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, 1996
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 Union 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
UNION RETIREMENT PLAN
Financial Statements
June 30, 1996
3
HARRIS CORPORATION UNION RETIREMENT PLAN
Table of Contents
June 30, 1996 PAGE
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INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits 2-5
Statement of Changes in Net Assets Available for Benefits 6-7
Notes to Financial Statements 8-12
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4
[BRAY, BECK & KOETTER LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Investment Committee
Harris Corporation Union Retirement Plan
Melbourne, Florida
We have audited the accompanying statements of net assets available for benefits
of the Harris Corporation Union Retirement Plan (the "Plan") as of June 30, 1996
and 1995, and the related statement of changes in net assets available for
benefits for the 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 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, 1996 and 1995, and the changes in its net assets available for benefits for
the year ended June 30, 1996, in conformity with generally accepted accounting
principles.
/s/ Bray, Beck & Koetter
Melbourne, Florida
October 3, 1996
1
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5
FINANCIAL STATEMENTS
6
HARRIS CORPORATION UNION RETIREMENT PLAN
Statements of Net Assets Available for Benefits
June 30, 1996 and 1995
- ------------------------------------------------------------------------------------------
June 30, 1996
- ------------------------------------------------------------------------------------------
Money Equity
Balanced Short-Term Market Income
Fund Bond Fund Fund Fund
------------ ----------- ------- ---------
ASSETS
INVESTMENTS (NOTE 3):
Plan interest in Harris
Corporation Master Trust $16,390,846 $10,317,935 $ 4,803 $ 5,468,465
Participant loans - - - -
------------ ------------ ------------ ------------
Total investments 16,390,846 10,317,935 4,803 5,468,465
RECEIVABLES:
Contributions receivable from
Harris Corporation 1,444,426 - - -
Accrued interest and dividends 83,306 111,454 612 21,195
Securities sold 138,790 - - 5,951
------------ ------------ ------------ ------------
Total receivables 1,666,522 111,454 612 27,146
CASH AND CASH EQUIVALENTS (NOTE 2) 203,510 113,845 133,138 522,546
------------ ------------ ------------ ------------
Total assets 18,260,878 10,543,234 138,553 6,018,157
LIABILITIES
Accrued expenses 1,442 - - -
Securities purchased 217,361 153,066 - 40,045
------------ ------------ ------------ ------------
Total liabilities 218,803 153,066 - 40,045
------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $18,042,075 $10,390,168 $ 138,553 $ 5,978,112
============ ============ ============ ============
See accompanying notes to financial statements. 2
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7
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Equity Stable Harris
Index Value Growth Corporation Loan
Fund Fund Fund Stock Fund Fund Total
- ----------- --------- --------- -------------- -------- --------
$ 1,664,315 $ 5,631,649 $ 2,689,978 $ 594,685 $ - $42,762,676
- - - - 1,378,738 1,378,738
- ----------- ------------ ------------ ---------- ------------ ------------
1,664,315 5,631,649 2,689,978 594,685 1,378,738 44,141,414
- - - - - 1,444,426
2,517 30,071 1,373 95 - 250,623
143 - 3,174 - - 148,058
- ----------- ------------ ------------ ---------- ------------ ------------
2,660 30,071 4,547 95 - 1,843,107
52,373 24,381 34,432 14,247 - 1,098,472
---------- ------------ ------------ ---------- ------------ ------------
1,719,348 5,686,101 2,728,957 609,027 1,378,738 47,082,993
2,575 - - - - 4,017
- - 5,241 - - 415,713
- ----------- ------------ ------------ ---------- ------------ ------------
2,575 - 5,241 - - 419,730
- ----------- ------------ ------------ ---------- ------------ ------------
$ 1,716,773 $ 5,686,101 $ 2,723,716 $ 609,027 $ 1,378,738 $46,663,263
=========== =========== =========== =========== =========== ===========
Continued 3
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8
HARRIS CORPORATION UNION RETIREMENT PLAN
Statements of Net Assets Available for Benefits
June 30, 1996 and 1995
- -------------------------------------------------------------------------------------------------
June 30, 1995
- -------------------------------------------------------------------------------------------------
