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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1994 COMMISSION FILE NUMBER 1-3863
HARRIS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 34-0276860
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(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
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1025 W. NASA Boulevard
Melbourne, Florida 32919
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(407) 727-9100
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, par value $1 per share New York Stock Exchange, Inc.
7 3/4% Sinking Fund Debentures due 2001 New York Stock Exchange, Inc.
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Section 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. /X/
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of August 31, 1994.
$1,642,340,000
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of August 31, 1994.
39,391,006 Shares
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement dated September 15, 1994
(Incorporated by Reference into Part III).
<PAGE> 2
PART I
ITEM 1. BUSINESS
THE COMPANY
Harris Corporation was incorporated in Delaware in 1926 as the successor to
three companies founded in the 1890's. The executive offices of the Company are
located at 1025 W. NASA Boulevard, Melbourne, Florida 32919, and the telephone
number is (407) 727-9100.
Harris Corporation, along with its subsidiaries (hereinafter called
"Harris" or the "Company"), is a worldwide company focused on four core
businesses: advanced electronic systems, semiconductors, communications and an
office equipment distribution network.
The Company's four core businesses were carried out during fiscal 1994
through three business sectors and a subsidiary, which correspond to its
business segments used for financial reporting purposes: Electronic Systems
Sector, Semiconductor Sector, Communications Sector and Lanier Worldwide, Inc.
Harris structures its operations primarily around the markets it serves. Its
operating divisions, which are the basic operating units, have been organized on
the basis of technology and markets. For the most part, each operating division
has its own marketing, engineering, manufacturing and service organizations.
Reference is made to the Note Business Segments in the Notes to Financial
Statements for further information with respect to business sectors and the
subsidiary.
Total sales in 1994 increased to $3.3 billion from $3.1 billion a year
earlier. Total sales in the United States increased 6.0 percent, and
international sales, which amounted to 29 percent of the corporate total,
increased 11.9 percent. Net Income increased .6 percent to $111.8 million from
$111.1 million. Income from continuing operations before income taxes increased
to $193.5 million in 1994 from $169.8 million in 1993. Results for fiscal 1994
included an $11.5 million after-tax charge resulting from the Company's
write-off of securities received from the 1990 sale of a discontinued business
and a $10.1 million one-time after-tax charge for a cumulative effect of a
change in accounting principle.
The Company's three business sectors and the subsidiary and their principal
products are as follows:
Electronic Systems Sector: engages in advanced research, and develops,
designs and produces advanced information processing and communication systems
and software for defense applications, air traffic control, avionics, satellite
communications, space exploration, mobile radio networks, simulation, energy
management, law enforcement, electronic systems testing, and newspaper
composition.
Semiconductor Sector: produces advanced analog, digital and mixed-signal
integrated circuits and discrete semiconductors for power, signal processing,
data-acquisition, and logic applications for automotive systems, wireless
communications, telecommunications line cards, video and imaging systems,
industrial equipment, computer peripherals, and military and aerospace systems.
Communications Sector: produces broadcast, radio-communication, and
telecommunication products and systems, including transmitters and studio
equipment for radio and TV, HF, VHF and UHF radio-communication equipment,
microwave radios, digital telephone switches, telephone subscriber-loop
equipment, and in-building paging equipment.
Lanier Worldwide, Inc.: sells, services, supports and provides supplies for
copying systems, facsimile systems and networks, dictation systems,
optical-based electronic-image management systems, continuous recording systems
and PC-based health care management systems.
The financial results shown in the tables below are presented to comply
with current financial accounting standards relating to business segment
reporting. Information concerning the identifiable assets of the Company's
business segments is contained in the Note Business Segments in the Notes to
Financial Statements. In calculating operating profit, allocations of certain
expenses among the business segments involve the exercise of business judgment.
Intersegment sales, which are insignificant, are accounted for at prices
comparable to those paid by unaffiliated customers.
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<TABLE>
NET SALES AND OPERATING PROFIT BY BUSINESS SEGMENT
(DOLLARS IN MILLIONS)
NET SALES
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YEAR ENDED ELECTRONIC SEMI- COMMUNI- LANIER
JUNE 30 SYSTEMS CONDUCTOR CATIONS WORLDWIDE TOTAL
----------------------- ---------- -------- -------- ---------- ---------
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1992................... $1,016.9 $584.5 $495.6 $907.0 $ 3,004.0
1993................... 1,042.1 590.8 544.2 922.0 3,099.1
1994................... 1,128.9 635.3 628.2 943.7 3,336.1
</TABLE>
OPERATING PROFIT
<TABLE>
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YEAR ENDED ELECTRONIC SEMI- COMMUNI- LANIER CORPORATE INTEREST
JUNE 30 SYSTEMS CONDUCTOR CATIONS WORLDWIDE EXPENSE EXPENSE TOTAL
----------------------- ------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1992................... $100.9 $(14.4 ) $46.0 $83.9 $(25.4 ) $(66.0 ) $125.0
1993................... 98.9 44.4 43.9 84.2 (41.7 ) (59.9 ) 169.8
1994................... 101.3 70.2 57.6 89.8 (67.1 )* (58.3 ) 193.5
</TABLE>
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*Corporate expense in 1994 includes a $17.8 million charge resulting from the
write-off of securities received from the 1990 sale of a discontinued business.
ELECTRONIC SYSTEMS
The Electronic Systems Sector of Harris is composed of several operating
divisions and is engaged in advanced research, development, design and
production of advanced information processing and communication systems and
sub-systems for government and commercial organizations in the United States and
overseas. Applications of the sector's state-of-the-art technologies include air
traffic control, avionics, communications, space exploration, mobile radio
networks, energy management, electronics systems testing, newspaper composition
and information management systems.
The Electronic Systems Sector is a major supplier of advanced-technology
and electronic systems to the United States Department of Defense, the Federal
Aviation Administration, National Aeronautics and Space Administration, Federal
Bureau of Investigation and other federal and local government agencies,
aircraft manufacturers, electric utilities, newspapers and publishing houses.
Sales in fiscal 1994 for this business segment increased 8.3 percent to
$1,128.9 million from $1,042.1 million in fiscal 1993. Operating profit of
$101.3 million increased from $98.9 million in the previous year. This sector
contributed 34 percent of Company sales in 1994 and 1993.
The sector is the leading supplier of air-traffic control communication
systems. The sector is also a major supplier of custom aircraft and spaceborne
communication and information processing systems, a leading supplier of
terrestrial and satellite communication systems and a preeminent supplier of
super-high-frequency military satellite ground terminals for the Department of
Defense.
The sector is a major supplier of custom ground-based systems and software
designed to collect, store, retrieve, process, analyze, display and distribute
information for government, defense and law enforcement applications, including
meteorological data processing systems and range management information systems.
The sector also provides computer controlled electronic maintenance, logistic,
simulation and test systems for military aircraft, ships and ground vehicles.
The sector is a worldwide supplier of energy management and distribution
automation systems for electric utilities and information-processing systems for
newspapers and publishing houses.
Most of the sales of this sector are made directly or indirectly to the
United States government under contracts or subcontracts containing standard
government clauses providing for redetermination of profits, if applicable, and
for termination for the convenience of the government or for default of the
contractor. These
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sales consist of a variety of contracts and programs with various governmental
agencies, with no single program accounting for 10 percent or more of total
Harris sales.
The backlog of unfilled orders for this segment of Harris' business was
$530 million at June 30, 1994, substantially all of which is expected to be
filled during the 1995 fiscal year, compared with $593 million a year earlier.
SEMICONDUCTOR
The Semiconductor Sector of the Company produces analog, digital and
mixed-signal integrated circuits and discrete and intelligent-power
semiconductors for data-acquisition, signal processing, logic and power
applications that demand the highest levels of performance in terms of speed,
precision, low power consumption and reliability, often in harsh environments.
Sales in fiscal 1994 for this business segment increased 7.5 percent to
$635.3 million from $590.8 million in fiscal 1993. The sector's operating profit
was $70.2 million in fiscal 1994, compared with $44.4 milion in fiscal 1993. The
sector contributed 19 percent of Company sales in fiscal 1994 and 1993.
The sector produces discrete-power products, including MOS (metal oxide
semiconductors) power devices, transistors, rectifiers, power control circuits
and transient suppression products. The sector pioneered development of
"intelligent-power" technology which permits the combination of analog, logic
and power circuits on the same chip. Such products are widely used in automotive
electronic systems, such as automotive fuel injection systems, anti-lock braking
and engine control, and industrial motor control.
The sector is a major supplier of devices which address the needs of signal
processing applications, including linears, switches, multiplexers, data
conversion and digital signal processing chips. In addition, the sector is a
leader in mixed-signal telecommunication line card applications, including SLICs
(subscriber line interface circuits), CODECs, and cross-point switches used in
private-branch-exchange (PBX) systems and of other circuits for cellular
communications, high resolution graphic monitors, broadcast video and military
radar systems.
The sector is a major supplier of integrated circuits and discrete devices
to the military and aerospace markets, with an emphasis on commercial and
military space applications. The sector is the leading supplier of
radiation-hardened circuits. The sector's custom, semicustom and standard
integrated circuits are based on CMOS (complementary metal oxide semiconductor),
SOS (silicon-on-sapphire), SOI (silicon-on-insulator), bipolar analog and power
analog/digital process technologies.
The sector is also a leading supplier of custom and semicustom integrated
circuits, known as application specific integrated circuits (ASICs). These
circuits are designed for high-performance military, space, automotive and
industrial applications.
Principal customers for the products of this sector include video imaging,
computer, communication, telephone, industrial, medical and other electronic
equipment manufacturers, automobile manufacturers, defense contractors and U.S.
government agencies. In general, these products are sold directly to customers
through a worldwide sales organization, which includes independent
manufacturers' representatives, and to distributors, who, in turn, resell to
their customers. Internationally, this sector also sells through distributors.
See "International Business."
The integrated circuit manufacturing technology and integrated circuit
industry is characterized by rapid advances in product performance technology.
Semiconductor technology is vital to the equipment and electronic systems
designed and manufactured by the Electronic Systems Sector and Communications
Sector of the Company. Harris is a party to technology exchange agreements with
other companies to develop new and expanded technologies.
The backlog of unfilled orders for this segment of Harris' business was
$298 million at June 30, 1994, substantially all of which is expected to be
filled during the 1995 fiscal year, compared with $300 million a year earlier.
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COMMUNICATIONS
The Communications Sector of the Company designs, manufactures, and sells
products characterized by three principal communication technologies: broadcast,
including radio and television products and transmission systems; two-way radio,
including high-frequency (HF), very high frequency (VHF) and ultra-high
frequency (UHF) products, and complete turnkey communication systems; and
telecommunications, including microwave systems, digital telephone switches and
auxiliary telecommunication products.
Sales in fiscal 1994 for this business segment increased 15.4 percent to
$628.2 million from $544.2 million. The sector recorded operating profit of
$57.6 million, up from $43.9 million in fiscal 1993. The sector contributed 19
percent of Company sales in fiscal 1994 and 17 percent in 1993.
Under the Farinon trademark, the sector is the largest producer of low-and
medium-capacity analog and digital microwave systems in North America.
The sector is the largest supplier of radio and television broadcast
transmission equipment and radio-studio equipment in the United States. The
sector's products include radio and television transmitters, antennas, and
audio, remote-control and video production systems. The sector is also a leading
supplier of mobile broadcast units.
This sector is a leading supplier of two-way HF, VHF and UHF radio
equipment and offers a comprehensive line of products and systems for long-and
short-distance communications. The sector also designs and installs turnkey
communication systems involving a variety of communication technologies,
including HF, VHF, microwave, fiber-optics and switching systems with command
and control centers. The products are sold to commercial and government
customers worldwide.
The sector is also a worldwide supplier of voice and data digital network
switches and private branch exchanges (PBXs) to long-distance carriers,
utilities, corporations and government agencies.
In addition, the sector supplies telecommunication products and systems
under the Dracon trademark, including telephone test systems and tools, ISDN
terminal adapters and telephone-integrated voice-paging systems for a wide
variety of in-plant applications.
Internationally, particularly in the developing and oil-producing nations,
the sector designs, sells, installs and services communication systems involving
radio and television broadcasting equipment and long-and short-range radios on
both a product and a turnkey basis.
Principal customers for products of the Communications Sector include
foreign and domestic government and military agencies, commercial and industrial
firms, radio and TV broadcasters, telephone companies, utilities, construction
companies and oil producers.
In general, these products are sold and serviced domestically directly to
customers through the sales organizations of the operating divisions and through
established distribution channels. Internationally, the sector markets and sells
its products and services through established distribution channels. See
"International Business."
The backlog of unfilled orders for this segment of Harris' business was
$300 million at June 30, 1994, substantially all of which is expected to be
filled during the 1995 fiscal year, compared with $258 million a year earlier.
LANIER WORLDWIDE
Lanier Worldwide, Inc. is a wholly-owned subsidiary of Harris which
markets, sells, and services office equipment and business communication
products on a global basis.
Sales in fiscal 1994 for this business segment increased 2.4 percent to
$943.7 million from $922.0 million. Operating profit was $89.8 million, up from
$84.2 million last year. Lanier Worldwide contributed 28 percent of Company
sales in fiscal 1994 and 30 percent in 1993.
Lanier Worldwide markets office products, including copiers, dictation
systems, voice-recording products and systems, facsimile units, and
information-management systems through a global network of direct sales
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offices and authorized dealers. Lanier Worldwide also leases certain of these
products to customers on a short-term basis.
Due to the nature of its business, backlog of unfilled orders is not
considered significant to an understanding of this segment's business.
INTERNATIONAL BUSINESS
In fiscal 1994, sales of products exported from the United States or
manufactured abroad were $982 million or 29.4 percent of the corporate total,
compared with $877 million (28.3 percent) in fiscal 1993 and $861 million (28.7
percent) in fiscal 1992. Exports from the United States, principally to Europe,
Asia and Latin America, totalled $388 million or 39.5 percent of the
international sales in fiscal 1994, $295 million or 33.7 percent in fiscal 1993
of the international sales, and $273 million or 31.7 percent of the
international sales in fiscal 1992.
Foreign operations represented 17.8 percent of consolidated net sales and
23.8 percent of consolidated total assets as of June 30, 1994. Electronic
products and systems are produced principally in the United States and
international electronic revenues are derived primarily from exports.
Semiconductor assembly facilities are located in Malaysia, Ireland and Singapore
and electronic products assembly facilities are located in Canada and England.
International marketing activities are conducted through subsidiaries which
operate in Canada, Europe, Central and South America, Asia and Australia.
Reference is made to Exhibit 21 "Subsidiaries of the Registrant" for further
information regarding foreign subsidiaries.
Harris utilizes indirect sales channels, including dealers, distributors
and sales representatives, in the marketing and sale of some lines of equipment,
both domestically and internationally. These independent representatives may buy
for resale, or, in some cases, solicit orders from commercial or governmental
customers for direct sales by Harris. Prices to the ultimate customer in many
instances may be recommended or established by the independent representative
and may be on a basis which is above or below the Company's list prices. Such
independent representative generally receives a discount to the Company's list
prices and may mark-up such prices in setting the final sales prices paid by the
customer. During the fiscal year, orders came from a large number of foreign
countries, no one of which accounted for as much as five percent of total
orders.
Certain of Harris' exports are paid for by letters of credit, with the
balance either on open account or installment note basis. Advance payments,
progress payments or other similar payments received prior to or upon shipment
often cover most of the related costs incurred. Performance guarantees are
generally required on significant foreign government contracts.
The particular economic, social and political conditions for business
conducted outside the United States differ from those encountered by domestic
business. Management believes that the composite business risk for the
international business as a whole is somewhat greater than that faced by its
domestic operations as a whole. International business may subject the Company
to, among other things: the laws and regulations of foreign governments relating
to investments, operations, currency exchange controls, revaluations and
fluctuations of currencies; uncertainties as to local laws and enforcement of
contract and intellectual property rights; and occasional requirements for
onerous contract clauses; and, in certain areas, the risk of war, rapid changes
in governments and economic policies, the threat of international boycotts and
United States anti-boycott legislation. Nevertheless, in the opinion of
management, these risks are offset by the diversification of the international
business and the protection provided by letters of credit and advance payments.
Except for inconsequential matters involving road and utility
rights-of-way, Harris has never been subjected to threat of government
expropriation, either within the United States or abroad.
Financial information regarding the Company's domestic and international
operations is contained in the Note Business Segments in the Notes to Financial
Statements.
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COMPETITION; PRINCIPAL CUSTOMERS; BACKLOG
The Company operates in highly competitive businesses that are sensitive to
technological advances. While successful product and systems development is not
necessarily dependent on total financial resources, some of Harris' competitors
in each of the sectors of its business are larger and can maintain higher levels
of expenditures for research and development than Harris. Harris concentrates in
each of its sectors on the market opportunities which management believes are
compatible with its overall technological capabilities and objectives. Principal
competitive factors in these sectors are cost-effectiveness, product
reliability, service and ability to meet delivery schedules as well as, in
international areas, the effectiveness of dealers.
Sales to the U.S. government, which is the Company's only customer
accounting for 10 percent or more of total sales, were 34.8 percent, 35.7
percent, and 37.6 percent of total sales in 1994, 1993 and 1992 respectively. It
is not expected that Defense Department budget cutbacks will have a material
effect on the profitability of the Company, due in part to the Company's efforts
to reduce its reliance on defense contracts.
Harris' backlog of unfilled orders was approximately $1.1 billion at June
30, 1994 and at June 30, 1993. Substantially all of the backlog orders at June
30, 1994 are expected to be filled by June 30, 1995.
RESEARCH AND ENGINEERING
Research and engineering expenditures by Harris totaled approximately $624
million in 1994, $564 million in 1993 and $531 million in 1992.
Company-sponsored research and product development costs were $128 million in
1994, $121 million in 1993, $122 million in 1992. The balance was funded by
government and commercial customers. Company-funded research is directed to the
development of new products and to building technological capability in selected
semiconductor, communications and electronic systems areas. Government-funded
research helps strengthen and broaden the technical capabilities of Harris in
its areas of interest. Almost all of the decentralized operating divisions
maintain their own engineering and new product development departments, with
scientific assistance provided by advanced-technology departments.
Harris holds numerous patents which it considers, in the aggregate, to
constitute an important asset. However, it does not consider its business or any
sector to be materially dependent upon any single patent or any group of related
patents. The Company is engaged in a pro-active patent licensing program.
ENVIRONMENTAL AND OTHER REGULATIONS
The manufacturing facilities of Harris, in common with those of industry
generally, are subject to numerous laws and regulations designed to protect the
environment, particularly in regard to wastes and emissions. In general, Harris
has complied with these requirements and such compliance has not had a material
adverse effect on its business or financial condition. Expenditures to protect
the environment and to comply with current environmental laws and regulations
over the next several years are not expected to have a material impact on the
Company's competitive or financial position. If future laws and regulations
contain more stringent requirements than presently anticipated, expenditures may
be higher than the Company's present estimates of potential environmental costs.
New waste treatment facilities and pollution control equipment are being
installed to satisfy legal requirements and to achieve the Company's waste
minimization and prevention goals. An estimated $4.7 million was spent on
environmental capital projects in fiscal 1994. The Company currently forecasts
authorization for environmental-related capital projects totalling $2.5 million
in fiscal 1995. Such amounts may increase in future years. The Company
anticipates that capital expenditures may be required over the next several
years for compliance costs under the new Clean Air Act; however, considerable
uncertainty remains with regard to estimates of such capital expenditures
because the regulations have not yet been issued.
EMPLOYEES
As of June 30, 1994, Harris had approximately 28,200 employees.
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ITEM 2. PROPERTIES
Harris operates approximately 29 plants and approximately 400 offices in
the United States, Canada, Europe, Central and South America, Asia and Australia
consisting of about 7.1 million square feet of manufacturing, administrative,
engineering and office facilities that are owned and about 3.9 million square
feet of sales, office and manufacturing facilities that are leased. The leased
facilities are occupied under leases for terms ranging from one year to 30
years, a majority of which can be terminated or renewed at no longer than
five-year intervals at Harris' option. The location of the principal
manufacturing plants owned by the Company in the United States and the sectors
which utilize such plants are as follows: Electronic Systems -- Malabar,
Melbourne and Palm Bay, Florida; Semiconductor -- Palm Bay, Florida; Findlay,
Ohio; and Mountaintop, Pennsylvania; Communications -- Novato and San Carlos,
California; Quincy, Illinois; and Rochester, New York; and Lanier Worldwide --
Atlanta, Georgia. Harris considers its facilities to be suitable and adequate
for the purposes for which they are used.
As of June 30, 1994, the following facilities were in productive use by
Harris:
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SQ. FT. SQ. FT.
TOTAL TOTAL
SECTOR FUNCTION OWNED LEASED
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<S> <C> <C> <C>
Electronic Systems Office/Manufacturing 3,180,000 552,000
Semiconductor Office/Manufacturing 2,621,000 269,000
Communications Office/Manufacturing 779,000 647,000
Lanier Worldwide Office/Manufacturing 144,000 756,000
OTHER
Corporate Offices 384,000 625
Sales/Service Offices 13,700 1,653,000
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TOTALS 7,121,700 3,877,625
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
From time to time, as a normal incident of the nature and kind of business
in which the Company is engaged, various claims or charges are asserted and
litigation commenced against the Company arising from or related to product
liability; patents, trademarks, or trade secrets; breach of warranty; antitrust;
distribution; or contractual relations. Claimed amounts may be substantial, but
may not bear any reasonable relationship to the merits of the claim or the
extent of any real risk of court awards. In the opinion of management, final
judgments, if any, which might be rendered against the Company in such
litigation are reserved against, covered by insurance or would not have a
material adverse effect on the financial position or the business of the Company
as a whole.
The Company may from time to time be, either individually or in conjunction
with other major U.S. manufacturers or defense contractors, the subject of U.S.
government investigations for alleged criminal or civil violations of
procurement or other federal laws. No criminal charges are presently known to be
filed against the Company and the Company is unable to predict the outcome of
such investigations or to estimate the amounts of claims or other actions that
could be instituted against it, its officers or employees as a result of such
investigations. Under present government procurement regulations, indictment
could result in a government contractor, such as the Company, being suspended or
debarred from eligibility for awards of new government contracts for up to three
years. In addition, foreign export control licenses could be suspended or
revoked. The Company is currently involved in various investigations and is
cooperating with the representatives of the responsible government agencies.
Management does not believe that the outcome of these investigations will have
any material adverse effect on the financial position or the business of the
Company as a whole.
In addition, the Company is subject to numerous federal and state
environmental laws and regulatory requirements and is involved from time to time
in investigations or litigation of various potential environmental issues
concerning the ongoing conduct of its facilities or the cleanup of contamination
by past activities. The Company from time to time receives notices from the
United States Environmental Protection Agency
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("EPA") and equivalent state environmental agencies that it is a potentially
responsible party ("PRP") under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA" or the "Superfund Act") and/or
equivalent state legislation. Such notices assert potential liability for
cleanup costs of various sites, most of which are non-Company owned treatment or
disposal sites, allegedly containing hazardous substances attributable to the
Company from past operations. The Company has been named as a PRP at only 14
such sites, excluding sites as to which the Company's records disclose no
involvement or as to which the Company's liability has been finally determined;
the Company expects to resolve most of such exposures on a de minimis basis. The
Company is also occasionally a defendant in "toxic tort" litigation involving
alleged personal injury or property damage claims resulting from past hazardous
waste practices. In the opinion of management, any payments the Company may be
required to make as a result of these claims will not have a material adverse
effect on the financial condition or the business of the Company as a whole.
In August 1991, PLS, Inc., a California software company, filed suit
against the Company in California Superior Court for San Diego County alleging
fraud, breach of contract and other charges in connection with a license
agreement the Company had transferred in January 1990 to a third party, which
thereafter filed for bankruptcy protection. In December 1992, the jury returned
a verdict in favor of the plaintiff. In May 1993, the court reduced the jury
award and entered judgment against the Company for $13,379,000 in compensatory
damages and $53,424,700 in punitive damages, together with interest and costs of
suit. The Company posted a bond to stay enforcement of the judgment and filed a
notice of appeal with the California Court of Appeal. The Company is vigorously
pursuing its appeal; and in February 1994 filed its appellate brief. Plaintiff's
responsive brief was filed in September 1994 seeking, among other things,
reinstatement of the jury verdict of $13,379,000 in compensatory damages and
$85,000,000 in punitive damage.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT AS OF SEPTEMBER 1, 1994.* (SEE ALSO ITEM 10
OF PART III).
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS EXPERIENCE DURING
NAME AGE OFFICE HELD PAST FIVE YEARS
- ------------------------------ ------------------------- -------------------------------------
<S> <C> <C> <C>
John T. Hartley 64 Chairman of the Chairman of the Board since October,
Board of Directors 1987. Chief Executive Officer since
and Chief April, 1986. President, 1986 to
Executive Officer 1993. President and Chief Operating
Officer, 1982 to 1986. President
and Principal Operating Officer,
1978 to 1982. Executive Vice
President, 1976 to 1978. Vice
President -- Group Executive, 1971
to 1976. Vice President -- General
Manager, Electronic Systems
Division, 1967 to 1971. Director
since 1976.
</TABLE>
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*This listing identifies the executive officers of the Company, as defined
pursuant to the Securities Exchange Act of 1934, as well as all other corporate
officers.
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<TABLE>
<CAPTION>
EXECUTIVE BUSINESS EXPERIENCE DURING
NAME AGE OFFICE HELD PAST FIVE YEARS
- ------------------------------ ------------------------- -------------------------------------
<S> <C> <C> <C>
Phillip W. Farmer 56 President and Chief President and Chief Operating Officer
Operating Officer since April, 1993. Executive Vice
President and Acting President --
Semiconductor Sector, 1991 to 1993.
President -- Electronic Systems
Sector, 1989 to 1991. Senior Vice
President -- Sector Executive, 1988
to 1989. Vice President -- Palm Bay
Operations, 1986 to 1988. Vice
President -- General Manager,
Government Support Systems
Division, 1982 to 1986. Director
since 1993.
Wesley E. Cantrell 59 President and President and Chief Executive
Chief Executive Officer, Lanier Worldwide, Inc.
Officer, since March, 1987. Senior Vice
Lanier Worldwide, Inc. President -- Sector Executive,
Lanier Business Products Sector,
1985 to 1987. President, Lanier
Business Products, 1977 to 1987.
Executive Vice President and
National Sales Manager, Lanier
Business Products, 1972 to 1977.
Vice President, Lanier Business
Products, 1966 to 1972. Employed by
Lanier Business Products since
1955.
John C. Garrett 51 President -- President -- Semiconductor Sector
Semiconductor Sector since April, 1993. Formerly
Executive Vice President,
Industrial Business, Square D
Company 1987 to 1993, and various
general management assignments with
General Electric Company 1964 to
1987.
Allen S. Henry 54 President -- Electronic President -- Electronic Systems
Systems Sector Sector since June, 1991. Vice
President -- General Manager,
Government Communication Systems
Division, 1989 to 1991. Vice
President -- Programs, Aerospace
Systems Division, 1985 to 1989.
Vice President -- Engineering,
Aerospace Systems Division, 1983 to
1985. Vice President --
Engineering, Electronic Systems
Division, 1980 to 1983. Director --
Engineering, Electronic Systems
Division, April to December 1980.
Employed by Harris since 1972.
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS EXPERIENCE DURING
NAME AGE OFFICE HELD PAST FIVE YEARS
- ------------------------------ ------------------------- -------------------------------------
<S> <C> <C> <C>
Guy W. Numann 62 President -- President -- Communications Sector
Communications Sector since August, 1989. Senior Vice
President -- Sector Executive, 1984
to 1989. Vice President -- Group
Executive, RF Communications Group,
1983 to 1984. Vice President --
General Manager, RF Communications
Division, 1974 to 1983. Vice
President -- Engineering, RF
Communications Division, 1970 to
1974.
Frank J. Lewis 63 Senior Vice President -- Senior Vice President -- Assistant to
Assistant to the the Chairman and Chief Executive
Chairman and Chief Officer since April, 1988. Sector
Executive Officer Executive, 1982 to 1988. Vice
President -- Group Executive, 1979
to 1982. Vice President -- General
Manager, Government Communications
Systems Division, 1978 to 1979.
Vice
President -- Programs, Electronic
Systems Division, 1976 to 1978.
Bryan R. Roub 53 Senior Vice President -- Senior Vice President -- Finance
Chief Financial Officer since July, 1984. Formerly with
Midland-Ross Corporation in the
capacities of Executive Vice
President -- Finance, 1982 to 1984;
Senior Vice President, 1981 to
1982; Vice President and
Controller, 1977 to 1981; and
Controller, 1973 to 1977.
Robert E. Sullivan 62 Senior Vice President -- Senior Vice President --
Administration Administration since September,
1986. Formerly Senior Vice
President -- Finance and
Administration at Harris Graphics
Corporation, 1983 to 1986. Vice
President -- Controller at Harris,
1981 to 1983 and various management
positions, including Vice President
-- Treasurer, 1971 to 1981.
Richard L. Ballantyne 54 Vice President -- General Vice President -- General Counsel and
Counsel and Secretary Secretary since November, 1989.
Formerly Vice President -- General
Counsel and Secretary, Prime
Computer, Inc., 1982 to 1989.
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS EXPERIENCE DURING
NAME AGE OFFICE HELD PAST FIVE YEARS
- ------------------------------ ------------------------- -------------------------------------
<S> <C> <C> <C>
Fayette Brown III 51 Vice President -- Vice President -- Corporate
Corporate Development Development since August, 1985.
Director -- Corporate Development,
February to August 1985. Director
-- Marketing, Semiconductor Sector,
1982 to 1985. Director --
Matra-Harris Liaison, 1979 to 1982.
Manager -- Corporate Development,
1976 to 1979. Various financial
positions, 1967 to 1976.
W. Peter Carney 62 Vice President -- Vice President -- Corporate Relations
Corporate Relations since October, 1987. Director --
Corporate Communications, 1981 to
1987.
James L. Christie 42 Vice President -- Vice President -- Internal Audit
Internal Audit since August, 1992. Director --
Internal Audit, 1986 to 1992.
Formerly Director -- Internal Audit
and Division Controller at Harris
Graphics Corporation, 1985 to 1986.
Various corporate and division
financial positions at Harris, 1978
to 1985.
Robert W. Fay 47 Vice President -- Vice President -- Controller since
Controller January, 1993. Acting Vice
President -- Controller,
Semiconductor Sector, 1991 to 1993.
Vice President -- Treasurer, 1988
to 1993. Treasurer, 1985 to 1988.
Director -- Financial Operations,
Semiconductor Sector, 1984 to 1985.
Controller -- Bipolar Digital
Semiconductor Division, 1981 to
1984. Manager -- Corporate Finance
and Cash Management, 1978 to 1981.
Nick E. Heldreth 52 Vice President -- Vice President -- Human Resources
Human Resources since June, 1986. Formerly Vice
President -- Personnel and
Industrial Relations, Commercial
Products Division, Pratt & Whitney
and various related assignments
with
United Technologies Corporation,
1974 to 1986.
Herbert N. McCauley 61 Vice President -- Vice President -- Information
Information Management Management since August, 1980.
Director -- Management Information
Systems, 1976 to 1980.
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS EXPERIENCE DURING
NAME AGE OFFICE HELD PAST FIVE YEARS
- ------------------------------ ------------------------- -------------------------------------
<S> <C> <C> <C>
Phillip Mighdoll 52 Vice President -- Quality Vice President -- Quality since
and New Products January, 1991. Formerly President
and Chief Executive Officer,
SWEDtech, Inc., 1990 to 1991.
Senior Consultant, Arthur D.
Little, Inc., 1986 to 1989.
David S. Wasserman 51 Vice President -- Vice President -- Treasurer since
Treasurer January, 1993. Vice President --
Taxes 1987 to 1993. Formerly Senior
Vice President, Midland-Ross
Corporation, 1979 to 1987.
</TABLE>
There is no family relationship between any of the Company's executive
officers or directors. All of the Company's executive officers are elected by
and serve at the pleasure of the Board of Directors.
12
<PAGE> 14
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Harris Corporation Common Stock, par value $1 per share (the "Common
Stock"), is listed on the New York Stock Exchange, Inc. and is also traded on
the Boston, Midwest, Philadelphia and Pacific Stock Exchanges and through the
Intermarket Trading System. As of August 31, 1994, there were 10,562 holders of
record of the Common Stock.
The high and low closing prices as reported in the consolidated transaction
reporting system and the dividends paid on the Common Stock for each quarterly
period in the last two fiscal years are reported below:
<TABLE>
<CAPTION>
PER SHARE AMOUNTS (IN DOLLARS)
--------------------------------------------------------
QUARTERS ENDED
--------------------------------------------------------
9-30-93 12-31-93 3-31-94 6-30-94 TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Fiscal 1994
Dividends................... .28 .28 .28 .28 1.12
Stock prices (high/low)..... 43 3/4-36 3/8 47 3/8-41 1/2 52 1/4-44 49-41 3/4
</TABLE>
<TABLE>
<CAPTION>
9-25-92 12-25-92 3-26-93 6-30-93 TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Fiscal 1993
Dividends................... .26 .26 .26 .26 1.04
Stock prices (high/low)..... 33 1/4-27 1/4 35 1/2-28 3/4 38 5/8-32 7/8 39 1/4-33 7/8
</TABLE>
In August, 1994, the directors declared a quarterly cash dividend of 31
cents per share. The Company has paid cash dividends in every year since 1941.
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes selected financial information of Harris
Corporation and its subsidiaries for each year during the five year period ended
June 30, 1994. This table should be read in conjunction with other financial
information of Harris, including "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and financial statements included
elsewhere herein.
<TABLE>
<CAPTION>
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED JUNE 30
------------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales..................... $3,336.1 $ 3099.1 $3,004.0 $3,040.1 $3,052.7
Income from continuing
operations before
extraordinary item and
cumulative effect of change
in accounting principle..... 121.9 111.1 87.5 19.5 130.7
Discontinued operations....... -- -- (9.3) -- --
Extraordinary loss from early
retirement of debt.......... -- -- (3.0) -- --
Cumulative effect of change in
accounting principle........ (10.1) -- -- -- --
Net income.................... 111.8 111.1 75.2 19.5 130.7
Per share data:
Income from continuing
operations before
extraordinary item and
cumulative effect of
change in accounting
principle................ 3.07 2.82 2.24 .50 3.30
Discontinued operations..... -- -- (.24) -- --
Extraordinary loss.......... -- -- (.08) -- --
Cumulative effect of
accounting change........ (.25) -- -- -- --
Net income.................. 2.82 2.82 1.92 .50 3.30
Cash dividends.............. 1.12 1.04 1.04 1.04 .96
Net working capital........... 893.6 792.5 768.9 643.0 390.4
Total assets.................. 2,677.1 2,542.0 2,483.8 2,485.8 2,625.1
Long-term debt................ 661.7 612.0 612.5 563.3 300.8
</TABLE>
13
<PAGE> 15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
The information in this review, along with Business Segment data shown on
page 2, reflects the Company's continuing operations.
RESULTS OF OPERATIONS
FISCAL 1994 COMPARED WITH 1993 -- Sales in fiscal 1994 increased 8 percent,
while income from continuing operations before cumulative effect of change in
accounting principle increased 10 percent. Income from continuing operations for
1994 included a $17.8 million charge ($11.5 million after income taxes) for the
Company's write-off of securities received from a prior-year sale of a
discontinued business.
Semiconductor segment sales increased 8 percent while net income was up 85
percent. Strong sales and earnings of commercial products more than offset a
decline in military shipments. In 1994, the segment took actions to streamline
its manufacturing operations as a response to declining military-related sales.
Segment profit margins increased in 1994 due to ongoing cost reduction programs
and a larger mix of higher-value products. Results for the year included an
after-tax charge of $12.1 million to establish reserves for restructuring
actions to be carried out during fiscal 1995. These charges were partially
offset by an after-tax gain of $9.9 million from the sale of a fabrication
facility. Segment net income in both years also includes comparable gains from
ongoing sales of investment securities.
Communications segment sales increased 15 percent and net income increased
33 percent. Sales growth was principally in international markets. International
sales accounted for 53 percent and 48 percent of total sales in 1994 and 1993,
respectively. International sales in 1994 were particularly strong in rapidly
developing countries such as China, Mexico, and Russia. The segment expects
international sales to account for two-thirds of total segment sales within the
next few years. International segment sales are transacted on terms that
substantially mitigate credit and foreign currency risks. The increase in
segment earnings was due to higher sales while maintaining operating expenses at
prior-year levels.
Lanier Worldwide segment sales increased 2 percent and net income increased
17 percent. In the United States, segment sales and net income continued their
strong performance. The segment returned to profitability in Europe in the
second half of 1994, as a result of restructuring efforts with special emphasis
on the French, Italian, and European Headquarters operations. This turnaround
occurred despite unfavorable foreign exchange rates and economic conditions that
continue in many of the segment's European markets.
Electronic Systems segment sales increased 8 percent while segment net
income decreased 8 percent. Strong sales in the segment's air traffic control
business and information systems business were responsible for the sales
increase and reflect continuing diversification of the segment's product lines
and markets. Changing defense priorities and federal budget pressure are
expected to restrain funding of defense-related programs in the future, thereby
making the segment's diversification strategy a continuing emphasis of the
business. Segment net income declined due to losses incurred in its
telecommunications business and costs associated with the close-down of the
segment's facilities in Orlando, Florida. In the fourth quarter of 1994, the
telecommunications business was downsized and moved to the Company's
Communications segment. As a result of these actions, the Company expects the
telecommunications business to improve in fiscal 1995.
Cost of sales, rentals, and services as a percentage of sales increased to
68.2 percent from 67.3 percent in the prior year due to slightly higher cost
ratios in all segments. This trend is not expected to continue in fiscal 1995.
Engineering, selling, and administrative expenses as a percentage of sales were
24.9 percent in fiscal 1994, compared to 26.5 percent in the prior year. While
total operating expenses were higher than 1993, the increase in these expenses
was less than the relative increase in sales. Lower marketing expenses for the
Lanier Worldwide segment contributed to the 1994 lower expense ratio as this
segment began to realize the savings from combining many of its marketing and
distribution units. Company-sponsored research and development expenditures were
5.8 percent more than the previous year.
Interest income and interest expense were slightly lower during fiscal
1994. The increase in income in the "Other-net" category resulted from a gain on
the sale of a semiconductor facility, offset in part by higher provisions for
doubtful accounts receivable, foreign currency losses, and reductions in gains
from the sale of investment securities.
14
<PAGE> 16
The provision for income taxes in fiscal 1994 was 37.0 percent of income
before income taxes compared to 34.6 percent in the prior year. The increase
from the statutory rate in both years resulted from the provision for state
income taxes.
CAPITAL EXPENDITURES -- Expenditures for land, buildings, and equipment totaled
$117 million in 1994, up from $95 million in the prior year. During fiscal 1994,
$51 million was invested in equipment for rental to customers, down from $54
million invested in the prior year. Substantially all of this investment in
rental equipment is related to Lanier Worldwide products.
FISCAL 1993 COMPARED WITH 1992 -- Sales in fiscal 1993 increased slightly, while
income from continuing operations before extraordinary item increased 27.0
percent.
Semiconductor segment sales were relatively unchanged; however, the segment
posted a significant increase in earnings due to improved operating margins.
Operating expense decreased as a result of prior years restructuring activities
and improved product mix. Strong growth in strategic products replaced lower
revenues that resulted from a downturn in defense sales and a move away from
low-value-added products. Segment net income in both years also includes
comparable gains from ongoing sales of investment securities.
Electronic Systems sales increased slightly, while segment net income
decreased 9 percent due to lower computer sales and costs associated with the
realignment of the segment's government automatic-test and support systems
business. Computer sales were down due to vendor-related manufacturing problems
associated with a new series of computers.
Communications segment sales increased 10 percent and net income decreased
7 percent. International sales grew at more than 20 percent while domestic sales
remained flat. Earnings increases in several of the segment's business units
were more than offset by a significant decline in earnings of the broadcast
products unit. Depressed market conditions and new product delays resulted in
lower sales and profit margins for this unit.
Lanier Worldwide's net income decreased significantly on slightly higher
sales due to losses in European operations that resulted from recessionary
market conditions and currency fluctuations. All international operations were
consolidated into one business unit and plans were developed to restructure
these operations in 1994.
Cost of sales, rentals, and services as a percentage of sales decreased to
67.3 percent from 67.7 percent in the prior year due primarily to improved gross
margins in the Semiconductor segment. Engineering, selling, and administrative
expenses as a percentage of sales were 26.5 percent in fiscal 1993, compared to
27.2 percent in the prior year due to lower operating expenses in the
Semiconductor segment. Company-sponsored research and development expenditures
were slightly lower than the previous year.
The $3.7-million decrease in interest income resulted from $4.0 million of
interest recognized on a federal tax claim in the previous year. Interest
expense was lower in fiscal 1993 due to lower interest rates and a reduced level
of borrowing. "Other-net" includes gains from the sale of investment securities
in both years. Income was higher in this category primarily due to prior-year
foreign currency losses and bad debt expenses.
The provision for income taxes as a percentage of income before income
taxes was 34.6 percent compared to 30.0 percent in the prior year. The increase
from the statutory federal tax rate of 34 percent during the current year was
primarily due to the provision for state income taxes, which were partially
offset by adjustments made to prior tax accruals. The reduction from the
statutory federal tax rate in the prior year was primarily due to tax benefits
associated with foreign income and adjustments made to prior tax accruals, which
were partially offset by the provision for state income taxes.
CAPITAL EXPENDITURES -- Expenditures for land, buildings, and equipment totaled
$95 million in 1993, up from $72 million in the prior year. During fiscal 1993,
$54 million was invested in equipment for rental to customers, down from $70
million invested in the prior year. Substantially all of this investment related
to Lanier Worldwide products.
15
<PAGE> 17
FINANCIAL CONDITION
Cash Position. At June 30, 1994, cash, and cash equivalents totaled $139
million, an increase from $132 million at June 30, 1993.
Receivables, Unbilled Costs, and Inventories. Notes and accounts receivable
amounted to $798 million at June 30, 1994, compared to $755 million a year
earlier. Unbilled costs and inventories increased $68 million over the prior
year to $833 million. The increase in these accounts is proportionate to the
increase in revenues.
Borrowing Arrangements. The Company has available $220 million under
revolving credit agreements until December 1, 1998. Under these agreements, no
borrowings were outstanding at June 30, 1994. In addition, the Company has $131
million in open bank credit lines, of which $98 million was available at June
30, 1994.
Capitalization. At June 30, 1994, debt totaled $683 million, representing
36.5 percent of total capitalization (defined as the sum of total debt plus
shareholders' equity). A year earlier, debt of $649 million was 36.2 percent of
total capitalization. Year-end long-term debt included $150 million of 10 3/8
percent debentures due 2018, $250 million of notes payable to insurance
companies, $200 million of notes payable to banks and $35 million of unsecured
term notes.
In 1994, the Company issued 621,560 shares of the Common Stock to employees
under the terms of the Company's stock purchase, option and incentive plans.
The Company expects to maintain operating ratios, fixed-charge coverages,
and balance-sheet ratios sufficient for retention of its present debt ratings.
Retirement Plans. Retirement benefits for substantially all of the
Company's employees are provided primarily through a retirement plan having
profit-sharing and savings elements. The Company also has non-contributory
defined-benefit pension plans. All obligations under the Company's retirement
plans have been fully funded by the Company's contributions, the provision for
which totaled $70 million during the 1994 fiscal year. The Company provides
limited health-care benefits to retirees who have 10 or more years of service.
In the first quarter of fiscal 1994, the Company adopted Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions." The implementation of this accounting standard in relation
to the benefits described above resulted in a one-time after-tax charge of $10.1
million. The ongoing impact of this accounting standard is not expected to have
a material effect in future years.
Impact of Foreign Exchange. The U.S. dollar weakened against a majority of
international currencies in 1994. Approximately 80 percent of the Company's
international business is transacted in local currency environments. The impact
of translating the assets and liabilities of these operations to fewer U.S.
dollars is included as a component of Shareholders' Equity. At June 30, 1994,
the cumulative translation adjustment reduced Shareholders' Equity by $22
million compared to a reduction of $13 million at June 30, 1993.
The Company utilizes exchange rate agreements with customers and suppliers
and foreign currency hedging instruments to minimize the currency risks of
international transactions. Gains and losses resulting from currency rate
fluctuations did not have a material effect on the Company's result in 1994,
1993, or 1992.
IMPACT OF INFLATION
To the extent feasible, the Company has consistently followed the practice
of adjusting its prices to reflect the impact of inflation on wages and salaries
for employees and the cost of purchased materials and services.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this Item are
set forth in the pages indicated in Item 14(a)(1) and (2) below.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
16
<PAGE> 18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item, with respect to Directors of the
Company, is incorporated herein by reference to the Company's Proxy Statement
dated September 15, 1994. See also pages 8 through 11 of Part I above.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item, with respect to compensation of
Directors and Executive Officers of the Company, is incorporated herein by
reference to the Company's Proxy Statement dated September 15, 1994.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item, with respect to security ownership
of certain beneficial owners and management, is incorporated herein by reference
to the Company's Proxy Statement dated September 15, 1994.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended June 30, 1994, there existed no relationships
and there were no transactions reportable under this Item.
17
<PAGE> 19
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
<TABLE>
<CAPTION>
PAGE
<S> <C>
(1) Financial Statements:
Consolidated Statement of Income -- Years ended June 30, 1994, 1993
and 1992........................................................... 23
Consolidated Statement of Retained Earnings --
Years ended June 30, 1994, 1993 and 1992.......................... 23
Consolidated Balance Sheet -- June 30, 1994 and 1993................ 24
Consolidated Statement of Cash Flows --
Years ended June 30, 1994, 1993 and 1992.......................... 25
Notes to Financial Statements....................................... 26
(2) Financial Statement Schedules:
For each of the three years in the period ended June 30, 1994.
Schedule II -- Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees other
than Related Parties.......................... 33
Schedule V -- Property, Plant and Equipment.................. 34
Schedule VI -- Accumulated Depreciation, Depletion and
Amortization of Property, Plant and
Equipment...................................................... 37
Schedule VIII -- Valuation and Qualifying Accounts............. 40
Schedule IX -- Short-Term Borrowings.......................... 41
Schedule X -- Supplementary Income Statement Information..... 42
</TABLE>
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or the notes thereto.
(3) Exhibits
(3)(a) Restated Certificate of Incorporation of Harris Corporation
(October 1986) is incorporated herein by reference to Exhibit 3 to the
Company's Quarterly Report on Form 10-Q for the quarter ended December
26, 1986.
(3)(b) By-laws of Harris Corporation as in effect on the date
hereof is incorporated herein by reference to Exhibit 3(b) to the
Company's Annual Report on Form 10-K for the year ended June 30, 1986.
(4)(a) Specimen stock certificate for the Company's Common Stock is
incorporated herein by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on September 13, 1982 (Registration Number 2-79308).
(4)(b) Rights Agreement dated as of November 24, 1986, between
Harris Corporation and Ameritrust Company National Association, as
Rights Agent, is incorporated herein by reference to Exhibit 1 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 9, 1986.
(4)(c) Registrant by this filing agrees, upon request, to furnish
to the Securities and Exchange Commission copies of financial documents
evidencing long-term debt.
(10) Material Contracts:
*(a) Senior Executive Severance Agreements are incorporated
herein by reference to Exhibit 10(a) to the Company's Annual Report
on Form 10-K for the year ended June 30, 1987.
18
<PAGE> 20
*(b) Harris Corporation Annual Incentive Plan is incorporated
herein by reference to Exhibit 10(b) to the Company's Annual Report
on Form 10-K for the year ended June 30, 1991.
*(c) Harris Corporation Stock Incentive Plan.
*(d) Harris Corporation 1981 Stock Option Plan for Key Employees
is incorporated herein by reference to Exhibit 10(d) of the Company's
Annual Report on Form 10-K for the year ended June 30, 1991.
*(e) Lanier Worldwide, Inc. Key Contributor Bonus Plan is
incorporated herein by reference to Exhibit 10(e) to the Company's
Annual Report on Form 10-K for the year ended June 30, 1992.
*(f) Lanier Worldwide, Inc. Longer-Term Incentive Plan for Key
Employees is incorporated herein by reference to Exhibit 10(f) of the
Company's Annual Report on Form 10-K for the year ended June 30,
1991.
*(g) Harris Corporation Retirement Plan.
*(h) Revised Harris Corporation Supplemental Executive
Retirement Plan.
*(i) Lanier Worldwide, Inc. Pension Plan.
*(j) Lanier Worldwide, Inc. Savings Incentive Plan.
*(k) Lanier Worldwide, Inc. Supplemental Executive Retirement
Plan.
*(l) Directors Retirement Plan is incorporated herein by
reference to Exhibit 10(l) to the Company's Annual Report on Form
10-K for the year ended June 30, 1990.
(11) Statement regarding computation of net income per share.
(21) Subsidiaries of the Registrant.
(23) Consent of Ernst & Young.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the
fiscal year ended June 30, 1994.
- ------------------
*Management contract or compensatory plan or arrangement.
19
<PAGE> 21
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
HARRIS CORPORATION
(Registrant)
Dated: September 23, 1994
By /s/ BRYAN R. ROUB
Bryan R. Roub
Senior Vice President-Chief
Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------------------------------------- ----------------
<S> <C> <C>
/s/ JOHN T. HARTLEY Chairman of the Board
John T. Hartley and Chief Executive Officer
(Principal Executive Officer)
/s/ BRYAN R. ROUB Senior Vice President -- Chief
Bryan R. Roub Financial Officer
(Principal Financial Officer)
/s/ ROBERT W. FAY Vice President -- Controller
Robert W. Fay (Principal Accounting Officer)
/s/ ROBERT CIZIK Director
Robert Cizik
/s/ LESTER E. COLEMAN Director
Lester E. Coleman
</TABLE>
September 23, 1994
<TABLE>
<S> <C> <C>
/s/ RALPH D. DENUNZIO Director
Ralph D. DeNunzio
/s/ JOSEPH L. DIONNE Director
Joseph L. Dionne
/s/ PHILLIP W. FARMER Director
Phillip W. Farmer
/s/ C. JACKSON GRAYSON, JR. Director
C. Jackson Grayson, Jr.
/s/ WALTER F. RAAB Director
Walter F. Raab
/s/ ALEXANDER B. TROWBRIDGE Director
Alexander B. Trowbridge
</TABLE>
20
<PAGE> 22
ANNUAL REPORT ON FORM 10-K
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
YEAR ENDED JUNE 30, 1994
HARRIS CORPORATION
MELBOURNE, FLORIDA
21
<PAGE> 23
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To Harris Directors and Shareholders:
We have audited the accompanying consolidated balance sheets of Harris
Corporation and subsidiaries as of June 30, 1994 and 1993, and the related
consolidated statements of income, retained earnings, and cash flows for each of
the three years in the period ended June 30, 1994. Our audits also included the
financial statement schedules listed in the Index at Item 14(a). These financial
statements and schedules are the responsibility of the Corporation's management.
Our responsibility is to express an opinion on these financial statements and
schedules 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Harris Corporation and subsidiaries at June 30, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended June 30, 1994, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
As discussed in the Accounting Change note to the financial statements,
effective July 1, 1993, the Corporation changed its method of accounting for
postretirement benefits other than pensions.
ERNST & YOUNG LLP
Orlando, Florida
August 2, 1994
22
<PAGE> 24
<TABLE>
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
YEARS ENDED JUNE 30
- ---------------------------------------------------------------------------------------
IN MILLIONS EXCEPT PER SHARE AMOUNTS 1994 1993 1992
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE
Revenue from product sales and rentals $2,972.0 $2,739.2 $2,658.0
Revenue from services 364.1 359.9 346.0
Interest 33.3 34.2 37.9
- ---------------------------------------------------------------------------------------
3,369.4 3,133.3 3,041.9
COSTS AND EXPENSES
Cost of product sales and rentals 2,055.7 1,872.7 1,821.0
Cost of services 219.1 213.3 211.6
Engineering, selling, and administrative expenses 830.8 822.2 816.5
Interest 58.3 59.9 66.0
Other-net (5.8) (4.6) 1.8
- ---------------------------------------------------------------------------------------
3,158.1 2,963.5 2,916.9
- ---------------------------------------------------------------------------------------
Income from continuing operations before
write-off of securities and income taxes 211.3 169.8 125.0
Write-off of securities received from 1990 sale
of discontinued data-communications business 17.8 -- --
- ---------------------------------------------------------------------------------------
Income from continuing operations before income
taxes 193.5 169.8 125.0
Income taxes 71.6 58.7 37.5
- ---------------------------------------------------------------------------------------
Income from continuing operations before
extraordinary item and cumulative effect of
change in accounting principle 121.9 111.1 87.5
Discontinued operations net of income taxes -- -- (9.3)
- ---------------------------------------------------------------------------------------
Income before extraordinary item and cumulative
effect of change in accounting principle 121.9 111.1 78.2
Extraordinary loss from early retirement of debt
net of income taxes -- -- (3.0)
Cumulative effect of change in accounting
principle net of income taxes (10.1) -- --
- ---------------------------------------------------------------------------------------
Net income $ 111.8 $ 111.1 $ 75.2
=======================================================================================
Income per share:
Continuing operations before extraordinary item
and cumulative effect of change in
accounting principle $3.07 $2.82 $2.24
Discontinued operations -- -- (.24)
Extraordinary loss -- -- (.08)
Cumulative effect of change in accounting
principle (.25) -- --
- ---------------------------------------------------------------------------------------
Net income per share $2.82 $2.82 $1.92
=======================================================================================
</TABLE>
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30
- ---------------------------------------------------------------------------------------
IN MILLIONS EXCEPT PER SHARE AMOUNTS 1994 1993 1992
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $ 906.7 $ 836.4 $ 801.7
Net income for the year 111.8 111.1 75.2
Cash dividends ($1.12 per share in 1994,
$1.04 per share in 1993 and 1992) (44.2) (40.8) (40.5)
Treasury stock retired (31.2) -- --
- ---------------------------------------------------------------------------------------
Balance at end of year $943.1 $906.7 $836.4
=======================================================================================
<FN>
See Notes to Financial Statements.
</TABLE>
23
<PAGE> 25
<TABLE>
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
<CAPTION>
JUNE 30
- -------------------------------------------------------------------------------------------------------
In millions 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 139.1 $ 131.7
Receivables 647.2 607.6
Unbilled costs and accrued earnings on fixed-price contracts 369.7 320.9
Inventories 463.1 444.4
Deferred income taxes 79.2 66.0
- -------------------------------------------------------------------------------------------------------
Total current assets 1,698.3 1,570.6
OTHER ASSETS
Plant and equipment 551.3 564.1
Notes receivable-net 151.1 147.2
Intangibles resulting from acquisitions 166.0 162.8
Other assets 110.4 97.3
- -------------------------------------------------------------------------------------------------------
$2,677.1 $2,542.0
=======================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABLILITIES
Short-term debt $ 19.8 $ 35.2
Trade accounts payable 184.5 169.4
Compensation and benefits 188.5 168.0
Other accrued items 164.9 150.6
Advance payments by customers 59.7 55.5
Unearned leasing and service income 129.3 120.6
Income taxes 57.0 77.4
Current portion of long-term debt 1.0 1.4
- -------------------------------------------------------------------------------------------------------
Total current liabilities 804.7 778.1
OTHER LIABILITIES
Deferred income taxes 22.7 10.6
Long-term debt 661.7 612.0
STOCKHOLDERS' EQUITY
Preferred Stock, without par value:
Authorized-1,000,000 shares; issued-none
Common Stock, $1.00 par value:
Authorized-100,000,000 shares; issued and outstanding
32,298,118 shares in 1994 and 39,604,496 shares in 1993 39.3 39.6
Other capital 230.3 216.3
Retained earnings 943.1 906.7
Unearned compensation (3.2) (8.3)
Cumulative translation adjustments (21.5) (13.0)
- -------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,188.0 1,141.3
- -------------------------------------------------------------------------------------------------------
$2,677.1 $2,542.0
=======================================================================================================
See Notes to Financial Statements.
</TABLE>
24
<PAGE> 26
<TABLE>
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
YEARS ENDED JUNE 30
- ------------------------------------------------------------------------------------------------
IN MILLIONS 1994 1993 1992
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations before extraordinary
item and cumulative effect of change in accounting
principle $ 121.9 $ 111.1 $ 87.5
Adjustments to reconcile income to net cash provided by
operating activities:
Depreciation 145.7 150.0 164.7
Amortization 7.7 7.3 6.6
Non-current deferred income taxes 12.1 (27.8) (2.5)
Loss from discontinued operations -- -- (9.3)
Extraordinary loss -- -- (3.0)
Changes in assets and liabilities:
Receivables (43.6) 8.0 35.9
Unbilled costs and inventories (67.4) (58.1) (17.7)
Trade payables and accrued liabilities 39.7 (18.8) (64.1)
Advance payments and unearned income 12.9 7.8 21.2
Income taxes (33.6) 50.6 36.7
Other (22.3) (20.8) 19.2
- ------------------------------------------------------------------------------------------------
Net cash provided by operating activities 173.1 209.3 275.2
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquired business -- (25.9) --
Capital expenditures-net of normal disposals (134.9) (137.1) (122.0)
- ------------------------------------------------------------------------------------------------
Net cash used in investing activities (134.9) (163.0) (122.0)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowings 302.7 362.1 344.5
Payments of borrowings (267.1) (373.7) (391.7)
Dividends (44.2) (40.8) (40.5)
Purchase of Common Stock for treasury (36.7) -- --
Proceeds from sale of Common Stock 13.5 10.3 2.0
- ------------------------------------------------------------------------------------------------
Net cash used in financing activities (31.8) (42.1) (85.7)
- ------------------------------------------------------------------------------------------------
Effect of translation on cash equivalents 1.0 3.3 (1.8)
- ------------------------------------------------------------------------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 7.4 7.5 65.7
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 131.7 124.2 58.5
- ------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 139.1 $ 131.7 $ 124.2
================================================================================================
<FN>
See Notes to Financial Statements.
</TABLE>
25
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the
accounts of the Corporation and its subsidiaries. Significant intercompany
transactions and account have been eliminated.
CASH EQUIVALENTS--Cash equivalents are temporary cash investments with a
maturity of three months or less when purchased. These investments include
accrued interest and are carried at the lower of cost or market.
INVENTORIES--Inventories are priced at the lower of cost (determined by average
and first-in, first-out methods) or market.
PLANT AND EQUIPMENT--Plant and equipment are carried on the basis of cost.
Depreciation is computed by straight-line and accelerated methods using
estimated useful lives of the assets.
INTANGIBLES--Intangibles resulting from acquisitions are being amortized by the
straight-line method principally over 40 years.
INCOME TAXES--The Corporation follows the liability method of account for
income taxes.
REVENUE RECOGNITION--Revenue is recognized from sales other than a long-term
contracts when a product is shipped, from rentals as they accrue, and from
services when performed. Revenue on long-term contracts is accounted for
principally by the percentage-of-completion method whereby income is recognized
based on the estimated stage of completion of individual contracts. Unearned
income on service contracts is amortized by the straight-line method over the
term of the contracts.
FUTURES AND FORWARD CONTRACTS--Gains and losses on futures and forward
contracts that qualify as hedges are deferred and recognized as an adjustment
of the carrying amount of the hedged asset or liability or anticipated
transaction.
RETIREMENT BENEFITS--The Corporation and its subsidiaries provide retirement
benefits to substantially all employees primarily through a retirement plan
having profit-sharing and savings elements. Contributions by the Corporation
to the retirement plan are based on profits and employee' savings with no other
funding requirements. The Corporation may make additional contributions to the
fund at its discretion. The Corporation also has noncontributory
defined-benefit pension plans which are fully funded.
Retirement benefits also include an unfunded limited health-care plan
for U.S. based retirees. In 1994, the Corporation began accruing the estimated
cost of retiree medical benefits during an employee's active service life. The
Corporation previously expensed the cost of these benefits on a pay-as-you-go
basis.
EARNINGS PER SHARE--Income per share is based upon the weighted average of
common shares outstanding during each year.
RECLASSIFICATIONS--Certain prior year amounts have been reclassified to conform
with current-year classifications.
ACCUNTING CHANGE
In 1994, the Corporation adopted Statement of Financial Accounting Standards
No. 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions." Health-care benefits are provided on a limited cost-sharing basis
to retirees who have 10 or more years of service. The cumulative effect at
July 1, 1993, of adopting this statement resulted in a one-time charge of
$10,100,000, net of income tax benefits of $6,400,000. The impact of this
change on income before extraordinary item and cumulative effect of change in
accounting principle was not material in fiscal 1994.
DISCONTINUED OPERATIONS
In 1989, the Corporation decided to exit a significant portion of its
data-communications and computer-based office systems businesses. In 1992, the
Corporation provided $9,300,000 (net of income tax benefits of $5,700,000) for
additional losses incurred in the disposal of the computer-based office systems
business.
26
<PAGE> 28
In 1993, a California state court awarded damages against the
Corporation in the amount of $66.9 million to a California software company.
The suit arose from a contract between the plantiff and a discontinued operation
of the Corporation. The Corporation believes the judgment is unjustified and
has filed an appeal with the California Court of Appeals. The ultimate outcome
of this ligitation is unknown. Accordingly, no provisions, beyond those
already provided as part of prior discontinued operation charges, have been
made in the accompanying consolidated financial statements.
NONRECURRING ITEM
In 1994, the Corporations residual holdings in a company that acquired its 1989
discontinued data-based communication business became impaired. Consequently,
the Corporation provided $17,800,000 ($11,500,000 after income taxes or 29
cents per share) to write off its interest in this company.
RECEIVABLES
Receivables are summarized below:
(In millions) 1994 1993
- -------------------------------------------------------------
Accounts receivable $581.8 $547.0
Notes receivable due within one year-net 94.9 88.0
- -------------------------------------------------------------
676.7 635.8
Less allowances for collection losses 29.5 28.2
- --------------------------------------------------------------
$647.2 $607.6
=============================================================
INVENTORIES AND UNBILLED COSTS
Inventories are summarized below:
(In millions) 1994 1993
- -------------------------------------------------------------
Finished products $185.6 $176.9
Work in process 200.0 206.1
Raw materials and supplies 77.5 61.4
- -------------------------------------------------------------
$463.1 $444.4
=============================================================
Unbilled costs and accrued earnings on fixed-price contracts are net of
progress payments of $206.4 million in 1994 and $162.3 million in 1993.
PLANT AND EQUIPMENT
Plant and equipment are summarized below:
(In millions) 1994 1993
- -------------------------------------------------------------
Land $ 30.3 $ 35.7
Buildings 431.4 442.1
Machinery and equipment 1,257.1 1,214.8
- -------------------------------------------------------------
1,718.8 1,692.6
Less allowances for depreciation 1,167.5 1,128.5
- -------------------------------------------------------------
$ 551.3 $ 564.1
=============================================================
INTANGIBLES
Accumulated amortization of intangible assets at June 30 was $33,100,000 for
1994 and $29,100,000 for 1993.
