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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
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)
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:
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(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):
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[HARRIS LOGO]
HARRIS CORPORATION
1025 West NASA Boulevard
Melbourne, Florida 32919
September 17, 1999
Dear Fellow Shareholder:
You are cordially invited to attend the 1999 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 22, 1999, 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 two directors for
a three-year term expiring in 2002 and the ratification of the appointment of
independent auditors for fiscal year 2000.
Following the business session, I will report on current operations and on
our forward plans. After 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 card in the enclosed envelope.
Cordially,
/s/ Phillip W. Farmer
Phillip W. Farmer
Chairman 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 1999
Annual Meeting of Shareholders
---------------------------------------------
TO THE HOLDERS OF COMMON STOCK
OF HARRIS CORPORATION:
The 1999 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 22, 1999, at 10:00 a.m. local time, for
the following purposes:
1. To elect two directors for a three-year term expiring in 2002;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for fiscal year 2000; and
3. To transact such other business as may properly come before the meeting
or any adjournments.
Holders of common stock of record at the close of business on August 27,
1999, will be entitled to vote at the meeting and all adjournments thereof.
By Order of the Board of Directors
Richard L. Ballantyne
Corporate Secretary
Melbourne, Florida
September 17, 1999
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 CARD FOR WHICH A
RETURN ENVELOPE IS PROVIDED.
<PAGE> 4
HARRIS CORPORATION
1999 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Notice of 1999 Annual Meeting of the Shareholders
General Information......................................... 1
PROPOSAL 1: ELECTION OF DIRECTORS -- TERM EXPIRING IN
2002...................................................... 2
Current Directors Not Up for Election....................... 4
The Board's Committees and Their Functions.................. 6
Committee Membership........................................ 7
Director Compensation....................................... 8
Our Largest Shareholders.................................... 10
Shares Held by Directors and Executive Officers............. 11
Report of the Management Development and Compensation
Committee on Executive Compensation....................... 12
Stock Performance........................................... 15
Executive Compensation...................................... 16
Section 16(a) Beneficial Ownership Reporting Compliance..... 21
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS.................................................. 21
Shareholder Proposals for the 2000 Annual Meeting........... 22
Discretionary Voting of Other Matters....................... 22
</TABLE>
<PAGE> 5
HARRIS CORPORATION
1025 West NASA Boulevard
Melbourne, Florida 32919
---------------------------------------------
Proxy Statement
Annual Meeting of Shareholders
to be held October 22, 1999
---------------------------------------------
GENERAL INFORMATION
We are furnishing this proxy statement in connection with the solicitation
of proxies by the board of directors of Harris Corporation for use at the 1999
Annual Meeting of Shareholders to be held on October 22, 1999, and at any
adjournments thereof.
On September 17, 1999, we commenced mailing this proxy statement, the
accompanying proxy card and a copy of our Annual Report to Shareholders for the
fiscal year ended July 2, 1999 to our shareholders.
The record date for shareholders entitled to vote at the Annual Meeting is
August 27, 1999.
Only our common stock has voting rights. On the record date there were
79,677,138 shares outstanding and approximately 10,307 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.
VOTING INSTRUCTIONS
You are entitled to one vote for each share of common stock that you own as
of the close of business on the record date. Please carefully read the
instructions below on how to vote your shares. Because the instructions vary
depending on how you hold your shares, it is important that you follow the
instructions that apply to your particular situation.
IF YOUR SHARES ARE HELD
IN YOUR NAME
Voting by mail
Even if you plan to attend the meeting, you can vote by mail by completing,
signing, dating and mailing the enclosed proxy card.
Voting in person at the meeting
If you plan to attend the meeting, you can vote in person. In order to vote
at the meeting, you will need to bring your share certificates or other evidence
of your share ownership with you to the meeting.
Revoking your proxy
As long as your shares are registered in your name, you may revoke your
proxy at any time before it is exercised. There are several ways you can do
this:
- By filing a written notice of revocation with our Corporate Secretary;
- By duly signing and delivering another proxy that bears a later date; or
- By attending the meeting and voting in person.
IF YOUR SHARES ARE HELD IN
"STREET NAME"
Voting by mail
If your shares are registered in the name of your broker or nominee, you
should vote your shares as directed by that broker or other nominee.
Voting in person at the meeting
If you plan to attend the meeting and vote in person, you should contact
your broker or nominee to obtain a broker's proxy card and bring it and your
account statement or other evidence of your share ownership with you to the
meeting.
Revoking your proxy
If your shares are held in street name, you must contact your broker to
revoke your proxy.
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<PAGE> 6
VOTING RULES
By giving us your proxy, you authorize the individuals named on the proxy
card to vote your shares in the manner you indicate at the meeting or any
adjournments thereof.
With respect to the election of nominees for director, you may:
- vote "for" the election of both of the nominees for director named in
this proxy statement;
- "withhold" authority to vote for both of the nominees; or
- "withhold" authority to vote for one of the nominees and vote "for" the
remaining nominee.
If a quorum is present at the meeting, the two nominees receiving the
greatest number of votes will be elected to serve as directors. Because of this
rule, non-voted shares and shares whose votes are withheld will not affect the
outcome of the election for directors; and, withholding authority to vote for a
particular nominee will not prevent that nominee from being elected.
With respect to the proposal to ratify the appointment of Ernst & Young LLP
as our independent auditors for fiscal year 2000, you may:
- vote "for" ratification;
- vote "against" ratification; or
- "abstain" from voting on the proposal.
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 proposal
will be required to ratify the appointment of auditors. Because of this rule, a
vote to abstain from voting on this matter will have the effect of a vote
against ratification of the auditors.
If you return your proxy card with no votes marked, your shares will be
voted as follows:
- FOR the election of both of the nominees for director named in this proxy
statement; and
- FOR the ratification of the appointment of Ernst & Young LLP as our
independent auditors for fiscal year 2000.
It is possible for a proxy to indicate that some of the shares represented
are not being voted with respect to certain proposals. This occurs, for example,
when a broker is not permitted to vote on a matter without instructions from the
beneficial owner of the shares. In these cases, non-voted shares will not be
considered present and entitled to vote with respect to that matter, although
they may be considered present and entitled to vote for other purposes and will
be counted in determining the presence of a quorum. Accordingly, if a quorum is
present at the meeting, non-voted shares as to a particular proposal will not
affect the outcome of that proposal.
We actively solicit proxy participation. We will bear the cost of
soliciting proxies. In addition to this notice by mail, we request and encourage
brokers, custodians, nominees and others to supply proxy materials to
shareholders, and we will reimburse them for their expenses. Our officers and
employees may, by letter, telephone, electronic mail, or in person, make
additional requests for the return of proxies, although we do not reimburse our
own employees for soliciting proxies. We have also hired Georgeson & Company
Inc. for a fee of $7,500 plus out-of-pocket expenses to help solicit proxies.