Money Equity
Balanced Short-Term Market Income
Fund Bond Fund Fund Fund
------------ ------------ -------- -----------
ASSETS
INVESTMENTS (NOTE 3):
Plan interest in Harris Corporation
Master Trust $11,480,525 $ 9,536,069 $63,652 $3,400,962
Participant loans - - - -
------------ ------------ -------- -----------
Total investments 11,480,525 9,536,069 63,652 3,400,962
RECEIVABLES:
Contribution receivable from
Harris Corporation 1,116,112 - - -
Accrued interest and dividends 70,032 113,103 330 -
Securities sold - - - -
------------ ------------ -------- -----------
Total receivables 1,186,144 113,103 330 -
CASH AND CASH EQUIVALENTS (NOTE 2) 1,035,208 43,944 14,473 10
------------ ------------ --------- ------------
Total assets 13,701,877 9,693,116 78,455 3,400,972
LIABILITIES
Accrued expenses 5,127 - - -
Securities purchased 180,986 238,232 - -
------------ ------------ -------- -----------
Total liabilities 186,113 238,232 - -
------------ ------------ -------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $13,515,764 $ 9,454,884 $ 78,455 $ 3,400,972
=========== =========== =========== ===========
See accompanying notes to financial statements. 4
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9
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Equity Stable Harris
Index Value Growth Corporation Loan
Fund Fund Fund Stock Fund Fund Total
- ----------- ----------- ----------- ----------- ----------- -----------
$ 588,356 $ 4,951,437 $ 1,392,844 $ 207,621 $ - $31,621,466
- - - - 1,195,555 1,195,555
- ----------- ----------- ----------- ----------- ----------- -----------
588,356 4,951,437 1,392,844 207,621 1,195,555 32,817,021
- - - - - 1,116,112
755 26,290 5 18 - 210,533
- 1,824 - - - 1,824
- ----------- ----------- ----------- ----------- ----------- -----------
755 28,114 5 18 - 1,328,469
7,273 245,891 - 10,817 - 1,357,616
- ----------- ----------- ----------- ----------- ----------- -----------
596,384 5,225,442 1,392,849 218,456 1,195,555 35,503,106
731 - - - - 5,858
- - - - - 419,218
- ----------- ----------- ----------- ----------- ----------- -----------
731 - - - - 425,076
- ----------- ----------- ----------- ----------- ----------- -----------
$ 595,653 $ 5,225,442 $ 1,392,849 $ 218,456 $ 1,195,555 $35,078,030
=========== =========== =========== =========== =========== ===========
5
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10
HARRIS CORPORATION UNION RETIREMENT PLAN
Statement of Changes in Net Assets Available for Benefits
Year Ended June 30, 1996
- -------------------------------------------------------------------------------------------------------------------
Money Equity
Balanced Short-Term Market Income
Fund Bond Fund Fund Fund
------------ ------------ ---------- ----------
INCREASES:
Plan interest in Harris Corporation
Master Trust investment income $1,914,408 $ 521,467 $ 5,156 $ 982,655
Interest income - - - -
Cash contributions from Harris
Corporation under profit-
sharing program 1,444,426 - - -
Cash contributions under deferred income program:
From Harris Corporation 489,664 982,757 6,118 265,237
From plan participants 1,247,887 631,480 8,490 580,069
------------ ------------ ---------- ----------
5,096,385 2,135,704 19,764 1,827,961
NET PARTICIPANTS' TRANSFERS
BETWEEN FUNDS (211,268) (876,427) 40,670 796,688
DECREASES:
Benefits paid directly to
participants 309,621 295,433 - 44,974
Administrative expenses 49,185 28,560 336 2,535
------------ ------------ ---------- ----------
358,806 323,993 336 47,509
------------ ------------ ---------- ----------
NET INCREASE IN NET
ASSETS AVAILABLE FOR BENEFITS 4,526,311 935,284 60,098 2,577,140
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 13,515,764 9,454,884 78,455 3,400,972
------------ ------------ ---------- ----------
END OF YEAR $ 18,042,075 $ 10,390,168 $ 138,553 $5,978,112
============ ============ ========== ==========
See accompanying notes to financial statements. 6
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11
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Equity Stable Harris
Index Value Growth Corporation Loan
Fund Fund Fund Stock Fund Fund Total
- ---------- ----------- ---------- ----------- ---------- -----------
$ 222,682 $ 336,625 $ 493,116 $ 75,031 $ - $ 4,551,140
- - - - 98,667 98,667
- - - - - 1,444,426
118,760 278,404 144,485 218,698 - 2,504,123
209,295 896,737 322,871 70,790 - 3,967,619
- ---------- ----------- ---------- -------- ---------- -----------