CREDIT ARRANGEMENTS
The Corportion maintains revolving credit agreements which provide for
borrowings up to $220,000,000 until December 1, 1998. These agreements provide
for various interest rates at the Corporation's election, but in no event above
LIBOR plus 0.5 percent. A commitmenet fee of 0.2 percent per annum is payable
on the unused portion of the credit. The Corporation is not required to
maintain compensation balances in connection with these agreements. No
borrowings were outstanding at June 30, 1994 under these agreements.
The Corporation also has lines of credit for short-term financing
aggregating $130,700,000 from various U.S. and foreign banks, of which
$97,700,000 was available on June 30, 1994. These arrangements provide for
borrowing at various interest rates, are reviewed annually for renewal, and may
be used on such terms as the Corporation and the banks mutually agree. These
lines do not require compensating balances.
Short-term debt is summarized below:
(In millions) 1994 1993
- -------------------------------------------------------------
Bank notes $14.5 $28.4
Other 5.3 6.8
- -------------------------------------------------------------
$19.8 $35.2
=============================================================
27
<PAGE> 29
<TABLE>
NOTES TO FINANCIAL STATEMENTS
LONG-TERM DEBT
<CAPTION>
Long-term debt includes the following:
- ----------------------------------------------------------------------
(IN MILLIONS) 1994 1993
- ----------------------------------------------------------------------
<S> <C> <C>
Notes payable to insurance companies $250.0 $250.0
Notes payable to banks 200.0 150.0
10 3/8% debentures, due 2018 150.0 150.0
Unsecured term notes 34.5 34.5
Other 27.2 27.5
- ----------------------------------------------------------------------
$661.7 $612.0
======================================================================
</TABLE>
Notes payable to insurance companies mature $100,000,000 in 1996,
$54,000,000 in 1999, $34,000,000 in 2000, and $62,000,000 in 2001. The weighted
average interest rate for this debt is 9.42 percent.
In 1992, the Corporation refinanced $80,950,000 of its 11.5 percent
debentures, due 2010, and a portion of its short-term debt with $150,000,000 of
unsecured bank notes. The debenture redemption resulted in an extraordinary loss
of $3,020,000, net of income tax benefits of $1,851,000. In 1994, the
Corporation borrowed an additional $50,000,000 of unsecured bank notes. These
bank notes currently bear an interest rate of LIBOR plus 0.5 percent and mature
in fiscal 1999. The fiscal 1994 weighted average interest rate for notes payable
to banks is 4.26 percent.
Indentures and note agreements contain certain financial covenants
including maintenance of at least $800,000,000 of tangible net worth and total
debt not to exceed 45 percent of total capital.
Maturities on long-term debt for the five years following 1994 are:
$1,049,000 in 1995. $131,019,000 in 1996, $503,000 in 1997, $4,886,000 in 1998,
and $256,436,000 in 1999.
SHAREHOLDERS' EQUITY
Changes in shareholders' equity accounts other than retained earnings are
summarized as follows:
<TABLE>
<CAPTION>
COMMON CUMULATIVE
STOCK OTHER UNEARNED TRANSLATION
(IN MILLIONS) AMOUNT CAPITAL COMPENSATION ADJUSTMENTS
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT JULY 1, 1991 $38.9 $196.5 $ (8.9) $ .2
Shares issued under Stock Option Plan (56,722 shares) .1 1.5 -- --
Shares granted under Stock Incentive Plans (214,250 shares) .2 5.3 (5.5) --
Compensation expense -- -- 1.6 --
Termination of shares granted under Stock Incentive Plans (39,442
shares) -- (1.3 ) 1.3 --
Shares sold under Employee Stock Purchase Plans (23,200 shares) -- .4 -- --
Foreign currency translation adjustments -- -- -- 1.8
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1992 39.2 202.4 (11.5) 2.0
Shares issued under Stock Option Plan (299,811 shares) .3 9.7 -- --
Shares granted under Stock Incentive Plans (228,750 shares) .2 6.2 (6.5) --
Compensation expense -- -- 7.3 --
Termination of shares granted under Stock Incentive Plans (75,192
shares) (.1 ) (2.3 ) 2.4 --
Shares sold under Employee Stock Purchase Plans (10,294 shares) -- .3 -- --
Foreign currency translation adjustments -- -- -- (15.0)
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1993 39.6 216.3 (8.3) (13.0)
Shares issued under Stock Option Plan (315,747 shares) .3 11.1 -- --
Shares granted under Stock Incentive Plans (257,909 shares) .3 9.6 (9.8) --
Compensation expense -- -- 10.7 --
Termination of shares granted under Stock Incentive Plans (126,638
shares) (.1 ) (4.1 ) 4.2 --
Shares sold under Employee Stock Purchase Plans (47,904 shares) -- 2.1 -- --
Foreign currency translation adjustments -- -- -- (8.5)
Purchase and retirement of Common Stock for treasury (801,300
shares) (.8 ) (4.7 ) -- --
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1994 $39.3 $230.3 $ (3.2) $ (21.5)
==========================================================================================================================
</TABLE>
PREFERRED STOCK PURCHASE RIGHTS
Each outstanding share of Common Stock includes one preferred share purchase
right that entitles the holder to purchase one two-hundredth share of a new
series of participating preferred stock at an exercise price of $125. The rights
will not be exercisable, or transferrable apart from the Common Stock, until 10
days following an announcement that a person or affiliated group has acquired,
or obtained the right to acquire, beneficial ownership of 20 percent or more of
the Common Stock or until 10 days following an announcement of a tender or
exchange offer for 30 percent or more of the Common Stock. The rights, which do
not have voting rights, will be exercisable by all holders except for a holder
or affiliated group
28
<PAGE> 30
beneficially owning 20 percent or more of the Common Stock. All rights will
expire on November 23, 1996, and may be redeemed by the Corporation at a price
of $.01 per right at any time prior to either their expiration or such time
that the rights become exercisable.
In the event the Corporation is acquired in a merger or other business
combination or certain other events occur, provision shall be made so that each
holder of a right shall have the right to receive, upon exercise thereof at the
then current exercise price, that number of shares of common stock of the
surviving company which at the time of such transaction would have a market
value of two times the exercise price of the right.
STOCK OPTIONS AND AWARDS
The following information relates to stock option and incentive stock awards.
Option prices are 100 percent of market value on the date the options are
granted. Option grants are for a maximum of ten years after dates of grant and
may be exercised in installments.
Number of Option Prices
Shares Per Share
- -------------------------------------------------------------------------------
Exercised during the Year:
1992 56,722 $14.38 to $28.38
1993 411,538 $14.38 to $35.69
1994 504,203 $14.38 to $38.63
Granted during 1994 172,848 $40.88 to $52.25
Expired during 1994 2,000 $35.69
Terinations during 1994 20,546 $14.38 to $42.50
Outstanding at June 30, 1993 1,105,827 $14.38 to $38.63
Outstanding at June 30, 1994 751,926 $14.38 to $52.25
Exercised at June 30, 1993 862,227 $14.38 to $38.63
Exercised at June 30, 1994 581,660 $14.38 to $46.88
===============================================================================
The Corporation has a stock incentive plan for directors and key
employees. Awards under this plan may include the grant of performance shares,
restricted stock, stock options, stock appreciation rights, or other
stock-based awards. The aggregate number of shares of Common Stock which may be
awarded under the plan in each fiscal year is one percent of the total
outstanding shares of Common Stock plus shares available from prior years.
Performance shares outstanding were 735,966 at June 30, 1994; 608,306 at June
30, 1993; and 454,748 at June 30, 1992. Shares of Common Stock reserved for
future awards under the plan were 864,970 at June 30, 1994; 749,169 at June 30,
1993; and 668,841 at June 30, 1992.
Unearned compensation resulting from the stock incentive plan and
charged to shareholders' equity was $10,646,000 in 1994, $6,434,000 in 1993 and
$5,490,000 in 1992. Unearned compensation is amortized to expense over the
vesting period of the performance shares and is adjusted for changes in the
market value of the Common Stock.
Under the Corporation's domestic retirement plan, employees may
purchase a limited amount of the Corporation's Common Stock at 70 percent of
current market value. Under employee stock purchase plans, 47,904 shares were
issued during fiscal 1994. Shares of Common Stock reserved for future purchases
by the retirement plan were 1,460,497 at June 30, 1994.
RESEARCH AND DEVELOPMENT
Corporation-sponsored research and product development costs were $127,770,000
in 1994, $120,600,000 in 1993, and $122,100,000 in 1992.
RETIREMENT PLANS
Retirement and defined-benefit plans expense amounted to $70,200,000 in 1994,
$56,900,000 in 1993, and $53,000,000 in 1992.
INTEREST EXPENSE
Total interest was $58,600,000 in 1994, $60,200,000 in 1993, and $66,100,000 in
1992, of which $300,000, $300,000, and $100,000, respectively, was capitalized.
Interest paid was $59,000,000 in 1994, $60,800,000 in 1993, and $67,600,000 in
1992.
INCOME TAXES
The provisions for income taxes from continuing operations are summarized as
follows:
- -------------------------------------------------------------
(In millions) 1994 1993 1992
- -------------------------------------------------------------
Current:
United States $50.0 $18.6 $ 4.0
International 11.3 20.7 16.3
State and local 4.9 6.0 5.6
- --------------------------------------------------------------
66.2 45.3 25.9
- --------------------------------------------------------------
Deferred:
United States (2.8) 15.6 7.2
International 5.6 (.4) 1.1
State and local 2.6 (1.8) 3.3
- --------------------------------------------------------------
5.4 13.4 11.6
- --------------------------------------------------------------
$71.6 $58.7 $37.5
==============================================================
29
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS
The components of deferred income tax assets (liabilities) at June 30 are as
follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
(In millions) 1994 1993
- -----------------------------------------------------------------------------------
Current Non-Current Current Non-Current
Deferred Deferred Deferred Deferred
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Completed contracts $(13.2) $ 20.6 $(22.0) $ 18.1
Inventory valuations 15.8 - 17.2 -
Accruals 73.9 8.5 62.7 22.6
Depreciation - (49.3) - (51.4)
Leases (1.0) (18.3) (1.6) (13.1)
International tax loss
carryforwards - 12.8 - 14.6
All other - net 6.6 15.8 13.0 13.2
- -----------------------------------------------------------------------------------
82.1 (9.9) 69.3 4.0
Valuation allowance (2.9) (12.8) (3.3) (14.6)
- -----------------------------------------------------------------------------------
$79.2 $(22.7) $ 66.0 $(10.6)
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
A reconciliation of the effective income tax rate follows:
- -----------------------------------------------------------------------------------
1994 1993 1992
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory U.S. income tax rate 35.0% 34.0% 34.0%
State taxes 2.6 1.6 4.7
Adjustment to prior year accruals - (3.1) (4.0)
Interantional incvome 1.2 2.2 (4.3)
Tax benefits related to export sales (3.1) (1.4) (1.0)
Nondeductible amortization .9 .7 .9
Other items .4 .6 (.3)
- -----------------------------------------------------------------------------------
Effective income tax rate 37.0% 34.6% 30.0%
===================================================================================
</TABLE>
United States income taxes have not been provided on $414,900,000 of
undistributed earnings of international subsidiaries because of the
Corporation's intention to reinvest these earnings. The determination of
unrecognized deferred U.S. tax liability for the undistributed earnings of
international subsidiaries is not practicable.
Pretax income from continuing operations of international subsidiaries
was $55,900,000 in 1994, $38,200,000 in 1993, and $47,700,000 in 1992.
BUSINESS SEGMENTS
Descriptions of the Corporation's business segments appear on page 1. Net sales
and operating profit by segment are on page 2.
Sales made to the U.S government by all segments (primarily Electronic
Systems segment) were 34.8 percent of total sales in 1994, 35.7 percent of total
sales in 1993, and 37.6 percent of total sales in 1992. Intersegment sales,
which are insignificant, are accounted for at prices comparable to unaffiliated
customers.
Selected information by business segment and geographical area is
summarized below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
(In millions) 1994 1993 1992
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
IDENTIFIABLE ASSETS
Electronic Systems $ 730.8 $ 657.9 $ 555.6
Semiconductor 609.3 643.1 702.0
Communications 406.2 370.5 359.7
Lanier Worldwide 738.6 689.2 682.7
Corporate 192.2 181.3 183.8
- -----------------------------------------------------------------------------------
$2,677.1 $2,542.0 $2,483.8
===================================================================================
CAPITAL EXPENDITURES
Electronic Systems $ 26.5 $ 34.5 $ 27.7
Semiconductor 43.6 27.4 21.8
Communications 17.5 16.5 13.1
Lanier Worldwide 14.1 8.9 6.3
Corporate 14.9 8.1 2.8
- -----------------------------------------------------------------------------------
$ 116.6 $ 95.4 $ 71.7
===================================================================================
DEPRECIATION
Electronic Systems $ 29.0 $ 30.4 $ 30.8
Semiconductor 47.5 52.0 69.0
Communications 13.9 13.1 13.5
Lanier Worldwide 7.0 6.9 6.1
Corporate 6.5 6.8 7.7
- -----------------------------------------------------------------------------------
$ 103.9 $ 109.2 $ 127.1
===================================================================================
GEOGRAPHICAL INFORMATION
U.S. operations:
Net sales $2,741.8 $2,517.2 $2,415.5
Operating profit 137.6 131.6 77.3
Identifiable assets 2,041.2 1,951.0 1,913.7
International operations:
Net sales $594.3 $ 581.9 $ 588.5
Operating profit 55.9 38.2 47.7
Identifiable assets 635.9 591.0 570.1
===================================================================================
</TABLE>
Corporate assets consist primarily of cash, cash equivalents, deferred
income taxes, and plant equipment.
Export sales approximated $387,600,000 in 1994, $295,400,000 in 1993,
and $272,700,000 in 1992. Export sales and net sales of international
operations were principally to Europe, Asia, and Latin America.
LEASE COMMITMENTS
Total rental expense from continuing operations amounted to $52,900,000 in 1994,
$56,100,000 in 1993. Future minimum rental commitments under leases, primarily
for land and buildings, amounted to approximately $148,800,000 at June 30, 1994.
These commitments for the years following 1994 are: 1995-$41,100,000,
1996-$30,700,000, 1997-$22,900,000, 1998-$13,900,000, 1999-$8,200,000 and
$32,000,000 thereafter.
30
<PAGE> 32
FINANCIAL INSTRUMENTS
The Corporation uses foreign exchange contracts and options to hedge
intercompany accounts and off-balance-sheet foreign currency commitments.
Management believes the use of foreign currency financial instruments should
not subject the Corporation to undue risk resulting from changes in foreign
currency exchange rates. The Corporation had foreign exchange forward and
option contracts with a face value of $288,800,000 at June 30, 1994 and
$195,500,000 at June 30, 1993. These contracts were primarily agreements to buy
or sell Japanese, European and Malaysian currencies for periods consistent
with the terms of the underlying transaction, generally one year or less.
Foreign exchange forward and option contracts used to hedge off-balance sheet
commitments were $165,600,000 at June 30, 1994 and $88,400,000 at June 30,
1993.
Concentractions of credit risk with respect to trade and notes
receivable are limited due to the wide variety of customers and markets into
which the Corporation sells its products and services.
The net carrying amounts of foreign exchange contracts, long-term
investments and debt approximates the quoted fair market value of these
financial instruments.
31
<PAGE> 33
<TABLE>
QUARTERLY FINANCIAL DATA (UNAUDITED)
Selected quarterly financial data is summarized below.
<CAPTION>
QUARTERS ENDED
- ----------------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS 9-30-93 12-31-93 3-31-94 6-30-94(1) TOTAL YEAR
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FISCAL 1994
Net sales $769.1 $807.5 $838.3 $921.2 $3,336.1
Gross profit 248.6 257.8 259.5 295.4 1,061.3
Income before income taxes 39.8 48.4 51.0 54.3 193.5
Income before cumulative effect of
change in accounting principle 24.7 30.0 33.0 34.2 121.9
Cumulative effect of change in
accounting principle (10.1) -- -- -- (10.1)
Net income 14.6 30.0 33.0 34.2 111.8
Per share:
Income before continuing operations
before cumulative effect of
change in accounting principle .62 .75 .83 .87 3.07
Cumulative effect of change in
accounting principle (.25) -- -- -- (.25)
Net income .37 .75 .83 .87 2.82
Dividends .28 .28 .28 .28 1.12
Stock prices (high/low) 43 3/4-36 3/8 47 3/8-41 1/2 52 1/4-44 49-41 3/4
===========================================================================================================================
<FN>
(1) Fiscal 1994 fourth quarter results include a $17.8 million ($11.5 million
after income taxes or 29 cents per share) charge for the write-off of
securities received from a prior-year sale of a discontinued business.
</TABLE>
<TABLE>
<CAPTION>
QUARTERS ENDED
- -----------------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS 9-25-92 12-25-92 3-26-93 6-30-93 TOTAL YEAR
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FISCAL 1993
Net sales $727.6 $768.8 $744.2 $858.5 $3,099.1
Gross profit 234.3 251.4 244.7 282.7 1,013.1
Income before income taxes 31.9 40.2 42.9 54.8 169.8
Net income 20.7 25.4 27.5 37.5 111.1
Per share:
Net income .53 .64 .70 .95 2.82
Dividends .26 .26 .26 .26 1.04
Stock prices (high/low) 33 1/4-27 1/4 35 1/2-28 3/4 38 5/8-32 7/8 39 1/4-33 7/8
============================================================================================================================
</TABLE>
32
<PAGE> 34
<TABLE>
SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS, AND EMPLOYEES
OTHER THAN RELATED PARTIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
BALANCE AT END OF
DEDUCTIONS PERIOD
BALANCE ------------------------- ----------------------
AT (1) (2) (2)
BEGINNING AMOUNTS AMOUNTS (1) NOT
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT CURRENT
<S> <C> <C> <C> <C> <C> <C>
- ---------------------
YEAR ENDED JUNE 30,
1994:
Ricardo A. Diaz.... $773,890 $ 8,510 -- $9,171 $756,209
Gerald L. Doyle.... $373,015 $235,907 (C) $ 4,140 -- $6,107 $598,675
YEAR ENDED JUNE 30,
1993:
Ricardo A. Diaz.... $781,141 -- $ 7,251 -- $8,510 $765,380
Gerald L. Doyle.... -- $375,000 (B) $ 1,985 -- $3,611 $369,404
YEAR ENDED JUNE 30,
1992:
Ricardo A. Diaz.... $786,569 (A) -- $ 5,428 -- $5,936 $775,205
<FN>
- ---------------
Note A -- Amount represents a 7.5% Employee Note Receivable due April 1996. Note
is secured by employee's real property.
Note B -- Amount represents a 7.5% Employee Note Receivable due December 1997.
Note is secured by employee's real property.
Note C -- Amount represents a 7.5% Employee Note Receivable due March 1999. Note
is secured by employee's real property.
</TABLE>
33
<PAGE> 35
<TABLE>
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
HARRIS CORPORATION AND SUBSIDIARIES
YEAR ENDED JUNE 30, 1994
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER
CHANGES--
BALANCE AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT)-- AT END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
- ---------------------------------
Plant and Equipment
Land........................... $ 35,655 -- $ 5,388 -- $ 30,267
$ (131)(A)
Buildings...................... 387,973 $ 14,882 20,738 52(B) 382,038
Construction in progress....... 5,695 (150) -- -- 5,545
Land improvements.............. 19,910 164 13 -- 20,061
(232)(A)
Leasehold improvements......... 28,611 2,758 7,139 (264)(B) 23,734
---------- -------- -------- ----------- ----------
Land and buildings.......... 477,844 17,654 33,278 (575) 461,645
---------- -------- -------- ----------- ----------
5(A)
Machinery and equipment........ 941,667 92,083 63,693 (999)(B) 969,063
(80)(A)
Rental equipment............... 174,287 50,797 32,432 (4,282)(B) 188,290
Tools, jigs and fixtures....... 2,518 139 57 4(B) 2,604
Trucks and automobiles......... 4,732 594 936 27(B) 4,417
438(A)
Furniture and fixtures......... 66,916 7,246 5,211 (243)(B) 69,146
Plant orders in progress....... 24,669 (1,019) 8 -- 23,642
---------- -------- -------- ----------- ----------
Machinery and equipment..... 1,214,789 149,840 102,337 (5,130) 1,257,162
---------- -------- -------- ----------- ----------
Totals.................... $1,692,633 $167,494 $135,615 $(5,705) $1,718,807
========= ======== ======== =========== =========
</TABLE>
[FN]
Note A -- Transfers between property, plant and equipment classifications.
Note B -- Foreign currency translation gains and losses.
Note C -- The annual provisions for depreciation have been computed principally
in accordance with the following rates:
<TABLE>
<S> <C>
Buildings............................... 2% to 20%
Land improvements....................... 2% to 33%
Leasehold improvements.................. 5% to 50%
Machinery and equipment................. 5% to 33%
Rental equipment........................ 20% to 50%
Tools, jigs and fixtures................ 10% to 33%
Trucks and automobiles.................. 14% to 33%
Furniture and fixtures.................. 5% to 33%
</TABLE>
34
<PAGE> 36
<TABLE>
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
HARRIS CORPORATION AND SUBSIDIARIES
YEAR ENDED JUNE 30, 1993
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER
CHANGES--
BALANCE AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT)-- AT END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
- ---------------------------------
Plant and Equipment
$ 184(A)
Land........................... $ 34,614 $ 126 -- 731(B) $ 35,655
(302)(A)
9,306(B)
Buildings...................... 368,722 13,988 $ 3,310 (431)(C) 387,973
902(A)
Construction in progress....... 5,788 (998) -- 3(B) 5,695
Land improvements.............. 17,582 1,443 2 887(B) 19,910
412(A)
(605)(C)
Leasehold improvements......... 28,217 2,552 2,204 239(D) 28,611
---------- -------- ------- ---------- ----------
Land and buildings.......... 454,923 17,111 5,516 11,326 477,844
---------- -------- ------- ---------- ----------
(222)(A)
1,609(B)
(3,195)(C)
Machinery and equipment........ 911,066 64,700 33,952 1,661(D) 941,667
(969)(A)
(5,926)(C)
Rental equipment............... 163,135 54,059 36,029 17(D) 174,287
(92)(A)
Tools, jigs and fixtures....... 2,431 298 -- (119)(C) 2,518
(129)(A)
135(B)
(213)(C)
Trucks and automobiles......... 4,486 1,047 632 38(D) 4,732
1,123(A)
3,064(B)
(612)(C)
Furniture and fixtures......... 60,618 4,526 2,157 354(D) 66,916
Plant orders in progress....... 17,987 7,739 150 (907)(A) 24,669
---------- -------- ------- ---------- ----------
Machinery and equipment..... 1,159,723 132,369 72,920 (4,383) 1,214,789
---------- -------- ------- ---------- ----------
Totals.................... $1,614,646 $149,480 $78,436 $ 6,943 $1,692,633
========= ======== ======= ========== =========
</TABLE>
[FN]
Note A -- Transfers between property, plant and equipment classifications.
Note B -- Transfers (to) from other classifications in the Consolidated Balance
Sheet.
Note C -- Foreign currency translation gains and losses.
Note D -- Assets acquired in acquisition.
Note E -- The annual provisions for depreciation have been computed principally
in accordance with the following rates:
<TABLE>
<S> <C>
Buildings............................... 2% to 20%
Land improvements....................... 2% to 33%
Leasehold improvements.................. 5% to 50%
Machinery and equipment................. 5% to 33%
Rental equipment........................ 20% to 50%
Tools, jigs and fixtures................ 10% to 33%
Trucks and automobiles.................. 14% to 33%
Furniture and fixtures.................. 5% to 33%
</TABLE>
35
<PAGE> 37
<TABLE>
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
HARRIS CORPORATION AND SUBSIDIARIES
YEAR ENDED JUNE 30, 1992
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER
CHANGES--
BALANCE AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT)-- AT END OF
CLASSIFICATION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
- ---------------------------------
Plant and Equipment
Land........................... $ 34,988 -- $ 338 $ (36)(A) $ 34,614
1,270(A)
Buildings...................... 355,988 $ 12,837 1,687 314(C) 368,722
Construction in progress....... 12,064 (6,276) -- -- 5,788
Land improvements.............. 17,096 167 9 328(A) 17,582
(2,746)(A)
Leasehold improvements......... 31,902 2,183 3,449 327(C) 28,217
---------- -------- ------- ----------- ----------
Land and buildings.......... 452,038 8,911 5,483 (543) 454,923
---------- -------- ------- ----------- ----------
1,172(A)
1,900(B)
Machinery and equipment........ 883,140 63,969 40,324 1,209(C) 911,066
24(A)
Rental equipment............... 118,394 69,528 31,289 6,478(C) 163,135
(2)(A)
1(B)
Tools, jigs and fixtures....... 2,205 184 -- 43(C) 2,431
43(A)
Trucks and automobiles......... 4,471 557 755 170(C) 4,486
(82)(A)
Furniture and fixtures......... 58,461 4,792 3,302 749(C) 60,618
Plant orders in progress....... 24,719 (6,671) 90 29(A) 17,987
---------- -------- ------- ----------- ----------
Machinery and equipment..... 1,091,390 132,359 75,760 11,734 1,159,723
---------- -------- ------- ----------- ----------
Totals.................... $1,543,428 $141,270 $81,243 $11,191 $1,614,646
========= ======== ======= =========== =========
</TABLE>
[FN]
Note A -- Transfers between property, plant and equipment classifications.
Note B -- Transfers (to) from other classifications in the Consolidated Balance
Sheet.
Note C -- Foreign currency translation gains and losses.
Note D -- The annual provisions for depreciation have been computed principally
in accordance with the following rates:
<TABLE>
<S> <C>
Buildings............................... 2% to 20%
Land improvements....................... 2% to 33%
Leasehold improvements.................. 5% to 50%
Machinery and equipment................. 5% to 33%
Rental equipment........................ 20% to 50%
Tools, jigs and fixtures................ 10% to 33%
Trucks and automobiles.................. 14% to 33%
Furniture and fixtures.................. 5% to 33%
</TABLE>
36
<PAGE> 38
<TABLE>
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
HARRIS CORPORATION AND SUBSIDIARIES
YEAR ENDED JUNE 30, 1994
($000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER
CHANGES--
BALANCE AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT)-- AT END OF
DESCRIPTION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
- ---------------------------------
Plant and Equipment $ (245)(A)
Buildings...................... $178,178 $19,316 $6,992 (4)(B) $190,253
Land improvements.............. 11,777 852 7 -- 12,622
(102)(A)
Leasehold improvements........... 20,816 3,176 6,628 (116)(B) 17,146
---------- -------- -------- ---------- ----------
Buildings and
improvements.............. 210,771 23,344 13,627 (467) 220,021
---------- -------- -------- ---------- ----------
460(A)
Machinery and equipment.......... 759,080 74,688 58,215 (670)(B) 775,343
(212)(A)
Rental equipment................. 100,561 41,787 25,962 (2,583)(B) 113,591
2(A)
Tools, jigs and fixtures......... 2,436 215 43 2(B) 2,612
(84)(A)
Trucks and automobiles........... 3,577 514 506 12(B) 3,513
181(A)
Furniture and fixtures........... 52,068 5,099 4,780 (158)(B) 52,410
---------- -------- -------- ---------- ----------
Machinery and equipment........ 917,722 122,303 89,506 (3,050) 947,469
---------- -------- -------- ---------- ----------
Totals.................... $1,128,493 $145,647 $103,133 $ (3,517) $1,167,490
========= ======== ======== ========== =========
<FN>
Note A -- Transfers between property, plant and equipment classifications.
Note B -- Foreign currency translation gains and losses.
</TABLE>
37
<PAGE> 39
<TABLE>
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
HARRIS CORPORATION AND SUBSIDIARIES
YEAR ENDED JUNE 30, 1993
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER
CHANGES--
BALANCE AT ADD BALANCE
BEGINNING ADDITIONS (DEDUCT)-- AT END OF
DESCRIPTION OF PERIOD AT COST RETIREMENTS DESCRIBE PERIOD
- ---------------------------------
Plant and Equipment
$ (78)(A)
Buildings...................... $ 154,490 $ 20,270 $ 2,280 5,776(C) $ 178,178
Land improvements.............. 10,431 847 1 500(C) 11,777
(39)(A)
Leasehold improvements......... 20,369 2,821 1,767 (568)(B) 20,816
---------- -------- ------- -------- ----------
Buildings and
improvements................... 185,290 23,938 4,048 5,591 210,771
---------- -------- ------- -------- ----------
(65)(A)
(1,942)(B)
Machinery and equipment........ 710,258 78,940 29,688 1,577(C) 759,080
(517)(A)
Rental equipment............... 94,719 40,834 29,846 (4,629)(B) 100,561
(24)(A)
Tools, jigs and fixtures....... 2,180 273 -- 7(B) 2,436
44(A)
(167)(B)
Trucks and automobiles......... 3,374 697 506 135(C) 3,577
679(A)
(300)(B)
Furniture and fixtures......... 45,769 5,362 1,956 2,514(C) 52,068
---------- -------- ------- -------- ----------
Machinery and equipment..... 856,300 126,106 61,996 (2,688) 917,722
---------- -------- ------- -------- ----------
Totals.................... $1,041,590 $150,044 $66,044 $2,903 $1,128,493
========= ======== ======= ======== =========
<FN>
Note A -- Transfers between property, plant and equipment classifications.
Note B -- Foreign currency translation gains and losses.
Note C -- Transfers (to) from other classifications in the Consolidated Balance
Sheet.
</TABLE>
38
<PAGE> 40
<TABLE>
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
HARRIS CORPORATION AND SUBSIDIARIES
YEAR ENDED JUNE 30, 1992
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
BALANCE CHARGED OTHER
AT TO CHANGES--
BEGINNING COSTS ADD BALANCE
OF AND (DEDUCT)-- AT END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS DESCRIBE PERIOD
- ---------------------------------
Plant and Equipment
$ (145)(A)
Buildings...................... $136,485 $ 19,599 $ 1,455 6(B) $ 154,490
Land improvements.............. 9,707 741 9 (8)(A) 10,431
(176)(A)
Leasehold improvements......... 20,414 3,167 3,311 275(B) 20,369
-------- -------- ------- -------- ----------
Buildings and
improvements................... 166,606 23,507 4,775 (48) 185,290
-------- -------- ------- -------- ----------
715(A)
Machinery and equipment........ 649,392 96,019 36,616 748(B) 710,258
(292)(A)
Rental equipment............... 69,691 37,606 16,987 4,701(B) 94,719
(2)(A)
Tools, jigs and fixtures....... 1,914 261 -- 7(B) 2,180
24(A)
Trucks and automobiles......... 3,126 687 543 80(B) 3,374
(116)(A)
Furniture and fixtures......... 42,030 6,582 3,083 356(B) 45,769
-------- -------- ------- -------- ----------
Machinery and equipment..... 766,153 141,155 57,229 6,221 856,300
-------- -------- ------- -------- ----------
Totals.................... $932,759 $164,662 $62,004 $6,173 $1,041,590
======== ======== ======= ======== =========
<FN>
Note A -- Transfers between property, plant and equipment classifications.
Note B -- Foreign currency translation gains and losses.
</TABLE>
39
<PAGE> 41
<TABLE>
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
HARRIS CORPORATION AND SUBSIDIARIES
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
-------------------------
(1) (2)
BALANCE CHARGED CHARGED
AT TO COSTS TO OTHER BALANCE
BEGINNING AND ACCOUNTS DEDUCTIONS-- AT END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
- -----------------------------------
YEAR ENDED JUNE 30, 1994:
Amounts Deducted From
Respective Asset Accounts $ 891(A)
6,754(B)
------------
Allowances for collection
losses........................... $28,245 $ 8,790 $ 102(C) $ 7,645 $29,492
========= ========= =========== ============ ========
YEAR ENDED JUNE 30, 1993:
Amounts Deducted From
Respective Asset Accounts $ 1,028(A)
8,058(B)
------------
Allowances for collection
losses........................... $29,638 $ 7,648 $ 45(D) $ 9,086 $28,245
========= ========= =========== ============ ========
YEAR ENDED JUNE 30, 1992:
Amounts Deducted From
Respective Asset Accounts $ 1,118(A) $ 11,583(B)
65(D) 1,526(C)
----------- ------------
Allowances for collection
losses........................... $30,545 $11,019 $ 1,183 $ 13,109 $29,638
========= ========= =========== ============ ========
<FN>
Note A -- Foreign currency translation gains and losses.
Note B -- Uncollectible accounts charged off, less recoveries on accounts
previously charged off.
Note C -- Amounts reclassified to other accounts in the Consolidated Balance
Sheet.
Note D -- Additions resulting from businesses acquired.
</TABLE>
40
<PAGE> 42
<TABLE>
SCHEDULE IX -- SHORT-TERM BORROWINGS
HARRIS CORPORATION AND SUBSIDIARIES
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B COL. C COL. D COL. E COL. F
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED
AVERAGE AVERAGE
MAXIMUM AMOUNT INTEREST
AMOUNT OUTSTANDING RATE
BALANCE WEIGHTED OUTSTANDING DURING DURING
AT AVERAGE DURING THE THE
CATEGORY OF AGGREGATE END OF INTEREST THE PERIOD PERIOD
SHORT-TERM BORROWINGS PERIOD RATE PERIOD (B) (C)
- -------------------------------------
YEAR ENDED JUNE 30, 1994:
Short-term debt payable to banks
(A)................................ $ 19,765 9.4 % $163,466 $101,977 6.5%
YEAR ENDED JUNE 30, 1993:
Short-term debt payable to banks
(A)................................ $ 35,222 9.3 % $103,688 $ 65,157 11.8%
YEAR ENDED JUNE 30, 1992:
Short-term debt payable to banks
(A)................................ $ 43,043 11.5 % $206,544 $102,867 10.6%
<FN>
- ---------------
Note A -- Short-term debt includes borrowings by Harris international
subsidiaries from banks under bank overdraft, lines of credit, or
short-term note agreements. Maturity dates under bank overdraft
arrangements are not formalized but are reviewed periodically --
generally on an annual basis.
Note B -- The average amount outstanding during the period was computed by
dividing the total month-end principal balances by 13.
Note C -- The weighted average interest rate during the period was computed by
dividing the actual interest expense on short-term debt by the average
short-term debt outstanding.
</TABLE>
41
<PAGE> 43
<TABLE>
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
HARRIS CORPORATION AND SUBSIDIARIES
(IN THOUSANDS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
COL. A
COL. B
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CHARGED TO
COSTS AND EXPENSES
YEARS ENDED JUNE 30,
--------------------------------
ITEM 1994 1993 1992
- -----------------------------------------------------------
1. Maintenance and repairs................................ $56,081 $57,400 $59,847
2. Depreciation and amortization of intangible assets,
preoperating costs and similar deferrals.............. A A A
3. Taxes, other than payroll and income taxes............. A A A
4. Royalties.............................................. A A A
5. Advertising costs...................................... A $31,859 $34,092
<FN>
- ---------------
Note A -- Amounts are not presented as such amounts are less than 1% of total
sales and revenues.
</TABLE>
42
<PAGE> 1
EXHIBIT 10(c)
HARRIS CORPORATION
STOCK INCENTIVE PLAN
AMENDED AS OF AUGUST 26, 1994
1. PURPOSE.
The purpose of the Harris Corporation Stock Incentive Plan (the "Plan") is to
promote the long-term growth and performance of Harris Corporation (the
"Corporation") and its affiliates and to attract and retain outstanding
individuals by awarding directors and salaried employees performance-based
stock awards, restricted stock, stock options, stock appreciation rights and/or
other stock-based awards.
2. DEFINITIONS
The following definitions are applicable to the Plan:
"Award" means the grant of performance shares, restricted stock, stock
options, stock appreciation rights or other stock-based award under the Plan.
"Board" means the Board of Directors of the Corporation.
"Board Committee" means a committee of the Board consisting of the members of
the Board who are not employees of the Corporation or any affiliate thereof.
"Commission" means the Securities and Exchange Commission.
"Committee" means a committee of the Board to which the Board has delegated
authority and responsibility under the Plan and which shall be appointed by,
and serve at the pleasure of, the Board, and shall be constituted so as to
satisfy any applicable legal requirements, including the requirements of Rule
16b-3 promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or under any successor rule adopted by the Commission.
"Common Stock" means the common stock of the Corporation, $1.00 par value per
share.
"Grant Date" means the date on which the grant of an Option under Section 7.1
hereof or a SAR under Section 8.1 hereof becomes effective pursuant to the
terms of the Stock Option Agreement or Stock Appreciation Rights Agreement, as
the case may be, relating thereto.
"Option" means the option to purchase shares of Common Stock granted under
Sections 7.1 and 10.1 hereof.
<PAGE> 2
"Option Price" means the purchase price of each share of Common Stock under
an Option.
"Outside Director" means a member of the Board who is not an employee of the
Corporation or any affiliate thereof.
"Participant" means any salaried employee of the Corporation and its
affiliates designated by the Board Committee to receive an Award under the
Plan.
"Performance Period" means the period of time established by the Board
Committee for achievement of certain objectives under Section 5.1 hereof.
"Restriction Period" means the period of time specified in a Performance
Share Award Agreement or a Restricted Stock Award Agreement, as the case may
be, between the Participant and the Corporation during which the following
conditions remain in effect: (i) certain restrictions on the sale or other
disposition of shares of Common Stock awarded under the Plan, and (ii) subject
to the terms of the applicable agreement, the continued employment of the
Participant.
"Stock Appreciation Rights" or "SARs" means the right to receive a cash
payment from the Corporation equal to the excess of the fair market value of a
stated number of shares of Common Stock at the exercise date over a fixed price
for such shares.
3. SHARES SUBJECT TO PLAN
3.1 SHARES RESERVED UNDER THE PLAN. The aggregate number of shares of
Common Stock which may be awarded under the Plan in each fiscal year of the
Corporation, subject to adjustment as provided in Section 3.2 hereof, shall be
one percent (1%) of the total outstanding shares of Common Stock as of the
first day of such year for which the Plan is in effect; provided that such
number shall be increased in any year by the number of shares of Common Stock
available for grant hereunder in previous years but not subject of Awards
granted hereunder in such year; and provided further, that no more than two
million (2,000,000) shares of Common Stock shall be cumulatively available for
the grant of incentive stock options under the Plan. In addition, any Common
Stock issued by the Corporation through the assumption or substitution of
outstanding grants from an acquired corporation or entity shall not reduce the
shares available for grants under the Plan. Shares of Common Stock to be
issued pursuant to the Plan may be authorized and unissued shares, treasury
shares, or any combination thereof. Subject to Section 8.2 hereof, if any
shares of Common Stock subject to an Award hereunder are forfeited or any such
Award otherwise terminates without the issuance of such shares of Common Stock
to a Participant, or if any shares of Common Stock are surrendered by a
Participant in full or partial payment of the Option Price of an Option, such
shares, to the extent of any
2
<PAGE> 3
such forfeiture, termination or surrender, shall again be available for grant
under the Plan; PROVIDED, HOWEVER, that shares of Common Stock surrendered by a
Participant subject to Section 16 of the Securities Exchange Act of 1934, as
amended, or any successor thereto, in payment of the Option Price, shall be
available for grant under the Plan only to Participants not subject to such
Section; and
3.2 ADJUSTMENTS. Subject to Section 12 hereof, the aggregate number of
shares of Common Stock which may be awarded under the Plan and outstanding
Awards shall be adjusted by the Board Committee to reflect a change in the
capitalization of the Corporation, including but not limited to, a stock
dividend or split, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, spin-off, spin-out or other distribution of
assets to shareholders; provided that the number and price of shares subject to
outstanding Options granted to Outside Directors pursuant to Section 10 hereof
and the number of shares subject to future Options to be granted pursuant to
Section 10 shall be subject to adjustment only as set forth in Section 10
hereof.
4. ADMINISTRATION OF PLAN
4.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered by the
Board Committee; PROVIDED, HOWEVER, the Board Committee may delegate some or
all of its authority and responsibility under the Plan to the Committee;
PROVIDED, FURTHER, that the Board Committee may not delegate to the Committee
any authority to make Awards hereunder to the Chief Executive Officer of the
Corporation. The Board Committee shall have authority to interpret the Plan,
to establish, amend, and rescind any rules and regulations relating to the
Plan, to prescribe the form of any agreement or instrument executed in
connection herewith, and to make all other determinations necessary or
advisable for the administration of the Plan. All such interpretations, rules,
regulations and determinations shall be conclusive and binding on all persons
and for all purposes. In addition, the Board Committee shall have authority,
without amending the Plan, to grant Awards hereunder to Participants who are
foreign nationals or employed outside the United States or both, on terms and
conditions different from those specified herein as may, in the sole judgment
and discretion of the Board Committee, be necessary or desirable to further the
purpose of the Plan. Notwithstanding the foregoing, neither the Board, the
Board Committee nor the Committee shall have any discretion with respect to
Options granted to Outside Directors pursuant to Section 10 hereof.
4.2 DESIGNATION OF PARTICIPANTS. Participants shall be selected, from time
to time, by the Board Committee, from those salaried employees of the
Corporation and its affiliates who, in the opinion of the Board Committee, have
the capacity to contribute materially to the continued growth and successful
performance of the Corporation.
3
<PAGE> 4
5. PERFORMANCE AWARDS
5.1 AWARDS. Awards of shares of Common Stock may be made, from time to
time, to such salaried employees of the Corporation and its affiliates as may
be selected by the Board Committee. The release of such shares to the
Participant at the lapse of restriction on the sale or transfer of shares
subject to such Awards shall be contingent upon (i) achievement of such
corporate, sector, division or other objectives during the Performance Period
as shall be established by the Board Committee and (ii) the expiration of the
Restriction Period. Except as provided in Section 11 hereof and the
Performance Share Award Agreement between the Participant and the Corporation,
shares subject to such Awards under this Section 5.1 shall be released to the
Participant only after the expiration of the relevant Restriction Period. Each
Award under this Section 5.1 shall be evidenced by a Performance Share Award
Agreement between the Participant and the Corporation which shall specify the
applicable performance objectives, the Performance Period, the Restriction
Period, any forfeiture conditions and such other terms and conditions as the
Board Committee shall determine.
5.2 STOCK CERTIFICATES. Upon expiration of the Restriction Period, the
Corporation shall issue a certificate registered in the name of the Participant
or his designee evidencing the shares of Common Stock to which the Participant
is entitled and release such shares to the custody of the Participant.
5.3 RIGHTS AS SHAREHOLDERS. Subject to the provisions of the Performance
Share Award Agreement between the Participant and the Corporation, during the
Performance Period, Participants may exercise full voting rights with respect
to all shares awarded thereto under Section 5.1 hereof and shall be entitled to
receive dividends and other distributions paid with respect to those shares.
During the period between the completion of the Performance Period and the
expiration of the Restriction Period, Participants may exercise full voting
rights and shall be entitled to receive dividends and other distributions only
as to the number of shares determined in accordance with the Performance Share
Award Agreement between the Participant and the Corporation.
5.4 TRANSFERABILITY OF SHARES. Certificates evidencing the shares of Common
Stock awarded under the Plan shall not be sold, exchanged, assigned,
transferred, pledged, hypothecated or otherwise disposed of until the
expiration of the Restriction Period.
5.5 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an employee of
either the Corporation or of one of its affiliates, the number of shares
subject of the Award, if any, to which the Participant shall be entitled shall
be determined in accordance with the Performance Share Award Agreement between
the Participant and the Corporation.
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<PAGE> 5
5.6 TRANSFER OF EMPLOYMENT. If a Participant transfers employment from one
business unit of the Corporation or any of its affiliates to another business
unit during a Performance Period, such Participant shall be eligible to receive
such number of shares of Common Stock as the Board Committee may determine
based upon such factors as the Board Committee in its sole discretion may deem
appropriate.
6. RESTRICTED STOCK AWARDS
6.1 AWARDS. Awards of shares of Common Stock subject to such restrictions
as to vesting and otherwise as the Board Committee shall determine, may be
made, from time to time, to salaried employees of the Corporation and its
affiliates as may be selected by the Board Committee. The Board Committee may
in its sole discretion at the time of the Award or at any time thereafter
provide for the early vesting of such Award prior to the expiration of the
Restriction Period. Each Award under this Section 6.1 shall be evidenced by a
Restricted Stock Award Agreement between the Participant and the Corporation
which shall specify the vesting schedule, any rights of acceleration, any
forfeiture conditions, and such other terms and conditions as the Board
Committee shall determine.
6.2 STOCK CERTIFICATES. Upon expiration of the Restriction Period, the
Corporation shall issue a certificate registered in the name of the Participant
or his designee evidencing the shares of Common Stock to which the Participant
is entitled and release such shares to the custody of the Participant.
6.3 RIGHTS AS SHAREHOLDERS. During the Restriction Period, Participants may
exercise full voting rights with respect to all shares awarded thereto under
Section 6.1 hereof and shall be entitled to receive dividends and other
distributions paid with respect to those shares.
6.4 TRANSFERABILITY OF SHARES. Certificates evidencing the shares of Common
Stock awarded under the Plan shall not be sold, exchanged, assigned,
transferred, pledged, hypothecated or otherwise disposed of until the
expiration of the Restriction Period.
6.5 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an employee of
either the Corporation or of any of its affiliates, the number of shares
subject of the Award, if any, to which the Participant shall be entitled shall
be determined in accordance with the Restricted Stock Award Agreement between
the Participant and the Corporation. All remaining shares as to which
restrictions apply at the date of termination of employment shall be forfeited
subject to such exceptions, if any, authorized by the Board Committee.
5
<PAGE> 6
7. STOCK OPTIONS
7.1 GRANTS. Options may be granted, from time to time, to such salaried
employees of the Corporation and its affiliates as may be selected by the Board
Committee. The Option Price shall be determined by the Board Committee
effective on the Grant Date; PROVIDED HOWEVER, that such price shall not be
less than one hundred percent (100%) of the fair market value of a share of
Common Stock on the Grant Date. The number of shares of Common Stock subject
to each option granted to each Participant, the terms of each option, and any
other terms and conditions of an Option granted hereunder shall be determined
by the Board Committee, in its sole discretion, effective on the Grant Date;
PROVIDED, HOWEVER, that no option shall be exercisable any later than ten (10)
years from the Grant Date. Each option shall be evidenced by a Stock Option
Agreement between the Participant and the Corporation which shall specify the
type of Option granted, the Option Price, the term of the Option, the number of
shares of Common Stock to which the Option pertains, the conditions upon which
the Option becomes exercisable and such other terms and conditions as the Board
Committee shall determine.
7.2 PAYMENT OF OPTION PRICE. No shares of Common Stock shall be issued upon
exercise of an Option until full payment of the Option Price therefor by the
Participant. Upon exercise, the Option Price may be paid in cash, in shares of
Common Stock having a fair market value equal to the Option Price, or in any
combination thereof.
7.3 RIGHTS AS SHAREHOLDERS. Participants shall not have any of the rights
of a shareholder with respect to any shares subject to an Option until such
shares have been issued upon the proper exercise of such Option.
7.4 TRANSFERABILITY OF OPTIONS. Options granted under the Plan may not be
sold, transferred, pledged, assigned, hypothecated or otherwise disposed of
except by will or by the laws of descent and distribution. All Options granted
to a Participant under the Plan shall be exercisable during the lifetime of
such Participant only by such Participant, his agent, guardian or
attorney-in-fact.
7.5 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an employee of
either the Corporation or of any of its affiliates, the Options granted
hereunder shall be exercisable in accordance with the Stock Option Agreement
between the Participant and the Corporation.
8. STOCK APPRECIATION RIGHTS
8.1 GRANTS. Stock Appreciation Rights may be granted, from time to time, to
such salaried employees of the Corporation and its affiliates as may be
selected by the Board Committee. SARs may be granted at the discretion of the
Board Committee
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<PAGE> 7
either (i) in connection with an Option or (ii) independent of an Option. The
price from which appreciation shall be computed shall be established by the
Board Committee at the Grant Date; PROVIDED, HOWEVER, that such price shall not
be less than one-hundred percent (100%) of the fair market value of the number
of shares of Common Stock subject of the grant on the Grant Date. In the event
the SAR is granted in connection with an Option, the fixed price from which
appreciation shall be computed shall be the Option Price. Each grant of a SAR
shall be evidenced by a Stock Appreciation Rights Agreement between the
Participant and the Corporation which shall specify the type of SAR granted,
the number of SARs, the conditions upon which the SARs vest and such other
terms and conditions as the Board Committee shall determine.
8.2 EXERCISE OF SARS. SARs may be exercised upon such terms and conditions
as the Board Committee shall determine; PROVIDED, HOWEVER, that SARs granted in
connection with Options may be exercised only to the extent the related Options
are then exercisable. Notwithstanding Section 3.1 hereof, upon exercise of a
SAR granted in connection with an Option as to all or some of the shares
subject of such Award, the related Option shall be automatically cancelled to
the extent of the number of shares subject of the exercise, and such shares
shall no longer be available for grant hereunder. Conversely, if the related
Option is exercised as to some or all of the shares subject of such Award, the
related SAR shall automatically be cancelled to the extent of the number of
shares of the exercise, and such shares shall no longer be available for grant
hereunder.
8.3 PAYMENT OF EXERCISE. Upon exercise of a SAR, the holder shall be paid
in cash the excess of the fair market value of the number of shares subject of
the exercise over the fixed price, which in the case of a SAR granted in
connection with an Option shall be the Option Price for such shares.
8.4 RIGHTS OF SHAREHOLDERS. Participants shall not have any of the rights
of a shareholder with respect to any Options granted in connection with a SAR
until shares have been issued upon the proper exercise of an Option.
8.5 TRANSFERABILITY OF SARS. SARs granted under the Plan may not be sold,
transferred, pledged, assigned, hypothecated or otherwise disposed of except by
will or by the laws of descent and distribution. All SARs granted to a
Participant under the Plan shall be exercisable during the lifetime of such
Participant only by such Participant, his agent, guardian, or attorney-in-fact.
8.6 TERMINATION OF EMPLOYMENT. If a Participant ceases to be an employee of
either the Corporation or of any of its affiliates, SARs granted hereunder
shall be exercisable in accordance with the Stock Appreciation Rights Agreement
between the Participant and the Corporation.
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<PAGE> 8
9. OTHER STOCK-BASED AWARDS
Awards of shares of Common Stock and other awards that are valued in whole or
in part by reference to, or are otherwise based on, Common Stock, may be made,
from time to time, to salaried employees of the Corporation and its affiliates
as may be selected by the Board Committee. Such Awards may be made alone or in
addition to or in connection with any other Award hereunder. The Board
Committee may in its sole discretion determine the terms and conditions of any
such Award. Each such Award shall be evidenced by an agreement between the
Participant and the Corporation which shall specify the number of shares of
Common Stock subject of the Award, any consideration therefor, any vesting or
performance requirements and such other terms and conditions as the Board
Committee shall determine.
10. OUTSIDE DIRECTORS' OPTIONS
10.1 GRANTS. Effective the date of the 1990 Annual Meeting of Shareholders
and on the date of each Annual Meeting thereafter, each Outside Director shall
automatically be granted an Option to purchase 1,000 shares of Common Stock.
All such Options shall be nonstatutory stock options. The Option Price shall
be one hundred percent (100%) of the fair market value of the shares of Common
Stock on the date of grant.
10.2 EXERCISE OF OPTIONS. Except as set forth in this Section 10,
twenty-five percent (25%) of the total number of shares subject of an Option
granted to an Outside Director shall become exercisable on the first
anniversary of the date of grant of the year in which the option is granted and
twenty-five percent (25%) on the anniversary date of each of the next three
succeeding years. The right to purchase shares with respect to shares which
have become exercisable shall be cumulative during the term of the Option. Any
Option granted to Outside Directors that has been outstanding for more than one
(1) year shall immediately become exercisable in the event of a Change of
Control, as hereinafter defined. The Option may be exercised by the Outside
Director during the period that the Outside Director remains a member of the
Board and for a period of three (3) months following retirement, provided that
only those Options exercisable at the date of the Outside Director's retirement
may be exercised during the period following retirement and, provided further,
that in no event shall the Option be exercisable more than ten (10) years after
the date of grant.
In the event of the death of an Outside Director, the Option shall be
exercisable only within the twelve (12) months next succeeding the date of
death, and then only (i) by the executor or administrator of the Outside
Director's estate or by the person or persons to whom the Outside Director's
rights under the Option shall pass by the Outside Director's will or the laws
of descent and distribution, and (ii) if and to the extent that the Outside
Director was entitled to exercise the Option at the date of the Outside
Director's death, provided that in no event shall the Option be exercisable
8
<PAGE> 9
more than ten (10) years after the date of grant.
10.3 PAYMENT OF OPTION PRICE. An Option granted to an Outside Director
shall be exercisable only upon payment to the Corporation of the Option Price.
Payment for the shares shall be in United States dollars, payable in cash or by
check.
10.4 ADJUSTMENTS. In case there shall be a merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure such that the shares of Common Stock are changed into or become
exchangeable for a larger or smaller number of shares, thereafter the number of
shares subject to outstanding Options granted to Outside Directors and the
number of shares subject to Options to be granted to Outside Directors pursuant
to the provisions of this Section 10 shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease in the number of
shares of Common Stock by reason of such change in corporate structure,
provided that the number of shares shall always be a whole number, and the
purchase price per share of any outstanding Options shall, in the case of an
increase in the number of shares, be proportionately reduced, and in the case
of a decrease in the number of shares, shall be proportionately increased.
11. CHANGE OF CONTROL
11.1 DEFINITION OF CHANGE OF CONTROL. For purposes hereof, a "change of
control" shall be deemed to have occurred if (i) a third person, including a
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934
or any rules or regulations thereunder, acquires shares of the Corporation
having twenty percent (20%) or more of the total number of votes that may be
cast for the election of directors of the Corporation, or (ii) as the result of
any tender or exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were directors of the Corporation before the
Transaction shall cease to constitute a majority of the Board of the
Corporation or any successor to the Corporation.
11.2 ACCELERATION OF BENEFITS. In the event of a "change of control" of the
Corporation, all outstanding Awards shall be cashed out immediately prior to
the occurrence of the "change of control" in such manner and in such amounts as
determined by the Board Committee in its sole discretion at the time such
Awards are made.
12. AMENDMENT OR TERMINATION OF PLAN
Until such time as a "change of control" shall have occurred, the Board or
the Board Committee may amend, suspend or terminate the Plan or any part
thereof from time to time, provided that no change may be made which would
impair the rights of
9
<PAGE> 10
a Participant to whom shares of Common Stock have theretofore been awarded
without the consent of said Participant; and provided, further, that neither
the Board nor the Board Committee may make any alteration or amendment to the
Plan which would materially increase the benefits accruing to Participants
under the Plan, increase the aggregate number of shares which may be issued
under the Plan (other than an increase reflecting a change in capitalization of
the Corporation), change the class of employees eligible to participate in the
Plan, or amend, modify or delete Section 10 hereof, without the approval of the
shareholders of the Corporation so long as such approval is required by
applicable law or regulation. Further, Section 10 hereof may not be amended
more frequently than once every six months, except to comply with changes to
the Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules promulgated thereunder.
13. MISCELLANEOUS
13.1 RIGHTS OF EMPLOYEES. Nothing in the Plan shall interfere with or limit
in any way the right of the Corporation or any affiliate to terminate any
Participant's employment at any time, nor confer upon any Participant any right
to continued employment with the Corporation or any affiliate.
13.2 TAX WITHHOLDING. The Corporation shall have the authority to
withhold, or to require a Participant to remit to the Corporation, prior to
issuance or delivery of any shares or cash hereunder, an amount sufficient to
satisfy federal, state and a local tax withholding requirements associated with
any Award. In addition, the Corporation may, in its sole discretion, permit a
Participant to satisfy any tax withholding requirements, in whole or in part,
by (i) delivering to the Corporation shares of Common Stock held by such
Participant having a fair market value equal to the amount of the tax or (ii)
directing the Corporation to retain shares of Common Stock otherwise issuable
to the Participant under the Plan.
13.3 STATUS OF AWARDS. Awards hereunder shall not be deemed compensation
for purposes of computing benefits under any retirement plan of the Corporation
or affiliate and shall not affect any benefits under any other benefit plan now
or hereafter in effect under which the availability or amount of benefits is
related to the level of compensation.
13.4 WAIVER OF RESTRICTIONS. The Board Committee may, in its sole
discretion, based on such factors as the Board Committee may deem appropriate,
waive in whole or in part, any remaining restrictions or vesting requirements
in connection with any Award hereunder.
13.5 DELEGATION TO MANAGEMENT. The Board Committee may delegate to one or
more officers of the Corporation or a committee of officers the right to grant
Awards hereunder to employees who are not officers or directors of the
Corporation
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and to cancel or suspend Awards to employees who are not officers or directors
of the Corporation.
13.6 ADJUSTMENT OF AWARDS. Subject to Section 12, the Board Committee shall
be authorized to make adjustments in performance award criteria or in the terms
and conditions of other Awards (except Options granted pursuant to Section 10
hereof) in recognition of unusual or nonrecurring events affecting the
Corporation or its financial statements or changes in applicable laws,
regulations or accounting principles; provided, however, that no such
adjustment shall impair the rights of any Participant without his consent. The
Board Committee may also make Awards hereunder in replacement of, or as
alternatives to, Awards previously granted to Participants, including without
limitation, previously granted Options having higher Option Prices and grants
or rights under any other plan of the Corporation or of any acquired entity.
The Board Committee may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent it
shall deem desirable to carry it into effect. In the event the Corporation
shall assume outstanding employee benefit awards or the right or obligation to
make future such awards in connection with the acquisition of another
corporation or business entity, the Board Committee may, in its discretion,
make such adjustments in the terms of Awards under the Plan as it shall deem
appropriate. Notwithstanding the above, neither the Board, the Board Committee
nor any Committee shall have the right to make any adjustments in the terms or
conditions of Options granted pursuant to Section 10.
13.7 CONSIDERATION FOR AWARDS. Except as otherwise required in any
applicable agreement or by the terms of the Plan, Participants under the Plan
shall not be required to make any payment or provide consideration for an Award
other than the rendering of services.
13.8 EFFECTIVE DATE AND TERM OF PLAN. The Plan shall be effective as of July
1, 1989, subject to the approval of the Plan by the holders of a majority of
the shares of Common Stock at the 1990 Annual Shareholders meeting. Any grants
made hereunder prior to such approval shall be effective when made (unless
otherwise specified by the Board Committee at the time of grant), but shall be
conditioned on, and subject to, the approval of the Plan by shareholders.
Unless terminated under the provisions of Section 12 hereof, the Plan shall
continue in effect until terminated by the Board.
Approved by the Board of Directors this 26th day of August, 1994.
Attested:
______________________________
/c/ R. L. Ballantyne
f94064
11
<PAGE> 1
Exhibit 10(g)
HARRIS CORPORATION
RETIREMENT PLAN
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C> <C>
1.1 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 After-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 After-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Basic Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Balanced Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Break-in-Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Consolidated Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.11 Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.12 Corporation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.13 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.14 Early Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.15 Employment Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.16 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.17 ERISA - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.18 Excess Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
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<TABLE>
<S> <C> <C>
1.19 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.20 Harris Stock Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.21 Harris Stock After-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.22 Harris Stock Matching After-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.23 Harris Stock Matching Pre-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.24 Harris Stock Pre-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.25 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.26 Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.27 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.28 Layoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.29 Leave of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.30 Matching After-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.31 Matching After-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.32 Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.33 Matching Pre-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.34 Matching Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.35 Military Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.36 Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.37 Original Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.38 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.39 Participating Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.40 Period of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
1.41 Period of Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.42 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.43 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.44 Predecessor Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.45 Pre-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.46 Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.47 Profit-Sharing Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.48 Profit-Sharing Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.49 Related Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.50 Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.51 Savings Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.52 Severance from Service Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.53 Supplemental Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.54 Taxable Wage Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.55 Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.56 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.57 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.58 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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<PAGE> 5
ARTICLE II
PARTICIPATION
<TABLE>
<S> <C> <C>
2.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2 Renewal of Participation on Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3 Periods of Service on Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.4 Service with Predecessor Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.5 Participation for Purposes of Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
<TABLE>
<S> <C> <C>
3.1 Profit-Sharing Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2 Allocation of Profit-Sharing Contributions to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3 Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.4 Matching Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.5 After-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.6 Matching After-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.7 Elections to Make Pre-Tax and After-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.8 Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.9 Participating Company's Obligation to Make
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.10 Treatment of Forfeited Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.11 Finality of Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
- iv -
<PAGE> 6
ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS
<TABLE>
<S> <C>
4.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2 Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.3 Percentage Limitation on Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.4 Percentage Limitation on After-Tax and Matching
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.5 Multiple Use of Alternative Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.6 Limitations on Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
ARTICLE V
VESTING AND FORFEITURES
<TABLE>
<S> <C> <C>
5.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.2 Vesting on Retirement, Death or Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.3 Vesting on Other Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.4 Effect of In-Service Withdrawals on a Participant's Vested Percentage . . . . . . . . . . . . . . . . . . . . . 43
5.5 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
ARTICLE VI
ACCOUNTS AND INVESTMENTS
<TABLE>
<S> <C> <C>
6.1 Establishment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.2 Investment of Profit-Sharing Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.3 Investment of Accounts Other than Profit-Sharing Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
- v -
<PAGE> 7
<TABLE>
<S> <C> <C>
6.4 Allocation of Earnings and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.5 Special Rules Concerning Harris Stock Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
ARTICLE VII
DISTRIBUTIONS
<TABLE>
<S> <C> <C>
7.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.2 Small Benefit Cash-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.3 Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.4 Time of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.5 Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.6 Payments on Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.7 Benefit Amount and Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.8 Order of Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.9 Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.10 Designating Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.11 Payment of Group Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.12 Inability to Locate Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
</TABLE>
ARTICLE VIII
LOANS
<TABLE>
<S> <C> <C>
8.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.2 Loan Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.3 Terms and Conditions of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C>
8.4 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.5 Repayment and Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.6 Mechanics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.7 Special Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
</TABLE>
ARTICLE IX
IN-SERVICE WITHDRAWALS
<TABLE>
<S> <C> <C>
9.1 At-Will Withdrawals from Savings Account and After-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.2 Hardship Withdrawals from Pre-Tax Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.3 Emergency Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.4 Reduction of Investment Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
</TABLE>
ARTICLE X
TOP-HEAVY PROVISIONS
<TABLE>
<S> <C> <C>
10.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.2 Minimum Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.3 Minimum Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.4 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>
ARTICLE XI
ADMINISTRATION
<TABLE>
<S> <C> <C>
11.1 Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.2 Corporation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.3 Powers and Duties of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
</TABLE>
- vii -
<PAGE> 9
<TABLE>
<S> <C> <C>
11.4 Actions of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.5 Finality of Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.6 Immunities of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.7 Advisers and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.8 Committee Member who is Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.9 Information Provided by Participating Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.10 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
11.11 Trust Fund Available to Pay All Plan Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
</TABLE>
ARTICLE XII
AMENDMENT AND TERMINATION AND CHANGE OF CONTROL
<TABLE>
<S> <C> <C>
12.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
12.2 Termination of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
12.3 Discontinuance of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
12.4 Vesting on Termination or Discontinuance of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
12.5 Distribution on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
12.6 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
</TABLE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
<TABLE>
<S> <C> <C>
13.1 Restrictions on Alienation; Qualified Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . . . . 97
13.2 Exclusive Benefit Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
13.3 Return of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
</TABLE>
- viii -
<PAGE> 10
<TABLE>
<S> <C> <C>
13.4 No Contract of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
13.5 Payment of Benefits on Incapacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
13.6 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
13.7 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
13.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
13.9 Mistaken Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
</TABLE>
ARTICLE XIV
SPECIAL PROVISIONS FOR
EMPLOYEES OF
HARRIS TECHNICAL SERVICES DIVISION OF
HARRIS TECHNICAL SERVICES CORPORATION
<TABLE>
<S> <C> <C>
14.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
14.2 Profit-Sharing Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
14.3 Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
14.4 No Matching Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
14.5 No Investment in the Harris Stock Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
14.6 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
</TABLE>
- ix -
<PAGE> 11
INTRODUCTION
The Harris Corporation Retirement Plan (the "Plan") is hereby
amended and restated effective July 1, 1994. Those Participants in the Plan
who are Employees on July 1, 1994 shall continue to participate in the Plan, as
restated. Those Participants in the Plan who are not Employees on July 1, 1994
shall not be participants in the Plan, as restated, and their benefits shall be
determined under the terms of the Plan that were in effect prior to July 1,
1994 unless they are reemployed as Employees by a Participating Company.
