-----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, GZ/C6liO4lx4VVHGxFPt0UPpJDE95mv7wfKXbQv8ovG/B0Jxmjbc4xrqigsJSkYt DcHLKHtNJ7rG7/9fApPiZw== 0000800459-97-000019.txt : 19971224 0000800459-97-000019.hdr.sgml : 19971224 ACCESSION NUMBER: 0000800459-97-000019 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971223 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARMAN INTERNATIONAL INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000800459 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651] IRS NUMBER: 112534306 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-09764 FILM NUMBER: 97743442 BUSINESS ADDRESS: STREET 1: 1101 PENNSYLVANIA AVENUE N W STREET 2: STE 1010 CITY: WASHINGTON STATE: DC ZIP: 20004 BUSINESS PHONE: 2023931101 MAIL ADDRESS: STREET 1: 1101 PENNSYLVANIA AVENUE NW STREET 2: SUITE 1010 CITY: WASHINGTON STATE: DC ZIP: 20004 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------ FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ____________ Commission file number _______________ ------------------------------- HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED RETIREMENT SAVINGS PLAN (Full title of the Plan) HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED 1101 PENNSYLVANIA AVENUE, NW WASHINGTON, D.C. 20004 (Name of issuer of the securities held pursuant to the Plan and address of its principal executive office) - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- Harman International Industries, Incorporated Retirement Savings Plan Financial Statements and Supplemental Schedules June 26, 1997 and June 30, 1996 (With Independent Auditors' Report Thereon) Harman International Industries, Incorporated Retirement Savings Plan Index to Financial Statements and Supplemental Schedules
Page Independent Auditors' Report 1 Statement of Net Assets Available for Plan Benefits - June 26, 1997 2 Statement of Net Assets Available for Plan Benefits - June 30, 1996 3 Statement of Changes in Net Assets Available for Plan Benefits - Period ended June 26, 1997 4 Statement of Changes in Net Assets Available for Plan Benefits - Year ended June 30, 1996 5 Notes to Financial Statements 6 Schedule Line 27a - Schedule of Investments Held at End of Plan Year - June 26, 1997 1 Line 27d - Schedule of Reportable Transactions - Period ended June 26, 1997 2 All other supplemental schedules omitted are not applicable or are not required, based on disclosure requirements of the Employee Retirement Income Security Act of 1974 and regulations issued by the Department of Labor.
Independent Auditors' Report The Administrative Committee of the Board of Directors Harman International Industries, Incorporated: We have audited the accompanying statements of net assets available for Plan benefits of the Harman International Industries, Incorporated Retirement Savings Plan (the Plan) as of June 26, 1997 and June 30, 1996 and the related statements of changes in net assets available for Plan benefits for the period ended June 26, 1997 and year ended June 30, 1996. 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 audit 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 Plan benefits of the Harman International Industries, Incorporated Retirement Savings Plan as of June 26, 1997 and June 30, 1996 and the changes in net assets available for Plan benefits for the period ended June 26, 1997 and year ended June 30, 1996 in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information in Schedules 1 and 2 is presented for the purpose of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and is not a required part of the basic financial statements. The fund information in the statements of net assets available for Plan benefits and the related statements of changes in net assets available for Plan benefits is presented for purposes of additional analysis rather than to present the net assets available for Plan benefits and the changes in net assets available for Plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, when considered in relation to the basic financial statements taken as a whole. /s/ KPMG Peat Marwick LLP November 14, 1997 1 Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 26, 1997
The Putnam Fixed Fund for Company Income Growth and Stock Assets Fund Income Fund ------------ ------------ ------------ Investments: Guaranteed investment contracts $22,045,554 - - Mutual funds - 19,792,594 - Harman International Industries, Incorporated common stock - - 9,284,984 Money market funds 163,883 - - Pooled separate accounts - - - Participant loans - - - ------------ ------------ ------------ 22,209,437 19,792,594 9,284,984 Contributions receivable 1,042,518 806,479 582,660 ------------ ------------ ------------ Total assets 23,251,955 20,599,073 9,867,644 Liabilities Other liabilities 7,063 6,295 2,953 ------------ ------------ ------------ Net assets available for Plan benefits $23,244,892 20,592,778 9,864,691 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 26, 1997
