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:
Lanier Worldwide, Inc. Savings Incentive 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
LANIER WORLDWIDE, INC.
SAVINGS INCENTIVE PLAN
Financial Statements
and Supplementary Information
June 30, 1998
3
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE 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......................................................................5-8
SUPPLEMENTARY INFORMATION:
Schedule of Assets Held for Investment Purposes......................................................9
Schedule of Reportable Transactions.................................................................10
- --------------------------------------------------------------------------------
4
INDEPENDENT AUDITOR'S REPORT
Pension and Retirement Committee
Lanier Worldwide, Inc. Savings Incentive Plan
Melbourne, Florida
We have audited the accompanying statements of net assets available for
benefits of the Lanier Worldwide, Inc. Savings Incentive 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.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules
contained on pages 9 and 10 as of and for the year ended June 30, 1998 are
presented for purposes 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 are not a required part of the financial
statements. The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
1998 financial statements taken as a whole.
/s/ Bray, Beck & Koetter
Melbourne, Florida
November 11, 1998
- --------------------------------------------------------------------------------
1
5
FINANCIAL STATEMENTS
6
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
Statements of Net Assets Available for Benefits
June 30, 1998 and 1997
- --------------------------------------------------------------------------------
1998 1997
------------ ------------
ASSETS
INVESTMENTS, AT FAIR VALUE (NOTE 5):
Registered investment companies:
T. Rowe Price Summit Cash Reserves Fund $ 16,665,234 $ 15,799,184
T. Rowe Price Equity Index 500 Fund 65,929,024 47,857,599
T. Rowe Price Short Term Bond Fund 2,076,858 1,846,392
T. Rowe Price New America Growth Fund 36,898,829 26,655,958
T. Rowe Price Balanced Fund 13,388,325 10,650,401
T. Rowe Price International Stock Fund 4,721,267 4,166,626
Harris Corporation common stock 3,192,571 1,459,535
Participant loans 6,257,885 6,230,045
------------ ------------
Total investments 149,129,993 114,665,740
RECEIVABLES:
Employer contributions 145,331 69,186
Employee contributions 398,794 300,481
------------ ------------
Total receivables 544,125 369,667
LIABILITIES - -
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $149,674,118 $115,035,407
============ ============
See accompanying notes to financial statements.
7
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended June 30, 1998
- --------------------------------------------------------------------------------
T. Rowe Price T. Rowe Price T. Rowe Price
Summit Cash Equity Index Short Term
Reserves Fund 500 Fund Bond Fund
------------ ------------ ------------
INCREASES:
Investment income $ 831,543 $ 1,086,682 $ 110,665
Contributions from employer 586,057 1,304,995 101,807
Contributions from employees 1,356,899 4,317,091 353,942
------------ ------------ ------------
2,774,499 6,708,768 566,414
Net transfers between funds (300,557) 2,051,524 (127,344)
DECREASES:
Benefits paid directly to participants 1,602,624 4,393,848 215,046
Administrative expenses 1,422 3,791 357
------------ ------------ ------------
1,604,046 4,397,639 215,403
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF
INVESTMENTS (NOTE 5) - 13,774,303 10,613
------------ ------------ ------------
Net increase in net assets available for benefits 869,896 18,136,956 234,280
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 15,851,538 47,961,177 1,856,476
------------ ------------ ------------
END OF YEAR $ 16,721,434 $ 66,098,133 $ 2,090,756
============ ============ ============
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
3
8
- -----------------------------------------------------------------------------------------------------
T. Rowe Price T. Rowe Price T. Rowe Price
New America Balanced International Harris Loan
Growth Fund Fund Stock Fund Stock Fund Fund Total
- ------------ ------------ ------------ ------------ ------------ ------------
$ 1,491,211 $ 452,947 $ 220,356 $ 47,624 $ 503,184 $ 4,744,212
1,258,064 439,669 246,848 965,979 - 4,903,419
4,394,847 1,567,564 1,023,149 930,844 - 13,944,336
- ------------ ------------ ------------ ------------ ------------ ------------
7,144,122 2,460,180 1,490,353 1,944,447 503,184 23,591,967
(863,641) (336,389) (517,820) (417) 94,644 -
3,020,680 933,764 387,138 198,087 569,988 11,321,175
3,327 1,307 692 6 - 10,902
- ------------ ------------ ------------ ------------ ------------ ------------
3,024,007 935,071 387,830 198,093 569,988 11,332,077
7,041,366 1,567,300 (21,639) 6,878 - 22,378,821
- ------------ ------------ ------------ ------------ ------------ ------------
10,297,840 2,756,020 563,064 1,752,815 27,840 34,638,711
26,758,287 10,691,250 4,190,944 1,495,690 6,230,045 115,035,407
- ------------ ------------ ------------ ------------ ------------ ------------
$ 37,056,127 $ 13,447,270 $ 4,754,008 $ 3,248,505 $ 6,257,885 $149,674,118
============ ============ ============ ============ ============ ============
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4
9
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
Notes to Financial Statements
June 30, 1998
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Lanier Worldwide, Inc. Savings
Incentive 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 Lanier Worldwide, Inc. Savings Incentive Plan (the "Plan") is a
defined contribution plan available to substantially all permanent
employees of Lanier Worldwide, Inc. ("the Company and Sponsor"). It is
subject to the provisions of the Employee Income Security Act of 1974
(ERISA).