PROPOSAL 1: ELECTION OF DIRECTORS -- TERM EXPIRING IN 2002
Our Restated Certificate of Incorporation classifies our board of directors
into three classes with three-year terms of office ending in different years.
This year, the terms of Robert Cizik, John T. Hartley and Karen Katen expire at
the Annual Meeting. Mr. Cizik has decided to retire from the board and not to
stand for election. Based upon the recommendation of the Corporate Governance
Committee, Mr. Hartley and Ms. Katen have been nominated by the board for a new
three-year term expiring at the Annual Meeting of Shareholders in 2002. In
accordance with the Restated Certificate, a director shall hold office until the
Annual Meeting of Shareholders for the year in which that director's term
expires, and until that director's successor shall be elected and shall qualify,
subject, however, to his or her prior death, resignation, retirement,
disqualification or removal from office. Vacancies may be filled by the
remaining directors.
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<PAGE> 7
The authorized number of directors is presently fixed at nine. Effective at
the Annual Meeting the authorized number of directors will be fixed at eight.
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 card will vote in favor of
electing Mr. Hartley and Ms. Katen to serve for the three-year term expiring in
2002, unless otherwise specified in the proxy card. If any nominee becomes
unavailable for election, proxies voting for that nominee may be voted for a
substitute nominee selected by the board.
None of the directors, including each of the nominees, is related to any
other nominee or director or to any executive officer of Harris or its
subsidiaries by blood, marriage or adoption.
Biographical summaries of the nominees and of the continuing directors
appear below, and data with respect to the number of shares of our common stock
beneficially owned by them as of July 31, 1999, is set forth in the table on
page 11.
NOMINEES FOR ELECTION --
TERM EXPIRING IN 2002
HARTLEY PHOTO
JOHN T. HARTLEY, 69, is our former chairman of the board and chief executive
officer. He is the chairperson of the Executive and
Finance Committee and the Investment Committee for the
Harris Corporation Retirement Plans and 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 we merged with
Radiation, 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 AXA Financial Inc., 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 a past chairman of the Defense
Policy Advisory Committee on Trade.
KATEN PHOTO
KAREN KATEN, 50, 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 and corporate senior 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 our 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, 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 is also a council
member of the Graduate School of Business at the University of Chicago.
RECOMMENDATION REGARDING PROPOSAL 1
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES.
3
<PAGE> 8
CURRENT DIRECTORS NOT UP FOR ELECTION
Biographical summaries of our current directors whose terms continue to run
until 2000 or 2001 appear below.
TERM EXPIRING IN 2000
DENUNZIO PHOTO
RALPH D. DENUNZIO, 67, 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 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 our 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.
Mr. DeNunzio is a director of FDX Corporation and NIKE, Inc.
DIONNE PHOTO
JOSEPH L. DIONNE, 66, 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 our board in 1989 and is the chairperson of the
Corporate Governance Committee and a member of the Ethics Committee, the
Executive and Finance Committee and the Management Development and Compensation
Committee.
Mr. Dionne is a director of AXA Financial Inc., 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 a former chairman of the
board of The United Way of Tri-State and the Council for Aid to Education.
TROWBRIDGE PHOTO
ALEXANDER B. TROWBRIDGE, 69, 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 our 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.
Mr. Trowbridge is a director of ICOS Corporation, IRI International, New England
Life Insurance Company, The Gillette Company, The Rouse Company, Sunoco, Inc.
and E. M. Warburg Pincus Counsellors Funds. He is a member of the Council on
Foreign Relations.
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<PAGE> 9
TERM EXPIRING IN 2001
FARMER PHOTO
PHILLIP W. FARMER, 61 is our chairman of the board and chief executive officer.
He joined Harris in 1982 as vice president-general
manager of the Government Support Systems Division and
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 Harris in 1991, president and chief operating
officer in 1993 and chairman of the board, president and chief executive officer
in 1995. Mr. Farmer served as president until July 1, 1999.
Mr. Farmer was elected to our 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 Harris, 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.
COLEMAN PHOTO
LESTER E. COLEMAN, 68, 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 our board in 1985 and is the chairperson of the
Management Development and Compensation Committee and a member of the Audit
Committee and the Ethics Committee.
Dr. Coleman is a director of Norfolk Southern Corporation and S. C. Johnson &
Son, Inc.
DECRANE PHOTO
ALFRED C. DECRANE, JR., 68, is the retired chairman of the board and chief
executive officer of Texaco Inc. He joined Texaco in
1959, became president in 1983 and 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 our board in 1996 and is the chairperson of the
Ethics Committee and a member of the Audit Committee and the Corporate
Governance 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.
MEETINGS AND ATTENDANCE
In fiscal 1999, our board held six regular meetings and four special
meetings and the standing committees of our board met eighteen times. Each
director attended at least 75% of the meetings of the board and of those
committees of which he or she was a member. All of the directors attended an
average of 98% of such meetings of the board and committees on which they serve.
5
<PAGE> 10
THE BOARD'S COMMITTEES AND THEIR FUNCTIONS
Our board has established six standing committees to assist in the
discharge of its responsibilities. The principal functions of each committee are
described below.
AUDIT COMMITTEE
The Audit Committee assists the board in ensuring that our 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 our independent auditors and management
representatives, as appropriate, to review the scope and results of the annual
audit of our financial statements and the recommendations of the auditors. The
committee also:
- Ensures the independence of the independent and internal auditors;
- Reviews, with management and auditors, overall financial, information
systems and operating controls for Harris;
- Evaluates the professional competency of our financial staff and internal
auditors;
- Reviews the scope of our internal audit program;
- Reviews the nature and extent of non-audit professional services
performed by the auditors; and
- Annually recommends the selection of our independent auditors to the
board of directors.
From time to time the committee also undertakes special projects. These
projects have included reviewing our various insurance coverages, our
environmental policies and reviewing and assessing the potential impact of the
"Year 2000 issue" upon our operations and our efforts to deal with this impact.
The committee held four meetings during the past fiscal year.
MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE
The Management Development and Compensation Committee performs the
following primary functions:
- Reviews and evaluates plans for the development, succession, training and
utilization of our management resources;
- Reviews our compensation philosophy and establishes the compensation of
our officers, other than the chief executive officer and president, whose
compensation is recommended by the committee and approved by all the
outside directors; and
- Administers our stock incentive and stock based compensation plans.
The committee held three meetings during the past fiscal year.
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee performs the following primary
functions:
- Identifies, evaluates and recommends director nominees to the board to
fill vacancies and to be elected at an annual meeting of the
shareholders;
- Considers suggestions for director nominees from all sources, including
shareholders (for the procedures to be followed by shareholders for
nominating directors see the discussion below under "Shareholder
Proposals for the 2000 Annual Meeting");
- Recommends directors' compensation and benefit plans to the board;
- Recommends committees of the board and committee members as well as
tenure and other policies of the board;
- Sets meeting schedules for the board of directors and recommends meeting
schedules for the committees; and
- Facilitates the board's evaluation of the board's effectiveness.