The Plan and the related trust are intended to be a tax-exempt plan and trust
under sections 401(a) and 501(a) of the Code, respectively. The Plan also is
intended to be a profit-sharing plan that contains a qualified cash or deferred
arrangement under section 401(k) of the Code.
- 1 -
<PAGE> 12
ARTICLE I
DEFINITIONS
1.1 ACCOUNTS -- means all of the accounts described in section
6.1, and such other accounts that may be established on behalf of each
Participant, to be credited with contributions made on behalf of a Participant,
adjusted for earnings and losses as provided in the Plan and debited by Plan
expenses allocable to the Accounts, distributions, withdrawals and loans to the
Participant.
1.2 AFTER-TAX ACCOUNT - means the account established to
record After-Tax Contributions made on the Participant's behalf other than
those invested in the Harris Stock Fund.
1.3 AFTER-TAX CONTRIBUTIONS -- means the contributions described in
section 3.5.
1.4 BASIC ACCOUNT -- means the account established to record
the portion of the Profit-Sharing Contributions allocable to a Participant's
Compensation.
1.5 BALANCED FUND -- means the Balanced Fund described in
Appendix A.
- 2 -
Harris Retirement Plan
<PAGE> 13
Definitions
1.6 BENEFICIARY -- means the person or persons entitled to
receive any benefits payable under the Plan on account of a Participant's
death.
1.7 BREAK-IN-SERVICE -- means a Period of Severance, as
defined below.
1.8 CODE -- means the Internal Revenue Code of 1986, as
amended from time to time.
1.9 COMPENSATION -- means the following items of remuneration
which an Employee earns for work or personal services performed for a
Participating Company:
(a) salary or wage;
(b) commission paid pursuant to a sales incentive
plan;
(c) overtime premium, shift differential or,
additional compensation in lieu of overtime
premium;
(d) compensation in lieu of vacation;
(e) any annual bonus or incentive compensation
payable in the form of cash pursuant to the
Annual Incentive Plan or any successor thereto or
other similar plan adopted by the Corporation
from time to time or any stock award made in lieu
of an annual cash bonus or incentive
compensation;
- 3 -
Harris Retirement Plan
<PAGE> 14
Definitions
(f) any cash bonus or incentive compensation payable
in the form of cash or any stock awards made
pursuant to an established plan of the
Corporation or Employee's Employment Unit,
including but not limited to, bonus awards, spot
awards, lump sum, profit sharing, team awards and
gain sharing awards;
(g) any compensation of a type described in items (a)
through (f) above which is paid as an employee
contribution to the Plan;
(h) any salary reduction contributions to a Section
125 plan maintained by a Participating Company;
but excluding:
(i) any extraordinary compensation of a recurring
or non-recurring nature not included under
items (a) to (f) above;
(ii) any extraordinary compensation in the nature of
bonus, commission or incentive compensation which
is not paid pursuant to an established plan of
the Employee's Employment Unit or pursuant to an
established sales incentive plan;
- 4 -
Harris Retirement Plan
<PAGE> 15
Definitions
(iii) any bonus or special allowance paid by reason of
employment in a foreign country;
(iv) any award made or amount paid pursuant to the
Stock Incentive Plan or any successor thereto,
including, but not limited to, performance
shares, stock options, restricted stock, SARs, or
other stock-based awards or dividend equivalents;
(v) severance pay or special retirement pay;
(vi) retention bonuses or completion bonuses unless
authorized by the appropriate officer of the
Corporation in a uniform and nondiscriminatory
manner;
(vii) reimbursement or allowances with respect to
expenses incurred in connection with employment,
such as tax equalization, reimbursement for
moving expenses, mileage or expense allowance or
education refund.
In no event does the term "Compensation" include indirect compensation such as
employer paid group insurance premiums, or contributions under this or other
qualified employee benefit plan, other than as a contribution described in item
(g) above.
Only Compensation not in excess of the amount allowed under Code
section 401(a)(17), which is $150,000 for 1994, shall be taken into account.
In
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Definitions
addition, in the year in which an Employee becomes a Participant, only
Compensation received after he becomes a Participant shall be taken into
account. For purposes of any test imposed under any section of the Code, the
Plan authorizes the use of any definition of Compensation that satisfies the
requirements of such section.
1.10 CONSOLIDATED SUBSIDIARIES -- means those subsidiaries of
the Corporation which are included in the consolidated annual financial
statement for the Corporation.
1.11 CORPORATION -- means Harris Corporation.
1.12 CORPORATION COMMITTEE -- means the committee established
under section 11.2.
1.13 DISABILITY -- means a disability that qualifies a
Participant for disability benefits under title II or title XVI of the Federal
Social Security Act, and occurs on the effective date determined by the Social
Security Administration.
1.14 EARLY RETIREMENT AGE -- means age 55.
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Definitions
1.15 EMPLOYMENT UNIT - means any division or other readily
identifiable segment of the operations of a Participating Company, for example,
as identified in the annual report or such other segments as may be established
for purposes of the Plan by the Corporation, in its discretion.
1.16 EMPLOYEE -- means an individual who is employed by a
Participating Company, or division or operation thereof, designated in Appendix
C either (a) within the United States or (b) outside the United States who is
covered by the Corporation's current expatriate assignment policy; provided
that the individual is not covered by a retirement plan which is maintained by
the Participating Company pursuant to a collective bargaining agreement and
which was in effect on or after July 1, 1990. With respect to a Participating
Company not all of whose employees are eligible to be participants (a "Limited
Participating Company"), the term "Employee" shall include those employees of
the Participating Company who were Participants prior to their employment by
the Limited Participating Company. Solely for Plan qualification testing, the
term "Employee" includes a "leased employee" only to the extent required in
section 414(n) of the Code.
1.17 ERISA -- means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
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Definitions
1.18 EXCESS COMPENSATION -- means the portion of a
Participant's Compensation that exceeds the Taxable Wage Base for the year in
which the Compensation is received.
1.19 FISCAL YEAR -- means the fiscal year of the Corporation
commencing on July 1 and ending on June 30.
1.20 HARRIS STOCK FUND -- means the Fund described in Appendix
A that is designed to be invested in qualifying employer securities within the
meaning of Section 407 of ERISA, as it applies to an eligible individual
account plan.
1.21 HARRIS STOCK AFTER-TAX ACCOUNT -- means the portion of the
After-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund.
1.22 HARRIS STOCK MATCHING AFTER-TAX ACCOUNT -- means the
portion of the Matching After-Tax Contributions made on the Participant's
behalf invested in the Harris Stock Fund.
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Definitions
1.23 HARRIS STOCK MATCHING PRE-TAX ACCOUNT -- means the portion
of the Matching Pre-Tax Contributions made on the Participant's behalf invested
in the Harris Stock Fund.
1.24 HARRIS STOCK PRE-TAX ACCOUNT -- means the portion of the
Pre-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund.
1.25 HIGHLY COMPENSATED EMPLOYEE -- means a "highly compensated
employee" for a Plan Year as defined in section 414(q) of the Code, including
the family aggregation rules contained therein.
1.26 HOUR OF SERVICE -- means each hour for which an Employee
is paid or entitled to payment for the performance of duties for a
Participating Company or Related Company.
1.27 INVESTMENT FUNDS -- means the funds described in Appendix
A to the Plan.
1.28 LAYOFF -- means a temporary suspension of the active
employment of an Employee with the understanding that the Employee will be
recalled to active employment if and when his services are again required. A
period of
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Definitions
Layoff terminates, and a Participant who is not recalled is deemed to terminate
employment, on the earliest of the following dates:
(a) the expiration date specified in a notice of recall
delivered to the Employee;
(b) the first anniversary of the date the Layoff began, or
(c) the election of an Employee to terminate the Layoff
by written notice delivered to the Corporation.
1.29 LEAVE OF ABSENCE -- means a period of interruption of the
active employment of an Employee granted by the Participating Company or
Predecessor Company with the understanding that the Employee will return to
active employment at the expiration of the period of time. A Leave of Absence
is of definite duration, but may be extended by the Participating Company or
Predecessor Company for additional periods. The term Leave of Absence does not
include a Military Leave.
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Definitions
1.30 MATCHING AFTER-TAX ACCOUNT -- means the account
established to record Matching After-Tax Contributions made on the
Participant's behalf other than those invested in the Harris Stock Fund.
1.31 MATCHING AFTER-TAX CONTRIBUTIONS -- means the
contributions made on behalf of a Participant under section 3.6.
1.32 MATCHING CONTRIBUTIONS -- means the aggregate of the
Matching After-Tax Contributions and the Matching Pre-Tax Contributions.
1.33 MATCHING PRE-TAX ACCOUNT -- means the account established
to record the Matching Pre-Tax Contributions made on the Participant's behalf
other than those invested in the Harris Stock Fund.
1.34 MATCHING PRE-TAX CONTRIBUTIONS -- means the contributions
made on behalf of a Participant under section 3.4.
1.35 MILITARY LEAVE -- means an interruption of active
employment of an Employee with a Participating Company or Predecessor Company
to enter the Armed Forces of the United States under such circumstances that
the Employee
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<PAGE> 22
Definitions
thereby becomes entitled to reemployment rights under Federal law. Military
Leave terminates on the expiration of such reemployment rights.
1.36 NORMAL RETIREMENT AGE -- means age 65.
1.37 ORIGINAL PLAN -- means the terms of the 1990 Revised
Harris Corporation Retirement Plan, and any prior plan to the extent
incorporated therein.
1.38 PARTICIPANT -- means an Employee who satisfies the
requirements of Section 2.1. Employees who do not satisfy the requirements of
Article II may, nevertheless, be Participants solely for purposes of making
Rollover Contributions under Section 3.8.
1.39 PARTICIPATING COMPANY -- means the Corporation and any
Related Company or division or operation thereof so designated by the
Corporation. Appendix C, as it may be amended from time to time, lists each
Participating Company, or division thereof, whose Employees may become
Participants.
1.40 PERIOD OF SERVICE -- means the period of time that begins
on the Employee's employment or reemployment date, whichever is applicable, and
ends
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Definitions
on his Severance from Service Date. The Employee's employment or reemployment
date is the date on which the Employee first performs an Hour of Service.
1.41 PERIOD OF SEVERANCE -- means the period of time commencing
on the Severance from Service Date and ending on the date on which the Employee
again performs an Hour of Service.
1.42 PLAN -- means the Harris Corporation Retirement Plan.
1.43 PLAN YEAR -- means the Fiscal Year.
1.44 PREDECESSOR COMPANY -- means any corporation (a) of which
a Related Company is a successor by reason of having acquired all or
substantially all of its business and assets by purchase, merger, consolidation
or liquidation, or (b) from which a Related Company acquired a business
formerly conducted by such corporation; provided, however, that in the case of
any such corporation that continued to conduct a trade or business subsequent
to the acquisition by a Related Company referred in (a) or (b) above, the
status of such corporation as a Predecessor Company relates only to the period
of time prior to the date of such acquisition.
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Definitions
1.45 PRE-TAX ACCOUNT -- means the account established to record
the Pre-Tax Contributions made on the Participant's behalf other than those
invested in the Harris Stock Fund.
1.46 PRE-TAX CONTRIBUTIONS -- means the contributions made on
behalf of a Participant under section 3.3.
1.47 PROFIT-SHARING ACCOUNT -- means the account established to
record the Profit-Sharing Contributions made on a Participant's behalf, and
includes the Basic Account and the Supplemental Account.
1.48 PROFIT-SHARING CONTRIBUTIONS -- means the contributions
described in section 3.1.
1.49 RELATED COMPANY -- means the Corporation and any
corporation that is a member of a controlled group of corporations (as defined
in section 414(b) of the Code) with the Corporation; any trade or business
(whether or not incorporated) which is under common control (as defined in
section 414(c) of the Code) with the Corporation; any organization (whether or
not incorporated) which is a member of an affiliated service group (as defined
in section 414(m) of the
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Harris Retirement Plan
<PAGE> 25
Definitions
Code) which includes the Corporation, and any other entity required to be
aggregated with the Corporation under section 414(o) of the Code.
1.50 ROLLOVER ACCOUNT -- means the account established to
record the Rollover Contributions made by a Participant from another
tax-qualified plan.
1.51 SAVINGS ACCOUNT -- means the account established under
section 6.1(f).
1.52 SEVERANCE FROM SERVICE DATE -- means, with respect to a
Related Company, the earlier of (a) the date on which the Employee quits,
retires, is discharged or dies, or (b) the first anniversary of the first date
of a period in which an Employee remains absent from service (with or without
pay) for any reason other than quitting, retirement, discharge or death;
provided that "second anniversary" shall be substituted for "first anniversary"
if the absence is due to maternity or paternity reasons as defined in section
410(a)(5)(E) of the Code. The period between the first and the second
anniversary shall not be a Period of Service or a Period of Severance.
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Definitions
1.53 SUPPLEMENTAL ACCOUNT -- means the account established to
record the portion of the Profit-Sharing Contribution allocable to a
Participant's Excess Compensation.
1.54 TAXABLE WAGE BASE -- means the maximum amount of earnings
that may be considered wages under section 3121(a)(1) of the Code, except for
purposes of Medicare taxes, as in effect on the first day of the Plan Year. In
the case of an Employee who was a Participant for only a portion of a
particular Plan Year, the Taxable Wage Base shall be multiplied by the ratio of
the number of calendar months (including a fraction of a month as a full month)
in the Plan Year during which he was a Participant to 12 months.
1.55 TRUST AGREEMENT -- means the Trust Agreement relating to
the Harris Corporation Retirement Plan, entered into between the Corporation
and the Trustee, as it may be amended from time to time.
1.56 TRUST FUND -- means the assets held by the Trustee in
accordance with the Trust Agreement.
1.57 TRUSTEE -- means Boston Safe Deposit & Trust Company, or
such successor (or successors) thereto designated by the Corporation to act as
trustee
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<PAGE> 27
Definitions
under the provisions of the Trust Agreement, who shall agree to act as such by
executing the Trust Agreement.
1.58 VALUATION DATE -- means the last day of each calendar
month.
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Harris Retirement Plan
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ARTICLE II
PARTICIPATION
2.1 IN GENERAL. An Employee shall become a Participant in the
Plan on the date he completes a one-year Period of Service, provided that he is
employed by a Participating Company on that date.
2.2 RENEWAL OF PARTICIPATION ON REEMPLOYMENT. An Employee who
terminates employment after he has become a Participant and is reemployed by a
Participating Company shall become a Participant immediately on reemployment.
An Employee who terminates employment before he has become a Participant shall
become a Participant as provided in section 2.1, provided that his Period of
Service prior to reemployment shall be used to satisfy the one-year Period of
Service requirement of Section 2.1 to the extent provided under section 2.3.
2.3 PERIODS OF SERVICE ON REEMPLOYMENT. The following rules
apply to an Employee who terminates employment before he has become a
Participant and is reemployed by a Related Company and, for purposes of section
5.3, to a Participant who terminates employment and is reemployed by a
Participating Company or Related Company:
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Harris Retirement Plan
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Participation
(a) EARLY REEMPLOYMENT. If the Employee (or
Participant) is reemployed before he incurs a one-year Period of Severance, his
Period of Service before he terminated employment shall be counted as service.
(b) LATER REEMPLOYMENT. If the Employee (or
Participant) is reemployed after he incurs a one-year Period of Severance, his
Period of Service before he terminated shall be counted as service, unless his
Period of Severance equals or exceeds the greater of his prior Period of
Service or five years.
(c) MEASURING THE TIME PERIOD FOR REEMPLOYMENT UNDER
SPECIAL CIRCUMSTANCES. If an Employee terminates employment for any reason
other than quitting, discharge, or retirement, and subsequently quits, is
discharged, or retires, his Period of Severance shall be counted as service
only if he is reemployed by a Related Company within 12 months of when he first
terminated employment.
2.4 SERVICE WITH PREDECESSOR COMPANY. In the case of a
corporation (other than a Related Company) which becomes a Predecessor Company
by reason of the acquisition of all or substantially all of the assets and
business of such corporation by a Related Company, an Employee's Period of
Service shall include employment with such Predecessor Company, as provided in
the corporate documents effecting the acquisition.
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<PAGE> 30
Participation
2.5 PARTICIPATION FOR PURPOSES OF ROLLOVER CONTRIBUTIONS.
Employees of a Participating Company who do not satisfy the requirements of
Section 2.1 may, nevertheless, be Participants solely for purposes of making
Rollover Contributions under Section 3.8.
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Harris Retirement Plan
<PAGE> 31
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
3.1 PROFIT-SHARING CONTRIBUTIONS.
(a) BASIC. The amount of Profit-Sharing
Contributions made on behalf of Participating Companies for a Fiscal Year with
respect to Participants in this Plan and the Harris Corporation Union
Retirement Plan shall equal 11-1/2 percent of the adjusted consolidated net
income of the Corporation and its Consolidated Subsidiaries before net income
taxes for such Fiscal Year as determined in subsection (d), reduced by the
portion of such amount that would have been allocable under Section 3.2 with
respect to Participants' Compensation, if Compensation were determined without
regard to statutory limits under section 401(a)(17) or 415 of the Code.
(b) SPECIAL. The Corporation, in its discretion, may
provide for an additional Profit-Sharing Contribution in a specified dollar
amount or pursuant to a formula with respect to any Fiscal Year.
(c) APPORTIONMENT BETWEEN THE PLAN AND THE HARRIS
UNION RETIREMENT PLAN. Profit-Sharing Contributions for a Plan Year shall be
apportioned for accounting and payment purposes between the Plan and the Harris
Corporation Union Retirement Plan (the "Union Plan") based on the ratio
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Harris Retirement Plan
<PAGE> 32
Contributions and Allocations
of the total Compensation plus Excess Compensation for the Plan Year of
participants in each plan to the total Compensation plus Excess Compensation of
all participants in the Plan and the Union Plan for the Plan Year.
(d) ADJUSTED CONSOLIDATED NET INCOME. The adjusted
consolidated net income of the Corporation and its Consolidated Subsidiaries
before net income taxes shall be determined on the basis of the annual audit
report prepared by the Corporation's independent public accountants by
adjusting the consolidated net income shown in the report to eliminate the
effect, if any, of the following items:
(1) any provision for taxes on or measured by
income for such years required by the
laws of the United States or of any state
or political subdivision thereof
(including the Ohio Franchise Income Tax,
whether or not in fact measured by
income), or any provision for similar
taxes required by the laws of any other
country;
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Harris Retirement Plan
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Contributions and Allocations
(2) all items consisting of credits or
deficiencies relating to taxes described
in clause (1) above on or measured by
income for prior Fiscal Years:
(3) any provision for contributions for such
Fiscal Year under this Plan or under any
profit-sharing retirement plan of a
Consolidated Subsidiary of the
Corporation;
(4) all dividends received during such Fiscal
Year with respect to stock of a Related
Company which is not included among the
Consolidated Subsidiaries;
(5) gains or losses from the sale, exchange
or other disposition of capital or
depreciable property, as defined in the
Code;
(6) any income from the use of the "lifo"
inventory method resulting from either a
reduction in inventory or a decrease in
the cost index;
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Harris Retirement Plan
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Contributions and Allocations
(7) all items of income and expense which
relate directly to the conduct by a
Related Company of a business (i) which
was formerly conducted by a corporation
which was not then a Related Company, and
(ii) the net income (or loss) of which
was included for the first time in
determining the consolidated net income
of the Corporation and its Consolidated
Subsidiaries for the Fiscal Year in
question;
(8) all exchange adjustments resulting from
translating to United States currency
those year-end balance sheet items of
subsidiaries which are denominated in a
foreign currency;
(9) any item of income or expense relating to
the right of any employee to receive cash
upon cancellation of an unexercised stock
option, and
(10) the net of all items of income and
expense, other than tax items described
in subsection (1) and (2) above,
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Harris Retirement Plan
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Contributions and Allocations
relating to Lanier Business Products, Inc.
and any subsidiary thereof which is a
Related Company.
3.2 ALLOCATION OF PROFIT-SHARING CONTRIBUTIONS TO PARTICIPANTS.
(a) IN GENERAL. The Profit-Sharing Contributions for
a Plan Year with respect to an Employment Unit shall be allocated among
eligible Participants described in subsection (c) who are employed by the
Employment Unit during some part or all of the Plan Year based on the ratio of
each eligible Participant's Compensation plus Excess Compensation for the Plan
Year to the Compensation plus Excess Compensation of all eligible Participants
for the Plan Year.
(b) LIMITATION ON AMOUNT. Notwithstanding subsection
(a), the amount allocated to an eligible Participant with respect to Excess
Compensation shall not exceed the "base contribution percentage" by more than
the lesser of (i) the base contribution percentage or (ii) 5.7% (or if greater,
the percentage equal to the Old Age portion of the tax under Section 3111(a) of
the Code, as in effect on the first day of the Plan Year). The term "base
contribution percentage" means the percentage of Compensation contributed by
the Participating Company with
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Harris Retirement Plan
<PAGE> 36
Contributions and Allocations
respect to each Participant's Compensation not in excess of the Participant's
Taxable Wage Base.
(c) LIMITATION ON ELIGIBILITY. A Participant shall
be eligible to receive an allocation of Profit-Sharing Contributions for a Plan
Year if (1) the Participant is employed on the last day of the Plan Year or (2)
the Participant terminates employment during the Plan Year on or after Early
Retirement Age or Normal Retirement Age, or due to Disability, death, Lay-off,
Leave of Absence or Military Leave.
3.3 PRE-TAX CONTRIBUTIONS.
(a) MAXIMUM ELECTION. A Participant may elect to
reduce his Compensation by an amount equal to any whole percentage not to
exceed 12 percent and have the amount of such reduction contributed to the Plan
as a Pre-Tax Contribution. A Participant's Pre-Tax Contribution to the Plan
and other plan of the Participating Company or Related Company for any calendar
year shall not exceed $7,000 (as adjusted in accordance with Code section
402(g)(5) for increases in the cost of living) including the full fair market
value of any Common Stock contributed as a Pre-Tax Contribution. For Pre-Tax
Contributions invested in the Harris Stock Fund, the normal form of
contribution shall be cash; provided,
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Harris Retirement Plan
<PAGE> 37
Contributions and Allocations
however, that the Corporation, in its discretion, may make the contribution in
common stock of the Corporation; which may be contributed at a discount from
fair market value.
(b) CONTRIBUTIONS IN EXCESS OF THE MAXIMUM. If the
Pre-Tax Contribution on behalf of a Participant reaches the limit described in
subsection (a), any additional contributions made during the calendar year
pursuant to the Participant's election shall be deemed to be After-Tax
Contributions and any Matching Pre-Tax Contributions with respect to that
amount shall be deemed to be Matching After-Tax Contributions.
3.4 MATCHING PRE-TAX CONTRIBUTIONS. The Participating Company
shall make a Matching Pre-Tax Contribution on behalf of each Participant
employed by it in the amount of 100 percent of the first six percent of the
Pre-Tax Contributions made on behalf of the Participant during the Plan Year.
The normal form of matching contribution for Pre-Tax Contributions invested in
the Harris Stock Fund shall be in cash; provided, however, that the
Corporation in its discretion, may make the contribution in common stock of the
Corporation, which may be contributed at a discount from fair market value.
The Trustee is authorized to purchase common stock of the Corporation in the
open market, and to give effect to the discount, if any, that has been
established from time to time
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Harris Retirement Plan
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Contributions and Allocations
by allocating shares to Participants' Accounts in addition to the number of
shares purchased on the open market by means of a given contribution.
3.5 AFTER-TAX CONTRIBUTIONS. A Participant may elect to
reduce his Compensation by an amount equal to any whole percentage not to
exceed 12 percent and have the amount of such reduction contributed to the Plan
as an After-Tax Contribution. In no event shall the sum of the Participant's
Pre-Tax Contributions and After-Tax Contributions for a Plan Year exceed 12
percent of Compensation.
3.6 MATCHING AFTER-TAX CONTRIBUTIONS. The Participating
Company shall make a Matching After-Tax Contribution on behalf of each
Participant employed by one of its constituent Employment Units in the amount
of 100 percent of the first six percent of the After-Tax Contributions on
behalf of the Participant, reduced by the amount of the Matching Pre-Tax
Contribution made on behalf of the Participant during the Plan Year. The
normal form of matching contribution for After-Tax Contributions invested in
the Harris Stock Fund shall be in cash; provided, however, that the Corporation
in its discretion, may make the contribution in common stock of the
Corporation, which may be contributed at a discount from fair market value.
The Trustee is authorized to purchase common stock of the Corporation in the
open market, and to give effect to the discount, if
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Harris Retirement Plan
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Contributions and Allocations
any, that has been established from time to time by allocating shares to
Participants' Accounts in addition to the number of shares purchased on the
open market by means of a given contribution.
3.7 ELECTIONS TO MAKE PRE-TAX AND AFTER-TAX CONTRIBUTIONS.
(a) WRITTEN ELECTIONS. A Participant's initial
election to reduce his Compensation and have Pre-Tax Contributions and/or
After-Tax Contributions made on his behalf shall be made in writing by filing
the appropriate form, which shall specify the effective date of the election.
The initial election shall take effect as of the first payroll period
commencing immediately after the effective date of the election.
(b) CHANGING ELECTIONS. A Participant may change the
percentage (in increments of one percent) of future Pre-Tax Contributions
and/or After-Tax Contributions made on his behalf by filing the appropriate
form or by following the appropriate telephone procedures for changing
elections as established by the Corporation Committee. A change may be made
not more than once each month. A change of election shall become effective as
of the first payroll period commencing immediately after the effective date of
the election.
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Harris Retirement Plan
<PAGE> 40
Contributions and Allocations
(c) TERMINATING ELECTIONS. A Participant may
terminate his election to have Pre-Tax Contributions and/or After-Tax
Contributions made on his behalf by filing the appropriate form. The
termination election shall become effective as of the first payroll period
commencing immediately after the effective date of the election.
(d) CORPORATION'S DISCRETION TO LIMIT ELECTIONS. The
Corporation Committee may direct that Participant elections with respect to
Pre-Tax Contributions and/or After-Tax Contributions be changed in any manner
the Corporation Committee, in its discretion, shall determine appropriate to
preserve the qualification of the Plan under section 401(a) of the Code and as
a cash or deferred arrangement under section 401(k) of the Code.
3.8 ROLLOVER CONTRIBUTIONS. Employees, with the consent of
the Corporation Committee or its delegate, may at any time make a rollover
contribution to the Plan. Rollover contributions shall include only (1) cash
funds transferred directly from a tax-qualified plan within the meaning of
section 401 of the Code, and (2) cash funds distributed from a tax-qualified
plan or a conduit individual retirement account that are eligible for rollover
treatment and are transferred to the Plan within 60 days of the Employee's
receipt thereof. An Employee may be required to establish that the transfer of
amounts into a
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Harris Retirement Plan
<PAGE> 41
Contributions and Allocations
Rollover Account will not require any changes to the terms of the Plan or risk
adverse consequences for the Plan or Trust.
3.9 PARTICIPATING COMPANY'S OBLIGATION TO MAKE
CONTRIBUTIONS.
(a) CONTRIBUTIONS. Each Participating Company agrees
to pay to the Trustee the contributions that are required with respect to
Participants who are employed by one of its constituent Employment Units.
Profit-Sharing Contributions with respect to a Fiscal Year shall be paid to the
Trustee no later than the time for filing the Participating Company's federal
income tax return for such Fiscal Year, including extensions. Pre-Tax
Contributions and After-Tax Contributions shall be withheld and paid by the
Employment Unit, and Matching Contributions shall be paid by the Participating
Company to the Trustee no later than 20 days following the last day of the
calendar month in which the amounts were withheld from the Participants'
Compensation.
(b) LIMITATION. Contributions under this Article III
shall not be required to the extent they exceed the limitations of section 404
of the Code, in which case they shall be reduced to the extent allowable and
necessary in the
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Harris Retirement Plan
<PAGE> 42
Contributions and Allocations
following order: (1) Profit-Sharing Contributions; (2) Matching Contributions,
and (3) Pre-Tax Contributions.
3.10 TREATMENT OF FORFEITED AMOUNTS.
(a) REDUCTION OF CONTRIBUTIONS. Forfeitures shall be
allocated to Employment Units as provided in subsection (b) and used to reduce
Profit-Sharing Contributions and Matching Contributions of the Participating
Companies in which the Employment Units are included.
(b) ALLOCATION OF FORFEITURES TO EMPLOYMENT UNITS.
Forfeitures of Profit-Sharing Contributions and Matching Contributions shall be
credited to the Employment Unit with which the Participant was last employed
before the forfeiture occurred.
3.11 FINALITY OF ALLOCATIONS
The Corporation Committee shall give a written benefit
statement to each Participant at least annually setting forth the amount of the
contributions allocated to his Accounts; provided, however, that if any such
Participant is deceased, such statement shall be given to his Beneficiary. Any
Participant or Beneficiary claiming that an error has been made in a benefit
statement shall
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Harris Retirement Plan
<PAGE> 43
Contributions and Allocations
notify the Corporation Committee in writing within 90 days following the
delivery or mailing of such statement. The Corporation Committee shall review
the claim and advise the Participant or Beneficiary of its decision in writing.
If no such notice of error is filed, the benefit statement shall be presumed to
be correct.
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Harris Retirement Plan
<PAGE> 44
ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS
4.1 IN GENERAL. Notwithstanding any provisions of Article III
to the contrary, the contributions provided for in Article III shall be limited
to the extent necessary to meet the requirements of this Article IV.
4.2 PRE-TAX CONTRIBUTIONS.
(a) TREATMENT OF CERTAIN CONTRIBUTIONS AS AFTER-TAX.
If the Corporation Committee determines that a Participant's Pre-Tax
Contributions for a calendar year have reached the dollar limit of section
402(g) of the Code, any additional contributions for that calendar year
pursuant to the Participant's Pre-Tax Contribution election shall be deemed to
be After-Tax Contributions and the Matching Contributions with respect to that
amount, if any, shall be deemed to be Matching After-Tax Contributions.
(b) RETURN OF EXCESS DEFERRALS. In the event that a
Participant's Pre-Tax Contributions already made to the Plan for a calendar
year exceed the limits of section 402(g) of the Code, the excess amount, as
adjusted for income and loss, may, in the discretion of the Corporation
Committee, be distributed to the Participant no later than April 15 of the
following year in
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Harris Retirement Plan
<PAGE> 45
Limitations on Contributions
accordance with the requirements of section 402(g) of the Code and Treasury
Regulation section 1.402(g)1.
4.3 PERCENTAGE LIMITATION ON PRE-TAX CONTRIBUTIONS.
(a) SATISFYING THE ACTUAL DEFERRAL PERCENTAGE TEST.
The Pre-Tax Contributions made on behalf of Participants with respect to a Plan
Year shall satisfy the "actual deferral percentage test" of section 401(k)(3)
of the Code and Treasury regulation section 1.401(k)-1(b)(2), the provisions of
which are incorporated herein by reference.
(b) TREATMENT OF EXCESS CONTRIBUTIONS AS AFTER-TAX.
In the event it is necessary to reduce or limit the amount of any Participant's
Pre-Tax Contributions, the amount of Pre-Tax Contributions made on behalf of
Highly Compensated Employees shall be deemed to be After-Tax Contributions and
any Matching Pre-Tax Contributions made with respect to those Contributions
shall be deemed to be Matching After-Tax Contributions. The Highly Compensated
Employees to whom this recharacterization is applicable shall be determined in
accordance with Treasury regulation section 1.401(k)-1(f)(2), the provisions of
which are incorporated herein by reference.
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Limitations on Contributions
4.4 PERCENTAGE LIMITATION ON AFTER-TAX AND MATCHING
CONTRIBUTIONS.
(a) SATISFYING THE ACTUAL CONTRIBUTION PERCENTAGE
TEST. The After-Tax Contributions and Matching Contributions made on behalf of
Participants with respect to a Plan Year shall satisfy the "actual contribution
percentage test" of section 401(m)(3) of the Code and Treasury regulation
section 1.401(m)-1(b), the provisions of which are incorporated herein by
reference.
(b) REDUCTION AND FORFEITURE OF AFTER-TAX
CONTRIBUTIONS AND MATCHING CONTRIBUTIONS. In the event it is necessary to
reduce or limit a Participant's After-Tax Contributions and Matching
Contributions to satisfy the actual contribution percentage test, the amount of
such contributions, as adjusted for income and losses, on behalf of Highly
Compensated Employees shall be reduced in accordance with Treasury regulation
section 1.401(m)-1(e)(2), the provisions of which are incorporated herein by
reference. The amount of the After-Tax Contributions and Matching Contribution
shall be returned to the Highly Compensated Employees (including return by
transfer to a non-qualified deferred compensation plan, in accordance with a
timely election filed by the Participant) or forfeited as follows:
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Limitations on Contributions
(1) After-Tax Contributions in excess of six
percent of Compensation shall be
returned, and
(2) Remaining After-Tax Contributions and
Matching After-Tax Contributions
attributable thereto. After-Tax
Contributions shall be returned.
Matching After-Tax Contributions to the
extent vested shall be returned and to
the extent not vested shall be forfeited
and used to reduce contributions in
accordance with section 3.10.
4.5 MULTIPLE USE OF ALTERNATIVE LIMITATIONS.
Multiple use of the alternative limitations of sections
401(k)(3)(A)(iii)(II) and 401(m)(A)(ii) of the Code shall be restricted in
accordance with Treasury Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
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Limitations on Contributions
4.6 LIMITATIONS ON ANNUAL ADDITIONS.
(a) The Defined Contribution Limit. The "annual
addition," as defined herein, for any Plan Year, to a Participant's Accounts in
all defined contribution plans maintained by the Participating Company or
Related Company shall not exceed the lesser of (i) 25 percent of the
Participant's Compensation for the Plan Year, or (ii) $30,000 (as adjusted in
accordance with section 415(d) of the Code). The term "annual additions" means
the sum of all contributions and forfeitures allocated to a Participant's
Accounts (other than his Rollover Account).
(b) The Combined Limit. If the Participant also has
participated in a defined benefit plan maintained by a Related Company, the
limitations of section 415(e) of the Code shall apply. If the limitations of
section 415(e) are exceeded, the benefits under any defined benefit plan
maintained by the Participating Company or Related Company shall be reduced
before the annual additions to the Plan are reduced.
(c) Reduction of Contributions. If the Corporation
Committee determines at any time that the annual addition to any Participant's
Accounts exceeds such limitation for any Plan Year, the contributions on behalf
of the Participant shall be reduced, to the extent necessary, in the following
order:
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Limitations on Contributions
(1) Pre-Tax Contributions in excess of six
percent;
(2) Remaining Pre-Tax Contributions and
Matching Pre-Tax Contributions
attributable thereto shall be reduced
proportionately;
(3) Profit-Sharing Contributions;
(4) After-Tax Contributions in excess of six
percent;
(5) Remaining After-Tax Contributions and
Matching After-Tax Contributions
attributable thereto shall be reduced
proportionately.
After-Tax Contributions and Pre-Tax Contributions, as adjusted for
gains, shall be returned to the Participant (including return by transfer to a
non-qualified deferred compensation plan, in accordance with a timely election
filed by the Participant). Profit-Sharing Contributions and Matching
Contributions, as adjusted for gains, to the extent allowable shall be held in
a suspense account and allocated to the Accounts of such Participant in the
next Plan Year; provided that if the Participant is not covered by the Plan in
the next Plan Year, the amount shall be allocated to the remaining Participants
in the Plan who are employed by the Employment Unit that employed the
Participant.
(d) LIMITS ON LIMITS. The limits stated on this
Article IV shall apply only to the extent required under the Code. Except as
otherwise specifically
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Limitations on Contributions
provided in this section 4.6, all of the requirements of section 415 of the
Code, and limitations thereon, including the transitional rules and grandfather
rules, are incorporated herein by reference.
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ARTICLE V
VESTING AND FORFEITURES
5.1 IN GENERAL. A Participant shall have a fully vested
interest at all times in his Pre-Tax Account, After-Tax Account, Harris Stock
Pre-Tax Account, Harris Stock After Tax Account and Savings Account (other than
the portion attributable to matching contributions made after October 1, 1984)
and Rollover Account.
5.2 VESTING ON RETIREMENT, DEATH OR DISABILITY. A Participant
shall have a fully vested interest in his Profit Sharing Account, Matching
Pre-Tax Account, Matching After-Tax Account, Harris Stock Matching Pre-Tax
Account, Harris Stock Matching After-Tax Account and portion of his Savings
Account attributable to matching contributions made after October 1, 1984, on
termination of employment by any Related Company in the event of:
(a) retirement on or after Normal Retirement Age;
(b) retirement on or after Early Retirement Age;
(c) retirement on or after the effective date of a
Participant's Disability determination by the Social Security Administration.
(d) death.
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Vesting and Forfeitures
5.3 VESTING ON OTHER TERMINATION OF EMPLOYMENT.
(a) VESTING SCHEDULE. A Participant who terminates
employment other than on the occurrence of one of the events described in
section 5.2 shall have a vested interest in his Profit-Sharing Account,
Matching Pre-Tax Account, Matching After-Tax Account, Harris Stock Matching
Pre-Tax Account, Harris Stock Matching After-Tax Account and the portion of his
Savings Account attributable to matching contributions made after October 1,
1984 in accordance with the following schedule:
<TABLE>
<CAPTION>
Period of Service Vested Percentage
<S> <C>
Less than 3 years 0%
3 years but less than 4 years 30%
4 years but less than 5 years 40%
5 years but less than 6 years 60%
6 years but less than 7 years 80%
7 years or more 100%
</TABLE>
(b) COMPUTING A PARTICIPANT'S PERIOD OF SERVICE. For
the purpose of determining a Participant's Period of Service under subsection
(a), the rules of section 2.3 shall apply.
(c) VESTING ON SALE OF BUSINESS. In the event of the
sale or disposition of a business or a sale of substantially all of the assets
of a trade or
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Vesting and Forfeitures
business, the Corporation may, in its discretion, provide for accelerated
vesting with respect to those Participants affected by the sale.
5.4 EFFECT OF IN-SERVICE WITHDRAWALS ON A PARTICIPANT'S VESTED
PERCENTAGE. If a Participant receives a withdrawal under Article IX or
distribution under Article VII from his Profit-Sharing Account at a time when
the Participant has less than a fully vested interest in that account, the
dollar amount of his vested interest in his Profit-Sharing Account (X) shall be
determined at any time by the following formula:
X = P(AB + D) - D
For the purpose of applying the formula, P is the Participant's
vested interest in his Profit-Sharing Account at the time the determination is
made, AB is the balance credited to the Profit-Sharing Account at the time the
determination is made, and D is the amount of the withdrawal.
5.5 FORFEITURES.
(a) TIMING OF FORFEITURE. Effective July 1, 1985, a
Participant who terminates employment with less than a fully vested interest in
his Accounts shall forfeit the nonvested interest on the earlier of the date on
which the Participant:
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Vesting and Forfeitures
(1) receives a lump sum distribution of all
or a portion of the vested interest in
such Accounts, provided that such
distribution is made no later than the
close of the second Plan Year following
the year in which the Participant
terminates employment;
(2) incurs five consecutive one-year
Periods of Severance; or
(3) at any earlier date allowable under
the Code.
(b) EFFECT OF PARTIAL DISTRIBUTION ON A PARTICIPANT'S
VESTED PERCENTAGE. If the Participant elects to receive a lump sum
distribution of less than the full amount of his vested interest, the part of
his nonvested interest that shall be forfeited under subsection (a)(1) is the
total nonvested interest multiplied by a fraction, the numerator of which is
the amount of the distribution and the denominator of which is the total value
of his vested interest in his Accounts other than his After-Tax Account, Harris
Stock After-Tax Account and Rollover Account.
(c) EFFECT OF REPAYMENT OF DISTRIBUTION. If a
Participant incurs a forfeiture under subsection (a)(1), then returns to
employment with a
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Vesting and Forfeitures
Participating Company and becomes a Participant in the Plan before incurring
five consecutive one-year Periods of Severance, the forfeited amount shall be
restored by the Employment Unit of the Participating Company with which the
Participant is reemployed.
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ARTICLE VI
ACCOUNTS AND INVESTMENTS
6.1 ESTABLISHMENT OF ACCOUNTS. The Committee shall establish
and maintain for each Participant the following Accounts showing the
Participant's interest under the Plan:
(a) Profit-Sharing Account, which shall consist of
(1) a Basic Account to reflect the portion of
Profit-Sharing Contributions allocable to
the Participant's Compensation, and
(2) a Supplemental Account to reflect the
portion of Profit-Sharing Contributions
allocable to the Participant's Excess
Compensation;
(b) Pre-Tax Account to reflect Pre-Tax Contributions
made on the Participant's behalf other than those invested in the Harris Stock
Fund;
(c) After-Tax Account to reflect After-Tax
Contributions made on the Participant's behalf other than those invested in the
Harris Stock Fund;
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Accounts and Investments
(d) Matching Pre-Tax Account to reflect Matching
Pre-Tax Contributions made on the Participant's behalf other than those
invested in the Harris Stock Fund;
(e) Matching After-Tax Account to reflect Matching
After-Tax Contributions made on the Participant's behalf other than those
invested in the Harris Stock Fund;
(f) Savings Account to reflect the Savings
Contributions under the Plan as in effect prior to July 1, 1990, and the
aggregate of the Participant's voluntary and required contributions to the
Harris Video Systems Savings/Incentive Plan less withdrawals, as of June 30,
1990;
(g) Harris Stock Pre-Tax Account to reflect the
portion of the Pre-Tax Contributions made on the Participant's behalf invested
in the Harris Stock Fund;
(h) Harris Stock After-Tax Account to reflect the
portion of the After-Tax Contributions made on the Participant's behalf
invested in the Harris Stock Fund;
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Accounts and Investments
(i) Harris Stock Matching After-Tax Account to
reflect the portion of the Matching After-Tax Contributions made on the
Participant's behalf invested in the Harris Stock Fund;
(j) Harris Stock Matching Pre-Tax Account to reflect
the portion of the Matching Pre-Tax Contributions made on the Participant's
behalf invested in the Harris Stock Fund, and
(k) Rollover Account to reflect the Participant's
Rollover Contributions.
6.2 INVESTMENT OF PROFIT-SHARING ACCOUNT.
(a) IN GENERAL. Except as provided in subsection
(b), the amounts allocated to a Participant's Profit-Sharing Account shall be
invested in the Balanced Fund.
(b) PARTICIPANT-DIRECTED INVESTMENTS AT AGE 55. On
attaining age 55, a Participant shall be entitled to direct the investment of
his Profit-Sharing Account in accordance with the procedures set out in section
6.3.
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Accounts and Investments
The Profit-Sharing Account shall remain invested in the Balanced Fund until the
Participant changes his or her election with respect thereto.
6.3 INVESTMENT OF ACCOUNTS OTHER THAN PROFIT-SHARING ACCOUNT.
Except as provided in section 6.2, effective October 1, 1993, each Participant
shall have the right to direct the investment of his Accounts and future
contributions to his Accounts among the Investment Funds in accordance with the
following procedures and such other procedures provided in the documents
pertaining to each Investment Fund:
(a) WRITTEN OR TELEPHONIC DIRECTION. Each election
shall be completed by filing the appropriate election form or by following the
appropriate telephone procedures for direct transfer as established by the
Corporation Committee.
(b) ELECTIONS IN 10% INCREMENTS FOR CURRENT BALANCES.
An election with respect to current account balances, including the
Participant's initial election with respect to the balance arising from a
Rollover Contribution, shall be made in increments of ten percent of the
account balance;
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Accounts and Investments
(c) ELECTIONS IN 10% INCREMENTS FOR FUTURE
CONTRIBUTIONS. An election with respect to future contributions shall be made
in increments of ten percent of the contribution (after the contribution is
reduced by the dollar amount directed into the Harris Stock Fund), provided
that the combined Pre-Tax Contributions and After-Tax Contributions invested in
the Harris Stock Fund shall equal no more than one percent of Compensation. To
the extent Pre-Tax Contributions and After-Tax Contributions are invested in
the Harris Stock Fund, the Matching Contributions attributable thereto also
shall be invested in the Harris Stock Fund;
(d) CHANGING ELECTIONS. A change of election may be
made at any time; provided that an election change shall become effective only
on the first day of the month. To be effective on the first day of any month,
a written election must be made on or before the 20th day of the preceding
month, and a telephonic election must be made on or before the 25th day of the
preceding month. If more than one election change is made on or before the
applicable deadline, the most recent election change shall be given effect.
(e) ELECTIONS APPLY TO ALL ACCOUNTS. Each of the
Participant's Accounts (including his Profit-Sharing Account on the
Participant's attaining age 55) shall be invested among the Investment Funds in
the same manner, such that
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Accounts and Investments
each election by a Participant with respect to the Investment Funds shall apply
to all of his Accounts in the same proportion.
(f) INVESTMENT IN BALANCED FUND ABSENT ELECTION. A
Participant's Accounts and contributions made on behalf of the Participant
shall be invested in the Balanced Fund until the Participant makes a valid
investment election pursuant to this section 6.3 and any other procedures
established by the Corporation Committee.
6.4 ALLOCATION OF EARNINGS AND LOSSES. Earnings and losses
shall be allocated at least annually. In determining a Participant's share of
the earnings or losses of each of the Investment Funds as of any Valuation
Date, the total earnings or losses of the particular Investment Fund, net of
expenses allocable to that fund, shall be allocated among the Participants'
Accounts invested in that Investment Fund based on the ratio of each
Participant's Accounts to the aggregate of the Accounts of all Participants,
before taking into account any contributions that are required to be but are
not yet made as of the Valuation Date and before taking into account any
distributions, withdrawals or loans to Participants for the period coinciding
with the Valuation Date. Contributions to Accounts are not credited with
earnings in the month in which they are credited to any Account.
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Accounts and Investments
6.5 SPECIAL RULES CONCERNING HARRIS STOCK FUND.
Notwithstanding any other provision of section 6.2 and 6.3 to the contrary, the
following rules shall apply to investments in the Harris Stock Fund:
(a) AVAILABILITY. Only Pre-Tax Contributions,
After-Tax Contributions and Matching Contributions made with respect to
Compensation earned on or after October 1, 1993 may be invested in this fund.
For any Plan Year, the combined Pre-Tax Contributions and After-Tax
Contributions invested in this fund on behalf of a Participant in each Plan
Year shall equal no more than one percent of the Participant's Compensation for
such Plan Year. An election to invest in the Harris Stock Fund shall take
effect as soon as administratively feasible after the election is received.
(b) RESTRICTIONS ON TRANSFERS. A Participant may not
transfer amounts from other Investment Funds to the Harris Stock Fund. Any
contributions invested in this Fund must remain in this fund for a minimum of
36 months, provided that amounts invested in this fund may be distributed to
the Participant before the expiration of the 36-month period, if the
Participant is otherwise entitled to a distribution under the Plan.
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Accounts and Investments
(c) DIVIDENDS. A Participant's allocable share of
cash dividends (and other cash earnings) credited to the Harris Stock Fund,
will be reinvested in the Harris Stock Fund unless the Participant elects with
respect to the dividends credited to his Account for a quarter to invest such
cash dividends (and other cash earnings) among the Investment Funds other than
the Harris Stock Fund in increments of ten percent of the amount of the
dividends (and other earnings). Only cash dividends (and earnings) that have
been credited to the Participant's Accounts for at least one month are subject
to the Participant's investment election under this subsection (c). Each
election shall be completed by filing the appropriate form or by following the
appropriate telephone procedures as established by the Corporation Committee,
pursuant to section 6.3(d). Dividends paid in the form of stock shall be
retained in a Participant's Account until liquidated, in the sole discretion of
the Trustee. Such liquidated dividends shall be cash earnings subject to
investment elections in accordance with this subsection of the Plan.
(d) CONTRIBUTIONS. The normal form of contributions
for amounts invested in the Harris Stock Fund shall be in cash; provided,
however, that the Corporation, in its discretion, may make the contribution in
common stock of the Corporation, which may be contributed at a discount from
fair market value. The Trustee is authorized to purchase common stock of the
Corporation in
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Accounts and Investments
the open market, and to give effect to the discount, if any, that has been
established from time to time by allocating shares to Participants' Accounts in
addition to the number of shares purchased on the open market by means of a
given contribution.
(e) DISTRIBUTIONS. Distributions from the Harris
Stock Fund shall be in the form of cash or shares of Harris Stock at the
election of the Participant. Fractional shares and distributions of a de
minimis amount as determined by the Corporation Committee shall be paid in
cash.
(f) VOTING. Participants may submit non-binding
proxies to the Trustee, which will vote the shares in the Harris Stock Fund in
the exercise of its sole discretion.
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ARTICLE VII
DISTRIBUTIONS
7.1 IN GENERAL. A Participant shall be entitled to receive a
distribution of the vested interest in his Accounts on the earlier of
termination of employment or attainment of age 59 1/2, except that his Pre-Tax
Contributions and Matching Pre-Tax Contributions are distributable only as
allowed under section 401(k) of the Code. Distributions shall be made upon the
sale or disposition of the stock in a subsidiary, or the sale or disposition of
substantially all the assets of a trade or business, as provided, under the
corporate documents effecting the sale or disposition and in accordance with
Section 401(k)(10) of the Code. A termination of employment shall not be
deemed to occur for purposes of this section 7.1 and section 7.2 until the
Participant is no longer employed by a Related Company. A Participant may
elect to receive any amount invested in the Harris Stock Fund in the form of
stock; provided that fractional shares and distributions of a de minimis amount
as determined by the Corporation Committee shall be paid in cash.
7.2 SMALL BENEFIT CASH-OUT. Except as provided in section
7.5, in any case in which a Participant's vested interest in his Accounts does
not (and did not at the time of any prior distributions) exceed $3,500 (or such
larger amount as may be permitted by law), the vested interest shall be paid to
the Participant in a lump sum as soon as reasonably practicable upon
termination of employment.
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Distributions
7.3 FORM OF PAYMENT.
(a) OPTIONS. In any case in which a Participant's
vested interest in his Accounts exceeds the amount provided in Section 7.2, the
Participant may elect at any time to receive payment in:
(1) a lump sum of any portion or all of the
balance of the Participant's Accounts;
(2) substantially equal periodic installment
payments over a period of time
to be elected by the Participant;
(3) a combination of (a) and (b), or
(4) a direct rollover.
(b) CHANGES ALLOWED. A Participant may change his
election with respect to the form of payment at any time before or after
distribution of benefits commences, subject to the provisions of section 7.9.
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Distributions
(c) EFFECT OF FAILURE TO SPECIFY AN OPTION. If a
Participant fails to file an election under this section 7.3, his benefits
shall be paid in accordance with section 7.4.
7.4 TIME OF PAYMENT. On termination of employment, a
Participant, other than one described in section 7.2, may elect that payment of
benefits begin immediately or at any other time. If a Participant fails to
file an election under this section 7.4 and payment of benefits has not already
commenced, payment of his benefits shall commence on April 1 of the calendar
year following the year in which the Participant attains 70 1/2 and shall be
paid in accordance with the minimum distributions requirements of section
401(a)(9) of the Code.
7.5 DIRECT ROLLOVER.
(a) Effective January 1, 1993, a Participant or
"distributee" may elect at any time to have any portion of an "eligible
rollover distribution" paid in a direct rollover to the trustee or custodian of
an "eligible retirement plan" specified by the Participant or distributee,
whichever is applicable. Payment of a direct rollover in the form of a check
payable to the trustee or custodian of an eligible retirement plan, for the
benefit of the Participant or distributee, may be mailed to the Participant or
distributee.
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Distributions
(b) For purposes of this section 7.5, the following
terms shall have the following meanings:
(1) "Distributee" means a surviving spouse or
a spouse or former spouse who is an
alternate payee under a Qualified
Domestic Relations Order defined in
section 414(p) of the Code.
(2) "Eligible retirement plan" means an
individual retirement account described
in section 408(a) of the Code, an
individual retirement annuity described
in section 408(b) of the Code, an annuity
plan described in section 403(a) of the
Code, or a qualified trust described in
section 401(a) of the Code that accepts
an eligible rollover distribution;
provided that if the distributee is a
surviving spouse, an eligible retirement
plan means an individual retirement
account or individual retirement annuity.
(3) "Eligible rollover distribution" means
any distribution of all or a portion of
the Participant's Accounts, other
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Distributions
than the portion of his After-Tax Account
and Harris Stock After-Tax Account
attributable to After-Tax Contributions,
but does not include a distribution (i)
in installments over a period of ten
years or more or over a period described
in section 7.9(c), or (ii) to the extent
the distribution is required under
section 401(a)(9) of the Code.
7.6 PAYMENTS ON DEATH. If a Participant dies before he has
received the full amount of the vested interest in his Accounts, the unpaid
amount shall be paid to his Beneficiary in the manner provided in this Article
VII (including section 7.5 only if the Beneficiary is the spouse) as though the
Beneficiary were the Participant.
7.7 BENEFIT AMOUNT AND WITHHOLDING.
(a) Vested Amount and Adjustments. For purposes of
this Article VII, a Participant's vested interest in his Accounts shall be
determined as of the Valuation Date coinciding with or immediately following
the date of the event giving rise to the distribution, plus any Profit-Sharing
Contribution to which the Participant may be entitled under section 3.2 that
has not yet been credited to
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Distributions
the Participant's Profit-Sharing Account. Any unpaid amount in the
Participant's Accounts shall continue to be adjusted for earnings and losses as
provided in section 6.4 until it is distributed.
(b) WITHHOLDING. The amount of any distribution
shall be reduced to the extent necessary to comply with Federal, state and
local income tax withholding requirements.
7.8 ORDER OF DISTRIBUTIONS. Any distribution under this Plan
shall be charged against the Participant's Accounts pursuant to administrative
procedures designed to maximize the tax benefits to the Participant by
distributing to him first his After-Tax Contributions to the extent permitted
by law.
7.9 STATUTORY REQUIREMENTS. Notwithstanding any other
provisions of the Plan to the contrary, the following rules shall apply to all
payments under the Plan:
(a) LATEST COMMENCEMENT DATE. Unless the Participant
files a written election to defer payment of benefits, benefits payments with
respect to any Participant shall commence no later than the 60th day after the
close of the Plan Year in which the latest of the following occurs:
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Distributions
(1) the date on which the Participant attains
Normal Retirement Age;
(2) the 10th anniversary of the date on which
the Participant commenced
participation in the Plan, or
(3) the date on which the Participant
terminated employment.
Failure to file an election under section 7.4 for payment of benefits to
commence shall be deemed to be a written election to defer payment of benefits
under this subsection (a).
(b) REQUIRED BEGINNING DATE. Notwithstanding
subsection (a) above, payment of benefits to a Participant shall commence no
later than April 1 of the calendar year following the calendar year in which
the Participant attains age 70 1/2.
(c) MAXIMUM DURATION OF DISTRIBUTIONS. Payment of a
Participant's benefit shall be made over a period not to exceed one of the
following periods:
(1) the life of the Participant;
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Distributions
(2) the life of the Participant and the
Participant's Beneficiary;
(3) a period certain not extending beyond the
life expectancy of the Participant, or
(4) a period certain not extending beyond the
joint and last survivor expectancy of the
Participant and his Beneficiary.
The amount to be distributed each year must be at least equal to the
quotient obtained by dividing the Participant's benefit by the life expectancy
of the Participant or the joint and last survivor expectancy of the Participant
and his Beneficiary. Life expectancy and joint and last survivor expectancy
shall be computed by the use of the return multiples contained in Treasury
regulation section 1.72-9. For purposes of this computation, a Participant's
and a spouse's life expectancy may be recalculated annually; however, the life
expectancy of a Beneficiary, other than the Participant's spouse, may not be
recalculated. If the Participant's spouse is not the Beneficiary, the method
of distribution selected must ensure that at least 50 percent of the present
value of the amount available for distribution is paid within the life
expectancy of the Participant.
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Distributions
(d) DISTRIBUTION AFTER THE PARTICIPANT'S DEATH. In
the event a Participant who is receiving benefits dies, the remaining balance
of his benefits shall be distributed at least as rapidly as under the method of
distribution elected by the Participant. If a Participant dies before
distribution of benefits commences, the Participant's entire interest will be
distributed no later than five years after the Participant's death, except to
the extent that an election is made to receive distributions in accordance with
(1) or (2) below:
(1) if any portion of the Participant's
benefit is payable to a Beneficiary,
installment distributions may be made
over the life or life expectancy of the
Beneficiary, provided that the
installments commence no later than one
year after the Participant's death, and
(2) if the Beneficiary is the Participant's
spouse, the commencement of distributions
may be delayed until the date on which
the Participant would have attained age
70 1/2. If the spouse dies before
payments begin, subsequent distribution
shall be made as if the spouse had been
the Participant.
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Distributions
For purposes of the foregoing, payments may be calculated by use of
the return multiples specified in Treasury regulation section 1.72-9. Life
expectancy of a spouse may be recalculated annually. However, in the case of
any other Beneficiary, such life expectancy shall be calculated at the time
payment first commences without further recalculation. Any amount paid to a
child of the Participant shall be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the spouse when the child
reaches the age of majority.
(e) LIMIT ON LIMITS. All distributions under this
section 7.9 shall be determined and made in accordance only to the extent
required under section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Treasury regulation section
1.401(a)(9)2, the provisions of which are incorporated herein by reference.
7.10 DESIGNATING BENEFICIARIES.
(a) WRITTEN DESIGNATION. Each Participant may, by
filing a written notice with the Corporation Committee, designate a Beneficiary
or Beneficiaries to receive any benefits payable as a result of the death of
the Participant. This designation may be changed by the Participant at any
time by giving written notice to the Corporation Committee. Any designation of
a
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Beneficiary other than the Participant's spouse must be consented to by the
spouse in writing and witnessed by a notary public (or a representative of the
Plan prior to October 1, 1993). Any consent required under this section 7.10
shall be valid only with respect to the spouse who signed it. Spousal consent
shall not be required if the Participant establishes to the satisfaction of a
Plan representative that such consent may not be obtained because (a) there is
no spouse; (b) the spouse cannot be located, or (c) there exists such other
circumstances as the Secretary of the Treasury may prescribe as excusing the
requirement for such consent. A Participant may revoke any prior election
without obtaining the consent of the spouse to such revocation. In the absence
of a new election that meets the requirements of this section 7.10, the spouse
shall be the Beneficiary.
(b) DEATH PRIOR TO DESIGNATING BENEFICIARY. In the
event the Participant dies with no beneficiary designation on file, the
Participant's Beneficiary shall be the Participant's surviving spouse, if any,
and if there is no surviving spouse, the Participant's estate.
7.11 PAYMENT OF GROUP INSURANCE PREMIUMS. If a retired
Participant is eligible to be included in any contributory group insurance
program maintained or sponsored by an Employment Unit, a retired Participant
who is receiving benefits under the Plan in installments and who elects to be
covered under such
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contributory group insurance program may direct that a specified portion of the
installment payments be withheld and paid by the Trustee on his behalf to the
Employment Unit as his contribution under such group insurance program. Such
direction by a retired Participant shall be in writing on a form prescribed by
the Corporation Committee. Any such direction may be revoked by the retired
Participant not less than 15 days prior to the effective date of such
revocation. Any withholding and payment of insurance costs on behalf of a
retired Participant shall be made in accordance with Treasury regulation
section 1.401(a)-13.
7.12 INABILITY TO LOCATE PARTICIPANT. If, when any payment
becomes due, the Corporation Committee is unable to locate the Participant or
Beneficiary after exercising reasonable diligence, payment shall be stopped and
future payments to such individual discontinued. Any remaining unpaid benefits
with respect to such Participant or Beneficiary shall be deemed to be
forfeited, provided that if the Participant or Beneficiary later notifies the
Corporation Committee of his address, to the extent required by law payment of
the forfeited amount shall be reinstated by the Participating Company with
which the Participant was last employed.
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ARTICLE VIII
LOANS
8.1 IN GENERAL. Each "party in interest," as defined in
section 3(14) of ERISA, with respect to the Plan for whom a Pre-Tax Account,
After-Tax Account and/or Rollover Account is maintained may request that a loan
be made to him from his Pre-Tax Account, After-Tax Account and/or Rollover
Account by filing an appropriate application, pursuant to procedures adopted by
the Corporation Committee. All loan requests shall be approved on a reasonably
equivalent basis (within the meaning of section 4975(d)(1)(A) of the Code and
section 408(b)(1)(A) of ERISA), subject to the conditions set forth in this
Article VIII.
8.2 LOAN ADMINISTRATION. The Corporation Committee shall be
responsible for administering the loan program, but may delegate the operation
of the program to the Plan's record-keeper. The procedures for applying for a
loan and the basis on which loans will be approved or denied shall be described
in the summary plan description for the Plan or in other documents prepared by
or at the direction of the Corporation for this purpose and such additional
documents are hereby incorporated by reference to the extent required by the
Department of Labor.
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8.3 TERMS AND CONDITIONS OF LOANS. The terms and conditions
of each loan shall be set forth in the promissory note and security agreement
evidencing the loan and shall include, but not be limited to, the following:
(a) MAXIMUM AMOUNT. The principal amount of a loan
made under this Plan to any individual together with the outstanding principal
amount of any other loan made to such individual under any other qualified plan
under section 401(a) of the Code maintained by a Related Company shall not
exceed the lesser of
(1) 50 percent of the individual's vested
interest in his Accounts,
(2) $50,000 reduced by the highest
outstanding balance of any previous loans
from the Plan and any other plans of a
Related Company during the one-year
period ending immediately before the date
on which the current loan is made.
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(3) such amount that repayment of principal
plus interest does not exceed 25 percent
of the individual's gross pay.
(b) MINIMUM AMOUNT. The minimum loan amount shall be
$500 and all loan amounts shall be in increments of $100.
(c) PERIOD. No loan shall be made for a period less
than 12 months or longer than four and one-half years or such other periods as
may be established from time to time under the Corporation Committee's written
loan procedures.
(d) SECURITY. A loan shall be secured by the
Participant's Accounts up to the amount of the outstanding balance of the loan.
