<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________
to ____________ Commission file number ___________
- ----------------------------------------------------
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
(Full Title of Plan)
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
1101 PENNSYLVANIA AVENUE, NW
WASHINGTON, D.C. 20004
(Name of issuer of the securities held pursuant to the
Plan and address of its principal executive office)
- ----------------------------------------------------
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedules
June 26, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Index to Financial Statements and Supplemental Schedules
Page
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits
June 26, 1998 2
Statement of Net Assets Available for Plan Benefits
June 26, 1997 3
Statement of Changes in Net Assets Available for Plan Benefits
Year ended June 26, 1998 4
Statement of Changes in Net Assets Available for Plan Benefits
Period ended June 26, 1997 5
Notes to Financial Statements 6
Schedules
Line 27a Schedule of Investments Held at End of Plan Year
June 26, 1998 11
Line 27d Schedule of Reportable Transactions
Year ended June 26, 1998 12
All other supplemental schedules omitted are not applicable or are not
required, based on disclosure requirements of the Employee Retirement
Income Security Act of 1974 and regulations issued by the Department
of Labor.
<PAGE>
Independent Auditors' Report
The Administrative Committee of the Board of Directors
Harman International Industries, Incorporated:
We have audited the accompanying statements of net assets available
for Plan benefits of the Harman International Industries, Incorporated
Retirement Savings Plan (the Plan) as of June 26, 1998 and 1997 and
the related statements of changes in net assets available for Plan benefits
for the year ended June 26, 1998 and period from July1, 1996 through
June 26, 1997. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for Plan benefits of the
Harman International Industries, Incorporated Retirement Savings Plan
as of June 26, 1998 and 1997 and the changes in net assets available for
Plan benefits for the year ended June 26, 1998 and period from July1,
1996 through June 26, 1997 in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information in Schedules 1 and 2 is presented for the purpose of
complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 and is not a required part of the basic financial
statements. These supplemental schedules are the responsibility of the
Plan's management. The fund information in the statements of net
assets available for Plan benefits and the related statements of changes
in net assets available for Plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for Plan
benefits and the changes in net assets available for Plan benefits of each
fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated, in all material
respects, when considered in relation to the basic financial statements
taken as a whole.
/s/ KPMG Peat Marwick LLP
October 23, 1998
1
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1998
<TABLE>
<CAPTION>
The Putnam
Fund for
Fixed Income Growth and Company
Assets Fund Income Stock Fund
------------ ----------- ----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts $ 23,359,736 - -
Mutual funds - 23,658,142 -
Harman International Industries,
Incorporated common stock - - 7,654,103
Money market funds 960,229 - -
Participant loans - - -
------------ ----------- ----------
24,319,965 23,658,142 7,654,103
Contributions receivable 1,000,455 793,622 556,126
------------ ----------- ----------
Total assets 25,320,420 24,451,764 8,210,229
Liabilities
Other liabilities 1,569 1,527 494
------------ ----------- ----------
Net assets available for Plan benefits $ 25,318,851 24,450,237 8,209,735
------------ ----------- ----------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1998
<TABLE>
<CAPTION>
George
Putnam Putnam
Fund of Investors Putnam
Assets Boston Fund Voyager Fund
---------- ---------- -----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts - - -
