys out of the Share of a Participating Plan directly to or for the benefit of participants in such Plan and their beneficiaries, or to an insurance company to provide for the payment of such benefits by the purchase of an Insurance Contract, or to a paying or disbursing agent (which may be the Corporation Committee). Any assets disbursed or paid over by the Trustee pursuant to this Section 3.1 shall no longer be part of the Master Fund. 3.2. RELIANCE ON CORPORATION COMMITTEE. Any directions pursuant to Section 3.1 may, but need not, specify the application to be made of moneys so ordered. The Trustee shall charge such transfer against the Share of such one or more of the Participating Plans as the Corporation Committee shall direct. Each direction to the Trustee under Section 3.1 shall constitute a certification by the Corporation Committee that such direction is in accordance with applicable law, the terms of any relevant Participating Plan and the terms of this Agreement, and the Trustee shall have no duty to make any independent inquiry or investigation as to any of the foregoing before acting upon such direction, or to see to the application of any moneys paid over. 3.3. TRUSTEE NOT RESPONSIBLE FOR PLAN ADMINISTRATION. The Trustee shall not be responsible under this Agreement, or otherwise, in any way respecting the determination, computation, payment or application of any benefit, for the form, - 11 - 19 terms, payment provisions or issuer of any Insurance Contract which it is directed to purchase to provide for the payment of benefits under any Participating Plan, for performing any functions under any such Insurance Contract which it may be directed to purchase and/or hold as contract holder thereunder (other than the execution of any documents incidental thereto and transfer or receipt of funds thereunder), or for any other matter affecting the administration of a Participating Plan, by the Company or the Corporation Committee or any other Person to whom such responsibility is allocated or delegated pursuant to the terms of the Participating Plan. ARTICLE IV Investment of Trust Assets -------------------------- 4.1. ASSET MANAGERS. Discretionary authority for the management and control of assets of a Participating Plan from time to time held in the Master Fund may be retained, allocated or delegated, as the case may be, for one or more purposes, to and among the Asset Managers by the Named Fiduciary, in its absolute discretion. The terms and conditions of appointment, authority and retention of any Asset Manager shall be the sole responsibility of the Named Fiduciary. The Named Fiduciary shall promptly notify the Trustee in writing of the appointment or removal of an Asset Manager. Any notice of appointment pursuant to this Section 4.1 shall constitute a representation and warranty that the Asset Manager has been appointed in accordance with the provisions of the - 12 - 20 Participating Plan and that any Asset Manager (other than the Trustee or the Named Fiduciary) is an Investment Manager. 4.2. INVESTMENT DISCRETION. Subject to Section 5.1, the assets of the Trust shall be invested and reinvested, without distinction between principal and income, at such time or times in such investments and pursuant to such investment strategies or courses of action and in such shares and proportions, as the Asset Managers, in their sole discretion, shall deem advisable. 4.3. LIMITATIONS ON INVESTMENT DISCRETION. In addition to the limitations imposed by Section 5.1, the Named Fiduciary may limit, restrict or impose guidelines affecting the exercise of the discretion hereinabove conferred on any Asset Manager. Any limitations, restrictions or guidelines applicable to the Trustee, as Asset Manager, shall be communicated in writing to the Trustee. The Trustee shall have no responsibility with respect to the formulation of any funding policy or any investment or diversification policies embodied therein. The Named Fiduciary shall be responsible for communicating, and monitoring adherence to, any limitations or guidelines imposed on any other Asset Manager by Section 5.1 or Section 7.3 or the guidelines described above. 4.4. RESPONSIBILITY FOR DIVERSIFICATION. The Named Fiduciary shall be responsible for determining the diversification policy (if required) of the Master Fund, for monitoring adherence by the Assert Managers to such policy, and for advising the Asset Managers with respect to limitations on employer or other - 13 - 21 securities or property contained in any Participating Plan or imposed on such Plan by applicable law or by the Named Fiduciary. ARTICLE V Investment Funds Within the Master Fund --------------------------------------- 5.1. PARTICIPATING INVESTMENT FUNDS. At the direction of the Named Fiduciary, the interest of a Participating Plan in the Master Fund may be allocated and held and invested in one or more Investment Funds established hereunder by the Named Fiduciary as required or permitted by the terms of each Participating Plan. As of the date hereof, the Master Fund shall be held and invested in the Investment Funds listed and described in Appendix C attached hereto. The Named Fiduciary, to the extent permitted by a Participating Plan, may establish additional Investment Funds, or freeze, terminate or modify the description of any Investment Fund. The determination of the Named Fiduciary of investments eligible for inclusion in any Investment Fund shall be conclusive and binding on all Persons interested in the Participating Plans. Such Investment Funds shall include, where applicable, a Common Stock Fund which shall consist of Company Stock. The income of each Investment Fund shall be accumulated and invested in such Fund. To the extent that any cash shall be allocated to the Common Stock Fund, the Trustee shall regularly purchase Company Stock on the open market or, if the Plan so provides, from the Company or in private transactions, in accordance with a non-discretionary purchasing program. - 14 - 22 The Trustee shall have no authority or obligation to invest or reinvest cash balances of any Directed Fund in the General Trust or otherwise pursuant to this Agreement unless and until it receives appropriate directions from the Asset Manager. Cash balances (including interim investment thereof) in the Common Stock Fund shall be limited to the administrative needs of such Investment Fund. For the purposes of this Section 5.1 and Section 5.2, "administrative needs" shall mean needs consistent with the Trustee's implementation of the regular purchasing program described herein, anticipated distributions and withdrawals from such Investment Fund, and transfers among the Investment Funds at the election of participants. Any investment limitation affecting Company securities shall not be applicable to the extent any Investment Fund is invested in units of the General Trust. 5.2. THE COMPANY STOCK FUND. Notwithstanding the unrestricted powers conferred on the Trustee in this Agreement, the Trustee shall purchase and retain the Company Stock in the Common Stock Fund regardless of market fluctuations and, subject to Article XVI, the Trustee shall sell such stock only to meet administrative needs of the Participating Plan. The Trustee shall have no duty to inform participants in the Participating Plans of the unique nature of the Company Stock Fund. - 15 - 23 ARTICLE VI Responsibility for Directed Funds --------------------------------- 6.1. RESPONSIBILITY FOR SELECTION OF AGENTS. All transactions of any kind or nature in or from a Directed Fund shall be made upon such terms and conditions and from or through such brokers, dealers and principals and other agents as the Asset Manager shall direct. No such transactions shall be executed through the facilities of the Trustee except where the Trustee shall make available its facilities solely for the purpose of temporary investment of cash reserves of a Directed Fund. Nothing in the preceding sentence shall confer any authority upon the Trustee to invest the cash balances of any Directed Fund unless and until it receives directions from the Asset Manager. 6.2. TRUSTEE NOT RESPONSIBLE FOR INVESTMENTS IN DIRECTED FUNDS. The Trustee shall be under no duty or obligation to review or to question any direction of any Asset Manager, or to review securities or any other property held in any Directed Fund with respect to prudence or proper diversification or compliance with any limitation on the Asset Manager's authority under this Agreement or the terms of a Participating Plan, any agreement entered into between the Company or the Named Fiduciary and the Asset Manager or imposed by applicable law, or to make any suggestions or recommendation to the Company, the Named Fiduciary or the Asset Manager with respect to the retention or investment of any assets of any Directed Fund, and shall have no authority to take any action or to - 16 - 24 refrain from taking any action with respect to any asset of a Directed Fund unless and until it is directed to do so by the Asset Manager. 6.3. INVESTMENT VEHICLES. Any Investment Vehicle, or interest therein, acquired by or transferred to the Trustee upon the directions of the Asset Manager shall be allocated to a designated Directed Fund, and the Trustee's duties and responsibilities under this Agreement shall not be increased or otherwise affected thereby. The Trustee shall be responsible solely for the safekeeping of the physical evidence, if any, of the Trust's ownership of or interest or participation in such Investment Vehicle. 6.4. RELIANCE ON ASSET MANAGER. The Trustee shall be required under this Agreement to execute documents, to settle transactions, to take action on behalf of or in the name of the Trust and to make and receive payments on the direction of the Asset Manager. Any direction of the Asset Manager shall constitute a certification to the Trustee (i) that the transaction will not constitute a prohibited transaction under ERISA or the Code, (ii) that the investment is authorized under the terms of this Agreement and any other agreement or law affecting the Asset Manager's authority to deal with the Directed Fund, (iii) that any contract, agency, joinder, adoption, participation or partnership agreement, deed, assignment or other document of any kind which the Trustee is requested or required to execute to effectuate the transaction has been reviewed by the Asset Manager and, to the extent it deems advisable and prudent, its counsel, (iv) that such instrument or document is in proper form for execution by the Trustee, and - 17 - 25 (v) that all other reasonable acts to perfect and protect the Trust's rights have been taken, and the Trustee shall have no duty to make any independent inquiry or investigation as to any of the foregoing before acting upon such direction. In addition, the Trustee shall not be liable for the default of any Person with respect to any Investment Vehicle or any investment in a Directed Fund or for the form, genuineness, validity, sufficiency or effect of any document executed by, delivered to or held by it for any Directed Fund on account of such investment, or if, for any reason (other than the negligence or willful misconduct of the Trustee) any rights of the Trust therein shall lapse or shall become unenforceable or worthless. 