George Putnam Putnam Putnam Fund of Investors Voyager Assets Boston Fund Fund ------------ ------------ ------------ Investments: Guaranteed investment contracts - - - Mutual funds 6,360,375 414,961 11,877,940 Harman International Industries, Incorporated common stock - - - Money market funds - - - Pooled separate accounts - - - Participant loans - - - ------------ ------------ ------------ 6,360,375 414,961 11,877,940 Contributions receivable 345,965 46,755 743,935 ------------ ------------ ------------ Total assets 6,706,340 461,716 12,621,875 Liabilities Other liabilities 2,023 132 3,777 ------------ ------------ ------------ Net assets available for Plan benefits 6,704,317 461,584 12,618,098 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 26, 1997
Putnam Putnam Diversified Putnam OTC Income and Overseas Assets Fund Trust Fund Growth Fund ------------ ------------ ------------ Investments: Guaranteed investment contracts - - - Mutual funds 276,642 325,440 382,745 Harman International Industries, Incorporated common stock - - - Money market funds - - - Pooled separate accounts - - - Participant loans - - - ------------ ------------ ------------ 276,642 325,440 382,745 Contributions receivable 67,237 28,472 40,962 ------------ ------------ ------------ Total assets 343,879 353,912 423,707 Liabilities Other liabilities 88 103 122 ------------ ------------ ------------ Net assets available for Plan benefits 343,791 353,809 423,585 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 26, 1997
New Participant Opportunities Loan Assets Fund Fund Total ------------ ------------ ------------ Investments: Guaranteed investment contracts - - 22,045,554 Mutual funds 3,832,944 - 43,263,641 Harman International Industries, Incorporated common stock - - 9,284,984 Money market funds - - 163,833 Pooled separate accounts - - - Participant loans - 21,643 21,643 ------------ ------------ ------------ 3,832,944 21,643 74,779,705 Contributions receivable 342,634 - 4,047,617 ------------ ------------ ------------ Total assets 4,175,578 21,643 78,827,322 Liabilities Other liabilities 1,219 - 23,775 ------------ ------------ ------------ Net assets available for Plan benefits 4,174,359 21,643 78,803,547 ------------ ------------ ------------
See accompanying notes to financial statements. 2 Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 30, 1996
The Putnam Fixed Fund for Company Income Growth and Stock Assets Fund Income Fund ------------ ------------ ------------ Investments: Guaranteed investment contracts $21,508,663 - - Mutual funds - 15,199,934 - Harman International Industries, Incorporated common stock - - 6,368,068 Money market funds 52,238 - - Pooled separate accounts - - - Participant loans - - - ------------ ------------ ------------ 21,560,901 15,199,934 6,368,068 Contributions receivable 846,027 661,707 455,365 ------------ ------------ ------------ Total assets 22,406,928 15,861,641 6,823,433 Liabilities Other liabilities 9,158 6,455 2,704 ------------ ------------ ------------ Net assets available for Plan benefits $22,397,770 15,855,186 6,820,729 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 30, 1996
George Putnam Putnam New Fund of Voyager Opportunities Assets Boston Fund Fund ------------ ------------ ------------ Investments: Guaranteed investment contracts - - - Mutual funds 3,846,337 11,830,731 3,324,378 Harman International Industries, Incorporated common stock - - - Money market funds - - - Pooled separate accounts - - - Participant loans - - - ------------ ------------ ------------ 3,846,337 11,830,731 3,324,378 Contributions receivable 342,815 721,627 198,072 ------------ ------------ ------------ Total assets 4,189,152 12,552,358 3,522,450 Liabilities Other liabilities 1,633 5,024 1,412 ------------ ------------ ------------ Net assets available for Plan benefits 4,187,519 12,547,334 3,521,038 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Net Assets Available for Plan Benefits June 30, 1996
Participant Loan Aetna Assets Fund Fund Total ------------ ------------ ------------ Investments: Guaranteed investment contracts - 755,930 22,264,593 Mutual funds - - 34,201,380 Harman International Industries, Incorporated common stock - - 6,368,068 Money market funds - - 52,238 Pooled separate accounts - 605,378 605,378 Participant loans 72,071 - 72,071 ------------ ------------ ------------ 72,071 1,361,308 63,563,728 Contributions receivable - - 3,225,613 ------------ ------------ ------------ Total assets 72,071 1,361,308 66,789,341 Liabilities Other liabilities - - 26,386 ------------ ------------ ------------ Net assets available for Plan benefits 72,071 1,361,308 66,762,955 ------------ ------------ ------------
