<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HARRIS CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
[HARRIS LOGO]
HARRIS CORPORATION
1025 West NASA Boulevard
Melbourne, Florida 32919
September 16, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of Harris Corporation. The meeting will be held at the Melbourne Airport Hilton
at Rialto Place in Melbourne, Florida on Friday, October 23, 1998, starting at
10:00 a.m., local time.
The accompanying notice of the meeting and the proxy statement cover the
formal business of the meeting, which includes the election of three directors
for a three year term expiring in 2001, and the ratification of the appointment
of auditors for the coming year.
Following the business session, I will report on current operations and on
our forward plans. Following these reports there will be an open discussion
period during which your questions and comments will be welcome.
The attendance of shareholders at our annual meetings has been helpful in
maintaining communications and understanding. We hope you will be able to join
us. Whether or not you plan to attend, you can ensure your shares are
represented at the meeting by promptly completing, signing, dating and returning
your proxy form in the enclosed envelope.
Cordially,
/s/ Phillip W. Farmer
Phillip W. Farmer
Chairman, President and
Chief Executive Officer
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY CARD
<PAGE> 3
HARRIS CORPORATION
1025 West NASA Boulevard
Melbourne, Florida 32919
---------------------------------------------
Notice of 1998
Annual Meeting of Shareholders
---------------------------------------------
TO THE HOLDERS OF COMMON STOCK
OF HARRIS CORPORATION:
The 1998 Annual Meeting of the Shareholders of Harris Corporation will be
held at the Melbourne Airport Hilton at Rialto Place, Airport Boulevard,
Melbourne, Florida, on Friday, October 23, 1998, at 10:00 a.m. local time, for
the following purposes:
1. To elect three directors for a three year term expiring in 2001;
2. To ratify the selection of Ernst & Young LLP as the Corporation's
independent auditors for fiscal 1999; and
3. To transact such other business as may properly come before the meeting.
Holders of Common Stock of record at the close of business on August 28,
1998 will be entitled to vote at the meeting and all adjournments thereof.
By order of the Board of Directors
Richard L. Ballantyne
Secretary
Melbourne, Florida
September 16, 1998
IMPORTANT NOTICE
YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING OF
SHAREHOLDERS OR IF YOU PLAN TO ATTEND BUT WISH TO VOTE BY PROXY, PLEASE
COMPLETE, DATE, SIGN, AND MAIL PROMPTLY THE ENCLOSED PROXY FOR WHICH A RETURN
ENVELOPE IS PROVIDED.
<PAGE> 4
HARRIS CORPORATION
1025 West NASA Boulevard
Melbourne, Florida 32919
---------------------------------------------
Proxy Statement
Annual Meeting of Shareholders
to be held October 23, 1998
---------------------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Harris Corporation ("Harris" or the
"Corporation") for use at the Annual Meeting of Shareholders to be held on
Friday, October 23, 1998, and at any adjournment thereof.
The record date for shareholders entitled to vote at the Annual Meeting is
August 28, 1998. This Proxy Statement, the accompanying proxy and a copy of the
Corporation's Annual Report to Shareholders for the fiscal year ended July 3,
1998, are being mailed to shareholders commencing on September 16, 1998.
The Corporation has only one class of outstanding shares, namely Common
Stock, par value $1 per share, of which there were 80,008,737 shares outstanding
on the record date and approximately 10,643 holders of record. Each share is
entitled to one vote. The attendance by proxy or in person of holders of a
majority of the shares entitled to vote at the meeting will constitute a quorum
to hold the meeting.
The shares represented by each valid proxy will be voted at the meeting or
any adjournment thereof, and, if a choice is specified in the proxy, the shares
will be voted in accordance with such specification. If no vote is specified,
the shares will be voted FOR the election of the nominees named in this Proxy
Statement and FOR the ratification of Ernst & Young LLP as the independent
auditors for fiscal 1999. With respect to the election of directors, a
shareholder may (1) vote "for" the election of all three of the nominees for
director named in this Proxy Statement, (2) "withhold" authority to vote for all
of the nominees, or (3) "withhold" authority to vote for one or more of the
nominees and vote "for" the remaining nominee or nominees. The election of
directors requires a plurality of the votes cast, which means that if a quorum
is present at the meeting, the three candidates for director receiving the
greatest number of votes will be elected. Withholding authority to vote for a
particular nominee will not prevent that nominee from being elected. With
respect to the ratification of the appointment of Ernst & Young LLP as the
Corporation's independent auditors for fiscal 1999, a shareholder may (1) vote
"for" such ratification, (2) vote "against" such ratification, or (3) "abstain"
from voting on the matter. If a quorum is present at the meeting, the
affirmative vote of a majority of the shares represented at the meeting and
entitled to vote on this matter will be required to ratify the appointment of
auditors. A vote to abstain from voting on this matter will have the effect of a
vote against ratification of the auditors.
With respect to shares held in brokerage accounts, any such shares which
are not voted by the broker with respect to a particular matter will not be
considered present and entitled to vote with respect to such matter, although
such shares may be considered present and entitled to vote for other purposes
and will be counted for purposes of determining the presence of a quorum. If a
quorum is present, any such shares will not affect the determination of whether
such matter is approved.
A shareholder may revoke a proxy at any time prior to the time it is voted
at the meeting by filing with the Secretary of the Corporation a written notice
of revocation, by duly executing and delivering a subsequent proxy bearing a
later date, or by attending the meeting and voting in person.
The cost of soliciting proxies will be borne by the Corporation. Officers
and employees may, by letter, telephone, electronic mail, or in person, make
additional requests for the return of proxies. The Corporation will reimburse
brokerage houses, custodians, nominees and others for their out-of-pocket
expenses incurred in
<PAGE> 5
connection with such solicitation. The Corporation also has retained Georgeson &
Company Inc. to aid in the solicitation of proxies at an estimated fee of $7,500
plus out-of-pocket expenses.
ELECTION OF THREE DIRECTORS
The Restated Certificate of Incorporation of the Corporation classifies the
Board of Directors into three classes with three year terms of office ending in
different years. This year, the terms of Phillip W. Farmer, Lester E. Coleman
and Alfred C. DeCrane, Jr. expire at the Annual Meeting of Shareholders and each
of them has been nominated for a new three year term expiring at the Annual
Meeting of Shareholders in 2001. In accordance with the Restated Certificate of
Incorporation, a director shall hold office until the Annual Meeting of
Shareholders for the year in which such director's term expires and until such
director's successor shall be elected and shall qualify, subject, however, to
prior death, resignation, retirement, disqualification or removal from office.
Vacancies may be filled by the remaining directors.
The authorized number of directors is presently fixed at nine. From time to
time, the Board considers potential candidates, and as an appropriate candidate
is identified the Board will consider increasing the authorized number of
directors. The terms of the continuing directors will expire at subsequent
Annual Meetings of Shareholders.
The persons named in the accompanying proxy will vote in favor of electing
Messrs. Farmer, Coleman and DeCrane to serve for the three year term expiring in
2001, unless otherwise specified in the proxy. If any nominee shall become
unavailable for election, the proxies will be voted for the election of such
persons, if any, as shall be designated as a replacement by the Board of
Directors.
None of the incumbent directors, including each of the nominees, is related
to any other nominee or director or to any executive officer of the Corporation
or its subsidiaries by blood, marriage or adoption.
Biographical summaries of the nominees and of the continuing directors
appear on the following pages, and data with respect to the number of shares of
the Corporation's Common Stock beneficially owned by them as of July 31, 1998 is
set forth in the table on page 9.
2
<PAGE> 6
BOARD OF DIRECTORS
NOMINEES FOR ELECTION
[PHOTOGRAPH OF PHILLIP W. FARMER]
PHILLIP W. FARMER
Nominee for
Term Expiring 2001
Mr. Farmer, 60, is chairman of the board, president and
chief executive officer of the Corporation. He joined Harris
in 1982 as vice president-general manager of the Government
Support Systems Division, was named vice president-Palm Bay
Operations, Electronic Systems Sector in 1986, and senior vice
president-sector executive in 1988. He was elected president
of the Electronic Systems Sector in 1989, executive vice
president of the Corporation in 1991, president and chief
operating officer of the Corporation in 1993 and chairman of
the board and chief executive officer in 1995. Mr. Farmer was
elected to the Harris Board in 1993 and is a member of the
Executive and Finance Committee and the Investment Committee
for the Harris Corporation Retirement Plans. Prior to his
employment with the Corporation, Mr. Farmer held various
management and technical positions with General Electric for
twenty years. He serves on the board of governors of both the
Aerospace Industries Association and the Manufacturers
Alliance. He is also a trustee of the Florida Institute of
Technology.