6.5. MERGER OF FUNDS. The Trustee shall not have any discretionary responsibility or authority to manage or control any asset held in a Directed Fund upon the resignation or removal of an Asset Manager unless and until it has been notified in writing by the Named Fiduciary that the Asset Manager's authority has terminated and that such Directed Fund's assets are to be integrated with the Discretionary Fund. Such notice shall not be deemed effective until two bank business days (i.e., two days on which the Bank is open for business) after it has been received by the Trustee. The Trustee shall not be liable for any losses to the Master Fund resulting from the disposition of any investment made by the Asset Manager or for the retention of any illiquid or unmarketable investment or any investment which is not publicly traded or for the holding of any other investment acquired by the Asset Manager if the Trustee is unable to dispose of such investment because of any restrictions imposed by the Securities Act of 1933 or - 18 - 26 other Federal or state law, or if an orderly liquidation of such investment is impractical under prevailing conditions, or for failure to comply with any investment limitations imposed pursuant to Section 4.3 or 5.1, or for any other violation of the terms of this Agreement, the Participating Plans or applicable law as a result of the addition of Directed Fund assets to the Discretionary Fund. 6.6. NOTIFICATION OF NAMED FIDUCIARY IN EVENT OF BREACH. If the Trustee has knowledge of a breach committed by an Asset Manager, it shall notify the Named Fiduciary thereof and the Trustee shall have no further responsibility hereunder therefor. 6.7. DEFINITION OF KNOWLEDGE. The parties hereto acknowledge that while the Trustee will perform certain duties (such as custodial, reporting, recording, valuation and bookkeeping functions) with respect to Directed Funds, such duties will not involve the exercise of any discretionary authority to manage or control the assets of the Directed Funds and will be the responsibility of officers or other employees of the Trustee who are unfamiliar with and have no responsibility for investment management. Therefore, in the event that knowledge of the Trustee shall be a prerequisite to imposing a duty upon or to determining liability of the Trustee under this Agreement or any statute regulating the conduct of the Trustee with respect to such Directed Funds or relieving the Company of its undertakings under Section 16.2, the Trustee will not be presumed hereunder to have knowledge of, or to have participated in, any act or omission of an Asset Manager involving the investment of assets allocated to the Directed Funds solely as a - 19 - 27 result of the receipt and processing of information in the course of performing such duties. 6.8. DUTY TO ENFORCE CLAIMS. The Trustee shall have no duty to commence or maintain any action, suit or legal proceeding on behalf of the Trust on account of or growing out of any investment made in or for a Directed Fund unless the Trustee has been directed to do so by the Asset Manager or the Named Fiduciary and unless the Trustee is either in possession of funds sufficient for such purpose or has been indemnified to its satisfaction for reasonable counsel fees, costs and other expenses and liabilities to which it, in its sole judgment, may be subjected by beginning or maintaining such action, suit or legal proceeding. 6.9. RESTRICTIONS ON TRANSFER. Nothing herein shall be deemed to empower any Asset Manager to direct the Trustee to transfer any asset of a Directed Fund to itself except for purposes enumerated in paragraph (j), (l) or (m) of Section 7.1. ARTICLE VII Powers of Asset Managers ------------------------ 7.1. GENERAL POWERS. Without in any way limiting the powers and discretions conferred upon any Asset Manager by the other provisions of this Agreement or by law, each Asset Manager shall be vested with the following powers and discretions with respect to the assets of the Trust subject to its management and control, and, upon the directions of the Asset Manager of a Directed Fund, the Trustee shall make, execute, acknowledge and deliver any and - 20 - 28 all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to enable such Asset Manager to carry out such powers and discretions: (a) to sell, exchange, convey, transfer or otherwise dispose of any property by private contract or at public auction, and no person dealing with the Asset Manager shall be bound to see to the application of the purchase money or to inquire into the validity, expediency or propriety of any such sale or other disposition; (b) to enter into contracts or to make commitments either alone or in company with others to sell or acquire property; (c) to purchase or sell, write or issue, puts, calls or other options, covered or uncovered, to enter into financial futures contracts, forward placement contracts and standby contracts, and in connection therewith, to deposit, hold (or direct Bankers, as Trustee or in its individual capacity, to deposit or hold) or pledge assets of the Master Fund; (d) to purchase part interests in real property or in mortgages on real property, wherever such real property may be situated; (e) to lease to others for any term without regard to the duration of the Trust any real property or part interest in real property; (f) to delegate to a manager or the holder or holders of a majority interest in any real property or mortgage on real property or in any oil, mineral or gas properties, the management and operation of any part interest in such - 21 - 29 property or properties (including the authority to sell such part interests or otherwise carry out the decisions of such manager or the holder or holders of such majority interest); (g) to vote upon any stocks, bonds or other securities (BUT, with respect to the voting of Company Stock and/or to other shareholder rights therein, subject to the provisions of any Participating Plan); to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options and to make any payments incidental thereto; to consent to or otherwise participate in corporate reorganizations or other changes affecting corporate securities and to delegate discretionary powers and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities or other property; (h) to organize corporations under the laws of any state for the purpose of acquiring or holding title to property (or, in the case of a Directed Fund, to direct the Trustee to organize such corporations or to appoint an ancillary trustee acceptable to the Trustee for such purpose); (i) to invest in a fund consisting of securities issued by corporations and selected and retained solely because of their inclusion in, and in accordance with, one or more commonly used indices of such securities, with the objective of providing investment results for the fund which approximate the overall performance of such designated index; - 22 - 30 (j) to enter into any partnership, as a general or limited partner, or joint venture; (k) to purchase units or certificates issued by an investment company or pooled trust or comparable entity; (l) to transfer money or other property to an insurance company issuing an Insurance Contract; (m) to transfer assets of a Discretionary or Directed Fund to a common, collective or commingled trust fund exempt from tax under the Code maintained by an Asset Manager or an affiliate of an Asset Manager or by another trustee who is designated in writing by the Named Fiduciary, to be held and invested subject to all of the terms and conditions thereof, and such trust shall be deemed adopted as part of the Trust and the Participating Plans to the extent that assets of the Trust are invested therein; PROVIDED, HOWEVER, that any transfer from a Directed Fund to the General Trust may be made only with the prior approval of the Trustee and shall be invested only in one or more short term investment funds or other special purpose funds established from time to time thereunder; and (n) to be reimbursed for the reasonable expenses incurred in exercising any of the foregoing powers or to pay the reasonable expenses incurred by any agent, manager or trustee appointed pursuant hereto. 7.2. ADDITIONAL POWERS OF TRUSTEE. In addition, the Trustee is hereby authorized: - 23 - 31 (a) to register any securities held in the Master Fund in its own name or in the name of a nominee and to hold any securities in bearer form, and to combine certificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary or representative capacities or as agent for customers, or to deposit or to arrange for the deposit of such securities in any qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by other depositors, or to deposit or arrange for the deposit of any securities issued by the United States Government, or any agency or instrumentality thereof, with a Federal Reserve Bank, but the books and records of the Trustee shall at all times show that all such investments are part of the Master Fund; (b) to employ suitable agents, depositories and counsel, domestic or foreign, and to charge their reasonable expenses and compensation against the Master Fund, and to confer upon any such depository the powers conferred upon the Trustee by paragraph (a) of this Section 7.2 as well as the power to appoint subagents and depositories, wherever situated, in connection with the retention of securities or other property; (c) to borrow money from any source as may be necessary or advisable to effectuate the purposes of the Trust on such terms and conditions as the Trustee, in its absolute discretion, may deem advisable; - 24 - 32 (d) to deposit any funds of the Trust in accounts deposits or savings certificates, which bear a reasonable rate of interest, issued and maintained by Bankers Trust Company, in its separate corporate capacity, or in any other institution affiliated with Bankers Trust Company; (e) to compromise, compound, submit to arbitration or settle any debt or obligation owing to or from or otherwise adjust all claims in favor of or against the Master Fund other than claims solely affecting the right of any Person to benefits under a Participating Plan; to reduce or increase the rate of interest or extend, or otherwise modify, foreclose upon default, or enforce any such debt or obligation; to sue or defend suits or legal proceedings to protect any interest in the Trust and to represent the Trust in all suits or legal proceedings in any court or before any other administrative agency, body or tribunal; (f) to make any distribution or transfer of assets as of a Valuation Date authorized under Article X or XI or to effectuate participants' rights under a Participating Plan in cash or in kind, or partly in cash or kind, and, in furtherance thereof, to value such assets, which valuation shall be conclusive and binding on all Persons; (g) upon the direction of the Named Fiduciary, to maintain and operate one or more market inventory funds as a vehicle to exchange securities among Discretionary Funds and Directed Funds without alienating the property from the Trust; - 25 - 33 (h) to enroll the Master Fund in a program maintained by Bankers to permit customer's accounts to participate in dividend reinvestment plans offered by issuers of securities held in accounts, such as the Master Fund, in order to realize upon the discount from market value offered shareholders without impact on the managed assets in the Master Fund, and to receive reasonable compensation therefor (including reimbursement for certain of its out-of-pocket costs associated therewith) out of the income received by the Master Fund from participation in such program; (i) to hold uninvested cash awaiting investment and such additional cash balances for such time period as it shall reasonably deem necessary, without incurring any liability for the payment of interest thereon; and (j) generally, consistent with the provisions of this Agreement to perform all acts (whether or not expressly authorized herein) which it may deem necessary and prudent for the protection of the assets of the Trust. 