See accompanying notes to financial statements. 3 Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Period ended June 26, 1997
The Putnam Fixed Fund for Company Income Growth and Stock Fund Income Fund ------------ ------------ ------------ Employer contributions, net $ 1,323,291 1,116,812 766,030 Employee contributions 1,087,768 1,261,015 808,026 Fund transfers, net 165,523 (85,908) 2,137,475 Other additions (deletions), net 81,921 13,073 8,361 ------------ ------------ ------------ 2,658,503 2,304,992 3,719,892 ------------ ------------ ------------ Investment income: Interest and dividends 1,206,528 1,501,104 35,684 Net appreciation (depreciation) 87 2,934,266 (202,987) ------------ ------------ ------------ Net investment income 1,206,615 4,435,370 (167,303) ------------ ------------ ------------ Benefit payments 2,980,224 1,975,033 485,749 Administrative expenses 37,722 27,737 22,878 ------------ ------------ ------------ 3,017,996 2,002,770 508,627 ------------ ------------ ------------ Net increase (decrease) 847,122 4,737,592 3,043,962 Net assets at beginning of year 22,397,770 15,855,186 6,820,729 ------------ ------------ ------------ Net assets at end of year $ 23,244,892 20,592,778 9,864,691 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Period ended June 26, 1997
George Putnam Putnam Putnam Fund of Investors Voyager Boston Fund Fund ------------ ------------ ------------ Employer contributions, net 504,724 58,082 1,067,406 Employee contributions 576,688 39,568 1,329,279 Fund transfers, net 838,795 313,305 (2,510,668) Other additions (deletions), net 4,184 (70) 16,900 ------------ ------------ ------------ 1,924,391 410,885 (97,083) ------------ ------------ ------------ Investment income: Interest and dividends 435,479 13,476 821,996 Net appreciation (depreciation) 648,361 42,885 446,299 ------------ ------------ ------------ Net investment income 1,083,840 56,361 1,268,295 ------------ ------------ ------------ Benefit payments 482,184 5,180 1,082,440 Administrative expenses 9,249 482 18,008 ------------ ------------ ------------ 491,433 5,662 1,100,448 ------------ ------------ ------------ Net increase (decrease) 2,516,798 461,584 70,764 Net assets at beginning of year 4,187,519 - 12,547,334 ------------ ------------ ------------ Net assets at end of year 6,704,317 461,584 12,618,098 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Period ended June 26, 1997
Putnam Putnam Diversified Putnam OTC Income and Overseas Fund Trust Fund Growth Fund ------------ ------------ ------------ Employer contributions, net 100,114 32,966 44,564 Employee contributions 84,709 23,737 37,813 Fund transfers, net 154,224 327,761 287,384 Other additions (deletions), net (21) 354 62 ------------ ------------ ------------ 339,026 384,818 369,823 ------------ ------------ ------------ Investment income: Interest and dividends 14,814 10,992 1,631 Net appreciation (deprecation) (8,712) (2,413) 53,024 ------------ ------------ ------------ Net investment income 6,102 8,759 54,655 ------------ ------------ ------------ Benefit payments 876 39,242 459 Administrative expenses 461 346 434 ------------ ------------ ------------ 1,337 39,588 893 ------------ ------------ ------------ Net increase (decrease) 343,791 353,809 423,585 Net assets at beginning of year - - - ------------ ------------ ------------ Net assets at end of year 343,791 353,809 423,585 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Period ended June 26, 1997
New Opportunities Participant Aetna Fund Loan Fund Fund Total ------------ ------------ ------------ ------------ Employer contributions, net 496,595 - 790 5,511,374 Employee contributions 635,610 - - 5,884,213 Fund transfers, net (352,236) - (1,275,655) - Other additions (deletions), net 3,028 (53,679) - 74,113 ------------ ------------ ------------ ------------ 782,997 (53,679) (1,274,865) 11,469,700 ------------ ------------ ------------ ------------ Investment income: Interest and dividends 29,329 3,251 9,131 4,083,415 Net appreciation (deprecation) 59,011 - 58,839 4,028,660 ------------ ------------ ------------ ------------ Net investment income 88,340 3,251 67,970 8,112,075 ------------ ------------ ------------ ------------ Benefit payments 212,056 - 154,413 7,417,856 Administrative expenses 5,960 - - 123,327 ------------ ------------ ------------ ------------ 218,016 - 154,413 7,541,183 ------------ ------------ ------------ ------------ Net increase (decrease) 653,321 (50,428) (1,361,308) 12,040,592 Net assets at beginning of year 3,521,038 72 ,071 1,361,308 66,762,955 ------------ ------------ ------------ ------------ Net assets at end of year 4,174,359 21,643 - 78,803,547 ------------ ------------ ------------ ------------