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[PHOTOGRAPH OF LESTER E. COLEMAN]
LESTER E. COLEMAN
Nominee for
Term Expiring 2001
Dr. Coleman, 67, is the retired chairman of the board and
chief executive officer of the Lubrizol Corporation, a
diversified specialty chemical company and is currently a
graduate student at Dartmouth College. Dr. Coleman joined
Lubrizol in 1955 as a research chemist. He was elected a
director of Lubrizol in 1974, became president in 1976, chief
executive officer in 1978 and chairman of the board in 1982.
He retired from Lubrizol in 1996. Dr. Coleman was elected to
the Harris Board in 1985 and is a member of the Audit
Committee and the Management Development and Compensation
Committee and is chairperson of the Ethics Committee. He is a
director of Lubrizol Corporation, Norfolk Southern Corporation
and S. C. Johnson & Son, Inc.
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[PHOTOGRAPH OF ALFRED C. DECRANE, JR.]
ALFRED C. DECRANE, JR.
Nominee for
Term Expiring 2001
Mr. DeCrane, 67, is the retired chairman of the board and
chief executive officer of Texaco Inc. He joined Texaco in
1959, became president in 1983, chairman of the board in 1987
and was elected to the additional position of chief executive
officer in 1993. He retired from Texaco in July 1996. Mr.
DeCrane was elected to the Harris Board in 1996 and is a
member of the Audit Committee, the Corporate Governance
Committee and the Ethics Committee. Mr. DeCrane is a director
of Bestfoods, Birmingham Steel Corporation, CIGNA Corporation,
Corn Products International, Inc. and U.S. Global Leaders
Growth Fund, Ltd. and is a member of the Morgan Stanley
International Advisory Board. He also serves as co-chairman of
the U.S.--Saudi Arabian Business Council and is a member of
the Board of Trustees of the University of Notre Dame.
3
<PAGE> 7
CONTINUING DIRECTORS
[PHOTOGRAPH OF ROBERT CIZIK]
ROBERT CIZIK
Term Expiring 1999
Mr. Cizik, 67, is a former chairman of the board and
chief executive officer of Cooper Industries, Inc., a
diversified worldwide manufacturing company. He joined Cooper
Industries in 1961, and after a series of management
positions, was elected president and chief operating officer
in 1973, chief executive officer in 1975, chairman of the
board in 1983 and retired in 1996. Mr. Cizik was elected to
the Harris Board in 1988, is chairperson of the Audit
Committee and a member of the Ethics Committee and Executive
and Finance Committee. He is a director of Air Products and
Chemicals, Inc., Temple-Inland Inc. and Stanadyne Automotive
where he also serves as non-executive chairman of the board.
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[PHOTOGRAPH OF RALPH D. DENUNZIO]
RALPH D. DENUNZIO
Term Expiring 2000
Mr. DeNunzio, 66, is former chairman of the board and
chief executive officer of the investment banking firm of
Kidder, Peabody & Co. Incorporated. Following his retirement
from Kidder, Peabody & Co. Incorporated in 1987, he became
president of Harbor Point Associates, Inc., a private
investment and consulting firm in New York City. Mr. DeNunzio
served as chairman of the Board of Governors of the New York
Stock Exchange from 1971 to 1972 and as vice chairman from
1969 to 1971. He also served as chairman of the Securities
Industry Association for the year 1981. Mr. DeNunzio was
elected to the Harris Board in 1973 and is a member of the
Ethics Committee, the Executive and Finance Committee and the
Investment Committee for the Harris Corporation Retirement
Plans and is chairperson of the Management Development and
Compensation Committee. He is a director of AMP Incorporated,
FDX Corporation and NIKE, Inc.
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[PHOTOGRAPH OF JOSEPH L. DIONNE]
JOSEPH L. DIONNE
Term Expiring 2000
Mr. Dionne, 65, is chairman of the board and the retired
chief executive officer of The McGraw-Hill Companies, Inc., a
publishing and information company. He joined McGraw-Hill as
vice president of its book company in 1967, and after a series
of management positions, was elected president and chief
operating officer in 1981, president and chief executive
officer in 1983, and chairman of the board and chief executive
officer in 1988. He retired as chief executive officer of
McGraw-Hill in April 1998. Mr. Dionne was elected to the
Harris Board in 1989 and is chairperson of the Corporate
Governance Committee, and is also a member of the Ethics
Committee, the Executive and Finance Committee and the
Management Development and Compensation Committee. He is a
director of The Equitable Companies Incorporated, The
Equitable Life Assurance Society of the United States, and
Ryder System, Inc. Mr. Dionne is a member of the board of
trustees of Hofstra University. He is currently chairman of
the board of The United Way of Tri-State and of the Council
for Aid to Education.
4
<PAGE> 8
[PHOTOGRAPH OF JOHN T. HARTLEY]
JOHN T. HARTLEY
Term Expiring 1999
Mr. Hartley, 68, is the retired chairman of the board and
chief executive officer of the Corporation. He is the
chairperson of the Executive and Finance Committee and the
Investment Committee for the Harris Corporation Retirement
Plans, and is a member of the Ethics Committee. He joined
Radiation Incorporated in 1956 as a research engineer after
serving one year as a member of the faculty of Auburn
University. He was appointed a vice president of Radiation in
1961. In 1968, a year after the merger of Radiation with
Harris, he was named vice president-general manager of the
Electronic Systems division. He was elected vice
president-group executive of Harris in 1971, executive vice
president and a director in 1976, president and principal
operating officer in 1978, president and chief operating
officer in 1982, chief executive officer in 1986 and chairman
of the board in 1987. He retired from Harris on July 1, 1995.
Mr. Hartley is a director of The Equitable Companies
Incorporated, The Equitable Life Assurance Society of the
United States, and The McGraw-Hill Companies, Inc. He is also
a director of the National Association of Manufacturers and
serves as the chairman of the Board of Trustees of the Florida
Institute of Technology. Mr. Hartley is a former member of
President Reagan's and President Bush's National Security
Telecommunications Advisory Committee and is past chairman of
the Defense Policy Advisory Committee on Trade.
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[PHOTOGRAPH OF KAREN KATEN]
KAREN KATEN
Term Expiring 1999
Ms. Katen, 49, is president of the Pfizer U.S.
Pharmaceuticals Group (the principal operating division of
Pfizer, Inc.), executive vice president of the global Pfizer
Pharmaceuticals Group, corporate vice president and a member
of the Corporate Management Committee of Pfizer. Ms. Katen
joined Pfizer in 1974, following receipt of BA and MBA degrees
from the University of Chicago. Ms. Katen was elected to the
Harris Board in 1994 and is a member of the Corporate
Governance Committee, the Ethics Committee and the Management
Development and Compensation Committee. Ms. Katen is a
director of General Motors and the International Council of
J.P. Morgan & Co. She is a member of the Pharmaceutical
Research and Manufacturers Association of America, vice
chairman of the Board of the National Pharmaceutical Council,
and the boards of United Way Tri-state and the Women's Forum,
Inc. Ms. Katen is also on the national board of trustees for
the American Cancer Society Foundation and is trustee for the
University of Chicago and also a council member of the
Graduate School of Business at the University of Chicago.
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[PHOTOGRAPH OF ALEXANDER B. TROWBRIDGE]
ALEXANDER B. TROWBRIDGE
Term Expiring 2000
Mr. Trowbridge, 68, is president of Trowbridge Partners
Inc., a management consulting firm. He is a past president of
the National Association of Manufacturers, in which capacity
he served for ten years. He was vice chairman of Allied
Chemical Corporation (now Allied-Signal Corporation) from 1976
to 1980, president of The Conference Board Inc. from 1970 to
1976, and president of the American Management Association
from 1968 to 1970. He was Secretary of Commerce from 1967 to
1968. Mr. Trowbridge was elected to the Harris Board in
January 1990 and is a member of the Audit Committee, the
Ethics Committee, and the Investment Committee for the Harris
Corporation Retirement Plans. He is a director of ICOS
Corporation, IRI International, New England Life Insurance
Company, The Gillette Company, The Rouse Company, Sun Company,
Inc., Sun Resorts International and E. M. Warburg Pincus
Counsellors Funds. He is a member of the Council on Foreign
Relations.
5
<PAGE> 9
INFORMATION ON BOARD OF DIRECTORS AND COMMITTEES
MEETINGS AND ATTENDANCE
During the year, there were six meetings of the Board of Directors and
seventeen meetings of the standing committees of the Board. All directors
attended all meetings of the Board and of the Board committees on which they
served.