The committee held three meetings during the past fiscal year.
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EXECUTIVE AND FINANCE COMMITTEE
The Executive and Finance Committee is authorized to evaluate and review
our financial position, capital structure, significant capital asset
transactions, major acquisitions and divestitures, and during the intervals
between meetings of the board of directors, to the extent permitted by law, to
exercise all of the powers of the board (except for certain reserved matters) in
the management of our business.
The committee held two meetings during the past fiscal year.
INVESTMENT COMMITTEE FOR THE
HARRIS CORPORATION RETIREMENT PLANS
The Investment Committee for the Harris Corporation Retirement Plans
oversees the financial administration and operation of our 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 also recommends new retirement and pension plans and changes to such
plans.
The committee held four meetings during the past fiscal year.
ETHICS COMMITTEE
The Ethics Committee reviews and oversees our continuing program relating
to standards of business conduct, sound business practices and legal
requirements in connection with our business.
The committee held two meetings during the past fiscal year.
COMMITTEE MEMBERSHIP
The committee members for each of the six standing committees of the board
are set forth below, with the chairperson listed first:
<TABLE>
<CAPTION>
AUDIT CORPORATE GOVERNANCE ETHICS
----- -------------------- ------
<S> <C> <C>
Robert Cizik* Joseph L. Dionne Alfred C. DeCrane, Jr.
Lester E. Coleman Alfred C. DeCrane, Jr. Robert Cizik*
Alfred C. DeCrane, Jr. Karen Katen Lester E. Coleman
Alexander B. Trowbridge Ralph D. DeNunzio
Joseph L. Dionne
John T. Hartley
Karen Katen
Alexander B. Trowbridge
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT COMMITTEE FOR THE HARRIS MANAGEMENT DEVELOPMENT AND
EXECUTIVE AND FINANCE CORPORATION RETIREMENT PLANS COMPENSATION
--------------------- ----------------------------------- --------------------------
<S> <C> <C>
John T. Hartley John T. Hartley Lester E. Coleman
Robert Cizik* Ralph D. DeNunzio Joseph L. Dionne
Ralph D. DeNunzio Phillip W. Farmer Karen Katen
Joseph L. Dionne Alexander B. Trowbridge
Phillip W. Farmer
</TABLE>
- ---------------
* Robert Cizik, a current member of the board serves as the chairperson of the
Audit Committee and is a member of the Ethics Committee and Executive and
Finance Committee. Mr. Cizik is retiring from the board effective at the 1999
Annual Meeting.
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DIRECTOR COMPENSATION
Directors who are not employees of Harris receive the following fees for
their services on the board:
- $30,000 annual retainer fee for serving as a director;
- $1,500 annual retainer fee for each committee of which they are a member;
- An additional $3,000 annual retainer fee for each committee on which they
serve as a committee chairperson;
- $1,200 for attendance at each board meeting; and
- $800 for attendance at each committee meeting and for attendance at any
other meeting devoted to our affairs.
We also reimburse each non-employee director for out-of-pocket expenses
incurred in connection with attendance at board and committee meetings. In
addition, we provide each non-employee director with travel, accident and
disability insurance in the event that he or she is involved in an accident
while traveling on business relating to Harris.
In addition to receiving reimbursement for tax preparation and estate
planning services of up to $5,000 per year, if desired, non-employee directors
can also participate in our matching gift program available to all employees,
where we match contributions to eligible educational institutions and charitable
organizations on a one-for-one basis up to an annual maximum of $10,000 per
director.
Stock Options
Under our Stock Incentive Plan, each non-employee director is automatically
granted an option to purchase 2,000 shares of our common stock on the date of
each Annual Meeting of Shareholders. The options are non-statutory options for
tax purposes, are priced at fair market value on the date of grant and vest as
follows:
- 50% of the option shares become exercisable on the first anniversary of
the date of grant, and
- 25% of the option shares become exercisable on each of the next two
succeeding anniversary dates.
Notwithstanding the above, in the event of a change in control of Harris,
any non-employee director's options outstanding for more than one year at that
time immediately vest. A director may exercise vested options for a period of
three years following the date of retirement; and, a director's vested options
may be exercised for a period of twelve months following the date of death. In
any event, all options expire 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.
Deferred Compensation
Under our previous Directors Retirement Plan, upon retirement or
disability, a non-employee director with five or more years of service would
receive an annual cash retirement benefit payable for life in an amount equal to
50% of the annual retainer fee then in effect, plus an additional 10% for each
year of service in excess of five years, up to a maximum of 100% of the retainer
fee. In the event of a change in control, a retired director who was a
beneficiary under the plan would be paid a lump sum payment equal to the
actuarial equivalent of the retirement benefit.
Effective January 1, 1998, the board terminated the Directors Retirement
Plan with respect to all future non-employee directors and converted the rights
under the plan of all directors with less than ten years of service at such time
into stock units under our 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 at such time were given the option of
retaining their rights under the Directors Retirement Plan based upon the 1997
annual retainer fee of $26,500 or converting their rights into stock units under
our 1997 Plan.
Also effective January 1, 1998, the board amended our 1997 Plan to provide
that on January 1 of each year, each non-employee director would be credited
with 500 stock units, which number may be changed from time to time
8
<PAGE> 13
by the board. In addition, under the 1997 Plan, each non-employee director may
elect to defer all or a portion of his or her fees. Deferred amounts may be
invested in investment alternatives similar to those available under our
Retirement Plan or in 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 our common stock on the first day of the month following the
calendar month in which the fees are deferred. Once amounts are credited in
stock equivalents, they may not be reallocated into any other investment
alternatives and are payable only following the director's resignation,
retirement or death. Each stock unit is credited with dividend equivalents,
which are deemed reinvested in additional stock units on the dividend payment
date. A director may elect to receive amounts deferred under the 1997 Plan,
including amounts deferred in the form of stock units, either in a lump sum
cash payment on a date within five years of his or her resignation or
retirement or in annual payments over a designated number of years, provided
all amounts are fully paid within ten years of resignation or retirement.
Within ninety days following a change of control, we must pay to each director
(or former director) a lump sum cash payment equal to the then remaining
balance in his or her account.