See accompanying notes to financial statements. 4 Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Year ended June 30, 1996
The Putnam Fixed Fund for Company Income Growth and Stock Fund Income Fund ------------ ------------ ------------ Employer contributions, net $ 1,155,799 999,796 667,097 Employee contributions 1,122,407 1,252,115 734,615 Fund transfers, net (1,827,314) 82,910 (2,409,595) Transfer from related plans - - - Other additions (deletions), net 5,788 14,021 9,584 ------------ ------------ ------------ 456,680 2,348,842 (998,299) ------------ ------------ ------------ Investment income: Interest and dividends 1,311,957 894,051 287,109 Net appreciation - 2,030,216 1,732,126 ------------ ------------ ------------ Net investment income 1,311,957 2,924,267 2,019,235 ------------ ------------ ------------ Benefit payments 2,739,006 950,660 463,553 Administrative expenses 48,231 26,251 20,722 ------------ ------------ ------------ 2,787,237 976,911 484,275 ------------ ------------ ------------ Net increase (decrease) (1,018,600) 4,296,198 536,661 Net assets at beginning of year 23,416,370 11,558,988 6,284,068 ------------ ------------ ------------ Net assets at end of year $22,397,770 15,855,186 6,820,729 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Year ended June 30, 1996
George Putnam Putnam New Fund of Voyager Opportunities Boston Fund Fund ------------ ------------ ------------ Employer contributions, net 531,832 1,103,563 225,185 Employee contributions 602,683 1,339,449 296,360 Fund transfers, net 169,609 1,073,179 2,911,211 Transfer from related plans - - - Other additions (deletions), net 7,972 15,297 543 ------------ ------------ ------------ 1,312,096 3,531,488 3,433,299 ------------ ------------ ------------ Investment income: Interest and dividends 240,668 542,462 - Net appreciation 286,309 2,058,463 119,137 ------------ ------------ ------------ Net investment income 526,977 2,600,925 119,137 ------------ ------------ ------------ Benefit payments 233,859 736,480 29,271 Administrative expenses 6,945 19,927 2,127 ------------ ------------ ------------ 240,804 756,407 31,398 ------------ ------------ ------------ Net increase (decrease) 1,598,269 5,376,006 3,521,038 Net assets at beginning of year 2,589,250 7,171,328 - ------------ ------------ ------------ Net assets at end of year 4,187,519 12,547,334 3,521,038 ------------ ------------ ------------
See accompanying notes to financial statements. Harman International Industries, Incorporated Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Year ended June 30, 1996
Participant Loan Aetna Fund Fund Total ------------ ------------ ------------ Employer contributions, net - 4,588 4,687,860 Employee contributions - 9,070 5,356,699 Fund transfers, net - - - Transfer from related plans - 711,506 711,506 Other additions (deletions), net (87,885) - (34,680) ------------ ------------ ------------ (87,885) 725,164 10,721,385 ------------ ------------ ------------ Investment income: Interest and dividends 6,417 22,610 3,305,274 Net appreciation - 87,569 6,313,820 ------------ ------------ ------------ Net investment income 6,417 110,179 9,619,094 ------------ ------------ ------------ Benefit payments - 413,654 5,566,483 Administrative expenses - - 124,203 ------------ ------------ ------------ - 413,654 5,690,686 ------------ ------------ ------------ Net increase (decrease) (81,468) 421,689 14,649,793 Net assets at beginning of year 153,539 939,619 52,113,162 ------------ ------------ ------------ Net assets at end of year 72,071 1,361,308 66,762,955 ------------ ------------ ------------
See accompanying notes to financial statements. 5 Harman International Industries, Incorporated Retirement Savings Plan Notes to Financial Statements June 26, 1997 and June 30, 1996 (1) Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements of the Harman International Industries, Incorporated Retirement Savings Plan (the Plan) have been presented on an accrual basis and present the net assets available for Plan benefits and changes in those net assets. Investments Investments in guaranteed investment contracts (GIC) are reported at contract value as these contracts are fully benefit responsive. Contract value represents contributions plus interest at the contract rate, less funds used to pay withdrawals and administration expenses. The Plan participates in mutual funds managed by Putnam Management