COMMITTEES OF THE BOARD
The Board has established six standing committees to assist in the
discharge of its responsibilities. The principal functions of each committee are
described below.
The AUDIT COMMITTEE assists the Board in ensuring that the Corporation's
financial, auditing and reporting practices, procedures and controls are within
acceptable limits of sound practice and in accordance with applicable laws and
regulations. The Committee meets periodically with the independent auditors,
together with representatives of management, as appropriate, for the purpose of
reviewing the scope and results of the annual audit of the financial statements
and the recommendations of the auditors. The Committee also evaluates the
professional competency of the financial staff and internal auditors, reviews
the scope of the internal audit program, reviews the nature and extent of
non-audit professional services performed by the auditors and annually
recommends to the Board of Directors the firm of independent public accountants
to be selected as auditors of the Corporation. The Committee held three meetings
during the past fiscal year. From time to time the Committee also undertakes
special projects. Such projects have included reviewing the Corporation's
environmental policies and reviewing and assessing the potential impact of the
"Year 2000 issue" upon the Corporation's operations and the efforts to deal with
such impact. The members of the Audit Committee are Messrs. Cizik (Chairperson),
Coleman, DeCrane and Trowbridge.
The MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE reviews and evaluates
plans for the development, training and utilization of the Corporation's
management resources; reviews the Corporation's compensation philosophy and
establishes the compensation of officers of the Corporation other than the chief
executive officer and president, whose compensation is recommended by the
Committee and approved by all the outside directors; and administers the
Corporation's stock incentive and stock based compensation plans. The Committee
held two meetings during the past fiscal year. The members of the Management
Development and Compensation Committee are Messrs. Coleman, DeNunzio
(Chairperson) and Dionne and Ms. Katen.
The CORPORATE GOVERNANCE COMMITTEE identifies, evaluates and recommends
director nominees to the Board of Directors to fill vacancies and to be elected
at the annual meeting of the shareholders; recommends directors' compensation
and benefit plans to the Board; recommends committees of the Board and committee
members; sets meeting schedules for the Board of Directors and recommends
meeting schedules for the committees; and facilitates the Board's evaluation of
its effectiveness. The Corporate Governance Committee considers suggestions for
director nominees from all sources, including shareholders. Any shareholder
suggestion, together with an appropriate biographical summary, should be sent to
the Secretary of the Corporation. In addition, the By-Laws of the Corporation
establish certain requirements concerning shareholder nominations for election
of directors, including that notice of such nominations be delivered to the
Secretary of the Corporation not less than 60 nor more than 90 days prior to the
date of the annual meeting of shareholders (generally the fourth Friday in
October). Each notice of nomination is required to contain the name and address
of the shareholder who intends to make the nomination; the name, address and
written consent of the nominee and such other nominee information as would be
required to be disclosed in a proxy solicitation. The Committee held four
meetings during the past fiscal year. The members of the Corporate Governance
Committee are Messrs. DeCrane and Dionne (Chairperson) and Ms. Katen.
The EXECUTIVE AND FINANCE COMMITTEE is authorized to evaluate and review
the Corporation's financial position, capital structure, significant capital
asset transactions, major acquisitions and divestitures, and during the
intervals between the meetings of the Board of Directors, to the extent
permitted by law, to exercise all of the powers of the Board (except for certain
matters reserved for the Board) in the management of the business
6
<PAGE> 10
of the Corporation. The Committee held two meetings during the past fiscal year.
The members of the Executive and Finance Committee are Messrs. Cizik, DeNunzio,
Dionne, Farmer and Hartley (Chairperson).
The INVESTMENT COMMITTEE FOR THE HARRIS CORPORATION RETIREMENT PLANS
oversees the financial administration and operation of the Corporation's various
retirement and pension plans, including the selection and review of the
performance of the investment funds and the independent investment advisors for
the plans. The Committee held four meetings during the past fiscal year. The
members of the Investment Committee for the Harris Corporation Retirement Plans
are Messrs. DeNunzio, Farmer, Hartley (Chairperson) and Trowbridge.
The ETHICS COMMITTEE reviews and oversees the Corporation's continuing
program relating to standards of business conduct, sound business practices and
legal requirements in connection with the Corporation's business. The Committee
held two meetings during the past fiscal year. The Ethics Committee is comprised
of all the outside directors. Dr. Coleman is the Chairperson.
DIRECTORS' COMPENSATION
Non-employee directors receive an annual retainer fee of $30,000 (increased
from $26,500 effective January 1, 1998 in connection with the restructuring of
director compensation discussed below). In addition, non-employee directors who
serve on the standing committees receive an additional annual fee of $1,500 for
their services on each committee, plus $3,000 (increased from $1,000 on January
1, 1998) if serving as chairperson of a committee.
Each non-employee director also receives $1,200 for attendance at each
Board meeting plus $800 for attendance at each committee meeting and for
attendance at any other meeting devoted to the affairs of the Corporation. Each
non-employee director is also reimbursed for out-of-pocket expenses incurred in
connection with attendance at Board and committee meetings. In addition, each
non-employee director is provided travel, accident and disability insurance in
the event that the director is involved in an accident while traveling on
business relating to the Corporation.
Under the Corporation's Stock Incentive Plan, non-employee directors are
automatically granted an option to purchase 2,000 shares of the Corporation's
Common Stock on the date of each Annual Meeting of Shareholders. The options are
non-statutory options for tax purposes and are priced at 100% of the fair market
value on the date of grant. Fifty percent of the option shares become
exercisable on the first anniversary of the date of grant and twenty-five
percent on each of the next two succeeding anniversary dates; however, any
options outstanding for more than one year at the time a change in control of
the Corporation occurs become immediately exercisable. In the event of a
director's retirement, vested options may be exercised for three years
thereafter, and, in the event of a director's death, options then exercisable
may be exercised for twelve months thereafter. In no event may such options be
exercisable more than ten years after the date of grant. Neither the Board nor
any committee of the Board has any discretion with respect to options granted to
non-employee directors.
At the October 1997 Director's meeting, the Board approved a restructuring
of director compensation. The restructuring was intended to more closely align
director compensation with creating and sustaining shareholder value. The
elements of the restructuring included: suspension of the Corporation's
Directors Retirement Plan; an annual grant of 500 Harris stock units; increases
in the annual retainer fee and committee chairperson fee; and amendment of the
director's deferral plan to permit the deferral of fees into Harris stock units.
Under the Corporation's Directors Retirement Plan, upon retirement or
disability a director with five or more years of service receives an annual cash
retirement benefit payable for life in an amount equal to fifty percent of the
retainer fee in effect upon retirement or disability, plus an additional ten
percent for each year of service in excess of five years, up to one hundred
percent of the retainer. In the event of a change in control, a retired director
who is a beneficiary under the plan will be paid a lump sum payment equal to the
actuarial equivalent of the retirement benefit.
7
<PAGE> 11
Effective January 1, 1998, the Directors Retirement Plan was terminated
with respect to all future non-employee directors and the rights under the plan
of all non-employee directors with less than ten years of service were converted
into Harris stock units under the Corporation's 1997 Directors' Deferred
Compensation and Annual Stock Unit Award Plan (described below). In addition,
all non-employee directors with ten or more years of service were given the
option of retaining rights under the plan based upon the 1997 $26,500 annual
retainer or converting their rights under the plan into Harris stock units under
the Corporation's 1997 Directors' Deferred Compensation and Annual Stock Unit
Award Plan.
The number of Harris stock units credited to those directors whose rights
under the Directors Retirement Plan were converted into such units was
determined by dividing (1) the actuarial present value of the annual retirement
benefit that would have been payable under the plan (assuming retirement at age
72 and based on an interest rate of 6.5% compounded annually and giving credit
to directors with less than five years service equal to 10% of the annual
retainer for each year of service) by (2) the average daily closing price for a
share of the Corporation's Common Stock for the three-month period from October
1, 1997 through December 31, 1997.
In connection with the changes to the Directors Retirement Plan, effective
January 1, 1998, the Corporation's 1997 Directors' Deferred Compensation Plan
was renamed the "1997 Directors' Deferred Compensation and Annual Stock Unit
Award Plan" (the "Directors' Plan") and was amended to provide that on January 1
of each year, commencing with January 1, 1998, the Corporation shall credit each
non-employee director with 500 Harris stock units. The number of such units to
be credited on each January 1 may be changed from time to time by the Board.