(e) NUMBER OF LOANS. Effective January 1, 1994, two
loans shall be available under the Plan to a Participant at any time, but no
third loan shall be made to an individual within 30 days following the
repayment in full of a prior loan, or such other time period as may be provided
from time to time under Plan procedures.
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(f) PARTICIPANT COVERS LOAN EXPENSES. Any loan made
under the Plan shall be subject to such other terms and conditions as the
Corporation Committee shall deem necessary or appropriate, including the
condition that the individual execute a satisfactory promissory note and
security agreement and the condition that he reimburse the Plan for any state
documentary stamps and other taxes, and any other reasonable expenses specified
by the Corporation Committee, which the Plan incurs to extend, make and service
the loan.
(g) HOW TO APPLY. A loan may be initiated by
following the appropriate telephonic or other procedures established by the
record-keeper, as the delegate of the Corporation Committee.
8.4 INTEREST RATE. The interest rate for a loan made under
this Plan shall be fixed for the term of each loan, and shall be set as
determined by the Corporation Committee on a quarterly basis at a rate which it
deems reasonable at the time for a fully secured loan and which is consistent
with applicable Department of Labor regulations.
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8.5 REPAYMENT AND DEFAULT.
(a) PAYMENTS. A loan made under the Plan shall
require that repayment be made in substantially level installments through
payroll withholding while the individual is an Employee and through such other
means (not less frequently than quarterly) as the Corporation Committee deems
appropriate for an individual who is not an Employee. Nevertheless, any
individual who terminates employment for any reason other than retirement,
discharge or lay-off must repay all of the outstanding principal balance of his
loan, plus interest due, within 90 days of the date of termination.
(b) PREPAYMENT. An individual may repay, at any
time, all of the outstanding principal balance of his loan, plus interest due,
without penalty.
(c) CREDITING PAYMENTS. Principal and interest
payments shall be credited to the Participant's Pre-Tax Account, After-Tax
Account and/or Rollover Account and shall be invested in the same manner as
Pre-Tax Contributions, After-Tax Contributions and Rollover Contributions.
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(d) DEFAULT. The events of default shall be set
forth in the promissory note and security agreement which evidence the loan.
Such events shall include, but not be limited to, the following:
(1) an individual terminates employment as an
Employee for any reason and does not make
payments when due, subject to a 90-day
grace period;
(2) the Trustee concludes that the individual
no longer is a good credit risk;
(3) to the extent permissible under federal
law, the individual's obligation to repay
the loan has been discharged through
bankruptcy or any other legal process of
action which did not actually result in
payment in full, and
(4) the individual does not make payments
when due, subject to the applicable 90
day grace period.
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(d) EFFECT OF DEFAULT. Upon the existence or
occurrence of an event of default, the loan may become due and payable in full
and, if such loan is not actually repaid in full, shall be cancelled on the
books and records of the Plan and the amount otherwise distributable to such
individual shall be reduced, as of the date his Accounts otherwise become
distributable, by the principal amount of the loan then due plus any accrued
but unpaid interest. Such principal and interest shall be determined without
regard to whether the loan had been discharged through bankruptcy or any other
legal process or action which did not actually result in payment in full;
however, interest shall continue to accrue on such loan only to the extent
permitted under applicable law. Cancellation of the amount distributable to an
individual under this subsection (d) shall not occur until a distributable
event occurs under the Plan. In the event a default occurs before a
distributable event occurs, the Corporation Committee shall take such other
steps to cure the default as it deems appropriate under the circumstances to
preserve Plan assets.
8.6 MECHANICS. A loan to an individual under this Plan shall
be made from his Pre-Tax Account, After-Tax Account and Rollover Account, and
the loan shall be an asset of the respective accounts. For investment
purposes, the principal amount of the loan shall be deducted from the
Participant's Investment
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Funds other than the Harris Stock Fund in proportion to their value in his
Accounts as of the Valuation Date immediately preceding the loan.
8.7 SPECIAL POWERS. The Corporation Committee shall have the
power to take such action as it deems necessary or appropriate to stop the
benefit payments to or on behalf of an individual who fails to repay a loan
(without regard to whether the obligation to repay the loan had been discharged
through bankruptcy or other legal process or action) until his Pre-Tax Account,
After-Tax Account and/or Rollover Account has been reduced by the principal due
(without regard to such discharge) on such loan or to distribute the note which
evidences such loan in full satisfaction of any interest in the Pre-Tax
Account, After-Tax Account, and/or Rollover Account which is attributable to
the unpaid balance of such loan.
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ARTICLE IX
IN-SERVICE WITHDRAWALS
9.1 AT-WILL WITHDRAWALS FROM SAVINGS ACCOUNT AND AFTER-TAX
ACCOUNT.
(a) AVAILABILITY. Subject to section 9.4, a
Participant may elect to withdraw at any time in a lump sum all or a portion of
the balance in his Savings Account and After-Tax Account for any purpose by
filing the appropriate election with the Local Committee.
(b) LIMITATIONS. A Participant may make a withdrawal
under this subsection (a) not more than once every three months. A
Participant's election to make After-Tax Contributions shall be suspended, and
no After-Tax Contributions or Matching After-Tax Contributions shall be
credited to the Participant's Account, for a period of six months after the
date of a Participant's withdrawal from the After-Tax Account. The
Participant's election shall automatically be reinstated at the expiration of
such six-month period, unless the Participant has filed a change of election
pursuant to section 3.7.
9.2 HARDSHIP WITHDRAWALS FROM PRE-TAX ACCOUNT.
(a) AVAILABILITY. Subject to section 9.4, a
Participant who has taken all loans and withdrawals under section 9.1, may
elect to withdraw in a
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In-Service Withdrawals
lump sum up to 100 percent of his Pre-Tax Contributions, plus earnings on that
amount that were credited to the Pre-Tax Account no later than June 30, 1989,
and/or his Rollover Account to satisfy an immediate and heavy financial need,
by filing an election with the Corporation Committee. Withdrawals under this
section 9.3 shall be authorized by the Corporation Committee in the event of
financial need meeting the safe harbor standards of Treasury regulation section
1.401(k)-1(d)(2), which is incorporated herein by reference. A withdrawal
shall be deemed to be made on account of an immediate and heavy financial need
under those regulations if the withdrawal is for:
(1) medical expenses incurred by the
Participant, his spouse or any of his
dependents;
(2) purchase (excluding mortgage payments) of
a principal residence for the
Participant;
(3) payment of tuition and related education
fees for the next 12 months of
post-secondary education for the
Participant, his spouse, children or
dependents;
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In-Service Withdrawals
(4) payment to prevent the eviction of the
Participant from his principal residence
or foreclosure on the mortgage of the
Participant's principal residence.
(5) any other event determined by the
Commissioner of Internal Revenue.
A withdrawal shall be deemed necessary to satisfy an immediate and
heavy financial need of the Participant if:
(i) the withdrawal is not in excess
of the amount required to meet
the financial need of the
Participant, including taxes and
additions to tax applicable to
such withdrawal, and
(ii) the Participant has obtained all
other distributions,
withdrawals, and all nontaxable
loans currently available under
this Plan and any other plans
maintained by a Related Company.
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In-Service Withdrawals
(b) LIMITATIONS. A Participant may take a withdrawal
under this section 9.2 no more than once in a six-month period.
9.3 EMERGENCY WITHDRAWALS. Subject to section 9.4, a
Participant who has taken all withdrawals available under Sections 9.1 and 9.2
above may elect to withdraw in a lump sum all or a portion of the balance in
his Basic Account and Supplemental Account if the withdrawal otherwise
satisfies the requirements of section 9.2(a). An election to withdraw under
this section 9.3 is subject to the approval of the "sector executive" which
shall be granted on a uniform and nondiscriminatory basis.
9.4 REDUCTION OF INVESTMENT FUND BALANCES. The Investment
Funds in which a Participant's Accounts are invested, other than the Harris
Stock Fund, shall be reduced proportionately to reflect the amount of the
Participant's withdrawals under this Article IX, except that a Participant may
not withdraw contributions invested in the Harris Stock Fund, and no more than
80 percent of the balance determined as of the Valuation Date immediately
preceding the withdrawal shall be available to be withdrawn from equity and
fixed income fund balances; provided that the amount remaining in the equity
and fixed income funds determined as of the Valuation Date coinciding with or
next following the withdrawal may be withdrawn as part of the withdrawal
request.
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ARTICLE X
TOP-HEAVY PROVISIONS
10.1 IN GENERAL. Notwithstanding any other provisions of the
Plan to the contrary, for any Plan Year in which this Plan is "top-heavy," as
defined herein, the provisions of this Article X shall apply. If the Plan is
top-heavy and then ceases to be top-heavy, except as otherwise provided in
section 10.3, the provisions of this Article X shall cease to apply.
10.2 MINIMUM ALLOCATION.
(a) For any Plan Year for which the Plan is
top-heavy, a minimum allocation shall be made for each "non-key employee" who
is employed by a Participating Company on the last day of the Plan Year in an
amount equal to the lesser of (a) three percent of Compensation or (b) the
largest percentage of Compensation allocated to any "key employee" during the
Plan Year. The minimum allocation is determined without regard to any Social
Security contribution. The minimum allocation shall not apply to any non-key
employee who receives a minimum contribution or minimum benefit under any other
plan of a Related Company.
(b) To satisfy subsection (a), the Profit-Sharing
Contributions for such Plan Year first shall be allocated to all Participants
employed on the last day of the Plan Year in an amount that meets the minimum
allocation amount,
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Top-Heavy Provisions
and any remaining Profit-Sharing Contribution then shall be allocated in
accordance with section 3.2.
10.3 MINIMUM VESTING. For any Plan Year for which the Plan is
top-heavy, the vested interest of a Participant who is employed by a
Participating Company during any part of the Plan Year shall be determined
under the following schedule:
<TABLE>
<CAPTION>
PERIOD OF SERVICE VESTED PERCENTAGE
----------------- -----------------
<S> <C>
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
</TABLE>
If the Plan becomes top-heavy and ceases to be top-heavy, a
Participant who have a five-year Period of Service as determined under section
5.3 may elect to have his vested interest continue to be determined under this
section 10.3, notwithstanding that the Plan is no longer top-heavy.
10.4 DEFINITIONS. For purposes of this Article X, the
following terms shall have the following meanings:
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Top-Heavy Provisions
(a) "Determination date" means the last day of the
preceding Plan Year.
(b) "Determination period" means the Plan Year
containing the determination date and the four preceding Plan Years.
(c) "Key employee" means an Employee or former
employee (and their Beneficiaries) who, at any time during the determination
period, is
(1) an officer of the Participating Company
and has annual compensation greater than
50 percent of the dollar limitation in
effect under section 415(b)(1)(A) of the
Code for any such Plan Year,
(2) one of the ten Employees having annual
compensation in excess of the limitation
in effect under section 415(c)(1)(A) of
the Code and owning (or considered as
owning with the meaning of section 318 of
the Code) the largest interests in the
Participating Company,
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Top-Heavy Provisions
(3) a five-percent owner (within the meaning
of section 416(i)(1)(B) of the Code) of
the Participating Company, or
(4) a one-percent owner of the Participating
Company having annual compensation from
the Participating Company of more than
$150,000.
The determination of "key employee" shall be made under section
416(i)(1) of the Code, the terms of which are incorporated herein by reference.
(d) "Non-key employee" means any Employee who is not
a key employee.
(e) "Permissive aggregation group" means the
"required aggregation group" and any other plans of the Participating Company
which, when considered as a group with the required aggregation group, would
continue to satisfy the requirements of sections 401(a)(4) and 410 of the Code.
(f) "Required aggregation group" means (1) each
qualified plan of the Participating Company in which at least one key employee
participates or participated at any time during the determination period
(regardless of whether
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Top-Heavy Provisions
the plan has terminated), and (2) any other qualified plan of the Participating
Company which enables a plan described in (1) to meet the requirements of
sections 401(a) and 410 of the Code.
(g) "Top-heavy" means:
(1) the top-heavy ratio for the Plan exceeds
60 percent and the Plan is not part of
any required aggregation group or
permissive aggregation group;
(2) the Plan is part of a required
aggregation group but not a permissive
aggregation group and the top-heavy ratio
for the required aggregation group
exceeds 60 percent;
(3) the Plan is part of a required
aggregation group and a permissive
aggregation group and the top-heavy ratio
for the permissive aggregation group
exceeds 60 percent.
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Top-Heavy Provisions
(h) "Top-heavy ratio" means:
(1) if the Participating Company or Related
Company has not maintained any defined
benefit plan which during the five-year
period ending on the determination date
had accrued benefits, the top-heavy ratio
is a fraction, the numerator of which is
the sum of the account balances of all
key employees as of the determination
date (including any part of any account
balance distributed in the five-year
period ending on the determination date),
and the denominator of which is the sum
of all account balances (including any
part of any account balance distributed
in the five-year period ending on the
determination date).
(2) If a Related Company maintains or has
maintained a defined benefit plan which
during the five-year period ending on the
determination date had accrued benefits,
the top-heavy ratio is a fraction, the
numerator of which is the sum of account
balances
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Top-Heavy Provisions
under the defined contributions plans
for all key employees (including any part
of any account balance distributed in the
five-year period ending on the
determination date), and the present
value of accrued benefits under the
defined benefit plans for all key
employees as of the determination date,
and the denominator of which is the sum
of the account balances under the defined
contribution plans for all participants
(including any part of any account
balance distributed in the five-year
period ending on the determination date),
and the present value of accrued benefits
under the defined benefit plans for all
participants as of the determination
date.
(3) For purposes of (1) and (2) above, the
value of account balances and the present
value of accrued benefits shall be
determined as of the most recent
"valuation date" that falls within or
ends with the 12-month period ending on
the determination date, except as
provided in section 416 of the Code for
the first and second plan years of a
defined benefit plan. In the
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Top-Heavy Provisions
case of a defined benefit plan, the
"present value of accrued benefits" shall
be determined under the terms of the
applicable defined benefit plan. The
account balances and accrued benefits of
a Participant who is not a key employee
but who was a key employee in a prior
year, or who has not been credited with
at least an Hour of Service with any
Participating Company maintaining the
plan at any time during the five-year
period ending on the determination date
shall be disregarded. When aggregating
plans, the value of account balances and
accrued benefits shall be calculated with
reference to the determination dates that
fall within the same calendar year.
(4) The calculation of the top-heavy ratio
shall be determined in accordance with
section 416 of the Code, the provisions
of which are incorporated herein by
reference.
(i) "Valuation date" means the last day of the Plan
Year.
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ARTICLE XI
ADMINISTRATION
11.1 NAMED FIDUCIARIES. The Corporation shall be the "named
fiduciary" responsible for the control, management and administration of the
Plan.
11.2 CORPORATION COMMITTEE. The Corporation shall establish a
Corporation Committee to administer the Plan. The members of the Corporation
Committee shall be appointed, and removed at any time, by the appropriate
officers of the Corporation. A member of the Corporation Committee may resign
at any time by giving written notice to the Corporation at least 15 days prior
to the effective date of the resignation.
11.3 POWERS AND DUTIES OF COMMITTEE. The Corporation Committee
shall have the powers and duties conferred on it by the terms of the Plan. The
Corporation Committee may establish such rules and regulations as it deems
necessary to enable it to administer the Plan. The Corporation Committee shall
have the discretionary authority to determine eligibility for benefits and
construe the terms of the Plan.
11.4 ACTIONS OF COMMITTEE. No formal meeting and no minutes
shall be required with respect to actions taken by the Corporation Committee.
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Administration
11.5 FINALITY OF DECISIONS. All decisions and directions made
by the Corporation Committee, in the discretionary exercise of its powers and
duties, shall be final and binding on all parties concerned.
11.6 IMMUNITIES OF COMMITTEE. Except as otherwise provided by
law, no member of the Corporation Committee shall be liable to a Participating
Company or to any Participant or Beneficiary by reason of the exercise in good
faith of any power or discretion vested in him by the terms of the Plan.
11.7 ADVISERS AND AGENTS. The Corporation, or the Corporation
Committee, with the consent of the Corporation, may employ one or more persons
to render advice with respect to any responsibility that the Corporation, or
the Corporation Committee, respectively, has under the Plan. The Corporation,
or the Corporation Committee, may appoint unrelated parties to carry out
trustee, investment management and record-keeping responsibilities with respect
to the Plan. The Corporation shall indemnify any person, including an employee
of the Corporation, who is acting on behalf of the Corporation or the
Corporation Committee in this capacity with respect to liability that may arise
by reason of his action or failure to act concerning the Plan, excepting any
willful or gross misconduct or criminal acts, to the extent required in the
respective contracts governing such arrangements.
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Administration
11.8 COMMITTEE MEMBER WHO IS PARTICIPANT. A member of the
Corporation Committee who also is a Participant shall have no right to vote
with respect to any action that pertains solely to him as a Participant. In
the event a majority of the remaining members are unable to agree as to the
action to be taken with respect to the Participant, the chief executive officer
of the Corporation shall appoint an impartial person to arbitrate the matter
between the remaining members and to reach a decision.
11.9 INFORMATION PROVIDED BY PARTICIPATING COMPANIES. Each
Participating Company and Employment Unit shall provide the Corporation, the
Corporation Committee and the Trustee with complete and timely information
regarding employment data for each Employee and Participant needed by the
Corporation, Corporation Committee or Trustee to administer the Plan,
including, but not limited to, information concerning Compensation, date of
employment, date of termination of employment, reason for termination and any
other information required by the Corporation, Corporation Committee, or
Trustee.
11.10 EXPENSES. All reasonable and proper expenses of the Plan
and the Trust, including, but not limited to, investment advisory fees,
record-keeping fees, and Trustee's fees shall be paid from Participants'
Accounts in a uniform and nondiscriminatory manner, which may be ratably,
unless otherwise paid by the
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Administration
Corporation. The Corporation may seek reimbursement of any expense which it
pays that is properly payable by the Trust Fund.
11.11 TRUST FUND AVAILABLE TO PAY ALL PLAN BENEFITS. The Plan
is intended to be a single plan under Treasury regulation section
1.414(l)-1(b)(1). The maintenance of Accounts as required by the terms of the
Plan shall be for record-keeping purposes only. All of the Trust Fund shall be
available to pay benefits to all Participants and Beneficiaries.
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ARTICLE XII
AMENDMENT AND TERMINATION AND CHANGE OF CONTROL
12.1 AMENDMENT. The Corporation reserves the right to amend
the Plan by action of its Board of Directors or the appropriate committee
thereof at any time and from time to time, subject to the following
limitations:
(a) no amendment shall be made which vests in any
Participating Company any interest in any assets of the Plan other than as
specifically provided in section 12.2;
(b) no amendment shall be made which would have the
effect of decreasing a Participant's "accrued benefit" as proscribed in section
411(d)(6) of the Code; and
(c) no amendment shall have the effect of reducing a
Participant's vested interest in his Accounts. If the Plan is amended to
change the vesting schedule, each Participant with at least a three-year Period
of Service shall have the right to elect to have his vested interest computed
without regard to the amendment. Each Participant shall be permitted to make
this election during the period ending 60 days after the latest of the date (1)
the amendment is adopted; (2) the amendment is effective, and (3) the
Participant is issued a written notice of the amendment by the Corporation or
its delegate.
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Amendment and Termination and Change of Control
Amendments will normally be initiated by the Corporation Committee,
approved by upper management of the Corporation, then adopted by resolution of
the Retirement Plan Investment Committee of the Board of Directors.
12.2 TERMINATION OF PLAN. This Plan is intended to be
permanent, and it is the expectation of the Corporation that it will continue
indefinitely. However, the Corporation reserves the right to terminate the
Plan by resolution of its Board of Directors or the appropriate committee
thereof. In the case of a complete termination of the Plan, previously
unallocated forfeitures shall be allocated as otherwise provided in the Plan.
To the extent previously unallocated forfeitures cannot be allocated because
all Participants have reached the limitations of section 415 of the Code, the
unallocated amount shall revert back to the appropriate Participating Company,
as provided in section 3.10.
12.3 DISCONTINUANCE OF CONTRIBUTIONS. The Corporation reserves
the right to discontinue contributions to the Plan by amendment or by
resolution of the Board of Directors or the appropriate committee thereof.
12.4 VESTING ON TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS.
As of the date of the partial or complete termination of the Plan or upon the
complete discontinuance of contributions to the Plan, each affected
Participant shall
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<PAGE> 103
Amendment and Termination and Change of Control
become fully vested in his Accounts and no further allocations of contributions
or forfeitures shall be made after such date on behalf of an affected
Participant.
12.5 DISTRIBUTION ON TERMINATION. Upon the complete
termination of the Plan, the Trustee shall distribute to each affected
Participant the full amount standing to the credit of his Accounts; provided
that if such amount exceeds (or at the time of any prior distribution exceeded)
$3,500 and the Participant is not yet age 65, such lump sum shall not be paid
without his consent. If the Participant does not consent, an annuity contract
shall be purchased for and distributed to the Participant.
12.6 CHANGE OF CONTROL.
(a) DEFINITION. Notwithstanding any other provisions
of the Plan to the contrary, if
(1) a third person, including a "group" as
defined in Section 12(d)(3) of the
Securities Exchange Act of 1934 (or any
rules or regulations thereunder),
acquires shares of the Corporation having
20 percent or more of the total number of
votes that may be cast for the election
of directors of the Corporation; or
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<PAGE> 104
Amendment and Termination and Change of Control
(2) as a result of any cash tender or
exchange offer, merger or other business
combination of the foregoing transactions
(the "Transaction"), the persons who were
directors of the Corporation before the
Transaction cease to constitute a
majority of the Board of Directors of the
Corporation or any successor to the
Corporation,
then during the period commencing on the date of acquisition of said voting
power or control of the Board of Directors of the Corporation or any successor
thereto and ending at the close of business on the next following June 30 (the
"Restriction Period"), the provisions of this section 12.6 shall apply.
(b) EFFECT. During the Restriction Period, the Plan
may not be terminated or amended to the extent the amendment would:
(1) reduce coverage under the Plan;
(2) reduce the amount of Profit-Sharing
Contributions required to be made for the
Plan Year ending on the last day of the
Restriction Period;
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<PAGE> 105
Amendment and Termination and Change of Control
(3) reduce the amount of After-Tax
Contributions eligible for a matching
contribution that a Participant is
permitted to make or the amount of the
Matching After-Tax Contributions required
under sections 3.5 and 3.6; or
(4) reduce the amount of Pre-Tax
Contributions that a Participant is
permitted to make or the amount of
Matching Pre-Tax Contributions required
under sections 3.3 and 3.4.
(c) For the purpose of computing the amount of the
Profit-Sharing Contributions for the twelve-month period ending on the last day
of a Restriction Period, the adjusted consolidated net income of the
Corporation and its Consolidated Subsidiaries before net income taxes for the
Fiscal Year ending on such date is deemed to be the forecast of the
consolidated net income of the Corporation and its Consolidated Subsidiaries
for such Fiscal Year as set forth in the annual operating plan of the
Corporation for such Fiscal Year.
(d) During the Restriction Period, any person who was
an Employee on the day preceding the first day of the Restriction Period shall
be
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<PAGE> 106
Amendment and Termination and Change of Control
deemed to be an Employee so long as he is employed by a member of a "controlled
group of corporations" which includes, or by a trade or business that is under
common control with (as those terms are defined in sections 414(b) and (c) of
the Code) the Corporation, any corporation which is the survivor of any merger
or consolidation to which the Corporation was a party, or any corporation into
which the Corporation has been liquidated.
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<PAGE> 107
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 RESTRICTIONS ON ALIENATION; QUALIFIED DOMESTIC RELATIONS
ORDERS. Except as otherwise may be required for Federal, state or local income
tax withholding purposes, no benefit or interest under this Plan shall be
subject to assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall apply to the creation, assignment or recognition of a
right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a Qualified
Domestic Relations Order, as defined in section 414(p) of the Code. In
accordance with uniform and nondiscriminatory procedures established by the
Corporation Committee from time to time, the Corporation Committee upon the
receipt of a domestic relations order which seeks to require the distribution
of a Participant's Account in whole or in part to an "alternative payee" (as
that term is defined in Code section 414(p)(8)) shall:
(1) promptly notify the Participant and such
"alternate payee" of the receipt of such order and of the procedure which the
Corporation Committee will follow to determine whether such order constitutes a
"Qualified Domestic Relations Order" within the meaning of Code section 414(p),
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Miscellaneous Provisions
(2) determine whether such order constitutes a
"Qualified Domestic Relations Order" and notify the Participant and the
"alternate payee" of the results of such determination and,
(3) if the Corporation Committee determines that such
order does constitute a "Qualified Domestic Relations Order," distribute to
such "alternate payee" under the terms of such order the amount called for
under the order in a single sum within 60 days of the date such order is
determined to constitute a Qualified Domestic Relations Order, without regard
to whether a distribution would be permissible to the Participant at such time
under this Plan.
The determination and the distribution made by, or at the direction
of, the Corporation Committee under this section 13.1 shall be final and
binding on the Participant and on all other persons interested in such order.
An "alternate payee" under this section 13.1 shall not be an eligible person
for purposes of obtaining a loan pending the distribution of such alternate
payee's entire interest under this Plan.
13.2 EXCLUSIVE BENEFIT REQUIREMENT. Except as provided in
sections 12.2 and 13.3, no assets of the Plan shall revert to a Participating
Company or be
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<PAGE> 109
Miscellaneous Provisions
used for or diverted to purposes other than providing benefits to Participants
and their Beneficiaries and defraying reasonable costs of administering the
Plan.
13.3 RETURN OF CONTRIBUTIONS.
(a) Mistakes of fact. Any contribution made by a
Participating Company due to a mistake of fact shall be returned to the
Participating Company within one year of the date the contribution was made.
(b) Nondeductible Contributions. In the event the
deduction of a contribution made by a Participating Company is disallowed under
section 404 of the Code, such contribution (to the extent disallowed) shall be
returned to the Participating Company within one year of the disallowance of
the deduction.
13.4 NO CONTRACT OF EMPLOYMENT. Neither the establishment and
maintenance of the Plan nor the participation in the Plan by any Employee shall
be construed as a contract between the Employee and any Participating Company
so as to give any Employee the right to be retained by any Participating
Company, or to interfere with the rights of any Participating Company to
discharge the Employee at any time.
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<PAGE> 110
Miscellaneous Provisions
13.5 PAYMENT OF BENEFITS ON INCAPACITY. In the event the
Corporation Committee determines that any person to whom a distribution is to
be made is unable to care for his affairs by reason of illness or other
disability, any amount distributable to such person (unless prior claim thereto
shall have been made by a duly qualified guardian or other legal
representative) may, in the discretion of the Corporation Committee, be paid to
such other person deemed by the Corporation Committee to be responsible for
such person. Any such payment made under this section 13.5 shall constitute a
complete discharge of any liability under this Plan.
13.6 MERGER. In the event of a merger or consolidation with,
or transfer of assets or liabilities to any other plan, each Participant shall
receive a benefit immediately after such merger, consolidation or transfer (if
the Plan then terminated) which is at least equal to the benefit the
Participant was entitled to receive immediately before such merger,
consolidation or transfer (if the Plan had then terminated).
13.7 CONSTRUCTION. The headings and subheadings in this Plan
have been inserted for convenience of reference only and are to be ignored in
the construction of its provisions. Wherever appropriate, the masculine shall
be read as the feminine, the plural as the singular, and the singular as the
plural. References in this Plan to a section shall be to a section in this
Plan unless
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Harris Retirement Plan
<PAGE> 111
Miscellaneous Provisions
otherwise indicated. References in this Plan to a section of the Code, ERISA
or any other federal law shall also refer to the regulations issued under such
section.
13.8 GOVERNING LAW. This Plan shall be construed, to the
extent to which state law is applicable, in accordance with the laws of the
State of Florida. Venue for any action arising under this Plan shall be in
Brevard County, Florida.
13.9 MISTAKEN PAYMENTS. If a mistake is made in favor of a
Participant or Beneficiary in the payment of benefits under this Plan, the
Corporation or the Trustee (acting at the Corporation direction and on behalf
of the Plan) shall take such action against the Participant or Beneficiary to
remedy such mistake and to make the Plan whole as the Corporation deems proper
and appropriate under the circumstances, and any mistake in favor of the Plan
shall promptly be corrected by, or at the direction of, the Corporation.
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ARTICLE XIV
SPECIAL PROVISIONS FOR
EMPLOYEES OF
HARRIS TECHNICAL SERVICES DIVISION OF
HARRIS TECHNICAL SERVICES CORPORATION
-------------------------------------
Notwithstanding the provisions of any other Article of this Plan to
the contrary, the following special provisions apply to Participants who are
employees of the Harris Technical Services Division of Harris Technical
Services Corporation.
14.1 PARTICIPATION. Notwithstanding section 2.1, an Employee
shall become a Participant on the first day on which the Employee performs an
Hour of Service.
14.2 PROFIT-SHARING CONTRIBUTIONS. (a) Notwithstanding section
3.1, a Profit-Sharing Contribution shall be made for each Plan Year on behalf
of Employees of the Employment Unit consisting of the Harris Technical Services
Division in an amount equal to 7 percent of before-tax M-2 profits. Ten (10)
percent of the estimated Profit-Sharing Contribution for each Plan Year shall
be made no later than the last day of October, January, and April of each year.
The remaining Profit-Sharing Contribution for each Plan Year shall be made no
later than the last day of September. (b) Notwithstanding any provision to the
contrary in Section 3.2, Profit-Sharing Contributions shall be allocated pro
rata to each Participant on the basis of the number of full months of his or
her Period of
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Miscellaneous Provisions
Service completed during the Plan Year, provided that fractional months shall
be aggregated. The limitation in eligibility in section 3.2(c) shall not
apply.
14.3 PRE-TAX CONTRIBUTIONS. Section 3.3(a) shall apply,
provided, however, that a Participant may elect to reduce his Compensation by
an amount equal to any whole percentage not to exceed 15 percent and have the
amount of such reduction contributed to the Plan as a Pre-Tax Contribution.
14.4 NO MATCHING PRE-TAX CONTRIBUTIONS. Notwithstanding any
other provision of the Plan to the contrary, no Matching Pre-Tax Contributions
will be made on behalf of Participants.
14.5 NO INVESTMENT IN THE HARRIS STOCK FUND. Notwithstanding
any provision of the Plan to the contrary, Participants may not direct
investments into the Harris Stock Fund.
14.6 VESTING. The Vesting Schedule in section 5.3(a) shall be
replaced by the following vesting schedule:
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<PAGE> 114
Miscellaneous Provisions
<TABLE>
<CAPTION>
PERIOD OF SERVICE VESTED PERCENTAGE
----------------- -----------------
<S> <C>
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
</TABLE>
HARRIS CORPORATION
Date: /S/ JUNE 24, 1994 By: /S/ DAVID S. WASSERMAN
---------------------------- --------------------------
Attest: /S/ KAREN G. FINK Title: /s/ Vice President and
--------------------------- Treasurer
--------------------------
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Harris Retirement Plan
<PAGE> 115
APPENDIX A
INVESTMENT FUNDS. The Investment Funds available under the plan as of October
1, 1993 are as follows:
(a) BALANCED FUND. Assets held in this fund will be invested in a
variety of stocks, bonds, mortgages, fixed-income securities such as
U.S. Treasury bills, certificates of deposit, commercial paper and
real estate.
(b) SHORT-TERM BOND FUND. Assets in this fund will be invested in
shorter-term fixed-income securities such as government bonds, U.S.
Treasury bills and notes, certificates of deposit, federal agency
obligations, mortgage securities and corporate bonds.
(c) MONEY MARKET FUND. Assets in this fund will be invested in a
diversified portfolio of high-quality, short-term fixed instruments
such as U.S. Treasury bills, federal agency obligations, commercial
paper, certificates of deposit and banker's acceptances.
(d) STABLE VALUE FUND. Assets held in this fund will be invested in a
diversified portfolio of investment contracts and short-term,
high-quality fixed income instruments that guarantee principal and a
specified rate of return for a specified period.
Harris Retirement Plan
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<PAGE> 116
(e) EQUITY INCOME FUND. Assets held in this fund will be invested
primarily in dividend-paying common stocks of established companies
but may also be invested in convertible bonds and/or convertible
preferred stock.
(f) INDEXED EQUITY FUND. Assets held in this fund will be invested in a
stock portfolio that mirrors the Standard & Poor's 500 Stock Index.
(g) GROWTH FUND. Assets in this fund will be invested for the longer
term, primarily in common stocks of companies which are currently
experiencing an above-average rate of earnings growth. The fund's
stock selection criteria include a requirement that each company
have a five-year average performance record of sales, earnings,
dividend growth, pre-tax margins, return on equity.
(h) HARRIS STOCK FUND. Assets in this fund will be invested in common
stock of the Corporation.
The Investment Funds may be changed at any time and from time to time.
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<PAGE> 117
APPENDIX B
SPECIAL PROVISIONS FOR TRANSFERRED PARTICIPANTS
-----------------------------------------------
The provisions of this Appendix B are effective as of January 1,
1990.
(a) For purposes of this Appendix B, the following terms shall have the
following meanings:
(1) "TRANSFERRED PARTICIPANTS" means those
former Employees whose employment with a
Participating Company ceased due to a
sale of the stock or assets of a Sold
Operation.
(2) "SOLD OPERATION" means (i) the Data
Communications Division and (ii) the
Chatsworth Operation.
(3) "CLOSING DATE" means the date as of which
the sale of the relevant Sold Operation
was effective.
(b) Each Transferred Participant shall be fully vested in his Accounts
as of the relevant Closing Date.
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<PAGE> 1
EXHIBIT 10(h)
HARRIS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I - PURPOSE AND EFFECTIVE DATE
1.1 PURPOSE. The Harris Corporation Supplemental Executive Retirement Plan
(the "SERP") is intended to provide deferred compensation for a "select group
of management or highly compensated employees" as defined in section 201(2) of
ERISA. In particular, the SERP is intended to provide participants in the
Harris Corporation Retirement Plan (the "Retirement Plan") with contributions
that would have been made on their behalf, but for the limitations of sections
401(a)(17), 401(k)(3) and 415 of the Code.
1.2 EFFECTIVE DATE. The SERP, as amended herein, is effective as of July 1,
1994.
ARTICLE II - DEFINITIONS
Each term used in this Plan shall have the definition given to it in the
Retirement Plan, unless otherwise specifically provided herein.
2.1 ACCOUNT - means the account established under section 5.1 for each
Participant.
2.2 CODE - means the Internal Revenue Code of 1986, as amended from time to
time.
2.3 COMMITTEE - means the Corporation Committee, the members of which shall be
appointed in the exercise of discretion of the Retirement Plan Investment
Committee of the Board of Directors of the Corporation.
2.4 CORPORATION - means Harris Corporation.
2.5 ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
<PAGE> 2
- 2 -
2.6 PARTICIPANT - means an individual who meets the requirements of sections
3.1 or 3.2 and, where applicable, enters into a salary deferral agreement
pursuant to Article IV.
2.7 RETIREMENT PLAN - means the Harris Corporation Retirement Plan, as amended
from time to time.21
2.8 SERP - means the Harris Corporation Supplemental Executive Retirement
Plan, as amended from time to time.
ARTICLE III - PARTICIPATION
3.1 CONTINUED PARTICIPATION. Any individual who is a participant in the
Harris Corporation Supplemental Executive Retirement Plan as of June 30, 1994
shall continue to participate in this SERP.
3.2 GENERAL PARTICIPATION. The following shall be eligible to participate:
Any employee who receives compensation for a Plan Year from the Corporation of
at least $120,000 (as indexed for inflation in a manner to be determined in the
sole discretion of the Committee) and has completed one Year of Service and (a)
for whom contributions under the Retirement Plan are reduced as a result of
sections 401(a)(17), 401(k)(3) or 415 of the Code, or (b) who is designated by
the Committee as a Participant.
ARTICLE IV - CONTRIBUTIONS
4.1 IN GENERAL. (a) Subject to the provisions of subsection 4.2, whenever
contributions to the Retirement Plan on behalf of a Participant are reduced
pursuant to sections 401(a)(17), 401(k)(3) or 415 of the Code, the amount of
the reduction shall be credited to the Participant's Account. (b) For any
Plan Year during which a Participant is not a participant in the Retirement
Plan and has filed a Salary Deferral Agreement under Section 4.3, contributions
shall be made to the SERP in an amount equal to the Profit-Sharing Contribution
that he would have received under Section 3.2 of the Retirement Plan had he
been a participant in the Retirement Plan (without regard to sections
401(a)(17), 401(k) and 415 of the Code) and any other contributions
attributable to his Salary Deferral Agreement under Section 4.3 of this SERP,
had it been made under Section 3.7 of the Retirement Plan (without regard to
sections 401(a)(17), 401(k) and 415 of the Code).
<PAGE> 3
- 3 -
4.2 SALARY DEFERRAL AGREEMENT. Pre-Tax Contributions and Matching Pre-Tax
Contributions under the Retirement Plan that are reduced pursuant to sections
401(a)(17), 401(k)(3) or 415 of the Code shall be credited to the Participant's
Account only if he or she timely enters into a deferral election on the form
and in the manner prescribed by the Committee.
4.3 SALARY DEFERRAL AGREEMENT. A Participant who is not a participant in the
Retirement Plan may enter into a Salary Deferral Agreement, electing to defer
into the SERP a percentage of his or her Compensation, in one percent
increments up to 12 percent, without regard to any limitation under section
401(a)(17) of the Code. The Salary Deferral Agreement shall be made on the
form and in the manner prescribed by the Committee.
A Participant described in this Section 4.3 may increase or decrease the
deferral percentage for a subsequent Plan Year by filing a new deferral
election prior to the first day of the Plan Year to which the new deferral
election applies. Any deferral election made by the Participant will remain in
effect for subsequent Plan Years unless the Participant timely files a new
deferral election.
4.4 SPECIAL AWARD AMOUNTS. The Corporation, in its sole discretion, may make
additional special award contributions on behalf of some or all Participants.
4.5 TRANSFERRED ACCOUNTS. A Participant's Account under this SERP may include
amounts transferred directly from a prior employer's nonqualified deferred
compensation plan, subject to the sole discretion of the Committee, and shall
be held, managed and distributed under the terms of this SERP; provided,
however, that such transferred amounts shall be fully vested at all times.
4.6 INDIVIDUAL ARRANGEMENTS. A Participant's Account under this SERP may
include additional amounts of salary deferrals pursuant to a written individual
deferred compensation agreement between the Corporation and the Participant,
subject to the sole discretion of the Committee. Such arrangements must be
memorialized in a writing signed before the Participant performs the services
for which the compensation is to be deferred. Such amounts shall be held,
managed and distributed under the terms of this SERP; provided, however, that
such amounts shall be fully vested at all times.
ARTICLE V - ACCOUNTS AND INVESTMENTS
5.1 ESTABLISHMENT OF ACCOUNTS. The Account established for each Participant
shall be credited with contributions, then adjusted for earnings, losses,
expenses
<PAGE> 4
- 4 -
and distributions as provided herein at least annually or more frequently as
determined by the Committee.
5.2 INVESTMENTS. Amounts credited to the Account of a Participant shall be
deemed to be invested pursuant to the Participant's investment election under
the Retirement Plan. If a Participant who is also a participant in the
Retirement Plan has no investment election in effect under the Retirement Plan,
such Participant's Account shall be invested in the Balanced Fund. If a
Participant is not a participant in the Retirement Plan, the Participant may
file an investment election under the SERP, directing the investment of his
Account in conformity with the terms of the Retirement Plan, except that
Participants may not direct the investment of their SERP Account in Harris
Stock unless they are participants in the Retirement Plan and their account
under the Retirement Plan is invested in the Harris Stock Fund.
ARTICLE VI - VESTING AND DISTRIBUTIONS
6.1 VESTING. Contributions shall have the character that they would have had
if they been made to the Retirement Plan and shall become vested in accordance
with the terms of the Retirement Plan.
6.2 TIME OF PAYMENT. A Participant shall begin to receive payment of benefits
on the attainment of age 55 or termination of employment, if later; provided,
however, that if a Participant makes an election under section 6.3(a), benefits
shall not commence earlier than 30 days after the date the election is filed
with the Committee.
6.3 FORM OF PAYMENT. (a) A Participant who has attained age 60 by June 30,
1994, or who has not participated in the Retirement Plan may elect the form in
which benefits shall be paid by filing an election with the Committee on the
form and in the manner prescribed by the Committee. A Participant who has not
attained age 60 by June 30, 1994 may elect the form in which benefits shall be
paid by filing an election with the Committee on the form and in the manner
prescribed by the Committee when he or she becomes a Participant. An election
period shall be provided for each Participant during the period commencing on
the 90th day and ending on the 30th day preceding such Participant's retirement
date. During this period, a Participant may elect the form in which benefits
shall be paid or may change a prior election. All elections shall become
irrevocable on the 30th day preceding a Participant's retirement date.
<PAGE> 5
- 5 -
(b) Except as provided in 6.3(c), a Participant who has not filed an election
under section 6.3(a) shall receive benefits either (i) at the same time and in
the same manner that benefits are paid under the Retirement Plan; or (ii) if
such Participant has not participated in the Retirement Plan, the balance of
the Participant's Account under this SERP shall be paid in annual installments
over ten years. A participant who makes an election under section 6.3(a) may
elect to receive benefits in the following forms:
(1) Except as provided in section 6.3(c), payment of benefits at the same
time and in the same manner that benefits are paid under the Retirement Plan;
(2) Payment of benefits in annual installments over a five year period; or
(3) Payment of benefits in annual installments over a ten year period.
(c) If a Participant elects payment of benefits at the same time and in the
same manner that benefits are paid under the Retirement Plan or if benefits
will be paid in such manner because a Participant has not filed an election
under section 6.3(a), and:
(1) after separating from service, elects to have a substantial amount, as
determined in the sole discretion of the Committee, of his or her benefits
under the Retirement Plan paid as a direct distribution to the Participant, the
balance of the Participant's Account under this SERP shall be paid in a lump
sum; or
(2) after separating from service, elects to have a substantial amount, as
determined in the sole discretion of the Committee, of his or her benefit under
the Retirement Plan paid as a direct rollover under section 401(a)(31) of the
Code, the balance of the Participant's Account under this SERP shall be paid in
annual installments over a period of ten years.
(d) Notwithstanding the above, if a Participant's vested interest in his
Account does not exceed $3,500 (or such larger amount applicable under the
Small Benefit Cash-out provision of the Retirement Plan), the vested interest
shall be paid to the Participant in a lump sum as soon as reasonably
practicable upon entitlement to a distribution.
6.4 DEATH. Any amounts credited to the Participant's Account at death shall
be paid to the Participant's beneficiary, determined under section 6.5 below,
in the same manner that they would have been paid to the Participant.
6.5 DESIGNATION OF BENEFICIARY. Each Participant may designate a beneficiary
to receive any benefits payable as a result of the Participant's death.
The beneficiary
<PAGE> 6
- 6 -
designation shall be effective only if it is made on the form and in the manner
prescribed by the Committee. A beneficiary designation may be revoked or
changed by the Participant at any time by filing a new form with the Committee.
Absent a valid beneficiary designation hereunder, the Participant's beneficiary
shall be determined under the terms of the Retirement Plan.
6.6 FINANCIAL HARDSHIP. All or a portion of any amounts credited to the
Participant's Account may be immediately paid to the Participant if the
Participant incurs a financial hardship, as determined in the sole discretion
of the Committee.
6.7 PAYMENT ON INCAPACITY. In the event the Committee determines that any
person to whom a distribution is to be made is unable to care for his or her
affairs by reason of illness or other disability, any amount distributable to
such person hereunder may be paid to such other person deemed by the Committee,
in its sole discretion, to be responsible for such person (unless prior claim
thereto has been made by a duly qualified guardian or other legal
representative). Any such payment made under this section 6.7 shall constitute
a complete discharge of any liability under this Plan.
6.8 OVERPAYMENTS. In the event the benefits actually paid with respect to a
Participant exceed the benefits to which he or she is entitled under the terms
of this Plan, future benefits shall be reduced in any manner which the
Committee, in its sole discretion, deems equitable.
6.9 WITHHOLDING FOR TAXES. The Corporation shall have the right to deduct any
Federal, state or local income, employment, or other taxes required by law to
be withheld with respect to any benefits payable under this SERP, and to
withhold such amounts from any payment otherwise due the Participant (or
beneficiary).
ARTICLE VII - ADMINISTRATION
7.1 COMMITTEE. This Plan shall be administered by the Committee.
7.2 AUTHORITY OF COMMITTEE. The Committee shall, in its sole and absolute
discretion, have the complete authority to interpret this SERP, to adopt rules
for carrying out the purposes of this SERP and to make all other determinations
necessary or advisable for the administration of this SERP. To the extent
practicable, the Committee shall conform the administration of this SERP to the
provisions of the Retirement Plan. Any decision or interpretation of any
provision of this SERP made by the Committee, the Corporation, or their
delegates, shall be final and conclusive, and shall be binding on all
Participants (and their
<PAGE> 7
- 7 -
beneficiaries). A Participant who is a member of the Committee may participate
in a decision of the Committee that may affect his or her rights or obligations
under this SERP only if the decision does not require a vote of the Committee.
7.3 DELEGATION OF AUTHORITY. The Committee may delegate any of its
administrative powers or duties with respect to this SERP to any person or
committee designated by it and may employ such attorneys, agents, and advisors
as it may deem necessary or advisable to assist it in carrying out its duties
hereunder.
7.4 LIABILITY OF COMMITTEE. No member of the Committee and no individual to
whom the Committee has delegated authority to administer this SERP shall be
liable for any action or failure to act under this SERP, except where such
action or failure to act was due to gross negligence or fraud.
ARTICLE VIII - GENERAL PROVISIONS
8.1 AMENDMENT AND TERMINATION. The Corporation may amend or terminate this
Plan at any time, in whole or in part. Amendments will normally be initiated
by the Committee, approved by upper management of the Corporation, then adopted
by resolution of the Retirement Plan Investment Committee of the Board of
Directors.
8.2 ANTI-ALIENATION. A Participant's rights and interest under this SERP may
not be assigned or transferred except by will or the laws of descent or
distribution. Any other purported transfer, assignment, pledge or other
encumbrance or attachment of any payments or benefits under this SERP shall not
be permitted or recognized.
8.3 FUNDING. The Corporation may, but is not required to, establish a trust
to fund the benefits under this SERP, provided that the assets in such trust
are subject to the claims of the Corporation's general creditors in the event
of insolvency. To the extent benefits are not funded by a trust, a Participant
(and beneficiary) shall have no interest in any fund or specific asset of the
Corporation, and the rights of a Participant (and beneficiary) to any benefits
under this SERP shall be solely those of an unsecured creditor of the
Corporation.
8.4 SEPARABILITY. If any provision of this SERP is found unlawful by any
court having proper jurisdiction, such provision shall be construed by such
court to most nearly reflect the Corporation's original intent in adopting this
SERP, consistent with applicable law.
<PAGE> 8
- 8 -
8.5 NOT A CONTRACT OF EMPLOYMENT. This SERP shall not constitute a contract
of continuing employment or in any manner obligate the Corporation to continue
or discontinue the service of an employee.
8.6 CONSTRUCTION OF SERP. This SERP shall be construed in accordance with the
laws of the State of Florida.
IN WITNESS WHEREOF, Harris Corporation does hereby adopt this SERP, as
amended, effective July 1, 1994.
HARRIS CORPORATION
Date: /S/ June 24, 1994 By: /S/ David S. Wasserman
----------------- ---------------------------
1027300
<PAGE> 1
Exhibit 10(i)
LANIER WORLDWIDE, INC.
PENSION PLAN
AS EFFECTIVE AS OF
JULY 1, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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Section 1 HISTORY AND EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. Controlling Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2. Plan Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1. Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) Grandfather Rule . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Actuarial Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3. Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4. Annuity Starting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5. Average Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6. Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7. Benefit Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.8. Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.9. Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.10. Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.11. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.12. Covered Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.13. Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.14. Early Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.15. Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.16. Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.17. Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.18. Employment Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . 8
3.19. Employment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.20. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.21. Harris/LBP Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.22. Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.23. Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.24. Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.25. Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.26. Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.27. Participation Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
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3.28. Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.29. Plan Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.30. Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.31. Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.32. TRA 86 Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.33. Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.34. Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.35. Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.36. Vested Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.37. Vesting Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.38. Year of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Vesting and Participation . . . . . . . . . . . . . . . . . . . . . . 10
(1) Period of Employment . . . . . . . . . . . . . . . . . . . . 10
(2) Termination/Reemployment . . . . . . . . . . . . . . . . . . 10
(3) Rule of Parity for 6 Breaks in Service . . . . . . . . . . . 11
(4) Service With Other Entities . . . . . . . . . . . . . . . . 11
(5) Special Rule for Harris Employees . . . . . . . . . . . . . 11
(6) Special Rule for July 31, 1991 Participants . . . . . . . . 12
(b) Benefit Accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(1) Period of Employment . . . . . . . . . . . . . . . . . . . . 12
(2) Termination/Reemployment . . . . . . . . . . . . . . . . . . 13
(3) Rule of Parity for 6 Breaks in Service . . . . . . . . . . . 13
Section 4 PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.1. General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2. Transferred Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3. Reemployment Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Prior Service Disregarded . . . . . . . . . . . . . . . . . . . . . . 14
(b) Prior Service Aggregated . . . . . . . . . . . . . . . . . . . . . . 14
4.4. Absence from Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5. Plan Not An Employment Contract . . . . . . . . . . . . . . . . . . . . . . . 14
4.6. Pre-1988 Age Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5 BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1. Normal Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2. Early Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Early Commencement . . . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Early Commencement Reduction Factor . . . . . . . . . . . . . . . . . 15
</TABLE>
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5.3. Vested Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Early Commencement . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Early Commencement Reduction . . . . . . . . . . . . . . . . . . . . 17
5.4. Disability Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) At Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . 17
(b) Definition of Total and Permanent Disability . . . . . . . . . . . . 17
(c) Proof of Disability . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Early Commencement . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Survivor Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(f) Termination of Disability . . . . . . . . . . . . . . . . . . . . . . 19
5.5. Suspension of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Continued Employment . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Suspension Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Actuarial Adjustment for Certain Months . . . . . . . . . . . . . . . 21
(1) Following Receipt of Suspension Notice . . . . . . . . . . . 21
(2) Prior to Receipt of Suspension Notice . . . . . . . . . . . 21
(3) Actuarial Equivalence . . . . . . . . . . . . . . . . . . . 22
5.6. Calculation of Additional Accrued Benefit Following
Initial Commencement of Benefits . . . . . . . . . . . . . . . . . . . . . . 22
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Annuity-Benefits Suspended . . . . . . . . . . . . . . . . . . . . . 22
(c) Lump-Sum - Benefits Suspended . . . . . . . . . . . . . . . . . . . . 23
(d) Adjustment Where Benefits Not Suspended . . . . . . . . . . . . . . . 23
(e) Certain Lump Sum Payments . . . . . . . . . . . . . . . . . . . . . . 23
Section 6 BENEFIT PAYMENT FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.1. Normal Payment Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Annuities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Lump Sum Cash Out . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(c) Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . 25
6.2. Election Procedures and Timing . . . . . . . . . . . . . . . . . . . . . . . 25
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Procedures and Spousal Consent . . . . . . . . . . . . . . . . . . . 25
(c) Timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . 26
6.3. Description of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Actuarial Equivalent and Other Special Rules . . . . . . . . . . . . 26
(1) Actuarial Equivalent . . . . . . . . . . . . . . . . . . . . 26
(2) Minimum Incidental Death Benefit Rule . . . . . . . . . . . 26
</TABLE>
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(3) Death . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(4) Recomputation of Period Certain . . . . . . . . . . . . . . 27
(b) Payment Options . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(1) Single Life Annuity Option . . . . . . . . . . . . . . . . . 27
(2) 10 Year Period Certain and Continuous
Annuity Option . . . . . . . . . . . . . . . . . . . . . . . 27
(3) Joint and Survivor Annuity Option . . . . . . . . . . . . . 27
(4) Lump Sum Option . . . . . . . . . . . . . . . . . . . . . . 27
(c) Other Payment Options . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.4. Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.5. No Estoppel of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.6. Claims for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7 SURVIVOR BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.1. Preretirement Survivor Benefit For Married Participants . . . . . . . . . . . 29
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(1) Normal . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(2) Early . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(d) Lump Sum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2. Preretirement Survivor Annuity For Participants
Who Terminate Employment after 55 or are Disabled . . . . . . . . . . . . . . 31
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.3. No Post Retirement Survivor Benefits . . . . . . . . . . . . . . . . . . . . 32
Section 8 PLAN FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.1. Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.2. Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.3. Prohibition Against Reversion . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9 NAMED FIDUCIARIES AND PLAN SPONSOR . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.1. Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2. Allocation and Delegation by Named Fiduciaries . . . . . . . . . . . . . . . 34
9.3. Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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9.4. Dual Fiduciary Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.5. Plan Sponsor Power and Duties . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(b) Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(c) Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(d) Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(e) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10 TRUST FUND AND TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 11 TERMINATION, AMENDMENT AND ADOPTION . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1. Right to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.2. Full Vesting Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . 36
11.3. Allocation of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.4. Merger, Consolidation and Transfer of Assets
or Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.5. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 12 RESTRICTIONS ON CERTAIN BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.1. Limitations on Annual Benefit . . . . . . . . . . . . . . . . . . . . . . . . 37
12.2. Limit on Benefits of Highest-Paid Employees . . . . . . . . . . . . . . . . . 38
(a) Restricted Participants . . . . . . . . . . . . . . . . . . . . . . . 38
(b) Applicability of Limit . . . . . . . . . . . . . . . . . . . . . . . 38
(c) Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) Security Arrangement . . . . . . . . . . . . . . . . . . . . . . . . 39
(e) Plan Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(f) Transition Period . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 13 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.1. Spendthrift Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.2. Legally Incompetent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.3. Benefits Supported Only by Trust Fund . . . . . . . . . . . . . . . . . . . . 40
13.4. Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.5. Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.6. Nonreversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.7. Agent for Service of Process . . . . . . . . . . . . . . . . . . . . . . . . 41
13.8. Top Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(a) Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(b) Special Top Heavy Plan Rules . . . . . . . . . . . . . . . . . . . . 42
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13.9. Qualified Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . 44
13.10. Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Exhibit A
Attachment 1 to Exhibit A - Former Lanier Participants
Attachment 2 to Exhibit A - Former Harris/DPI Participants
Attachment 3 to Exhibit A - Former BSD Participants
Attachment 4 to Exhibit A - Certain Terminated Participants
</TABLE>
- vi -
<PAGE> 8
LANIER WORLDWIDE, INC.
PENSION PLAN
AS EFFECTIVE AS OF
JULY 1, 1994
Section 1
HISTORY AND EFFECTIVE DATE
--------------------------
This Lanier Worldwide, Inc. Pension Plan (the "Plan"), which is effective July
1, 1994, amends and restates the Plan as most recently amended and restated
effective as of August 2, 1991. The August 1, 1991 document amended and
restated the Plan as adopted on April 30, 1990. The April 30, 1990 document
amended, restated and renamed the Harris/3M Document Products, Inc. Pension
Plan as originally effective as of January 1, 1986 and as last amended and
restated effective as of July 1, 1987 ("Harris/DPI Plan"). The Harris/Lanier
Retirement Plan and Trust ("Harris/LBP Plan") as originally effective as of
July l, 1965 and as last amended and restated effective as of January 1, 1988,
was merged into this Plan effective as of October 1, 1989.
This Plan is intended to satisfy all applicable TRA 86 Requirements and all
applicable requirements of subsequent legislation through June 30, 1994. The
April 30, 1990 document was intended to satisfy all applicable TRA 86
Requirements effective as of July 1, 1989 for this Plan and January 1, 1989 for
the Harris/LBP Plan or such earlier dates as required under either such plan by
applicable TRA 86 Requirements.
Except as expressly otherwise provided, the provisions of this Plan shall apply
only to those persons who are employees of an Employer on or after July 1,
1994. The benefits, if any, of a person whose employment with an Employer
terminated before July 1, 1994 and who is not reemployed by an Employer after
such date shall, except as expressly provided otherwise in this Plan, be
determined in accordance with the provisions of this Plan as in effect as of
the date his employment so terminated or, if his termination occurred before
October 1, 1989, the Harris/LBP Plan, if applicable, as amended to comply with
applicable TRA 86 Requirements. For convenience, the substantive provisions of
this Plan as in effect before August 1, 1991, the substantive provisions of the
Harris/DPI Plan as in effect before July 1, 1989, and the substantive
provisions of the Harris/LBP Plan are described in Exhibit A.
<PAGE> 9
Section 2
CONSTRUCTION
------------
2.1. CONTROLLING LAWS. To the extent such laws are not preempted by
federal law, this Plan and the related Trust Agreement shall be construed and
interpreted under the laws of the State of Georgia.
2.2. PLAN TYPES. The Plan Sponsor intends that this Plan and the related
Trust Agreement satisfy the requirements for tax exempt status under Code
Section 401(a), Code Section 501(a) and related Code sections as a defined
benefit pension plan and that the provisions of this Plan and the Trust
Agreement be construed and interpreted in accordance with the requirements of
the Code and the regulations under the Code governing such plans.
2.3. CONSTRUCTION. The headings and subheadings in this Plan have been
inserted for convenience of reference only and are to be ignored in the
construction of its provisions. Wherever appropriate, the masculine shall be
read as the feminine, the plural as the singular, and the singular as the
plural. References in this Plan to a section (Section ) shall be to a section
in this Plan unless otherwise indicated. References in this Plan to a section
of the Code, ERISA or any other federal law shall also refer to the regulations
issued under such section.
Further, except as expressly stated otherwise, no provision of this Plan or the
related Trust Agreement is intended to nor shall grant any rights to
Participants or Beneficiaries or any interest in the Fund in addition to those
minimum rights or interests required to be provided under ERISA and the Code
and the regulations under ERISA and the Code.
Section 3
DEFINITIONS
-----------
The capitalized terms and phrases used in this Plan shall have the meanings set
forth in this Section 3:
3.1. ACCRUED BENEFIT.
(a) GENERAL. The term "Accrued Benefit" means, for each
Participant as of any Determination Date, a monthly benefit payable to such
Participant in
- 2 -
<PAGE> 10
the form of a single life annuity commencing as of his Normal Retirement Date.
Such monthly benefit shall be determined in accordance with the formula in this
Section 3.1 based on his Average Compensation, Benefit Service and Covered
Compensation as of such Determination Date.
Subject to Section 3.1(b), such monthly benefit shall be equal to
the sum of (1) and (2), where:
(1) equals 1.22% of the Participant's Average
Compensation which does not exceed his Covered
Compensation multiplied by the lesser of (i) his total
years and fractional years of Benefit Service or (ii) 30,
and
(2) equals 1.55% of the Participant's Average
Compensation which exceeds his Covered Compensation
multiplied by the lesser of (i) his total years and
fractional years of Benefit Service or (ii) 30.
(b) GRANDFATHER RULE. The Accrued Benefit of each Participant
shall not be less than his grandfathered accrued benefit, if any, as determined
as of the earlier of his most recent termination date or June 30, 1989 under
the formula set forth in Exhibit A, or, for an individual who was a participant
in the Harris/LBP Plan prior to October 1, 1989, his grandfathered accrued
benefit, if any, as determined as of the earlier of his most recent termination
date or December 31, 1988 under the formula set forth in Exhibit A.
3.2. ACTUARIAL EQUIVALENT -- means a form of benefit payment having in
the aggregate a present value equal to the present value of the aggregate
amounts of benefits expected to be received under the single life annuity form
of benefit payment described in Section 6.3(b), computed in accordance with
the following assumptions:
(a) The Unloaded 1983 Group Annuity Mortality Table for Males
with a one year set back for a Participant and a 5-year set back for
a Participant's Spouse or Beneficiary, and
(b) An interest rate assumption equal to (1) or (2), whichever
is applicable:
(1) for benefits paid in a form other than a single
sum, 7% per annum, compounded annually; and
(2) for benefits paid in a single sum, the Pension
Benefit Guaranty Corporation ("PBGC") interest
rate (deferred or
- 3 -
<PAGE> 11
immediate, whichever is appropriate) that would be used by the PBGC
(as of the first day of the Plan Year in which such benefit is paid)
for purposes of determining the present value of a single sum
distribution on a plan termination;
provided, however, that the Actuarial Equivalent of the Accrued Benefit of a
Participant shall not be less than the actuarial equivalent of his accrued
benefit, if any, as determined as of the earlier of his most recent termination
date or September 30, 1989 in accordance with the factors set forth in Exhibit
A.
3.3. AFFILIATE -- means as of any date the Plan Sponsor and (a) any
parent, subsidiary or brother-sister corporation which (as of such date) is a
member of a controlled group of corporations (as defined in Code Section
1563(a), disregarding Code Section 1563(a)(4) and Code Section 1563(e)(3)(C))
of which the Plan Sponsor is a member; (b) any trade or business, whether or
not incorporated, which (as of such date) is considered to be under common
control with the Plan Sponsor under regulations prescribed by the Secretary of
the Treasury pursuant to Code Section 414(c); (c) any person or organization
which (as of such date) is a member of an affiliated service group (as defined
in Code Section 414(m)) with the Plan Sponsor; and (d) any other organization
which during such year is required to be aggregated with the Plan Sponsor under
Code Section 414(o); provided, solely for purposes of Section 12.1, the phrase
"more than 50 percent" shall be substituted for "at least 80 percent" each
place that "at least 80 percent" appears in Code Section 1563(a)(1).
3.4. ANNUITY STARTING DATE -- means for each Participant, Spouse or
Beneficiary the first day of the first period for which an amount is paid as an
annuity under this Plan or such other date as described in regulations under
Code Section 401.
3.5. AVERAGE COMPENSATION -- means for each Participant as of any
Determination Date one-twelfth of the average of a Participant's Compensation
during the 5 consecutive calendar year period in which such average is highest
(or actual number of consecutive calendar years if less than 5) out of the 10
calendar year period (or actual number of such calendar years if less than 10)
during which the Participant was an Employee and ending with the calendar year
which includes the Determination Date. Notwithstanding the foregoing, the
Average Compensation of any Participant shall not be less than his Average
Compensation determined as of July 31, 1991 under the Plan as in effect on such
date. See Exhibit A for the definition which applied to Participants who
terminated employment before August 1, 1991.
- 4 -
<PAGE> 12
3.6. BENEFICIARY -- means either
(a) the person or persons last designated in writing by a
Participant on a properly completed beneficiary designation form
delivered to the Plan Sponsor before his death to receive the
benefits, if any, (other than the preretirement survivor annuity
described in Section 7.1) payable under this Plan at his death or,
if no such designation is made, or if no person so designated
survives the Participant or, if after checking his last known
mailing address, the whereabouts of the person so designated is
unknown,
(b) the person or persons, if any, expressly so designated by
the Participant to receive the benefit payable as a result of his
death under the group term life insurance program maintained by his
Employer or, if no such designation was made, or if no such person
so designated survives the Participant, or, if after checking his
last known mailing address, the whereabouts of the person so
designated is unknown,
(c) the Participant's surviving spouse or, if there is no
surviving spouse or the whereabouts of such surviving spouse are
unknown,
(d) the Participant's surviving children (natural and adopted)
in equal shares or, if there are no such surviving children or if
the whereabouts of such children are unknown,
(e) the estate of the last survivor as between the Participant
and his Beneficiary, if a personal representative of such deceased
person has qualified within 12 months from the date of death or, if
no personal representative has so qualified,
(f) any heirs-at-law of the last survivor as between the
Participant and his Beneficiary as determined by the Plan Sponsor
under the laws of the State of Georgia whose whereabouts are known
to the Plan Sponsor.
