-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RoxHjelzPaFwHyqqjGuZaKOJCyIDyCJBbjbtTKJcbsQyxpw5vUzOefiacNbzhbWt jmK/R92KteyMESGzXnUzkA== 0000950152-98-009840.txt : 19981229 0000950152-98-009840.hdr.sgml : 19981229 ACCESSION NUMBER: 0000950152-98-009840 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19981228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARRIS CORP /DE/ CENTRAL INDEX KEY: 0000202058 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 340276860 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-03863 FILM NUMBER: 98776278 BUSINESS ADDRESS: STREET 1: 1025 W NASA BLVD CITY: MELBOURNE STATE: FL ZIP: 32919 BUSINESS PHONE: 4077279125 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 11-K 1 HARRIS CORPORATION RETIREMENT PLAN--FORM 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 11-K _______________________ (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 1-3863 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Harris Corporation Retirement Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Harris Corporation 1025 W. NASA Blvd. Melbourne, Florida 32919 2 HARRIS CORPORATION RETIREMENT PLAN Financial Statements June 30, 1998 3 HARRIS CORPORATION RETIREMENT PLAN
Table of Contents June 30, 1998 PAGE - ------------------------------------------------------------------------------------------------------------------- INDEPENDENT AUDITOR'S REPORT...........................................................................1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits.....................................................2 Statement of Changes in Net Assets Available for Benefits With Fund Information...................3-4 Notes to Financial Statements.....................................................................5-9
4 INDEPENDENT AUDITOR'S REPORT Investment Committee Harris Corporation Retirement Plan Melbourne, Florida We have audited the accompanying statements of net assets available for benefits of the Harris Corporation Retirement Plan (the "Plan") as of June 30, 1998 and 1997, and the related statement of changes in net assets available for benefits for the year ended June 30, 1998. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at June 30, 1998 and 1997, and the changes in its net assets available for benefits for the year ended June 30, 1998, in conformity with generally accepted accounting principles. /s/ Bray, Beck & Koetter Melbourne, Florida November 12, 1998 - ------------------------------------------------------------------------------- 1 5 FINANCIAL STATEMENTS 6 HARRIS CORPORATION RETIREMENT PLAN Statements of Net Assets Available for Benefits June 30, 1998 and 1997 - --------------------------------------------------------------------------------
1998 1997 -------------- -------------- ASSETS INVESTMENTS, AT FAIR VALUE (NOTE 4): Plan interest in Harris Corporation Master Trust $2,238,332,501 $1,876,328,507 Participant loans 34,819,599 32,850,494 -------------- -------------- Total investments 2,273,152,100 1,909,179,001 RECEIVABLES: Contributions receivable: Harris Corporation 29,795,876 25,410,442 Participants 3,922,511 353,634 Loan payments 1,613,953 - Accrued interest and dividends 5,437,988 7,079,360 Securities sold 17,835,383 12,213,540 -------------- -------------- Total receivables 58,605,711 45,056,976 CASH AND CASH EQUIVALENTS (NOTE 3) 76,897,460 67,625,393 -------------- -------------- Total assets 2,408,655,271 2,021,861,370 LIABILITIES Accounts payable 5,859,595 - Accrued expenses 1,952,000 724,124 Securities purchased 8,002,613 13,713,604 Outstanding options 3,678,574 2,386,053 -------------- -------------- Total liabilities 19,492,782 16,823,781 -------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS $2,389,162,489 $2,005,037,589 ============== ==============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 2 7 HARRIS CORPORATION RETIREMENT PLAN Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended June 30, 1998 - --------------------------------------------------------------------------------
Money Equity Balanced Short-Term Market Income Fund Bond Fund Fund Fund ------------- ------------- ------------- ------------- INCREASES: Plan interest in Harris Corporation Master Trust investment income $ 170,962,901 $ 6,173,086 $ 1,121,023 $ 76,729,046 Interest income - - - - Contributions: Participant rollover 1,130,604 53,197 538,634 1,362,544 Employer profit sharing 7,236,260 1,609,547 520,097 5,612,835 Employer matching 2,403,308 1,637,767 411,754 6,961,426 Employee 10,578,289 2,206,341 708,766 11,735,183 ------------- ------------- ------------- ------------- 192,311,362 11,679,938 3,300,274 102,401,034 NET TRANSFERS (TO) FROM HARRIS CORPORATION UNION RETIREMENT PLAN (316,175) (268,963) 3,652 (159,030) NET PARTICIPANTS' TRANSFERS BETWEEN FUNDS (105,150,816) (9,825,205) 9,723,549 (20,850,694) DECREASES: Benefits paid directly to participants 45,241,688 4,958,103 4,304,713 20,206,672 Administrative expenses 3,002,847 233,331 60,624 1,823,817 ------------- ------------- ------------- ------------- 48,244,535 5,191,434 4,365,337 22,030,489 ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS AVAILABLE FOR BENEFITS 38,599,836 (3,605,664) 8,662,138 59,360,821 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 900,018,460 93,960,209 17,136,816 374,957,907 ------------- ------------- ------------- ------------- END OF YEAR $ 938,618,296 $ 90,354,545 $ 25,798,954 $ 434,318,728 ============= ============= ============= =============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- 3 8