7.3. LIMITATION OF POWERS. The foregoing provisions of this Article VII shall not be deemed to expand the permissible investments for any Investment Fund under Section 5.1 or to limit the Named Fiduciary's power to restrict the exercise of such powers by an Asset Manager as provided in Section 4.3. In addition, any powers conferred on the Trustee or any other Asset Manager thereunder may be suspended or revoked at any time by the Named Fiduciary upon written notice to the Asset Manager or the Trustee in accordance with Section 15.6. - 26 - 34 ARTICLE VIII Records and Accounts of Trustee ------------------------------- 8.1. RECORDS. The Trustee shall keep accurate and detailed accounts of all investments, receipts, disbursements and other transactions in the Master Fund and all accounts, books and records relating thereto shall be open to inspection and audit at all reasonable times during normal business hours by any Person designated by the Named Fiduciary. 8.2. ANNUAL ACCOUNT. Within ninety (90) days following the close of each Accounting Period, and within ninety (90) days after the removal or resignation of the Trustee as provided in Article X, the Trustee shall file with the Account Party, in accordance with Section 15.6, a written account setting forth the receipts and disbursements of the Master Fund and the investments and other transactions effected by it upon its own authority or pursuant to the directions of any Person as herein provided during the Accounting Period. 8.3. PERIODIC ACCOUNT. If so required by the terms of any Particular Plan, within thirty (30) days following the close of each calendar month, calendar quarter or other time period (but not more frequently than monthly) the Trustee shall provide the Account Party with, in accordance with Section 15.6, a written account for any such Participating Plan, setting forth the receipts and disbursements of the Master Fund and the investments and other transactions effected by it upon its own authority or pursuant to the directions of any Person as herein provided during such period; PROVIDED, HOWEVER, that such written account - 27 - 35 shall be limited to an accounting of investments and transactions in the Master Fund and shall not affect the responsibilities of the parties, if any, under Section 2.5 herein. 8.4. ACCOUNT STATED. Upon the expiration of ninety (90) days from the date of filing its annual account with the Account Party, the Trustee shall be forever released and discharged from all liability and further accountability to the Company, the Account Party or any other Person with respect to the accuracy of such accounting and the propriety of all acts and failures to act of the Trustee reflected in such account, except with respect to any such acts or transactions as to which the Account Party shall, within such 90-day period, file with the Trustee specific written objections. 8.5. JUDICIAL ACCOUNTINGS. Nothing herein shall in any way limit the right of the Trustee to bring any action or proceeding in a court of competent jurisdiction to settle its account or for such other relief with respect thereto as it may deem appropriate. 8.6. NECESSARY PARTIES. Except to the extent that Sections 502 and 504 of ERISA may provide otherwise, in order to protect the Master Fund from the expense of litigation, no Person other than the Company shall be a necessary party in any proceeding under Section 8.5 or may require the Trustee to account or may institute any other action or proceeding against the Trustee or the Trust. - 28 - 36 ARTICLE IX Compensation, Taxes and Expenses -------------------------------- 9.1. COMPENSATION AND EXPENSES. Any reasonable expenses incurred by the Trustee in connection with its administration of the Master Trust including, but not limited to, reasonable fees for legal services rendered to the Trustee in connection with the performance of its duties hereunder, such compensation to the Trustee as shall be agreed upon from time to time between the Trustee and the Company, and all other proper charges and disbursements of the Trustee, shall be paid from the Master Fund, unless paid by the Company. Anything in the preceding sentence to the contrary notwithstanding, the Company shall reimburse the Trustee for any such expenses if for any reason such expenses are not paid out of the Master Fund. The Trustee's entitlement to reimbursement hereunder shall not be affected by the resignation or removal of the Trustee or by the termination of the Trust. The Named Fiduciary may direct the Trustee to pay from the Master Fund any other administration expenses of a Participating Plan. Each direction to the Trustee under this Section 9.1 and Section 9.3 shall constitute a certification by the Named Fiduciary that such direction is in accordance with applicable law, the terms of any relevant Participating Plan and the terms of this Agreement, and the Trustee shall have no duty to make any independent inquiry or investigation as to any of the foregoing before acting upon such direction, or to see to the application of any moneys paid over. - 29 - 37 9.2. TAXES. All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws, domestic or foreign, upon the Master Fund or the income thereof shall be paid from the Master Fund, unless paid by the Company. The Trustee shall notify the Named Fiduciary of any taxes that may be assessed. In the event that the Named Fiduciary shall determine that the taxes are not lawfully assessed, it may elect to direct the Trustee at the expense of the Trust, to contest such assessments, or it may itself contest such assessment. 9.3. ALLOCATION. Any tax or expense paid from the Master Fund hereunder which is determined by the Named Fiduciary to be specially allocable to one or more Investment Funds or Participating Plans, as the case may be, shall be charged against such Investment Funds or the Share of such Participating Plans, in such proportions as the Named Fiduciary shall direct the Trustee in writing. Any expense which is allocable to all of the Investment Funds or all of the Participating Plans shall be charged against each of the Investment Funds or each of the Participating Plans in the same proportion as the value of the total assets held in each such Investment Fund or Participating Plan bears to the value of the total assets in the Master Fund. - 30 - 38 ARTICLE X Resignation or Removal of Trustee --------------------------------- 10.1. RESIGNATION OR REMOVAL. The Trustee may be removed by the Company at any time upon sixty (60) days' notice in writing to the Trustee. The Trustee may resign at any time upon sixty (60) days' notice in writing to the Company. The parties may waive the sixty-day notice period by the written consent of both parties. 10.2. DESIGNATION OF A SUCCESSOR. Upon the removal or resignation of the Trustee, the Company shall either appoint a successor trustee who shall have substantially the same powers and duties as those conferred upon the Trustee hereunder, and upon acceptance of such appointment by the successor trustee, the Trustee shall assign, transfer and pay over the Master Fund to such successor trustee, or the Company shall direct the Trustee to assign, transfer and pay over the Master Fund to one or more insurance companies pursuant to insurance contracts issued to the Participating Plans. If, for any reason, the Company cannot or does not act promptly to appoint a successor trustee or designate an insurance company in the event of the resignation or removal of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor trustee, and any reasonable expenses incurred by the Trustee in connection therewith shall be charged to and paid from the Master Fund as an expense of administration. - 31 - 39 10.3. RESERVE FOR EXPENSES. Upon its resignation or removal under Section 10.1, the Trustee is authorized to reserve such amount as to it may deem advisable for payments of its reasonable fees and expenses in connection with the settlement of its account or otherwise, and any balance of such reserve remaining after the payment of such fees and expenses shall be paid over in accordance with the directions of the Company under Section 10.2. The Trustee is authorized to invest such reserves in any investment authorized under the terms of this Agreement appropriate for the temporary investment of cash reserves of trusts. ARTICLE XI Withdrawal of Participating Plans --------------------------------- 11.1. EVENT OF WITHDRAWAL. Upon receipt of notice from the Company of the termination (including any partial termination) and distribution of the assets of a Participating Plan or of the withdrawal of any Participating Plan, or part thereof, from the Trust, the Trustee shall segregate the share of the assets of the Master Fund allocable to such Participating Plan, or part thereof, and shall dispose of such assets in accordance with the directions of the Company. 