3.7. BENEFIT SERVICE -- means for each Participant as of any
Determination Date such Participant's full and fractional Years of Service as
described in Section 3.38(b) completed as a Participant in this Plan including
any benefit service credited under a prior plan prior to October 1, 1989 which
is described in Exhibit A. Notwithstanding the foregoing, a Participant's
Benefit Service shall not include any service performed by such Participant
with respect to which he has received (after July 31, 1991) a distribution of
the present value of his nonforfeitable Accrued Benefit as a result of his
termination of participation in this Plan except as provided in Section
13.8(b)(3).
- 5 -
<PAGE> 13
3.8. BOARD -- means the Board of Directors of the Plan Sponsor or the
Pension and Retirement Committee of such Board of Directors.
3.9. BREAK IN SERVICE -- means for each Employee or former Employee, each
12 consecutive month period beginning on an Employee's Employment Termination
Date or anniversary of such date during which an Employee or former Employee
fails to complete an Hour of Service.
3.10. CODE -- means the Internal Revenue Code of 1986, as amended, or any
successor statute, and, in the event an amendment to the Code renumbers a
section of the Code referred to in this Plan, any such reference to such
section automatically shall become a reference to such section as renumbered.
3.11. COMPENSATION -- means for each Employee the sum of (a) and (b) minus
(c), where
(a) equals the total compensation of an Employee for any
calendar year or portion thereof from one or more Affiliates which
is subject to income tax withholding under Code Section 3401(a)
determined without regard to any limits under such Code section for
the nature or location of such Participant's employment or the
services performed by such Participant,
(b) equals the elective deferrals made by an Affiliate on
behalf of such Employee that are not includible in his gross income
for federal income tax purposes for such period because they are
contributed to a cash or deferred arrangement described in Code
Section 401(k) or because they are excluded under Code Section
125, and
(c) equals any payments made under a severance pay plan or
program, any payment made in consideration of an Employee's release
of claims in favor of an Affiliate, any payment attributable to
foreign assignment differential and any payments made under Longer
Term Incentive Plans.
Notwithstanding the foregoing, Compensation shall not include any remuneration
for services as a "leased employee" of an Affiliate and Compensation for any
calendar year beginning after December 31, 1993 shall not include any amount in
excess of the amount allowable under Code Section 401(a)(17), which is
$150,000 for 1994. This definition shall apply for calendar years beginning
after May 14, 1990, see Exhibit A for the definition which applies for calendar
years beginning before May 14, 1990.
3.12. COVERED COMPENSATION -- means for each Participant as of any
Determination Date, 1/12 of the average (without indexing) of the "taxable wage
- 6 -
<PAGE> 14
bases" in effect under the Social Security Act for each calendar year during
the 35 year period ending with the last day of the calendar year in which he
attains (or will attain) his "social security retirement age," determined by
assuming that the "taxable wage base" for all future years shall be the same as
the "taxable wage base" in effect as of the beginning of the Plan Year which
includes the Determination Date. A Participant's Covered Compensation for a
Plan Year after the 35 year period is the Participant's Covered Compensation
for the Plan Year during which he attained "social security retirement age,"
and a Participant's Covered Compensation for a Plan Year before the 35 year
period is the "taxable wage base" in effect as of the beginning of that Plan
Year. For purposes of this definition, the term "taxable wage base" means for
any Plan Year the contribution and benefit base in effect under Section 230 of
the Social Security Act at the beginning of such Plan Year and the term "social
security retirement age" means age 65 for a Participant born before January 1,
1938; age 66 for a Participant born after December 31, 1937; and age 67 for a
Participant born after December 31, 1954.
3.13. DETERMINATION DATE -- means the date as of which a Participant's
Accrued Benefit is determined under this Plan or, if earlier, the most recent
date the Participant terminated employment as an Eligible Employee.
3.14. EARLY RETIREMENT DATE -- means
(a) the first day of the calendar month coinciding with or
next following the later of (1) the date on which the Participant
reaches age 55 or (2) the date on which the Participant completes 10
full years of Vesting Service, provided the Participant is an
Employee on such date, or
(b) a Participant's early retirement date a set forth in
Exhibit A.
3.15. ELIGIBLE EMPLOYEE -- means for each Plan Year each Employee of an
Employer other than
(a) an Employee who is treated as such solely by reason of the
"leased employee" rules set forth in Code Section 414(n),
(b) an Employee who is a member of (or who is represented by)
a collective bargaining unit which has failed to reach an agreement
with his Employer that he be eligible to participate in this Plan,
(c) an Employee who is a non-resident alien and who receives
no earned income from an Employer from sources within the United
States (as described more fully in Code Section 410(b)(3)(C)),
- 7 -
<PAGE> 15
(d) an Employee (other than an Employee of Lanier Puerto Rico,
Inc.) who works primarily outside the United States and who is paid
under a payroll system which is not linked electronically to the
payroll system for Employees who work primarily within the United
States; and
(e) an Employee who is classified on the personnel records of
an Employer as employed in a temporary, summer, or casual part-time
position for short-term workload, which employment is intended to
terminate upon completion of such assignment.
3.16. EMPLOYEE -- means a person (a) who is employed and paid as a
full-time, part-time, regular or temporary employee of an Affiliate or (b) who
is treated as such under the "leased employee" rules set forth in Code Section
414(n).
3.17. EMPLOYER -- means the Plan Sponsor, Lanier Puerto Rico, Inc., and
each other Affiliate which the Board designates in writing as such from time to
time.
3.18. EMPLOYMENT COMMENCEMENT DATE -- means the first date on which an
Employee first performs an Hour of Service or, if a former Employee is
reemployed after he has a Break in Service, the first date on which the
reemployed Employee first performs an Hour of Service after such Break in
Service.
3.19. EMPLOYMENT TERMINATION DATE -- means for each Employee the earlier
of (a) the date such Employee quits, retires, dies or is discharged in
accordance with the personnel policy of an Affiliate or (b) the date on which a
12 consecutive month period ends during which he did not perform an Hour of
Service.
3.20. ERISA -- means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute and, in the event an amendment to ERISA
renumbers a section of ERISA referred to in this Plan, any such reference to
such section automatically shall become a reference to such section as
renumbered.
3.21. HARRIS/LBP PLAN -- means the Harris/Lanier Retirement Plan and Trust
Agreement as last amended and restated effective as of January 1, 1988. See
Exhibit A for the substantive provisions of the Harris/LBP Plan which are
effective for periods before October 1, 1989.
3.22. HOUR OF SERVICE -- means each hour for which an Employee is directly
or indirectly paid or entitled to payment for the performance of duties as an
Employee.
3.23. NAMED FIDUCIARY -- means the person or persons described in Section
9.1.
- 8 -
<PAGE> 16
3.24. NORMAL RETIREMENT AGE -- means except as set forth in Exhibit A, the
date a Participant reaches age 65 and completes 5 Years of Service.
3.25. NORMAL RETIREMENT DATE -- means for each Participant the first day
of the calendar month immediately following or coincident with the date he
reaches Normal Retirement Age.
3.26. PARTICIPANT -- means an Eligible Employee who has become a
participant in this Plan in accordance with Section 4 or a former Eligible
Employee who is entitled to receive benefits under this Plan.
3.27. PARTICIPATION REQUIREMENT -- means the later of the completion of
one Year of Service or the attainment of age 21.
3.28. PLAN -- means this Lanier Worldwide, Inc. Pension Plan as set forth
in this document and all amendments to this document and, for periods prior to
October 1, 1989, the Harris/3M Document Products, Inc. Pension Plan as last
amended and restated effective as of July 1, 1987.
3.29. PLAN SPONSOR -- means Lanier Worldwide, Inc. and any successor to
such corporation.
3.30. PLAN YEAR -- means the fiscal year ending June 30. See Exhibit A
for the Plan Year of the Harris/LBP Plan prior to its merger into this Plan.
3.31. SPOUSE -- means the person who is the Participant's lawful spouse on
the earlier of (a) his Annuity Starting Date or (b) his date of death.
3.32. TRA 86 REQUIREMENTS -- means all applicable requirements of the Tax
Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986, the Omnibus
Budget Reconciliation Act of 1987, the Technical and Miscellaneous Revenue Act
of 1988 and those requirements treated by the IRS as subject to Section 1140
of the Tax Reform Act of 1986 as well as any technical corrections to those
requirements contained in the Revenue Reconciliation Act of 1989.
3.33. TRUST AGREEMENT -- means the Harris Corporation Master Pension Trust
Agreement, a copy of which is attached as Exhibit B, as may be amended from
time to time.
3.34. TRUST FUND -- means the trust fund created in accordance with the
Trust Agreement.
3.35. TRUSTEE -- means the person or persons acting from time to time as
the trustee for the Trust Fund.
- 9 -
<PAGE> 17
3.36. VESTED DATE -- except as provided in Exhibit A, means for each
Employee the earlier of the date on which he
(a) completes 5 full years of Vesting Service, or
(b) reaches Normal Retirement Age as an Employee.
3.37. VESTING SERVICE -- means for, each Employee as of any Determination
Date, such Employee's Years of Service as described in Section 3.38(a)
excluding any period of employment completed by an Employee before he reaches
age 18.
3.38. YEAR OF SERVICE
(a) VESTING AND PARTICIPATION. For vesting and participation
purposes the term "Years of Service" is determined in accordance
with this Section 3.38(a)
(1) PERIOD OF EMPLOYMENT. An Employee's period of
employment will be deemed to start on his Employment
Commencement Date and will end on the first day of his
first Break in Service following that Employment
Commencement Date. An Employee will receive credit for
one Year of Service for each 12 consecutive month period
beginning on his Employment Commencement Date and on each
anniversary thereof during which he is an Employee or has
not begun a Break in Service. Thus, an Employee will
receive credit for vesting and participation purposes for
each day of employment and for each day of any separation
from service due to an absence or termination of
employment after his Employment Commencement Date and
before the first day of his first Break in Service.
(2) TERMINATION/REEMPLOYMENT. Except as provided in
Section 3.38(a)(3), if an Employee terminates employment
and is reemployed more than 12 months after such
Employment Termination Date, his Years of Service shall be
determined by aggregating the service completed in each
period of employment in accordance with the following
rules:
(i) FULL YEARS -- First determine the number
of completed 12 consecutive month periods
completed in each period of employment.
(ii) EXTRA MONTHS - Next determine the number
of completed months of employment in each period
of employment in excess of full years of
employment in each
- 10 -
<PAGE> 18
such period and aggregate such months into
additional full years of employment on the basis
that each month taken into account shall be
considered as 1/12 of a year. For this purpose
employment from the anniversary of an Employment
Commencement Date to the immediately preceding
date in the next succeeding month will be treated
as a completed month of employment.
(iii) EXCESS DAYS - Next determine the number
of days of employment in each period of
employment in excess of completed months of
employment and aggregate those additional days
into additional months of employment on the basis
that 30 days of such employment equals one month.
(3) RULE OF PARITY FOR 6 BREAKS IN SERVICE --
Notwithstanding the rules set forth in Section
3.38(a)(2), if an Employee has a Break in Service, his
employment in any period of employment completed before
the Break in Service shall not be aggregated with
employment completed after the Break in Service if
(i) he terminated employment before his
Vested Date and the number of his consecutive
Breaks in Service exceeds the greater of (A) 6 or
(B) his number of Years of Service completed
before his most recent Break in Service, or
(ii) he had at least two consecutive Breaks in
Service (without regard to whether he terminated
employment after his Vested Date) and he failed
to complete at least one Year of Service
following his reemployment.
(4) SERVICE WITH OTHER ENTITIES -- Except as set
forth in Exhibit A and Section 3.38(a)(5), no period of
employment which an Employee completes as an employee of
any other organization whatsoever shall be taken into
account under this Plan unless such organization is an
Affiliate.
(5) SPECIAL RULE FOR HARRIS EMPLOYEES -- Each
Employee shall receive credit for periods of employment
with Harris Corporation or its affiliates to the extent
that such Employee would have received credit for such
employment if he had been so employed with the Plan
Sponsor without regard to whether Harris Corporation or
the affiliate was an Affiliate of the Plan Sponsor at the
time such service was completed. However, this provision
- 11 -
<PAGE> 19
shall have absolutely no effect for employment in Plan
Years beginning after June 30, 1992 to the extent it is
not permissible under the regulations under Code Section
401(a)(4).
(6) SPECIAL RULE FOR JULY 31, 1991 PARTICIPANTS --
Finally, notwithstanding the foregoing, each person who
was a Participant on July 31, 1991 shall be deemed to have
completed 5 Years of Service for purposes of Section 3.36
when he completes 4 full Years of Service and 11
additional months of employment and to have completed 10
Years of Service for purposes of Section 3.14, Section
5.3(b) and Section 6.3(b) when he completes 9 full Years
of Service and 11 additional months of employment. For
this purpose, 30 days of employment shall equal one month.
(b) BENEFIT ACCRUAL. For benefit accrual purposes, the term
"Years of Service" means a Participant's full and fractional years
as a Participant and an Eligible Employee determined in accordance
with this Section 3.38(b)
(1) PERIOD OF EMPLOYMENT. A Participant will receive
credit for one Year of Service for each 12 consecutive
month period during which he is both a Participant and an
Eligible Employee in any "period of employment" described
in Section 3.38(a)(1) as modified by this Section
3.38(b)(1). A "period of employment" shall begin on the
first day of the first full calendar month in which he is
deemed to be a Participant and shall end with the last day
of the last full calendar month in which he is deemed to
be both a Participant and an Eligible Employee. An
Eligible Employee will be deemed to be a Participant for a
full calendar month at the end or beginning of a period of
employment only if he is both a Participant and an
Eligible Employee (or absent from employment as an
Eligible Employee) on at least 15 consecutive days in such
calendar month.
An Eligible Employee will receive credit for benefit
accrual purposes during a period of employment for all
employment as an Eligible Employee and for any separation
from service due to an absence from employment as an
Eligible Employee provided he returns to employment as an
Eligible Employee within 12 months of the first day of
such absence.
A Participant will receive credit for 1/12th of one Year
of Service for each full calendar month of employment in
excess of a full year of employment.
- 12 -
<PAGE> 20
(2) TERMINATION/REEMPLOYMENT. If a Participant
terminates employment as an Eligible Employee and is
thereafter reemployed as such, his Years of Service and
fractional Years of Service shall be determined by
aggregating the number of full years in each period
determined, first, in accordance with Section 3.38(b)(1)
and, second, by aggregating the additional months in each
period (also determined in accordance with Section
3.38(b)(1)) converting those months into years on the
basis that each month equals 1/12th of one Year of
Service.
(3) RULE OF PARITY FOR 6 BREAKS IN SERVICE.
Notwithstanding the rules set forth in Section
3.38(b)(2), if an Employee has a Break in Service, his
employment in any period of employment completed before
the Break in Service shall not be aggregated with
employment completed after his reemployment if
(A) he terminated employment before his
Vested Date and the number of his consecutive
Breaks in Service exceeds the greater of (A) 6 or
(B) his number of Years of Service completed
before his most recent Break in Service, or
(B) he had at least two consecutive Breaks in
Service (without regard to whether he terminated
employment after his Vested Date) and he failed
to complete at least one Year of Service
following his reemployment.
Section 4
PARTICIPATION
-------------
4.1. GENERAL RULE. Each Eligible Employee shall become a Participant on
the first day of the month which immediately follows or is coincident with the
date he satisfies the Participation Requirement.
4.2. TRANSFERRED EMPLOYEE. Each individual who is transferred to the
employment of an Employer from an Affiliate which is not an Employer pursuant
to transfer policies as described in the personnel manuals of the Employer and
the Affiliate shall become a Participant on the later of (a) the date of his
transfer or (b) the first day of the month coincident with or next following
his satisfaction of the Participation Requirement provided he is employed as an
Eligible Employee on such date.
- 13 -
<PAGE> 21
4.3. REEMPLOYMENT RULE.
(a) PRIOR SERVICE DISREGARDED. If a former Employee
terminates employment before his Vested Date under circumstances
such that his prior Years of Service are disregarded on his
reemployment under the rules described in Section 3.38(a)(3), then
such Employee shall be treated under Section 4.1 as a new Employee.
(b) PRIOR SERVICE AGGREGATED. If a former Employee is
reemployed under circumstances such that his prior Years of Service
are aggregated with his Years of Service following reemployment
under Section 3.38(a), then he shall begin to participate in
accordance with this Section 4.3(b).
(1) If he was a Participant prior to his most recent
Employment Termination Date, he shall resume participation
on the first date following his reemployment that he is an
Eligible Employee.
(2) If he was not a Participant before his most
recent Employment Termination Date, he shall become a
Participant on the later of (i) the date on which he
becomes eligible to participate under Section 4.1. or
(ii) the first date following such reemployment on which
he is an Eligible Employee.
4.4. ABSENCE FROM SERVICE. If an Eligible Employee is absent from
service during the period which includes the first date on which (but for such
absence) he would have become a Participant under Section 4.1 and he
subsequently resumes the performance of duties as an Eligible Employee within
12 months after the first date of such absence then he shall become a
Participant upon his reemployment retroactive to the date on which he would
have become a Participant under Section 4.1.
4.5. PLAN NOT AN EMPLOYMENT CONTRACT. This Plan is not a contract of
employment and participation in this Plan shall not give any Employee the right
to be retained in the employ of the Plan Sponsor or any Affiliate, nor, upon
termination of his employment, to have any interest in the Trust Fund except as
expressly provided in this Plan.
4.6. PRE-1988 AGE LIMITATION. See Exhibit A.
- 14 -
<PAGE> 22
Section 5
BENEFITS
--------
5.1. NORMAL RETIREMENT BENEFITS. Subject to Exhibit A, a Participant who
terminates employment as an Employee on or after his Normal Retirement Age
shall be entitled to receive a monthly benefit equal to the greater of
(a) his "early retirement benefit" under this Plan determined
in accordance with Code Section 411(a)(9) and the regulations under
Code Section 411(a)(9); or
(b) his Accrued Benefit determined as of the date he actually
terminates employment.
Any benefit determined under this Section 5.1 shall be paid to such
Participant in accordance with Section 6 no earlier than his Normal Retirement
Date.
5.2. EARLY RETIREMENT BENEFITS.
(a) GENERAL. Subject to Exhibit A, a Participant who
terminates employment as an Employee on or after his Early
Retirement Date and before his Normal Retirement Date shall be
entitled to receive a monthly benefit equal to his Accrued Benefit
determined as of the date he terminates employment. Payment of such
benefit shall be scheduled to commence in accordance with Section 6
as of his Normal Retirement Date, if he is then living.
(b) EARLY COMMENCEMENT. A Participant who is eligible for a
benefit under this Section 5.2 may elect to begin receiving his
benefit under this Section 5.2 as of the first day of any calendar
month before his Normal Retirement Date; provided (1) his employment
actually terminates on or before such date and (2) a properly
completed election to begin receiving benefits is filed with the
Plan Sponsor within the 90-day period ending on such date. A
Participant who has made an election under this Section 5.2 may
revoke a previous election and make a new election prior to the date
payments were scheduled to commence under the previous election
subject to the conditions of the preceding sentence.
(c) EARLY COMMENCEMENT REDUCTION FACTOR. If the payment of a
Participant's benefit under this Section 5.2 begins before his
Normal Retirement Date pursuant to an election under Section
5.2(b), then, subject to Exhibit A, such benefit shall be a
percentage of the Accrued Benefit which otherwise
- 15 -
<PAGE> 23
would be payable to him at his Normal Retirement Date. The
percentage shall be determined in accordance with the following
table:
EARLY COMMENCEMENT REDUCTION FACTOR
-----------------------------------
<TABLE>
<CAPTION>
PARTICIPANT'S ATTAINED PERCENTAGE OF ACCRUED
AGE AT PAYABLE AT
ANNUITY STARTING DATE NORMAL RETIREMENT DATE
--------------------- ----------------------
<S> <C>
65 100%
64 99%
63 97%
62 92%
61 86%
60 80%
59 74%
58 68%
57 62%
56 56%
55 50%
</TABLE>
5.3. VESTED BENEFITS.
(a) GENERAL. Subject to Exhibit A, a Participant whose
employment as an Employee terminates on or after his Vested Date but
before his Early Retirement Date shall be entitled to receive a
monthly benefit, which shall be equal to his Accrued Benefit
determined as of the date on which his employment terminates.
Payment of such benefit shall be scheduled to commence in accordance
with Section 6 as of his Normal Retirement Date, if he is then
living. Subject to Exhibit A, a Participant whose employment
terminates before his Vested Date shall not be entitled to any
benefit under this Plan.
(b) EARLY COMMENCEMENT. A Participant who is eligible for a
benefit under Section 5.3(a) and who has completed at least 10
years of Vesting Service may elect to begin receiving his benefit
under this Section 5.3 reduced in accordance with Section 5.3(c)
as of the first day of any month coinciding with or following the
date on which he reaches age 55 and before his Normal Retirement
Date; provided (1) his employment actually terminates on or before
such date and (2) a properly completed election is filed with the
Plan Sponsor within the 90-day period ending on such date. A
Participant who has made an election under this Section 5.3(b) may
revoke previous election
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<PAGE> 24
and make a new election prior to the date payments were scheduled to
commence under his previous election subject to the conditions of
the preceding sentence.
(c) EARLY COMMENCEMENT REDUCTION. If the payment of a
Participant's benefit under this Section 5.3 begins before his
Normal Retirement Date pursuant to an election under Section
5.3(b), then, subject to Exhibit A, such benefit shall be the
Actuarial Equivalent of the Accrued Benefit which otherwise would
be payable to him as of his Normal Retirement Date.
5.4. DISABILITY RETIREMENT BENEFIT.
(a) AT NORMAL RETIREMENT DATE. A Participant who becomes
totally and permanently disabled, as described in Section 5.4(b),
while he is an Eligible Employee and on or after the date on which
he completes 10 years of Vesting Service, shall be entitled to
receive a monthly disability benefit, the payment of which shall be
scheduled to commence in accordance with Section 6 as of his Normal
Retirement Date, if he is then living and if such total and
permanent disability has been continuous to his Normal Retirement
Date. The amount of the monthly benefit under this Section 5.4
shall be equal to his Accrued Benefit determined as of his Normal
Retirement Date based on the following assumptions:
(1) his Covered Compensation determined as of the
date his employment terminates by reason of disability,
(2) the Benefit Service which he would have completed
as of his Normal Retirement Date if his Benefit Service
had continued to such date, and
(3) the Average Compensation which he would have had
at his Normal Retirement Date if he had continued to
receive annual Compensation after his employment
terminates by reason of disability and through his Normal
Retirement Date equal to his actual Compensation (i) for
the last calendar year before the date his employment
terminates by reason of disability or (ii) for the
calendar year in which his employment terminates by reason
of disability, whichever is greater.
(b) DEFINITION OF TOTAL AND PERMANENT DISABILITY. A
Participant shall be considered to be totally and permanently
disabled for purposes of this Plan if he suffers a physical or
mental impairment which (1) qualifies him for a monthly disability
insurance benefit under the Social Security Act,
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<PAGE> 25
(2) wholly prevents him from holding any substantially gainful
employment and (3) which can be expected to result in death or to be
of long continued and indefinite duration.
A Participant shall not be considered to be totally and permanently
disabled for purposes of this Plan, however, if the Plan Sponsor
determines that his disability is a result of any of the following:
(i) injury or disease sustained by the Participant
while willfully participating in acts of violence, riots,
civil insurrections or while committing a felony;
(ii) injury or disease sustained by the Participant
while serving in any armed forces or as the result of
warfare or any act of war, declared or undeclared unless
the Plan Sponsor determines that such injury or disease
was sustained while performing services as an Employee;
(iii) injury or disease sustained by the Participant
while working for a person other than an Affiliate and
arising out of such work; or
(iv) intentional, self-inflicted injury.
(c) PROOF OF DISABILITY. The Participant shall provide
evidence that he is eligible for disability benefits under the
Social Security Act that such eligibility is retroactive to the date
his employment terminates and that he continues to be eligible for
such disability benefits through his Annuity Starting Date or his
date of death, if earlier. Such proof must be provided as soon as
practical after the Participant is determined eligible for Social
Security disability benefits and prior to payment of any benefits
under this Plan. The decision of the Plan Sponsor as to the
existence and continuation of a total and permanent disability shall
be final and binding.
(d) EARLY COMMENCEMENT. A Participant who is eligible for a
benefit under Section 5.4(a) and continues to be so disabled
through the date which would have been his Early Retirement Date (if
he had continued to be employed as an Employee) may elect in writing
to begin receiving his benefit under this Section 5.4 as of the
first day of any month coinciding with or following the date which
would have been his Early Retirement Date and before his Normal
Retirement Date; provided a properly completed election is filed
with the Plan Sponsor within the 90-day period ending on such date.
If a disabled Participant elects early commencement of his
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<PAGE> 26
benefit under this Section 5.4(d), the amount of such benefit shall
be based on the following:
(1) his Covered Compensation determined as of the
date his employment terminates by reason of disability,
(2) the Benefit Service which he would completed as
of his Annuity Starting Date under this Section 5.4(d) if
his Benefit Service had continued to the date of early
commencement, and
(3) the Average Compensation which he would have had
as of his Annuity Starting Date under this Section 5.4(d)
if he had continued to receive annual Compensation after
his employment terminates by reason of disability and
through the date of early commencement equal to his actual
Compensation (i) for the last calendar year before the
date his employment terminates by reason of disability or
(ii) for the calendar year in which his employment
terminates by reason of disability, whichever is greater.
If the payment of a Participant's benefit under this Section 5.4
begins before his Normal Retirement Date pursuant to an election
under this Section 5.4(d), such benefit shall be subject to the
applicable early commencement percentage reduction factor set forth
in Section 5.2(c).
(e) SURVIVOR BENEFITS. No survivor benefits shall be payable
on behalf of a disabled Participant who dies prior to his Annuity
Starting Date unless and to the extent preretirement survivor
benefits are payable on behalf of such Participant under Section 7.
(f) TERMINATION OF DISABILITY. If a Participant's total and
permanent disability ceases prior to his Annuity Starting Date for
any reason other than death, and if the Participant returns or
offers to return to the employment of an Employer or an Affiliate
within 90 days after his disability ceases, then, for purposes of
determining his eligibility to receive benefits under the Plan upon
his subsequent termination of employment and the amount of such
benefits, the period during which he was totally and permanently
disabled shall be included in his Benefit Service and he shall be
treated as if he had received annual Compensation during such period
equal to his actual Compensation (i) for the last calendar year
before the date his employment terminates by reason of disability or
(ii) for the calendar year in which his employment terminates by
reason of disability, whichever is greater.
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<PAGE> 27
If such Participant does not return or offer to return to the
employment of an Employer or an Affiliate within such 90-day period,
his eligibility to receive benefits and the amount of such benefits,
if any, shall be determined as if his employment had terminated (on
the date his employment terminated as a result of such disability)
for reasons other than disability.
5.5. SUSPENSION OF BENEFITS.
(a) REEMPLOYMENT. The payment of benefits to a Participant
under this Plan (before or after the Participant's Normal Retirement
Age) shall be suspended subject to the terms and conditions of this
Section 5.5 if, and as of the date, the Participant is reemployed
as a full-time Employee (as determined in accordance with the
payroll records of the Employer). In the case of a Participant who
was reemployed as a full-time Employee and whose benefits were
temporarily suspended prior to August 1, 1991, the Committee shall
provide written notice of such suspension as described in Section
5.5(c) to each such Participant during the month of August 1991 and
the Committee shall make the adjustment provided in Section 5.5(d)
for such Participant as of the date he actually retires for each
calendar month in which the Participant's benefits were temporarily
suspended.
If the Participant is not classified on the payroll as a full-time
Employee upon such reemployment, the benefit payable to the
Participant shall continue to be paid uninterrupted as adjusted in
accordance with Section 5.6(d).
(b) CONTINUED EMPLOYMENT. If a Participant continues to work
as a full-time Employee after the Participant's Normal Retirement
Age, payment of the Participant's benefits under this Plan shall be
suspended subject to the terms and conditions of this Section 5.5
while the Participant is so employed, and such suspension shall
commence as of the Participant's Normal Retirement Date. In the
case of a Participant who continued to work as a full-time Employee
after his Normal Retirement Age and whose benefits were temporarily
suspended prior to August 1, 1991, the Committee shall provide
written notice of such suspension as described in Section 5.5(c) to
each such Participant during the month of August 1991 and the
Committee shall make the adjustment provided in Section 5.5(d) for
such Participant as of the date he actually, retires for each
calendar month in which the Participant's benefits were temporarily
suspended.
The benefit of each Participant who continues to work as an Employee
after the Participant's Normal Retirement Age but who is not
classified as a full-time Employee automatically shall be determined
and payment shall commence to the Participant as of the
Participant's Normal Retirement
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<PAGE> 28
Date. Such benefit shall thereafter be adjusted in accordance with
Section 5.6(d).
If the employment status of a Participant who is receiving annuity
benefits under this Plan and who is classified as other than a
full-time Employee changes to that of a Participant who is
classified as a full-time Employee, then notice shall be provided to
such Participant as described in Section 5.5(c) and his benefits
shall be suspended subject to the terms and conditions of this
Section 5.5 while the Participant is so employed. Alternatively,
if the employment status of a Participant who is classified as a
full-time Employee and whose benefits are suspended under this
Section 5.5 changes to that of an other than full-time Employee,
then benefit payments shall commence to such Participant as soon as
practicable after the Plan Sponsor receives notice of such change
and such benefit shall thereafter be adjusted in accordance with
Section 5.6(d).
(c) SUSPENSION NOTICE. The Committee shall provide written
notice to each Participant whose benefits are suspended under this
Section 5.5 by personal delivery or by first class mail during the
first calendar month in which such benefits are suspended. Such
notice shall be based on the applicable requirements set forth in
the Department of Labor regulations under ERISA Section 203.
(d) ACTUARIAL ADJUSTMENT FOR CERTAIN MONTHS.
(1) FOLLOWING RECEIPT OF SUSPENSION NOTICE. If a
Participant's benefits are suspended for any month
following receipt of suspension notice described in
Section 5.5(c) and the Participant received compensation
for employment on less than 8 days in such month, then the
benefits payable to him when benefits commence or
recommence shall be increased by the Actuarial Equivalent
of the benefit which would have been payable to the
Participant during such month as a result of his prior
retirement or, if he continued in employment after his
Normal Retirement Age, the benefit which would have been
payable if he had begun receiving benefits on his Normal
Retirement Date.
No such adjustment shall be made for any Participant under
this Section 5.5(d)(1) unless such Participant notifies
the Plan Sponsor that an adjustment is due for such months
and the Plan Sponsor actually receives such notice.
(2) PRIOR TO RECEIPT OF SUSPENSION NOTICE. If a
Participant's benefits are suspended in any month prior to
his Normal
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<PAGE> 29
Retirement Age and the Participant did not receive the
suspension notice described in Section 5.5(c) during or
prior to such month, then the benefits payable to him when
benefits commence or recommence shall be increased by the
Actuarial Equivalent of the benefits which otherwise would
have been payable to him as a result of his prior
retirement during the months prior to receipt of such
notice and prior to his Normal Retirement Age. If a
Participant's benefits are suspended in any month after
his Normal Retirement Age and the Participant did not
receive the notice described in Section 5.5(c) during
or prior to such month, then the benefit payable to him
when benefits commence or recommence shall be equal to the
greater of (i) his Accrued Benefit determined as of such
date (calculated in accordance with Section 5.6 if
applicable) as adjusted in accordance with this Section
5.5(d) or (ii) his Accrued Benefit determined as of his
Normal Retirement Date actuarially adjusted in accordance
with the factors set forth in Section 5.5(d)(3) to the
date such benefits first commence or recommence.
(3) ACTUARIAL EQUIVALENCE. Actuarial Equivalence
shall be determined as of the date as of which benefits
commence or recommence following a suspension using the
interest rate in Section 3.2(b)(1) and the mortality
table described in Section 3.2(a).
5.6. CALCULATION OF ADDITIONAL ACCRUED BENEFIT FOLLOWING INITIAL
COMMENCEMENT OF BENEFITS.
(a) GENERAL. Except as provided in Section 5.6 below, the
Accrued Benefit attributable to any period of employment following
commencement of benefits shall be calculated by reducing (1) the
Participant's Accrued Benefit attributable to his total Benefit
Service and Average Compensation determined as of the date benefits
are scheduled to recommence or the date as of which an adjustment to
such benefit is made by (2) the Accrued Benefit determined as of the
immediately preceding benefit commencement date.
(b) ANNUITY-BENEFITS SUSPENDED. If the Accrued Benefit
determined as of the immediately preceding benefit commencement date
was paid in the form of an annuity, the Accrued Benefit payable upon
recommencement shall be the sum of (1) the Accrued Benefit payable
at the immediately preceding benefit commencement date reduced by
any early commencement reduction factors applicable to such earlier
commencement date, (2) the additional Accrued Benefit payable as a
result of employment following such benefit commencement calculated
in accordance with Section 5.6(a) reduced by applicable early
commencement
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<PAGE> 30
reduction factors as of the date of recommencement and (3) any
adjustment required under Section 5.5(d).
Such Accrued Benefit shall be paid upon his subsequent retirement or
when benefits commence as a result of his employment as other than a
full-time Employee or his reaching age 70 1/2. The form of benefit
shall be determined in accordance with Section 6.1(a) unless the
Participant elects, in accordance with the election procedures set
forth in Section 6.2, to receive an optional form.
(c) LUMP SUM - BENEFITS SUSPENDED. If the Accrued Benefit
determined as of the immediately preceding benefit commencement date
was paid in a lump sum before August 1, 1991 and such Participant
was reemployed before August 1, 1991, then the Accrued Benefit
payable on recommencement shall be the sum of (1) the additional
Accrued Benefit calculated in accordance with Section 5.6(a) reduced
by applicable early commencement reduction factors and (2) any
adjustment required under Section 5.5(d). Such benefit shall be
paid upon his subsequent retirement or when benefits commence as a
result of his employment as other than a full-time Employee or his
reaching age 70 1/2. The form of benefit shall be determined under
Section 6.1(a) unless the Participant elects in accordance with the
election procedures set forth in Section 6.2, to receive an
optional form.
(d) ADJUSTMENT WHERE BENEFITS NOT SUSPENDED. If a Participant
is reemployed or continues in employment after his Normal Retirement
Age and his benefits are not suspended, then his additional Accrued
Benefit shall be calculated as of December 31 following his Normal
Retirement Age in accordance with Section 5.6(a) to reflect any
additional accruals since the date as of which his benefit was last
determined. Such additional Accrued Benefit shall be paid or begin
to be paid in January following such December 31. Such additional
Accrued Benefit shall be paid in the same form as the benefit which
was not suspended assuming the Participant's spouse properly
consented to the form of the benefit currently being paid (or, in
the case of a lump sum, which was previously paid before August 1,
1991 and such Participant was reemployed before August 1, 1991) to
such Participant in accordance with the procedures set forth in
Section 6.2, if applicable, on or after the Participant reached
Normal Retirement Age. Otherwise, such adjustment shall be paid in
accordance with Section 6.1(a) unless the Participant elects in
accordance with the election procedures set forth in Section 6.2 to
have the adjustment paid in the same form as the benefit which was
not suspended.
(e) CERTAIN LUMP SUM PAYMENTS. If a Participant received a
lump sum distribution after July 31, 1991 as a result of his
termination of
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<PAGE> 31
employment and he is thereafter reemployed as an Eligible Employee
or if a Participant received a lump sum distribution before August
1, 1991 as a result of his termination of employment but is
reemployed as an Eligible Employee after July 31, 1991, then he
shall be treated as a new Participant for purposes of determining
his Accrued Benefit following his reemployment.
Section 6
BENEFIT PAYMENT FORMS
---------------------
6.1. NORMAL PAYMENT FORMS.
(a) ANNUITIES. Except as provided in Section 6.1(b) and
unless a Participant otherwise elects in accordance with Section
6.2, a Participant's entire nonforfeitable benefit under the Plan
attributable to employer and employee contributions shall be paid
(1) in the form of a single life annuity option (as
described in Section 6.3(b)(1)) to a Participant who does
not have a Spouse on his Annuity Starting Date, or
(2) subject to Exhibit A, in the form of a 50% joint
and survivor annuity option (as described in Section
6.3(b)(3)) to the Participant if the Participant has a
Spouse on his Annuity Starting Date.
(b) LUMP SUM CASH OUT. If the Actuarial Equivalent single sum
value of a Participant's entire nonforfeitable benefit under this
Plan attributable to employer and employee contributions as
determined either (1) as soon as practicable after he terminates
employment and the Plan Sponsor receives all of the data necessary
to make the calculation or (2) as of his Annuity Starting Date is
$3500 or less, then, the Plan Sponsor shall direct the immediate
payment of the Actuarial Equivalent single sum value of such benefit
in a single sum in cash as soon as practicable after the date his
employment terminates or, if applicable, as of his Annuity Starting
Date in lieu of any other benefit under this Plan.
If the Actuarial Equivalent lump sum value of a Participant's
nonforfeitable benefit under the Plan attributable to employer and
employee contributions is zero as of the date he terminates
employment,
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<PAGE> 32
he shall be deemed to have received a distribution of such
nonforfeitable benefit when he terminates employment.
If an individual is deemed to receive a distribution under this
Section 6.1(b), his forfeited employer derived benefit
automatically shall be restored if he is reemployed as an Eligible
Employee before he incurs 6 consecutive Breaks in Service.
(c) EMPLOYEE CONTRIBUTIONS. See Exhibit A.
6.2. ELECTION PROCEDURES AND TIMING.
(a) GENERAL. Subject to Section 6.2(b), a Participant who is
eligible for an annuity form of a benefit under Section 6.1(a) may
elect on a properly completed form delivered to the Plan Sponsor at
any time within the 90-day period ending on his Annuity Starting
Date to have his benefit paid in one of the Actuarial Equivalent
optional benefit payment forms described in Section 6.3 or, if
applicable, Exhibit A.
(b) PROCEDURES AND SPOUSAL CONSENT. The Plan Sponsor shall
(consistent with the regulations under Code Section 417) furnish to
each Participant no less than 30 days and no more than 90 days
before his Annuity Starting Date such written explanation of the
normal payment forms, the optional payment forms and the
Participant's rights under Code Section 401(a)(11), Section
411(a)(11), and Section 417 as may be required under such sections.
Any such election or revocation of an election under this Section
6.2 shall be made by delivering the properly completed form provided
for this purpose to the Plan Sponsor, and the last properly
completed form delivered to the Plan Sponsor before the end of the
90-day period described in Section 6.2(a) shall control, the
payment of benefits under this Plan. A Spouse's properly executed
and notarized consent to the payment of Plan benefits in one of the
optional payment arrangements shall be irrevocable with respect to
such Spouse under this Plan.
(c) TIMING. The payment of a Participant's benefit shall be
made as of his Normal Retirement Date unless the Participant
properly elects early commencement of such benefit under Section 5
or Exhibit A. Actual payment of the Participant's benefit shall
begin as soon as practicable after the Participant's Annuity
Starting Date and in no event later than 60 days after the end of
the Plan Year in which he or she reaches Normal Retirement Age
provided he or she actually retired on or before such date.
Payments which do not actually commence on the Participant's Annuity
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<PAGE> 33
Starting Date shall be adjusted so that the first payment includes
all amounts due through the date of such payment.
If a Participant does not retire or terminate employment on or
before his "required beginning date," actual payment of his or her
benefits shall begin no later than his "required beginning date."
(d) REQUIRED BEGINNING DATE. Except as otherwise provided in
this Section 6.2(d), a Participant's "required beginning date"
shall be the April 1 following the calendar year in which he reaches
age 70 1/2.
Notwithstanding the foregoing, if a Participant attained age 70 1/2
prior to January 1, 1988 and was not a "5%-owner" (as described in
Code Section 416(i)) at any time during the Plan Year ending in the
calendar year in which he reaches age 66 1/2 or any subsequent year,
his "required beginning date" shall be the April 1 immediately
following the end of the Plan Year in which he or she actually
retires or first becomes a 5%-owner, whichever comes first.
6.3. DESCRIPTION OF OPTIONS.
(a) ACTUARIAL EQUIVALENT AND OTHER SPECIAL RULES.
(1) ACTUARIAL EQUIVALENT. The amount payable under
an optional payment arrangement under this Section 6.3,
shall be equal to the Actuarial Equivalent of the benefit
to which the Participant otherwise would be entitled in
the single life annuity form described in Section
6.3(b)(1).
(2) MINIMUM INCIDENTAL DEATH BENEFIT RULE. No
optional payment arrangement may be selected if the value
of the payments to the Participant under such option
(determined as of the Annuity Starting Date) would not
comply with the minimum distribution requirements of Code
Section 401(a)(9)(G) and the regulations under that
section.
(3) DEATH. A benefit shall be paid in accordance
with the terms of any validly elected option, provided
that an election under which the life expectancy of the
Participant's designated Beneficiary is used to calculate
the amount of the benefit shall be void, and the
Participant shall be entitled to make another election, if
his designated Beneficiary dies before the Participant's
Annuity Starting Date.
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<PAGE> 34
(4) RECOMPUTATION OF PERIOD CERTAIN. Any period
certain shall be reduced to equal the life expectancy of
the Participant (or, if greater, the joint life expectancy
of the Participant and his designated Beneficiary) as
determined in accordance with Code Section 401(a)(9) as
of his Annuity Starting Date if such life expectancy or
joint life expectancy is less than the period selected.
(b) PAYMENT OPTIONS. The following optional payment forms are
available to a Participant after Normal Retirement Age or after age
55 with at least 10 years of Vesting Service.
(1) SINGLE LIFE ANNUITY OPTION -- means a monthly
benefit payable only during the lifetime of the
Participant.
(2) 10 YEAR PERIOD CERTAIN AND CONTINUOUS ANNUITY
OPTION -- means a reduced monthly benefit (relative to
Section 6.3(b)(1)) which shall be payable during the
lifetime of the Participant and shall, if the Participant
dies within 10 years of his Annuity Starting Date,
continue to be paid to his designated Beneficiary for the
balance of such 10-year period.
(3) JOINT AND SURVIVOR ANNUITY OPTION -- means a
reduced monthly benefit (relative to Section 6.3(b)(1))
which shall be payable during the lifetime of the
Participant and shall continue to be paid after the death
of the Participant to the person designated as his
Beneficiary, if such Beneficiary survives him, in an
amount equal to 100% or 50% of the monthly benefit payable
during the lifetime of the Participant, (as the
Participant shall designate) for such Beneficiary's
lifetime. Unless a married Participant and such
Participant's Spouse elect otherwise in accordance with
Section 6.2 and subject to Exhibit A, a married
Participant's Beneficiary shall be such Participant's
Spouse and the normal form of the benefit payable to such
Participant automatically shall be the 50% survivor
option.
(4) LUMP SUM OPTION -- means a single sum
distribution.
(c) OTHER PAYMENT OPTIONS. See Exhibit A.
(d) DIRECT ROLLOVER. Effective January 1, 1993, a Participant
or "distributee" may elect at any time to have any portion of an
"eligible rollover distribution" paid in a direct rollover to the
trustee or custodian of an "eligible retirement plan" specified by
the Participant or distributee, whichever is applicable. Payment of
a direct rollover in the form of a
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<PAGE> 35
check payable to the trustee or custodian of an eligible retirement
plan, for the benefit of the Participant or distributee, may be
mailed to the Participant or distributee. For purposes of this
Section 6.3(d), the following terms shall have the following
meanings:
(1) "Distributee means a surviving spouse or a spouse
or former spouse who is an alternative payee under a
Qualified Domestic Relations Order defined in section
414(p) of the Code.
(2) "Eligible retirement plan" means an individual
retirement account described in section 408(a) of the
Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code that accepts an eligible
rollover distribution; provided that if the distributee is
a surviving spouse, an eligible retirement plan means an
individual retirement account or individual retirement
annuity.
(3) "Eligible rollover distribution" means any
distribution of a Participant's nonforfeitable benefit in
a lump sum payment.
6.4. BENEFICIARY. Subject to Section 6.2(b), each Participant shall, on
a form provided for this purpose by the Plan Sponsor, (1) designate a person or
persons as his Beneficiary to receive any benefits payable in the event of the
death of the Participant under any optional form of benefit payment selected by
the Participant and (2) designate a secondary Beneficiary to receive benefits,
if any, payable under an optional payment form which provides a guaranteed
period of payments.
A Participant may, from time to time and subject to Section 6.2(b), change his
Beneficiary by written notice to the Plan Sponsor, and upon receipt by the Plan
Sponsor of such change the rights of all previously designated Beneficiaries to
receive any benefits under this Plan shall cease; provided that if the optional
form of payment provides a lifetime annuity to the surviving Beneficiary, such
Beneficiary may not be changed after the Annuity Starting Date. If the
Participant dies before his entire benefit has been distributed to him under a
Period Certain Annuity, payments shall be made to his Beneficiary at least as
rapidly as the method of distribution to the Participant. If a Participant
dies before he has received his benefit attributable to his contributions, if
any, under this Plan, the entire benefit payable to a Beneficiary shall be
distributed by December 31 of the calendar year which includes the fifth
anniversary of the Participant's death.
6.5. NO ESTOPPEL OF PLAN. No person is entitled to any benefit under
this Plan except and to the extent expressly provided under this Plan. The
fact that
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<PAGE> 36
payments have been made from this Plan in connection with any claim for
benefits under this Plan does not (i) establish the validity of the claim, (ii)
provide any right to have such benefits continue for any period of time, or
(iii) prevent the Plan from recovering the benefits paid to the extent that the
Plan Sponsor determines that there was no right to payment of the benefits
under this Plan or that there was a mistake in the calculation of benefits
under this Plan. Thus, if a benefit is paid under this Plan and it is
thereafter determined by the Plan Sponsor that such benefit should not have
been paid, or that such benefit was overpaid (whether or not attributable to an
error by the Participant, the Plan Sponsor or any other person), then the Plan
Sponsor may take such action as the Plan Sponsor deems necessary or appropriate
to remedy such situation, including, without limitation, deducting the amount
of any overpayment theretofore made to or on behalf of such Participant from
any succeeding payments to or on behalf of such Participant or from instituting
legal action to recover such overpayments. Conversely, if a benefit is not
paid under this Plan and it is thereafter determined by the Plan Sponsor that a
benefit should have been paid, or if a benefit is underpaid under this Plan and
it is thereafter determined by the Plan Sponsor that such benefit was
underpaid, any succeeding benefits payable shall be adjusted to correct such
underpayment.
6.6. CLAIMS FOR BENEFITS. Except as provided in Section 6.1(b) and
Section 7.1(d), no benefit shall become payable under this Plan unless and
until a claim for such benefit is submitted to the Plan Sponsor on a form
provided for that purpose by the Participant, Spouse, or Beneficiary entitled
to receive such benefit unless the Plan Sponsor determines that a delay might
violate the distribution deadlines set forth in Code Section 401(a)(9) and the
Plan Sponsor has sufficient information (in the judgment of the Plan Sponsor)
to cause the payment of such benefit absent such claim. All claims shall be
filed, reviewed and, if applicable, appealed in accordance with the summary
plan description for this Plan as in effect from time to time.
Section 7
SURVIVOR BENEFIT
----------------
7.1. PRERETIREMENT SURVIVOR BENEFIT FOR MARRIED PARTICIPANTS.
(a) GENERAL. If a Participant dies after his Vested Date but
before his Annuity Starting Date, a monthly survivor benefit shall
(subject to the terms and conditions of this Section 7.1) be
payable on his behalf to the person, if any, who is his Spouse and
who survives the Participant, provided such
- 29 -
<PAGE> 37
person has been legally married to the Participant for the
12-consecutive month period ending on his date of death and such
person is not eligible for a benefit under Section 7.2. The
benefit, if any, payable under this Section 7.1 shall equal the
monthly survivor benefit which would have been payable to such
Spouse as if such Participant had
(1) retired or terminated his employment on the
earlier of (A) his date of death or (B) except for a
disabled Participant who remains totally and permanently
disabled as described in Section 5.4 through his date of
death, his most recent Employment Termination Date;
(2) elected to commence receiving his benefit, as of
the date payments are scheduled to commence to his Spouse
under Section 7.1(c)(1) or, if such Spouse elects early
commencement, the date so elected under Section
7.1(c)(2);
(3) elected to have his benefits paid in the form of
the 50% joint and survivor annuity option (as described in
Section 6.3(b)(3)); and
(4) died before his Annuity Starting Date.
(b) EXCLUSIONS. No survivor benefit shall be payable under this Section
7.1
(1) on behalf of any Participant who dies before his
Vested Date or after his Annuity Starting Date; or
(2) to any person (i) who is not the Participant's
Spouse on his date of death, (ii) who has not been legally
married to the Participant for the 12-consecutive month
period ending on his date of death, (iii) who is not
living on the date as of which the payment is scheduled to
commence under Section 7.1(c) or (iv) who is eligible for
a benefit under Section 7.2.
(c) COMMENCEMENT.
(1) NORMAL. Subject to Section 6.6, if a Spouse is
eligible for a survivor benefit under Section 7.1(a),
payment of such benefit shall be scheduled to commence as
of the later of (i) the date which would have been the
deceased Participant's Normal Retirement Date (if he had
survived) or (ii) the first day of the calendar month
following his date of death.
- 30 -
<PAGE> 38
(2) EARLY. A Spouse who is eligible for a benefit
under Section 7.1(a) may file with the Plan Sponsor a
written request that payment of such benefit commence
before the applicable date described in Section
7.1(c)(1). Payment to such Spouse may commence as of
(i) the first date (following his death) as
of which the deceased Participant would have been
eligible (if he had survived), to begin receiving
benefits under Section 5, or
(ii) the first day of any calendar month
thereafter.
In order to elect early commencement, such Spouse must file an
election under this Section 7.1(c)(2) within the 90-day period
ending on the date as of which the spouse desires the Participant's
survivor benefit to commence or, if the Participant died after age
55 and the Spouse elects to commence receiving benefits as of the
earliest possible date, within a reasonable period of time (as
determined by the Plan Sponsor) following the Participant's date of
death.
(d) LUMP SUM. If the Actuarial Equivalent single sum value of
the survivor benefit payable to a surviving Spouse under Section
7.1(a) is $3500 or less, then payment of such survivor benefit
automatically shall be paid to such Spouse in a single sum in cash
as soon as practicable after the Participant's date of death. If
the Actuarial Equivalent single sum value of a survivor benefit
exceeds $3500, the surviving Spouse may file with the Plan Sponsor a
written request (made in a manner which satisfies Code Section 417
and within the time period set forth in Section 7.1(c)(2)) that
such benefit be paid in a single sum as of the earliest possible
benefit commencement date under Section 7.1(c), and such benefit
shall be paid to such Spouse in such a single sum as of such date.
For purposes of this Section 7.1(d), the single sum value of the
survivor benefit shall be determined as soon as practicable after
the Participant's death and the Plan Sponsor receives all of the
data necessary to make such calculation.
7.2. PRERETIREMENT SURVIVOR ANNUITY FOR PARTICIPANTS WHO TERMINATE
EMPLOYMENT AFTER 55 OR ARE DISABLED.
(a) GENERAL. If a Participant should die before his Annuity
Starting Date either
(1) while he is an Employee, but after his Early
Retirement Date, or
- 31 -
<PAGE> 39
(2) while he is totally and permanently disabled as
described in Section 5.4, but after his termination of
employment by reason of such disability and after
attaining age 55
then a monthly survivor benefit shall (subject to the terms and
conditions of this Section 7.2) be payable on his behalf to the
person, if any, who is his Spouse and who survives the participant;
provided such Spouse has been legally married to the Participant
throughout the 12-consecutive month period ending on his date of
death.
(b) AMOUNT. The monthly amount of the survivor annuity
payable under this Section 7.2 shall be equal to the monthly
survivor benefit which would have been payable to such Spouse under
Section 7.1(a) if the Participant had elected the 100% Joint and
Survivor Annuity Option under Section 6.3(b)(3) and designated his
Spouse as his Beneficiary.
(c) EXCLUSIONS. No survivor benefit shall be payable under
this Section 7.2
(1) on behalf of any Participant who is not
described in Section 7.2(a), or
(2) to any person (i) who is not the Participant's
Spouse on his date of death, (ii) who has not been legally
married to the Participant for the 12-consecutive month
period ending on his date of death or (iii) who is not
living as of the date as of which payment is scheduled to
commence under this Section 7.2.
(d) COMMENCEMENT. Subject to Section 6.6, the benefit
payable under this Section 7.2 shall be payable at the same time as
the benefit payable under Section 7.1 and shall be subject to the
single sum distribution rules of Section 7.1(d).
7.3. NO POST RETIREMENT SURVIVOR BENEFITS. No survivor benefit shall be
payable under this Plan on behalf of a Participant if he dies after his Benefit
Commencement Date unless such benefit is called for under the form of benefit
payable to such Participant under Section 6 or Exhibit A as of his date of
death.
- 32 -
<PAGE> 40
Section 8
PLAN FUNDING
------------
8.1. CONTRIBUTIONS. During the continuation of this Plan and after 1982,
the Employers shall pay all costs of this Plan in such amounts and at such
times as may be recommended by the Plan's actuary in accordance with a funding
method and policy established by the Plan Sponsor which (1) is consistent with
the objectives of this Plan and (2) is designed to pay the normal costs of this
Plan and to amortize the unfunded past service liability under this Plan over a
period of time not longer than is permitted by law. Except as otherwise
required under Title IV of ERISA, no Employer shall have any obligation
whatsoever to make contributions or otherwise provide for unfunded benefits
after this Plan has been terminated or contributions have been discontinued.
Forfeitures arising under this Plan shall be applied to reduce the costs of
this Plan and shall not operate to increase the benefits otherwise payable to
Participants.
8.2. TRUST FUND. The Employers shall pay all contributions to the
Trustee, and the Trustee shall hold, invest, manage and distribute such
contributions and the increment earnings thereon as the Trust Fund, in
accordance with the Trust Agreement, for the exclusive benefit of Participants
and their beneficiaries. All of the assets of the Trust Fund shall be
available on an on-going basis to pay any of the liabilities of this Plan.
8.3. PROHIBITION AGAINST REVERSION
(a) Except as provided in Section 8.3(b), no Employer shall
have any present or prospective right, claim, or interest in the
Trust Fund or in any contribution made to the Trustee prior to the
satisfaction of all liabilities of this Plan with respect to
Participants and Beneficiaries. Upon satisfaction of all
liabilities to Participants and Beneficiaries, the Employers shall
be entitled to a reversion as described in Section 11.3 if this
Plan is terminated. For this purpose, the term "liabilities" shall
mean benefits actually accrued as of the date of the termination.
This Section 8.3 shall not be amended or revoked in any manner
whatsoever to the end that any part of the corpus or income of the
Trust Fund may be used for or converted for purposes other than for
the exclusive benefit of such persons prior to the satisfaction of
all liabilities with respect to such persons.
(b) Upon direction of the Plan Sponsor, contributions by an
Employer shall be returned by the Trustee, if and to the extent such
a return is permitted by law, under the following circumstances:
- 33 -
<PAGE> 41
(1) A contribution which is made by an Employer by a
mistake of fact shall be returned to the Employer within
one year after the payment of such contribution.
(2) A contribution shall be returned to the
contributing Employer within one year after the date of
denial of the initial qualification of this Plan, all such
contributions being hereby conditioned upon continued
qualification of this Plan under Code Section 401.
(3) A contribution shall be returned to the
contributing Employer to the extent that a deduction for
such contribution is disallowed under Code Section 404,
within one year after the disallowance, all such
contributions being hereby conditioned upon being
deductible under Code Section 404.
An Employer entitled to the return of a contribution in accordance
with this Section 8.3(b) may in its discretion waive such right by
submitting written notice of such waiver to the Plan Sponsor.
Section 9
NAMED FIDUCIARIES AND PLAN SPONSOR
----------------------------------
9.1. NAMED FIDUCIARIES. The Plan Sponsor shall be the "named fiduciary"
responsible for the control, management and administration of this Plan.
9.2. ALLOCATION AND DELEGATION BY NAMED FIDUCIARIES. The Plan Sponsor
may by written instrument filed with the records of this Plan, designate a
person who is not a Named Fiduciary to carry out any of its responsibilities
under this Plan, other than the responsibilities of the Trustee in the
management and control of the Trust Fund; provided, however, that no such
allocation or designation shall be effective as to any other person until such
other person has consented in writing to such designation.
9.3. ADVISERS. The Plan Sponsor, or a person designated by the Plan
Sponsor to perform any responsibility of the Plan Sponsor pursuant to the
procedure described in Section 9.2, may employ one or more persons to render
advice with respect to any responsibility the Plan Sponsor has under this Plan
or such person has by virtue of such designation.
- 34 -
<PAGE> 42
9.4. DUAL FIDUCIARY CAPACITIES. Any person may serve in more than one
fiduciary capacity with respect to this Plan, and a fiduciary may be a
Participant provided such person otherwise satisfies the requirements for
participation under this Plan.
9.5. PLAN SPONSOR POWER AND DUTIES.
(a) GENERAL. The Plan Sponsor or its delegate shall have the
exclusive responsibility and complete discretionary authority to
control the operation, management and administration of this Plan,
with all powers necessary to enable it properly to carry out such
responsibilities, including (but not limited to) the power to
construe this Plan and the Trust Agreement, to determine eligibility
for benefits, to resolve all interpretive, operational, equitable
and other questions that arise under this Plan, to designate another
person as the ERISA "plan administrator" for the Plan and to settle
disputed claims. The decisions of the Plan Sponsor on all matters
within the scope of its authority shall be final and binding upon
all parties to this instrument, Participants, their Spouses and
Beneficiaries.
(b) RECORDS. All acts and determinations of the Plan Sponsor
or its delegate shall be duly recorded and all such records,
together with such other documents as may be necessary for the
administration of this Plan, shall be preserved in the custody of
the Plan Sponsor.
(c) INFORMATION. Each Employer shall supply the Plan Sponsor
with complete and timely information regarding employment data for
each Employee and Participant including, but not limited to, his
Compensation, date of death or other termination of employment and
such other information as may be required by the Plan Sponsor.
(d) RELIANCE. The officers and directors of each Employer
shall be entitled to rely upon all information and data contained in
any certificate or report or other material prepared by any
accountant, attorney or other consultant or adviser selected by the
Plan Sponsor to perform services on behalf of this Plan.
(e) EXPENSES. All reasonable and proper expenses of this Plan
and the Trust Fund, including investment advisory fees and the
Trustee's fees as agreed upon by the Plan Sponsor and the Trustee,
shall be paid from the Trust Fund by the Trustee unless (1) the
payment of such expense would constitute a "prohibited transaction"
within the meaning of ERISA Section 406 or Code Section 4975 or
(2) the Plan Sponsor pays such expenses. The
- 35 -
<PAGE> 43
Plan Sponsor may seek reimbursement of any expense which is properly
payable by the Trust Fund.
Section 10
TRUST FUND AND TRUSTEE
----------------------
The Trust Fund shall be held, administered, controlled and invested by the
Trustee subject to the terms of the Trust Agreement for the exclusive benefit
of Participants and Beneficiaries.
Section 11
TERMINATION, AMENDMENT AND ADOPTION
-----------------------------------
11.1. RIGHT TO TERMINATE. The Plan Sponsor expects this Plan to be
continued indefinitely but, of necessity, reserves the right to terminate this
Plan or to partially terminate this Plan at any time by action of the Board.
Subject to the consent of the Plan Sponsor, an Employer at any time may
terminate its participation in this Plan by action of its board of directors
and thereby terminate the accrual of benefits under this Plan for its
Employees.
11.2. FULL VESTING UPON TERMINATION. Should this Plan be terminated or
partially terminated under this Section 11, the Accrued Benefit of each
affected Participant who is an Employee on the effective date of such
termination or partial termination shall immediately become fully vested and
nonforfeitable, subject to the sufficiency of the assets of the Trust Fund to
provide such benefits and subject to the provisions of Section 11.3 regarding
the allocation of such assets among such benefits.
11.3. ALLOCATION OF ASSETS. Upon a complete termination of this Plan, the
Plan Sponsor shall direct the Trustee to allocate the net assets of the Trust
Fund among the affected participants and beneficiaries in accordance with ERISA
Section 4044.
After all the liabilities of this Plan to such Participants and Beneficiaries
have been satisfied, any residual assets of the Trust Fund shall be distributed
to the Plan Sponsor and the Plan Sponsor shall distribute such residual assets
(less the
- 36 -
<PAGE> 44
amount of any excise tax on such residual assets) among the Employers in
accordance with the Plan Sponsor's directions. For this purpose, the term
"liabilities" shall mean benefits actually accrued as of the date of the
termination.
11.4. MERGER, CONSOLIDATION AND TRANSFER OF ASSETS OR LIABILITIES. In the
case of any merger or consolidation of this Plan with, or transfer of assets or
liabilities of this Plan to, any other plan, each Participant shall, if such
plan then terminated, be entitled to receive a benefit which immediately after
the merger, consolidation, or transfer is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated).
11.5. AMENDMENT. The Plan Sponsor shall have the right at any time and
from time to time to amend this Plan in any respect by action of its Board.
However, no amendment shall be made which would divert any of the assets of the
Trust Fund to any purpose other than the exclusive benefit of participants and
beneficiaries and no amendment shall eliminate or reduce an early retirement
subsidy or eliminate an optional form of benefit except to the extent
permissible under Code Section 411(d)(6).
Section 12
RESTRICTIONS ON CERTAIN BENEFITS
--------------------------------
12.1. LIMITATIONS ON ANNUAL BENEFIT. Effective for the 1987 Plan Year and
thereafter, notwithstanding any provision of the Plan to the contrary, the
annual benefit paid to or on behalf of a Participant shall not exceed the
limitations under Code Section 415 as adjusted for the cost of living in
accordance with Code Section 415(d) and the regulations under Code Section
415(d) as of January 1 of each limitation year for Participants who are
Employees and retired and terminated Participants who are receiving benefits or
who are entitled to receive benefits; provided, however, that the Code Section
415 limitations applicable to a benefit which is paid in a single sum shall be
the limitations in effect on his Annuity Starting Date and no further benefits
shall be payable to or on behalf of a Participant as a result of any cost of
living adjustments subsequent to the payment of such single sum benefit.
Notwithstanding the foregoing, if the Accrued Benefit of a Participant exceeds
the limitations of this Section 12.1 but does not exceed the limitations of
Code Section 415 as in effect on December 31, 1986 (including any special
grandfather provisions applicable to benefits accrued as of December 31, 1982),
then his Accrued Benefit under this Plan shall not be less than his "current
accrued benefit" (as such term
- 37 -
<PAGE> 45
is defined in Section 1106(i)(3) of the Tax Reform Act of 1986) under such
plan as of June 30, 1987 or, for a person who was a Participant in the
Harris/LBP Plan, December 31, 1986.
