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, 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 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, 1997 3 HARRIS CORPORATION UNION RETIREMENT PLAN Table of Contents June 30, 1997 PAGE - ----------------------------------------------------------------------------- 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..........................................8-11 4 [LOGO] BRAY, BECK & KOETTER CERTIFIED PUBLIC ACCOUNTANTS, P.A. 410 Indian River Avenue, Suite A Post Office Box 6583 Titusville, Florida 32782-6583 (407) 269-0732 FAX (407) 264-0925 39 South Atlantic Avenue, Suite A Post Office Box 321057 Cocoa Beach, Florida 32932-1057 (407) 783-8321 FAX (407) 799-0925 1901 South Harbor City Blvd One Harbor Place Suite 500A Post Office Box 249 Melbourne, Florida 32902-0249 (407) 676-1440 FAX (407) 984-8018 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, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended June 30, 1997. 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, 1997 and 1996, and the changes in its net assets available for benefits for the year ended June 30, 1997, in conformity with generally accepted accounting principles. /s/ Bray, Beck & Koetter Melbourne, Florida October 10, 1997 1 5 FINANCIAL STATEMENTS 6 HARRIS CORPORATION UNION RETIREMENT PLAN Statements of Net Assets Available for Benefits June 30, 1997 and 1996 - -------------------------------------------------------------------------------- June 30, 1997 ----------------------------------------------------------------------- Money Equity Balanced Short-Term Market Income Fund Bond Fund Fund Fund ----------- ----------- ----------- ----------- ASSETS INVESTMENTS (Note 3): Plan interest in Harris Corporation Master Trust $21,677,882 $ 9,612,177 $ 316,164 $ 8,336,928 Participant loans -- -- -- -- ----------- ----------- ----------- ----------- Total investments 21,677,882 9,612,177 316,164 8,336,928 RECEIVABLES: Contributions receivable from Harris Corporation 1,532,194 -- -- -- Accrued interest and dividends 95,066 114,090 2,276 23,435 Securities sold 130,923 662,498 -- 1,005 ----------- ----------- ----------- ----------- Total receivables 1,758,183 776,588 2,276 24,440 CASH AND CASH EQUIVALENTS (Note 2) 216,538 102,182 16,783 359,803 ----------- ----------- ----------- ----------- Total assets 23,652,603 10,490,947 335,223 8,721,171 LIABILITIES Accrued expenses 10,580 2,817 338 315 Securities purchased 203,305 257,767 26,515 22,889 Outstanding options 61,405 -- -- -- ----------- ----------- ----------- ----------- Total liabilities 275,290 260,584 26,853 23,204 ----------- ----------- ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $23,377,313 $10,230,363 $ 308,370 $ 8,697,967 =========== =========== =========== =========== 2 7 ---------------------------------------------------------------------------------------------------------------- Equity Stable Harris Index Value Growth Corporation Loan Fund Fund Fund Stock Fund Fund Total ------------ ----------- ----------- ----------- ---------- ----------- $ 3,477,539 $ 6,399,698 $ 3,004,508 $ 1,151,030 $ -- $53,975,926 -- -- -- -- 1,862,671 1,862,671 ------------ ----------- ----------- ----------- ---------- ----------- 3,477,539 6,399,698 3,004,508 1,151,030 1,862,671 55,838,597 -- -- -- -- -- 1,532,194 53 35,799 1,604 165 -- 272,488 -- 62 6,128 5,167 -- 805,783 ------------ ----------- ----------- ----------- ---------- ----------- 53 35,861 7,732 5,332 -- 2,610,465 114,442 226,889 48,057 33,684 -- 1,118,378 ------------ ----------- ----------- ----------- ---------- ----------- 3,592,034 6,662,448 3,060,297 1,190,046 1,862,671 59,567,440 166 1,938 2,429 -- -- 18,583 -- -- 6,440 33,345 -- 550,261 -- -- -- -- -- 61,405 ------------ ----------- ----------- ----------- ---------- ----------- 166 1,938 8,869 33,345 -- 630,249 ------------ ----------- ----------- ----------- ---------- ----------- $ 3,591,868 $ 6,660,510 $ 3,051,428 $ 1,156,701 $ 1,862,671 $58,937,191 ============ =========== =========== =========== =========== =========== Continued 3 8 HARRIS CORPORATION UNION RETIREMENT PLAN Statements of Net Assets Available for Benefits - Continued June 30, 1997 and 1996 - -------------------------------------------------------------------------------- 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. 4 9 - ------------------------------------------------------------------------------- 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 =========== =========== =========== =========== =========== =========== 5 10 HARRIS CORPORATION UNION RETIREMENT PLAN Statement of Changes in Net Assets Available for Benefits Year Ended June 30, 1997 - -------------------------------------------------------------------------------- Money Equity Balanced Short-Term Market Income Fund Bond Fund Fund Fund ------------ ------------ ------------ ------------ INCREASES: Plan interest in Harris Corporation Master Trust investment income $ 3,545,199 $ 649,639 $ 10,151 $ 1,808,091 Interest income -- -- -- -- Cash contributions from Harris Corporation under profit- sharing program 1,532,194 -- -- -- Cash contributions under deferred income program: From Harris Corporation 373,796 431,021 7,302 305,855 From plan participants 933,272 581,831 28,523 663,712 ------------ ------------ ------------ ------------ 6,384,461 1,662,491 45,976 2,777,658 NET PARTICIPANTS' TRANSFERS BETWEEN FUNDS (252,299) (1,284,399) 165,105 366,541 DECREASES: Benefits paid directly to participants 718,737 508,464 40,422 334,400 Administrative expenses 78,187 29,433 842 89,944 ------------ ------------ ------------ ------------ 796,924 537,897 41,264 424,344 ------------ ------------ ------------ ------------ NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 5,335,238 (159,805) 169,817 2,719,855 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 18,042,075 10,390,168 138,553 5,978,112 ------------ ------------ ------------ ------------ END OF YEAR $ 23,377,313 $ 10,230,363 $ 308,370 $ 8,697,967 ============ ============ ============ ============ See accompanying notes to financial statements. 