Mutual funds 7,468,023 1,693,184 17,304,275
Harman International Industries,
Incorporated common stock - - -
Money market funds - - -
Participant loans - - -
---------- ---------- -----------
7,468,023 1,693,184 17,304,275
Contributions receivable 319,543 143,494 748,066
---------- ---------- -----------
Total assets 7,787,566 1,836,678 18,052,341
Liabilities
Other liabilities 482 109 1,117
---------- ---------- -----------
Net assets available for Plan benefits 7,787,084 1,836,569 18,051,224
---------- ---------- -----------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1998
<TABLE>
<CAPTION>
Putnam
Diversified Putnam
Putnam Income and Overseas
Assets OTC Fund Trust Fund Growth Fund
---------- -------- --------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts - - -
Mutual funds 1,089,764 623,075 986,906
Harman International Industries,
Incorporated common stock - - -
Money market funds - - -
Participant loans - - -
---------- -------- --------
1,089,764 623,075 986,906
Contributions receivable 146,049 49,607 96,731
---------- -------- --------
Total assets 1,235,813 672,682 1,083,637
Liabilities
Other liabilities 70 40 64
---------- -------- --------
Net assets available for
Plan benefits 1,235,743 672,642 1,083,573
---------- -------- --------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1998
<TABLE>
<CAPTION>
Putnam Putnam
Putnam Asset Asset
Asset Allocation Allocation
Allocation Balanced Consolidated
Assets Growth Fund Fund Fund
---------- ---------- ---------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts - - -
Mutual funds 212,974 132,623 11,697
Harman International Industries,
Incorporated common stock - - -
Money market funds - - -
Participant loans - - -
---------- ---------- ---------
212,974 132,623 11,697
Contributions receivable 31,552 12,509 7,421
---------- ---------- ---------
Total assets 244,526 145,132 19,118
Liabilities
Other liabilities 14 9 1
---------- ---------- ---------
Net assets available for
Plan benefits 244,512 145,123 19,117
---------- ---------- ---------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1998
<TABLE>
<CAPTION>
New
Opportunities Participant
Assets Fund Loan Fund Total
---------- --------- -----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts - - 23,359,736
Mutual funds 6,925,659 - 60,106,322
Harman International Industries,
Incorporated common stock - - 7,654,103
Money market funds - - 960,229
Participant loans - 5,836 5,836
---------- --------- -----------
6,925,659 5,836 92,086,226
Contributions receivable 467,672 - 4,372,847
---------- --------- -----------
Total assets 7,393,331 5,836 96,459,073
Liabilities
Other liabilities 447 - 5,943
---------- --------- -----------
Net assets available for Plan benefits 7,392,884 5,836 96,453,130
---------- --------- -----------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1997
<TABLE>
<CAPTION>
The Putnam
Fund for
Fixed Income Growth and Company
Assets Fund Income Stock Fund
------------ ----------- ----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts $ 22,045,554 - -
Mutual funds - 19,792,594 -
Harman International Industries,
Incorporated common stock - - 9,284,984
Money market funds 163,883 - -
Participant loans - - -
------------ ----------- ----------
22,209,437 19,792,594 9,284,984
Contributions receivable 1,042,518 806,479 582,660
------------ ----------- ----------
Total assets 23,251,955 20,599,073 9,867,644
Liabilities
Other liabilities 7,063 6,295 2,953
------------ ----------- ----------
Net assets available for Plan benefits $ 23,244,892 20,592,778 9,864,691
------------ ----------- ----------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1997
<TABLE>
<CAPTION>
George
Putnam Putnam
Fund of Investors Putnam
Assets Boston Fund Voyager Fund
---------- -------- -----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts - - -
Mutual funds 6,360,375 414,961 11,877,940
Harman International Industries,
Incorporated common stock - - -
Money market funds - - -
Participant loans - - -
---------- -------- -----------