Indemnification
We have entered into indemnification agreements with each of our directors
and executive officers, including those executive officers named in the summary
compensation table on page 16. These agreements require us to indemnify these
directors and officers with respect to their activities as directors or officers
of Harris or when serving at Harris' request as a director, officer or trustee
of another corporation, trust or other enterprise against expenses (including
attorneys' fees, judgments, fines, and amounts paid in settlement) actually and
reasonably incurred by them in any threatened, pending or completed action,
suit, or proceeding whether civil, criminal, administrative or investigative to
which they are, or are threatened to be made, parties as a result of their
service to Harris. Harris will indemnify each indemnitee for any one or a
combination of the following, whichever is most advantageous to the indemnitee:
(1) the benefits provided by Harris' Restated Certificate of Incorporation and
By-Laws in effect on the date of the indemnification agreement; (2) the benefits
provided by Harris' Restated Certificate of Incorporation and By-Laws at the
time expenses are incurred by the indemnitee; (3) the benefits allowable under
Delaware law in effect on the date of the indemnification agreement; (4) the
benefits allowable under the law of the jurisdiction under which Harris exists
at the time expenses are incurred by the indemnitee; (5) the benefits available
under liability insurance obtained by Harris; and (6) such other benefits as may
be otherwise available to the indemnitee under Harris' existing practices. Under
the indemnification agreements, each indemnitee will continue to be indemnified
even after ceasing to occupy a position as an officer, director, employee or
agent of Harris with respect to suits or proceedings arising out of acts or
omissions during his or her service to Harris.
Each indemnitee agrees to notify Harris promptly of any proceeding brought
or threatened and not to make any admission or settlement without Harris'
consent, unless the indemnitee determines to undertake his or her own defense
and waives the benefits of the indemnification agreement.
Retirement
It is our policy that directors retire from the board effective at the end
of the month in which they reach age 72. 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 the director continue to serve on
the board.
9
<PAGE> 14
OUR LARGEST SHAREHOLDERS
The rules of the SEC require disclosure regarding any person known to us to
be a beneficial owner of more than five percent of our common stock.
The following table sets forth information, as of July 31, 1999, with
respect to the beneficial ownership of our common stock of each person who, to
our knowledge, beneficially owned more than five percent of our common stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ---------- --------
<S> <C> <C>
The Prudential Insurance Company of America................. 7,965,693 10.10%(1)
751 Broad Street
Newark, New Jersey 07102-3777
J.P. Morgan & Co. Incorporated.............................. 4,971,371 6.2%(2)
60 Wall Street
New York, New York 10260
</TABLE>
- ---------------
(1) The information is based on an amended Schedule 13G with respect to our
common stock filed by The Prudential Insurance Company of America with the
SEC on May 7, 1999, in which Prudential states that it has sole dispositive
and voting power with respect to 1,095,000 shares, shared dispositive power
with respect to 6,867,693 shares and shares voting power with respect to
6,843,035 shares.
(2) The information is based on a Schedule 13G with respect to our common stock
filed by J.P. Morgan & Co. Incorporated with the SEC on February 22, 1999,
in which J.P. Morgan states that it has sole dispositive power with respect
to 4,717,071 shares, sole voting power with respect to 3,509,011 shares,
shared dispositive power with respect to 209,700 shares and shared voting
power with respect to 99,300 shares.
10
<PAGE> 15
SHARES HELD BY DIRECTORS AND EXECUTIVE OFFICERS
The table below lists the beneficial ownership of shares and equivalent
units of our common stock, as of July 31, 1999, by each director, including the
nominees for election at the 1999 Annual Meeting, each of the executive officers
named in the summary compensation table and all directors and executive officers
as a group. Except as otherwise noted, the named individual or family members
had sole voting and investment power with respect to the securities.
<TABLE>
<CAPTION>
SHARES DEFERRED
BENEFICIALLY STOCK
NAME OWNED(1) UNITS(2)
---- ------------ ---------
<S> <C> <C>
Wesley E. Cantrell(3)................................... 204,262 454
Robert Cizik(4)*........................................ 16,500 2,542
Lester E. Coleman(4)(5)................................. 16,500 4,900
E. Van Cullens(3)....................................... 57,621 563
Alfred C. DeCrane, Jr.(4)............................... 4,637 5,992
Ralph D. DeNunzio(4).................................... 20,500 4,657
Joseph L. Dionne(4)..................................... 15,009 3,978
Phillip W. Farmer(3).................................... 439,246 4,100
John T. Hartley(4)(5)................................... 39,963 4,030
Karen Katen(4).......................................... 9,500 4,560
Bryan R. Roub(3)(5)..................................... 161,782 1,975
Alexander B. Trowbridge(4).............................. 15,009 5,302
Gregory L. Williams(3)*................................. 22,594 117
All Directors and Executive Officers as a group (18
persons)(6)........................................... 1,243,489 46,726
</TABLE>
- ---------------
(1) No individual director, nominee for director or named executive officer
beneficially owns 1% or more of our outstanding common stock. The directors
and executive officers as a group beneficially own 1.55% of our outstanding
common stock.
(2) For the non-employee directors, this column includes stock equivalent units
credited under our 1997 Plan discussed above under "Director Compensation,"
and for Mr. Hartley, also includes amounts deferred in the form of stock
equivalent units under our 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 our Stock
Incentive Plan for which the performance period had not expired and as to
which the named individuals have sole voting power but no investment power,
as follows: Mr. Cantrell -- 25,000 shares; Mr. Cullens -- 15,000 shares; Mr.
Farmer -- 75,000 shares; Mr. Roub -- 25,000 shares; and Mr.
Williams -- 5,000 shares; and (ii) shares underlying options granted under
the Stock Incentive Plan which are exercisable or become exercisable within
60 days of July 31, 1999, as follows: Mr. Cantrell -- 129,570 shares; Mr.
Cullens -- 42,500 shares; Mr. Farmer -- 223,070 shares; Mr. Roub -- 70,716
shares; and Mr. Williams -- 17,500 shares.
(4) The shares reported include shares underlying options granted under our
Stock Incentive Plan which are exercisable within 60 days of July 31, 1999,
as follows: Mr. Cizik -- 8,500 shares; Dr. Coleman -- 2,500 shares; Mr.
DeCrane -- 2,500 shares; Mr. DeNunzio -- 14,500 shares; Mr. Dionne -- 14,500
shares; Mr. Hartley -- 4,500 shares; Ms. Katen -- 4,500 shares; and Mr.
Trowbridge -- 11,500 shares.
(5) The shares reported do not include shares owned by family members as
follows: Dr. Coleman -- 600 shares; Mr. Hartley -- 2,000 shares; and Mr.
Roub -- 400 shares. Dr. Coleman, Mr. Hartley and Mr. Roub disclaim
beneficial ownership of such shares.
11
<PAGE> 16
(6) The shares reported as owned by all directors and executive officers as a
group include (i) 183,200 performance shares awarded to the executive
officers under our Stock Incentive Plan as to which the executive officers
have sole voting power but no investment power; and (ii) 648,434 shares
underlying options granted under our Stock Incentive Plan which are
exercisable or become exercisable within 60 days of July 31, 1999. The
shares reported do not include 3,000 shares owned by family members, for
which the directors and executive officers disclaim beneficial ownership.
* Mr. Cizik is retiring from the board effective at the Annual Meeting of
Shareholders. Mr. Williams' employment with Harris was terminated on August
13, 1999 in connection with the sale of our semiconductor business, and as a
result his performance shares were forfeited.