11.2. DISQUALIFICATION. The Company shall promptly notify the Trustee if any Participating Plan has been or is likely to be disqualified under Section 401 of the Code. In that event, the Share of such Participating Plan shall be treated as a Plan withdrawn pursuant to Section 11.1. - 32 - 40 11.3. APPROVAL OF APPROPRIATE AGENCIES. The Trustee may, in its absolute discretion, condition delivery, transfer or distribution of any assets withdrawn from the Master Fund under this Article XI upon the Trustee's receiving assurances satisfactory to it that any notice which may be required to be given under ERISA or the Code to any Person, the Department of Labor, the Internal Revenue Service or the Pension Benefit Guaranty Corporation has been given, or that any filing which is required to be made to determine that a termination has not affected the qualification of a Participating Plan has been made, and that any plan to which such assets are to be transferred is a qualified plan under Section 401(a) of the Code. The Trustee shall not be responsible under any Participating Plan to give any such notice or make any such filings or maintain any records required under ERISA or the Code, all of which, for purposes of this Agreement, shall be the responsibility of the Company. ARTICLE XII Amendment or Termination ------------------------ 12.1. AMENDMENT. Subject to Section 1.4, the Company reserves the right at any time and from time to time to amend, in whole or in part, any or all of the provisions of this Agreement by notice thereof in writing delivered to the Trustee; PROVIDED, HOWEVER, no amendment which affects the rights, duties or responsibilities of the Trustee may be made without its prior written consent. - 33 - 41 12.2. TERMINATION. Subject to Section 1.4, the Company reserves the right to terminate this Agreement by notice in writing thereof delivered to the Trustee. In the event of termination, the Trustee shall dispose of the Master Fund, after the payment of or other provision for all of its reasonable expenses (including any compensation to which the Trustee may be entitled), all in accordance with the written directions of the Company. In the event that termination results from the removal of the Trustee or the withdrawal of all of the Participating Plans, then such disposition shall be implemented in accordance with the provisions of Article X or Article XI as the case may be. 12.3. TRUSTEE'S AUTHORITY TO SURVIVE TERMINATION. Until the final distribution of the Master Fund, the Trustee shall continue to have and may exercise all of the powers and discretions conferred upon it by this Agreement. ARTICLE XIII Tender Offers ------------- 13.1. IN GENERAL. In the event that any person (other than the Company or any affiliate thereof) shall make a public offer for Company Stock held in the Common Stock Fund, the Company undertakes to provide promptly a copy of the offer, and any other material information concerning such offer, to each Participating Plan participant (including, for the purposes of this Article XIII, any beneficiary of a deceased participant) who has an interest in the Common Stock Fund with a form for furnishing to the Trustee timely instructions as to whether - 34 - 42 the Company Stock allocated to participants' accounts for purposes of this Article XIII should be tendered. Each participant may elect that all, but not less than all, of the Company Stock allocated to his account be tendered by the Trustee on his behalf. Upon timely receipt of instructions from a participant to so tender, the Trustee shall tender all such Company Stock allocated to such participant's account. Any Company Stock held by the Trustee as to which it receives either no instructions or incomplete instructions from a participant to whose account such stock is allocated shall be tendered in the same proportion as such Company Stock held by the Trustee for which participant instructions have been timely received by the Trustee. Any securities or other property received by the Trustee as a result of having tendered Company Stock, as hereinabove provided, shall be held, and any cash so received shall be invested in short term investments, pending any further action which the Trustee may be required or directed to take pursuant to the Participating Plan. Notwithstanding anything in this Agreement to the contrary, during the period of any public offer for Company Stock, the Trustee shall refrain from making purchases of Company Stock under this Agreement. In addition to any compensation or expenses provided under Section 9.1, the Trustee shall be entitled to reasonable compensation and reimbursement for its reasonable out-of-pocket expenses for any services attributable to the duties and responsibilities described in this Section 13.1. 13.2. TRUSTEE'S INDEMNIFICATION. In addition to any other claims the Trustee may have under this Agreement or by law, the Company hereby agrees to - 35 - 43 hold the Trustee harmless and to indemnify the Trustee from and against any and all losses, claims, damages, liabilities or expenses whatsoever (including, but not limited to, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation or proceeding, commenced or threatened, or any claim whatsoever), (a) arising out of, relating to or in connection with any public offer of the kind referred to above, whether in respect of the solicitation of directions from Participating Plan participants, or tabulating, reporting or acting upon such directions or otherwise, or (b) arising out of or based upon any untrue statement or alleged untrue statement contained in any instrument, document or other material furnished by or through the Company to Participating Plan participants, or otherwise used by the Company or authorized by it for use in respect of, any such public offer or arising out of or based upon an omission or alleged omission to state a material fact required to be stated or necessary to make other statements made in any such material not misleading, except, solely in the case of indemnification pursuant to clause (a), for a loss, claim, damage, liability or expense to the extent attributable to the bad faith or negligence of the Trustee. - 36 - 44 ARTICLE XIV Authorities ----------- 14.1. COMPANY. Whenever the provisions of this Agreement specifically require or permit any action to be taken by "the Company", such action must be authorized by the Board of Directors, or appropriate committee thereof, and satisfactory documentation of such action shall be provided to the Trustee. 14.2. SUBSIDIARY OR AFFILIATE. Any action required or permitted to be taken under this Agreement by a subsidiary or affiliate of the Company shall be given by the Board of Directors. 14.3. NAMED FIDUCIARY AND COMMITTEE. The Company shall furnish the Trustee from time to time with a list of the names and signatories of all Persons (other than the Company) authorized hereunder: (i) to receive accountings under Section 1.2(a); (ii) to act as a Named Fiduciary; (iii) to act as members of the Corporation Committee; or (iv) to issue orders, notices, requests, instructions and objections to the Trustee pursuant to the provisions of this Agreement. Any such list and the form of the instructions may be relied upon for accuracy and completeness by the Trustee. Each such Person shall thereupon furnish the Trustee with a list of the names and signatories of those individuals, if any, who are authorized, jointly or severally or otherwise, to act for such Person hereunder, and the Trustee shall be fully protected in acting upon any notices or directions received from any of them. - 37 - 45 14.4. INVESTMENT MANAGER. The Named Fiduciary shall cause each Investment Manager to furnish the Trustee from time to time with the names and signatures of those persons authorized to direct the Trustee on its behalf hereunder. 14.5. FORM OF COMMUNICATIONS. Any agreement or understanding between the Company and any Person (including an Investment Manager) or any other provision of this Agreement to the contrary notwithstanding, all notices, directions and other communications to the Trustee shall be in writing or in such other form, including transmission by electronic means through the facilities of third parties or otherwise, specifically agreed to in writing by the Trustee. The Trustee shall be fully protected in acting in accordance therewith, but shall not thereby assume responsibility for the failure or breakdown of any such means of communication not due to its own negligence or willful misconduct. 14.6. CONTINUATION OF AUTHORITY. The Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change in the composition or authority of the Named Fiduciary or membership of the Corporation Committee or terminating the authority of any Person, including any Investment Manager, has occurred. 14.7. NO OBLIGATION TO ACT ON UNSATISFACTORY NOTICE. The Trustee shall incur no liability under this Agreement for any failure to act pursuant to any notice, direction or any other communication from any Asset Manager, the Company, the Named Fiduciary, the Corporation Committee, or any other Person - 38 - 46 or the designee of any of them unless and until it shall have received instructions in the form specified in this Article XIV. ARTICLE XV General Provisions ------------------ 15.1. GOVERNING LAW. To the extent that state law shall not have been preempted by the provisions of ERISA or any other law of the United States heretofore or hereafter enacted, this Agreement shall be administered, construed and enforced according to the laws of the State of New York. 15.2. ENTIRE AGREEMENT. The Trustee's duties and responsibilities to any Participating Plan or any Person interested therein shall be limited to those specifically set forth in this Agreement. No amendment to any Participating Plan or agreement or instrument affecting any Participating Plan or any other document shall affect the Trustee's duties or responsibilities hereunder without its prior written consent. 15.3. RELIANCE ON EXPERTS. The Trustee may consult with experts (who may be experts employed by the Company) including legal counsel, appraisers, pricing services, accountants or actuaries, selected by it with due care with respect to the meaning and construction of this Agreement or any provision hereof, or concerning its powers and duties hereunder. 15.4. SUCCESSOR TO THE TRUSTEE. Any successor, by merger or otherwise, to substantially all of the trust business of Bankers shall automatically and without - 39 - 47 further action become the Trustee hereunder, subject to all the terms and conditions and entitled to all the benefits and immunities hereof. 15.5. NOTICES. All notices, reports, annual accounts and other communications from the Trustee to the Company, the Named Fiduciary, Corporation Committee, Investment Manager, or any other Person shall be deemed to have been duly given if mailed, postage prepaid, or delivered in hand to such Person at its address appearing on the records of the Trustee, which address shall be filed with the Trustee at the time of the establishment of the Trust and shall be kept current thereafter by the Named Fiduciary. All directions, notices, statements, objections and other communications to the Trustee shall be deemed to have been given if mailed, postage prepaid, or delivered in hand to the Trustee at its offices. 15.6. PLAN DOCUMENTS. The Named Fiduciary shall provide the Trustee with complete, current copies of all Participating Plans and the most recent tax qualification letters relative thereto. The Trustee shall be entitled to reply upon the Named Fiduciary's attention to this obligation and shall be under no duty to inquire to any Person as to the existence of any documents not provided hereunder. 15.7. NO WAIVER; RESERVATION OF RIGHTS. The rights, remedies, privileges and immunities expressed herein are cumulative and are not exclusive, and the Trustee shall be entitled to claim all other rights, remedies, privileges and immunities to which it may be entitled under applicable law. - 40 - 48 15.8. DESCRIPTIVE HEADINGS. The captions in this Agreement are solely for convenience of reference and shall not define or limit the provisions hereof. 