Under the Directors' Plan, each non-employee director may also elect to
defer all or a portion of such director's fees. Such deferred amounts may be
invested in investment alternatives similar to the investment alternatives
available under the Corporation's Retirement Plan. The Directors' Plan also
permits non-employee directors to invest all or a portion of such deferred fees
in Harris stock units, pursuant to which a director's account is credited with a
number of units of Harris stock equivalents based upon the fair market value of
the Corporation's Common Stock on the last day of the calendar month in which
the fees are deferred. Once amounts are credited in Harris stock equivalents,
they may not thereafter be reallocated into any other investment alternatives
and are only payable following a director's resignation, retirement or death.
Each Harris stock unit is credited with dividend equivalents, which are deemed
reinvested in additional Harris stock units on the dividend payment date.
Amounts deferred under the Directors' Plan, including amounts deferred in the
form of Harris stock units shall, at a director's election, be payable in either
a lump sum cash payment on a date within five years of resignation or retirement
or in annual payments over a designated number of years, provided the amounts
are fully paid within ten years of resignation or retirement. Within ninety days
following a change of control, the Corporation shall pay to each director (or
former director) a cash lump sum payment equal to the then remaining balance in
each such director's account.
The Corporation makes available to non-employee directors tax preparation
and estate planning services of up to $5,000 per annum. Directors can also
participate in a matching gift program available to all employees, where
contributions to eligible educational institutions and charitable organizations
are matched on a one-for-one basis up to an annual maximum of $10,000 per
director.
Each of the directors and executive officers (including those named in the
Summary Compensation Table below) have entered into an indemnification agreement
with the Corporation pursuant to which each director and executive officer shall
be indemnified against expenses (including attorneys' fees, judgments, fines,
and amounts paid in settlement) actually and reasonably incurred in connection
with any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal or administrative or investigative, to which he or she was, is,
or is threatened to be made a party by reason of being or having been such a
director or officer, to the full extent allowable under Delaware law.
It is the Corporation's policy that directors retire from the Board
effective at the end of the month in which they reach age seventy-two. In
addition, a director is expected to automatically tender his or her resignation
in the event of retirement or other significant change in status from the
position held at the time of election to the Board, although the Board may opt
to have such director continue to serve on the Board.
8
<PAGE> 12
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS
The rules of the Securities and Exchange Commission require disclosure
regarding any person known to the Corporation to be a beneficial owner of more
than five percent of the Corporation's Common Stock. The Corporation knows of no
person who, or group which, owns more than five percent of its Common Stock as
of July 31, 1998.
The following table sets forth certain information with respect to the
shares and equivalent units of the Corporation's Common Stock beneficially
owned, as of July 31, 1998, by each director, including the nominees for
election at the Annual Meeting, each of the executive officers named in the
Summary Compensation Table and the directors and all executive officers as a
group. Except as otherwise noted, the named individual or family members had
sole voting and investment power with respect to such securities.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY DEFERRED
NAME OF BENEFICIAL OWNER OWNED (1) STOCK UNITS (2)
------------------------ ------------ ---------------
<S> <C> <C>
Wesley E. Cantrell (3)...................................... 185,864 167
Robert Cizik (4)............................................ 14,000 1,096
Lester E. Coleman (4)(5).................................... 14,000 4,278
E. Van Cullens (3).......................................... 30,033 100
Alfred C. DeCrane, Jr. (4).................................. 3,081 3,571
Ralph D. DeNunzio (4)....................................... 18,000 4,041
Joseph L. Dionne (4)........................................ 12,496 3,379
Phillip W. Farmer (3)....................................... 384,803 3,011
John C. Garrett (3)......................................... 110,645 1,130
John T. Hartley (4)(5)...................................... 37,956 3,363
Karen Katen (4)............................................. 7,500 2,294
Bryan R. Roub (3)........................................... 141,458 1,544
Alexander B. Trowbridge (4)................................. 12,417 3,905
All Directors and Executive Officers as a group (18
individuals) (6).......................................... 1,172,404 34,535
</TABLE>
---------------
(1) No individual director, nominee for director or named executive officer
beneficially owns 1% or more of the Corporation's outstanding Common Stock.
The directors and executive officers as a group beneficially own 1.46% of
the Corporation's outstanding Common Stock. All references to Common Stock
are adjusted for the two-for-one stock split in September 1997.
(2) For the outside directors, this column includes stock equivalent units
credited under the 1997 Directors' Deferred Compensation and Annual Stock
Unit Award Plan discussed above under "Directors' Compensation" and for Mr.
Hartley, also includes amounts deferred in the form of stock equivalent
units under the Supplemental Executive Retirement Plan. For the executive
officers, this column includes amounts deferred in the form of stock
equivalent units under the Supplemental Executive Retirement Plan which are
settled in cash following, or under certain circumstances prior to,
retirement. These deferred stock equivalent units may not be voted or
transferred.
(3) The shares reported include (i) performance shares awarded under the
Corporation's Stock Incentive Plan for which the performance period has not
expired and as to which the named individuals have sole voting power but no
investment power, as follows: Mr. Cantrell -- 30,000 shares; Mr. Cullens --
10,000 shares; Mr. Farmer -- 90,000 shares; Mr. Garrett -- 30,000 shares;
and Mr. Roub -- 29,000 shares; and (ii) shares underlying stock options
granted under the Corporation's Stock Incentive Plan which are exercisable
within 60 days of July 31, 1998, as follows: Mr. Cantrell -- 107,070 shares;
Mr. Cullens -- 20,000 shares; Mr. Farmer -- 159,553 shares; Mr. Garrett --
44,770 shares; and Mr. Roub -- 50,341 shares.
(4) The shares reported include shares underlying stock options granted under
the Corporation's Stock Incentive Plan, which are exercisable within 60 days
of July 31, 1998, as follows: Mr. Cizik -- 12,000 shares; Dr. Coleman --
11,000 shares; Mr. DeCrane -- 1,000 shares; Mr. DeNunzio --
9
<PAGE> 13
12,000 shares; Mr. Dionne -- 12,000 shares; Mr. Hartley -- 2,500 shares; Ms.
Katen -- 2,500 shares; and Mr. Trowbridge -- 9,000 shares.
(5) The shares reported do not include shares owned by family members as
follows: Dr. Coleman -- 600 shares; and Mr. Hartley -- 2,000 shares. Dr.
Coleman and Mr. Hartley disclaim beneficial ownership of such shares.
(6) The shares reported as owned by the directors and all executive officers as
a group include (i) 231,400 performance shares awarded to the executive
officers under the Corporation's Stock Incentive Plan for which as of July
31, 1998, the executive officers have sole voting power but no investment
power; and (ii) 508,706 shares underlying stock options granted under the
Corporation's Stock Incentive Plan, or its predecessor, the Stock Option
Plan for Key Employees, which are exercisable within 60 days of July 31,
1998. The shares reported do not include 2,600 shares owned by family
members, for which such directors and executive officers disclaim beneficial
ownership.
10
<PAGE> 14
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Management Development and Compensation Committee, which is comprised
of non-employee directors, approves the Corporation's compensation philosophy
and the compensation, perquisites and other benefits for the Corporation's
executive officers under salary, incentive and other plans authorized by the
Board of Directors or the Corporation's shareholders. In addition, the Committee
recommends for consideration and approval by all of the non-employee directors
the compensation for the Chief Executive Officer.
COMPENSATION PHILOSOPHY
The Corporation's executive compensation philosophy is designed to meet the
needs of the Corporation, its executives and its shareholders. The executive
compensation program is structured to:
- closely link compensation to the individual's performance and the
Corporation's financial results;
- align the interests of the Corporation's executives and its shareholders
by emphasizing both the short term and strategic focus of the
Corporation's businesses and by facilitating management stock ownership;
and
- enable the Corporation to attract and retain a world class management
team.
This philosophy applies to all management employees of the Corporation
including the executive officers named in the Summary Compensation Table. The
Corporation's executive compensation program is composed of: (i) an annual cash
component, consisting of salary and an incentive based on the financial
performance of: a Sector or Division in the case of Sector and Division
management, respectively; a Sector and the Corporation in the case of the Sector
Presidents; and the Corporation in the case of the other Corporate executives;
and (ii) a long-term incentive component, consisting of stock options and
performance shares. Mr. Cantrell, the President of Lanier Worldwide,
participates in the Lanier Worldwide Key Contributor Bonus Plan and the Harris
Stock Incentive Plan.
The Corporation utilizes a formal system for evaluating executive
performance. Executive annual cash compensation consisting of base salary and an
annual incentive award opportunity is determined by reference to: external
industrial surveys of compensation of executives in similar positions;
individual performance and experience in the position; proxy statement
compensation analyses; and scope of responsibility. The payouts for annual
incentive awards are based upon the degree of achievement of the net income
target of the applicable business unit which is established at the start of the
year as part of the Corporation's strategic planning process. Similarly,
long-term compensation in the form of performance shares is based upon the
degree of attainment of financial and/or operating goals and objectives outlined
in the strategic planning process. The criteria of the financial and operating
goals used for the three year performance period ending July 3, 1998 were
cumulative earnings per share for the Corporation and cumulative net income for
the Sectors and Divisions.