If a Participant participates in one or more defined contribution plans
maintained by an Affiliate and the sum of the "defined benefit fraction" under
this Plan and the "defined contribution plan fraction" under such defined
contribution plan or plans (as such fractions are described in Code Section
415) is greater than one, his rate of benefit accrual under this Plan shall be
frozen or reduced to the extent necessary to cause such sum not to exceed one.
For purposes of determining whether the limitations under Code Section 415
have been exceeded with respect to any Participant, the Participant's
"compensation," as defined in Code Section 415(c)(3), shall mean Compensation
as defined in Section 3.11(a)(ii).
12.2. LIMIT ON BENEFITS OF HIGHEST-PAID EMPLOYEES.
(a) RESTRICTED PARTICIPANTS. A Restricted Participant for any
Plan Year is a Participant who is among the group of the 25
highly-compensated [within the meaning of Code Section 414(g)]
employees or former employees of the Employer with the greatest
compensation in the current or any prior Plan Year.
(b) APPLICABILITY OF LIMIT. The annual benefit paid to a
Restricted Participant will be subject to the limit described below,
unless:
(1) after the Plan distributes the entire benefit
payable to the Restricted Participant, the value of the
Plan assets equals or exceeds 110% of the value of current
Plan liabilities; or
(2) the value of the benefits payable to the
Restricted Participant is less than 1% of the value of
current Plan liabilities before the distribution; or
(3) another exception applies under or with respect
to the requirements of Regulations Section
1.401(a)(4)-5(b).
(c) LIMIT. If a limit applies to benefits payable to a
Restricted Participant, the amount of benefits paid without a
security arrangement in any year on behalf of the Participant cannot
exceed the amount payable under a straight-life annuity actuarially
equivalent to all the Participant's benefits under the Plan, other
than a social security supplement, plus the amount of any social
security supplement payable in that year.
- 38 -
<PAGE> 46
(d) SECURITY ARRANGEMENT. To the extent permitted by
applicable law, a distribution in excess of the limit may be made to
a Restricted Participant if the Restricted Participant provides
security for any payments in excess of the limit that is
satisfactory to the Plan Administrator.
(e) PLAN TERMINATION. In the event of termination of the
Plan, the benefits payable to a Restricted Participant will be
limited to an amount that satisfies the nondiscrimination
requirements of Code Section 401(a)(4).
(f) TRANSITION PERIOD. The provisions of paragraphs (a)
through (e) above apply to distributions on and after January 1,
1993, provided, however, that any distribution made prior to the
Plan Year beginning July 1, 1994 may be made in accordance with the
limitations then in effect under Regulations Section 1.401-4(c),
including any exceptions available thereunder, e.g., the expiration
of restrictions ten years after the date of the establishment or
favorable amendment of the Plan.
Any security arrangement in effect with respect to a Restricted
Participant pursuant to Regulations Section 1.401-4(c) shall
continue to apply only if and to the extent required under
Regulations Section 1.401(a)(4)-5(b). In particular, any security
arrangement may be terminated on certification by the Plan
Administrator that:
(1) after the Plan distributes the entire benefit
payable to the Restricted Participant, the value of the
Plan assets equals or exceeds 110% of the value of current
Plan liabilities; or
(2) the value of the benefits payable to the
Restricted Participant is less than 1% of the value of
current Plan liabilities before the distribution; or
(3) another exception applies under Regulations
Section 1.401(a)(4)-5(b).
- 39 -
<PAGE> 47
Section 13
MISCELLANEOUS
-------------
13.1. SPENDTHRIFT CLAUSE. Except to the extent permitted by law, no
benefit, payment or distribution under this Plan shall be subject to the claim
of any creditor of a Participant, Spouse or Beneficiary, or to any legal
process by any creditor of such person, and no Participant, Spouse or
Beneficiary shall have any right to alienate, commute, anticipate, or assign
all or any portion of any benefit, payment or distribution under this Plan
except to the extent expressly provided in this Plan. This Section 13.1 shall
not preclude the enforcement of a federal tax levy made pursuant to Code
Section 6331 or the collection of an unpaid tax judgment.
13.2. LEGALLY INCOMPETENT. The Plan Sponsor may in its discretion direct
payment (A) to an incompetent or disabled person, whether because of minority
or mental or physical disability, (B) to the guardian or to the person having
custody of such person or (C) to any person designated or authorized under any
state statute to receive such payment on behalf of such incompetent or disabled
person, without further liability either on the part of the Plan Sponsor or the
Employers for the amount of such payment to the person on whose account such
payment is made.
13.3. BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim
for any benefit under this Plan shall look solely to the assets of the Trust
Fund and to the Pension Benefit Guaranty Corporation for the satisfaction of
such claim. In no event will the Plan Sponsor, the Employers, or any of their
officers, directors, or employees be liable in their individual capacities to
any person whomsoever for the payment of benefits under the provisions of this
Plan.
13.4. DISCRIMINATION. The Plan Sponsor shall administer the Plan in a
manner which it deems equitable under the circumstances for all similarly
situated Employees, Participants, Spouses and Beneficiaries, including adopting
such administrative or other rules as the Plan Sponsor in its discretion deems
appropriate for any such persons affected by circumstances such as a sale,
acquisition, merger, reorganization, plant closing, layoff, work force
reduction or other similar event or transaction; provided, however, the Plan
Sponsor shall not permit any discrimination in favor of highly compensated
Employees (within the meaning of Code Section 414(q)) which would be
prohibited under Code Section 401(a). If for any Plan Year the Plan Sponsor
determines that following the terms of the Plan would result in a failure to
satisfy the nondiscrimination tests under Code Section 401(a)(4) or the
coverage requirements under Code Section 410(b), the Plan Sponsor shall take
such action, to the extent permitted under the Code, as it deems appropriate
under the circumstances to prevent such failure.
- 40 -
<PAGE> 48
13.5. CLAIMS. Any payment to a Participant, Spouse or Beneficiary or to
their legal representatives or heirs-at-law, made in accordance with the
provisions of this Plan, shall to the extent thereof be in full satisfaction of
all claims under this Plan against the Plan Sponsor and the Employers, any of
whom may require such Participant, Spouse, Beneficiary, legal representative or
heirs-at-law, as a condition precedent to such payment, to execute a receipt
and release therefor in such form as shall be determined by the Plan Sponsor.
13.6. NONREVERSION. Except as provided in Section 8.3 and Section 11,
no part of the Trust Fund shall ever be used for or be diverted to purposes
other than for the exclusive benefit of participants and beneficiaries.
13.7. AGENT FOR SERVICE OF PROCESS. The agent for service of process for
this Plan shall be the person currently listed in the records of the Secretary
of State of Georgia as the agent for service of process for the Plan Sponsor.
13.8. TOP HEAVY PLAN.
(a) DETERMINATION. If the Plan Sponsor as of each June 30
("the determination date") determines that the sum of the present
value of the accrued benefits of "key employees" (as defined in Code
Section 416(i)) exceeds 60% of the sum of the present value of the
accrued benefits of all employees as of such determination date in
accordance with the rules set forth in Code Section 416(g), this
Plan shall be "top heavy" for the Plan Year which begins on the
immediately following July 1. For purposes of this Section 13.8,
such present value shall be determined using the mortality table
specified in Section 3.2(a) and an interest rate specified in
Section 3.2(b)(1) and the present value of the accrued benefit of
each Employee as of any determination date shall be equal to the sum
of (1) and (2) where
(1) equals the present value of such Employee's
cumulative accrued benefit under this Plan (determined for
this purpose as of the most recent valuation date used for
computing plan cost under Code Section 412 which falls
within the 12-month period ending on such determination
date) plus the present value of any distributions made
during the 5 year period ending on such determination
date, and
(2) equals the present value of his accrued benefit,
if any, (determined as of the valuation date which
coincides with or precedes the determination date for such
plan) plus any distributions made from such plans during
the 5 year period ending on such determination date under
- 41 -
<PAGE> 49
(i) each other qualified plan (as described
in Code Section 401(a)) maintained by an
Affiliate (A) in which a key employee is a
participant or (B) which enables any plan
described in subclause (A) to meet the
requirements of Code Section 401(a)(4) or
Section 410, and
(ii) each other qualified plan maintained by
an Affiliate (other than a plan described in
clause (i)) which may be aggregated with this
Plan and the plans described in clause (i),
provided such aggregate group (including a plan
described in this clause (ii)) continues to meet
the requirements of Code Section 401(a)(4) and
Section 410.
Notwithstanding any contrary Plan provision, if an individual has
not performed services for an Employer at any time during the 5 year
period ending on the determination date, any accrued benefit for
such individual shall not be taken into account for purposes of the
top-heavy determination required under this Section 13.8(a).
(b) SPECIAL TOP HEAVY PLAN RULES. If the Plan Sponsor
determines that this Plan is "top heavy" for any Plan Year, the
special rules set forth in this Section 13.8(b) shall apply
notwithstanding any other rules to the contrary set forth elsewhere
in this Plan.
(1) The Accrued Benefit for each Participant who is
not a key employee and who completes at least 1000 hours
of Service during such Plan Year shall not, in the
aggregate, be less than the product of (i) 2% of such
Participant's average compensation (as defined under Code
Section 415) for the 5 consecutive years during which
such Participant had the highest aggregate compensation
from an Affiliate (excluding compensation for years after
the last year for which the Plan is "top heavy") and (ii)
his total years of service, not to exceed 10 (excluding
years in which the Plan is not "top-heavy"), and, further,
accruals required under this Section 13.8(b)(1) by reason
of this Plan being "top heavy" shall be offset by the
Actuarial Equivalent value of the contributions and
forfeitures, if any, allocated on behalf of such
Participant under any defined contribution plan (which is
taken into account under this Section 13.8) solely by
reason of such plan being "top heavy" and no accruals
shall be permitted under this Section 13.8 for any Plan
Year in which the contributions and forfeitures allocated
on behalf of such Participant under any such defined
contribution plan equal at least 5% of such Participant's
compensation.
- 42 -
<PAGE> 50
(2) A Participant's nonforfeitable interest in his
Accrued Benefit under this Plan shall be determined under
the following schedule:
<TABLE>
<CAPTION>
Completed Years Nonforfeitable
of Vesting Service Interest
------------------ --------------
<S> <C>
Less than 2 0
2 20%
3 40%
4 60%
5 or more 100%
</TABLE>
However, the vesting schedule set forth in this Section
13.8(b)(2) shall not apply to any Participant who does not
have an Hour of Service after the date as of which this
Plan becomes "top heavy". In the event that this Plan
later ceases to be "top heavy," the vesting rules in
Section 3.36 shall once again apply; provided, however,
that
(A) the nonforfeitable portion of a
Participant's accrued benefit shall not
thereafter be less than the nonforfeitable
portion of his accrued benefit before the Plan
ceases to be "top heavy,"
(B) the nonforfeitable portion of the accrued
benefit of any Participant who has completed at
least 3 years of Vesting Service with an
Affiliate on the date the Plan ceases to be "top
heavy" shall continue to be determined under the
vesting schedule set forth in this Section
13.8(b)(2) if such vesting schedule is more
favorable to the Participant, and
(C) solely for purposes of Section 3.38(b)
and Section 7.1, "2 full Years of Vesting
Service" shall replace the language in Section
3.36(a).
(3) If a Participant receives his Accrued Benefit in
a lump sum (after July 31, 1991) and such Participant's
vested Accrued Benefit is less than 100% upon his
termination of participation in this Plan as a result of
this Plan being top-heavy in any year of his employment,
such Participant may upon his reemployment,
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<PAGE> 51
provided he is reemployed before incurring 6 Breaks in Service, have
his Accrued Benefit calculated in accordance with Section 3.7 but
without regard to the last sentence in Section 3.7 if he repays to
the Plan an amount equal to the dollar amount of his lump sum
distribution plus interest on such distribution in accordance with
Code Section 411(a)(7).
(4) The Plan Sponsor shall take such action as
necessary to satisfy the requirements of Code Section
415(e) and Section 416(h) if the Plan Sponsor (following
the procedure set forth in Section 13.8(a)) determines
that this Plan fails to meet the requirements set forth in
Code Section 416(h)(2)(B).
13.9. QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding Section 13.1,
this Plan shall provide for payment of benefits in accordance with the
applicable requirements of a "qualified domestic relations order" as that term
is defined in Code Section 414(p). The Plan Sponsor, in accordance with a
uniform and nondiscriminatory procedures established by the Plan Sponsor, shall
(a) promptly notify the Participant and any alternate payee
(as that term is defined in Code Section 414(p)(8)) of the receipt
of a domestic relations order and this Plan's procedures for
determining the qualified status of such order,
(b) determine the qualified status of such order and
(c) administer any distributions under this Plan pursuant to
such order in accordance with the rules set forth in Code Section
414(p) and any such determination or payment shall be final and
binding on all parties.
To the extent necessary or appropriate and in accordance with the rules set
forth in Code Section 414(p) the Plan Sponsor may direct the Trustee to
separately account for any amounts payable pursuant to a qualified domestic
relations order.
If the order so provides, the Plan shall make an immediate lump sum payment to
the alternate payee without regard to whether the Participant could (if he
terminated employment) receive a lump sum. For purposes of determining the
present value of any benefits payable pursuant to a qualified domestic
relations order before a Participant's separation from service, the interest
rate shall be the interest rate described in Section 3.2(b)(2).
13.10. INCOME TAX WITHHOLDING. The amount of any distribution to a
Participant (or Beneficiary) shall be reduced to the extent necessary to comply
with Federal, state and local income tax withholding requirements.
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<PAGE> 52
IN WITNESS WHEREOF, Lanier Worldwide, Inc. has caused this Plan to be executed
and its seal to be affixed and attested by its duly authorized officers this
/s/ 24 day of June, 1994.
LANIER WORLDWIDE, INC.
By:/s/ Wesley E. Cantrell
---------------------------
Title:/s/ President and CEO
------------------------
(SEAL)
ATTEST:
By:./s/ Michael Kelly
------------------------------------------------
Title:/s/ VP, General Counsel
---------------------------------------------
1034140
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<PAGE> 53
ATTACHMENT 1 TO EXHIBIT A
TO THE
LANIER WORLDWIDE, INC. PENSION PLAN
FORMER LANIER PARTICIPANTS
APPLICATION
This Attachment 1 shall apply only to those Participants who are Former LBP
Participants.
Section 1.2.
DEFINITIONS
The terms in this Section 1-2 shall have the meanings set forth opposite such
terms for purposes of this Attachment 1 and this Plan. Except as provided in
this Section 1-2, a capitalized term shall have the meaning set forth in the
Plan.
1-2-1 ACCRUED BENEFIT - means the minimum accrued benefit for each Former LBP
Participant which is a monthly benefit determined for such Participant as of
the earlier of his most recent termination date or December 31, 1988 which is
payable in the form of a single life annuity commencing as of his Normal
Retirement Dare (if he is then living). Such monthly benefit shall equal the
greater of (a) or (b), where:
(a) equals the sum of (1) the monthly amount of the Former LBP Participant's
benefits accrued as of December 31, 1981 under the terms of the Harris/LBP
Plan as then in effect plus (2) the excess of 1.667% of the Former LBP
Participant's Final Average Compensation as of the earlier of his most recent
termination date or December 31, 1988 over 1.667% of his Primary Social
Security Benefit as of the earlier of his most recent termination date or
December 31, 1988 multiplied by his total years and fractional years of
Benefit Service as of the earlier of his most recent termination date or
December 31, 1988 completed after December 31, 1981; and
(b) equals the product of (1) and (2), where (1) equals the excess of 1.667%
of the Participant's Final Average Compensation as of the earlier of his most
recent termination date or December 31, 1988 over 1.667% of his Primary Social
Security Benefit as of the earlier of his most recent
<PAGE> 54
termination date or December 31, 1988, and where (2) equals the lesser of (i)
his total years and fractional years of Benefit Service as of the earlier of
his most recent termination date or December 31, 1988 or (ii) 30.
1-2-2 ACTUARIAL EQUIVALENT - means for each Former LBP Participant a benefit
of equivalent value computed in accordance with accepted actuarial principles
which shall not be less than the equivalent value of the Participant's Accrued
Benefit determined under Section 1-2-1 as of the earlier of his most recent
termination date or September 30, 1989 based on
(i) the 1971 Group Annuity Mortality Table for Males projected to 1990 with a
one year set back for a Participant and a 5 year set back for a Participant's
Spouse or Beneficiary,
(ii) a 7% per annum compounded interest rate assumption for any form of
benefit except a single sum benefit, and
(iii) for benefits paid in a single sum in Plan Years beginning on or after
January 1, 1987, the Pension Benefit Guaranty Corporation ("PBGC") interest
rate (deferred or immediate, whichever is appropriate) that would be used by
the PBGC (as of the earlier of the date of distribution or December 31, 1988)
for purposes of determining the present value of a single sum distribution on
a plan termination. However, for Plan Years beginning after December 31, 1984
and before January 1, 1987, the interest rate for single sum benefits shall
equal the interest rate applied by the PBGC for the valuation of immediate
annuities in connection with a pension plan termination as in effect for the
first day of the Plan Year which included the Participant's Annuity Starting
Date.
1-2-3 BENEFIT SERVICE - means for each Former LBP Participant as of any
Determination Date his full and fractional Years of Service (as determined in
accordance with Section 3.40) completed as a Participant under Harris/LBP Plan
prior to October 1, 1989 except
(a) periods of service completed under the Harris/LBP Plan prior to 1982 for
which such Former LBP Participant withdraws his contributions under the
Harris/LBP Plan unless he (i) has reached his Vested Date or has attained age
Normal Retirement at the time of such withdrawal or (ii) he repays his
contributions with interest in the manner provided in Section 1-4-4;
(b) periods of service prior to 1982 during which the Participant was
eligible to participate in the Plan as then in effect but declined to make the
contributions then required under the Plan; and
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<PAGE> 55
(c) periods of service for which such Participant received a single sum
benefit under the Harris/LBP Plan of $3500 or less.
1-2-4 COMPENSATION - means for a Former LBP Participant who was not employed
as an Employee after December 31, 1988, the total cash compensation of an
Eligible Employee for any Plan Year or portion thereof as reported by a
Participating LBP Company on Internal Revenue Service Form W-2 (or any
successor form) for such Participant for such Plan Year or portion thereof, (or
which would be reported on Form W-2 but for the operation of Code Section
401(k) or Code Section 125) excluding severance pay, reimbursed expenses,
payments for moving expenses and educational benefits, payments for group
insurance, payments under the Harris/LBP Plan and other forms of indirect
compensation; provided, that (a) Compensation in the case of salesmen whose
sales expenses are not paid by the LBP as a participating affiliate shall, for
purposes of the Harris/LBP Plan, be 90% percent of the gross commissions paid
to such salesmen and (b) Compensation for an employee of Harris Technical
Services Corporation shall not include any portion of his cash compensation
which is attributable to a "special allowance" paid by Harris Technical
Services Corporation.
1-2-5 ELIGIBLE EMPLOYEE - means for periods before October 1, 1989, an
Employee who is employed by a Participating LBP Company other than
(i) an Employee who was not employed by LBP in its Lanier Management Company
Division or Lanier Business Products Division during any period when the plan
sponsor of the Harris/LBP was Oxford Industries, Inc.,
(ii) an Employee who is classified on the personnel records of any
Participating LBP Company as employed on a temporary, summer, or casual
part-time position for short term work load, which employment is intended to
terminate upon completion of the assignment for which he was employed,
(iii) an Employee who is treated as such solely by reason of the "leased
employee" rules set forth in Code Section 414(n),
(iv) an Employee who is a member of (or who is represented by) a collective
bargaining unit which has failed to reach an agreement with his Participating
LBP Company that he be eligible to participate in this Plan,
(v) an Employee who is a non-resident alien and who receives no earned income
from a Participating LBP Company from sources within the United States (as
described more fully in Code Section 410(b)(3)(C)), and
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<PAGE> 56
(vi) an Employee who works primarily outside the United States and who is
paid under a payroll system which is not linked electronically to the payroll
system for LBP Employees who work primarily within the United States.
1-2-6 EMPLOYEE - means for periods before October 1, 1989 a person who was an
employee of LBP or an entity which would be considered a single employer with
LBP under Code Section 414.
1-2-7 FINAL AVERAGE COMPENSATION - means for a Former LBP Participant for
purposes of determining his Accrued Benefit as of the earlier of his most
recent termination date or December 31, 1988 one twelfth of the average of the
Compensation of such Participant during the 5 consecutive calendar years in
which such average is the highest (or actual number of consecutive calendar
years if less than 5) out of the last 10 calendar years during which the
Participant was an LBP Employee including the calendar year which includes his
Employment Termination Date, or, if earlier, his Normal Retirement Date (or
actual number of such calendar years if less than 10); provided that for
purposes of determining such average, such Participant's Compensation for the
calendar year which includes his most recent Employment Termination Date, or if
earlier, his Normal Retirement Date shall (if he actually received Compensation
for less than 12 months in such calendar year) be deemed to be the Compensation
he would have received for the entire calendar year if he had continued to earn
compensation at the same rate he was earning Compensation on his Employment
Termination Date, or if earlier, his Normal Retirement Date. Notwithstanding
any Plan provision to the contrary, the Accrued Benefit of each Former LBP
Participant after February 28, 1987 shall not be less than his Accrued Benefit
as determined as of February 28, 1987 and the "Normal Retirement Date"
limitation in this Section 1-2-7 shall not apply for Plan Years beginning on
or after January 1, 1988 to a Participant who completes an Hour of Service on
or after that date.
1-2-8 FORMER LBP PARTICIPANT - means a person who was a participant in the
Harris/LBP Plan before October 1, 1989.
1-2-9 LBP - means Lanier Business Products, Inc.
1-2-10 NORMAL RETIREMENT AGE - means for each Former LBP Participant who
became a participant in the Harris/LBP Plan on or before June 30, 1988, the
date such participant reaches age 65.
1-2-11 PARTICIPATING LBP COMPANY - means LBP and any entity which would be
considered a single employer with LBP under Code Section 414 which
participated in the Harris/LBP Plan with the permission of LBP's Board of
Directors.
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<PAGE> 57
1-2-12 PRIMARY SOCIAL SECURITY BENEFIT - means for a Former LBP Participant
for purposes of determining his Accrued Benefit as of the earlier of his most
recent termination date or December 31, 1988, the benefit which would be
available to such Participant as a monthly old age benefit, exclusive of
benefits for a spouse or other relative or dependent, under the Social Security
Act as in effect on the earlier of such Participant's Normal Retirement Date,
the date his employment terminates or December 31, 1988. The Plan Sponsor
shall calculate a Former LBP Participant's Primary Social Security Benefit in
accordance with uniform and nondiscriminatory rules and based upon the
following assumptions:
(1) A Former LBP Participant's wages earned through the earlier of his most
recent termination date or December 31, 1988 under this Plan shall be
determined in accordance with one of the following methods:
(i) such Former LBP Participant's actual wage history for all years of
employment ending on the earlier of his most recent termination date or
December 31, 1988, provided such Former LBP Participant furnishes such
actual wage history as reported by the Social Security Administration in a
form satisfactory to the Plan Sponsor on or before the later of 60 days
after (A) the date his employment terminates and (B) the date the Former LBP
Participant is notified of his benefits under the Plan, or
(ii) absent such actual wage history, such Former LBP Participant's
estimated wage history for all years of employment ending on the earlier of
his most recent termination date or December 31, 1988, provided such wage
history is estimated by applying a salary scale, projected backwards, to the
Former LBP Participant's compensation (as defined in Section 3.03 of
Revenue Ruling 71-446) as of the earlier of the date his most recent
termination date or December 31, 1988 and such salary scale is either (A)
that actual change in the average wages from year to year as determined by
the Social Security Administration or (B) a level percentage per year that
is not less than 6% per annum, and the Plan shall provide written notice to
each Former, LBP Participant of the Former LBP Participant's right to supply
such Former LBP Participant's actual wage history, the financial consequence
of failing to supply such actual wage history and that such history may be
obtained from the Social Security Administration.
(2) The Former LBP Participant's post-termination wages for each Plan Year
beginning after the earlier of the date his employment terminates or December
31, 1988 through his Normal Retirement Date shall equal the
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<PAGE> 58
Former LBP Participant's compensation as reported on Form W-2 for the earlier
of the year in which his employment terminates or 1988.
(3) A Former LBP Participant's monthly primary insurance amount shall be
determined under this Section 1-2-12 without regard to any delay, suspension
or forfeiture of such payment for any reason whatsoever, including a failure
to apply for such benefit or because the Participant continues to work.
1-2-12 VESTED DATE - means for each Former LBP Participant who does not
complete at least one Hour of Service after December 31, 1988, the earlier of
the date he completes 10 full years of Vesting Service or reaches Normal
Retirement Age as an Employee.
Section 1.3.
ELIGIBILITY TO PARTICIPATE
A Former LBP Employee whose most recent employment commencement date was on or
after his 60th birthday shall not become a Participant in this Plan; however,
this limitation shall not apply for Plan Years beginning after December 31,
1987 to an Employee who completes an Hour of Service after that date.
Section 1.4.
RETIREMENT AND TERMINATION BENEFITS
1-4-1 DEFERRED RETIREMENT BENEFITS. For Plan Years beginning before January
1, 1988, if a Participant remains an Employee after his Normal Retirement Date,
such Participant's benefit under the Harris/LBP Plan shall equal dollar for
dollar the monthly amount of the benefit which he would have received had he
retired on his Normal Retirement Date and shall not be increased on account of
any compensation, service, or by any actuarial adjustment, after such date.
This limitation shall not apply to Plan Years beginning on or after January 1,
1988 for Participants who complete an Hour of Service on or after such date.
1-4-2 VESTED BENEFITS.
(a) RETURN OF EMPLOYEE CONTRIBUTIONS. If a Former LBP Participant's
employment terminates before his Vested Date, he shall not be entitled to
any benefit under the Plan other than a return of his own contributions made
prior to 1982, if any, with interest as described in Section 1-4-4.
- 6 -
<PAGE> 59
(b) MILNER BUSINESS PRODUCTS, INC. The term "Milner Employee" shall mean
each former LBP Employee (1) who terminated employment during the 1987
calendar year at the request of LBP and immediately after such termination
became an employee of Milner Business Products, Inc. ("Milner") as a result
of the sale of certain assets of LBP to Milner effective as of April 27,
1987 and (2) who as of the date of such termination and employment by Milner
("Milner Date") had not completed 10 years of Vesting Service.
The nonforfeitable benefit, if any, payable to or on behalf of a Milner
Employee under this Plan shall be determined as follows:
(i) Solely, for purposes of determining a Milner Employee's nonforfeitable
interest in his Accrued Benefit as determined as of his Milner Date, his
years of Vesting Service with respect to such Accrued Benefit shall be
determined as if his continuous employment with Milner from his Milner Date
until the date he first terminates employment with Milner is employment as
an Employee under this Plan.
(ii) Such Accrued Benefit shall be payable to him as of his Normal
Retirement Date or as of the first day of any month coinciding with or
following the date on which he reaches age 55 and completes 10 years of
Vesting Service (as determined in accordance with this Section 1- 4-2(b))
and, if he dies after he has completed 10 years of Vesting Service but
before his Annuity Starting Date, any survivor benefit attributable to such
Accrued Benefit shall be payable to his Spouse in accordance with the terms
of Section 7.1.
(iii) No benefit shall be payable under this Plan to any Milner Employee
who terminates employment with Milner before he completes 10 years of
Vesting Service or, for Plan Years beginning on or after January 1, 1989
for a Milner Employee working for Milner on or after that date, 5 years of
Vesting Service (as determined in accordance with this Section 1-4-2(b))
except to the extent a benefit is payable to such individual as a result of
reemployment as an Eligible Employee after his Milner Date.
(iv) If a Milner Employee is reemployed as an Eligible Employee after his
Milner Date, his nonforfeitable interest in that portion of his Accrued
Benefit, if any, accrued after his
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<PAGE> 60
reemployment shall be determined solely with respect to his actual years of
Vesting Service (as determined without regard to the special rules of this
Section 1-4-2(b)) and no such individual shall receive credit (for vesting or
benefit accrual purposes) for employment with Milner with respect to any
benefits accrued under this Plan after his Milner Date.
1-4-3 DISABILITY RETIREMENT BENEFITS.
(a) MINIMUM BENEFIT. If a Former LBP Participant becomes totally and
permanently disabled, as defined in Section 5.4 of the Plan while he is an
Eligible Employee after he completes 10 years of Vesting Service but prior to
January 1, 1989, his disability benefit under Section 5.4 of the Plan shall
not be less than the Accrued Benefit he would have been entitled to receive
under Section 1-2-1 at his Normal Retirement Date or his Early Retirement
Date, if applicable, if he is then living and if such disability has been
continuous to such date based on the Primary Social Security Benefit, the
Benefit Service and the Final Average Compensation which such Former LBP
Participant would have had on December 31, 1988 assuming (1) his Benefit
Service had continued from his termination date to December 31, 1988 and (2)
he had continued to receive annual Compensation from his termination date to
December 31, 1988 equal to the annualized amount of his Compensation in the
last calendar year prior to his disability.
(b) TERMINATION OF DISABILITY. If a Former LBP Participant's total and
permanent disability ceases prior to his Annuity Starting Date for any reason
other than death, such Participant is described in Section 1-4-3(a) and such
Participant returns or offers to return to the employment of an Affiliate
within 90 days after his disability ceases, then, for purposes of determining
his eligibility to receive benefits under the Plan upon his subsequent
termination of employment and the amount of such benefits, he shall be treated
as if he had received annual Compensation during his period of disability and
prior to January 1, 1989 equal to the annualized amount of his Compensation in
the last calendar year prior to his disability.
1-4-4 BENEFITS ATTRIBUTABLE TO MANDATORY PARTICIPANT CONTRIBUTIONS.
(a) INVOLUNTARY CASHOUT. If a Former LBP Participant terminates employment
prior to his Vested Date and the Actuarially Equivalent single sum value of
his Accrued Benefit attributable to his contributions contributed to the Plan
prior to 1982 as determined in accordance with Code Section 411(c) is $3500
or less, such participant shall receive a lump sum distribution of his entire
accrued benefit attributable to such employee contributions and the nonvested
portion of his Accrued Benefit shall be treated as a
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<PAGE> 61
forfeiture unless he repays such distribution with interest as described in
Section 1-4-4(e).
(b) RIGHT OF IN SERVICE WITHDRAWAL. At any time prior to his termination of
employment, a Former LBP Participant who contributed to the Plan prior to 1982
may request a withdrawal of his contributions which shall be paid in the
normal annuity form described in Section 6.1 of the Plan. Notwithstanding
the foregoing, a Former LBP Participant may request (subject to the spousal
consent rules of Section 6.2 of the Plan unless his nonforfeitable benefit
was attributable entirely to the employee contributions and the distribution
was made before October 22, 1986) to receive a single sum distribution of his
contributions to the Plan prior to 1982. A Participant who withdraws his
contributions under this Section 1-4-4 at any time on or after January 1,
1982 and who thereafter repays the amount refunded with interest as provided
in Section 1-4-4(d) below shall not be entitled to withdraw his contributions
again prior to his Annuity Starting Date.
(c) VOLUNTARY WITHDRAWAL ON TERMINATION. If a Former LBP Participant
terminates employment and the Actuarial Equivalent single sum value of his
nonforfeitable Accrued Benefit attributable to employer and employee
contributions exceeds $3500, such Participant's Accrued Benefit shall be paid
in the normal annuity form described in Section 6.1 of the Plan.
Notwithstanding the foregoing, a Former LBP Participant may request (subject
to the spousal consent rules of Section 6.2 of the Plan unless his
nonforfeitable benefit was attributable entirely to employee contributions and
the distribution was made before October 22, 1986) to receive a single sum
distribution of his entire Accrued Benefit attributable to his employee
contributions. If he does not repay such distribution with interest as
described in Section 1-4-4(d), then any benefit to which such Participant (or
the spouse of such Participant) may become entitled under the Plan shall be
recomputed by excluding an amount equal to his accrued benefit derived from
employee contributions as determined in accordance with Code Section 411(c).
(d) INTEREST. Interest referred to in this Section 1-4-4 shall be computed
at an annual rate of 3%, compounded annually, for periods prior to January 1,
1976, at an annual rate of 5%, compounded annually, for periods after 1975 but
prior to January 1, 1988 and at an annual rate of 120% of the Federal mid-term
rate (as in effect under Code Section 1274 for the first month of the Plan
Year), compounded annually from January 1, 1988 until such Determination Date
or repayment date, if applicable. The interest rate under this Section
1-4-4(d) shall be adjusted from time to time in accordance with regulations
under Code Section 411(c).
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<PAGE> 62
(e) REPAYMENT. Repayment described in this Section 1-4-4 means repayment to
the Plan by the Former LBP Participant of the amount of the distribution
together with interest at the rates provided in Section 1-4-4(d) in cash
before (i) in the case of a distribution on account of a separation from
service, the earlier of 5 years after the first date on which the Participant
resumes employment as an Eligible Employee or the close of 6 consecutive
Breaks in Service following the distribution or (ii) in the case of any other
withdrawal, 5 years after the date of the withdrawal.
Section 1.5.
OPTIONAL FORMS OF BENEFITS
1-5-1 DESCRIPTION OF OPTIONS. Subject to Section 6.2 of the Plan each Former
LBP Participant may elect to have the following optional payment forms at his
Annuity Starting Date in addition to the optional payment forms described in
Section 6.3 of the Plan:
OPTION A:
A Participant who contributed to the Plan prior to 1982 also may elect
to have his contributions with interest refunded to him under Section 1-4-4 at
the time his first monthly benefit payment is made notwithstanding that he may
already have withdrawn and repaid such contributions after 1981. In the event
a Participant elects to have his contributions with interest refunded to him,
his Accrued Benefit shall be recomputed by excluding an amount equal to the
Accrued Benefit derived from employee contributions (determined in accordance
with Code Section 411) and the Actuarial Equivalent of the remaining Accrued
Benefit which would be payable to the Participant in a single life annuity may
be paid in any optional form under Section 6.3.
OPTION B:
A single sum cash distribution of the portion of his benefit accrued under the
Harris/LBP Plan as of December 31, 1981, and a monthly benefit payable under
any optional form described in Section 6.3 of the Plan for that portion of his
benefit accrued under the Plan after December 31, 1981.
OPTION C:
A Former LBP Participant who participated in the Harris/LBP Plan at any time
after December 31, 1985 and before October 1, 1989 shall be eligible, subject
to the spousal consent rules of Section 6.2 of the Plan, to elect an immediate
single sum
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<PAGE> 63
payment or an immediate annuity benefit (single life only, for a Participant
who does not have a Spouse on his Annuity Starting Date, 50% joint and survivor
annuity for a Participant who does have a Spouse on his Annuity Starting Date).
Such immediate benefit shall be equal to the Actuarial Equivalent of his
Accrued Benefit, if any, accrued under the Harris/LBP Plan prior to October 1,
1989 and under this Plan after September 30, 1989 and through April 30, 1990.
The remainder of his Accrued Benefit, if any, shall be payable in any optional
form described in Section 6.3, as of his Normal Retirement Date unless he is
eligible to receive it earlier under Section 5.
1-5-2 SURVIVOR BENEFITS.
(a) SURVIVING SPOUSE. For distributions made on or after October 22,
1986, if a Former LBP Participant made contributions to this Plan and
such Participant dies before his Vested Date, such Participant shall be
treated as dying after his Vested Date for purposes of Section 7.1 and
any survivor benefit payable to his surviving spouse under Section 7.1
shall be based on his Accrued Benefit attributable to his employee
contributions then remaining in the Plan.
(b) OTHER. If a Participant dies prior to his Annuity Starting Date
under this Plan and a survivor annuity benefit is not payable to such
Participant's surviving Spouse under Section 7.1 or Section 7.2 of the
Plan, then his Beneficiary shall be entitled to a survivor benefit equal
to the amount, if any, of the Participant's contributions under the Plan
prior to 1982, less withdrawals, with interest thereon computed at the
rate described in Section 1-4-4, compounded annually, to the date of
the Participant's death.
If a Participant dies after his Annuity Starting Date, and if no
survivor annuity benefit is payable to his surviving Spouse and if no
benefit is payable to a Beneficiary under an optional form of benefit,
then his Beneficiary shall be entitled only to the excess, if any, of
(1) the Participant's contributions under the Plan prior to 1982, less
withdrawals, with interest thereon computed at the rates described in
Section 1-4-4, compounded annually, to his benefit commencement date,
over (2) the aggregate of payments made under the Plan to such
Participant.
The survivor benefit payable under this Section 1-5-2(b), if any, shall
be paid in a single sum in cash.
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<PAGE> 64
ATTACHMENT 2 TO EXHIBIT A
TO THE
LANIER WORLDWIDE, INC. PENSION PLAN
FORMER HARRIS/DPI PARTICIPANTS
Section 2-1
APPLICATION
This Attachment 2 shall apply only to those Participants who are Former
Harris/DPI Participants.
Section 2-2
DEFINITIONS
The terms in this Section 2-2 shall have the meanings set forth opposite such
terms for purposes of this Attachment 2 and this Plan. Except as provided in
this Section 2-2, a capitalized term shall have the meaning set forth in the
Plan.
2-2-1 ACCRUED BENEFIT - (a) MINIMUM BENEFIT means the minimum accrued benefit
for each Former Harris/DPI Participant which is a monthly benefit determined
for such Participant as of the earlier of his most recent termination date or
June 30, 1989 which is payable in the form of a single life annuity commencing
as of his Normal Retirement Date (if he is then living). Such monthly benefit
shall be determined in accordance with the applicable formula set forth in this
Section 2-2-1.
(1) For each Former Harris/DPI Participant other than a Former LBP
Participant or Former 3M Participant, the monthly benefit shall equal the
product of (i) and (ii), where
(i) equals the excess of 1.667% of the Participant's Average
Compensation as of the earlier of his most recent termination date or
June 30, 1989 over 1.667% of his Primary Social Security Benefit as of
the earlier of his most recent termination date or June 30, 1989, and
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<PAGE> 65
(ii) equals the lesser of (A) his total years and fractional years of
Benefit Service as of the earlier of his most recent termination date or
June 30, 1989 or (B) 30.
(2) For each Former Harris/DPI Participant who is also a Former LBP
Participant, the minimum monthly benefit shall equal the greater of the
benefit under Section 2-2-1(a)(1) above or the sum of (i) and (ii) below
where
(i) equals the monthly amount of the Former LBP Participant's benefits
accrued as of December 31, 1981 under the terms of the Harris/LBP Plan
as then in effect, and
(ii) equals the excess of 1.667% of the Former LBP Participant's Final
Average Compensation as of the earlier of his most recent termination
date or June 30, 1989 over 1.667% of his Primary Social Security Benefit
as of the earlier of his most recent termination date or June 30, 1989
multiplied by his total years and fractional years of Benefit Service
completed after December 31, 1981 and before the earlier of his most
recent termination date or July 1, 1989.
(3) For any Former Harris/DPI Participant who also is a Former 3M
Participant, the minimum monthly benefit shall equal such Former 3M
Participant's benefit as determined under Section 2-2-1(a) based on his
Average Compensation (as determined under Section 2-2-3 as of the earlier
of his most recent termination date or June 30, 1989), his Benefit Service
(as determined under Section 3.7 of the Plan as of the earlier of his most
recent termination date or June 30, 1989) and his Social Security Benefit
(as determined in accordance with Section 2- 2-16 as of the earlier of his
most recent termination date or June 30, 1989).
(b) ALTERNATIVE MINIMUM FOR FORMER 3M PARTICIPANTS. Notwithstanding any
contrary provision, the Accrued Benefit of a Former Harris/DPI Participant who
also is a Former 3M Participant as shall be the greater of his Accrued Benefit
determined in accordance with Section 3.1 (taking into account the minimum
benefit under Section 2-2-1(a)(3)) or the product of (1), (2) and (3) where
(1) equals 1%,
(2) equals his Average Compensation determined as of the earlier of his most
recent termination date or June 30, 1989 (as determined under Section 3.5)
by substituting the numeral "4" in lieu of the numeral "5" wherever that
numeral appears in and by limiting such Average Compensation to $1,667), and
<PAGE> 66
(3) equals his Benefit Service determined as of the earlier of his most
recent termination date or June 30, 1989.
2-2-2 ACTUARIAL EQUIVALENT - means for each Former Harris/DPI Participant a
benefit of equivalent value computed in accordance with accepted actuarial
principles which shall not be less than the equivalent value of the
Participant's Accrued Benefit determined under Section 2-2-1 as of the earlier
of his most recent termination date or September 30, 1989 based on
(i) The 1971 Group Annuity Mortality Table for Males projected to 1990 with
a one year set, back for a Participant and a 5 year set back for a
Participant's Spouse or Beneficiary,
(ii) a 7% per annum compounded interest rate assumption for any form of
benefit except a single sum benefit, and
(iii) for benefits paid in a single sum in Plan Years beginning on or after
July 1, 1987, the Pension Benefit Guaranty Corporation ("PBGC") interest
rate (deferred or immediate, whichever is appropriate) that would be used by
the PBGC (as of the first day of the Plan Year in which such benefit is
paid) for purposes of determining the present value of a single sum
distribution on a plan termination. However, for Plan Years beginning after
December 31, 1984 and before January 1, 1987, the interest rate for single
sum benefits shall equal the interest rate applied by the PBGC for the
valuation of immediate annuities in connection with a pension plan
termination as in effect for the first day of the Plan year which included
the Participant's Annuity Starting Date.
2-2-3 AVERAGE COMPENSATION - means for a Former Harris/DPI Participant for
purposes of determining his Accrued Benefit as of the earlier of his most
recent termination date or June 30, 1989, one-twelfth of the average of the
Compensation of such Participant during the 5 consecutive calendar years in
which such average is highest (or actual number of consecutive calendar years
if less than 5) out of the last 10 calendar years during which the Participant
was a Harris/DPI Employee ending before the calendar year which includes his
Employment Termination Date, or, for a Participant who does not complete an
Hour of Service after June 30, 1989, his Normal Retirement Date if that date is
earlier than his Employment Termination Date (or actual number of such calendar
years if less than 10).
2-2-4 BENEFIT SERVICE - includes for each Former Harris/DPI Participant with
respect to whom assets and liabilities were transferred from the Harris/LBP
Plan or the 3M Plan his years of service for benefit accrual completed under
the Harris/LBP Plan or under the 3M Plan prior to his transfer to Harris/DPI.
- 3 -
<PAGE> 67
2-2-5 COMPENSATION - means for a Former Harris/DPI Participant who was not
employed as an Employee after June 30, 1989, the total cash compensation of an
Eligible Employee for any Plan Year or portion thereof as reported by
Harris/DPI on Internal Revenue Service Form W-2 (or any successor form) for
such Eligible Employee for such Plan Year or portion thereof or which would be
reported on Form W-2 but for the operation of Code Section 401(k), excluding
severance pay, reimbursed expenses, payments for moving expenses and
educational benefits, payments for group insurance income attributable to the
exercise of stock options, payments under this Plan and other forms of indirect
compensation; provided, that Compensation in the case of salesmen whose sales
expenses are not paid by an Employer shall, for purposes of the Harris/DPI
Plan, be 90% percent of the gross commissions paid to such salesmen.
2-2-6 ELIGIBLE EMPLOYEE - means for each Plan Year before July 1, 1989 each
Employee of Harris/DPI who has completed one Year of Service and reached age 21
other than
(a) an Employee who is treated as such solely by reason of the "leased
employee" rules set forth in Code Section 414(n),
(b) an Employee who is a member of (or who is represented by) a collective
bargaining unit which has failed to reach an agreement with his Employer
that he be eligible to participate in this Plan,
(c) an Employee who is a non-resident alien and who receives no earned
income from an Employer from sources within the United States (as described
more fully in Code Section 410(b)(3)(C)), and
(d) an Employee (other than an Employee who is employed by the Plan Sponsor
at the Puerto Rico branch) who works primarily outside the United States and
who is paid under a payroll system which is not linked electronically to the
payroll system for Employees who work primarily within the United States.
2-2-7 FORMER HARRIS/DPI PARTICIPANT - means a person who was a participant in
the Harris/DPI Plan before October 1, 1989.
2-2-8 FORMER 3M PARTICIPANT - means each Former Harris/DPI Participant who
transferred from 3M or its affiliates to the employ of Harris/DPI before June
30, 1986 in accordance with the DPI Agreement and each Former Harris/DPI
Participant who transferred from 3M Puerto Rico, Inc. to Harris/DPI after
January 31, 1987 but before August 1, 1987 in accordance with the agreement
between Harris/DPI and 3M and with respect to whom assets and liabilities were
transferred to the Harris/DPI Plan from the 3M Plan.
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<PAGE> 68
2-2-9 FORMER LBP PARTICIPANT - means each Former Harris/DPI Participant who
transferred from LBP to Harris/DPI before June 30, 1986 in accordance with the
DPI Agreement and with respect to whom assets were transferred to the
Harris/DPI Plan from the 3M Plan.
2-2-10 HARRIS/DPI - means Harris/3M Document Products, Inc.
2-2-11 LBP - means Lanier Business Products, Inc.
2-2-12 3M - means Minnesota Mining & Manufacturing Company.
2-2-13 3M PLAN - means the Employee Retirement Income Plan of Minnesota Mining
and Manufacturing Company as in effect from time to time prior to June 30,
1986.
2-2-14 NORMAL RETIREMENT AGE - means for each Former Harris/DPI Participant
who became a participant in the Harris/DPI Plan on or before August 31, 1988,
the date such participant reaches age 65.
2-2-15 SOCIAL SECURITY BENEFIT - means (a) for a Former Harris/DPI Participant
for purposes of determining his Accrued Benefit as of the earlier of his most
recent termination date or June 30, 1989, the benefit which would be available
to such Participant as a monthly old age benefit, exclusive of benefits for a
spouse or other relative or dependent, under the Social Security Act as in
effect on the earlier of his Normal Retirement Date, the date his employment
terminates or June 30, 1989. The Plan Sponsor shall calculate a Former
Harris/DPI Participant's Social Security Benefit in accordance with uniform and
nondiscriminatory rules and based upon the following assumptions
(1) A Former Harris/DPI Participant's wages earned through the earlier of
his most recent termination date or June 30, 1989 under this Plan shall be
determined in accordance with one of the following methods:
(i) such Former Harris/DPI Participant's actual wage history for all
years of employment ending on the earlier of his most recent termination
date or June 30, 1989 provided such Former Harris/DPI Participant
furnishes such actual wage history as reported by the Social Security
Administration in a form satisfactory to the Plan Sponsor on or before
the later of 60 days after (A) the date his employment terminates and
(B) the date the Former Harris/DPI Participant is notified of his
benefits under the Plan or
(ii) absent such actual wage history, such Former Harris/DPI
Participant's estimated wage history for all years of employment
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<PAGE> 69
ending on the earlier of his most recent termination date or June 30, 1989,
provided such wage history is estimated by applying a salary scale,
projected backwards, to the Former Harris/DPI Participant's compensation (as
defined in Section 3.03 of Revenue Ruling 71-446) as of the earlier of his
most recent termination date or June 30, 1989 and such salary scale is
either (A) that actual change in the average wages from year to year as
determined by the Social Security Administration (B) a level percentage per
year that is not less than 6% per annum, and the Plan shall provide written
notice to each Former Harris/DPI Participant of the Former Harris/DPI
Participant's right to supply such Former Harris/DPI Participant's actual
wage history, the financial consequence of failing to supply such actual
wage his and that such history may be obtained from the Social Security
Administration.
(2) The Former Harris/DPI Participant's post-termination for each Plan Year
beginning after June 30, 1989 through his Normal Retirement Date shall equal
the Former Harris/DPI Participant's compensation as reported on Form W-2 for
the earlier of the calendar year in which his employment terminates or 1988.
(3) A Former Harris/DPI Participant's monthly primary insurance amount shall
be determined under this Section 2-2-15 without regard to any delay,
suspension or forfeiture of such payment for any reason whatsoever,
including a failure to apply for such benefit or because the Participant
continues to work.
(b) Notwithstanding the foregoing, for each Former 3M Participant, the term
"Social Security Benefit" means the monthly primary insurance amount ("PIA")
which would be payable
(1) for each such Participant who is not employed as an Employee on or after
the earlier of age 55 or June 30, 1989, in accordance with Section
2-2-15(a) and
(2) for each such Participant (other than a Participant described in Section
2-2-15(b)(1)), in accordance with (i) the Social Security Act as in effect
on the earlier of the date his employment terminates or June 30, 1989, (ii)
the assumptions set forth in Section 2-2-15(a)(1) and (3) and (iii) the
special assumptions set forth below in Section 2-2-15(b)(3).
(3) PIA shall be determined:
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<PAGE> 70
(A) For a Former 3M Participant who finally terminates employment as an
Employee before age 62 or, if his employment had not terminated before
June 30, 1989, who on June 30, 1989 had not reached age 62, by assuming
that
(i) he is age 62 on the earlier of the date his employment finally
terminates or June 30, 1989,
(ii) his post-termination wages from the earlier of the date his
employment finally terminates or June 30, 1989 through his
retirement age under the Social Security Act shall equal zero, and
(iii) his PIA would be payable at age 62.
(B) For a Former 3M Participant who finally terminates employment as an
Employee on or after age 62 or, if his employment had not terminated
before June 30, 1989, who on June 30, 1989 was at least age 62, by
assuming that
(i) his post-termination wages from the earlier of the date his
employment finally terminates or June 30, 1989 through his
retirement age under the Social Security Act shall equal zero and
(ii) his PIA would be payable on the earlier of the date his
employment finally terminates or June 30, 1989.
2-2-16 VESTED DATE - means for each Participant who does not complete at least
one Hour of Service after June 30, 1989, the earlier of the date he completes
10 years of Vesting Service or reaches Normal Retirement Age as an Employee.
2-2-17 VESTING SERVICE - includes for each Former Harris/DPI Participant, his
years of service for vesting purposes as determined under the 3M Plan as of
December 2, 1985.
Section 2-3
ELIGIBILITY TO PARTICIPATE
An Employee whose most recent employment commencement date was on or after his
60th birthday shall not become a Participant in this Plan; however, this
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<PAGE> 71
limitation shall not apply for Plan Years beginning after June 30, 1988 to an
Employee who completes an Hour of Service on or after that date.
Section 2-4
RETIREMENT AND TERMINATION BENEFITS
2-4-1 DEFERRED RETIREMENT BENEFITS. For Plan Years beginning before July 1,
1988, if a Participant remains an Employee after his Normal Retirement Date,
such Participant's benefit under the Harris/DPI Plan shall equal dollar for
dollar the monthly amount of the benefit which he would have received had he
retired on his Normal Retirement Date and shall not be increased on account of
any compensation, service, or by any actuarial adjustment, after such date.
This limitation shall not apply to Plan Years beginning on or after July 1,
1988 for Participants who complete an Hour of Service on or after such date.
2-4-2 EARLY RETIREMENT BENEFITS.
(a) EARLY UNREDUCED RETIREMENT DATE PROVISIONS.
(1) EUR DATE. Notwithstanding any contrary Plan provision, the term
"EUR Date" means for each Former 3M Participant the first day of the
month coinciding with or next following the date such Participant
meets (or would have met if he had continued in employment as an
Employee) the age and service criteria set forth below:
<TABLE>
<CAPTION>
ATTAINED AGE
AT BENEFIT COMPLETED YEARS OF
COMMENCEMENT DATE BENEFIT SERVICE
----------------- ----------------------
<S> <C>
62 to 65 28
61 29
60 30
59 32
58 34
</TABLE>
Such age and service criteria shall be adjusted, for any
Annuity Starting Date which is not on a Participant's birthday
in accordance with the following rules:
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<PAGE> 72
(i) The number of completed years of Benefit Service
for a Participant whose Annuity Starting Date is
between his 58th and 60th birthdates shall be equal
to (A) the completed years of Benefit Service for his
"attained age" at his last birthday reduced by (B)
the product of 1/6 and the number of months by which
his "attained age" at his Annuity Starting Date
exceeds his "attained age" at his last birthday.
(ii) The number of completed years of Benefit
Service for a Participant whose Annuity Starting Date
is between his 60th and 62th birthdates shall be
equal to (A) the completed years of Benefit Service
for his "attained age" at his last birthday reduced
by (B) the product of 1/12 and the number of months
by which his "attained age" at his Annuity Starting
Date exceeds his "attained age" at his last birthday.
(2) UNREDUCED BENEFIT. A Former 3M Participant who
actually terminates employment as an Employee on or after his
EUR Date shall be entitled to receive a monthly benefit equal
to his Accrued Benefit determined as of the date his
employment as an Employee terminates and the payment of such
benefit be scheduled to commence as of his Normal Retirement
Date, if he is then living, or, if such Participant elects in
writing, as of his EUR Date or the first day of any month
after his EUR Date and before his Normal Retirement Date.
(3) SOCIAL SECURITY SUPPLEMENT. If a Former 3M
Participant who terminates employment as an Employee on or
after his EUR Date and begins receiving a benefit on or after
his EUR Date but before age 62, such Participant's monthly
benefit payable under this Plan (without regard to the form of
the benefit) shall be increased each month beginning with the
month which includes his Annuity Starting Date and ending with
the month in which he reaches age 62 or his date of death, if
earlier, by an amount which shall equal the amount of his
Social Security Benefit (as determined under Section
2-2-15(b)(3)(A); However, if payment of the supplement
described in this Section 2-4-2(a)(3) commenced after June
30, 1989 but before April 30, 1990, then his Social Security
Benefit shall be calculated as of his most recent termination
date without regard to the June 30, 1989 limitation contained
in Section 2-2-15(b(3)(A).
(4) MCCARTHY ENTERPRISES, INC. (i) GENERAL. Solely for
purposes of determining whether an Eligible McCarthy Employee
is eligible for the early unreduced retirement provisions of
this Section 2-4-2(a) with
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<PAGE> 73
respect to his Accrued Benefit as determined as of December 31, 1986,
his continuous employment with McCarthy (as defined in Section 2-4-3)
from December 31, 1986 until the date he first terminates employment
with McCarthy shall be deemed to be employment as an Employee under
this Plan. If an Eligible McCarthy Employee is reemployed as an
Employee after December 31, 1986, his eligibility for the early
unreduced retirement provisions with respect to that portion of his
Accrued Benefit, if any, accrued after December 31, 1986 shall be
determined without regard to the special rules of this Section
2-4-2(a)(4). Except as provided in Section 2-4-3 and this Section
2-4-2(a)(4), no individual shall receive service credit for
employment with McCarthy for any purpose under this Plan.
(ii) ELIGIBLE MCCARTHY EMPLOYEE. The term "Eligible
McCarthy Employee" shall mean each Former 3M
Participant who is a McCarthy Employee described in
Section 2-4-3, and whose projected EUR Date as
determined as of December 31, 1986 was on or before
January 1, 2002.
(5) THE MILNER COMPANY. (i) GENERAL. Solely for
purposes of determining whether an Eligible Milner Employee is
eligible for the early unreduced retirement provisions of this
Section 2-4-2 with respect to his Accrued Benefit as
determined as of April 26, 1987, his continuous employment
with Milner (as defined in Section 2-4-3) from April 26, 1987
until the date he first terminates employment with Milner
shall be deemed to be employment as an Employee under this
Plan. Except as provided in Section 2-4-3 and this Section
2-4-2(a)(5) no individual shall receive service credit for
employment with Milner for any purpose under this Plan.
(ii) ELIGIBLE MILNER EMPLOYEE. The term "Eligible
Milner Employee" shall mean each Former 3M
Participant who is a Milner Employee described in
Section 2-4-3, and whose projected EUR Date as
determined as of April 26, 1987 was on or before May
1, 2002.
(b) EARLY RETIREMENT TIMING AND AMOUNT.
(1) TIMING. Each Former 3M Participant who terminates
employment as an Employee as of the first day of the month
coincident with or next following the date he reaches age 55
shall be fully vested in his Accrued Benefit (without regard
to his completed Years of Service) and such Participant shall
be entitled to begin receiving his Accrued Benefit as of such
date or as of the first day of
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<PAGE> 74
any calendar month before his Normal Retirement Date; provided (1) his
employment actually terminates on or before such date and (2) his
properly completed election is filed with the Plan Sponsor within the
90-day period ending on such date.
(2) AMOUNT. If a Former 3M Participant terminates
employment as an Employee in accordance with Section
2-4-2(b)(1) before his EUR Date if he has an EUR Date or if he
does not have an EUR Date, then his benefit shall be the
greater of (A) or (B) where
(A) equals the greater of (i) or (ii) where
(i) equals his Accrued Benefit as determined
under Section 3.1 of the Plan taking into
account the minimum benefit in accordance
with Section 2-2-1(a)(3) as reduced in
accordance with Section 5.2(c) as if such
Former 3M Participant had elected to begin
receiving his benefit as of the date his
employment actually terminates and
(ii) equals his Accrued Benefit as
determined under Section 3.1 of the Plan
taking into account the minimum benefit in
accordance with Section 2-2-1(a)(3) as
reduced by the product of 5% and 1/12th of
the number of months by which his Annuity
Starting Date precedes the earlier of his
Normal Retirement Date or his EUR Date, if
any and
(B) equals his Accrued Benefit as determined in
accordance with Section 2-2-1(b) as reduced by the
product of 5% and 1/12th of the number of months by
which his Annuity Starting Date precedes the earlier
of his 62nd birthday or his EUR Date, if any.
If such Participant terminates employment on or after his EUR
Date, his benefit shall be determined in accordance with
Section 2-4-2(a).
(c) NORMAL BENEFIT FORM - FULLY SUBSIDIZED JOINT AND 50% SURVIVOR
ANNUITY. Notwithstanding Section 6.1(a)(2), each Former 3M
Participant who finally terminates employment as an Employee on or
after age 55 shall be entitled to receive retirement benefits
(exclusive of any supplement described in Section 2-4-2(a)(3)) in the
form of a fully subsidized (as described in Code Section 417) joint
and 50% survivor annuity payable to the Participant if the Participant
has a Spouse on his Benefit Commencement Date and the monthly benefit
payable to the Participant during his lifetime shall be equal to the
monthly benefit payable to such Participant in the single life form of
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<PAGE> 75
annuity described in Section 6.3(b) and after the Participant's death
a monthly benefit equal to 50% of the benefit payable to the
Participant shall be payable to his surviving Spouse for such Spouse's
lifetime.
2-4-3 VESTED BENEFITS.
(a) RETURN OF EMPLOYEE CONTRIBUTIONS. If a Former LBP
Participant's employment terminates before his Vested Date, he shall
not be entitled to any benefit under the Plan other than a return of
his own contributions made prior to 1982, if any, with interest as
described in Section 2-4-4.
(b) MCCARTHY ENTERPRISES, INC. The term "McCarthy Employee" shall
mean each individual (1) who is an Eligible Employee at the Columbus,
Ohio District Office or the Cincinnati, Ohio District Office on
December 31, 1986, (2) who as of such date has not reached his Vested
Date and (3) who as of the close of business on such date becomes an
employee of McCarthy Enterprises, Inc. ("McCarthy") as a result of the
sale of certain assets of the Plan Sponsor to McCarthy on such date
the benefit, if any, payable to or on behalf of a McCarthy Employee
shall be determined as follows:
(1) Solely for purposes of determining a McCarthy
Employee's nonforfeitable interest in his Accrued Benefit as
of December 31, 1986, his years of Vesting Service and his
Vested Date with respect to such Accrued Benefit shall be
determined as if his continuous employment with McCarthy from
December 31, 1986 until the date he first terminates
employment with McCarthy is employment as an Employee under
this Plan.
(2) Such Accrued Benefit shall be payable to him as of
his Normal Retirement Date or as of the first day of any month
coinciding with or following the date on which he reaches age
55 and completes 10 years of Vesting Service (as determined in
accordance with this Section 2-4-3(b)) and any survivor
benefit under Section 7 attributable to such Accrued Benefit
shall be payable to his Spouse.
(3) No benefit shall be payable under this Plan to any
McCarthy Employee who terminates employment with McCarthy
before he completes 10 years of Vesting Service or, if he is
an employee of McCarthy on July 1, 1989, 5 years of Vesting
Service except to the extent a benefit is payable to such
individual as a result of reemployment as an Eligible Employee
after December 31, 1986.
(4) If a McCarthy Employee is reemployed as an Eligible
Employee after December 31, 1986, his nonforfeitable interest
in that portion of
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<PAGE> 76
his Accrued Benefit, if any, accrued after such date shall be
determined solely with respect to his years of Vesting Service under
this Plan without regard to the special rules of this Section
2-4-3(b) and no such individual shall receive service credit (for
vesting or benefit purposes) for employment with McCarthy with respect
to any benefits accrued under this Plan after December 31, 1986.
(c) THE MILNER COMPANY. The term "Milner Employee" shall mean
each individual (1) who is an Eligible Employee at the Headquarters
Office of Harris/DPI in Atlanta, Georgia, an Atlanta Region Office or
a Fort Lauderdale Region Office on April 26, 1987, (2) who as of such
date has not reached his Vested Date and (3) who as of April 27, 1987
becomes an employee of The Milner Company ("Milner") as a result of
the sale of certain assets of the Plan Sponsor to Milner on such date.
The nonforfeitable benefit, if any, payable to or on behalf of a
Milner Employee shall be determined as follows
(1) Solely for purposes of determining a Milner
Employee's nonforfeitable interest in his Accrued Benefit as
of April 26, 1987, his years of Vesting Service and his Vested
Date with respect to such Accrued Benefit shall be determined
as if his continuous employment with Milner from April 26,
1987 until the date he first terminates employment with Milner
is employment as an Employee under this Plan.
(2) Such Accrued Benefit shall be payable to him as of
his Normal Retirement Date or as of the first day of any month
coinciding with or following the date on which he reaches age
55 and completes 10 years of Vesting Service (as determined in
accordance with this Section 2-4-3(c)) and any survivor
benefit under Section 7 attributable to such Accrued Benefit
shall be payable to his Spouse.
(3) No benefit shall be payable under this Plan to any
Milner Employee who terminates employment with Milner before
he completes 10 years of Vesting Service, or, if he is an
Employee of Milner on July 1, 1989, 5 years of Vesting
Service (as determined in accordance with this Section
2-4-3(c)) except to the extent a benefit is payable to such
individual as a result of reemployment as an Eligible Employee
after April 26, 1987.
(4) If a Milner Employee is reemployed as an Eligible
Employee after April 26, 1987, his nonforfeitable interest in
that portion of his Accrued Benefit, if any, accrued after
April 26, 1987 shall be determined solely with respect to his
years of Vesting Service under
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<PAGE> 77
this Plan without regard to the special rules of this Section
2-4-3(c) and no such individual shall receive service credit (for
vesting or benefit purposes) for employment with Milner with respect
to any benefits accrued under this Plan after April 26, 1987.
2-4-4 BENEFITS ATTRIBUTABLE TO MANDATORY PARTICIPANT CONTRIBUTIONS.