550,737 1,511,766 960,472 364,519 98,667 12,565,975
613,445 (876,621) 375,685 26,243 111,585 -
41,707 165,742 2,240 191 27,069 886,977
1,355 8,744 3,050 - - 93,765
- ---------- ----------- ---------- -------- ---------- -----------
43,062 174,486 5,290 191 27,069 980,742
- ---------- ----------- ---------- -------- ---------- -----------
1,121,120 460,659 1,330,867 390,571 183,183 11,585,233
595,653 5,225,442 1,392,849 218,456 1,195,555 35,078,030
- ---------- ----------- ---------- -------- ---------- -----------
$1,716,773 $ 5,686,101 $2,723,716 $609,027 $1,378,738 $46,663,263
========== =========== ========== ======== ========== ===========
7
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12
HARRIS CORPORATION UNION RETIREMENT PLAN
Notes to Financial Statements
June 30, 1996 and 1995
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1. DESCRIPTION OF THE PLAN AND SIGNIFICANT ACCOUNTING POLICIES
The Harris Corporation Union Retirement Plan includes all domestic
employees of Harris Corporation covered by a collective bargaining
agreement.
The Harris Corporation Union Retirement Plan and the Harris Corporation
Retirement Plan share a common Profit-Sharing Program and Deferred Income
Savings Program. The Corporation's annual contribution to the Balanced
Fund under 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 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.
Participants are eligible to make elective contributions on a pre-tax or
after-tax basis during the first year of service.
Distributions from the Plan can be made in the event of death, disability,
termination of employment or financial hardship.
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 Plan. 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.
A participant's right to profit-sharing funds and employer matched
deferred income contribu tions 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 Plan 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.
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.
8
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13
HARRIS CORPORATION UNION RETIREMENT PLAN
Notes to Financial Statements
June 30, 1996 and 1995
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1. DESCRIPTION OF THE PLAN AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
In the event of termination of the Plan, the net assets of the Plan are to
be converted into cash and distributed in a lump sum to each participant
or beneficiary of a deceased participant based upon their beneficial
interest in the Plan, net of any participant loans outstanding.
Upon enrollment into the Plan, a participant may direct employer and
employee contributions in any of eight investment options. The investment
options are fully described in the "Employer Summary Plan Description".
Elections to change funds can be made once every month; 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.
The accounting records of the Plan are maintained on the accrual basis.
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 contribu tions and allocated
investment income less actual distribution 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.
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.
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 Trust fund. In both fiscal 1996 and 1995, Harris Corporation
elected to pay administrative expenses such as legal fees, tax counsel and
accounting fees. Trustee, investment manager fees and certain
administrative expenses were paid by the Plan.
2. 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.
9
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14
HARRIS CORPORATION UNION RETIREMENT PLAN
Notes to Financial Statements
June 30, 1996 and 1995
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2. TRANSACTIONS WITH PARTIES-IN-INTEREST, CONTINUED
Included in cash and cash equivalents at June 30, 1996 and 1995 are
858,738 and 1,125,055 shares, respectively, of BT Pyramid Directed Account
Cash Fund, with a fair value of $858,738 and $1,125,055, respectively.
Investments of the Master Trust include 48,102 shares of Bankers Trust
Small Capitalization Fund with a fair value of $27,568,416 at June 30,
1996.
At June 30, 1996 and 1995, 222,053 and 132,223 shares, respectively, of
Harris Corporation common stock were included in investments of the Harris
Corporation Master Trust.
3. 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 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.