The Corporation's executive compensation program is designed to ensure that
executive pay remains competitive with pay for comparable jobs, responsibilities
and performance in leading industrial companies. The Corporation periodically
retains outside compensation and benefit consultants to review the Corporation's
executive compensation programs.
TOTAL ANNUAL COMPENSATION
Annual cash compensation consists of a fixed salary and an opportunity for
a variable performance incentive. The base salaries and planned incentive
compensation for senior executives other than the Chief Executive Officer are
recommended by Mr. Farmer and are reviewed and approved by the Committee. The
Corporation's Annual Incentive Plan, which was approved by the shareholders of
the Corporation at the 1995 Annual Meeting, provides for payment to executives
of a specified amount based upon achievement of specific financial objectives
including net income and revenue growth. Performance is measured as a percent of
attainment against these objectives. For fiscal 1998 the annual incentive
payment was based upon the attainment of net income targets of the applicable
business unit and, in the case of Lanier, net income and
11
<PAGE> 15
revenue growth. Such targets were established at the start of fiscal 1998.
Payments may not exceed 200% of the designated target amount. The percentage of
total annual pay attributable to incentive compensation increases
proportionately with the executive's level of management responsibility. For the
executive officers named in the Summary Compensation Table, planned incentive
compensation ranged from 40% to 57% of total annual compensation for fiscal
1998.
LONG-TERM COMPENSATION
The Corporation's Stock Incentive Plan, which was initially approved by the
shareholders at the 1990 Annual Meeting and which was subsequently amended and
approved by the shareholders of the Corporation at the 1995 Annual Meeting,
aligns executive interests and shareholder interests. The Plan permits the
granting of any or all of the following types of awards: (1) performance shares
(or units) conditioned upon meeting performance criteria, (2) restricted stock
(or units), (3) stock options, including incentive stock options, (4) stock
appreciation rights, independent of, or in tandem with, stock options, and (5)
other awards valued in whole or in part by reference to, or otherwise based on,
the Corporation's Common Stock.
The Committee believes that through the use of stock incentives the
interests of the Corporation's executives are directly related to enhancing
shareholder value. To date, the Committee has granted only performance share
awards and stock options. With respect to performance share awards, at the
beginning of the award cycle the Committee determines the applicable performance
criteria utilizing the Corporation's strategic planning process and a period of
time (generally, three fiscal years) during which the Corporation's performance
is to be measured. The performance share award and option grants for senior
executives other than the Chief Executive Officer are recommended by Mr. Farmer
and are reviewed and approved by the Committee. The Committee issues each
participant a number of performance shares and establishes a means for computing
the number of performance shares that can be earned during the period based on:
the performance of a Sector or Division in the case of Sector and Division
management, respectively; of a Sector and the Corporation in the case of the
Sector Presidents; and of the Corporation in the case of other Corporate
executives. For fiscal 1998, participant payouts ranged from zero to 120% of the
performance share award. Performance shares are subject to forfeiture if the
performance goals are not attained or if a participant's employment is
terminated for certain reasons before the performance period has ended. The
value of performance shares is based on the value of the Corporation's Common
Stock. Stock options are granted at fair market value as of the grant date, vest
over three years, and have a term of not greater than ten years. Stock options
provide value only when the price of the Corporation's Common Stock increases
above the option grant price.
Grants made to the executive officers under the Corporation's Stock
Incentive Plan and Annual Incentive Plan comply with the requirements of
Internal Revenue Code Section 162(m) relating to the tax deductibility of
certain compensation exceeding $1,000,000 for executive officers named in the
Summary Compensation Table. In any year, however, the Board or the Committee may
determine in light of all applicable circumstances that it would be in the best
interests of the Corporation for compensation to be paid under such plans or
otherwise in a manner that would not qualify such compensation as performance
based under Section 162(m).
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's base salary, incentive compensation,
performance share award and stock option grants are annually reviewed and
recommended by the Committee and approved by the outside directors. In
recommending Mr. Farmer's base salary, incentive compensation, performance share
award and stock option grant for fiscal 1998, the Committee considered both the
Corporation's performance and Mr. Farmer's individual performance by the same
measures described above for determining executive officer compensation.
Under the Corporation's Annual Incentive Plan, Mr. Farmer received annual
incentive compensation for fiscal 1998 based upon 98.32% achievement of the
Corporation's net income target for the year, which net income target and the
calculation of net income for the fiscal year (which calculation excludes
certain one
12
<PAGE> 16
time restructuring and similar charges) was set at the start of the fiscal year.
Mr. Farmer's long-term incentive compensation was based upon aggregate earnings
per share performance compared with the aggregate earnings per share target
established for the three year period commencing July 1, 1995 and ending July 3,
1998. Based upon the performance of the Corporation and the payout formula
recommended by the Committee, the outside directors authorized a payout of
30,000 shares for Mr. Farmer for the three year period commencing July 1, 1995
and ended July 3, 1998.
Ralph D. DeNunzio, Chairman
Lester E. Coleman
Joseph L. Dionne
Karen Katen
13
<PAGE> 17
PERFORMANCE GRAPH
The graph below compares the five-year cumulative total return for Harris
Common Stock with the comparable cumulative total return of the Standard and
Poor's ("S&P") 500 Stock Index ("S&P 500") and the S&P Technology Sector Index*
("S&P Technology"). The comparison of total return on investment (change in year
end stock price plus reinvested dividends) for each of the periods assumes that
$100 was invested on June 30, 1993 in the Corporation and the S&P 500 and the
S&P Technology.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG S&P 500, S&P TECHNOLOGY AND HARRIS CORPORATION
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P
(FISCAL YEAR COVERED) HARRIS S&P 500 TECHNOLOGY
<S> <C> <C> <C>
1993 100 100 100
1994 117 101 108
1995 142 128 176
1996 171 161 210
1997 251 217 319
1998 259 285 425
</TABLE>
- - ---------------
* The S&P Technology Sector Index is the successor to the S&P High Technology
Composite Index presented in past proxy statements.
14
<PAGE> 18
SUMMARY COMPENSATION TABLE
The following table sets forth annual and long-term compensation for
services to the Corporation for the fiscal years ended July 3, 1998, June 27,
1997 and June 30, 1996 for those executives who, as of July 3, 1998 were (i)
Chief Executive Officer and (ii) the other four most highly compensated
executives of the Corporation. All share data have been adjusted to reflect the
two-for-one stock split effected in September 1997.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- -----------------------
AWARDS PAYOUTS
---------- ----------
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS/ LTIP ALL OTHER
NAME AND COMPENSATION(1) SARS PAYOUTS(2) COMPENSATION(4)
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) # ($) ($)
------------------ ---- --------- -------- --------------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
P. W. Farmer 1998 725,000 737,400 79,200 84,553 1,327,500 255,166
Chairman, President 1997 591,667 658,920 83,600 65,738 2,411,406 181,435
and Chief Executive 1996 533,333 507,700 81,600 63,760 1,220,000 171,576
Officer
W.E. Cantrell 1998 312,115 352,501 26,400 25,986 407,100 26,386
President -- Lanier 1997 300,000 403,100 15,200 25,988 302,500(3) 25,411
Worldwide 1996 297,462 372,960 6,800 30,406 225,000(3) 9,414
E. Van Cullens 1998 312,500 198,257 84,542 20,000 0 39,247
President -- 1997 24,422 0 50,489 20,000 0 0
Communications Sector*
J.C. Garrett 1998 312,500 267,282 26,400 44,770 371,700 100,759
President -- 1997 296,667 251,887 30,400 32,000 894,413 84,771
Semiconductor 1996 277,500 235,761 34,000 20,000 610,000 89,893
Sector(5)
B.R. Roub 1998 296,667 265,464 25,520 22,125 398,250 97,325
Senior Vice President 1997 277,500 285,532 28,120 22,196 868,106 87,222
and Chief Financial 1996 263,333 253,850 30,600 33,246 549,000 74,788
Officer
</TABLE>
------------------
* Mr. Cullens joined Harris in June 1997; the amounts reported for fiscal 1997
reflect less than a full year of employment.