Company, Inc. on behalf of participating employee benefit plans. Each participating employee benefit plan is allocated its proportionate share of the net assets and the net investment income of the mutual funds. The investments in mutual funds are reported at fair value, which is based on quotations obtained from national securities exchanges. The Plan also participates in a stock fund to purchase shares of Harman International Industries, Incorporated (the Company) common stock. The fair value of the Company stock is determined based on quotations obtained from national securities exchanges. The assets of the Participant Loan Fund represent loans to certain participants (note 2) and are carried at outstanding loan balance, which approximates market value. Securities transactions are recorded on the trade-date basis. Net appreciation or depreciation resulting from revaluation of investments to fair value is reflected in the statements of changes in net assets available for Plan benefits and includes investments bought, sold, as well as held during the year. Dividend income is recorded on the ex-dividend date. Investments are principally managed by the Plan's trustee, Putnam Fiduciary Trust Company. Administrative Expenses Administrative expenses of the Plan are principally paid by the Plan. Use of Estimates Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from these estimates. Reclassifications Certain reclassifications have been made to the 1996 financial statements to conform to the 1997 presentation. 6 Harman International Industries, Incorporated Retirement Savings Plan Notes to Financial Statements, Continued (2) Plan Description The Plan agreement dated July 1, 1989, amends and restates five preexisting defined contribution and savings plan agreements for plans which were merged into the Plan and extends coverage to all eligible nonunion domestic employees of Harman International Industries, Incorporated. Effective July 1, 1995, the Plan also extends coverage to hourly collective bargaining unit employees of Harman Motive, Inc. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan is a defined contribution, savings and profit sharing plan sponsored by the Company. The Plan covers all eligible employees, as defined by the Plan, provided they have completed six months of consecutive service, have worked 500 hours and are at least 21 years of age. Plan participants should refer to the Plan agreement for more complete information. Plan Changes and Amendments The Plan year-end was changed to June 26, 1997. Future plan years will commence June 27 and end June 26. Effective December 24, 1996, investments of the former AKG Acoustics, Inc. Salary Savings Plan and TRS Madrigal Audio Labs, Inc. Employee Savings Plan which were managed by Aetna Life Insurance and Annuity Co. were transferred to and reflected with the appropriate Putnam Plan funds. Previously, such investments were not merged into the available investment funds of the Putnam Plan due to high surrender charges. Contributions Participants in the Plan may contribute on a tax-deferred basis from 1% to 12% of their compensation, as defined by the Plan. Participants may change their deferral percentage as of the first payroll period following the quarterly valuation date. The Company has made annual basic contributions equal to 2% of the compensation paid to all eligible participants active at the end of the Plan year and a matching contribution equal to 50% of the eligible participant's tax-deferred contribution percentage for each payroll period up to a maximum election of 6% per payroll period. In addition, the Company may make discretionary profit sharing contributions to the Plan, in an amount determined by the Company's Board of Directors. Company profit sharing contributions are limited to 15% of the participants' compensation, less the participants' tax-deferred contributions, the Company basic contribution and the Company matching contribution. Total Company and participant contributions may not exceed 15% of total participants' taxable compensation. Total annual additions to a participant's account, exclusive of adjustments to the fair market value of the participants' fund account, may not exceed the lesser of $30,000 or 25% of the participant's taxable compensation. Vesting Participants are 100% vested in their salary deferral contribution, employer's basic contribution and rollover contribution accounts, and become vested in profit sharing and matching contributions at the rate of 25% per year after the completion of three years of service, or 100% after reaching age 65, death or disability. 