6,360,375 414,961 11,877,940
Contributions receivable 345,965 46,755 743,935
---------- -------- -----------
Total assets 6,706,340 461,716 12,621,875
Liabilities
Other liabilities 2,023 132 3,777
---------- -------- -----------
Net assets available for Plan benefits 6,704,317 461,584 12,618,098
---------- -------- -----------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1997
<TABLE>
<CAPTION>
Putnam
Diversified Putnam
Putnam Income and Overseas
Assets OTC Fund Trust Fund Growth Fund
---------- ---------- -----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts $ - - -
Mutual funds 276,642 325,440 382,745
Harman International Industries,
Incorporated common stock - - -
Money market funds - - -
Participant loans - - -
---------- ---------- -----------
276,642 325,440 382,745
Contributions receivable 67,237 28,472 40,962
---------- ---------- -----------
Total assets 343,879 353,912 423,707
Liabilities
Other liabilities 88 103 122
---------- ---------- -----------
Net assets available for Plan benefits $ 343,791 353,809 423,585
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
June 26, 1997
<TABLE>
<CAPTION>
New
Opportunities Participant
Assets Fund Loan Fund Total
---------- --------- -----------
<S> <C> <C> <C>
Investments:
Guaranteed investment contracts - - 22,045,554
Mutual funds 3,832,944 - 43,263,641
Harman International Industries,
Incorporated common stock - - 9,284,984
Money market funds - - 163,883
Participant loans - 21,643 21,643
---------- --------- -----------
3,832,944 21,643 74,779,705
Contributions receivable 342,634 - 4,047,617
---------- --------- -----------
Total assets 4,175,578 21,643 78,827,322
Liabilities
Other liabilities 1,219 - 23,775
---------- --------- -----------
Net assets available for
Plan benefits 4,174,359 21,643 78,803,547
---------- --------- -----------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended June 26, 1998
<TABLE>
<CAPTION>
The Putnam
Fund for
Fixed Income Growth and Company
Fund Income Stock Fund
------------ ----------- ----------
<S> <C> <C> <C>
Employer contributions, net $ 1,908,051 740,145 609,790
Employee contributions 1,118,548 1,458,657 902,286
Fund transfers, net (158,255) (160,724) (2,369,447)
Other additions (deletions), net 516 1,975 (1,569)
------------ ----------- ----------
2,868,860 2,040,053 (858,940)
------------ ----------- ----------
Investment income:
Interest and dividends 1,408,324 2,846,437 38,394
Net appreciation (depreciation) - 750,094 28,993
------------ ----------- ----------
Net investment income 1,408,324 3,596,531 67,387
------------ ----------- ----------
Benefit payments 2,179,405 1,759,234 844,398
Administrative expenses 23,820 19,891 19,005
------------ ----------- ----------
2,203,225 1,779,125 863,403
------------ ----------- ----------
Net increase (decrease) 2,073,959 3,857,459 (1,654,956)
Net assets at beginning of year 23,244,892 20,592,778 9,864,691
------------ ----------- ----------
Net assets at end of year $ 25,318,851 24,450,237 8,209,735
------------ ----------- ----------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended June 26, 1998
<TABLE>
<CAPTION>
George
Putnam Putnam
Fund of Investors Putnam
Boston Fund Voyager Fund
------------ ---------- ----------
<S> <C> <C> <C>
Employer contributions, net 352,823 160,188 677,330
Employee contributions 549,996 305,713 1,389,953
Fund transfers, net (375,037) 642,704 679,644
Other additions (deletions), net 2,367 220 4,984
------------ ---------- ----------
530,149 1,108,825 2,751,911
------------ ---------- ----------
Investment income:
Interest and dividends 670,868 82,511 873,919
Net appreciation (depreciation) 398,332 239,985 3,145,030
------------ ---------- ----------
Net investment income 1,069,200 322,496 4,018,949
------------ ---------- ----------
Benefit payments 509,823 55,284 1,323,556
Administrative expenses 6,759 1,052 14,178
------------ ---------- ----------
516,582 56,336 1,337,734
------------ ---------- ----------
Net increase (decrease) 1,082,767 1,374,985 5,433,126