At June 30, 1996 and 1995, the Plan's interest in the net assets of the
Master Trust was approximately 2.67% and 2.31%, respectively. Investment
income and administrative expenses relating to the Master Trust are
allocated to the individual plans based upon average monthly balances
invested by each plan.
Investments of the Master Trust are as follows:
1996 1995
-------------- --------------
Fair value as determined by quoted market prices:
U.S. government securities $ 238,229,856 $ 256,477,882
Corporate debt securities 128,320,993 118,257,194
Foreign debt securities 17,869,790 -
Corporate equity securities 702,688,555 295,431,424
Provident Endeavor Growth Fund - 87,249,847
T. Rowe Price Equity Income Fund - 193,232,584
Wells Fargo Bank Index Fund 174,934,990 178,768,644
Putnam New Opportunities Fund 114,490,640 -
-------------- --------------
1,376,534,824 1,129,417,575
Fair value as determined by investee company:
J.P. Morgan Real Estate Fund 29,203,028 26,304,218
Contract value:
Unallocated insurance contracts 196,103,471 213,703,017
-------------- --------------
$1,601,841,323 $1,369,424,810
============== ==============
10
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15
HARRIS CORPORATION UNION RETIREMENT PLAN
Notes to Financial Statements
June 30, 1996 and 1995
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3. INTEREST IN HARRIS CORPORATION MASTER TRUST, CONTINUED
Investment income for the Master Trust is as follows:
1996 1995
------------- ------------
Net appreciation (depreciation) in fair value as determined by quoted
market price:
U.S. government securities $ (1,744,855) $ 6,284,253
Corporate debt securities (2,812,728) 3,190,047
Foreign debt securities (408,567) -
Corporate equity securities 75,231,983 54,787,093
Provident Endeavor Growth Fund - 17,174,126
T. Rowe Price Equity Income Fund - 18,984,069
Wells Fargo Bank Index Fund 49,971,202 32,482,357
Putnam New Opportunities Fund 13,627,254 -
------------- ------------
133,864,289 132,901,945
Net appreciation (depreciation) in fair value as determined by investee
company:
J.P. Morgan Real Estate Fund 956,872 277,049
------------- ------------
134,821,161 133,178,994
Interest and dividends 86,597,258 63,014,155
------------- ------------
$ 221,418,419 $196,193,149
============= ============
4. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under
Section 401(a) of the Internal Revenue Code (IRC) and is, therefore, not
subject to tax under present income tax law. The Plan is required to
operate in conformity with the IRC to maintain its qualification. The plan
administrator is not aware of any course of action or series of events
that have occurred that might adversely affect the Plan's qualified
status.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements at June 30, 1996 and 1995 to Form 5500:
1996 1995
------------ ------------
Net assets available for benefits per the
financial statement $ 46,663,264 $ 35,078,030
Amounts allocated to withdrawing participants (146,374) (275,414)
------------ ------------
Net assets available for benefits per the
Form 5500 $ 46,516,890 $ 34,802,616
============ ============
11
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16
HARRIS CORPORATION UNION RETIREMENT PLAN
Notes to Financial Statements
June 30, 1996 and 1995
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5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500, CONTINUED
The following is a reconciliation of benefits paid to participants per the
financial statements for the year ended June 30, 1996 to Form 5500:
Benefits paid to participants per the financial statements $ 886,977
Add (deduct) amounts allocated to withdrawing participants:
End of year 146,374
Beginning of year (275,414)
----------
Benefits paid to participants per Form 5500 $ 757,937
==========
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to June 30 but not yet paid as of that date.
6. AMENDMENTS
The following amendments were made to the Plan during 1996.
- The eligibility period for participation in the Deferred Income Savings
Program was lifted, effective September 1. Employees are immediately
eligible to make pre-tax or after-tax contributions of 1%- 12% of
eligible compensation.
- Immediate participation was allowed in the Harris Stock Fund, effective
April 1. Employees are able to purchase Harris stock at a 30% discount.
- Allocation of contributions to investment options was changed to allow
allocations in 1% increments (versus 10%), effective March 1.
12
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17
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/ Edward T. Golitko
----------------------------
Edward T. Golitko
Plan Administrator
Date: December 20, 1996