Contributions
-------------
Participants can contribute up to 15% of their salary in 1% increments.
Upon the later of completion of one year of service or attainment of
age 21, the Company matches 50% of the participant's contribution up to
a maximum of 6% of compensation (3% prior to July 1, 1997).
Payment of Benefits
-------------------
Distributions from the Plan may be made only in the event of death,
disability or termination of employment.
Participant Loans
-----------------
Participants may borrow against the vested portion of their accounts
from a minimum of $500 up to a maximum of $50,000 or 50% of the vested
portion of a participant's account, whichever is less. Loans made under
the Plan range up to five years.
Vesting and Forfeitures
-----------------------
All participants' contributions and earnings thereon are 100% vested.
Company contributions to participants' accounts vest 20% per year of
service, until a participant becomes fully vested after five years of
service. Company contributions become fully vested regardless of years
of service upon retirement, total and permanent disability or upon
death of the participant. Forfeitures of terminated participants'
nonvested accounts reduce the matching contributions of the Company.
Plan Termination
----------------
Under provisions of the Plan, the Company reserves the right to amend
or terminate the Plan at any time. If the plan is terminated, each
participant's account will become fully vested.
Investment Options
------------------
Participants may allocate contributions among six T. Rowe Price Mutual
Funds and the Harris Stock Fund. Participant contributions to the
Harris Stock Fund are limited to 1% of compensation. Shares of Harris
Corporation common stock are purchased or contributed by the Company at
a discount established from time to time by the Company. Amounts may
not be transferred from other funds to the Harris Stock Fund.
Contributions must remain in the fund for a minimum of 36 months.
T. Rowe Price Retirement Plan Services, Inc. ("T. Rowe Price") is the
Plan's Trustee, record keeper, and investment manager.
- --------------------------------------------------------------------------------
5
10
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
Notes to Financial Statements
June 30, 1998
- --------------------------------------------------------------------------------
2. 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 use of estimates regarding
certain types of assets, liabilities, revenues and expenses. Such
estimates relate primarily to unsettled transactions and events as of
the date of the financial statements. Accordingly, upon settlement,
actual results may differ from estimated amounts.
Investment Valuation and Income Recognition
-------------------------------------------
Investments in securities are stated at fair value as determined by
quoted market prices as of the close of business on the last day of the
plan year. Investments for which a quoted market value is not available
are stated at fair values reported by the trustee or investee company.
Participant loans are stated at cost.
The net appreciation (depreciation) in fair value of investments
reflected in the statements of changes in net assets available for plan
benefits represents the sum of the unrealized appreciation or
depreciation in the aggregate fair value of investments and the
realized gain or loss on the sale of investments.
Administrative Expenses
-----------------------
Unless otherwise elected by the Company, 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 Plan. In fiscal 1998, the Company elected to pay certain
administrative expenses such as legal fees, tax counsel and accounting
fees. Administrative expenses, which consist of Trustee, record keeping
and investment manager fees and commissions paid to T. Rowe Price, were
paid by the Plan.