Net assets at beginning of year 6,704,317 461,584 12,618,098
------------ ---------- ----------
Net assets at end of year 7,787,084 1,836,569 18,051,224
------------ ---------- ----------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended June 26, 1998
<TABLE>
<CAPTION>
Putnam
Diversified Putnam
Putnam Income and Overseas
OTC Fund Trust Fund Growth Fund
---------- ---------- ----------
<S> <C> <C> <C>
Employer contributions, net 182,360 62,084 109,675
Employee contributions 308,562 100,876 192,845
Fund transfers, net 278,534 136,358 259,377
Other additions (deletions), net - - 437
---------- ---------- ----------
769,456 299,318 562,334
---------- ---------- ----------
Investment income:
Interest and dividends 52 40,616 37,050
Net appreciation (depreciation) 156,349 2,099 95,263
---------- ---------- ----------
Net investment income 156,401 42,715 132,313
---------- ---------- ----------
Benefit payments 32,926 22,519 33,885
Administrative expenses 979 681 774
---------- ---------- ----------
33,905 23,200 34,659
---------- ---------- ----------
Net increase (decrease) 891,952 318,833 659,988
Net assets at beginning of year 343,791 353,809 423,585
---------- ---------- ----------
Net assets at end of year 1,235,743 672,642 1,083,573
---------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended June 26, 1998
<TABLE>
<CAPTION>
Putnam Asset
Putnam Asset Putnam Asset Allocation
Allocation Allocation Conservative
Growth Fund Balanced Fund Fund
---------- ---------- ---------
<S> <C> <C> <C>
Employer contributions, net 30,962 13,013 6,460
Employee contributions 74,764 11,511 5,215
Fund transfers, net 134,336 118,893 6,908
Other additions (deletions), net - - -
---------- ---------- ---------
240,062 143,417 18,583
---------- ---------- ---------
Investment income:
Interest and dividends 1,372 418 635
Net appreciation (depreciation) 3,390 1,335 (95)
---------- ---------- ---------
Net investment income 4,762 1,753 540
---------- ---------- ---------
Benefit payments 280 - -
Administrative expenses 32 47 6
---------- ---------- ---------
312 47 6
---------- ---------- ---------
Net increase (decrease) 244,512 145,123 19,117
Net assets at beginning of year - - -
---------- ---------- ---------
Net assets at end of year 244,512 145,123 19,117
---------- ---------- ---------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended June 26, 1998
<TABLE>
<CAPTION>
New
Opportunities Participant
Fund Loan Fund Total
------------ ----------- -------------
<S> <C> <C> <C>
Employer contributions, net 514,471 - 5,367,352
Employee contributions 1,056,336 - 7,475,262
Fund transfers, net 806,709 - -
Other additions (deletions), net 2,970 (16,652) (4,752)
------------ ----------- -------------
2,380,486 (16,652) 12,837,862
------------ ----------- -------------
Investment income:
Interest and dividends 118,928 845 6,120,369
Net appreciation (depreciation) 1,426,337 - 6,247,112
------------ ----------- -------------
Net investment income 1,545,265 845 12,367,481
------------ ----------- -------------
Benefit payments 701,720 - 7,463,030
Administrative expenses 5,506 - 92,730
------------ ----------- -------------
707,226 - 7,555,760
------------ ----------- -------------
Net increase (decrease) 3,218,525 (15,807) 17,649,583
Net assets at beginning of year 4,174,359 21,643 78,803,547
------------ ----------- -------------
Net assets at end of year 7,392,884 5,836 96,453,130
------------ ----------- -------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Period from July 1, 1996 through June 26, 1997
<TABLE>
<CAPTION>
The Putnam
Fund for
Fixed Income Growth and Company
Fund Income Stock Fund
------------- ------------ -----------
<S> <C> <C> <C>
Employer contributions, net $ 1,323,291 1,116,812 766,030
Employee contributions 1,087,768 1,261,015 808,026
Fund transfers, net 165,523 (85,908) 2,137,475
Other additions (deletions), net 81,921 13,073 8,361
------------- ------------ -----------
2,658,503 2,304,992 3,719,892
------------- ------------ -----------
Investment income:
Interest and dividends 1,206,528 1,501,104 35,684