15.9. SPENDTHRIFT PROVISION. Except as may be required or permitted by law, no interest or claim of interest of any kind of any participant in any Participating Plan under the provisions of this Trust is assignable, nor may any such interest or claim be subject to garnishment, attachment, execution or levy of any kind, and no attempt to transfer, assign, pledge or otherwise encumber or dispose of such interest by act of the Person involved or by operation of law will be recognized. ARTICLE XVI Undertaking by Company ---------------------- 16.1. UNDERTAKING. In consideration of Bankers' agreeing to enter into this Agreement, the Company hereby agrees to hold harmless Bankers, individually and as Trustee, and Bankers' directors, officers, and employees, from and against all amounts, including without limitation taxes, reasonable expenses (including reasonable counsel fees), liabilities, claims, damages, actions, suits or other charges, incurred by or assessed against Bankers, individually or as Trustee, or its directors, officers or employees (i) as a direct or indirect result of any act or omission of any predecessor trustee or fiduciary appointed under any Participating Plan unless the investment acquired by such predecessor trustee or fiduciary becomes part of the Discretionary Fund and Bankers fails to take appropriate - 41 - 49 action with respect thereto; (ii) except as otherwise provided in Section 16.2, as a direct or indirect result of anything done in good faith by or on behalf of Bankers in reliance upon the directions of any Investment Manager, the Corporation Committee, the Company, or the Named Fiduciary, or anything omitted to be done in good faith in the absence of such directions, or (iii) except as otherwise provided in Section 16.2, as a direct or indirect result of the failure of the Company, the Corporation Committee, or the Named Fiduciary, directly or indirectly, to adequately, carefully and diligently discharge its fiduciary responsibilities with respect to the Participating Plans. 16.2. LIMITATION ON UNDERTAKING. Anything hereinabove to the contrary notwithstanding, the Company shall have no responsibility to Bankers under Section 16.1 (ii) or (iii) if Bankers knowingly participated in or knowingly concealed any act or omission of any Person described therein knowing that such act or omission constituted a breach of such Person's fiduciary responsibilities, or if Bankers fails to perform any of the duties specifically undertaken by it under the provisions of this Agreement in the manner herein provided, or if Bankers fails to act in conformity with duly given and authorized directions hereunder. 16.3. WAIVER OF DEFENSE. The Company expressly waives and shall be forever estopped from asserting as a defense against Bankers, or any of its directors, officers or employees, in any action to enforce this undertaking that any one of them failed to discharge any obligation he, she or it may have or to be deemed to have had under any statute governing the conduct of fiduciaries in - 42 - 50 following the directions of the Company, the Named Fiduciary or Corporation Committee, the Investment Manager or any Person duly authorized to act for any of them under Article XIV. 16.4. SURVIVAL OF UNDERTAKINGS. The Company further agrees that the undertakings made in this Article XVI shall be binding on its successors or assigns and shall survive termination, amendment or restatement of this Agreement, or the resignation or removal of the Trustee, and that this Article shall be construed as a contract between the Company and the Trustee according to the laws of the State of New York in effect from time to time. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized and their corporate seals to be hereunto affixed and attested to as of the day and year first above written. (Corporate Seal) HARRIS CORPORATION ---------------------------------- Attest: By /s/ D.S. Wasserman ------------------------------- Title: Vice President-Treasurer /s/ Keith M. Davis - - - - - ------------------------------- Title: - 43 - 51 (Corporate Seal) BANKERS TRUST COMPANY Attest: By /s/ Frank Eipper ------------------------------ Title: Vice President /s/ Teresa L. Curtin - - - - - ----------------------------- Title: Asst. Vice President - 44 - 52 APPENDIX A Participating Plans ------------------- Harris Corporation Retirement Plan Harris Corporation Union Retirement Plan Harris Corporation Pension Plan Lanier Worldwide, Inc. Pension Plan - 45 - 53 APPENDIX B Recording-Keeping Requirements under Section 2.5 ------------------------------------------------ None - 46 - 54 APPENDIX C Investment Funds ---------------- Balanced Fund Short-Term Bond Fund Money Market Fund Stable Value Fund Equity Income Fund Indexed Equity Fund Growth Fund Harris Stock Fund - 47 - 55 STATE OF FLORIDA ) ) ss. : COUNTY OF BREVARD ) On the 10TH day of OCTOBER, in the year one thousand nine hundred and ninety-four, before me personally came D.S. WASSERMAN to me known, who being by me duly sworn, did depose and say: that he/she resides in MELBOURNE, FL; that he/she is the VICE PRESIDENT- TREASURER of Harris Corporation, the corporation described in and which executed the above instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; and that it was so affixed by order of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like order. /s/ Rhonda G. Johnson --------------------------- Notary Public - 48 - 56 STATE OF NEW YORK ) ) ss. : COUNTY OF NEW YORK ) On the 13TH day of OCTOBER, in the year one thousand nine hundred and ninety-four, before me personally came FRANK EIPPER to me known, who being by me duly sworn, did depose and say: that he/she resides in STAMFORD, CT; that he/she is the VICE PRESIDENT of BANKERS TRUST COMPANY, the corporation described in and which executed the above instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like order. /s/ Allison O. Taylor ------------------------------- Notary Public - 49 - EX-10.B 3 HARRIS CORP 10-Q EXHIBIT 10(B) 1 EXHIBIT 10(b) HARRIS CORPORATION MASTER RABBI TRUST AGREEMENT ---------------------------- 2 HARRIS CORPORATION MASTER RABBI TRUST AGREEMENT --------------------- This Trust Agreement made as of the 1st day of August, 1994 by and between HARRIS CORPORATION, a Delaware corporation ("Company") and BANKERS TRUST COMPANY, a New York banking corporation ("Trustee"). WHEREAS, Company has adopted various nonqualified deferred compensation plans and arrangements, as listed in Appendix A (the "Plans"); WHEREAS, Company has incurred or expects to incur liability under the terms of such Plans with respect to the individuals participating in such Plans (individually a "Participant" and collectively the "Participants"); WHEREAS, Company established the Harris Corporation Benefits Trust Agreement, effective September 23, 1987, which was amended and restated as the Harris Corporation Master Rabbi Trust Agreement, effective May 27, 1993 (the "Prior Agreement"); WHEREAS, Company desires to amend and restate the Prior Agreement in its entirety and appoint Trustee as successor trustee, effective August 1, 1994; WHEREAS, Company wishes to contribute to the trust (the "Trust") the assets that shall be held therein, subject to the claims of Company's creditors in the event of Company's Insolvency, as herein defined, until paid to Participants and their beneficiaries in such manner and at such times as specified in the Plans; WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plans as unfunded plans maintained for the purpose of providing deferred compensation for a select 3 group of management or highly compensated employees for purposes of Title 1 of the Employee Retirement Income Security Act of 1974; and WHEREAS, it is the intention of Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plans. NOW THEREFORE, the parties do hereby amend and restate the Prior Agreement and agree that the Trust shall be comprised, held and disposed of as follows. SECTION 1. ESTABLISHMENT OF TRUST. - - - - - ---------------------------------- (a) Company hereby establishes the Trust with the Trustee, consisting of such sums of money and other property acceptable to the Trustee as from time to time shall be paid and delivered to and accepted by the Trustee from the Company in accordance with subsection (e) below. All such money and other property paid or delivered to and accepted by the Trustee shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement. (b) The Trust hereby established is revocable by Company; it shall become irrevocable upon a Change in Control, as defined herein. (c) The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle - 2 - 4 A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of the Participants and general creditors as herein set forth. The Participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plans and this Trust Agreement shall be mere unsecured contractual rights of the Participants and their beneficiaries against Company. Any assets held by the Trust shall be subject to the claims of Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. (e) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Participant or beneficiary shall have any right to compel such additional deposits. Except as hereinafter provided, Company shall make contributions to the Trust from time to time as it shall determine in its sole discretion; provided, however that Company shall be required to contribute the required funding amount within the five-day period following a Change in Control. For purposes of this Agreement, the term "required funding amount" means the amount required to fund the obligations of Company under the Plans. - 3 - 5 (f) The Trustee does not assume any responsibility or undertake any duty to enforce payment of any contribution to the Plans or for the adequacy of the Trust or the funding standards adopted by Company to meet and discharge any liability under the Plans. No duties or obligations shall be imposed hereunder upon Trustee with respect to the Trust unless they have been specifically undertaken by Trustee by the express terms of this Agreement. SECTION 2. PAYMENTS TO PARTICIPANTS AND THEIR BENEFICIARIES. - - - - - ------------------------------------------------------------ (a) Company shall from time to time deliver to Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of each Participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plans), the time of commencement for payment of such amounts and appropriate federal, state and local tax withholding information. Except as otherwise provided herein, Trustee shall make payments to the Participants and their beneficiaries in accordance with such Payment Schedule. The Trustee may rely upon and shall be under no duty to verify the information contained in the Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of this Agreement and shall pay amounts withheld to the appropriate taxing authorities, or shall determine that - 4 - 6 such amounts have been reported, withheld and paid by Company. To the extent that Trustee pays benefits due a Participant under a Plan, Company shall be forever released and discharged from the obligation to pay such benefits. (b) The entitlement of a Participant or his or her beneficiaries to benefits under the Plans shall be determined by Company or such party as it shall designate under the Plans, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plans. (c) Company may make payment of benefits directly to the Participants or their beneficiaries as they become due under the terms of the Plans. Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to Participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plans, Company shall immediately make up the balance of each such payment as it falls due. Trustee shall notify Company when principal and earnings are not sufficient. Trustee shall not be responsible for withholding any federal, state or local taxes payable with respect to benefits paid by Company and shall pay amounts withheld to the appropriate taxing authority. - 5 - 7 SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY - - - - - -------------------------------------------------------------------------- WHEN COMPANY IS INSOLVENT, - - - - - ------------------------- (a) Trustee shall cease payment of benefits to the Participants and their beneficiaries if Company is Insolvent. Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay its debts as they become due, or (ii) Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1 (d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of Company under federal and state law as set forth below. (1) The Board of Directors or the Chief Executive Officer of Company shall have the duty to inform Trustee in writing of Company's Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that Company has become Insolvent, Trustee shall determine whether Company is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to the Participants or their beneficiaries. In all cases, Trustee shall be entitled to conclusively rely upon the written certification of the Board of Directors or the Chief Executive Officer of Company when determining whether Company is insolvent. (2) Unless Trustee has actual knowledge of Company's Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether - 6 - 8 Company is Insolvent. Trustee may in all events rely on such evidence concerning Company's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company's solvency. (3) If at any time Trustee has determined that Company is Insolvent, Trustee shall discontinue payments to the Participants or their beneficiaries and shall hold the assets of the Trust for the benefit of Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of the Participants or their beneficiaries to pursue their rights as general creditors of Company with respect to benefits due under the Plans or otherwise. (4) Trustee shall resume the payment of benefits to the Participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after Company has informed Trustee in writing that Company is not Insolvent (or is no longer Insolvent). (c) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to the Participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to the Participants or their beneficiaries by Company in lieu of the payments provided for hereunder during any such period of discontinuance. - 7 - 9 SECTION 4. PAYMENTS TO COMPANY. - - - - - ------------------------------- Except as provided in Section 3 hereof, after the Trust has become irrevocable, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payment of benefits have been made to the Participants and their beneficiaries pursuant to the terms of the Plans. SECTION 5. INVESTMENT AND ADMINISTRATIVE AUTHORITY. - - - - - --------------------------------------------------- (a) Responsibility for the management and control of the Trust (including the power to acquire or dispose of Trust assets) may be vested, in the discretion of Company, in Trustee and/or in such one or more Investment Managers, as hereinafter defined, appointed by Company. The portion of the Trust over which Trustee shall have such responsibility is hereinafter referred to as the "Discretionary Fund". Any portion of the Trust over which an Investment Manager shall have such responsibility is hereinafter referred to as a "Directed Fund". Allocation of assets of the Trust between and among any Discretionary or Directed Funds shall be determined by Company. (b) Trustee shall invest and reinvest the Discretionary Fund as a single fund without distinction between principal and income in such investment and at such time or times and in such shares and proportions as it, in its absolute discretion, shall deem advisable; except that, Trustee is authorized to hold in the Discretionary Fund uninvested cash awaiting investment and to maintain such - 8 - 10 additional cash balances as it shall deem reasonable or necessary to meet anticipated distributions from or administrative costs of the Plans or Trust, without incurring any liability for the payment of interest on such cash. Trustee shall discharge the foregoing powers and discretions in accordance with the funding policy, and to the extent the Plans so provide, guidelines established by Company and from time to time communicated in writing to Trustee. Trustee shall have no responsibility with respect to the formulation of any funding, investment or diversification policy embodied in such guidelines. In addition, if Company has exercised its discretion to vest responsibility for the management and control of any portion of the Trust in one or more Investment Managers, or, if the Trust is not the only funding medium under the Plans, then Company shall be responsible under the Plans and this Agreement for determining the proper diversification policy with respect to the investment of Plan assets (including the Trust), for monitoring adherence to such policy and for advising Trustee with respect to its compliance with any investment limitations. (c) The investment and reinvestment of any Directed Fund established under this Trust Agreement shall be under the exclusive management and control of an Investment Manager appointed by Company. For purposes of this Trust Agreement, "Investment Manager" shall mean an investment adviser registered under the Investment Advisers Act of 1940, a bank (other than the Trustee) as defined in that Act, or an insurance company qualified to perform investment management services under the laws of more than one - 9 - 11 State, which shall have acknowledged in writing that it is a fiduciary with respect to the Plans, and which shall have the power to manage, acquire and dispose of Plan assets. Trustee shall not be a party to any agreement with an Investment Manager, and the terms and conditions of appointment and retention of an Investment Manger shall be the sole responsibility of Company. Company shall certify in writing to Trustee: (a) that it has appointed an Investment Manager in accordance with the Plan; (b) that the Investment Manager is an "Investment Manager" as such term is defined above; and (c) the assets of the Trust Fund to be allocated to the Directed Fund over which such Investment Manager shall have responsibility. The Investment Manager shall furnish Trustee from time to time with the names and signatures of those persons who shall be authorized to direct Trustee on its behalf hereunder. Trustee shall have the right to request that all directions by an Investment Manager pursuant to this Trust Agreement be in writing and shall assume no liability hereunder for failure to act pursuant to such directions unless and until it shall receive directions in form satisfactory to it. Supervision of an Investment Manager shall be the exclusive responsibility of Company. Therefore, Trustee shall be under no duty or obligation to review or to question any direction of the Investment Manager or to review the securities or other property held in any Directed Fund with respect to prudence, proper diversification of Trust or Plan assets or compliance with any limitation on the Investment Manager's authority under the terms of the Plans, any agreement - 10 - 12 entered into between Company and an Investment Manager or imposed by applicable law, or to make any suggestions to Company or an Investment Manager with respect to the investment and reinvestment of any Directed Fund. The parties hereto acknowledge that while Trustee will perform certain duties (such as custodial, reporting, recording and bookkeeping functions) with respect to Directed Funds, such duties do not involve the exercise of any discretionary authority to manage or control assets of the Directed Funds and will be the responsibility of officers and other employees of Trustee who are unfamiliar with and have no responsibility for investment management. Therefore, in the event that knowledge of Trustee shall be a prerequisite to imposing a duty upon or determining liability of Trustee under this Trust Agreement or any statute regulating the conduct of Trustee with respect to such Directed Funds, Trustee will not be deemed to have knowledge of or have participated in any act or omission of an Investment Manager involving the investment of assets allocated to the Directed Funds solely as a result of the receipt and processing of information in the course of performing such duties. Trustee shall not have any discretionary responsibility or authority to manage or control any asset held in a Directed Fund upon the resignation or removal of an Investment Manager unless and until it has been notified in writing by Company that the Investment Manager's authority has terminated and that such Directed Fund assets are to be integrated with the Discretionary Fund. Such notice shall not be deemed effective until two business days after it has been - 11 - 13 received by Trustee. Trustee shall not be liable for any losses to the Trust resulting from the disposition of any investment made by an Investment Manager or for the retention of any illiquid or unmarketable investment or any investment which is not publicly traded or for the holding of any other investment acquired by the Investment Manager if Trustee is unable to dispose of such investment because of the Securities Act of 1933 or other Federal or state law or if an orderly liquidation of such investment is impractical under prevailing conditions, or for failure to comply with any investment or diversification limitations imposed by Company, or for any other violation of the terms of is Trust Agreement, the Plans or applicable laws, as a result of the addition of Directed Fund assets to the Discretionary Fund. (c) Without in any way limiting the powers and discretions conferred upon Trustee and any Investment Manager by the other provisions of this Agreement or by law, Trustee and each Investment Manager shall be vested with the following powers and discretions with respect to the assets of the Trust subject to its management and control, and, upon the directions of the Investment Manager of a Directed