Payment of Benefits
-------------------
Benefits are recorded when paid.
3. PLAN AMENDMENT
The Plan was amended and restated as of July 1, 1997. Changes to the
prior Plan included (I) provision for the daily valuation of
participants' accounts, (ii) provision for participants to change their
investment elections daily, (iii) increase to the rate of matching
contributions from 50% of the first 3% of employee deferrals to 50% of
the first 6% and (iv) changes to reflect applicable requirements
imposed on qualified plans under the Small Business Job Protection Act
of 1996 and the Uniformed Services Employment and Reemployment Rights
Act of 1994.
- --------------------------------------------------------------------------------
6
11
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
Notes to Financial Statements
June 30, 1998
- --------------------------------------------------------------------------------
4. INCOME TAX STATUS
The Plan obtained its latest determination letter on August 22, 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 that date and is
currently awaiting a new 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.
5. INVESTMENTS
At June 30, 1998 and 1997, investments with a fair value representing
5% or more of the Plan's net assets were as follows:
1998
----------------
T. Rowe Price Summit Cash Reserves Fund $ 16,665,234
T. Rowe Price Equity Index 500 Fund 65,929,024
T. Rowe Price New America Growth Fund 36,898,829
T. Rowe Price Balanced Fund 13,388,325
1997
----------------
T. Rowe Price Summit Cash Reserves Fund $ 15,799,184
T. Rowe Price Equity Index 500 Fund 47,857,599
T. Rowe Price New America Growth Fund 26,655,958
T. Rowe Price Balanced Fund 10,650,401
Participant Loans 6,230,045
During the year ended June 30, 1998, the Plan's investments (including
investments bought and sold as well as held during the year)
appreciated (depreciated) in fair value by $22,378,821 as follows:
Net Appreciation
(Depreciation) in
Fair Value
----------------
Fair value as determined by quoted market price:
T. Rowe Price Equity Index 500 Fund $ 13,774,303
T. Rowe Price Short-term Bond Fund 10,613
T. Rowe Price New America Growth Fund 7,041,366
T. Rowe Price Balanced Fund 1,567,300
T. Rowe Price International Stock Fund (21,639)
Harris Stock Fund 6,878
----------------
$ 22,378,821
================
- --------------------------------------------------------------------------------
7
12
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
Notes to Financial Statements
June 30, 1998
- --------------------------------------------------------------------------------
6. TRANSACTIONS WITH PARTIES-IN-INTEREST
Under Department of Labor regulations for reporting and disclosure, an
employee benefit plan such as the Lanier Worldwide, Inc. Savings
Incentive Plan is required to report investment transactions and
compensation paid to parties-in-interest.
The term "party-in-interest" is broadly defined, but would include
Lanier Worldwide, Inc.; Harris Corporation, Lanier Worldwide, Inc.'s
parent company; T. Rowe Price (Note 2) and any person or corporation
that renders services to the Plan. At June 30, 1998 the Plan held
71,442 shares of Harris Corporation common stock. All other investments
were held in T. Rowe Price mutual funds.
7. YEAR 2000 ISSUE (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 and recordkeeper, as
well as their vendors and suppliers. Lanier Worldwide, Inc. ("Company")
has determined its needs to replace or modify several of its software
systems and is in the process of replacing or outsourcing many of its
time- sensitive 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.
- --------------------------------------------------------------------------------
8
13
SCHEDULE G | FINANCIAL SCHEDULES | OMB No. 1210-0016
(FORM 5500) | | -----------------------
| This schedule may be filed as an attachment to the |
Department of the Treasury | Annual Return/Report Form 5500 under Section 104 of the | 1997
Internal Revenue Service | Employee Retirement Income Security Act |
| of 1974, referred to as ERISA | -----------------------
--------- | | THIS FORM IS OPEN
| SEE THE INSTRUCTIONS FOR ITEM 27 OF THE FORM 5500 | TO PUBLIC INSPECTION
Department of Labor | |
Pension and Welfare Benefits Administration | - ATTACH TO FORM 5500 |
- ------------------------------------------------------------------------------------------------------------------------------------
For calendar plan year 1997 or fiscal year beginning July 1, 1997, and ending June 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Name of plan sponsor as shown on line 1a of Form 5500 | EMPLOYER IDENTIFICATION NUMBER
Lanier Worldwide, Inc. | 59 | 0778222
- ------------------------------------------------------------------------------------------------------------------------------------
Name of plan Lanier Worldwide, Inc. | Three-digit
Savings Incentive Plan | plan number - 0 | 0 | 1
- ------------------------------------------------------------------------------------------------------------------------------------
PART I SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES-SEE FORM 5500, ITEM 27a.