7 Harman International Industries, Incorporated Retirement Savings Plan Notes to Financial Statements, Continued Investment Options Upon enrollment in the Plan, a participant may direct contributions in any increment in any of ten investment options: The Stable Value Fund - Invests in high quality guaranteed investment contracts. The Putnam Growth & Income Fund - Invests in common stocks with appreciation potential as well as current dividend payouts. The Harman Stock Fund - Invests solely in the stock of Harman International Industries. The George Putnam Fund of Boston - Invests in stock and bonds to balance current return with long-term growth potential. The Putnam Investors Fund - Invests primarily in the stocks of well established companies that provide opportunity for growth over time. The Putnam Voyager Fund - Invests primarily in the stocks of smaller, higher growth companies with capital appreciation potential rather than those that pay current dividends. The Putnam OTC Fund - Invests primarily in over-the-counter stocks of small to medium sized emerging growth companies. The Putnam Diversified Income & Trust Fund - Invests in a combination of US government, high yield and international bonds. The Putnam Overseas Growth Fund - Invests in a diversified portfolio of stocks of companies located outside North America. The Putnam New Opportunities Fund - Invests primarily in the stocks of certain emerging industry groups that offer above-average long-term growth potential. Participant Account Balances Separate accounts are maintained for each participant's salary deferral, rollover, employer profit sharing, basic and matching contribution balances. Earnings or losses of the Plan are allocated to the participant account balances by investment fund on a daily basis according to the number of shares in the participant account balances. Company profit sharing and basic contributions are allocated based on participant compensation. Company matching contributions are allocated based upon each participant's tax-deferred contribution percentage. Participant Loans The Plan does not allow for any participant loans. The loans discussed in note 1 arose from the mergers of related plans and no further loans will be granted after their repayment is completed. Benefits Upon separation from service, retirement at age 65, disability retirement or death, participants or their beneficiaries are entitled to receive their vested balances in a lump sum distribution. However, participants from prior merged plans, whose plans allowed distributions of plan benefits to be made in forms other than lump sum, may elect payment of benefit balances which were available prior to the mergers. Contributions made subsequent to the merger may only be distributed in a lump sum payment. 8 Harman International Industries, Incorporated Retirement Savings Plan Notes to Financial Statements, Continued Forfeitures Any amount forfeited by any employee terminating from the Plan before he/she is fully vested remains in the Plan until the end of the Plan quarter. Amounts forfeited by Plan participants are applied to reduce the employer contributions. Forfeitures were $260,003 and $225,819 for the period ended June 26, 1997 and year ended June 30, 1996, respectively. (3) Investments Investments in any single entity which represent 5% or more of the fair value of net assets available for benefits at June 26, 1997 and June 30, 1996 are as follows:
Description Cost Fair value 1997: The Putnam Fund for Growth and Income $14,895,666 19,792,594 Putnam Voyager Fund 9,597,666 11,877,940 George Putnam Fund of Boston 5,457,797 6,360,375 Putnam Stable Value Fund, in contracts with various companies, maturity dates ranging from January 6, 1997 through May 20, 2002, and interest rates ranging from 4.4% to 8.4% 20,989,217 20,989,217 Harman International Industries, Incorporated common stock (222,395 shares) 7,487,293 9,284,984 1996: The Putnam Fund for Growth and Income $12,617,831 15,199,934 Putnam Voyager Fund 9,407,500 11,830,731 George Putnam Fund of Boston 3,466,447 3,846,337 Putnam Stable Value Fund, in contracts with various companies, maturity dates ranging from March 28, 1996 through May 1, 2001, and interest rates ranging from 4.4% to 8.4% 20,507,901 20,507,901 Harman International Industries, Incorporated common stock (129,301 shares) 3,634,556 6,368,068