(1) Except for Mr. Cullens, none of the executive officers named in the Summary
Compensation Table received personal benefits in excess of the lesser of
$50,000 or 10% of annual salary and bonus for fiscal 1998, 1997, or 1996;
the amounts reported represent dividend equivalent payments on outstanding
performance shares granted under the Stock Incentive Plan for which the
performance period had not expired. Mr. Cullens' personal benefits for
fiscal 1998 includes $72,222 for certain relocation expense reimbursements
and related tax equalization payments and $8,800 for dividend equivalent
payments on outstanding performance shares and for fiscal 1997 includes a
$50,000 disruption payment in connection with joining the Corporation.
(2) The value of the performance shares earned for the three year performance
period ended July 3, 1998 (Mr. Cantrell -- 9,200 shares; Mr.
Farmer -- 30,000 shares; Mr. Garrett -- 8,400 shares; and Mr. Roub -- 9,000
shares) is based upon the closing price of the Corporation's Common Stock on
July 2, 1998 (the last trading day of fiscal 1998). The value of the
performance shares earned for the three year performance period ended June
27, 1997 adjusted for the September 1997 two-for-one stock split (Mr. Farmer
-- 55,000; Mr. Garrett -- 20,400; and Mr. Roub -- 19,800 shares) is based
upon the closing price of the Corporation's Common Stock on June 27, 1997.
The value of performance shares earned for the three year performance period
ended June 30, 1996 adjusted for the September 1997 two-for-one stock split
(Mr. Farmer -- 40,000; Mr. Garrett -- 20,000; and Mr. Roub -- 18,000) is
based upon the closing price of the Corporation's Common Stock on June 30,
1996. As of July 3, 1998, the aggregate number and value of performance
shares awarded under the Corporation's Stock Incentive Plan for which the
performance period had not expired (i.e. excluding the number and value of
performance shares with a performance period ending on July 3, 1998) is as
follows: Mr. Farmer -- 60,000 shares, with a value of $2,655,000; Mr.
Cantrell -- 20,000 shares, with a value of $885,000; Mr. Cullens -- 10,000
shares, with a value of $442,500; Mr. Garrett -- 20,000 shares, with a value
of $885,000; and Mr. Roub -- 20,000 shares, with a value of $885,000. The
value of the aggregate unearned performance shares is based upon the $44.25
closing price of the Corporation's Common Stock on July 2, 1998.
15
<PAGE> 19
(3) Mr. Cantrell's payouts for fiscal 1997 and 1996 were made pursuant to grants
under the Lanier Worldwide, Inc. Long Term Incentive Plan For Key Employees.
The payments reflected in the table for fiscal 1997 and 1996 are for
performance during the three year performance periods ended June 27, 1997
and June 30, 1996, respectively.
(4) Amounts reported include:
(i) Contributions to the Harris Corporation Retirement Plan for fiscal
1998: Mr. Farmer -- $19,000; Mr. Cullens -- $20,000; Mr.
Garrett -- $19,000; and Mr. Roub -- $19,000; for fiscal 1997: Mr.
Farmer -- $12,000; Mr. Garrett -- $12,000; and Mr. Roub -- $12,000; for
fiscal 1996: Mr. Farmer -- $12,000; Mr. Garrett -- $12,000; and Mr.
Roub -- $12,000.
(ii) Contributions to the Corporation's Supplemental Executive Retirement
Plan for fiscal 1998: Mr. Farmer -- $219,462; Mr. Cullens -- $16,828;
Mr. Garrett -- $74,904; and Mr. Roub -- $73,550; for fiscal 1997: Mr.
Farmer -- $156,385; Mr. Garrett -- $67,982; and Mr. Roub -- $68,463;
for fiscal 1996: Mr. Farmer -- $147,096; Mr. Garrett -- $73,128; and
Mr. Roub -- $58,532.
(iii) Contributions on behalf of Mr. Cantrell to the Lanier Worldwide, Inc.
Savings Incentive Plan for fiscal 1998 of $5,935; for fiscal 1997 of
$4,500; and for fiscal 1996 of $4,500. Contributions on behalf of Mr.
Cantrell to the Lanier Worldwide, Inc. Supplemental Executive
Retirement Savings Plan for fiscal 1998 of $15,537.
(iv) The taxable portion of premiums on life insurance provided by the
Corporation for fiscal 1998: Mr. Farmer -- $16,704; Mr.
Cantrell -- $4,914; Mr. Cullens -- $2,419; Mr. Garrett -- $6,855; and
Mr. Roub -- $4,775; for fiscal 1997: Mr. Farmer -- $13,050; Mr.
Cantrell -- $4,914; Mr. Garrett -- $4,343; and Mr. Roub -- $6,759; for
fiscal 1996: Mr. Farmer -- $12,480; Mr. Cantrell -- $4,914; Mr.
Garrett -- $4,765; and Mr. Roub -- $4,256.
(5) Mr. Garrett has announced that effective October 1, 1998 he will be retiring
from the Corporation.
16
<PAGE> 20
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Shown below is additional information on grants of stock options made under
the Stock Incentive Plan during the fiscal year ended July 3, 1998. The amounts
shown for potential realizable values are based upon assumed annualized rates of
stock price appreciation of five percent and ten percent over the full ten year
term (or shorter term) of the options, as required by the Securities and
Exchange Commission and are not intended to represent or forecast possible
future appreciation, if any, of the Corporation's Common Stock price.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL POTENTIAL REALIZABLE VALUE AT
UNDERLYING OPTIONS/SARS ASSUMED ANNUAL RATES OF STOCK
OPTIONS/SARS GRANTED TO EXERCISE OR PRICE APPRECIATION FOR OPTION TERM
GRANTED (1) EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------------
NAME (#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ------------ ------------ ----------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
P. W. Farmer......... 60,000 8.20 43.188 8/22/07 1,629,623 4,129,785
6,915 .94 49.750 8/26/99 26,740 54,170
1,491 .20 49.750 8/27/98 1,969 3,895
2,492 .34 49.750 8/27/98 3,291 6,510
13,655 1.87 53.625 4/23/03 205,811 455,700
W. E. Cantrell....... 20,000 2.73 43.188 8/22/07 543,208 1,376,595
5,986 .82 45.375 8/26/99 21,974 44,580
E. V. Cullens........ 20,000 2.73 43.188 8/22/07 543,208 1,376,595
J. C. Garrett........ 20,000 2.73 43.188 8/22/07 543,208 1,376,595
8,526 1.16 44.625 8/25/05 170,205 402,958
6,781 .93 44.625 8/23/06 157,145 382,436
8,276 1.13 44.625 4/23/03 107,549 239,138
1,187 .16 44.625 8/25/05 23,696 56,100
B. R. Roub........... 20,000 2.73 43.188 8/22/07 543,208 1,376,595
1,794 .25 47.500 8/27/98 2,379 4,709
331 .05 47.500 8/27/98 439 869
</TABLE>
------------------
<TABLE>
<CAPTION>
5% 10%
-------------- --------------
<S> <C> <C>
Shareholder Gain (2)....................................... $2,226,598,742 $5,642,638,379
Named Executive Officers' gain as % of all shareholder
gain..................................................... 0.20% 0.20%
</TABLE>
- - ---------------
(1) All stock option grants were made under the Corporation's Stock Incentive
Plan. The term of each stock option is generally ten years and is
exercisable in installments of: 50% after one year; 75% after two years; and
100% after three years. The exercise price is the closing price of a share
of the Corporation's Common Stock on the date of grant. The exercise price
may be paid in cash and/or shares of the Corporation's Common Stock, or
"cashless exercise" procedures may be used. If shares of the Corporation's
Common Stock are delivered in payment of the exercise price, a Restoration
Stock Option ("RSO") will be granted equal to the number of shares used to
exercise the stock option. The expiration date of these options is the same
as the expiration date of the underlying options. RSO grants are non-
qualified, and are exercisable commencing six months after the date of grant
at the market value on the grant date. Other than the first listed option
grant for each of Messrs. Farmer, Cantrell, Cullens, Garrett and Roub, the
options listed represent RSO grants. In the event of a change in control,
outstanding options become immediately exercisable.
(2) Shareholder gain reflects the hypothetical increase in market value of the
Corporation's Common Stock for all shareholders, assuming annual stock price
appreciation of 5% and 10%, respectively, over a ten year period.