REPORT OF THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The Management Development and Compensation Committee, which is comprised
solely of non-employee directors, approves our compensation philosophy and the
compensation, perquisites and other benefits for our executive officers under
salary, incentive and other plans authorized by our board of directors or
shareholders. In addition, the committee recommends for consideration and
approval by all of the non-employee directors the compensation for our Chief
Executive Officer and President.
COMPENSATION PHILOSOPHY
Our executive compensation philosophy is designed to meet our needs, as
well as the needs of our executives and shareholders. The executive compensation
program is structured to:
- Closely link compensation to an individual's performance and our
financial results;
- Align the interests of our executives and shareholders by emphasizing
both the short-term and strategic focus of our businesses and by
facilitating management stock ownership; and
- Enable us to attract and retain a world class management team.
This philosophy applies to all of our management employees, including the
executive officers named in the summary compensation table.
Our executive compensation program has two components:
- An annual cash component, consisting of a base salary and an incentive
bonus based on the financial performance of (1) a business unit in the
case of business unit management, (2) a business unit and Harris in the
case of the business unit division presidents and (3) Harris in the case
of the other corporate executives; and
- A long-term incentive component, consisting of stock options and
performance shares.
Mr. Cantrell, the President of Lanier Worldwide, participated in both the
Lanier Worldwide Key Contributor Bonus Plan and the Harris Stock Incentive Plan.
We utilize a formal system for evaluating executive performance and
determine executive annual cash compensation 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. Payouts for annual incentive awards are
based upon the degree to which an executive achieves the net income target
established for the applicable business unit at the start of our fiscal year, as
part of our strategic planning process. Similarly, long-term compensation in the
form of performance shares is based upon the degree to which an executive
attains financial and/or operating goals and objectives outlined in the
strategic planning process. For the three-year performance period ended July 2,
1999, we used cumulative earnings per share for Harris and cumulative net income
for our sectors and divisions as the criteria for long-term compensation.
Our executive compensation program is designed to ensure that executive pay
remains competitive with pay for comparable jobs, responsibilities and
performance in leading industrial
12
<PAGE> 17
companies. For this reason, we periodically retain outside compensation and
benefit consultants to review our executive compensation programs.
ANNUAL CASH COMPENSATION
Annual cash compensation consists of a fixed salary and an opportunity for
a variable performance incentive. Base salaries and planned cash incentive
compensation for senior executives, other than the Chief Executive Officer and
President, are recommended by Mr. Farmer and then reviewed and approved by the
Management Development and Compensation Committee.
Our Annual Incentive Plan, which was approved by our shareholders at the
1995 Annual Meeting, provides for payment to executives of a specified amount
(not to exceed 200% of the target amount) based upon the percentage achievement
of specific financial objectives, including net income and revenue growth. For
fiscal 1999, annual incentive payments were based upon the attainment of net
income targets of the applicable business unit and, in the case of Lanier, net
income and revenue growth. Such targets were established at the start of fiscal
1999. The percentage of an executive's annual cash compensation attributable to
the incentive bonus increases proportionately with his or her level of
management responsibility. For the executive officers named in the summary
compensation table, planned cash incentive compensation ranged from 33.3% to 55%
of total annual cash compensation for fiscal 1999. In limited circumstances the
board or the committee may also authorize a separate cash bonus or award.
LONG-TERM COMPENSATION
Our Stock Incentive Plan, which was initially approved by shareholders at
the 1990 Annual Meeting and subsequently amended and approved by shareholders at
the 1995 Annual Meeting, aligns executive and shareholder interests. The plan
permits the granting of any or all of the following types of awards:
- Performance shares, or units, conditioned upon meeting specified
performance criteria;
- Restricted stock, or units;
- Stock options, including incentive stock options;
- Stock appreciation rights, independent of, or in tandem with, stock
options; and
- Other awards valued in whole or in part by reference to, or otherwise
based on, our common stock.
The Management Development and Compensation Committee believes that through
the use of stock incentives the interests of our executives are directly related
to enhancing shareholder value.
With respect to performance share awards, at the beginning of an award
cycle, the committee determines the applicable performance criteria using our
strategic planning process and a period of time (generally, three fiscal years)
during which our performance is to be measured. The performance share award and
option grants for senior executives, other than the Chief Executive Officer and
President, are recommended by Mr. Farmer and then reviewed and approved by the
committee. The committee grants each participant a specified 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 (1) a business unit in the case of business unit management, (2) a business
unit and Harris in the case of division presidents, and (3) Harris in the case
of other corporate executives. Payouts for the three-year period ended July 2,
1999, ranged from zero to 100% 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 our common stock.
Stock options are granted at fair market value as of the date of grant,
vest over three years, and have a term of not greater than ten years. Stock
options provide value only when the price of our common stock increases above
the option grant price.
Grants made to executive officers under our Stock Incentive Plan and
payments under the 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
13
<PAGE> 18
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 our best interests for compensation to be paid under those plans or
otherwise in a manner so as not to qualify 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 Management Development and Compensation Committee and
approved by the non-employee directors. In recommending Mr. Farmer's total
annual compensation for fiscal 1999, the committee considered both our
performance and Mr. Farmer's individual performance by the same measures
described above for determining executive officer compensation.
Under our Annual Incentive Plan, Mr. Farmer received annual incentive
compensation for fiscal 1999 based upon 62.27% achievement of our net income
target for the 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 ended July 2,
1999. Based upon our performance and the payout formula recommended by the
committee, the non-employee directors authorized a payout of 24,000 shares for
Mr. Farmer for the three-year period ended July 2, 1999.