(4) Federal Income Taxes In August 1996, the Plan received a favorable determination letter from the Internal Revenue Service (IRS). However, an internal audit determined that certain operational defects had occurred. These defects were corrected and a filing was made with the IRS under the Voluntary Compliance Resolution (VCR) Program. The Company believes that the VCR filing, along with the new determination letter filing, will enable the Plan to continue to constitute a qualified Plan under Sections 401(a) and 401(k) of the Internal Revenue Code (IRC) and the Trust will continue to be exempt from income tax under Section 501(a) of the IRC. 9 Harman International Industries, Incorporated Retirement Savings Plan Notes to Financial Statements, Continued (5) Plan Termination Although it has not expressed any intent to do so, the Company has the right to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974. Upon Plan termination, all participant accounts immediately become 100% vested. (6) Commitments and Reconciliation to Form 5500 Included in net assets available for Plan benefits in the accompanying financial statements is $3,548,200 and $1,077,559 at June 26, 1997 and June 30, 1996, respectively, of amounts related to Plan participants and participants who have terminated their service with the Company as of the end of the Plan year. These amounts are shown as liabilities on the Form 5500, Annual Return/Report of Employee Benefit Plans, which is filed with the Internal Revenue Service. 10 Schedule 1 Harman International Industries, Incorporated Retirement Savings Plan Line 27a - Schedule of Investments Held at End of Plan Year June 26, 1997
Description of investment, Identity of issuer, including maturity date, rate of Current borrower or similar party interest, par or maturity value Cost value *Putnam Fiduciary Trust Company GIC Fund $1,056,337 in contracts with Metropolitan Life Insurance Co., and Unum Life Insurance Co. (2) maturing on December 31, 1998, December 31, 1997 and December 31, 1998 with interest of 6.3%, 8.0% and 6.5%, respectively, and the Boston Co. STIF account with interest of 5.6% $ 1,056,337 1,056,337 *Putnam Stable Value Fund $20,989,217 in contracts with various companies, maturity dates ranging from January 6, 1997 through May 20, 2002 and interest rates ranging from 4.4% to 8.4% 20,989,217 20,989,217 *George Putnam Fund of Boston 352,180 units at $18.06 per unit 5,457,797 6,360,375 *Putnam Voyager Fund 662,832 units at $17.92 per unit 9,597,666 11,877,940 *The Putnam Fund for Growth and Income 960,339 units at $20.61 per unit 14,895,666 19,792,594 *Putnam Investors Fund 37,965 units at $10.93 per unit 371,759 414,961 *Putnam OTC Fund 18,922 units at $14.62 per unit 282,419 276,642 *Putnam Diversified Income and Trust Fund 26,309 units at $12.37 per unit 325,777 325,440 *Putnam Overseas Growth Fund 21,551 units at $17.76 per unit 329,360 382,745 *Harman International Industries, Incorporated common stock 222,395 shares at $41.75 per share 7,487,293 9,284,984 *New Opportunities Fund 86,954 units at $44.08 per unit 3,562,435 3,832,944 *Putnam Money Market Fund 141,062 units at $1.00 per unit 141,062 141,062 Participant loans Interest rates ranging from 6.5% to 8.5% - 21,643 *Pending Account - 22,821 ---------- ---------- $64,496,788 74,779,705 ---------- ----------
* Party-in-interest investment. See accompanying independent auditors' report. Schedule 2 Harman International Industries, Incorporated Retirement Savings Plan Line 27d - Schedule of Reportable Transactions Period ended June 30, 1997
Description of Purchase Selling Description of asset transactions price price The Putnam Fund for Growth and Income Purchases $5,326,232 - Sales - 4,125,304 Putnam Voyager Fund Purchases 4,907,353 - Sales - 5,306,444 Putnam GIC Funds Purchases 17,285,994 - Sales - 17,456,578 Investment in Company Stock Purchases 7,691,718 - Sales - 4,571,812
See accompanying independent auditors' report. Schedule 2 Harman International Industries, Incorporated Retirement Savings Plan Line 27d - Schedule of Reportable Transactions Period ended June 30, 1997
Expense incurred Description of Cost of with Description of asset transactions asset transaction The Putnam Fund for Growth and Income Purchases 5,326,232 - Sales 3,505,858 - Putnam Voyager Fund Purchases 4,907,353 - Sales 4,717,187 - Putnam GIC Funds Purchases 17,285,994 - Sales 17,456,578 - Investment in Company Stock Purchases 7,691,718 - Sales 3,838,952 -
See accompanying independent auditors' report. Schedule 2 Harman International Industries, Incorporated Retirement Savings Plan Line 27d - Schedule of Reportable Transactions Period ended June 30, 1997
Current value of asset on Description of transaction Net Description of asset transactions date gain The Putnam Fund for Growth and Income Purchases 5,326,232 - Sales 4,125,304 619,446 Putnam Voyager Fund Purchases 4,907,353 - Sales 5,306,444 589,257 Putnam GIC Funds Purchases 17,285,994 - Sales 17,456,578 - Investment in Company Stock Purchases 7,691,718 - Sales 4,571,812 732,860
See accompanying independent auditors' report. -----END PRIVACY-ENHANCED MESSAGE-----