(a) INVOLUNTARY CASHOUT. If a Former LBP Participant terminates
employment prior to his Vested Date and the Actuarial Equivalent
single sum value of his accrued benefit attributable to his
contributions contributed to the Plan prior to 1982 as determined in
accordance with Code Section 411(c) is $3500 or less, such
participant shall receive a single sum distribution of his entire
accrued benefit attributable to such employee contributions and the
nonvested portion of his Accrued Benefit shall be treated as a
forfeiture unless he repays such distribution with interest as
described in Section 2-4-4(e).
(b) RIGHT OF IN SERVICE WITHDRAWAL. At any time prior to his
termination of employment, a Former LBP Participant who contributed to
the Plan prior to 1982 may request a withdrawal of his contributions
which shall be paid in the normal annuity form described in Section
6.1 of the Plan. Notwithstanding the foregoing, a Former LBP
Participant may request (subject to the spousal consent rules of
Section 6.2 of the Plan unless his nonforfeitable benefit was
attributable entirely to the employee contributions and the
distribution was made before October 22, 1986) to receive a single sum
distribution of his contributions to the Plan prior to 1982. A
Participant who withdraws his contributions under this Section 2-4-4
at any time on or after January 1, 1982 and who thereafter repays the
amount refunded with interest as provided in Section 2-4-4(d) below
shall not be entitled to withdraw his contributions again prior to his
Annuity Starting Date.
(c) VOLUNTARY WITHDRAWAL ON TERMINATION. If a Former LBP
Participant terminates employment and the Actuarial Equivalent single
sum value of his vested Accrued Benefit attributable to employer and
employee contributions exceeds $3500, such Participant's Accrued
Benefit shall be paid in the normal annuity form described in
accordance with Section 6.1 of the Plan. Notwithstanding the
foregoing, such Participant may request (subject to the spousal
consent rules of Section 6.2 of the Plan unless his nonforfeitable
benefit was attributable entirely to employee contributions and the
distribution was made before October 22, 1986) to receive a single sum
distribution of his entire Accrued Benefit attributable to his
employee contributions. If he does not repay such distribution with
interest as described in Section 2-4-4(d), then any benefit to which
such Participant (or the spouse of such Participant) may become
entitled under the Plan shall be
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<PAGE> 78
recomputed by excluding an amount equal to his accrued benefit derived
from employee contributions as determined in accordance with Code
Section 411(c).
(d) INTEREST. Interest referred to in this Section 2-4-4 shall
be computed at an annual rate of 3%, compounded annually, for periods
prior to January 1, 1976, at an annual rate of 5%, compounded
annually, for periods after 1975 but prior to July 1, 1988 and at an
annual rate of 120% of the Federal mid-term rate (as in effect under
Code Section 1274 for the first month of the Plan Year), compounded
annually from July 1, 1988 until such Determination Date or repayment
date, if applicable. The interest rate shall be adjusted from time to
time in accordance with regulations under Code Section 411(c).
(e) REPAYMENT. Repayment described in this Section 2-4-4 means
repayment to the Plan of the amount of the distribution together with
interest at the rates provided in Section 2-4-4(d) in cash before (i)
in the case of a distribution on account of a separation from service,
the earlier of 5 years after the first date on which the Participant
resumes employment as an Eligible Employee or the close of 6
consecutive Breaks in Service following the distribution or (ii) in
the case of any other withdrawal, 5 years after the date of the
distribution.
Section 2-5
OPTIONAL FORMS OF BENEFITS
2-5-1 FORMER LBP PARTICIPANTS. Subject to Section 6.2 of the Plan each
Former LBP Participant may elect to have the following optional payment forms
at his Annuity Starting Date in addition to the optional payment forms
described in Section 6.3 of the Plan:
OPTION A:
A Participant who contributed to the Plan prior to 1982 also may elect to
have his contributions with interest refunded to him under Section 2-4-4 at
the time his first monthly benefit payment is made notwithstanding that he may
already have withdrawn and repaid such contributions after 1981. In the event
a Participant elects to have his contributions with interest refunded to him,
his Accrued Benefit the amount of his benefits shall be recomputed by excluding
from the annual amount of such benefit an amount equal to the accrued benefit
derived from and the Actuarial Equivalent of the remaining benefit which would
be payable to the Participant in a Straight Life Annuity may be paid in any
optional form under Section 6.3.
- 15 -
<PAGE> 79
OPTION B:
A single sum cash distribution of the portion of his benefit accrued under the
Harris/LBP Plan as of December 31, 1981, and a monthly benefit payable under
any optional form described in Section 6.3 of the Plan for that portion of his
benefit accrued under the Plan after December 31, 1981.
2-5-2 FORMER 3M PARTICIPANTS.
(1) GENERAL. Subject to Section 6.2 and to the limitations in
this Section 2-5-2, each Former 3M Participant may elect to have that
portion of his Accrued Benefit which does not exceed such
Participant's benefit accrued under the 3M Plan as of his transfer
date ("3M Benefit") paid in accordance with the terms of one of the
options set forth in this Section 2-5-2 as of his Annuity Starting
Date in an amount equal to the Actuarial Equivalent of the 3M Benefit
to which the Participant otherwise would be entitled under Section
6.3(b). The excess, if any, of such Participant's Accrued Benefit
under this Plan over his 3M Benefit shall be payable under one of the
options set forth in Section 6.3. A benefit paid under this Section
2-5-2 shall be paid subject to the special rules set forth in Section
6.3(a)(2) through Section 6.3(a)(4).
(2) 5 OR 15 YEAR PERIOD CERTAIN AND CONTINUOUS ANNUITY OPTION - means
a monthly benefit which shall be payable during the lifetime of the
Participant and shall, if the Participant dies within 5 or 15 years of
his Annuity Stating Date, as elected by the participant, continue to
be paid to his designated Beneficiary for the balance of such 5 or 15
year period.
Section 2-6
OTHER SURVIVOR BENEFITS
2-6-1 SURVIVING SPOUSE. For distributions made on or after October 22, 1986,
if a Former LBP Participant made contributions to this Plan and such
Participant dies before his Vested Date, such Participant shall be treated as
dying after his Vested Date for purposes of Section 7.1 and any survivor
benefit payable to his surviving spouse under Section 7.1 shall be based on
his Accrued Benefit attributable to his employee contributions then remaining
in the Plan.
2-6-2 OTHER. If a Participant dies prior to his Annuity Starting Date under
this Plan and a survivor annuity benefit is not payable to such Participant's
surviving spouse under Section 7.1 or Section 7.2 of the Plan, then his
Beneficiary shall be entitled to a survivor benefit equal to the amount, if
any, of the Participant's contributions under the Plan prior to 1982, less
withdrawals, with interest thereon computed at
- 16 -
<PAGE> 80
the rate described in Section 2-4-4, compounded annually, to the date of the
Participant's death.
If a Participant dies after his Annuity Starting Date, and if no survivor
annuity benefit is payable to his surviving Spouse and if no benefit
is payable to a Beneficiary under an optional form of benefit, then his
Beneficiary shall be entitled only to the excess, if any, of (1) the
Participant's contributions under the Plan prior to 1982, less withdrawals,
with interest thereon computed at the rates described in Section 2-4-4,
compounded annually, to his benefit commencement date, over (2) the aggregate
of payments made under the Plan to such Participant.
The survivor benefit payable under this Section 2-6-2, if any, shall be paid
in a lump sum in cash.
- 17 -
<PAGE> 81
ATTACHMENT 3 TO EXHIBIT A
TO THE
LANIER WORLDWIDE, INC. PENSION PLAN
FORMER BSD PARTICIPANTS
Section 3-1
APPLICATION
This Attachment 3 shall apply only to those Participants who are Former BSD
Participants.
Section 3-2
DEFINITIONS
The terms in this Section 3-2 shall have the meanings set forth opposite such
terms for purposes of this Attachment 3 and this Plan. Except as provided in
this Section 3-2, a capitalized term shall have the meaning set forth in the
Plan.
3-2-1 FORMER BSD PARTICIPANT - means a person who was a Former Lanier
Participant as described in Attachment 1 to Exhibit A who was employed in the
Business Systems Division and whose employment was involuntarily terminated
after January 10, 1990 or who transferred to Syntrex, Inc. after January 26,
1990 but before March 1, 1990 as a result of the sale of assets between Harris
Corporation and Syntrex, Inc.
Section 3-3
TERMINATION BENEFITS
3-3-1 FULL VESTING. Each Former BSD Participant shall be fully vested in his
Accrued Benefit determined as of the date he terminated employment or
transferred to Syntrex, Inc. If a Former BSD Participant is reemployed as an
Eligible Employee, he shall not receive credit (for vesting or benefit accrual
purposes) for employment with Syntrex, Inc. with respect to any benefits
accrued under this Plan.
3-3-2 IMMEDIATE BENEFIT. If a Former BSD Participant is transferred to
Syntrex, Inc., such Participant shall be eligible, subject to the spousal
consent rules of Section 6.2
- 1 -
<PAGE> 82
of the Plan, to elect by filing with the Plan Sponsor a properly completed
election form an immediate lump sum benefit or an immediate annuity benefit
(life only annuity for a Participant who does not have a spouse on his Annuity
Starting Date, joint and 50% survivor annuity for a Participant who does have a
spouse on his Annuity Starting Date). Such immediate benefit shall be equal to
the Actuarial Equivalent of the benefit which otherwise would be payable to
such Participant in a life only annuity beginning at his Normal Retirement Date
based on his Accrued Benefit determined immediately before he transferred to
Syntrex, Inc.
<PAGE> 83
ATTACHMENT 4 TO EXHIBIT A
TO THE
LANIER WORLDWIDE, INC. PENSION PLAN
CERTAIN ADDITIONAL PROVISIONS
Section 4-1
DEFINITIONS
The following definitions were in effect for periods before August 1, 1991.
4-1-1 AVERAGE COMPENSATION - means as of any Determination Date for those
Participants who were employed as an Employee on or after July 1, 1989 or, for
Former LBP Participants, January 1, 1989, and who terminated employment before
August 1, 1991, one-twelfth of the average of a Participant's Compensation
during the 5 consecutive calendar year period in which such average is highest
(or actual number of consecutive calendar years if less than 5) out of the 10
calendar year period (or actual number of such calendar years if less than 10)
during which the Participant was an Employee ending immediately before the
calendar year which includes such Determination Date. Notwithstanding the
foregoing, if the Determination Date is a December 31 which occurs on or after
the Participant's earliest Early Retirement Date or his Normal Retirement Age
and the Participant actually terminates employment on such Determination Date,
then the 10 calendar year period shall include the calendar year which ends
with such Determination Date. See Attachments 1 through 3 of this Exhibit A
for the definition which applied to Participants who were not employed as an
Employee after June 30, 1989 or, for Former LBP Participants, after December
31, 1988.
4-1-2 COMPENSATION - means for each Employee the sum of (a) and (b) minus (c),
where
(a) equals (i) the total compensation of an Employee for any
calendar year or portion thereof reported by one or more Affiliates on
Internal Revenue Service Form W-2 (or any successor form) for such
Employee for such period which is includible in his gross income for
federal income tax purposes or (ii) for Plan Years beginning after
June 30, 1990, compensation as defined in Section 3.11(a) of the
Plan,
(b) equals the elective deferrals made by an Affiliate on behalf
of such Employee that are not includible in his gross income for
federal income tax purposes for such period because they are
contributed to a cash or deferred
- 1 -
<PAGE> 84
arrangement described in Code Section 401(k) or because they are
excluded under Code Section 125, and
(c) equals any payments made under a severance pay plan or
program, any payment made in consideration of an Employee's release of
claims in favor of an Affiliate, any payment attributable to foreign
assignment differential and any payments made under Longer Term
Incentive Plans.
Notwithstanding the foregoing, Compensation shall not include any remuneration
for services as a "leased employee" of an Affiliate and Compensation for any
calendar year beginning after December 31, 1988 shall not include any amount in
excess of $200,000 as adjusted for changes in the cost of living as provided in
Code Section 415(d). This definition shall apply for calendar years beginning
after June 30, 1989 or, for Former LBP Participants, after December 31, 1988,
and before May 14, 1990. See Attachments 1 through 3 of this Exhibit A for the
definition which applied to Participants who were not employed as an Employee
after June 30, 1989 or, for Former LBP Participants, after December 31, 1988.
4-1-3 EMPLOYER - means for periods on or after October 1, 1989 and before
January 2, 1991, the Plan Sponsor, the Executive Conference Center; Lanier
Financial Services, Inc., and for the period from October 1, 1989 through
October 30, 1989, Harris Technical Services Corporation; and each other
affiliate which the Board designates in writing as such from time to time.
Section 4-2
LANIER PLAZA EMPLOYEES
The term "Plaza Employee" shall mean each individual (who was an Eligible
Employee with the Executive Conference Center, Inc. before January 1, 1991 and
who as of the close of business on January 1, 1991 became an employee of Hotel
Management Services, Inc.). No Plaza Employee shall accrue any additional
benefits under the Plan after January 1, 1991. Solely for purposes of
determining a Plaza Employee's nonforfeitable interest in his Accrued Benefit
as of January 1, 1991, his years of Vesting Service and his Vested Date with
respect to such Accrued Benefit shall be determined as if his employment with
Hotel Management Services, Inc. is employment as an Employee under this Plan as
long as such Plaza Employee is treated as a "leased employee" of an Affiliate
under Code Section 414. His Accrued Benefit shall be payable to him in
accordance with Section 6; however, a Plaza Employee shall not be treated as
having terminated employment until such time as he is no longer treated as a
"leased employee" under this Plan or such earlier time as distribution is
permissible under the Code and consistent with the timing rules of Section 6.
<PAGE> 1
Exhibit 10(j)
LANIER WORLDWIDE, INC.
SAVINGS INCENTIVE PLAN
(Amended and Restated June /s/ 28, 1994)
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
HISTORY AND EFFECTIVE DATE
ARTICLE II
CONSTRUCTION
PAGE
----
2.1 Controlling Laws . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Type of Plan . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Construction . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
DEFINITIONS
3.1 Account . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Average Contribution Percentage . . . . . . . . . . . . . . 3
3.4 Average Deferral Percentage . . . . . . . . . . . . . . . . 3
3.5 Before-Tax Account . . . . . . . . . . . . . . . . . . . . . 3
3.6 Before-Tax Contributions . . . . . . . . . . . . . . . . . . 3
3.7 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . 4
3.8 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.9 Break in Service . . . . . . . . . . . . . . . . . . . . . . 5
3.10 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
- i -
<PAGE> 3
Page
----
3.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 5
3.12 Contribution Percentage . . . . . . . . . . . . . . . . . . 6
3.13 Deferral Percentage . . . . . . . . . . . . . . . . . . . . 6
3.14 Earnings and Profits . . . . . . . . . . . . . . . . . . . . 6
3.15 Election Form . . . . . . . . . . . . . . . . . . . . . . . 7
3.16 Elective Deferrals . . . . . . . . . . . . . . . . . . . . . 7
3.17 Eligible Employee . . . . . . . . . . . . . . . . . . . . . 7
3.18 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.19 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.20 Employment Commencement Date . . . . . . . . . . . . . . . . 7
3.21 Employment Termination Date . . . . . . . . . . . . . . . . 8
3.22 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.23 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.24 Excess Aggregate Contributions . . . . . . . . . . . . . . . 8
3.25 Excess Contributions . . . . . . . . . . . . . . . . . . . . 8
3.26 Excess Deferrals . . . . . . . . . . . . . . . . . . . . . . 9
3.27 Family Member . . . . . . . . . . . . . . . . . . . . . . . 9
3.28 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.29 Harris/LBP Plan . . . . . . . . . . . . . . . . . . . . . . 9
3.30 Highly Compensated Participant . . . . . . . . . . . . . . . 9
3.31 Hour of Service . . . . . . . . . . . . . . . . . . . . . . 9
- ii -
<PAGE> 4
Page
----
3.32 Matching Account . . . . . . . . . . . . . . . . . . . . . . 9
3.33 Matching Contributions . . . . . . . . . . . . . . . . . . . 9
3.34 Matched Deferrals . . . . . . . . . . . . . . . . . . . . . 9
3.35 Maximum Deferral Percentage . . . . . . . . . . . . . . . . 10
3.36 Nonhighly Compensated Participant . . . . . . . . . . . . . 10
3.37 Normal Retirement Age . . . . . . . . . . . . . . . . . . . 10
3.38 Participant . . . . . . . . . . . . . . . . . . . . . . . . 10
3.39 Participation Requirement . . . . . . . . . . . . . . . . . 10
3.40 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.41 Plan Quarter . . . . . . . . . . . . . . . . . . . . . . . . 10
3.42 Plan Sponsor . . . . . . . . . . . . . . . . . . . . . . . . 10
3.43 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.44 Rollover Account . . . . . . . . . . . . . . . . . . . . . . 10
3.45 TRA 86 Requirements . . . . . . . . . . . . . . . . . . . . 10
3.46 Trust Agreement . . . . . . . . . . . . . . . . . . . . . . 11
3.47 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.48 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.49 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . 11
3.50 Year of Service . . . . . . . . . . . . . . . . . . . . . . 11
- iii -
<PAGE> 5
Page
----
ARTICLE IV
PARTICIPATION
4.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 Pre-Merger Plan . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Reemployment Rule . . . . . . . . . . . . . . . . . . . . . 13
4.4 Absence from Service, Change in Status . . . . . . . . . . . 13
4.5 Plan Not An Employment Contract . . . . . . . . . . . . . . 13
4.6 Information . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
CONTRIBUTIONS AND ACCOUNTS
5.1 Before-Tax Contributions . . . . . . . . . . . . . . . . . . 15
(a) Percentage . . . . . . . . . . . . . . . . . . . . . 15
(b) Payroll Deductions . . . . . . . . . . . . . . . . . 15
(c) Account Credits and Vesting . . . . . . . . . . . . 15
(d) Investment Gains and Losses . . . . . . . . . . . . 15
5.2 Election Rules
(a) Initial Election . . . . . . . . . . . . . . . . . . 15
(b) Revised Election . . . . . . . . . . . . . . . . . . 16
(c) Termination of Election . . . . . . . . . . . . . . 16
(d) Resumption After Termination . . . . . . . . . . . . 16
(e) Timeliness and Election Procedures . . . . . . . . . 16
- iv -
<PAGE> 6
Page
----
(f) Plan Sponsor Action . . . . . . . . . . . . . . . . 16
5.3 Matching Contributions and Forfeitures . . . . . . . . . . . 16
(a) Amount . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Forfeitures . . . . . . . . . . . . . . . . . . . . 17
(c) Timing . . . . . . . . . . . . . . . . . . . . . . 17
(d) Insufficient Earnings and Profits . . . . . . . . . 17
(e) Account Credits and Vesting . . . . . . . . . . . . 17
(f) Investment Gains and Losses . . . . . . . . . . . . 17
5.4 Limitations on Allocations . . . . . . . . . . . . . . . . . 17
(a) General Rule . . . . . . . . . . . . . . . . . . . . 17
(b) Section 415 Limitations . . . . . . . . . . . . . . 17
(1) General Rule . . . . . . . . . . . . . . . 17
(2) Coordination . . . . . . . . . . . . . . . 18
(3) Corrections . . . . . . . . . . . . . . . . 18
(c) Individual Dollar Limit . . . . . . . . . . . . . . 19
(1) This Plan . . . . . . . . . . . . . . . . . 19
(2) Other Plans . . . . . . . . . . . . . . . . 19
(3) Claim . . . . . . . . . . . . . . . . . . . 19
(4) Determination of Investment Gain
or Loss . . . . . . . . . . . . . . . . . . 20
(5) Distribution of Excess Deferrals . . . . . 20
(6) Forfeiture of Related Match . . . . . . . . 20
- v -
<PAGE> 7
Page
----
(d) Limitations on Before-Tax Contributions
for Highly Compensated Participants . . . . . . . . 20
(1) General . . . . . . . . . . . . . . . . . . 20
(2) Special Rules . . . . . . . . . . . . . . . 20
(A) Other Plan or Arrangements . . . . 20
(B) Other Requirements . . . . . . . . 21
(3) Distribution of Excess
Contributions . . . . . . . . . . . . . . . 21
(4) Determination of Investment Gains
or Losses . . . . . . . . . . . . . . . . . 21
(5) Forfeiture of Related Match . . . . . . . . 21
(6) Qualified Matching Contribution . . . . . 21
(e) Limitations on Matching Contributions
for Highly Compensated Participants . . . . . . . . 22
(1) General . . . . . . . . . . . . . . . . . . 22
(2) Special Rules . . . . . . . . . . . . . . . 22
(A) Other Plan or Arrangements . . . . 22
(B) Other Requirements . . . . . . . . 23
(3) Distribution of Excess
Aggregate Contributions . . . . . . . . . . 23
(f) Multiple Use Limitation . . . . . . . . . . . . . . 23
(g) Limitations on Deductibility . . . . . . . . . . . . 23
(h) Withholding Obligations and Account Balance . . . . 23
(i) Allocation Corrections . . . . . . . . . . . . . . . 24
- vi -
<PAGE> 8
Page
----
5.5 Rollover Accounts . . . . . . . . . . . . . . . . . . . . . 24
5.6 Account Investments . . . . . . . . . . . . . . . . . . . . 24
5.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI
PLAN BENEFITS
6.1 Retirement Benefit . . . . . . . . . . . . . . . . . . . . . 26
6.2 Disability Benefit . . . . . . . . . . . . . . . . . . . . . 26
(a) Full Vesting . . . . . . . . . . . . . . . . . . . . 26
(b) Definition . . . . . . . . . . . . . . . . . . . . . 26
(c) Determination . . . . . . . . . . . . . . . . . . . 27
6.3 Death Benefit . . . . . . . . . . . . . . . . . . . . . . . 27
6.4 Vested Benefit . . . . . . . . . . . . . . . . . . . . . . . 27
(a) General Rule . . . . . . . . . . . . . . . . . . . . 27
(b) Vesting Schedule . . . . . . . . . . . . . . . . . . 27
(c) Reemployment . . . . . . . . . . . . . . . . . . . . 28
6.5 Forfeiture of Benefit of Missing Claimant . . . . . . . . . 28
6.6 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Request . . . . . . . . . . . . . . . . . . . . . . 29
(b) Administration . . . . . . . . . . . . . . . . . . . 29
(c) Limitations and Security . . . . . . . . . . . . . . 29
(d) Interest Rate . . . . . . . . . . . . . . . . . . . 30
- vii -
<PAGE> 9
Page
----
(e) Repayment and Default . . . . . . . . . . . . . . . 30
(f) Mechanics . . . . . . . . . . . . . . . . . . . . . 31
(g) Special Powers . . . . . . . . . . . . . . . . . . . 32
6.7 No In-Service Withdrawals . . . . . . . . . . . . . . . . . 32
ARTICLE VII
BENEFIT DISTRIBUTION
7.1 Method . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.2 Distribution Deadlines . . . . . . . . . . . . . . . . . . . 33
(a) General Rule . . . . . . . . . . . . . . . . . . . . 33
(b) $3500 or Less . . . . . . . . . . . . . . . . . . . 33
(c) More than $3500 . . . . . . . . . . . . . . . . . . 33
(d) Statutory Deadlines . . . . . . . . . . . . . . . . 33
(1) Participant . . . . . . . . . . . . . . . . 33
(i) Initial Distribution . . . . . . . 33
(ii) Required Beginning Date . . . . . . 34
(2) Beneficiary . . . . . . . . . . . . . . . . 34
7.3 Direct Rollover . . . . . . . . . . . . . . . . . . . . . . 34
7.4 Claim for Benefit . . . . . . . . . . . . . . . . . . . . . 35
7.5 Mistakes . . . . . . . . . . . . . . . . . . . . . . . . . . 35
- viii -
<PAGE> 10
Page
----
ARTICLE VIII
NAMED FIDUCIARIES AND PLAN SPONSOR
8.1 Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . 36
8.2 Allocation and Delegation by Named
Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . 36
8.3 Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.4 Dual Fiduciary Capacities . . . . . . . . . . . . . . . . . 36
8.5 Plan Sponsor Power and Duties . . . . . . . . . . . . . . . 36
(a) General . . . . . . . . . . . . . . . . . . . . . . 36
(b) Records . . . . . . . . . . . . . . . . . . . . . . 36
(c) Information . . . . . . . . . . . . . . . . . . . . 37
(d) Reliance . . . . . . . . . . . . . . . . . . . . . . 37
(e) Expenses . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE IX
TRUST FUND AND TRUSTEE
ARTICLE X
AMENDMENT AND TERMINATION
10.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . 39
- ix -
<PAGE> 11
Page
----
ARTICLE XI
MISCELLANEOUS
11.1 Spendthrift Clause . . . . . . . . . . . . . . . . . . . . . 40
11.2 Legally Incompetent . . . . . . . . . . . . . . . . . . . . 40
11.3 Benefits Supported Only by Trust Fund . . . . . . . . . . . 40
11.4 Discrimination . . . . . . . . . . . . . . . . . . . . . . . 40
11.5 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.6 Nonreversion . . . . . . . . . . . . . . . . . . . . . . . . 41
11.7 Merger or Consolidation . . . . . . . . . . . . . . . . . . 41
11.8 Reporting and Disclosure . . . . . . . . . . . . . . . . . 42
11.9 Top Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . 42
(a) Determination . . . . . . . . . . . . . . . . . . . 42
(b) Special Top Heavy Plan Rules . . . . . . . . . . . . 43
11.10 Qualified Domestic Relations Order . . . . . . . . . . . . . 43
Exhibit A
- x -
<PAGE> 12
LANIER WORLDWIDE, INC.
SAVINGS INCENTIVE PLAN
ARTICLE I
HISTORY AND EFFECTIVE DATE
This Lanier Worldwide, Inc. Savings Incentive Plan amends, restates
and renames the Harris/3M Document Products, Inc. Savings Incentive Plan as
originally effective as of April 1, 1986. That Plan was last amended and
restated effective as of July 1, 1987.
This amendment and restatement is intended to satisfy all applicable
TRA 86 Requirements effective as of July 1, 1989 and any earlier dates required
by applicable TRA 86 Requirements.
The name of this Plan was changed, effective as of October 1, 1989, as
a result of the merger of the Harris/Lanier Advantage Plan ("Harris/LBP Plan")
into this Plan, effective as of October 1, 1989. The Harris/LBP Plan was
originally effective as of October 1, 1986. This Plan also is intended to
amend the Harris/LBP Plan to the extent necessary to satisfy applicable TRA 86
Requirements.
This Plan was amended and restated on April 30, 1990. This amendment
and restatement is effective June 30, 1992.
This Plan was further amended on June/S/ 28, 1994, to satisfy all
applicable TRA 86 Requirements and the requirements of subsequent legislation
that are effective after July 1, 1989.
<PAGE> 13
ARTICLE II
CONSTRUCTION
2.1 CONTROLLING LAWS. To the extent state laws are not preempted
by federal law, this Plan and the related Trust Agreement shall be construed
and interpreted under the laws of the State of Maryland.
2.2 TYPE OF PLAN. The Plan Sponsor intends that this Plan and the
related Trust Agreement satisfy the requirements for tax exempt status under
Code Section 401 (including Code Section 401(k) and Section 401(m)), Code
Section 501(a) and related Code sections as a "profit sharing plan" which
includes a cash or deferred arrangement. The provisions of this Plan and the
Trust Agreement shall be construed and interpreted in accordance with the
requirements of the Code, ERISA, and the applicable regulations.
2.3 CONSTRUCTION. The headings and subheadings in this Plan have
been inserted for convenience of reference only and are to be ignored in the
construction of its provisions. Wherever appropriate, the masculine shall be
read as the feminine, the plural as the singular, and the singular as the
plural. References in this Plan to a section (Section ) shall be to a section
in this Plan unless otherwise indicated. References in this Plan to a section
of the Code, ERISA or any other federal law shall also refer to the regulations
issued under such section.
Further, except as expressly stated otherwise, no provision of this
Plan or the related Trust Agreement is intended to nor shall grant any rights
to Participants or Beneficiaries or any interest in the Fund in addition to
those minimum rights or interests required to be provided under ERISA and the
Code.
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<PAGE> 14
ARTICLE III
DEFINITIONS
The capitalized terms and phrases used in this Plan shall have the
meanings set forth in this Article 3:
3.1 ACCOUNT -- means the balance to the credit of a Participant
under this Plan. When amounts in a Participant's Account are described in
terms of their origin, the Account may be divided into the Before-Tax Account,
the Matching Account, and the Rollover Account, if any.
3.2 AFFILIATE -- means for any Plan Year the Plan Sponsor and any
trade or business, whether or not incorporated, which (during such year) is a
single employer with the Plan Sponsor under Code Section 414(b), (c), (m) or
(o); provided, solely for purposes of Section 5.4(b) (Section 415 Limitations),
the phrase "more than 50 percent" shall be substituted for "at least 80 percent"
each place that "at least 80 percent" appears in Code Section 1563(a)(1).
3.3 AVERAGE CONTRIBUTION PERCENTAGE -- means for each Plan Year
the average (expressed as a percentage) of the Contribution Percentages
computed separately (a) for the group of Highly Compensated Participants during
such Plan Year and (b) for the group of Nonhighly Compensated Participants
during such Plan Year.
3.4 AVERAGE DEFERRAL PERCENTAGE -- means for each Plan Year the
average (expressed as a percentage) of the Deferral Percentages computed
separately (a) for the group of Highly Compensated Participants during such
Plan Year and (b) for the group of Nonhighly Compensated Participants during
such Plan Year.
3.5 BEFORE-TAX ACCOUNT -- means the portion of a Participant's
Account attributable to the Before-Tax Contributions made on his behalf under
this Plan.
3.6 BEFORE-TAX CONTRIBUTIONS -- means (a) that part of a
Participant's Compensation (as described in Section 3.11(a)) which he elects
to defer into this Plan and which is intended to be excluded from his gross
income for federal income tax purposes solely by reason of the application of
Code Section 401(k) and Code Section 402(a)(8) and (b) any additional
contribution made by the Plan Sponsor under Section
5.4(d).
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<PAGE> 15
Article III: Definiations
3.7 BENEFICIARY -- means either
(a) if a Participant is married, the person who is his
spouse on his date of death, unless such spouse consents (or consented) on an
Election Form signed before a notary public to the specific Beneficiary
designation made by the Participant, or such spouse's consent is not required
under federal law,
(b) the person or persons so designated in writing by a
Participant on a properly completed Election Form which he delivers to the Plan
Sponsor before his death or, if no such designation is made, or if no person so
designated survives the Participant or, if after checking his last known
mailing address, the whereabouts of the person so designated is unknown,
(c) the person or persons, if any, expressly so
designated by the Participant to receive the death benefit payable under the
group term life insurance program maintained by his Employer or, if no such
designation was made, or if no such person so designated survives the
Participant, or, if after checking his last known mailing address, the
whereabouts of the person so designated is unknown,
(d) the Participant's surviving children (natural and
adopted) in equal shares or, if there are no such surviving children,
(e) the estate of the last survivor as between the
Participant and his Beneficiary, if a personal representative of such person
has qualified within 12 months from the date of such person's death or, if no
personal representative has so qualified,
(f) any heirs-at-law of the Participant and his
Beneficiary, as determined by the Plan Sponsor under the laws of the State of
Georgia, whose whereabouts are known to the Plan Sponsor.
The determination of whether a person is the spouse of a deceased
Participant shall be made by the Plan Sponsor from the Employer's records or
from evidence timely furnished to the Plan Sponsor by the person claiming to be
such spouse.
3.8 BOARD -- means the Board of Directors of the Plan Sponsor, or
any committee of the Board authorized to act for the Board under applicable
law.
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<PAGE> 16
Article III: Definitions
3.9 BREAK IN SERVICE -- means any 12 consecutive month period
which begins on an Employment Termination Date or anniversary of such date
during which an Employee or former Employee fails to complete an Hour of
Service.
3.10 CODE -- means the Internal Revenue Code of 1986, as amended,
or any successor statute, and, in the event an amendment to the Code renumbers
a section of the Code referred to in this Plan, any such reference to such
section automatically shall become a reference to such section as renumbered.
3.11 COMPENSATION -- means for each Participant for any applicable
period,
(a) For purposes of determining the amount of Elective
Deferrals and the Matching Contribution, the regular salary or wages, overtime,
bonuses, commissions, and regional and supplemental differential premiums paid
to such Participant during such period by one or more Employers, but does not
include long term incentive awards, severance payments, or foreign supplemental
allowances.
(b) For purposes of determining the Code Section 415
limitations described in Section 5.4 for Plan Years beginning after June 30,
1990, compensation as defined in Code Section 415(c)(3). The Plan Sponsor may
compute the Code Section 415 limitations with respect to a Plan Year using any
allowable definition of compensation.
(c) For purposes of computing a Participant's Average
Contribution Percentage and Average Deferral Percentage, and for any other
testing purpose with respect to a Plan Year, the Plan Sponsor may use any
allowable definition of compensation.
The Elective Deferrals made by an Employer on behalf of such
Participant that are not includible in his gross income for federal income tax
purposes for such period because they are contributed to a cash or deferred
arrangement described in Code Section 401(k) or because they are excluded
under Code Section 125 shall be included as Compensation for all purposes
except for determining the Code Section 415 limitations.
Compensation shall not include any amounts paid to or on behalf of an
Employee for any period when such Employee is not eligible to make Before-Tax
Contributions under this Plan unless the inability to make Before-Tax
Contributions is due to a suspension under Section 5.2(d) or (f) or the
application of the Code Section 415 limitations described in Section 5.4. For
purposes of this Plan, Compensation shall not include any amount received from
an Affiliate with
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<PAGE> 17
Article III: Definitions
respect to services rendered while the Affiliate was not an Employer.
Compensation for any Plan Year beginning on or after July 1, 1994 shall not
include any amount in excess of $150,000, adjusted for changes in the cost of
living as provided under Code Section 415(d).
3.12 CONTRIBUTION PERCENTAGE -- means with respect to all Highly
Compensated Participants and all Nonhighly Compensated Participants for each
Plan Year, the ratio, calculated separately for each Participant in each such
group, of
(a) the amount of the Matching Contributions, if any, to
be credited for such Plan Year to his Matching Account to
(b) his Compensation for such Plan Year.
For purposes of determining the Contribution Percentages of each
Highly Compensated Participant who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Participants, the Matching Contributions and
Compensation of his "family members" (as described in Code Section 414(q)(6))
shall be treated solely as the Matching Contributions and Compensation of such
Highly Compensated Participant.
3.13 DEFERRAL PERCENTAGE -- means with respect to all Highly
Compensated Participants and all Nonhighly Compensated Participants for each
Plan Year, the ratio, calculated separately for each Eligible Employee in each
such group, of
(a) the amount of his Before-Tax Contributions, if any,
to be credited for such Plan Year to his Before-Tax Employee Account to
(b) his Compensation for such Plan Year.
For purposes of determining the Deferral Percentage of each Highly
Compensated Participant who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Participants, the Before-Tax Contributions and
Compensation of any Family Member shall be treated solely as the Before-Tax
Contributions and Compensation of such Highly Compensated Participant.
3.14 EARNINGS AND PROFITS -- the net income of an Employer as
determined for each Plan Quarter by the Employer for financial accounting
purposes after excluding start-up expenses.
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<PAGE> 18
Article III: Definitions
3.15 ELECTION FORM -- means the form provided by the Plan Sponsor
for making the elections and designations called for under this Plan and no
such form shall be effective unless properly completed and timely delivered in
accordance with such rules as the Plan Sponsor shall adopt from time to time.
3.16 ELECTIVE DEFERRALS -- means for each Participant for each
calendar year, any elective contribution made on behalf of such Participant
under this Plan pursuant to such Participant's election under Section 5.1.
3.17 ELIGIBLE EMPLOYEE -- means for each Plan Year each Employee of
an Employer other than
(a) an Employee who is treated as such solely by reason
of the "leased employee" rules set forth in Code Section 414(n),
(b) an Employee who is a member of (or who is represented
by) collective bargaining unit which has failed to reach an agreement with his
Employer that he be eligible to participate in this Plan,
(c) an Employee who receives no earned income from an
Employer under the Employer's United States payroll system,
(d) an Employee who is employed by the Plan Sponsor at
the Puerto Rico branch,
(e) an Employee who is classified on the personnel
records of an Employer as employed in a temporary, summer, or casual part-time
position for short-term work load, which employment is intended to terminate
upon completion of such assignment.
3.18 EMPLOYEE -- means a person who is employed and paid as a
full-time, part-time, regular or temporary employee of an Affiliate or who is
treated as such under the "leased employee" rules set forth in Code Section
414(n).
3.19 EMPLOYER -- means the Plan Sponsor; for periods before
December 31, 1990, the Executive Conference Center, Inc.; Lanier Financial
Services, Inc.; and each other Affiliate which the Plan Sponsor designates in
writing as such from time to time.
3.20 EMPLOYMENT COMMENCEMENT DATE -- means the first date on which
an Employee first performs an Hour of Service or, if a former Employee is
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<PAGE> 19
Article III: Definitions
reemployed after he has a Break in Service, the first date on which the
reemployed Employee performs an Hour of Service after such Break in Service.
3.21 EMPLOYMENT TERMINATION DATE -- means as to each period of
employment for each Employee the first to occur of (a) the date on which he
quits, retires, is discharged or dies or (b) the date on which a 12 consecutive
month period ends during which he did not perform an Hour of Service.
3.22 ENTRY DATE -- means (1) for periods beginning before October
1, 1989, the first day in the first payroll period in each calendar month; (2)
for periods beginning after September 30, 1989 the first day in the first
payroll period beginning in each Plan Quarter; (3) for periods beginning after
June 30, 1992, the first day of the bi-weekly payroll period beginning on or
after the date on which an Eligible Employee satisfies the Participation
Requirements; and (4) for purposes of Section 5.2(b) hereof, the first day in
the first payroll period beginning after May 1, 1992.
3.23 ERISA -- means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute and, in the event an amendment to
ERISA renumbers a section of ERISA referred to in this Plan, any such reference
to such section automatically shall become reference to such section as
renumbered.
3.24 EXCESS AGGREGATE CONTRIBUTIONS -- means the excess of (a) the
Matching Contributions actually made on behalf of Highly Compensated
Participants for a Plan Year over (b) the maximum amount of such contributions
permitted for such Plan Year under Code Section 401(m)(2)(A). Such maximum
amount shall be determined by reducing Matching Contributions made on behalf of
such Highly Compensated Participants in order of their actual Contribution
Percentages, beginning with the highest of such percentages.
3.25 EXCESS CONTRIBUTIONS -- means the excess of (a) the Before-Tax
Contributions actually made on behalf of Highly Compensated Participants for a
Plan Year over (b) the maximum amount of such contributions permissible for
such Plan Year under Code Section 401(k)(3)(A). Such maximum amount shall be
determined by reducing Before-Tax Contributions made on behalf of such Highly
Compensated Participants in order of their actual Deferral Percentages,
beginning with the highest of such percentages. In the case of a Highly
Compensated Participant whose actual Deferral Percentage is determined under
the family aggregation rules, the amount of excess contributions shall be
determined in accordance with the leveling method of Treasury Regulations
Section 1.401(k)-1(f)(2) and Excess
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<PAGE> 20
Article III: Definitions
Contributions shall be allocated among the Family Members in proportion to
their respective contributions.
3.26 EXCESS DEFERRALS -- means for each Participant for each Plan
Year the Before-Tax Contributions for such Plan Year that the Participant
designates as exceeding the $7,000.00 limit set forth in Code Section 402(g),
as such limit is adjusted for cost of living increases in accordance with Code
Section 402(g), pursuant to the procedure set forth in Section 5.4(c).
3.27 FAMILY MEMBER -- means an individual described in Code Section
414(q)(6).
3.28 FORFEITURE -- the dollar amount deducted from a Participant's
Matching Account and forfeited in accordance with this Plan.
3.29 HARRIS/LBP PLAN - means the Harris/Lanier Advantage Plan as
amended from time to time.
3.30 HIGHLY COMPENSATED PARTICIPANT -- means each Participant who
is a "highly compensated employee" within the meaning of Code Section 414(q)
as determined by the Plan Sponsor in accordance with reasonable and
nondiscriminatory rules established by the Plan Sponsor, uniformly and
consistently applied.
3.31 HOUR OF SERVICE -- means each hour for which an Employee is
paid, or entitled to payment, for the performance of duties as an Employee
during any period of employment as such.
3.32 MATCHING ACCOUNT -- means the bookkeeping subaccount
maintained as part of a Participant's Account to show his vested interest in
the Trust Fund attributable to the Matching Contributions made on his behalf
under this Plan.
3.33 MATCHING CONTRIBUTIONS -- means the contributions made by the
Plan Sponsor in accordance with Section 5.3.
3.34 MATCHED DEFERRALS - means for each pay period that portion of
the Before-Tax Contributions contributed on behalf of a Participant for such
pay period which do not exceed 3% of his Compensation for such pay period.
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<PAGE> 21
Article III: Definitions
3.35 MAXIMUM DEFERRAL PERCENTAGE -- means
(a) for each Nonhighly Compensated Participant, 15%, and
(b) for each Highly Compensated Participant, 6%, or such
other percentage within limitations established by the Internal Revenue
Service, not to exceed 15%.
3.36 NONHIGHLY COMPENSATED PARTICIPANT -- means for each Plan Year
each Participant other than a Highly Compensated Participant.
3.37 NORMAL RETIREMENT AGE -- means age 65.
3.38 PARTICIPANT -- means for any Plan Year an Eligible Employee
who has satisfied the Participation Requirement and has become eligible to make
Before-Tax Contributions under this Plan in accordance with Article 4.
3.39 PARTICIPATION REQUIREMENT -- means the later of the completion
of one Year of Service or the attainment of age 21.
3.40 PLAN -- means this Lanier Worldwide, Inc. Savings Incentive
Plan as set forth in this document, and as amended from time to time, and, for
periods prior to October 1, 1989, the Harris/3M Document Products, Inc. Savings
Incentive Plan, as amended from time to time.
3.41 PLAN QUARTER -- means each calendar quarter in each Plan Year.
3.42 PLAN SPONSOR -- means Lanier Worldwide, Inc. and any successor
to such corporation and, for periods before October 1, 1989, Harris/3M Document
Products, Inc.
3.43 PLAN YEAR -- means the fiscal year ending each June 30.
3.44 ROLLOVER ACCOUNT -- means the portion of a Participant's
Account consisting of funds transferred from another qualified plan pursuant to
the provisions of Section 5.5, together with any earnings, and reduced by any
investment losses, thereon.
3.45 TRA 86 REQUIREMENTS -- means all applicable requirements of
the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986, the
Omnibus Budget Reconciliation Act of 1987, the Technical and Miscellaneous
Revenue Act of 1988 and those requirements treated by the IRS as subject to
Section 1140 of the Tax
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<PAGE> 22
Article III: Definitions
Reform Act of 1986 as well as any technical corrections to those requirements
contained in the Revenue Reconciliation Act of 1989.
3.46 TRUST AGREEMENT -- means the Harris Corporation Trust
Agreement established as part of this Plan, as amended from time to time.
3.47 TRUST FUND -- means the assets held by the Trustee in
accordance with the Trust Agreement.
3.48 TRUSTEE -- means the person or persons acting as the trustee
from time to time under the Trust Agreement.
3.49 VALUATION DATE -- means such date or dates within a Plan Year
as may be so designated by the Plan Sponsor and shall occur at least monthly.
3.50 YEAR OF SERVICE -- means each year of employment completed in
any "period of employment" as an Employee.
(a) CONTINUOUS EMPLOYMENT. A "period of employment" for
this purpose will be deemed to start on an Employee's Employment Commencement
Date and end on that Employment Termination Date which coincides with the first
day of his first Break in Service following that Employment Commencement Date.
Thus, an Employee will receive credit for each day of employment and for each
day of any separation from service due to an absence or termination of
employment if the absence or termination is less than 12 consecutive months
long.
(b) TERMINATION/REEMPLOYMENT. Except as provided in
Section 3.50(c) and (d), if an Employee terminates employment and is
reemployed more than 12 months after such Employment Termination Date, his
Years of Service shall be determined by aggregating the service completed in
each period of employment in accordance with the following rules:
(1) FULL YEARS - First, aggregate the full years
of employment completed in each period of employment.
(2) EXTRA MONTHS - Next, aggregate the number of
his completed months of employment in each period of employment in excess of
his full years of employment in each such period into additional full years of
employment on the basis that each month taken into account shall be considered
as 1/12 of a year.
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<PAGE> 23
Article III: Definitions
(3) EXCESS DAYS - Finally, aggregate the number
of days of employment in each period of employment in excess of completed
months of employment into additional months of employment on the basis that 30
days of such employment equals one month.
(c) Except as expressly provided in this Plan prior to
this amendment and restatement for certain transferred employees, no period of
employment completed by an Employee before he reaches age 18 shall be taken
into account in calculating his Years of Service for purposes of Section 6.4.
(d) Except as otherwise provided, no period of employment
which an Employee completes as an employee of any other organization whatsoever
shall be taken into account under this Plan unless such organization is an
Affiliate.
(e) Each Employee shall receive credit for periods of
employment with Harris Corporation or its affiliates to the extent that such
Employee would have received credit for such employment if he had been so
employed with the Plan Sponsor without regard to whether Harris Corporation or
the affiliate was an Affiliate of the Plan Sponsor at the time such service was
completed or to whether the Code or ERISA requires that he receive such credit.
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<PAGE> 24
ARTICLE IV
PARTICIPATION
4.1 GENERAL RULE. Each Eligible Employee shall become a
Participant on the first Entry Date which immediately follows or is coincident
with the date he satisfies the Participation Requirement. Each Participant who
is an Eligible Employee shall be eligible (but shall not be required) to make
Before-Tax Contributions in accordance with Article 5.
4.2 PRE-MERGER PLAN. Each person who was a Participant in the
Harris/LBP Plan on September 30, 1989 and who is an Eligible Employee on
October 1, 1989 shall continue to be a Participant in this Plan.
4.3 REEMPLOYMENT RULE. If an Employee terminates employment
before he satisfies the Participation Requirement and he is thereafter
reemployed, he shall be subject to the general participation rule of Section
4.1.
If an Employee terminates employment after he satisfies the
Participation Requirement but before he becomes a Participant and he is
thereafter reemployed, he shall become a Participant on the later of (a) the
date on which he becomes eligible to participate under Section 4.1 or (b) the
first day of the first pay period beginning after his reemployment, provided he
is an Eligible Employee on such date.
If a Participant terminates employment and he is thereafter
reemployed, he shall resume participation on the first day of the first pay
period beginning after his reemployment on which he is an Eligible Employee,
provided that he completes a new enrollment and designation of beneficiary
form.
4.4 ABSENCE FROM SERVICE, CHANGE IN STATUS. If an Employee fails
to become a Participant on an Entry Date solely because he was absent from
service or was not employed as an Eligible Employee on such Entry Date and he
is reemployed as an Eligible Employee, he shall become a Participant on the
first day of the first pay period beginning after he resumes employment as an
Eligible Employee.
4.5 PLAN NOT AN EMPLOYMENT CONTRACT. This Plan is not a contract
of employment and participation in this Plan shall not give any Employee the
right to be retained in the employ of the Plan Sponsor or any Affiliate, nor,
upon termination of his employment, to have any interest in the Trust Fund
except as expressly provided in this Plan.
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<PAGE> 25
Article IV: Participation
4.6 INFORMATION. Each Eligible Employee shall complete and
deliver an Election Form to the Plan Sponsor which sets forth such information
as the Plan Sponsor deems necessary for the orderly administration of this
Plan.
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<PAGE> 26
ARTICLE V
CONTRIBUTIONS AND ACCOUNTS
5.1 BEFORE-TAX CONTRIBUTIONS.
(a) PERCENTAGE. Subject to the rules set forth in this
Section 5.1, in Section 5.2 (Election Rules) and in Section 5.4 (Limitations
on Allocations), each Participant who is an Eligible Employee may elect to
defer Compensation into this Plan in 1% increments, up to the Maximum Deferral
Percentage.
(b) PAYROLL DEDUCTIONS. All contributions described in
Section 5.1(a) shall be made exclusively through payroll withholding, and such
contributions shall be transferred by the Employer to the Trustee as soon as
practicable after the end of the calendar month which includes the end of the
payroll period from which such contributions are withheld.
(c) ACCOUNT CREDITS AND VESTING. Subject to the
limitations under Section 5.4, any Before-Tax Contributions made on behalf of
each Participant since the immediately preceding Valuation Date shall be
credited to his Before-Tax Account as of each Valuation Date. Subject to
investment gains and losses, a Participant's interest in contributions which
are credited to his Before-Tax Account shall be fully vested.
(d) INVESTMENT GAINS AND LOSSES. The investment gains and
losses (whether realized or unrealized) for each investment fund within the
Trust Fund shall be determined by, or at the direction of, the Plan Sponsor as
of each Valuation Date, and such investment gains and losses shall be credited
to each Before-Tax Account as of such Valuation Date in the same proportion
that the balance to such account in such fund as of such Valuation Date bears
to the balance of all Before-Tax Accounts in such fund as of such Valuation
Date. For purposes of crediting investment gains and losses as of any
Valuation Date, the balance of a Before-Tax Account shall be determined before
crediting any Before-Tax Contributions credited to such account as of such
Valuation Date.
5.2 ELECTION RULES.
(a) INITIAL ELECTION. A Participant's initial election
under Section 5.1 for any period of employment shall be effective as of the
first pay day which occurs on or after the Entry Date on or after which (1) he
timely delivers a properly completed Election Form to the Plan Sponsor and (2)
he satisfies the Participation Requirements. An election shall remain in
effect until revised or terminated. No Participant shall be required to make
an election, and no benefits (other than the
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<PAGE> 27
Article V: Contributions and Accounts
benefits from Before-Tax Account and a Matching Account) shall be conditioned
on a Participant making such an election.
(b) REVISED ELECTION. An election, once effective, only
can be revised by a Participant once per calendar quarter, effective for the
first pay period beginning on or immediately following the date on which he
timely delivers a properly completed Election Form to the Plan Sponsor.
(c) TERMINATION OF ELECTION. A Participant shall have
the right to terminate an election to make Before-Tax Contributions at any time
during a Plan Year, and any such termination shall become effective as soon as
practicable after the Participant properly completes and delivers the related
Election Form to the Plan Sponsor.
(d) RESUMPTION AFTER TERMINATION. An Eligible Employee
who has terminated an election to make Before-Tax Contributions may elect to
resume making Before-Tax Contributions in accordance with Section 5.1
effective for the first pay period which begins at least 90 days after the date
his termination became effective, provided he timely delivers a properly
completed Election Form to the Plan Sponsor before the immediately preceding
Entry Date.
(e) TIMELINESS AND ELECTION PROCEDURES. The Plan Sponsor
from time to time shall establish and shall communicate in writing to
Participants such reasonable deadlines, rules and procedures for making the
elections described in this Plan as the Plan Sponsor in its absolute discretion
deems appropriate under the circumstances for the proper administration of this
Plan.
(f) PLAN SPONSOR ACTION. The Plan Sponsor shall have the
right at any time unilaterally to reduce the contribution which an Eligible
Employee elected be made on his behalf if the Plan Sponsor acting in its
absolute discretion determines that such reduction might be necessary to
satisfy the limitations of Section 5.4.
5.3 MATCHING CONTRIBUTIONS AND FORFEITURES.
(a) AMOUNT. Subject to the rules set forth in this
Section 5.3 and Section 5.4 (Limitations on Allocations), the Plan Sponsor on
behalf of each Employer shall make a Matching Contribution from the current
Earnings and Profits of all Employers for each Plan Quarter on behalf of each
Participant who is employed as an Eligible Employee on the last day of such
Plan Quarter. Such Matching Contribution shall equal the sum of 50% of the
Matched Deferrals contributed on his behalf for each pay period during such
Plan Quarter.
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<PAGE> 28
Article V: Contributions and Accounts
(b) FORFEITURES. Forfeitures shall be treated as part of
the Matching Contributions described in Section 5.3(a).
(c) TIMING. The Matching Contribution for any Plan Year
shall be made on or before the due date for filing the Plan Sponsor's federal
income tax return for the fiscal year which ends with or within such Plan Year.
(d) INSUFFICIENT EARNINGS AND PROFITS. If the Employers
have insufficient current Earnings and Profits and Forfeitures to make the full
contribution called for under Section 5.3(a), the Plan Sponsor may make a
smaller contribution for that plan Quarter or no contribution.
(e) ACCOUNT CREDITS AND VESTING. The Matching
Contributions made on behalf of each Participant shall be credited by, or at
the direction of, the Plan Sponsor to his Matching Account as of the date as of
which such contribution is made. A Participant's vested interest in the
Matching Contributions (and in the investment gains and losses allocable to
such contributions) credited to his Matching Account shall be determined under
Section 6.4.
(f) INVESTMENT GAINS AND LOSSES. The investment gains
and losses (whether realized or unrealized) for each investment fund within the
Trust Fund shall be determined by, or at the direction of, the Plan Sponsor as
of such Valuation Date, and such investment gains and losses shall (after
deductions for expenses, if any) be credited to each Matching Account as of
such Valuation Date in the same proportion that the balance to each such
account in such fund as of such Valuation Date bears to the balance of all
Matching Accounts in such fund as of such Valuation Date. For purposes of
crediting investment gains and losses as of any Valuation Date, the balance to
a Matching Account shall be determined before crediting any Matching
Contributions which are credited as of such Valuation Date.
5.4 LIMITATIONS ON ALLOCATIONS.
(a) GENERAL RULE. The contributions made under Section
5.1 and Section 5.3 and the crediting of such contributions to a Participant's
Account shall be subject to limitations, applied in the following order:
(b) SECTION 415 LIMITATIONS.
(1) GENERAL RULE. The Plan Year shall be the
"limitation year." For any Plan Year, the sum of the amounts (including any
Forfeitures) which are allocated to a Participant's Account for such Plan Year
as Matching
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<PAGE> 29
Article V: Contributions and Accounts
Contributions and as Before-Tax Contributions, when added to the contributions
which are treated under Section 5.4(b)(2) as made on behalf of such
Participant under this Plan shall not exceed the lesser of (i), (ii) or (iii),
where
(i) equals 25% of the Participant's
Compensation for such Plan Year,
(ii) equals $30,000, as adjusted as of the
first day of each Plan Year to equal the inflation adjusted figure, if any, as
set by the Internal Revenue Service for the calendar year which includes the
last day of such Plan Year, and
(iii) equals such amount as the Plan Sponsor
deems necessary or appropriate to satisfy the requirements of Code Section 415
(including any applicable transition rules) taking into account the
coordination rules of Section 5.4(b)(2) and the correction provisions of
Section 5.4(b)(3).
(2) COORDINATION.
(i) If for any Plan Year a contribution is
made on behalf of a Participant for such year under any other defined
contribution plan maintained by an Affiliate, such contribution shall be
treated under this Section 5.4(b) as made under this Plan.
(ii) If a defined benefit plan is adopted or
maintained by an Affiliate under which a benefit is accrued on behalf of a
Participant, any adjustment required to satisfy the requirements of Code
Section 415 as a result of his participation in such plan and in this Plan
shall be made exclusively in such defined benefit plan.
(iii) Contributions allocated to an
"individual medical benefit account" described in Code Section 415(1) and
contributions credited under a welfare benefit fund maintained by any Affiliate
for any year to a reserve for post-retirement medical benefits for a
Participant who is a "key employee" within the meaning of Code Section 416(i)
shall be treated as a Matching Contribution made on his behalf under this Plan
when, and to the extent, required under Code Section 415 or Section 419A(d).
(3) CORRECTIONS. If the Plan Sponsor determines
that the contributions credited to a Participant's Account (subject to this
Section 5.4) will exceed the limitations set forth in this Section 5.4(b),
the Plan Sponsor shall transfer such excess from his Account to a special
suspense account. Such transfer shall be
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<PAGE> 30
Article V: Contributions and Accounts
made first from the Participant's Matching Contributions and thereafter from
his Before-Tax Contributions. Transfers of Matching Contributions to such
suspense account shall be applied to offset the Matching Contribution for all
Participants in the next Plan Year (and in each succeeding Plan Year if
necessary). No additional Matching Contributions shall be made by the Plan
Sponsor while there is a balance credited to such suspense account. Any
suspense account established under this Section 5.4(b) shall not be subject to
adjustment for investment gains or losses and the balance of an such account
shall be returned to the Plan Sponsor in the event this Plan is terminated
before the date such account has been so applied in its entirety. Transfers of
Before-Tax Contributions to such suspense accounts may be credited to the
Participant in the next limitation year, or may be returned to the Participant,
in the sole discretion of the Plan Sponsor or its delegate.
(c) INDIVIDUAL DOLLAR LIMIT.
(1) THIS PLAN. The sum of a Participant's
Before-Tax Contributions under this Plan and his Elective Deferrals under any
plan maintained by an Affiliate shall not exceed $7,000 (as adjusted in
accordance with Code Section 402(g)(5) to account for increases in the cost of
living) in any calendar year beginning after 1986.
(2) OTHER PLANS. If a Participant's aggregate
Before-Tax Contributions under this Plan and his "elective deferrals" (within
the meaning of Code Section 402(g)), if any, made under other plans or
contracts exceeds the individual dollar limit described in Section 5.4(c)(1)
in any calendar year, such Participant may designate all or a portion of his
Before-Tax Contributions made during such calendar year as Excess Deferrals.
(3) CLAIM. A Participant may request a refund of
his Excess Deferrals by filing a written claim with the Plan Sponsor on or
before March 1 of the immediately following calendar year in accordance with
Code Section 402(g) and such reasonable administrative rules as may be
established by the Plan Sponsor from time to time. A Participant's claim must
specify the dollar amount of Participant's Excess Deferrals for the preceding
calendar year and shall include his certification that if such amounts are not
distributed to him, such Excess Deferrals, when added to his elective deferrals
made under other plans or contracts will exceed the individual dollar limit for
the calendar year for which the Before-Tax Contributions were made.
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Article V: Contributions and Accounts
(4) DETERMINATION OF INVESTMENT GAIN OR LOSS.
Excess Deferrals shall be adjusted for investment gain or loss as determined by
the Plan Sponsor in accordance with Code Section 402(g) and the related
regulations.
(5) DISTRIBUTION OF EXCESS DEFERRALS.
Notwithstanding any other provision of this Plan, Excess Deferrals, plus any
investment gain and minus any investment loss allocable to such Excess
Deferrals, shall be distributed no later than April 15 of any calendar year to
those Participants who request a refund in accordance with the claims procedure
set forth in this Section 5.4(c) In no event shall a Participant receive from
the Plan a distribution which exceeds either the Participant's total Before-Tax
Contributions made under the Plan for the calendar year to which such Excess
Deferrals relate or the balance credited to his Before-Tax Account as of the
Valuation Date immediately preceding such April 15.
(6) FORFEITURE OF RELATED MATCH. A Participant
shall not be entitled to any Matching Contributions attributable to Before-Tax
Contributions refunded as Excess Deferrals and any such Matching Contributions
credited to his Account shall be treated as a Forfeiture as of the date of such
distribution without regard to whether his interest in his Matching Account
otherwise was nonforfeitable.
(d) LIMITATIONS ON BEFORE-TAX CONTRIBUTIONS FOR HIGHLY
COMPENSATED PARTICIPANTS.
(1) GENERAL. The Average Deferral Percentage for
Highly Compensated Participants for any Plan Year shall not exceed the greater
of
(A) the Average Deferral Percentage for
Nonhighly Compensated Participants for such Plan Year multiplied by 1.25, or
(B) the lesser of (i) the Average Deferral
Percentage for Nonhighly Compensated Participants for such Plan Year multiplied
by 2, or (ii) the Average Deferral Percentage for Nonhighly Compensated
Participants plus 2 percentage points, or such smaller number of percentage
points as may be prescribed by the Secretary of the Treasury.
(2) SPECIAL RULES.
(A) OTHER PLAN OR ARRANGEMENTS. For
purposes of this Section 5.4(d), the Deferral Percentage for any Highly
Compensated Participant for the Plan Year who is eligible to have Elective
Deferrals allocated to his account under two or more plans or arrangements
described in Code Section 401(k) that are
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<PAGE> 32
Article V: Contributions and Accounts
maintained by an Affiliate shall be determined as if all such contributions
were made under this Plan.
Further, if this Plan satisfies the requirements of Code Section
401(a)(4) or Section 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of Code Section
401(a)(4) or Section 410(b) only if aggregated with this Plan, then this
Section 5.4(d) shall be applied by determining the Deferral Percentage of each
Participant as if all such plans were a single plan.
(B) OTHER REQUIREMENTS AS MAY BE
PRESCRIBED. The determination and treatment of the Before-Tax Contributions
and the Deferral Percentage of any Participant shall satisfy such other
requirements a may be prescribed by the Secretary of the Treasury.
(3) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the
Plan Sponsor determines that Excess Contributions have been made for any Plan
Year, such Excess Contributions (together with any investment gains or losses)
shall be distributed to affected Highly Compensated Participants on or before
the last day of the Plan Year immediately following the Plan Year for which
such Excess Contributions are made. Such distributions shall be made to such
affected Highly Compensated Participants on the basis of the portion of the
Excess Contributions which is attributable under Code Section 401(k) to such
Participant. The amount of Excess Contributions which are to be distributed
under this Section 5.4(d)(3 with respect to a Highly Compensated Participant
for any Plan Year shall be reduced by any Excess Deferrals previously
distributed to such Participant for the calendar year ending with or within
such Plan Year.
(4) DETERMINATION OF INVESTMENT GAINS OR LOSSES.
Excess Contributions shall be adjusted for investment gain or loss as
determined by the Plan Sponsor in accordance with Code Section 401(k) and the
related regulations.
(5) FORFEITURE OF RELATED MATCH. A Participant
shall not be entitled to any Matching Contribution attributable to Before-Tax
Contributions distributed as Excess Contributions and the portion of each
affected Highly Compensated Participant's Matching Contribution which is
attributable to such distribution shall be treated as a Forfeiture as of the
date of such distribution.
(6) QUALIFIED MATCHING CONTRIBUTION. If the Plan
Sponsor in lieu of distributing Excess Contributions (or in lieu of
distributing any part of such Excess Contributions) so elects in the exercise
of its absolute discretion, the Plan Sponsor shall make an additional
contribution on behalf of all eligible Nonhighly Compensated Participants in an
amount which will result in satisfying the
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<PAGE> 33
Article V: Contributions and Accounts
requirements of Section 5.4(d)(1) for such Plan Year (to the extent such
requirements are not satisfied through the distribution of Excess Contributions
to Highly Compensated Participants). Such additional contribution shall be a
"qualified matching contribution" within the meaning of Code Section 401(k),
shall be allocated and credited as of such date in equal parts among the
Before-Tax Accounts of all such Nonhighly Compensated Participants and shall be
used only to satisfy the limitations of this Section 5.4(d). A Nonhighly
Compensated Participant shall be eligible for a qualified matching contribution
under this Section 5.4(d) if such Participant elected that Before-Tax
Contributions be made to his Account during the last Plan Quarter of such Plan
Year and was an Eligible Employee on the last day of such Plan Year.
(e) LIMITATIONS ON MATCHING CONTRIBUTIONS FOR HIGHLY
COMPENSATED PARTICIPANTS.