Management Development and
Compensation Committee
Lester E. Coleman, Chairperson
Joseph L. Dionne
Karen Katen
14
<PAGE> 19
STOCK PERFORMANCE
The graph below compares the five-year cumulative total return of our
common stock with the comparable five-year cumulative total returns of the S&P
500 Stock Index and the S&P Technology Sector Index, a successor to the S&P High
Technology Composite Stock Index presented in past proxy statements. The figures
assume an initial investment of $100 on June 30, 1994 in Harris, the S&P 500 and
the S&P Technology Sector Index, and the reinvestment of dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG HARRIS, S&P 500 AND S&P TECHNOLOGY
<TABLE>
<CAPTION>
S&P 500 S&P TECH HARRIS
------- -------- ------
<S> <C> <C> <C>
'1994' 100.00 100.00 100.00
'1995' 126.00 163.00 121.00
'1996' 159.00 194.00 147.00
'1997' 214.00 295.00 210.00
'1998' 281.00 393.00 221.00
'1999' 345.00 672.00 201.00
</TABLE>
15
<PAGE> 20
EXECUTIVE COMPENSATION
The table below shows the annual and long-term compensation for the fiscal
years ended July 2, 1999, July 3, 1998 and June 27, 1997 of those executives
who, as of the end of fiscal 1999 were (1) our Chief Executive Officer, and (2)
our other four most highly compensated executive officers. All share data have
been adjusted to reflect the two-for-one stock split effected in September 1997.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- -------------------------
AWARDS PAYOUTS
------------ ----------
OTHER SECURITIES
ANNUAL UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) (1) ($) (#) (2) ($) (3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P. W. Farmer 1999 $791,667 $498,160 $ 72,000 75,000 $ 945,000 $449,986
Chairman and Chief 1998 $725,000 $737,400 $ 79,200 84,553 $1,327,500 $255,166
Executive Officer 1997 $591,667 $658,920 $ 83,600 65,738 $2,411,406 $181,435
- ----------------------
E. Van Cullens 1999 $335,833 $261,570 $ 14,400 45,000 $ 0 $ 76,769
President and Chief 1998 $312,500 $198,257 $ 84,542 20,000 $ 0 $ 39,247
Operating Officer* 1997 $ 24,422 $ 0 $ 50,489 20,000 $ 0 $ 0
- ----------------------
W. E. Cantrell 1999 $337,886 $182,600 $ 24,000 25,000 $ 315,000 $ 27,879
President- 1998 $312,115 $352,501 $ 26,400 25,986 $ 407,100 $ 26,386
Lanier Worldwide 1997 $300,000 $403,100 $ 15,200 25,988 $ 302,500(4) $ 25,411
- ----------------------
B. R. Roub 1999 $312,500 $177,470 $ 24,000 25,000 $ 315,000 $ 66,736
Senior Vice
President 1998 $296,667 $265,464 $ 25,520 22,125 $ 398,250 $ 97,325
and Chief Financial 1997 $277,500 $285,532 $ 28,120 22,196 $ 868,106 $ 87,222
Officer
- ----------------------
G. L. Williams 1999 $318,615 $101,341 $ 25,188 25,000 $ 0 $ 24,137
President- 1998 $115,230 $ 10,417 $146,048 10,000 $ 0 $ 81,583
Semiconductor 1997 -- -- -- -- -- --
Sector (5)
</TABLE>
* Mr. Cullens joined Harris in June 1997; the amounts reported for fiscal 1997
reflect less than a full year of employment. For fiscal 1999, Mr. Cullens
was President of our Communications Sector. Mr. Cullens became President and
Chief Operating Officer of Harris on July 1, 1999.
(1) Except for Mr. Cullens and Mr. Williams, 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 1999,
1998, or 1997; the amounts reported represent dividend equivalent payments
on outstanding performance shares granted under our Stock Incentive Plan for
which the performance period had not expired. Mr. Cullens' personal benefits
for fiscal 1998 include $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
include a $50,000 disruption payment in connection with joining Harris. Mr.
Williams personal benefit for fiscal 1999 include $20,388 for relocation
expense reimbursements and $4,800 for dividend equivalent payments on
outstanding performance shares. Mr. Williams' personal benefits for fiscal
1998 include $146,048 for certain relocation expense reimbursements.
(2) The value of the performance shares earned for the three-year performance
period ended July 2, 1999 (Mr. Cantrell -- 8,000 shares; Mr.
Farmer -- 24,000 shares; and Mr. Roub -- 8,000 shares) is based upon the
$39.375 closing price of our common stock on July 1, 1999 (the last trading
day of fiscal 1999). 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; and Mr. Roub -- 9,000 shares) is based
upon the $44.25 closing price of our common stock on July 2, 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 shares; and Mr. Roub -- 19,800 shares) is based upon the
$43.845 closing price of our common stock on June 27, 1997. As of July 3,
1999, the aggregate number and value of performance shares awarded under the
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 ended on July 2, 1999) is as follows: Mr. Farmer -- 45,000 shares,
with a value of $1,771,875; Mr. Cantrell -- 15,000 shares, with a value of
$590,625; Mr. Cullens -- 15,000 shares, with a value of $590,625; Mr.
Roub -- 15,000 shares, with a value of $590,625; and Mr. Williams -- 5,000
shares, with a value of
16
<PAGE> 21
$196,875. The value of the aggregate unearned performance shares is based upon
the $39.375 closing price of our common stock on July 1, 1999.
(3) Amounts reported include:
(i) Contributions to the Harris Corporation Retirement Plan for fiscal
1999: Mr. Farmer -- $20,000; Mr. Cullens -- $20,000; Mr.
Roub -- $20,000; and Mr. Williams -- $15,889; for fiscal 1998: Mr.
Farmer -- $19,000; Mr. Cullens -- $20,000; Mr. Roub -- $19,000; and Mr.
Williams -- $365; and for fiscal 1997: Mr. Farmer -- $12,000; and Mr.
Roub -- $12,000.
(ii) Contributions to our Supplemental Executive Retirement Plan for fiscal
1999: Mr. Farmer -- $409,628; Mr. Cullens -- $52,403; Mr.
Roub -- $46,736; and Mr. Williams -- $5,943; for fiscal 1998: Mr.
Farmer -- $219,462; Mr. Cullens -- $16,828; Mr. Roub -- $73,550; and
Mr. Williams -- $80,078; and for fiscal 1997: Mr. Farmer -- $156,385;
and Mr. Roub -- $68,463.
(iii) Contributions on behalf of Mr. Cantrell to the Lanier Worldwide, Inc.
Savings Incentive Plan for fiscal 1999 of $5,209; for fiscal 1998 of
$5,935; and for fiscal 1997 of $4,500. Contributions on behalf of Mr.
Cantrell to the Lanier Worldwide, Inc. Supplemental Executive
Retirement Savings Plan for fiscal 1999 of $17,686 and for fiscal
1998 of $15,537.
(iv) The taxable portion of premiums on life insurance provided by Harris
for fiscal 1999: Mr. Farmer -- $20,358; Mr. Cantrell -- $4,984; Mr.
Cullens -- $4,366; and Mr. Williams -- $2,305; for fiscal 1998: Mr.
Farmer -- $16,704; Mr. Cantrell -- $4,914; Mr. Cullens -- $2,419; Mr.
Roub -- $4,775; and Mr. Williams -- $1,140; and for fiscal 1997: Mr.
Farmer -- $13,050; Mr. Cantrell -- $4,914; and Mr. Roub -- $6,759.
(4) Mr. Cantrell's payouts for fiscal 1997 were made pursuant to grants under
the Lanier Worldwide, Inc. Long Term Incentive Plan For Key Employees. The
payments reflected in the table for fiscal 1997 are for performance during
the three-year performance period ended June 27, 1997.