Fund, Trustee shall make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to enable such Investment Manager to carry out such powers and discretions: (1) to purchase, sell, exchange, convey, transfer or otherwise acquire or dispose of any property by private contract or at public auction, and no - 12 - 14 person dealing with Trustee or Investment Manager shall be bound to see to the application of the purchase money or to inquire into the validity, expediency or propriety of any such acquisition or disposition, except that prior written approval of Company is required for Trustee to purchase, sell, lease, or otherwise acquire or dispose of real property on behalf of the Trust; (2) to purchase or sell, write or issue, puts, calls or other options, covered or uncovered, to enter into financial futures contracts, forward placement contracts and standby contracts, and in connection therewith, to deposit, hold (or direct Bankers Trust Company, as trustee or in its individual capacity, to deposit or hold) or pledge assets of the Trust; (3) to vote upon any stocks, bonds or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options and to make any payments incidental thereto; to consent to or otherwise participate in corporate reorganizations or other changes affecting corporate securities and to delegate discretionary powers and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities and other property; (4) to invest in a fund consisting of securities issued by corporations and selected and retained solely because of their inclusion in, and in accordance with, one or more commonly used indices of such securities, with - 13 - 15 the objective of providing investment results for the fund which approximate the overall performance of such designated index; (5) to enter into any partnerships, as a general or limited partner, or joint venture; (6) to purchase units or certificates issued by an investment company or pooled trust or comparable entity; (7) to transfer money or other property to an insurance company issuing an insurance contract; (8) to transfer assets of a Discretionary or Directed Fund to a common, collective or commingled trust fund maintained by Trustee, Investment Manager, or an affiliate of Trustee or Investment Manager, or by another trustee who is designated by Company, to be held and invested subject to all of the terms and conditions thereof, and such trust shall be deemed adopted as part of the Trust and the Plans, to the extent that assets of the Trust are invested therein; and (9) to be reimbursed for the reasonable expenses incurred in exercising any of the foregoing powers or to pay the reasonable expenses incurred by any agent, manager or trustee appointed pursuant hereto. (d) In addition, Trustee is hereby authorized: (1) to register any securities held in the Trust in its own name or in the name of a nominee and to hold any securities in bearer form, and to combine certificates representing such securities with certificates of the - 14 - 16 same issue held by Trustee in other fiduciary or representative capacities or as agent for customers, or to deposit or to arrange for the deposit of such securities in any qualified central depository, even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by other depositors, or to deposit or arrange for the deposit of any securities issued by the United States government or any agency or instrumentality thereof, with a Federal Reserve Bank, but the books and records of Trustee shall at all times show that all such investments are part of the Trust; (2) to employ suitable agents, depositories and counsel, domestic or foreign, and to charge reasonable expenses and compensation against the Trust, and to confer upon any such depository the powers conferred upon Trustee by paragraph (1) above, as well as the power to appoint subagents and depositories, wherever situated, in connection with the retention of securities and other property; (3) to borrow money from any source as may be necessary or advisable to effectuate the purposes of the Trust on such terms and conditions as Trustee may deem advisable, subject to prior written approval by Company; (4) to compromise, compound, submit to arbitration or settle any debt or obligation owing to or from or otherwise adjust all claims in favor of or against the Trust, other than claims solely affecting the right of any person - 15 - 17 to benefits under the Plans; to reduce or increase the rate of interest or extend or otherwise modify, foreclose upon default, or enforce any such debt or obligation; to sue or defend suits or legal proceedings to protect any interest in the Trust and to represent the Trust in all suits or legal proceedings in any court or before any other administrative agency or body or tribunal; and (5) generally, consistent with the provisions of this Trust Agreement, to perform all acts (whether or not expressly authorized herein) which it may deem necessary and prudent for the protection of the assets of the Trust; provided however, that in the event of a Change in Control as defined in Section 13(e), written approval by Company is required for Trustee to borrow on behalf of the Trust, or to lease or sell real property on behalf of the Trust. Notwithstanding anything to the contrary contained in this Trust Agreement, in the event of a Change in Control as defined in Section 13(e), Trustee shall invest all assets of the Trust in such fixed-income securities as the Trustee deems appropriate, in the exercise of its sole discretion, for a period of one year following such event and thereafter shall have and exercise investment discretion with respect to all assets of the Trust. - 16 - 18 SECTION 6. DISPOSITION OF INCOME. - - - - - --------------------------------- During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. SECTION 7. MONTHLY AND ANNUAL ACCOUNTING BY TRUSTEE. - - - - - ---------------------------------------------------- Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Company and Trustee and all books and records relating thereto shall be open to inspection and audit at all reasonable times by any persons designated by Company. Within 30 days following the close of each month, within 90 days following the close of each fiscal year (ending June 30th) and within 90 days after the removal or resignation of Trustee, Trustee shall deliver to Company a written account of its administration of the Trust during such month or year, as the case may be, or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it upon its own authority, or pursuant to the directions of any Investment Manager, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such month, year or as of the date of such removal or resignation, as the case may be. Upon the - 17 - 19 expiration of ninety (90) days from the date of filing such annual or other account, Trustee shall be forever released and discharged from all liability and accountability to the Company with respect to the propriety of all acts (and failures to act) and transactions reflected in such account, except with respect to any such acts or transactions as to which the Company shall, within such ninety (90) day period file with Trustee specific written objections. Company shall be entitled to such conferences with Trustee, as Company shall reasonably request, including but not limited to an annual conference. SECTION 8. RESPONSIBILITY OF COMPANY, TRUSTEE AND INVESTMENT MANAGERS. - - - - - ---------------------------------------------------------------------- (a) Company, Trustee and each Investment Manager shall discharge their respective fiduciary duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by Company or an Investment Manager which is contemplated by, and in conformity with, the terms of this Trust Agreement or anything omitted to be done by Trustee in the absence of any such direction, request or approval. Company agrees to indemnify Trustee against Trustee's reasonable costs, expenses and liabilities (including, without limitation, reasonable attorneys' fees and expenses) arising out of or relating to any action taken by Trustee in good faith - 18 - 20 and without negligence and in reliance upon direction, request or approval given by Company or an Investment Manager or anything omitted to be done in good faith in the absence of any such direction, request or approval. If Company does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust. (b) If Trustee undertakes or defends any litigation arising in connection with this Trust, Company agrees to indemnify Trustee against Trustee's reasonable costs, expenses and liabilities (including, without limitation, reasonable attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If Company does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust. (c) Trustee may consult with legal counsel and may reasonably rely on such counsel (who may also be counsel for Company generally) with respect to any of its duties or obligations hereunder. (d) Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals reasonably required to assist it in performing any of its duties or obligations hereunder and may charge the reasonable fees of such professionals to the Trust. (e) Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign - 19 - 21 the policy (as distinct from conversion of the policy to a different form) other than to a successor trustee, or to loan to any person the proceeds of any borrowing against such policy. Trustee shall not be responsible under this Trust Agreement for the form, term, payment provisions or issuer of any insurance contract which it may be directed to purchase and/or hold as contractholder hereunder. (f) However, notwithstanding the provisions of Section 8(e) above, Trustee may loan to Company the proceeds of any borrowing against an insurance policy held as an asset of the Trust. (g) Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE. - - - - - ------------------------------------------------ All administrative and Trustee's fees and expenses (including, but not limited to, reasonable legal fees) shall be paid from the Trust unless paid by the Company. Trustee shall be entitled to the fees listed on Schedule A attached hereto as reasonable compensation for the services rendered under this Trust Agreement. Trustee's entitlement to reimbursement hereunder shall not be affected by the resignation or removal of the Trustee or by the termination of the Trust. - 20 - 22 SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE. - - - - - ----------------------------------------------- (a) Trustee may resign at any time by written notice to Company, which shall be effective 90 days after receipt of such notice unless Company and Trustee agree otherwise. (b) Trustee may be removed by Company on 90 days notice or upon shorter notice accepted by Trustee. (c) In the event of a Change in Control, as defined herein, for a one-year period following such event, Trustee may be removed by Company only if 75 percent of the number of the Participants consent to such removal. (d) If Trustee resigns within one year of a Change in Control, as