- ------------------------------------------------------------------------------------------------------------------------------- Equity Stable Harris Index Value Growth Corporation International Loan Fund Fund Fund Stock Fund Fund Fund Total - --------------- --------------- --------------- --------------- --------------- --------------- --------------- $ 75,540,343 $ 13,699,158 $ 41,555,303 $ 2,176,074 $ (6,429) $ - $ 387,950,505 - - - - - 2,504,902 2,504,902 1,142,519 1,457,884 766,762 - 19,829 - 6,471,973 5,432,054 2,717,596 4,033,702 - 119,850 - 27,281,941 5,563,994 2,494,852 3,792,465 4,809,390 16,951 - 28,091,907 9,740,545 3,415,211 7,030,032 2,960,122 49,310 - 48,423,799 - --------------- --------------- --------------- --------------- --------------- --------------- --------------- 97,419,455 23,784,701 57,178,264 9,945,586 199,511 2,504,902 500,725,027 (498,082) 21,573 75,985 165,017 3,069 - (972,954) 66,831,218 44,107,127 8,513,944 (1,027,711) 7,250,371 428,217 - 11,491,023 13,630,439 7,285,086 1,230,338 6,588 964,014 109,318,664 514,697 223,236 449,037 920 - - 6,308,509 - --------------- --------------- --------------- --------------- --------------- --------------- --------------- 12,005,720 13,853,675 7,734,123 1,231,258 6,588 964,014 115,627,173 - --------------- --------------- --------------- --------------- --------------- --------------- --------------- 151,746,871 54,059,726 58,034,070 7,851,634 7,446,363 1,969,105 384,124,900 224,621,952 207,659,211 129,081,279 24,751,261 - 32,850,494 2,005,037,589 - --------------- --------------- --------------- --------------- --------------- --------------- --------------- $ 376,368,823 $ 261,718,937 $ 187,115,349 $ 32,602,895 $ 7,446,363 $ 34,819,599 $ 2,389,162,489 =============== =============== =============== =============== =============== =============== ===============
- -------------------------------------------------------------------------------- 4 9 HARRIS CORPORATION RETIREMENT PLAN Notes to Financial Statements June 30, 1998 and 1997 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following description of the Harris Corporation Retirement Plan ("Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General ------- The Harris Corporation Retirement Plan is a defined contribution plan covering substantially all domestic employees of Harris Corporation who are not covered by a collective bargaining agreement. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions ------------- The Harris Corporation Retirement Plan and the Harris Corporation Union Retirement Plan share a common Profit-Sharing Program and Deferred Income Savings Program. The Corporation's annual contribution to the Profit-Sharing Program is equal to 11.5% of the Corporation's adjusted and consolidated net income as defined under the plan documents, plus any discretionary amount determined by the Board of Directors of the Corporation. The Profit-Sharing contribution is allocated, in the subsequent Plan year, among participating employees' individual account balances based on eligible compensation. The Deferred Income Savings Program was designed to take advantage of Internal Revenue Code Section 401(k). Under the Deferred Income Savings Program, participants may contribute up to 12% of their regular eligible compensation to the Plan in 1% increments. The contributions can be in pre-tax or after-tax dollars at the participant's election. The employer contributes a matching amount equal to 100% of the participant's contributions, to a maximum of 6.857% of eligible compensation. Participants are eligible to make elective contributions on a pre-tax or after-tax basis during the first year of service. Participants become eligible to receive allocations under the Profit-Sharing Program and matching contributions under the Deferred Income Savings Program after completing one year of credited service. Payments of Benefits -------------------- Distributions from the Plans can be made in the event of death, disability, termination of employment or financial hardship. Participant Loans ----------------- The loan program permits employees to borrow against their 401(k) plan contributions. Employees may borrow in increments of $100 from a minimum of $500 to a maximum of $50,000, within certain limitations established by the Plans. Payback periods range from one to 4 1/2 years at the option of the participant. Interest rates are established by the Corporation based on market rates. The outstanding loans have been established as a separate fund. Principal and interest paid on the loans are allocated to the funds consistent with the allocation of their 401(k) plan contributions. - -------------------------------------------------------------------------------- 5 10 HARRIS CORPORATION RETIREMENT PLAN Notes to Financial Statements June 30, 1998 and 1997 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN, CONTINUED Vesting ------- A participant's right to