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Identity of issue, borrower, Description of investment including maturity date, Cost Current Value
lessor, or similar party rate of interest, collateral, par or maturity value
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Participant Loan 0.0650/0.0950 6,257,885
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Harris Stock Fund Restricted Company Stock 2,925,663 3,131,400
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Harris Stock Fund Unrestricted Company Stock 60,393 61,171
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
International Stock Fund Mutual Fund 4,216,671 4,721,267
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Equity Index 500 Fund Mutual Fund 36,408,025 65,929,025
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Short Term Bond Fund Mutual Fund 2,104,763 2,076,858
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
New America Growth Fund Mutual Fund 26,076,119 36,898,829
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Balanced Fund Mutual Fund 10,270,094 13,388,325
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
Summit Cash Reserves Mutual Fund 16,665,234 16,665,234
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
- ------------------------------------- ------------------------------------------------------ ----------------- ---------------------
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- ------------------------------------------------------------------------------------------------------------------------------------
FOR PAPERWORK REDUCTION ACT NOTICE, SEE THE INSTRUCTIONS FOR FORM 5500. MGA SCHEDULE G (FORM 5500) 1997
9
- --------------------------------------------------------------------------------
14
EIN 59-0778222 / PN 001
Schedule G (Form 5500) 1997 Page 3
- ------------------------------------------------------------------------------------------------------------------------------------
PART IV SCHEDULE OF LEASES IN DEFAULT OR CLASSIFIED AS UNCOLLECTIBLE--SEE FORM 5500, ITEM 27c.
- --- ------------- -------------------- --------------------------- ---------- -------- ------------ ----------- -------- -----------
(d)
(c) Terms and description (g) (h)
(b) Relationship (type of property, (f) Gross rental Expenses (j)
(a) Identity of to plan, location and date it was (e) Current receipts paid during (i) Amount in
lessor/lessee employer, employee purchased, terms Original value at during the the plan Net arrears
organization, regarding rent, taxes, Cost time of plan year year receipts
or other insurance, repairs, lease
party-in interest expenses, renewal options,
date property was leased)
- --- ------------- -------------------- --------------------------- ---------- -------- ------------ ----------- -------- -----------
- --- ------------- -------------------- --------------------------- ---------- -------- ------------ ----------- -------- -----------
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- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PART V SCHEDULE OF REPORTABLE TRANSACTIONS--SEE FORM 5500, LINE 27d.
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
(b) (f) (h)
Description of Expense (g) Current value
(a) asset (include (c) incurred Cost of of asset on (i)
Identity of party interest rate and Purchase (d) (e) with asset transaction Net gain or
involved maturity in case price Selling price Lease rental transaction date (loss)
of a loan)
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
EXF Mutual Fund 10,414,325 10,414,325 10,414,325
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
EXF Mutual Fund (3,932,512) (6,117,201) (3,932,512) (6,117,201) 2,184,689
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
NAG Mutual Fund 9,489,124 9,489,124 9,489,124
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
NAG Mutual Fund (4,893,099) (6,287,619) (4,893,099) (6,287,619) 1,394,520
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
SCR Mutual Fund 5,896,680 5,896,680 5,896,680
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
SCR Mutual Fund (5,030,630) (5,030,630) (5,030,630) (5,030,630) 0
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
- ------------------ ------------------- ----------- ------------- ------------- ------------ ---------- -------------- -------------
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10
- --------------------------------------------------------------------------------
15
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.
Lanier Worldwide, Inc.
Savings Incentive Plan
/s/ Jeffrey Pratt Morrill
--------------------------------
Jeffrey Pratt Morrill
Plan Administrator
Date: December 22, 1998