17
<PAGE> 21
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
Shown below is information with respect to the number of shares acquired
upon exercise of stock options and the aggregate gains realized on exercises
during fiscal 1998 for those executive officers named in the Summary
Compensation Table. The table also sets forth the number of shares covered by
exercisable and unexercisable options held by such executives on July 3, 1998
(adjusted for the September 1997 two-for-one stock split) and the aggregate
gains that would have been realized had these options been exercised on July 3,
1998, even though these options were not exercised, and the unexercisable
options could not have been exercised on July 3, 1998. These options were
granted under the Stock Incentive Plan.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL FISCAL YEAR-END(2)
SHARES VALUE YEAR-END(#) ($)
ACQUIRED ON REALIZED(1) --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
P. W. Farmer....... 65,738 2,126,784 75,000 129,553 1,079,063 694,688
W. E. Cantrell..... 16,000 465,000 81,084 40,986 1,511,880 231,563
E. V. Cullens...... 0 0 10,000 30,000 0 21,250
J. C. Garrett...... 35,182 470,386 0 59,770 0 231,563
B. R. Roub......... 5,264 53,105 28,716 36,625 395,961 224,094
</TABLE>
- - ---------------
(1) Market value on the date of exercise of shares covered by exercised options,
less option exercise price.
(2) Market value of shares underlying in-the-money options on July 3, 1998, less
option exercise price. The market value is based upon the July 2, 1998
closing price of $44.25 per share of the Corporation's Common Stock reported
as New York Stock Exchange Composite Transactions.
18
<PAGE> 22
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
Shown below is information with respect to awards of performance shares
granted under the Stock Incentive Plan during the fiscal year ended July 3, 1998
to those executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
OTHER PERIOD -----------------------------------------------
NUMBER OF UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME SHARES OR PAYOUT SHARES(#) SHARES(#) SHARES(#)
---- --------- ---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
P. W. Farmer......... 30,000 6/30/00 0 30,000 60,000
W. E. Cantrell....... 10,000 6/30/00 0 10,000 20,000
E. V. Cullens........ 10,000 6/30/00 0 10,000 20,000
J. C. Garrett........ 10,000 6/30/00 0 10,000 20,000
B. R. Roub........... 10,000 6/30/00 0 10,000 20,000
</TABLE>
------------------
Awards of performance shares under the Stock Incentive Plan to participants
are made at the beginning of each performance period and are earned based on the
performance of the Division, the Sector, the Corporation or some combination
thereof. The Plan is designed to motivate key employees to maximize shareholder
value by aligning their interests with shareholder interests. The payout is
determined by the outside directors in the case of Mr. Farmer, and by the
Management Development and Compensation Committee in the case of the other
executive officers and is based upon financial performance compared with
Strategic Plan objectives. Performance criteria include the Corporation's
cumulative earnings per share during the three year Strategic Plan cycle for
Messrs. Farmer and Roub. In the case of Messrs. Cantrell, Cullens and Garrett,
80% of the award is based upon relevant Sector cumulative net income during the
Strategic Plan cycle and 20% on the Corporation's cumulative earnings per share
during the Strategic Plan cycle. Share payouts are made following the
determination of the Committee and, in the case of Mr. Farmer, the outside
directors, and range from zero to a maximum of 200% of the original shares
awarded. The terms of these awards comply with Internal Revenue Code Section
162(m) requirements. Participants receive quarterly cash payments on the
performance share awards in an amount equal to dividends paid to shareholders on
the Corporation's Common Stock.
In the event of a change in control, the performance objectives applicable
to the award are deemed to be attained, and such performance shares are paid out
at the end of the performance period. However, in the event of (i) death,
disability, retirement or involuntary termination other than for cause, the
shares shall be paid as soon as practicable; (ii) resignation or termination for
cause, the shares shall be forfeited; and (iii) certain defined changes in the
Corporation's capital structure, then, at the participant's election, the award
shall be paid in shares or cash, as soon as practicable.
19
<PAGE> 23
LANIER WORLDWIDE DEFINED BENEFIT RETIREMENT PLANS
Lanier Worldwide, Inc.'s retirement program consists of (i) a
tax-qualified, funded pension plan, the Pension Equity Plan, which is available
to substantially all of the United States employees of Lanier Worldwide and its
participating subsidiaries and affiliated companies, and (ii) for executive
officers and other key employees, a non-qualified, unfunded supplemental
retirement income plan that provides benefits which, but for certain limits
imposed by the Internal Revenue Code on tax-qualified plans, would be provided
under Lanier Worldwide's qualified pension plan. The Pension Equity Plan is a
defined benefit plan. The Pension Equity Plan is fully paid by Lanier Worldwide,
and employees become vested upon the completion of five years of service.
In July of 1997, the Pension Equity Plan was amended to provide for a lump
sum retirement benefit calculated by reference to a formula based upon final
average pay, age and years of service. However, if the determination of benefits
payable to individuals currently eligible for retirement or nearing retirement
under the revised Plan, including Mr. Cantrell, would result in a reduction of
accrued benefits under the Plan as in effect prior to the 1997 amendment, the
benefits payable to such person would be as calculated under the Plan without
giving effect to the July 1, 1997 amendment. Such employees will receive annual
pension benefits determined by adding (a) 1.22% of the average of the employee's
five highest consecutive years' compensation in the last ten calendar years
before retirement, multiplied by the lesser of the employee's years of service
or 30, and (b) .33% of that part of the employee's five-year average
compensation in excess of a certain amount, multiplied by the lesser of the
employee's years of service or 30.
The following table sets forth the estimated annual benefits under the
Pension Equity Plan for executives (including Mr. Cantrell) calculating annual
benefits under the terms of the Pension Equity Plan (as in effect prior to the
July 1997 amendment) and the Lanier Worldwide, Inc. Supplemental Executive
Retirement Plan payable at age 65 or older to executives retiring after July 3,
1998:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
HIGHEST
CONSECUTIVE ESTIMATED ANNUAL RETIREMENT BENEFITS FOR
5-YEAR CREDITED YEARS OF SERVICE
AVERAGE -----------------------------------------
COMPENSATION 15 20 25 30
- - ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 250,000 $ 56,600 $ 75,400 $ 94,300 $113,200
500,000 114,700 152,900 191,200 229,400
750,000 172,800 230,400 288,100 345,700
1,000,000 231,000 307,900 384,900 461,900
1,250,000 289,100 385,400 481,800 578,200
</TABLE>
Under the plan, Mr. Cantrell is credited with the maximum of 30 years of
service.
For these purposes compensation consists of base salary, bonuses and sales
commissions and, for periods prior to January 1, 1998 income recognized upon the
exercise of Harris stock options. Base salary for purposes of calculating
retirement benefits under the Plan includes amounts deferred under the Lanier
Worldwide, Inc. Savings Incentive Plan. For fiscal 1998, highest consecutive
five year average compensation for Mr. Cantrell for purposes of the above
determinations was $880,962.
EXECUTIVE SEVERANCE AGREEMENTS
To provide continuity of management and dedication of the Corporation's
corporate officers in the event of a threatened or actual change in control of
the Corporation, the Board of Directors has approved severance agreements for
the officers, including the executive officers named in the Summary Compensation
Table. The officer is entitled to payments in the event of termination of
employment for defined reasons at any time prior to two years following a change
in control. Upon termination, other than for cause, disability, resignation or
retirement, the officer is entitled to payments in an amount equal to one, two
or three times annual base and incentive compensation, depending on the
officer's responsibilities. The compensation amounts are three years
20
<PAGE> 24
for Mr. Farmer and two years for the other named executive officers. In
addition, the agreements provide for the payment of any federal excise taxes
payable by the officer in the event the officer's employment is terminated. The
agreements also provide for the continuation of employee, welfare and fringe
benefits and paid vacation for a period of two years following a change in
control.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers and directors, and persons who own more than
ten percent of a registered class of the Corporation's equity securities, to
file reports of ownership and changes in ownership of such securities with the
Securities and Exchange Commission and the New York Stock Exchange. The
Corporation has procedures in place to assist its executive officers and
directors in preparing and filing these reports on a timely basis.
Based solely upon a review of the forms furnished to the Corporation, or
written representations from certain persons that no Forms 5 were required, the
Corporation believes that all such forms have been timely filed except for the
failure by Albert Smith, the former President of the Electronic Systems Sector,
to timely report the sale of 1,484 shares of Common Stock. Such sale was
subsequently reported by the filing of an amended Form 4.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends that the shareholders ratify the
appointment of Ernst & Young LLP, independent public accountants, to audit the
books and accounts of the Corporation for the current fiscal year. Shareholder
ratification of the appointment is not required under Delaware law, but the
Board has decided to ascertain the position of the shareholders on the
appointment. A representative of Ernst & Young LLP is expected to be present at
the Annual Meeting with the opportunity to make a statement if he desires to do
so and to be available to respond to appropriate questions of shareholders.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Pursuant to applicable rules under the Securities Exchange Act of 1934,
shareholder proposals intended to be presented at the 1999 Annual Meeting of
Shareholders and to be included in the Corporation's proxy statement and form of
proxy for that meeting must be received by the Corporation at its principal
executive offices not later than May 19, 1999. In addition, the By-Laws of the
Corporation contain requirements relating to the timing and content of the
advance notice which shareholders must provide to the Secretary of the
Corporation for any matter or any director nomination to be properly presented
at a shareholders meeting. To be timely, the notice for the 1999 Annual Meeting
of Shareholders must be received by the Secretary of the Corporation no earlier
than July 23, 1999 and no later than August 23, 1999. A copy of the By-Laws may
be obtained upon written request to the Secretary of the Corporation.