profit-sharing funds and employer matched deferred income contributions becomes vested using a formula based upon service, with 30% vesting after three years of credited service, an additional 10% vesting for the fourth year, and an additional 20% vesting for each of the three following years of credited service. At the time of retirement, death, or termination of employment, a participant's vested share of the Plans assets, net of any participant loans outstanding, becomes distributable in a lump-sum payment or through installments over a period of time as requested by the participant and approved by the Corporate Administrative Committee. Forfeitures ----------- A participant who terminates employment for reasons other than retirement or other specified circumstances and is not 100% vested, will forfeit the non-vested portion of the Corporation's contributions unless the participant returns to employment within five years. The forfeited contributions reduce the cash contributions from the Corporation. For the year ended June 30, 1998, employer contributions were reduced by $2,157,461 from forfeited nonvested accounts. Plan Termination ---------------- Although it has not expressed any intent to do so, Harris Corporation has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination participants will become 100 percent vested in their accounts. Investment Options ------------------ Upon enrollment into the Plan, a participant may direct employer, employee, and profit sharing contributions in any of nine investment options, except that profit sharing contributions may not be invested in the Harris Stock Fund. The investment options are fully described in the "Employer Summary Plan Description". Elections to change funds can be made daily; however, amounts in the Stable Value Fund, which is comprised of unallocated insurance contracts, cannot be transferred directly to the Short-Term Bond Fund or the Money Market Fund. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting ------------------- The accounting records of the Plan are maintained on the accrual basis. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. - -------------------------------------------------------------------------------- 6 11 HARRIS CORPORATION RETIREMENT PLAN Notes to Financial Statements June 30, 1998 and 1997 - -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Investment Valuation and Income Recognition ------------------------------------------- The fair value of the Plan's interest in the Harris Corporation Master Trust (the "Master Trust") is based on the beginning of year value of the Plan's interest in the trust plus actual contributions and allocated investment income less actual distributions and allocated administrative expenses. Quoted market prices are used when available, to value investments in the Master Trust. Investments for which a quoted market value is not available are stated at fair values reported by the trustee or investee company. Investments in unallocated insurance contracts are stated at contract value. Participant loans are stated at cost. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. The net appreciation (depreciation) in fair value of investments represents the sum of the unrealized appreciation or depreciation in aggregate fair value of investments and the realized gain or loss on sale of investments. Administrative Expenses ----------------------- Unless otherwise elected by Harris Corporation, all ordinary and extraordinary charges and expenses incurred by the Trustee in connection with the administration of the Plan are paid by the Trustee from the assets of the Master Trust. In fiscal 1997, Harris Corporation elected to pay administrative expenses such as legal fees, tax counsel and accounting fees. During fiscal 1998, these fees and expenses were paid by the Plan. Trustee, investment manager fees and certain administrative expenses were paid by the Plan. Payment of Benefits ------------------- Benefits are recorded when paid. 3. TRANSACTIONS WITH PARTIES-IN-INTEREST Under Department of Labor regulations for reporting and disclosure, an employee benefit plan is required to report investment transactions and compensation paid to a "party-in-interest". The term "party-in-interest" is broadly defined but would include Harris Corporation as the Plan Sponsor; Bankers Trust Company as Trustee; and any person or corporation that renders services to the Plan. Included in cash and cash equivalents at June 30, 1998 and 1997 are 38,642,181 and 67,070,853, shares respectively, of BT Pyramid Directed Account Cash Fund, with a fair value of $38,642,181 and $67,070,853. At June 30, 1998, Investments of the Master Trust include 97,182,986 shares of BT Pyramid Broad Market Fixed Income Fund with a fair value of $203,471,047; 198,897 shares of BT Pyramid Equity Index Fund with a fair value of $531,147,396; and 27,800 shares of Bankers Trust Company common stock with a fair value of $3,226,551. At June 30, 1998 and 1997, 693,016 and 306,916 shares with a fair market value of $30,969,499 and $25,780,944, respectively, of Harris Corporation common stock were included in investments of the Harris Corporation Master Trust. - -------------------------------------------------------------------------------- 