defined herein, Company shall select a successor trustee in accordance with the provisions of Section 11(b) hereof prior to the effective date of Trustee's resignation or removal. (e) Upon resignation or removal of Trustee and appointment of a successor trustee, all assets shall subsequently be transferred to the successor trustee. The transfer shall be completed within 180 days after receipt of notice of resignation, removal or transfer, unless Company extends the time limit. (f) If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraph(s)(a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a - 21 - 23 successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. SECTION 11. APPOINTMENT OF SUCCESSOR. - - - - - ------------------------------------- (a) If Trustee resigns or is removed in accordance with Section 10(a) or (b) hereof, Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by Company or the successor trustee to evidence the transfer. (b) If Trustee resigns or is removed pursuant to the provisions of Section 10(c) or (d) hereof, Company shall select a successor trustee; provided, however, that in the event of a Change in Control as defined in Section 13(e), for a one-year period following such event, 75 percent of the number of the Participants must consent to the appointment of a successor trustee. The appointment of a successor trustee shall be effective when accepted in writing by the new trustee. The new trustee shall have all the rights and powers of the former Trustee, including ownership rights in Trust assets. The former Trustee shall execute any instrument - 22 - 24 necessary or reasonably requested by the successor trustee to evidence the transfer. (c) The successor trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor trustee shall not be responsible for and Company shall indemnify and defend the successor trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor trustee. SECTION 12. AMENDMENT OR TERMINATION. - - - - - ------------------------------------- (a) This Trust Agreement may be amended by a written instrument executed by Trustee and Company; provided, however, that no amendments may be made within a one-year period after the occurrence of a Change in Control, as defined in Section 13(e), unless 75 percent of the number of Participants consent to the amendments. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plans (as certified to the Trustee by Company) or shall make the Trust revocable after it has become irrevocable in accordance with Section 1(b). (b) The Trust shall not terminate until the date on which the Participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plans, unless sooner revoked in accordance with Section l(b) - 23 - 25 hereof. Upon termination of the Trust, and pursuant to the written direction of Company, any assets remaining in the Trust shall be returned to Company. (c) Upon written approval of the Participants or beneficiaries entitled to payment of benefits pursuant to the terms of the Plans, Company may terminate this Trust prior to the time all benefit payments under the Plans have been made. Upon written direction from Company, all assets in the Trust at termination shall be returned to Company. SECTION 13. MISCELLANEOUS. - - - - - -------------------------- (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Notwithstanding anything to the contrary contained elsewhere in this Trust Agreement, any reference to the Plan or Plan provisions which require knowledge or interpretation of the Plan shall impose a duty upon the Company to communicate such knowledge or interpretation to the Trustee. The Trustee shall have no obligation to know or interpret any portion of the Plan and shall in no way be liable for any action taken contrary to the Plan. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of New York. (d) Any action required to be taken by Company pursuant to the terms of this Trust Agreement may be taken by the Board of Directors of Company or by - 24 - 26 any person authorized to act on behalf of Company by such Board of Directors. All actions of such Board shall be evidenced by a resolution of the Board of Directors certified to Trustee over the signature of its Secretary or Assistant Secretary under the corporate seal and Trustee shall be fully protected in acting in accordance with such resolutions so certified to it. (e) For purposes of this Trust, the term "Change in Control" shall mean the occurrence of either of the following events: (1) A third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, or any rules or regulations thereunder, acquires shares of Company having 20 percent or more of the total number of votes that may be cast for the election of Directors of Company; or (2) As the result of any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a "Transaction"), the persons who were Directors of Company before the Transaction shall cease to constitute a majority of the Board of Directors of Company or any successor to Company. SECTION 14. NOTICE OF CHANGE IN CONTROL. - - - - - ---------------------------------------- Within five days after having knowledge of a Change in Control, Company shall provide written notice of the occurrence of such Change in Control to Trustee and the Participants. - 25 - 27 SECTION 15. COMMUNICATIONS TO TRUSTEE OR COMPANY. - - - - - ------------------------------------------------- Communications to Trustee shall be sent to Trustee as follows: Bankers Trust Company, Global Assets--Retirement Services, 280 Park Avenue, 15 East, New York NY 10017, Attention: Doug Doucette, or to such other address as Trustee may specify. No communication shall be binding upon Trustee until it is received by Trustee. Communications to Company shall be sent to Company's principal office at 1025 West NASA Boulevard, Melbourne, Florida 32919, Attention: Corporate Secretary, or to such other address as Company may specify. SECTION 16. NON-ALIENATION OF BENEFITS. - - - - - --------------------------------------- No benefit under a Plan shall at any time be subject in any manner to alienation or encumbrance. If any Participant or beneficiary shall attempt to, or shall, alienate or in any way encumber his benefits under a Plan, or any part thereof, or if by reason of his bankruptcy or other event happening at any time any such benefits would otherwise be received by anyone else or would not be enjoyed by him, his interest in all such benefits shall automatically terminate and the same shall be held or applied to or for the benefit of such person, his spouse, children, or other dependents in accordance with the terms of such Plan. - 26 - 28 SECTION 17. ARBITRATION. - - - - - ------------------------ Any dispute between Participants and Company or Trustee as to the interpretation or application of the provisions of the Agreement and amounts payable under a Plan shall be determined exclusively by binding arbitration in Melbourne, Florida in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court or competent jurisdiction. All fees and expenses of such arbitration shall be paid by the Trustee and considered an expense of the Trust. SECTION 18. TRUST BENEFITS LIMITED TO PLAN BENEFITS. - - - - - ---------------------------------------------------- Nothing herein contained shall be construed as conferring upon any person any rights with respect to the Trust or the administration thereof other than the right to such benefits as may be provided with respect to such person by the terms of a Plan. All rights created under the Plans and this Agreement shall be mere unsecured contractual rights of the Participant against Company. SECTION 19. EFFECTIVE DATE. - - - - - --------------------------- The effective date of this Trust Agreement shall be August 1, 1994. HARRIS CORPORATION By:/s/ D.S. Wasserman ------------------------------- Title:/s/ Vice President-Treasurer ---------------------------- Date:/s/ October 10, 1994 ----------------------------- - 27 - 29 BANKERS TRUST COMPANY By:/s/ Frank Eipper ------------------------------- Title:/s/ Vice President ---------------------------- Date:/s/ 10/13/94 ----------------------------- - 28 - 30 APPENDIX A ---------- HARRIS CORPORATION MASTER RABBI TRUST AGREEMENT SUPPLEMENTAL BENEFITS PLANS --------------------------- o Harris Corporation Supplemental Executive Retirement Plan o Lanier Worldwide, Inc. Supplemental Executive Retirement Plan o Harris Corporation Directors Retirement Plan o Harris Corporation Deferred Compensation Plan for Principal Executives o Individual Deferred Compensation Agreements - 29 - 31 This fee schedule will be in effect for the period commencing 8/1/94 and ending 9/30/96. It presumes that the structure of the plan and the servicing requirements will remain unchanged during the fee period. If such changes occur, Bankers Trust has the right to request additional fees; Harris Corporation will have the opportunity to approve these fees in advance. HARRIS CORPORATION /s/ October 10, 1994 By:/s/ D.S. Wasserman - - - - - ------------------------------ ------------------------------- Date Title: Vice President-Treasurer BANKERS TRUST COMPANY /s/ 10-13-94 By:/s/ Frank Eipper - - - - - ------------------------------ ------------------------------ Date Title: Vice President Assumptions - - - - - ----------- 1. The Harris Corporation Master Rabbi Trust consists of five plans with one separately managed portfolio. There will be one unitization. 2. Participant Recordkeeping, Benefit Payment Services, and Participant Tax Reporting Services will be provided by the client or a client vendor. - 30 - EX-11 4 HARRIS CORP 10-Q EXHIBIT 11 1 EXHIBIT 11 - COMPUTATION OF NET INCOME PER SHARE ----------
Quarter Ended ----------------------------- September 30, September 30, 1994 1993 -------------- ------------- (In millions except per share amounts) Primary: Average shares outstanding 39.4 39.8 ===== ===== Income before cumulative effect of change in accounting principle $ 28.8 $ 24.7 Cumulative effect of change in accounting principle - (10.1) ------ ------ Net income $ 28.8 $ 14.6 ====== ====== Per share amounts: Income before cumulative effect of change in accounting principle $.73 $.62 Cumulative effect of change in accounting principle - (.25) ---- ---- Total $.73 $.37 ==== ==== Fully diluted: Total primary average shares outstanding 39.4 39.8 Dilutive stock options and employee stock purchase plan shares - based on treasury stock method using the greater of quarter-end market price or average market price .1 .2 ------ ------ Average fully diluted shares outstanding 39.5 40.0 ====== ====== Per share amounts: Income before cumulative effect of change in accounting principle $.73 $.62 Cumulative effect of change in accounting principle - (.25) ---- ---- Total $.73 $.37 ==== ====
EX-27 5 HARRIS CORP 10-Q EXHIBIT 27
5 1,000 3-MOS JUN-30-1995 SEP-30-1994 86,700 29,900 637,100 28,700 835,900 1,629,200 1,738,800 1,170,500 2,602,200 749,200 662,200 39,400 0 0 1,133,000 2,602,200 807,300 816,100 561,500 195,900 (400) 0 14,800 44,300 15,500 0 0 0 0 28,800 .73 .73
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