OTHER MATTERS
Except for the matters described in this Proxy Statement, the Board of
Directors is not aware of any matter that will or may be presented at the
meeting. If any other matter is properly brought before the meeting, it is the
intention of the persons named in the proxy to vote the shares to which the
proxy relates in accordance with their best judgment.
By Order of the Board of Directors
Richard L. Ballantyne
Secretary
Melbourne, Florida
September 16, 1998
21
<PAGE> 25
P R O X Y
HARRIS CORPORATION
MELBOURNE, FLORIDA 32919
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints P.W. FARMER, B.R. ROUB and R.L.
BALLANTYNE, or any of them, as Proxies, with full power of substitution, to
represent and to vote the stock of the undersigned at the Annual Meeting of
Shareholders of Harris Corporation to be held on October 23, 1998, or at any
adjournment, upon such business as may properly come before the meeting,
including the following items as set forth in the Proxy Statement.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE THREE NOMINEES FOR
DIRECTOR AND FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS
AUDITORS FOR FISCAL 1999. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS PROXY CARD.
-------------------------------------------------------------
Comments/Address Change: Please note here and mark
box on reverse side
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-------------------------------------------------------------
(THIS PROXY IS CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- - -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 26
<TABLE>
<S> <C>
PLEASE MARK
[X] EACH VOTE
LIKE THIS
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
FOR WITHHOLD FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS (terms expiring in 2001): [ ] [ ] 2. Ratification of [ ] [ ] [ ]
PHILLIP W. FARMER, LESTER E. COLEMAN, the selection of
ALFRED C. DeCRANE, Jr. Ernst & Young LLP
as auditors for
fiscal 1999
FOR, EXCEPT WITHHOLD VOTE FROM THE FOLLOWING NOMINEE(S): THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE,
- - ---------------------------------------------------- IT WILL BE VOTED FOR EACH ITEM SET FORTH ABOVE.
PROXY-PLEASE MARK, DATE, SIGN AND MAIL PROMPTLY
COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments/address change [ ]
on the reverse side.
Signature(s) Date , 1998
----------------------------------------------------------------------- --------------------
Please sign exactly as name appears above, date and mail this card promptly in accompanying postage-paid envelope. When signing as
attorney, executor, administrator, trustee, or guardian, give your full title as such.
- - -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
Your Proxy vote is important,
regardless of the number of shares you own.
Whether or not you plan to attend the meeting in person, please complete, date and sign
the above Proxy Card and return it without delay in the enclosed envelope.
[HARRIS CORPORATION LOGO]
</TABLE>
<PAGE> 27
INSTRUCTION CARD
HARRIS CORPORATION
MELBOURNE, FLORIDA 32919
TO PARTICIPANTS IN THE RETIREMENT PLAN HARRIS STOCK FUND:
THIS INSTRUCTION CARD IS SOLICITED BY THE HARRIS RETIREMENT PLAN TRUSTEE.
UNDER THE TERMS OF THE HARRIS RETIREMENT PLAN, IN CONNECTION WITH THE
ANNUAL MEETING OF SHAREHOLDERS OF HARRIS CORPORATION TO BE HELD ON OCTOBER
23, 1998, A PARTICIPANT MAY PROVIDE NON-BINDING INSTRUCTIONS TO THE PLAN
TRUSTEE ON HOW TO VOTE THE SHARES ALLOCABLE TO THAT PARTICIPANT'S HARRIS
STOCK FUND ACCOUNT, INCLUDING THE FOLLOWING ITEMS AS SET FORTH IN THE PROXY
STATEMENT.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE. THIS INSTRUCTION CARD WHEN PROPERLY EXECUTED, WILL
INSTRUCT THE PLAN TRUSTEE TO VOTE IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO DIRECTION IS MADE, THE INSTRUCTION WILL BE AN INSTRUCTION
TO THE PLAN TRUSTEE TO VOTE FOR THE ELECTION OF THE THREE NOMINEES FOR
DIRECTOR AND FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS
AUDITORS FOR FISCAL 1999.
----------------------------------------------------------------------------
Comments/Address Change: Please note here and mark box on reverse side
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
----------------------------------------------------------------------------
(Continued and to be signed on the reverse side)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 28
<TABLE>
<S> <C>
PLEASE MARK
[X] EACH VOTE
LIKE THIS
FOR WITHHOLD FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS (terms expiring in 2001): [ ] [ ] 2. Ratification of the [ ] [ ] [ ]
PHILLIP W. FARMER, LESTER E. COLEMAN, selection of
ALFRED C. DeCRANE, Jr. Ernst & Young LLP
as auditors for
fiscal 1999
FOR, EXCEPT WITHHOLD VOTE FROM THE FOLLOWING NOMINEE(S): VOTING INSTRUCTION CARD-PLEASE MARK, DATE, SIGN
AND MAIL PROMPTLY
- - --------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE
Please mark this box if you have [ ]
written comments/address change
on the reverse side.
Signature(s) Date , 1998
------------------------------------------------------------------------- -------------------------------------
Please sign exactly as name appears above, date and mail this card promptly in the accompanying postage-paid envelope. When signing
as attorney, executor, administrator, trustee, or guardian, give your full title as such.
- - ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
Your voting instruction is important,
regardless of the number of shares you own.
Please complete, date and sign the above Instruction Card and return it
without delay in the enclosed envelope.
[HARRIS CORPORATION LOGO]
</TABLE>
<PAGE> 29
I N S T R U C T I O N C A R D
HARRIS CORPORATION
MELBOURNE, FLORIDA 32919
TO PARTICIPANTS IN THE LANIER WORLDWIDE, INC. SAVINGS INCENTIVE PLAN:
THIS INSTRUCTION CARD IS SOLICITED BY THE LANIER WORLDWIDE, INC. SAVINGS
INCENTIVE PLAN TRUSTEE. UNDER THE TERMS OF THE LANIER WORLDWIDE SAVINGS
INCENTIVE PLAN, IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS OF HARRIS
CORPORATION TO BE HELD ON OCTOBER 23, 1998, A PARTICIPANT MAY PROVIDE NON-
BINDING INSTRUCTIONS TO THE PLAN TRUSTEE ON HOW TO VOTE THE SHARES ALLOCABLE TO
THAT PARTICIPANT'S HARRIS STOCK FUND ACCOUNT, INCLUDING THE FOLLOWING ITEMS AS
SET FORTH IN THE PROXY STATEMENT.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE. THIS INSTRUCTION CARD WHEN PROPERLY EXECUTED, WILL
INSTRUCT THE PLAN TRUSTEE TO VOTE IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO DIRECTION IS MADE, THE INSTRUCTION WILL BE AN INSTRUCTION TO
THE PLAN TRUSTEE TO VOTE FOR THE ELECTION OF THE THREE NOMINEES FOR DIRECTOR AND
FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS AUDITORS FOR
FISCAL 1999.
-----------------------------------------------------------------------------
Comments/Address Change: Please note here and mark box on reverse side
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Continued and to be signed on the reverse side)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 30
<TABLE>
<S> <C>
PLEASE MARK
[X] EACH VOTE
LIKE THIS
FOR WITHHOLD FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS (terms expiring in 2001): [ ] [ ] 2. Ratification of the [ ] [ ] [ ]
PHILLIP W. FARMER, LESTER E. COLEMAN, selection of
ALFRED C. DeCRANE, Jr. Ernst & Young LLP
as auditors for
fiscal 1999
FOR, EXCEPT WITHHOLD VOTE FROM THE FOLLOWING NOMINEE(S): VOTING INSTRUCTION CARD-PLEASE MARK, DATE, SIGN
AND MAIL PROMPTLY
- - --------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE
Please mark this box if you have [ ]
written comments/address change
on the reverse side.
Signature(s) Date , 1998
------------------------------------------------------------------------- -------------------------------------
Please sign exactly as name appears above, date and mail this card promptly in the accompanying postage-paid envelope. When signing
as attorney, executor, administrator, trustee or guardian, give your full title as such.
- - ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
Your voting instruction is important,
regardless of the number of shares you own.
Please complete, date and sign the above Instruction Card and return it
without delay in the enclosed envelope.
[HARRIS CORPORATION LOGO]
</TABLE>