6 11 - -------------------------------------------------------------------------------- Equity Stable Harris Index Value Growth Corporation Loan Fund Fund Fund Stock Fund Fund Total - ----------- ----------- ----------- ----------- ----------- ----------- $ 785,145 $ 387,206 $ 362,350 $ 292,830 $ -- $ 7,840,611 -- -- -- -- 118,140 118,140 -- -- -- -- -- 1,532,194 166,535 216,043 158,488 186,866 -- 1,845,906 311,972 505,184 300,420 106,422 -- 3,431,336 - ----------- ----------- ----------- ----------- ----------- ----------- 1,263,652 1,108,433 821,258 586,118 118,140 14,768,187 644,118 457,699 (464,650) (27,803) 395,688 -- 30,053 580,583 17,399 10,641 29,895 2,270,594 2,622 11,140 11,497 -- -- 223,665 - ----------- ----------- ----------- ----------- ----------- ----------- 32,675 591,723 28,896 10,641 29,895 2,494,259 - ----------- ----------- ----------- ----------- ----------- ----------- 1,875,095 974,409 327,712 547,674 483,933 12,273,928 1,716,773 5,686,101 2,723,716 609,027 1,378,738 46,663,263 - ----------- ----------- ----------- ----------- ----------- ----------- $ 3,591,868 $ 6,660,510 $ 3,051,428 $ 1,156,701 $ 1,862,671 $58,937,191 =========== =========== =========== =========== =========== =========== 7 12 HARRIS CORPORATION UNION RETIREMENT PLAN Notes to Financial Statements June 30, 1997 and 1996 - ------------------------------------------------------------------------------- 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 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 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 13 HARRIS CORPORATION UNION RETIREMENT PLAN Notes to Financial Statements June 30, 1997 and 1996 - ------------------------------------------------------------------------------- 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 contributions 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. 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 1997 and 1996, 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. 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. 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 14 HARRIS CORPORATION UNION RETIREMENT PLAN Notes to Financial Statements June 30, 1997 and 1996 - ------------------------------------------------------------------------------- 2. TRANSACTIONS WITH PARTIES-IN-INTEREST, CONTINUED Included in cash and cash equivalents at June 30, 1997 and 1996 are 1,118,378 and 858,738 shares, respectively, of BT Pyramid Directed Account Cash Fund, with a fair value of $1,118,378 and $858,738, 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, 1997 and 1996, 306,916 and 222,053 shares with a fair market value of $25,780,944 and $13,545,233, 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, 1997 and 1996, the Plan's interest in the net assets of the Master Trust was approximately 2.76% and 2.67%, 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: 1997 1996 --------------- --------------- Fair value as determined by quoted market prices: U.S. government securities $ 193,034,127 $ 238,229,856 Corporate debt securities 230,525,352 128,320,993 Foreign debt securities 10,191,484 17,869,790 Corporate equity securities 787,014,217 625,099,108 Morgan Stanley International Magnum Fund 60,206,396 50,021,031 Bankers Trust Pyramid Small Capitalization Fund -- 27,568,416 Wells Fargo Bank Index Fund 316,512,010 174,934,990 Putnam New Opportunities Fund 94,828,345 114,490,640 -------------- -------------- 1,692,311,931 1,376,534,824 Fair value as determined by investee company: J.P. Morgan Real Estate Fund 32,065,098 29,203,028 Contract value: Unallocated insurance contracts 205,927,404 196,103,471 -------------- -------------- $1,930,304,433 $1,601,841,323 ============== ============== 10 15 HARRIS CORPORATION UNION RETIREMENT PLAN Notes to Financial Statements June 30, 1997 and 1996 - -------------------------------------------------------------------------------- 3. INTEREST IN HARRIS CORPORATION MASTER TRUST, CONTINUED Investment income of the Master Trust for the year ended June 30, 1997 is as follows: Net appreciation (depreciation) in fair value as determined by quoted market price: U.S. government securities $ 3,056,900 Corporate debt securities 563,844 Foreign debt securities 1,056,480 Corporate equity securities 185,055,922 Morgan Stanley International Magnum Fund 9,385,047 Bankers Trust Pyramid Small Capitalization Fund (5,459,509) Wells Fargo Bank Index Fund 68,798,654 Putnam New Opportunities Fund 3,539,599 ------------- 265,996,937 Net appreciation (depreciation) in fair value as determined by investee company: J.P. Morgan Real Estate Fund 666,887 ------------- 266,663,824 Interest and dividends 64,503,167 ------------- $ 331,166,991 ============= 4. INCOME TAX STATUS The plan obtained its latest determination letter on February 3, 1995, 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 has been amended since receiving the determination letter. However, the plan administrator and the plan's tax counsel believe that the plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the plan was qualified and the related trust was tax-exempt as of the financial statement date. 11 16 SIGNATURES The Harris Coporation Union Retirement 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 Union Retirement Plan /s/ Edward T. Golitko ------------------------- Edward T. Golitko Plan Administrator Date: December 17, 1996