(1) GENERAL. The Average Contribution Percentage
for Highly Compensated Participants for any Plan Year shall not exceed the
greater of
(i) the Average Contribution Percentage for
Nonhighly Compensated Participants for such Plan Year multiplied by 1.25, or
(ii) the lesser of (A) the Average
Contribution Percentage for Nonhighly Compensated Participants for such Plan
Year multiplied by 2, or (B) the Average Contribution Percentage for Nonhighly
Compensated Participants plus 2 percentage points, or such smaller number of
percentage points as prescribed by the Secretary of the Treasury.
(2) SPECIAL RULES.
(A) OTHER PLAN OR ARRANGEMENTS. For
purposes of this Section 5.4(e), the Contribution Percentage for any Highly
Compensated Participant for the Plan Year who is eligible to have "employee
contributions" (within the meaning of Code Section 401(m)), or "matching
contributions" (as described in Code Section 401(m)(4)) allocated to his
account under two or more plans or arrangements described in Code Section
401(a) or Section 401(k) that are maintained by an Affiliate shall be
determined as if all such contributions were made under this Plan.
Further, if this Plan satisfies the requirements of Code Section
401(a)(4) and Section 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of Code Section
401(a)(4) and Section 410(b) only if aggregated
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<PAGE> 34
Article V: Contributions and Accounts
with this Plan, then this Section 5.4(e) shall be applied by determining the
Contribution Percentages of each Participant as if all such plans were a single
plan.
(B) OTHER REQUIREMENTS. The determination
and treatment of the Matching Contributions and the Contribution Percentage of
any Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
(3) DISTRIBUTION OF EXCESS AGGREGATE
CONTRIBUTIONS. If the Plan Sponsor determines that Excess Aggregate
Contributions have been made for any Plan Year, such Excess Aggregate
Contributions (together with any investment gains or losses) shall be forfeited
(if otherwise forfeitable under Section 6.4) or distributed (if not so
forfeitable) on or before the last day of the Plan Year immediately following
the Plan Year for which such Excess Aggregate Contributions were made. Any
amounts which are forfeited under this Section 5.4(e) shall be treated as a
Forfeiture as of the date of such distribution and such Forfeitures shall not
be allocated to any Participant whose contributions were reduced under this
Section 5.4(e) if such allocation would be inconsistent with Code Section
401(m). The portion of such Excess Aggregate Contribution distributed to or
forfeited by each affected Highly Compensated Participant shall be determined
in accordance with the regulations under Code Section 401(m).
(f) MULTIPLE USE LIMITATION. For Plan Years beginning on
or after July 1, 1989, the Plan Sponsor shall take whatever action is required
to prevent the multiple use of the alternative test described in Section
5.4(d)(1)(ii) for Before-Tax Contributions and in Section 5.4(e)(1)(ii) for
Matching Contributions in the same Plan Year to the extent required under Code
Section 401(m) and the regulations issued under that section. The Plan
Sponsor shall reduce the Contribution Percentages of Highly Compensated
Participants (beginning with the highest of such percentages) so that the
multiple use limit is not exceeded. Any such reduction shall be treated as an
Excess Aggregate Contribution.
(g) LIMITATIONS ON DEDUCTIBILITY. The sum of the
Matching Contributions and Before-Tax Contributions allocated to Participants'
Accounts for any taxable year shall not exceed the amount allowable as a
deduction for such taxable year for federal income tax purposes for
contributions to this Plan.
(h) WITHHOLDING OBLIGATIONS AND ACCOUNT BALANCE. Any
distributions to a Participant from his Before-Tax Employee Account or Matching
Account which are required under this Section 5.4 shall not exceed the value
(as of the date of such distribution) of such subaccount and the amount of any
such distributions shall be reduced as the Plan Sponsor deems necessary or
appropriate
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<PAGE> 35
Article V: Contributions and Accounts
to satisfy any applicable tax withholding requirements with respect to such
distributions.
(i) ALLOCATION CORRECTIONS. If an error or omission is
discovered in any Account, the Plan Sponsor shall make an appropriate equitable
adjustment in order to remedy such error or omission as of the Plan Year in
which the error or omission is discovered.
5.5 ROLLOVER ACCOUNTS. On or after his Entry Date, a Participant
may establish a Rollover Account, with the consent of the Plan Sponsor or its
delegate. Amounts that may be used to establish a Rollover Account include
only (1) funds transferred directly from another plan that is tax qualified
within the meaning of Code Section 401; and (2) funds distributed from a tax
qualified plan or a conduit individual retirement account that are eligible for
rollover treatment and are transferred to this Plan within 60 days of the
Participant's receipt thereof. A Participant may be required to establish that
the transfer of amounts into a Rollover Account will not create adverse
consequences for the Plan or Trust. Amounts in a Rollover Account shall be
held by the Trustee and invested and distributed in accordance with the
provisions of this Plan. A Participant's Rollover Account is fully vested at
all times and subject to investment direction by the Participant.
5.6 ACCOUNT INVESTMENTS. The Trustee at the direction of the Plan
Sponsor shall establish at least four separate investment funds within the
Trust Fund, and such funds as in effect from time to time shall be described in
the summary plan description for this Plan or in such other materials as the
Plan Sponsor furnishes from time to time to Participants. Each Participant
shall have the right to provide investment directives with respect to how (1)
his Account as of the preceding Valuation Date and (2) contributions to his
Account after such Valuation Date shall be invested as between such funds in
accordance with the following rules:
(a) Each such election shall be made on a properly
completed Election Form or otherwise in accordance with the applicable
procedures of the record keeper or Trustee.
(b) One change of election may be made in each Plan
Quarter with respect to each of (1) and (2) above, e.g., one change with
respect to a Participant's current Account and one change with respect to the
Participant's future Elective Deferrals.
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<PAGE> 36
Article V: Contributions and Accounts
(c) A Participant's election with respect to his Account
balance as the preceding Valuation Date may be made in any increments of such
balance. A Participant's election with respect to contributions to his Account
after such Valuation Date shall be made in ten percent increments of the
contribution.
(d) An election shall be effective on the same day if
received before 1:00 p.m., Eastern Standard Time or Eastern Daylight Time, as
the case may be, on a business day, and otherwise shall be effective on the
next business day.
5.7 EXPENSES. Expenses allocable to each Account shall be
deducted quarterly, and such deduction shall be shown separately on the
statement of a Participant's Account.
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<PAGE> 37
ARTICLE VI
PLAN BENEFITS
6.1 RETIREMENT BENEFIT. The Account of a Participant who is an
Employee on the date he reaches Normal Retirement Age shall become fully vested
no later than such date and, if he retires as an Employee on such date, shall
be paid to him in accordance with Section 7. A Participant who remains an
Employee after he reaches Normal Retirement Age shall remain eligible to
continue to participate in this Plan until the date of his actual retirement
and his Account shall be paid in accordance with Section 7.
6.2 DISABILITY BENEFIT.
(a) FULL VESTING. The Matching Account of a Participant
whose employment with an Employer or an Affiliate is terminated by reason of
his being disabled under this Section 6.2 shall become fully vested on the
date his employment is so terminated and shall be paid to him in accordance
with Section 7. If such individual recovers from his disability and is
reemployed as an Employee, such Employee shall participate in accordance with
Section 4.1 and he shall vest in any Matching Contributions credited to his
Account after his reemployment based on his actual Years of Service in
accordance with the vesting schedule set forth in Section 6.4(b).
(b) DEFINITION. A Participant shall be treated as
disabled for purposes of this Section 6.2 if he suffers a total and permanent
physical or mental impairment which (1) qualifies him for a monthly disability
insurance benefit under the United States Social Security Act and (2) which
wholly prevents him from holding any substantially gainful employment and (3)
which can be expected to result in death or to be of long continued and
indefinite duration. An Eligible Employee shall not be treated as disabled for
purposes of this Plan, however, if the Plan Sponsor determines that his
disability is a result of any of the following:
(i) any injury or disease sustained by him while
willfully participating in acts of violence, riots, civil insurrections or
while committing a felony;
(ii) any injury or disease sustained by him while
serving in any armed forces of any country or as the result of warfare or any
act of war, declared or undeclared;
(iii) any injury or disease sustained by him while
working for a person other than an Employer or any Affiliate and arising out of
such work; or
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<PAGE> 38
Article VI: Plan Benefits
(iv) any intentional, self-inflicted injury.
(c) DETERMINATION. The Plan Sponsor shall have exclusive
responsibility for determining whether a Participant is disabled. It may
consider whether a Participant is disabled upon its own motion or upon the
written request of such Participant. Any determination made by the Plan
Sponsor for purposes of this Section 6.2 Plan shall be final and conclusive.
6.3 DEATH BENEFIT.
If a Participant dies, his Account shall be changed to the
name of his Beneficiary and the vested portion of his Account shall be paid to
such Beneficiary in accordance with Section 7 and, further, if the Participant
was an Employee on his date of death, his Account also shall become fully
vested as of such date.
6.4 VESTED BENEFIT.
(a) GENERAL RULE. A Participant shall be eligible for
the payment of his Before-Tax Account and the vested portion of his Matching
Account after the date of his separation from service (within the meaning of
Code Section 401(k)(2)(B)), or, if sooner, upon the disposition of
substantially all the assets used in a trade or business of the Participant's
Employer, or of an Affiliate's interest in a subsidiary that was the
Participant's Employer (within the meaning of Code Section 401(k)(10)).
Payment of such amounts shall be made in accordance with Article 7.
(b) VESTING SCHEDULE. The Plan Sponsor shall determine
the vested portion of a Participant's Matching Account in accordance with the
vesting schedule set forth in this subsection. The vested portion of a
Participant's Matching Account shall be maintained as a separate Matching
Account until distributed in accordance with Section 7. The balance, or
nonvested portion, of a Participant's Matching Account shall be treated as a
Forfeiture as of the first Valuation Date following the earlier of the date
such Participant's Matching Account is distributed to him in accordance with
Section 7 or the date on which such Participant incurs six consecutive Breaks
in Service.
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<PAGE> 39
Article VI: Plan Benefits
<TABLE>
<CAPTION>
Vested Portion
Full of
Years of Service Matching Account
---------------- ----------------
<S> <C>
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
</TABLE>
(c) REEMPLOYMENT. If a former Employee is reemployed as
an Employee before he has 6 consecutive Breaks in Service and any portion of
his Matching Account had been treated as a Forfeiture under Section 6.4(b),
the Forfeiture shall be restored to his Matching Account as of the last day of
the Plan Year in which he is reemployed if the Employee repays to the Plan an
amount equal to the amount of his distribution from his Matching Account before
the earlier of (a) five years after the first date on which the former Employee
is reemployed by an Affiliate or (b) the date the Employee incurs six
consecutive Breaks in Service following the date of distribution.
6.5 FORFEITURE OF BENEFIT OF MISSING CLAIMANT. If the Account of
a Participant becomes payable under this Article 6 by reason other than his
death and the Plan Sponsor is unable to locate such Participant or if no
Beneficiary of a deceased Participant is identified and located by the Plan
Sponsor, then the Plan Sponsor, in its discretion, may treat the Account of
such Participant as a Forfeiture as of the last day of the Plan Year which
includes the anniversary of the date the Account of such Participant first
became payable or as of the last day of any subsequent Plan Year. However, if
such missing Beneficiary or Participant files a written claim with the Plan
Sponsor for his Account while this Plan remains in effect and proves his
identity as the person then entitled to such benefit under the terms of this
Plan to the satisfaction of the Plan Sponsor, the Plan Sponsor promptly shall
make an additional contribution to this Plan sufficient to restore his Account
which was so treated as a Forfeiture (without regard to any allocation of any
investment gains or losses) and such restored Account shall be paid to such
person immediately thereafter in a lump sum.
If this Plan is terminated and the Plan Sponsor (after taking the
action described in this Section 6.5) cannot locate a Participant or
Beneficiary, then such person shall be presumed dead and, if there is no
Beneficiary for such person or such Beneficiary cannot be located, all the
remaining Participants in this Plan on
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<PAGE> 40
Article VI: Plan Benefits
the date of such termination shall be treated as such person's Beneficiary and
such Account shall be divided equally among such Participants.
6.6 LOANS.
(a) REQUEST. Each "eligible person" may request that a
loan be made to him under this Plan from his Account by properly completing and
delivering a related Election Form to the Plan Sponsor, and all such requests
shall be granted on a reasonably equivalent basis (within the meaning of Code
Section 4975(d)(1)(A) and ERISA Section 408(b)(1)(A)) subject to the
conditions set forth in Section 6.6(a). For purposes of this Section 6.6,
the term "eligible person" means, for loans made before October 19, 1989, each
Participant who is an Eligible Employee and, for loans made after October 18,
1989, each Participant and Beneficiary who is a "party in interest" (as defined
in ERISA Section 3(14)) with respect to this Plan.
(b) ADMINISTRATION. The Plan Sponsor shall be the "named
fiduciary" responsible for administering the loan program through its Human
Resources Department. The procedures for applying for a loan and the basis on
which loans will be approved or denied shall be described in the summary plan
description for the Plan or in other documents prepared by or at the direction
of the Plan Sponsor for this purpose and such additional documents hereby are
expressly incorporated by reference to the extent required by the Department of
Labor.
(c) LIMITATIONS AND SECURITY.
(1) The principal amount of a loan made under
this Plan to any person together with the outstanding principal amount of any
other loan made to such person under any other plan maintained by an Affiliate
which satisfies the requirements of Code Section
401 shall not exceed the lesser of (i) or (ii), where
(i) equals 50% of the vested portion of his accounts and
(ii) equals $50,000 reduced by the excess
(if any) of the highest outstanding balance of any previous loans from the Plan
and any other plan maintained by an Affiliate during the one-year period ending
immediately before the date on which such current loan is made over the
outstanding balance of such previous loans on the date on which such current
loan is made.
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<PAGE> 41
Article VI: Plan Benefits
For loans made before October 19, 1989, the principal amount of the
loan shall not exceed the greater of (i) the limitation determined under the
preceding sentence or (ii) the lesser of 80% of the vested portion of his
Account or $8,000.
(2) No loan shall be made under this Plan to an
eligible person who is an Employee of an Affiliate which is not an Employer
unless such eligible person borrows first from the plan of the Affiliate which
employs him.
(3) No loan shall be made for a period which
exceeds four years. There is no minimum period for a loan.
(4) Any loan made under this Plan shall be
secured by 50% of his total vested interest in his Account but, for loans made
before October 19, 1989, loans shall be secured by a Participant's total vested
interest in his Account.
(5) No more than one loan shall be made under
this Plan to an eligible person at any one time, except that a loan made to an
eligible person under the Harris/LBP Plan before September 29, 1989 and a loan
under this Plan made before September 29, 1989 shall be treated as a single
loan for purposes of this Section 6.6.
(6) The principal amount of a loan made under
this Plan shall not be less than $500.
(d) INTEREST RATE. The interest rate for a loan made
under this Plan shall be set by the Plan Sponsor at a rate which the Plan
Sponsor deems reasonable at the time the loan is made for a fully secured loan
and which is consistent with Department of Labor regulations.
(e) REPAYMENT AND DEFAULT.
(1) A loan made under this Plan shall require
that repayment be made in substantially level installments (not less frequently
than quarterly) through payroll withholding while an eligible person is an
active Employee and through such other means as the Plan Sponsor deems
appropriate for an eligible person who is not an active Employee.
(2) The events of default shall be set forth in
the promissory note and security agreement which evidences the loan. Such
events may include the following:
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<PAGE> 42
Article VI: Plan Benefits
(i) an eligible person's employment as an
Employee terminates for any reason whatsoever unless, for loans made after
October 18, 1989, such person remains a "party in interest" with respect to
this Plan following his termination of employment,
(ii) the Trustee concludes that the eligible
person no longer is a good credit risk, or
(iii) to the extent permissible under federal
law, the eligible person's obligation to repay the loan has been discharged
through a bankruptcy or any other legal process or action which did not
actually result in payment in full.
Upon the existence or occurrence of an event of default, the loan may
become due and payable in full and, if such loan is not actually repaid in
full, shall be cancelled on the books and records of the Plan and the amount
otherwise distributable to such eligible person under this Plan shall be
reduced as of the date his Account otherwise becomes distributable by the
principal amount of the loan then due plus any accrued but unpaid interest.
Such principal and interest shall be determined without regard to whether the
loan had been discharged through a bankruptcy or any other legal process or
action which did not actually result in payment in full; however, interest
shall continue to accrue on such loan only to the extent permitted under
applicable law. Notwithstanding the foregoing, cancellation of the amount
distributable to a person under this Section 6.6(e)(2) shall not occur until a
distributable event occurs under the Plan. In the event a default occurs
before a distributable event, the Plan Sponsor shall take such other steps to
cure the default as it deems appropriate under the circumstances to preserve
Plan assets.
(3) Any loan made under this Plan shall be
subject to such other terms and conditions as the Plan Sponsor from time to
time shall deem necessary or appropriate, including the condition that the
eligible person execute an applicable financing statement and the condition
that he reimburse this Plan for the reasonable expenses which this Plan incurs
to make and service such loan.
(4) The terms and conditions of each loan shall
be set forth in the promissory note and security agreement evidencing such
loan.
(f) MECHANICS. A loan to an eligible person under this
Plan shall be made from his Account as of any date acceptable to the Plan
Sponsor and the Trustee. The individual may specify, under procedures
prescribed by the Plan Sponsor, the Account investments from which the loan
proceeds shall be
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<PAGE> 43
Article VI: Plan Benefits
withdrawn. If the Account investments so specified by the individual are less
than the principal amount of the loan, the balance of the loan proceeds may be
withdrawn from other Account investments, in accordance with the Plan Sponsor's
administrative policy. Solely to the extent required for record-keeping
purposes, the loan proceeds shall be debited first from his Rollover Account,
second from the portion of his Before-Tax Account that was subject to a
Matching Contribution, third from the portion of his Before-Tax Account that
was not subject to a Matching Contribution, and finally from his Matching
Account; repayments shall be credited to those Accounts in the reverse order.
Such loan shall be an asset of his Account and the interest paid on such loan
shall be credited to such Account.
(g) SPECIAL POWERS. The Plan Sponsor shall have the
power to take such action as the Plan Sponsor deems necessary or appropriate to
stop the payment of an Account to or on behalf of an eligible person who fails
to repay a loan (without regard to whether his obligation to repay such loan
had been discharged through a bankruptcy or any other legal process or action)
until his Account has been reduced by the principal due (without regard to such
discharge) on such loan or to distribute the note which evidences such loan in
full satisfaction of any interest in such Account which is attributable to the
unpaid balance of such loan.
6.7 NO IN-SERVICE WITHDRAWALS. No Participant shall have the
right to withdraw (by reason of hardship or otherwise) all or any portion of
his Account before an event specified in Section 6.4(a).
- 32 - Savings Incentive Plan
<PAGE> 44
ARTICLE VII
BENEFIT DISTRIBUTION
7.1 METHOD. The vested portion of a Participant's Account shall
be paid in a single sum to him or, in the case of his death, to his
Beneficiary, and such payment may (pursuant to Section 6.6(g)) include
distribution of the Participant's note which evidences a loan under Section
6.6.
7.2 DISTRIBUTION DEADLINES.
(a) GENERAL RULE. The vested portion of a Participant's
Account shall be payable to him as soon as practicable after the first
Valuation Date which follows the event specified in Section 6.4(a).
(b) $3500 OR LESS. If the vested portion of a
Participant's Account is $3500 or less and has not exceeded $3,500 at the time
of any prior distributions, such vested portion automatically shall be paid to
such Participant as of the earliest date permitted under Section 7.2(a).
(c) MORE THAN $3500. If the vested portion of a
Participant's Account exceeds (or at the time of any prior distribution
exceeded) $3500, distribution of such Account at any time before the
Participant reaches Normal Retirement Age shall be subject to the Participant's
consent. A failure to consent to payment at the earliest date payment is
permitted under Section 7.2(a) shall result in the postponement of such
payment until the Participant dies, reaches Normal Retirement Age or terminates
employment as an Employee, whichever occurs last. If a Participant has
terminated employment as an Employee on or before his Normal Retirement Age,
the payment of the vested portion of his Account shall be made to him no later
than 60 days after the end of the Plan Year which includes the date he reaches
Normal Retirement Age.
(d) STATUTORY DEADLINES.
(1) PARTICIPANT.
(i) INITIAL DISTRIBUTION. Notwithstanding
Section 7.2(c), the entire vested portion of a Participant's Account shall be
paid to him in a single sum on or before his "required beginning date." For
purposes of determining the amount of the initial distribution under this
Section 7.2(d)(1), a Participant's Account shall be determined as of the most
recent Valuation Date for which valuations have been completed preceding the
"required beginning date."
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<PAGE> 45
Article VII: Benefit Distribution
(ii) REQUIRED BEGINNING DATE. Except as
otherwise provided in this Section 7.2(d)(1)(ii), a Participant's "required
beginning date" shall be the April 1 following the calendar year in which he
reaches age 70 1/2.
If a Participant continues in employment after his "required beginning
date," any additional amounts credited to his Account shall be paid to him each
calendar year thereafter in a single sum on or before December 31 of such year.
(2) BENEFICIARY. Upon the death of a
Participant, the entire vested portion of his Account shall (regardless of any
request made by the Beneficiary) be paid to his Beneficiary in a single sum
before the date which is the first anniversary of the Participant's date of
death.
7.3 DIRECT ROLLOVER.
(a) Effective January 1, 1993, a Participant or
"distributee" may elect at any time to have any portion of an "eligible
rollover distribution" paid in a direct rollover to the trustee or custodian of
an "eligible retirement plan" specified by the Participant or distributee,
whichever is applicable. Payment of a direct rollover in the form of a check
payable to the trustee or custodian of an eligible retirement plan, for the
benefit of the Participant or distributee, may be mailed to the Participant or
distributee.
(b) For purposes of this Section 7.3, the following
terms shall have the following meanings:
(1) "Distributee" means a surviving spouse or a
spouse or former spouse who is an alternate payee under a Qualified Domestic
Relations Order defined in section 414(p) of the Code.
(2) "Eligible retirement plan" means an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code that accepts an eligible rollover
distribution; provided that if the distributee is a surviving spouse, an
eligible retirement plan means an individual retirement account or individual
retirement annuity.
(3) "Eligible rollover distribution" means any
distribution of all or a portion of the Participant's Account, but does not
include a distribution to the extent it is required under section 401(a)(9) of
the Code.
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<PAGE> 46
Article VII: Benefit Distribution
7.4 CLAIM FOR BENEFIT. Subject to Section 7.2(b), as a condition
to the payment of any benefit under this Plan, a claim for such benefit must
be filed with the Plan Sponsor on the related Election Form, and all such
claims (and any other claims by a Participant, former Participant or
Beneficiary) shall be processed in accordance with the claims procedure set
forth in the summary plan description for this Plan.
7.5 MISTAKES. If a mistake is made in favor of a Participant or a
Beneficiary in the payment of an Account, the Plan Sponsor or the Trustee
(acting at the Plan Sponsor's direction and on behalf of the Plan) shall take
such action against the Participant or Beneficiary to remedy such mistake and
to make the Plan whole as the Plan Sponsor deems proper and appropriate under
the circumstances, and any mistake made in favor of the Plan shall promptly be
corrected by, or at the direction of, the Plan Sponsor.
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<PAGE> 47
ARTICLE VIII
NAMED FIDUCIARIES AND PLAN SPONSOR
8.1 NAMED FIDUCIARIES. The Plan Sponsor shall be the "named
fiduciary" responsible for the control, management and administration of this
Plan.
8.2 ALLOCATION AND DELEGATION BY NAMED FIDUCIARIES. The Plan
Sponsor may by written instrument filed with the records of this Plan designate
a person who is not a Named Fiduciary to carry out any of its responsibilities
under this Plan, other than the responsibilities of the Trustee in the
management and control of the Trust Fund; provided, however, that no such
allocation or designation shall be effective until such person has consented to
such designation.
8.3 ADVISERS. The Plan Sponsor, or a person designated by the
Plan Sponsor to perform any responsibility of the Plan Sponsor pursuant to the
procedure described in Section 8.2, may employ one or more persons to render
advice with respect to any responsibility the Plan Sponsor has under this Plan
or such person has by virtue of such designation.
8.4 DUAL FIDUCIARY CAPACITIES. Any person may serve in more than
one fiduciary capacity with respect to this Plan, and a fiduciary may be a
Participant provided such person otherwise satisfies the requirements for
participation under this Plan.
8.5 PLAN SPONSOR POWER AND DUTIES.
(a) GENERAL. The Plan Sponsor or its delegate shall have
the exclusive responsibility and complete discretionary authority to control
the operation, management and administration of this Plan, with all powers
necessary to enable it properly to carry out such responsibilities, including
(but not limited to) the power to construe this Plan and the Trust Agreement,
to determine eligibility for benefits, to resolve all interpretive,
operational, equitable and other questions that arise under this Plan and to
settle disputed claims. The decisions of the Plan Sponsor on all matters
within the scope of its authority shall be final and binding upon all parties
to this instrument, participants, their spouses and beneficiaries.
(b) RECORDS. All acts and determinations of the Plan
Sponsor or its delegate shall be duly recorded and all such records, together
with such other documents as may be necessary for the administration of this
Plan, shall be preserved in the custody of the Plan Sponsor.
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<PAGE> 48
Article VIII: Named Fiduciaries and Plan Sponsor
(c) INFORMATION. Each Employer shall supply the Plan
Sponsor with complete and timely information regarding employment data for
each Employee and Participant including, but not limited to, his Compensation,
date of death or other termination of employment and such other information as
may be required by the Plan Sponsor.
(d) RELIANCE. The officers and directors of each
Employer shall be entitled to rely upon all information and data contained in
any certificate or report or other material prepared by any accountant,
attorney or other consultant or adviser selected by the Plan Sponsor to perform
services on behalf of this Plan.
(e) EXPENSES. All reasonable and proper expenses of this
Plan and the Trust Fund, including investment advisory fees and the Trustee's
fees as agreed upon by the Plan Sponsor and the Trustee, shall be paid from the
Trust Fund by the Trustee unless the Plan Sponsor elects (in accordance with
such procedures as agreed upon by the Plan Sponsor and the Trustee) to pay such
expenses. The Plan Sponsor may seek reimbursement of any expense which is
properly payable by the Trust Fund.
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<PAGE> 49
ARTICLE IX
TRUST FUND AND TRUSTEE
The Trust Fund shall be held, administered, controlled and invested by
the Trustee subject to the terms of the Trust Agreement for the exclusive
benefit of Participants and Beneficiaries.
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<PAGE> 50
ARTICLE X
AMENDMENT AND TERMINATION
10.1 AMENDMENT. The Plan Sponsor shall have the right at any time
and from time to time to amend this Plan in any respect by action of its Board,
provided that no amendment shall be made which would divert any of the assets
of the Trust Fund to any purpose other than the exclusive benefit of
Participants and Beneficiaries, except that this Plan may be amended
retroactively to affect the Accounts maintained for any person if necessary to
cause this Plan and the Trust Fund to be exempt from income taxes under the
Code.
10.2 TERMINATION. The Plan Sponsor reserves the right to terminate
or to partially terminate this Plan or to declare a discontinuance of
contributions to this Plan at any time by action of its Board, and the Plan
Sponsor reserves the right to terminate or to partially terminate the
participation in this Plan by any Employer by action of its Board.
Furthermore, an Employer's participation in this Plan automatically shall
terminate if, and at such time as, its status as an Employer terminates for any
reason whatsoever (other than through a merger or consolidation into another
Employer). If there is a termination or partial termination of this Plan or a
declaration of a discontinuance of contributions to this Plan, the Accounts of
all affected Participants who are Employees as of the date of such termination,
partial termination or declaration shall become fully vested.
In the case of any such termination, partial termination, or
declaration, the Plan Sponsor shall cause all unallocated amounts to be
allocated to the appropriate Accounts of the affected Participants and
Beneficiaries and shall direct the Trustee to distribute such Accounts to such
Participants and Beneficiaries in accordance with uniform rules established by
the Plan Sponsor at such time as permissible under Code Section 401(k), and
the Trustee shall follow such directions.
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<PAGE> 51
ARTICLE XI
MISCELLANEOUS
11.1 SPENDTHRIFT CLAUSE. Subject to Section 11.10, no Account,
benefit, payment or distribution under this Plan shall (except to the extent
permitted by law) be subject to the claim of any creditor of a Participant or
Beneficiary, or to any legal process by any creditor of such person, and no
Participant or Beneficiary shall have any right to alienate, commute,
anticipate, or assign all or any portion of his Account, benefit, payment or
distribution under this Plan except under Section 6.6 (Loans).
11.2 LEGALLY INCOMPETENT. The Plan Sponsor may in its discretion
direct that payment be made directly to (a) a person who is incompetent or
disabled, whether because of minority or mental or physical disability, (b) to
the guardian of such person, or to the person having custody of such person or
(c) to any person designated or authorized under any state statute to receive
such payment on behalf of such incompetent or disabled person, without further
liability either on the part of the Plan Sponsor, or an Employer for the amount
of such payment to the person on whose account such payment is made.
11.3 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any
claim for any benefit under this Plan shall look solely to the assets of the
Trust Fund for the satisfaction of such claim. In no event will the Plan
Sponsor, or an Employer, or any of their employees, officers, or directors, be
liable in their individual capacities to any person whomsoever for the payment
of benefits under this Plan.
11.4 DISCRIMINATION. The Plan Sponsor shall administer this Plan
in a uniform and consistent manner with respect to all similarly situated
Employees, Participants, spouses and Beneficiaries, including adopting such
administrative or other rules as the Plan Sponsor in its discretion deems
appropriate for any such persons affected by circumstances such as a sale,
acquisition, merger, reorganization, facility closing, layoff, work force
reduction or other similar event or transaction; provided, however, the Plan
Sponsor shall not permit any discrimination in favor of highly compensated
employees (within the meaning of Code Section 414(q)) which would be
prohibited under Code Section 401(a). If for any Plan Year the Plan Sponsor
determines that following the terms of the Plan would result in a failure to
coverage requirements under Code Section 410(b), the Plan Sponsor shall take
such action as it deems appropriate under the circumstances to prevent such
failure.
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<PAGE> 52
Article XI: Miscellaneous
11.5 CLAIMS. Any payment to a Participant or Beneficiary or to
their legal representative, or heirs at law, made in accordance with the
provisions of this Plan shall to the extent thereof be in full satisfaction of
all claims under this Plan against the Plan Sponsor and the Employers, any of
whom may require such person, his legal representative or heirs at law, as a
condition precedent to such payment, to execute a receipt and release therefor
in such form as shall be satisfactory to the Plan Sponsor or any Employer, as
the case may be.
11.6 NONREVERSION. No part of the Trust Fund shall ever be used
for or be diverted to purposes other than for the exclusive benefit of
Participants and Beneficiaries except
(a) as expressly provided otherwise in Section 5.4(b)(3)
with respect to a Section 415 suspense account;
(b) a contribution which is made by the Plan Sponsor by a
mistake of fact upon direction of the Plan Sponsor shall be refunded by the
Trustee to the Plan Sponsor within one year after the payment of such
contribution;
(c) if the Internal Revenue Service determines that this
Plan initially fails to satisfy the requirements of Code Section 401(a) and
related sections, all contributions made to this Plan, plus any investment
gains and less any such losses, shall be refunded to the
Plan Sponsor or, as for contributions made under Section 5.1, to the
Participant on whose behalf the contribution was made; and
(d) a contribution for which the Internal Revenue Service
denies an income tax deduction to the Plan Sponsor or an Employer shall be
refunded by the Trustee to the Plan Sponsor within one year after the denial of
such deduction upon the Plan Sponsor's direction, all such contributions being
made expressly on the condition that such contributions are deductible in full
for federal income tax purposes.
11.7 MERGER OR CONSOLIDATION. In the case of any merger or
consolidation of this Plan with, or transfer of assets or liabilities of this
Plan to, any other employee benefit plan, each person for whom an Account is
maintained shall be entitled to receive a benefit from such plan, if it is then
terminated, which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer,
if this Plan had been terminated; provided, no assets shall be transferred
directly to this Plan which are attributable to contributions which are subject
to the joint and survivor annuity requirements of Code Section 417.
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<PAGE> 53
Article XI: Miscellaneous
11.8 REPORTING AND DISCLOSURE. The Plan Administrator shall
satisfy any reporting and disclosure requirements applicable to this Plan under
the Code or ERISA.
11.9 TOP HEAVY PLAN.
(a) DETERMINATION. The Plan Sponsor as of each June 30
shall determine the sum of the present value of the accrued benefits of "key
employees" (as defined in Code Section 416(i)(1)) and the sum of the present
value of the accrued benefits of all other employees in accordance with the
rules set forth in Code Section 416(g) or shall take such other action as the
Plan Sponsor deems appropriate to conclude that no such determination is
necessary under the circumstances. If the sum of the present value of the
accrued benefits of such key employees exceeds 60% of the sum of the present
value of the accrued benefits of all employees as of any June 30, this Plan
shall be "top heavy" for the Plan Year which begins on the immediately
following July 1. For purposes of this Section 11.9 the present value of the
accrued benefit of each employee shall be equal to the sum of (1) and (2),
where
(1) equals the balance of his Account under this
Plan (determined for this purpose as of each June 30), including the value of
any distributions made during the 5 year period ending on such date and any
contributions due but as yet unpaid as of such date and
(2) equals the present value of his accrued
benefit, if any, (determined as of the valuation date which coincides with or
precedes the determination date for such plan) under
(A) each qualified plan (as described in
Code Section 401(a)) maintained by an Affiliate (i) in which a key employee is
a participant or (ii) which enables any plan described in subclause (i) to meet
the requirements of Code Section 401(a)(4) or Section 410, and
(B) each other qualified plan maintained by
an Affiliate (other than plan described in clause (A)) which may be aggregated
with this Plan and the plans described in clause (A), provided such aggregation
group (including a plan described in this clause (B)) continues to meet the
requirements of Code Section 401(a)(4) and Section 410; including the value
of any distributions made from such plans during the 5 year period ending on
such determination date and the value of any contributions due under such plans
but as yet unpaid as of such valuation date. However, the accrued benefit of
any individual shall be disregarded if such individual has not performed any
services for any Employer at any time during the 5 year period ending on the
date as of which such determination is made.
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<PAGE> 54
Article XI: Miscellaneous
(b) SPECIAL TOP HEAVY PLAN RULES. If the Plan Sponsor
determines that this Plan is "top heavy" for any Plan Year, the special rules
set forth in this Section 11.10 shall apply notwithstanding any other rules
to the contrary set forth elsewhere in this Plan.
(1) A contribution shall be made for such Plan
Year for each Employee who is an Eligible Employee on the last day of such year
which is equal to the lesser of (A) 4% of his "compensation" (as defined for
purposes of Section 5.4(b)) for such year or (B) the percentage at which
contributions are made (or are required to be made) for such year to the key
employee for whom such percentage is the highest. For Plan Years beginning
before 1989, the contribution actually, credited for such Plan Year to such
Participant's Before-Tax Employee Account and his Matching Account shall be
treated as an employer contribution for purposes of satisfying the minimum
contribution under Code Section 416.
(2) The Plan Sponsor shall take such action as
necessary to satisfy the requirements of Code Section 415(e) and Code Section
416(h) if it (following the procedure set forth in this Section 11.9)
determines that this Plan fails to meet the requirements set forth in Code
Section 416(h)(2)(B).
11.10 QUALIFIED DOMESTIC RELATIONS ORDER. In accordance with
uniform and nondiscriminatory procedures established by the Plan Sponsor from
time to time, the Plan Sponsor upon the receipt of a domestic relations order
which seeks to require the distribution of a Participant's Account in whole or
in part to an "alternate payee" (as that term is defined in Code Section
414(p)(8)) shall
(1) promptly notify the Participant and such "alternate
payee" of the receipt of such order and of the procedure which the Plan Sponsor
will follow to determine whether such order constitutes a "qualified domestic
relations order" within the meaning of Code Section
414(p),
(2) determine whether such order constitutes a "qualified
domestic relations order" and notify the Participant and the "alternate payee"
of the results of such determination and,
(3) if the Plan Sponsor determines that such order does
constitute a "qualified domestic relations order", distribute to such
"alternate payee" called for under the terms of such order the amount called
for under the order in a single sum within 60 days of the date such order is
determined to constitute a qualified domestic relations order without regard to
whether a distribution would be permissible to the Participant at such time
under this Plan.
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<PAGE> 55
Article XI: Miscellaneous
The determinations and the distribution made by, or at the direction
of, the Plan Sponsor under this Section 11.10 shall be final and binding on
the Participant and on all other persons interested in such order. An
"alternate payee" under this Section 11.10 shall not be an eligible person
for purposes of obtaining a loan pending the distribution of such alternate
payee's entire interest under this Plan.
IN WITNESS WHEREOF, Lanier Worldwide, Inc. has caused its duly authorized
officers to execute and affix its seal to this Plan this /S/ 28 day of June,
1994.
LANIER WORLDWIDE, INC.
By: /s/ WESLEY E. CANTRELL
-------------------------
Title: President and Chief
Executive Officer
(CORPORATE SEAL)
ATTEST: /s/ MICHAEL KELLY
-------------------
- 44 - Savings Incentive Plan
<PAGE> 56
EXHIBIT A
<PAGE> 57
ATTACHMENT 1- TO EXHIBIT A
TO THE
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
FORMER LBP PARTICIPANTS
-----------------------
ARTICLE I
APPLICATION
-----------
This Attachment 1 shall apply only to those Participants who are Former LBP
Participants and shall describe the provisions of the Harris/LBP Plan for
periods before October 1, 1989.
ARTICLE II
DEFINITIONS
-----------
The terms in this Section 1-2 shall have the meanings set forth opposite such
terms for purposes of this Attachment 1 and this Plan. Except as provided in
this Section 1-2, a capitalized term shall have the meaning set forth in the
Plan.
(a) ELIGIBLE EMPLOYEE - means for periods before October 1, 1989, an
Employee who is employed by a Participating LBP Company other than
(i) an Employee who is classified on the personnel records of any
Participating LBP Company as employed on a temporary, summer, or
casual part-time position for short term work load, which employment
is intended to terminate upon completion of the assignment for which
he was employed,
(ii) an Employee who is treated as such solely by reason of the
"leased employee" rules set forth in Code Section 414(n),
(iii) an Employee who is a member of (or who is represented by) a
collective bargaining unit which has failed to reach an agreement with
his Participating LBP Company that he be eligible to participate in
this Plan,
(iv) an Employee who is a non-resident alien and who receives no
earned income from a Participating LBP Company from sources within the
United States (as described more fully in Code Section 410(b)(3)(C)),
and
<PAGE> 58
(v) an Employee who works primarily outside the United States
and who is paid under a payroll system which is not linked
electronically to the payroll system for LBP Employees who work
primarily within the United States.
(b) EMPLOYEE - means for periods before October 1, 1989 a person who was
an employee of LBP or an entity which would be considered a single employer
with LBP under Code Section 414.
(c) FORMER LBP PARTICIPANT - means a person who was a participant in the
Harris/LBP Plan before October 1, 1989.
(d) LBP - means Lanier Business Products, Inc.
(e) MAXIMUM DEFERRAL PERCENTAGE - means for each Former LBP Participant
for periods before October 1, 1989, 10%.
(f) PARTICIPATING LBP COMPANY - means LBP, the Executive Conference
Center, Inc. and Lanier Financial Services, Inc.
(g) YEARS OF SERVICE - means for an Employee's "years of service" as
determined under Section 3.48 of the Plan as if all employment with LBP or an
entity which would have been would have been considered a single employer with
LBP under Code Section 414 before October 1, 1989 was employment as an
Employee under the Plan.
ARTICLE III
MATCHING CONTRIBUTION
Subject to the limitations of Section 5.4 (Limitations on Allocations), LBP on
behalf of each Participating LBP Company shall (as soon as practicable after
the end of each Plan Quarter) make a Matching Contribution from the current or
accumulated Earnings and Profits of all Participating LBP Companies for the
Plan Quarter ending September 30, 1989 on behalf of each Former LBP Participant
who is an Eligible Employee on that date and on whose behalf contributions were
credited as of such date to his Before-Tax Account. Such Matching Contribution
shall not exceed 25% of the Before-Tax Contributions contributed for such Plan
Quarter and credited to his Before-Tax Account as of such date which do not
exceed 6% of his Compensation (as defined in Section 3.11(a)) for such Plan
Quarter.
- 2 -
<PAGE> 59
ATTACHMENT 2 TO EXHIBIT A
TO THE
LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN
FORMER BSD PARTICIPANTS
Section 2-1.
APPLICATION
-----------
This Attachment 1 shall apply only to those Participants who are Former BSD
Participants.
Section 2-2.
DEFINITIONS
-----------
The terms in this Section 2-2 shall have the meanings set forth opposite such
terms for purposes of this Attachment 1 and this Plan. Except as provided in
this Section 2-2, a capitalized term shall have the meaning set forth in the
Plan.
1-1.1. FORMER BSD PARTICIPANT - means a person who was a Former LBP
Participant as described in Attachment 1 to Exhibit A who was employed in the
Business Systems Division and whose employment was involuntarily terminated
after January 1, 1990 or who transferred to Syntrex, Inc. after January 26,
1990 but before March 1, 1990 as a result of the sale of assets between Harris
Corporation and Syntrex, Inc.
Section 2-3.
TERMINATION BENEFITS
--------------------
2-3-1 FULL VESTING. Each Former BSD Participant shall be fully vested in his
Matching Account. If a Former BSD Participant is reemployed as an Eligible
Employee, he shall not receive credit (for vesting purposes) for employment
with Syntrex, Inc. with respect to any contributions allocated to his Matching
Account under this Plan after his reemployment.
2-3-2 DISTRIBUTION/TRANSFER. If a Former BSD Participant is transferred to
Syntrex, Inc., such Participant shall be eligible to elect an immediate lump
sum
<PAGE> 60
benefit by filing with the Plan Sponsor a properly completed election form
on or before February 10, 1990.
If a Participant fails to elect an immediate benefit on or before February 10,
1990, such Participant's Account shall be transferred to the Syntrex Employee
Savings Plan which shall assume all liabilities of this Plan with respect to
such Participant.
- 2 -
<PAGE> 1
Exhibit 10 (k)
LANIER WORLDWIDE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Formerly known as
Harris/3M Document Products, Inc.
Supplemental Executive Retirement Plan)
<PAGE> 2
LANIER WORLDWIDE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Formerly known as
Harris/3M Document Products, Inc.
Supplemental Executive Retirement Plan)
WHEREAS, the Harris/3M Document Products, Inc. Pension Plan, the Harris/3M
Document Products, Inc. Supplemental Executive Retirement Plan, the Lanier
Business Products, Inc. Supplemental Executive Retirement Plan and the
Harris/Lanier Retirement Plan and Trust were previously established by Lanier
Worldwide, Inc. or its predecessor; and
WHEREAS, the Harris/3M Document Products, Inc. Pension Plan and the
Harris/Lanier Retirement Plan and Trust were merged, effective as of October 1,
1989, the merged plan being known as the Lanier Worldwide, Inc. Pension Plan
(hereinafter referred to as the "Pension Plan"); and
WHEREAS, Lanier Worldwide, Inc. (hereinafter referred to as the "Corporation")
amended and restated the Harris/3M Document Products, Inc. Supplemental
Executive Retirement Plan (hereinafter referred to as the "Prior SERP") to be
consistent with the Pension Plan and to reflect certain recent changes in
federal tax law, particularly the new Section 401(a)(17) of the Internal
Revenue Code, effective as of October 1, 1989, and renamed such restated plan
as the Lanier Worldwide, Inc. Supplemental Executive Retirement Plan
(hereinafter referred to as the "SERP"); and
WHEREAS, Lanier Worldwide, Inc. desires to amend and restate the SERP to
authorize payment of certain expenses from a trust fund that may be
<PAGE> 3
established by the Corporation to provide a source of payments for the
Corporation's obligations under the SERP;
NOW, THEREFORE, effective as of December __, 1992, the Corporation hereby
amends section 7.5 of the SERP, and restates the SERP in its entirety, in order
to provide benefits in excess of the limits now applicable to the Pension Plan
and for other purposes hereinafter set forth.
ARTICLE 1. DEFINITIONS
1.1 DEFINITIONS. Except as otherwise required by the context, the terms used
in the SERP shall have the meaning hereinafter set forth.
(a) "BENEFICIARY". The term "Beneficiary" means a person, trust or
tax-exempt organization which, by the terms of a designation of beneficiary
executed by a Participant in accordance with the provisions of Article 5, is
entitled to receive the death benefit provided hereunder in the event of the
death of such Participant.
(b) "CODE"; "INTERNAL REVENUE CODE". The terms "Code" and "Internal Revenue
Code" mean the Internal Revenue Code of 1986, as amended from time to time.
Reference to a section of the Code includes such section and any comparable
sections of any future legislation that amends, supplements, or supersedes such
section.
- 2 -
<PAGE> 4
(c) "COMMITTEE". The term "Committee" means the administrative committee
that administers the SERP as set forth in Article 6.
(d) "CORPORATION". The term "Corporation" means Lanier Worldwide, Inc. and
any successor to such corporation.
(e) "ERISA". The term "ERISA" means the Employee Retirement Income Security
Act of 1974 (Public Law 93-406), as amended from time to time. Reference to a
section of ERISA includes such section and any comparable sections of any
further legislation that amends, supplements, or supersedes such section.
(f) "PARTICIPANT". The term "Participant" means any person who has
fulfilled the eligibility requirements contained in Article 2 hereof and whose
beneficial interest in the SERP has not been distributed in full.
(g) "PENSION PLAN". The term "Pension Plan" means the Lanier Worldwide,
Inc. Pension Plan.
(h) "PRIOR SERP". The term "Prior SERP" means the Harris/3M Document
Products, Inc. Supplemental Executive Retirement Plan.
(i) "SERP". The term "SERP" means this Lanier Worldwide, Inc. Supplemental
Executive Retirement Plan, as in effect on October 1, 1989, and as amended from
time to time thereafter.
1.2 CONSTRUCTION. Where necessary or appropriate to the meaning hereof, the
singular shall be deemed to include the plural, the plural to include the
singular, the masculine to include the feminine, and the feminine to include
the masculine.
- 3 -
<PAGE> 5
ARTICLE 2. PARTICIPATION
Any select management and highly compensated employee of the Corporation
covered by the Pension Plan who retires or otherwise incurs a termination of
employment thereunder on or after October 1, 1989 and becomes entitled to
receive a retirement benefit thereunder, and whose retirement benefits are
limited under the Pension Plan by the provisions of Section 401(a)(17) or 415
of the Code shall become a Participant in the SERP automatically upon such
limitation of participation.
ARTICLE 3. AMOUNT OF BENEFITS
The amount of the benefit payable hereunder shall be the excess of (a) the
amount of the retirement benefit that would have been payable under the Pension
Plan to such Participant but for the limitations contained in the Pension Plan
to effect compliance with Sections 401(a)(17) and 415 of the Code, over (b) the
amount of the retirement benefit that is actually payable under the provisions
of the Pension Plan to such Participant.
- 4 -
<PAGE> 6
ARTICLE 4. BENEFIT PAYMENTS
The supplemental benefits calculated under Article 3 shall be paid to a
Participant or his Beneficiary, if applicable, in the same manner and form as,
and coincident with, the payment of the retirement benefits of such
Participant, or Beneficiary, under the Pension Plan. Any factors or conditions
applicable to a Participant's or a Beneficiary's benefit under the Pension Plan
shall be applicable to such benefits under the SERP.
ARTICLE 5. BENEFICIARIES
In the event a Participant dies before his interest under the SERP has been
distributed to him in full, any remaining interest shall be distributed
pursuant to Article 5 to his Beneficiary who shall be the person designated as
his beneficiary under the Pension Plan.
ARTICLE 6. ADMINISTRATION OF THE SERP
6.1 IN GENERAL. The Corporation is the administrator of this SERP. However,
the Corporation Administrative Committee under the Pension Plan shall discharge
those administrative duties and exercise those administrative powers which are
specifically imposed or conferred upon the Committee by the SERP.
- 5 -
<PAGE> 7
6.2 POWERS AND DUTIES. The Committee shall have full Power and authority to
interpret, construe and administer the SERP and its interpretations and
construction hereof, and actions hereunder, including the timing, form, amount,
or recipient of any payment to be made hereunder, shall be binding and
conclusive on all persons for all purposes. The Committee may delegate any of
its powers, authorities, or responsibilities for the operation and
administration of the SERP to any person or committee so designated in writing
by it and may employ such attorneys, agents, and accountants as it may deem
necessary or advisable to assist it in carrying out its duties hereunder. No
member of the Committee shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of the SERP
unless attributable to his own willful misconduct or lack of good faith.
Members of the Committee shall not participate in any action or determination
regarding their own benefits, if any, payable under the SERP.
6.3 RULES, REGULATIONS AND PROCEDURES. The Committee may from time to time
adopt such rules, regulations and procedures, not inconsistent with the
declared purposes of this SERP, as it may deem necessary to enable it to
administer the SERP and to carry out the provisions of this SERP.
6.4 IMMUNITIES OF THE COMMITTEE. Except as otherwise provided by law, no
member of the Committee shall be liable to a participating employer or to any
Participant or his Beneficiary by reason of the exercise in good faith of any
power or discretion vested in him by the terms of this SERP, and all decisions
and
- 6 -
<PAGE> 8
directions made by the Committee in the exercise of its powers and duties
hereunder shall be final and binding upon all parties concerned.
ARTICLE 7. MISCELLANEOUS PROVISIONS
7.1 AMENDMENT AND TERMINATION. The Corporation reserves the right to
terminate, modify or amend this SERP at any time in whole or in part.
7.2 SPENDTHRIFT CLAUSE. No benefit of a Participant or Beneficiary under
this SERP shall be subject to alienation, sale, transfer, assignment, pledge,
attachment or encumbrance of any kind, either before or after his retirement.
Except as otherwise provided, if any such pensioner or Beneficiary shall
attempt to or shall alienate, sell, transfer, assign, pledge or otherwise
encumber his benefits under this SERP, or any part thereof, or if by reason of
bankruptcy or other event his benefits would devolve upon anyone else or would
not be enjoyed by him, his spouse or beneficiary, then the Committee, in its
sole discretion, may cause the interest of the pensioner or Beneficiary in any
such benefit to be terminated and to be held or applied to or for the benefit
of such person or persons and in such manner as the Committee may deem proper.
7.3 NOT A CONTRACT OF CONTINUING EMPLOYMENT. Under no circumstances shall
this SERP or the participation in the SERP by an employee constitute a contract
of continuing employment or in any manner obligate an employer to continue or
discontinue the service of an employee.
- 7 -
<PAGE> 9
7.4 PAYMENT OF BENEFITS TO OTHERS. If any Participant or Beneficiary to whom
a retirement benefit is payable is unable to care for his affairs because of
illness or accident, any payment due (unless prior claim therefor shall have
been made by a duly qualified guardian or other legal representative) may be
paid to the spouse, parent, brother, or sister, or any other individual deemed
by the Committee to be maintaining or responsible for the maintenance of such
person. Any payment made in accordance with the provisions of this Section 7.4
shall be a complete discharge of any liability of the SERP with respect to the
benefit so paid.
7.5 OBLIGATION UNSECURED. The obligation of the Corporation to pay benefits
provided hereunder shall be unfunded and unsecured and benefits shall be paid
by the Corporation out of its general treasury funds. In order to provide a
source of payment for its obligations under this SERP, the Corporation may
establish or continue to maintain a trust fund and contribute funds and
property thereto. If such a trust fund is established, the Corporation may, in
its sole discretion, direct the trustee to make disbursements from trust assets
in payment of expenses reasonably related to the establishment, operation, or
administration of the trust, including but not limited to payments to
attorneys, agents, accountants, and financial advisers or institutions. These
disbursements may take the form of reimbursement of the Corporation or its
parent corporation for such expenses paid by the Corporation or its parent
corporation, provided that the request for reimbursement includes documentation
of the expense that is reasonably acceptable to the trustee. Subject to the
provisions of the trust
- 8 -
<PAGE> 10
agreement governing any such trust fund, however, the obligation of the
Corporation under the SERP to provide a Participant or a Beneficiary with a
benefit shall nonetheless constitute the unsecured promise of the Corporation
to make payments as provided herein, and no person shall have any interest in,
or a lien or prior claim upon, any property of the Corporation.
7.6 CONTROLLING STATUS. No Participant shall be eligible for a supplemental
retirement benefit under the SERP unless such Participant is a Participant on
the date of his retirement, death, or other termination of employment.
7.7 CLAIMS OF OTHER PERSONS. The provisions of the SERP shall in no event be
construed as giving any person, firm or corporation any legal or equitable
right as against the Corporation, its officers, employees, or directors, except
any such rights as are specifically provided for in the SERP or are hereafter
created in accordance with the terms and provisions of the SERP.
7.8 SEVERABILITY. The invalidity or unenforceability of any particular
provision of the SERP shall not affect any other provision hereof, and the SERP
shall be construed in all respects as if such invalid or unenforceable
provision were omitted herefrom.
7.9 CONSTRUCTION OF SERP. The provisions of the SERP shall be governed and
construed in accordance with the laws of the State of Georgia.
- 9 -
<PAGE> 11
EXECUTED at Atlanta, Georgia, this ____ day of December, 1992.
LANIER WORLDWIDE, INC.
By /S/ WESLEY E. CANTRELL
-------------------------------
And /S/ JOE PAYNE
-------------------------------
1035054
- 10 -
<PAGE> 1
<TABLE>
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
YEARS ENDED JUNE 30,
---------------------------------
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Primary:
Average shares outstanding.......................... 39,720 39,444 39,057
======== ======== =======
Income from continuing operations before
extraordinary item and cumulative effect of
change in accounting principle................... $121,880 $111,079 $87,489
Discontinued operations............................. -- -- (9,300)
Extraordinary loss.................................. -- -- (3,020)
Cumulative effect of change in accounting
principle........................................ (10,063) -- --
-------- -------- -------
Net Income.......................................... $111,817 $111,079 $75,169
======== ======== =======
Per share amounts:
Continuing operations before extraordinary item
and cumulative effect of change in accounting
principle...................................... $3.07 $2.82 $2.24
Discontinued operations.......................... -- -- (.24)
Extraordinary loss............................... -- -- (.08)
Cumulative effect of change in accounting
principle...................................... (.25) -- --
-------- -------- -------
Total............................................ $2.82 $2.82 $1.92
======== ======== =======
Fully diluted:
Total primary average shares outstanding............ 39,720 39,444 39,057
Dilutive stock options and employee stock purchase
plan shares -- based on treasury stock method
using the greater of year-end market price or
average market price............................. 154 217 67
-------- -------- -------
Total fully diluted average shares outstanding...... 39,874 39,661 39,124
======== ======== =======
Per share amounts:
Continuing operations before extraordinary item
and cumulative effect of change in accounting
principle...................................... $3.05 $2.80 $2.24
Discontinued operations.......................... -- -- (.24)
Extraordinary loss............................... -- -- (.08)
Cumulative effect of change in accounting
principle...................................... (.25) -- --
-------- -------- -------
Total............................................ $2.80 $2.80 $1.92
======== ======== =======
</TABLE>
43
<PAGE> 1
<TABLE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Each of the below listed subsidiaries is 100% directly or indirectly owned
by Harris Corporation except as otherwise indicated, and all are included in the
consolidated financial statements.
<CAPTION>
STATE OR OTHER
JURISDICTION
NAME OF SUBSIDIARY OF INCORPORATION
- ----------------------------------------------------------------------------------------------
<S> <C>
Harris A.B. ............................................................. Sweden
Harris GmbH.............................................................. Germany
Harris K.K. ............................................................. Japan
Harris S.A. ............................................................. Belgium
Harris S.A. de C.V. ..................................................... Mexico
Harris Srl............................................................... Italy
Harris Advanced Technology (Malaysia) Sdn. Bhd. ......................... Malaysia
Harris Australia Pty. Ltd. .............................................. Australia
Harris Broadcast Systems (Nigeria) Limited (40% of voting securities
owned)................................................................. Nigeria
Harris Canada, Inc....................................................... Canada
Harris Communications Honduras, S.A. de C.V. ............................ Honduras
Harris Computer Systems Corporation ..................................... Florida
Harris Controls Australia Limited........................................ Australia
Harris Data Services Corporation......................................... Delaware
Harris do Brazil Limitada................................................ Brazil
Harris Far East Limited.................................................. Delaware
Harris Foreign Sales Corporation, Inc. .................................. Virgin Islands
Harris International Sales Corporation................................... Delaware
Harris Investments of Delaware, Inc. .................................... Delaware
Harris Ireland Ltd....................................................... Ireland
Harris Italiana, Inc. ................................................... Delaware
Harris Network Support Products, Inc..................................... Texas
Harris Pension Management Limited........................................ England
Harris Publishing Systems Corporation.................................... Delaware
Harris Semiconducteurs Sarl.............................................. France
Harris Semiconductor B.V. ............................................... Netherlands
Harris Semiconductor GmbH................................................ Germany
Harris Semiconductor Limited............................................. England
Harris Semiconductor HK, Ltd. ........................................... Hong Kong
Harris Semiconductor Y.H. ............................................... Korea
Harris Semiconductor, Inc. .............................................. Delaware
Harris Semiconductor (Florida), Inc. .................................... Delaware
Harris Semiconductor (Malaysia) Sdn. Bhd. ............................... Malaysia
Harris Semiconductor (Ohio), Inc. ....................................... Delaware
Harris Semiconductor Patents, Inc. ...................................... Delaware
Harris Semiconductor (Pennsylvania), Inc. ............................... Delaware
Harris Semiconductor Pte. Ltd. .......................................... Singapore
Harris Semiconductor (Taiwan) Ltd. ...................................... Taiwan
Harris Solid-State (Malaysia) Sdn. Bhd. ................................. Malaysia
Harris Southwest Properties, Inc. ....................................... Delaware
Harris Space Systems Corporation......................................... Delaware
Harris Systemes Electroniques S.A. ...................................... France
Harris Systems Limited................................................... England
</TABLE>
44
<PAGE> 2
<TABLE>
<CAPTION>
STATE OR OTHER
JURISDICTION
NAME OF SUBSIDIARY OF INCORPORATION
- ----------------------------------------------------------------------------------------------
<S> <C>
Harris Technical Services Corporation.................................... Delaware
Harris Video Communication Systems, Inc. ................................ Delaware
Allied Broadcast Equipment Canada, Ltd. ................................. Canada
Baseview Products, Inc. ................................................. Michigan
Communication & Information Processing Harris S.A........................ Argentina
ECCO Parent Limited...................................................... Ireland
Executive Conference Center, Inc. ....................................... Georgia
Lanier (Australia) Pty. Ltd. ............................................ Australia
Lanier Business Products, Inc. .......................................... Georgia
Lanier Financial Services, Inc. ......................................... Georgia
Lanier Holdings Pty. Ltd. ............................................... Australia
Lanier Holdings, Inc. ................................................... Delaware
Lanier International, Inc. .............................................. Delaware
Lanier Pacific Pty. Ltd. ................................................ Australia
Lanier Professional Services, Inc. ...................................... Delaware
Lanier Worldwide, Inc. .................................................. Delaware
Lanier Leasing, Inc. .................................................... Delaware
Lanier Europe, B.V. ..................................................... Netherlands
Lanier United Kingdom Ltd. .............................................. England
Lanier de Argentina...................................................... Argentina
Lanier Canada, Inc. ..................................................... Canada
Lanier de Chile, S.A. ................................................... Chile
Lanier S.A. ............................................................. Colombia
Lanier de El Salvador, S.A. de C.V. ..................................... El Salvador
Lanier de Guatemala, S.A. ............................................... Guatemala
Lanier de Dominicana, S.A. .............................................. Dominican Republic
Lanier de Panama, S.A. .................................................. Panama
Lanier Puerto Rico, Inc. ................................................ Puerto Rico
Lanier de Costa Rica S.A. ............................................... Costa Rica
Lanier France S.A. ...................................................... France
Lanier Espana S.A. ...................................................... Spain
Lanier Belgium S.A. ..................................................... Belgium
Lanier Danmark A/S....................................................... Denmark
Lanier Deutschland GmbH.................................................. Germany
Lanier Italia S.p.A. .................................................... Italy
Lanier Hellas AEBE....................................................... Greece
Lanier Nederland B.V. ................................................... Netherlands
Lanier Holdings A.G. .................................................... Switzerland
Lanier Finance A.G....................................................... Switzerland
Lanier (Schweiz) A.G. ................................................... Switzerland
Lanier Singapore Pte. Ltd. .............................................. Singapore
Lanier Norge A/S ........................................................ Norway
RF Communications, Inc. ................................................. Delaware
RF Communications, Inc. ................................................. New York
Scientific Calculations, Inc. ........................................... New York
Scientific Calculations Ltd. ............................................ England
Trident Copiers Ltd. .................................................... England
</TABLE>
45
<PAGE> 3
<TABLE>
<CAPTION>
STATE OR OTHER
JURISDICTION
NAME OF SUBSIDIARY OF INCORPORATION
- ----------------------------------------------------------------------------------------------
<S> <C>
Westronic Sales Corporation.............................................. Washington
WSL Telecontrol Corporation.............................................. Washington
</TABLE>
46
<PAGE> 1
<TABLE>
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the following registration
statements of Harris Corporation and in each related Prospectus of our report
dated August 2, 1994, with respect to the consolidated financial statements and
schedules of Harris Corporation and subsidiaries included in this Annual Report
(Form 10-K) for the year ended June 30, 1994:
<S> <C> <C> <C>
Form S-8 No. 2-74551 Harris Corporation 1981 Stock Option Plan for Key
Employees
Form S-8 No. 33-50169 Harris Corporation Retirement Plan
Form S-8 No. 33-50167 Harris Corporation Union Retirement Plan
Form S-8 Nos. 33-37969; Harris Corporation Stock Incentive Plan
33-51171
Form S-3 No. 33-35315 Harris Corporation Medium-Term Notes
ERNST & YOUNG LLP
Orlando, Florida
September 23, 1994
</TABLE>
47
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 1994 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> JUN-30-1994
<CASH> 139
<SECURITIES> 0
<RECEIVABLES> 677
<ALLOWANCES> 30
<INVENTORY> 463
<CURRENT-ASSETS> 1698
<PP&E> 1719
<DEPRECIATION> 1168
<TOTAL-ASSETS> 2677
<CURRENT-LIABILITIES> 805
<BONDS> 662
<COMMON> 39
0
0
<OTHER-SE> 1149
<TOTAL-LIABILITY-AND-EQUITY> 2677
<SALES> 3336
<TOTAL-REVENUES> 3369
<CGS> 2275
<TOTAL-COSTS> 2275
<OTHER-EXPENSES> 816
<LOSS-PROVISION> 9
<INTEREST-EXPENSE> 58
<INCOME-PRETAX> 194
<INCOME-TAX> 72
<INCOME-CONTINUING> 122
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (10)
<NET-INCOME> 112
<EPS-PRIMARY> 2.82
<EPS-DILUTED> 2.80
</TABLE>