7 12 HARRIS CORPORATION RETIREMENT PLAN Notes to Financial Statements June 30, 1998 and 1997 - -------------------------------------------------------------------------------- 4. INTEREST IN HARRIS CORPORATION MASTER TRUST The Harris Corporation Master Trust was established for the investment of assets of the Plan and the Harris Corporation Union Retirement Plan. Each participating retirement plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by Bankers Trust Company (Trustee). At June 30, 1998 and 1997, the Plan's interest in the net assets of the Master Trust was approximately 96.97% and 97.24%, respectively. Investment income and administrative expenses relating to the Master Trust are allocated to the individual plans based upon average daily balances invested by each plan. Investments of the Master Trust are as follows:
1998 1997 ---------------- ---------------- Fair value as determined by quoted market prices: U.S. government securities $ 136,991,415 $ 193,034,127 Corporate debt securities 119,443,881 230,525,352 Foreign debt securities 8,105,656 10,191,484 Corporate equity securities 891,181,774 787,014,217 Morgan Stanley International Magnum Fund 73,003,976 60,206,396 BT Pyramid Broad Market Fixed Income Fund 203,471,047 - BT Pyramid Equity Index Fund 531,147,396 - Wells Fargo Bank Index Fund - 316,512,010 Putnam New Opportunities Fund 82,309,171 94,828,345 ---------------- ---------------- 2,045,654,316 1,692,311,931 Fair value as determined by investee company: J.P. Morgan Real Estate Fund - 32,065,098 Contract value: Unallocated insurance contracts 261,412,879 205,927,404 ---------------- ---------------- $2,307,067,195 $1,930,304,433 ================ ================
- -------------------------------------------------------------------------------- 8 13 HARRIS CORPORATION RETIREMENT PLAN Notes to Financial Statements June 30, 1998 and 1997 - -------------------------------------------------------------------------------- 4. INTEREST IN HARRIS CORPORATION MASTER TRUST, CONTINUED Investment income of the Master Trust for the year ended June 30, 1998 is as follows: Net appreciation (depreciation) in fair value as determined by quoted market price: U.S. government securities $ 5,553,561 Corporate debt securities 2,544,994 Foreign debt securities (607,721) Corporate equity securities 171,954,218 Morgan Stanley International Magnum Fund 2,656,266 Wells Fargo Bank Index Fund 24,415,348 Putnam New Opportunities Fund 25,213,280 BT Pyramid Broad Market Fixed Income Fund 9,321,342 BT Pyramid Equity Index Fund 94,367,257 -------------- 335,418,545 Net appreciation (depreciation) in fair value as determined by investee company: J.P. Morgan Real Estate Fund 1,574,312 -------------- 336,992,857 Interest and dividends 61,999,493 -------------- $ 398,992,350 =============
5. TAX STATUS The plan obtained its latest determination letter on August 18, 1998, in which the Internal Revenue Service stated that the plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan administrator believes that the Plan currently is designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and that, therefore, the Plan qualifies under Section 401(a) and the related trust is tax-exempt as of June 30, 1998. Therefore, no provision for income taxes has been included in the Plan's financial statements. 6. YEAR 2000 ISSUES (UNAUDITED) Certain software and hardware systems are time-sensitive. Older time-sensitive systems often use a two-digit dating convention (e.g. "00" rather than "2000") that could result in system failure and disruption of operations as the year 2000 approaches. The Year 2000 problem will impact the Plan Sponsor, the trustee, recordkeeper, and investment managers, as well as their vendors and suppliers. Harris Corporation ("Company") has determined its needs to replace or modify several of its software systems. The Company has identified exposure in various operating and business systems including financial and administrative functions. The Company has also initiated communications with suppliers and other relevant third parties to identify and minimize disruptions to the Company's operations and to assist in resolving Year 2000 issues. However, there can be no certainty that the systems and products of other companies on which the Company and Plan relies will not have an adverse effect on the Company's or Plan's operations. - -------------------------------------------------------------------------------- 9 14 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized. Harris Corporation Retirement Plan /s/ Jeffrey Pratt Morrill ------------------------------ Jeffrey Pratt Morrill Plan Administrator Date: December 22, 1998 EX-23 2 EXHIBIT 23 1 EXHIBIT 23 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We consent to the incorporation by reference in the following registration statement of the Harris Corporation Retirement Plan of our report dated November 12, 1998, with respect to the financial statements of the Harris Corporation Retirement Plan included in this Annual Report (Form 11-K) for the year ended June 30, 1998. Form S-8 No. 33-50169 Harris Corporation Retirement Plan Bray, Beck & Koetter Melbourne, Florida December 23, 1998 -----END PRIVACY-ENHANCED MESSAGE-----