(5) Mr. Williams joined Harris in January, 1998; the amounts reported for fiscal
1998 reflect less than a full year of employment. In connection with the
sale by Harris of its semiconductor operations, Mr. Williams' employment
with Harris was terminated on August 13, 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The table below gives more information on stock options granted under our
Stock Incentive Plan during the 1999 fiscal year. Amounts shown for potential
realizable values are based upon assumed annualized rates of stock price
appreciation of 5% and 10% over the full ten-year term of the options, as
required by the SEC and are not intended to represent or forecast possible
future appreciation, if any, of our common stock price.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME GRANTED(1)(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P. W. Farmer 75,000 9.70% $34.06 8/28/08 $1,606,629 $ 4,071,514
- ---------------------
E. V. Cullens 25,000 3.23% $34.06 8/28/08 $535,543 $1,357,171
20,000 2.59% $33.81 4/23/09 $425,290 $1,077,768
- ---------------------
W. E. Cantrell 25,000 3.23% $34.06 8/28/08 $535,543 $1,357,171
- ---------------------
B. R. Roub 25,000 3.23% $34.06 8/28/08 $535,543 $1,357,171
- ---------------------
G. L. Williams 25,000 3.23% $34.06 8/28/08 $535,543 $1,357,171
- ---------------------
Shareholder Gain (2) ....................................... $1,972,372,292 $4,998,378,640
- ---------------------
Named Executive
Officers' Gain as a
% of All
Shareholder Gain ....................................... 0.21% 0.21%
</TABLE>
(1) All stock option grants were made under our Stock Incentive Plan. Each stock
option generally expires after 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 our common stock on
17
<PAGE> 22
the date of grant and may be paid in cash and/or shares of our common stock,
or an optionholder may use "cashless exercise" procedures. If shares of
common stock are delivered in payment of the exercise price, we will grant a
Restoration Stock Option ("RSO") 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 fair market value on the grant date. In the event of a change
in control, outstanding options immediately vest.
(2) Shareholder gain reflects the hypothetical increase in market value of our
common stock for all shareholders, assuming annual stock price appreciation
of 5% and 10%, respectively, over a ten-year period.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The table below presents information with respect to the number of shares
acquired upon exercise of stock options and the aggregate gains realized on
exercises during fiscal 1999 for those executive officers named in the summary
compensation table. No stock options were exercised by the named officers in
fiscal 1999. The table also sets forth the number of shares covered by
exercisable and unexercisable options held by those executives on July 2, 1999,
and the aggregate gains that would have been realized had these options been
exercised on July 2, 1999, even though they were not exercised and the
unexercisable options could not have been exercised on that date.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT FISCAL OPTIONS/SARS AT
ACQUIRED VALUE YEAR-END (#) FISCAL YEAR-END(1)($)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P. W. Farmer 0 0 155,570 120,000 $ 994,688 $528,750
- ---------------------
E. V. Cullens 0 0 25,000 60,000 0 $244,063
- ---------------------
W. E. Cantrell 0 0 107,070 40,000 $1,210,345 $176,250
- ---------------------
B. R. Roub 0 0 48,216 40,000 $ 344,690 $176,250
- ---------------------
G. L. Williams 0 0 5,000 30,000 0 $132,812
</TABLE>
(1) Market value of shares underlying in-the-money options on July 2, 1999, less
option exercise price. The market value is based upon the July 1, 1999 (the
last trading day of fiscal 1999) closing price of $39.375 per share of our
common stock reported as New York Stock Exchange Composite Transactions.
18
<PAGE> 23
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The table below sets forth information with respect to awards of
performance shares granted under our Stock Incentive Plan during the 1999 fiscal
year to those executive officers named in the summary compensation table. The
performance period for the awards in the table is the three-year period ending
June 30, 2001.
<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 15,000 6/30/2001 0 15,000 30,000
- ----------------------------------
E. V. Cullens 5,000 6/30/2001 0 5,000 10,000
- ----------------------------------
W. E. Cantrell 5,000 6/30/2001 0 5,000 10,000
- ----------------------------------
B. R. Roub 5,000 6/30/2001 0 5,000 10,000
- ----------------------------------
G. L. Williams 5,000 6/30/2001 0 5,000 10,000
</TABLE>
Awards of performance shares to participants are made at the beginning of
each performance period and are earned based on the performance of a business
unit, Harris 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 non-employee directors in
the case of the Chief Executive Officer and President 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 our cumulative earnings per share
during the three-year strategic plan cycle for Messrs. Farmer and Roub. In the
case of Messrs. Cantrell, Cullens and Williams, 80% of the award is based upon
relevant sector cumulative net income during the strategic plan cycle and 20% on
our cumulative earnings per share during the strategic plan cycle. Share payouts
are made following the determination of the committee and, in the case of the
Chief Executive Officer and President, the non-employee 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 our common stock.
In the event of a change in control, the performance objectives applicable
to the award are deemed to be attained, and performance shares are paid out at
the end of the performance period, provided however:
- In the event of death, disability, retirement or involuntary termination
other than for cause, the shares are paid as soon as practicable;
- In the event of resignation or termination for cause, the shares are
forfeited; and
- In the event of certain defined changes in our capital structure, then,
at the participant's election, the award is paid in shares or cash, as
soon as practicable.
LANIER WORLDWIDE DEFINED BENEFIT
RETIREMENT PLANS
Lanier Worldwide, Inc.'s defined benefit retirement program consists of:
- A tax-qualified, funded pension plan, the Pension Equity Plan, which is
available to substantially all of the United States employees of Lanier
and its participating subsidiaries and affiliated companies; and
- A non-qualified, unfunded supplemental retirement income plan, which is
available to executive officers and other key employees and that provides
benefits which, but for certain limits imposed by the Internal Revenue
Code on tax-qualified plans, would be provided under Lanier's Pension
Equity Plan.
19
<PAGE> 24
The Pension Equity Plan is a defined benefit plan. Its benefits are fully
paid by Lanier, and employees become vested upon the completion of five years of
service.
In July 1997, Lanier's board amended the Pension Equity Plan 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 that person would be as calculated under the
plan without giving effect to the amendment. Instead, those 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) 0.33% 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. Benefits are computed as a straight life
annuity, but may be converted to a lump sum or other form.
The following table shows the estimated annual benefits under (1) the
Pension Equity Plan for Lanier executives (including Mr. Cantrell) calculating
annual benefits under the terms of the Pension Equity Plan as in effect prior to
the 1997 amendment and (2) the Lanier Worldwide, Inc. Supplemental Executive
Retirement Plan, payable at age 65 or older.
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 these plans, Mr. Cantrell is credited with the maximum of 30 years of
service. For fiscal 1999, highest consecutive five year average compensation for
Mr. Cantrell for purposes of the above determination was $880,762.
Compensation as in effect prior to the July 1997 amendment consists of base
salary, bonuses and sales commissions and, for periods prior to 1998, income
recognized upon the exercise of Harris stock options. Compensation as in effect
after the July 1997 amendment consists of gross income, including salary,
bonuses, sales commissions, vacation pay, compensation received while on an
authorized leave of absence, and short-term disability payments, but excluding
severance pay, payments made in consideration of a release of employment with
Lanier, payments attributable to domestic or foreign assignment differential,
any contest payments, any expense-related reimbursement, and payments made under
any long-term incentive plan, including income from the exercise of stock
options or the value of life insurance includible in the participant's gross
income. For periods prior to 1998, income recognized upon the exercise of Harris
stock options is included. Base salary includes certain deferred amounts.
Benefits under the Pension Equity Plan and the Lanier Supplemental
Executive Retirement Plan are not subject to any deduction for Social Security
or other offset amounts.
EXECUTIVE SEVERANCE AGREEMENTS
To provide continuity of management and dedication of our corporate
executives in the event of a threatened or actual change in control of Harris,
our board has approved severance agreements for our officers and key managers,
including those officers named in the summary compensa-
20
<PAGE> 25
tion table. Under these agreements, officers and key managers of Harris are
provided with severance benefits in the event the executive's employment is
terminated by Harris without cause or by the executive for good reason within
two years following a change in control (all terms as defined in the severance
agreement). Under the severance agreement, the executive agrees not to
voluntarily terminate his or her employment with Harris during the six-month
period following a change in control. The lump sum severance benefit payable
under the severance agreement equals the sum of (a) the executive's unpaid base
salary through date of termination, a pro rata annual bonus (as determined under
the severance agreement) and any compensation deferred by the executive other
than under a tax-qualified plan and any accrued vacation pay; and (b) from one
to three times the executive's highest annual rate of base salary during the
12-month period prior to the date of termination and from one to three times the
greater of the executive's highest annual bonus in the last three years, the
executive's target bonus for the year during which the change in control
occurred, or the executive's target bonus for the year in which the executive's
employment is terminated. Payment amounts are three times compensation for Mr.
Farmer and two times compensation for the other named executive officers. In
addition, the executive receives the same level of medical, dental, accident,
disability, life insurance and any similar benefits (or the highest level of
coverage provided to active executives, if more favorable). The executive also
receives reimbursement for any relocation expense related to pursuit of other
business opportunities incurred within two years following the date of
termination, for recruitment or placement services of up to $4,000 and for
professional financial or tax planning services of up to $5,000. The severance
agreement also provides for a tax gross-up payment to the executive in the event
that payment of any severance benefits are subject to excise tax imposed under
Section 4999 of the Internal Revenue Code. In addition, Harris shall reimburse
the executive for any legal fees and costs with respect to any dispute arising
under the severance agreement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, as well as persons who own more than ten percent of our
outstanding shares of common stock, to file reports of ownership and changes in
ownership of our common stock with the SEC and the New York Stock Exchange. We
have procedures in place to assist our directors and executive officers in
preparing and filing these reports on a timely basis.
Based solely upon a review of the forms furnished to us, or written
representations from certain persons that no Forms 5 were required, we believe
that all required forms have been timely filed.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The board of directors has appointed Ernst & Young LLP, independent public
accountants, to audit our books and accounts for the fiscal year ending June 30,
2000.
Although Delaware law does not require shareholder ratification of the
appointment, the board has decided to ascertain the position of shareholders on
the appointment. We expect that a representative of Ernst & Young LLP will be
present at the meeting to respond to appropriate questions of shareholders and
to make a statement if he desires to do so.
RECOMMENDATION REGARDING PROPOSAL 2
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING JUNE 30, 2000.
21
<PAGE> 26
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Pursuant to applicable requirements of the Securities Exchange Act, we must
receive any proposals that shareholders wish to present at the 2000 Annual
Meeting no later than May 21, 2000, in order to be considered for inclusion in
our proxy statement and form of proxy for that meeting.
In addition, our By-Laws provide that for any shareholder proposal or
director nomination to be properly presented at the 2000 Annual Meeting, we must
receive notice of the matter not less than 60 nor more than 90 days prior to the
date of the meeting, which we expect to be held on October 27, 2000. To be
timely, the notice for the 2000 Annual Meeting of Shareholders must be received
by our Corporate Secretary no earlier than July 29, 2000 and no later than
August 28, 2000. Each notice of nomination must contain the name and address of
the shareholder who intends to make the nomination; the name, address and
written consent of the nominee and any other nominee information as would be
required to be disclosed in a proxy solicitation. You may obtain a copy of the
By-Laws upon written request to our Corporate Secretary.
Our Corporate Governance Committee will consider shareholders' nominees for
the board of directors and shareholder proposals submitted for the meeting. A
nomination or proposal that does not supply adequate information about the
nominee or proposal, and the shareholder making the nomination or proposal, will
be disregarded. You should address all nominations or proposals to:
Corporate Secretary
Harris Corporation
1025 West NASA Boulevard
Melbourne, Florida 32919
DISCRETIONARY VOTING OF 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, the persons
named in the proxy card intend 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
Corporate Secretary
Melbourne, Florida
September 17, 1999
22
<PAGE> 27
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 22, 1999, 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 TWO
NOMINEES FOR DIRECTOR AND FOR THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR
FISCAL 2000. 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> 28
[X] PLEASE
MARK
EACH
VOTE
LIKE
THIS
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
1. ELECTION OF DIRECTORS (terms expiring in 2002): FOR WITHHOLD
- John T. Hartley,
- Karen Katen [ ] [ ]
FOR, EXCEPT WITHHOLD VOTE FROM THE FOLLOWING NOMINEE(S):
- -------------------------------------------------------
2. Ratification of the FOR AGAINST ABSTAIN
selection of [ ] [ ] [ ]
Ernst & Young LLP
as independent auditors
for fiscal 2000
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 __, 1999
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 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 LOGO]
<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 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 22, 1999, 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 TWO NOMINEES
FOR DIRECTOR AND FOR THE RATIFICATION OF THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR FISCAL 2000.
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
[X] PLEASE
MARK
EACH
VOTE
LIKE
THIS
1. ELECTION OF DIRECTORS (terms expiring in 2002): FOR WITHHOLD
- John T. Hartley,
- Karen Katen [ ] [ ]
FOR, EXCEPT WITHHOLD VOTE FROM THE FOLLOWING NOMINEE(S):
- -------------------------------------------------------
2. Ratification of the FOR AGAINST ABSTAIN
selection of [ ] [ ] [ ]
Ernst & Young LLP
as independent auditors
for fiscal 2000
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 __, 1999
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 LOGO]
<PAGE> 31
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 22, 1999, 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 TWO NOMINEES
FOR DIRECTOR AND FOR THE RATIFICATION OF THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR FISCAL 2000.
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> 32
[X] PLEASE
MARK
EACH
VOTE
LIKE
THIS
1. ELECTION OF DIRECTORS (terms expiring in 2002): FOR WITHHOLD
- John T. Hartley,
- Karen Katen [ ] [ ]
FOR, EXCEPT WITHHOLD VOTE FROM THE FOLLOWING NOMINEE(S):
- -------------------------------------------------------
2. Ratification of the FOR AGAINST ABSTAIN
selection of [ ] [ ] [ ]
Ernst & Young LLP
as independent auditors
for fiscal 2000
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 __, 1999
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 LOGO]