Net appreciation (depreciation) 87 2,934,266 (202,987)
------------- ------------ -----------
Net investment income 1,206,615 4,435,370 (167,303)
------------- ------------ -----------
Benefit payments 2,980,224 1,975,033 485,749
Administrative expenses 37,772 27,737 22,878
------------- ------------ -----------
3,017,996 2,002,770 508,627
------------- ------------ -----------
Net increase (decrease) 847,122 4,737,592 3,043,962
Net assets at beginning of year 22,397,770 15,855,186 6,820,729
------------- ------------ -----------
Net assets at end of year $ 23,244,892 20,592,778 9,864,691
------------- ------------ -----------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Period from July 1, 1996 through June 26, 1997
<TABLE>
<CAPTION>
George
Putnam Putnam
Fund of Investors Putnam
Boston Fund Voyager Fund
----------- ---------- ------------
<S> <C> <C> <C>
Employer contributions, net 504,724 58,082 1,067,406
Employee contributions 576,688 39,568 1,329,279
Fund transfers, net 838,795 313,305 (2,510,668)
Other additions (deletions), net 4,184 (70) 16,900
----------- ---------- ------------
1,924,391 410,885 (97,083)
----------- ---------- ------------
Investment income:
Interest and dividends 435,479 13,476 821,996
Net appreciation (depreciation) 648,361 42,885 446,299
----------- ---------- ------------
Net investment income 1,083,840 56,361 1,268,295
----------- ---------- ------------
Benefit payments 482,184 5,180 1,082,440
Administrative expenses 9,249 482 18,008
----------- ---------- ------------
491,433 5,662 1,100,448
----------- ---------- ------------
Net increase (decrease) 2,516,798 461,584 70,764
Net assets at beginning of year 4,187,519 - 12,547,334
----------- ---------- ------------
Net assets at end of year 6,704,317 461,584 12,618,098
----------- ---------- ------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Period from July 1, 1996 through June 26, 1997
<TABLE>
<CAPTION>
Putnam
Diversified Putnam
Putnam Income and Overseas
OTC Fund Trust Fund Growth Fund
---------- ---------- ----------
<S> <C> <C> <C>
Employer contributions, net 100,114 32,966 44,564
Employee contributions 84,709 23,737 37,813
Fund transfers, net 154,224 327,761 287,384
Other additions (deletions), net (21) 354 62
---------- ---------- ----------
339,026 384,818 369,823
---------- ---------- ----------
Investment income:
Interest and dividends 14,814 10,992 1,631
Net appreciation (depreciation) (8,712) (2,413) 53,024
---------- ---------- ----------
Net investment income 6,102 8,579 54,655
---------- ---------- ----------
Benefit payments 876 39,242 459
Administrative expenses 461 346 434
---------- ---------- ----------
1,337 39,588 893
---------- ---------- ----------
Net increase (decrease) 343,791 353,809 423,585
Net assets at beginning of year - - -
---------- ---------- ----------
Net assets at end of year 343,791 353,809 423,585
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Period from July 1, 1996 through June 26, 1997
<TABLE>
<CAPTION>
New
Opportunities Participant Aetna
Fund Loan Fund Fund
------------- ---------- ------------
<S> <C> <C> <C>
Employer contributions, net 496,595 - 790
Employee contributions 635,610 - -
Fund transfers, net (352,236) - (1,275,655)
Other additions (deletions), net 3,028 (53,679) -
------------- ---------- ------------
782,997 (53,679) (1,274,865)
------------- ---------- ------------
Investment income:
Interest and dividends 29,329 3,251 9,131
Net appreciation (depreciation) 59,011 - 58,839
------------- ---------- ------------
Net investment income 88,340 3,251 67,970
------------- ---------- ------------
Benefit payments 212,056 - 154,413
Administrative expenses 5,960 - -
------------- ---------- ------------
218,016 - 154,413
------------- ---------- ------------
Net increase (decrease) 653,321 (50,428) (1,361,308)
Net assets at beginning of year 3,521,038 72,071 1,361,308
------------- ---------- ------------
Net assets at end of year 4,174,359 21,643 -
------------- ---------- ------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Period from July 1, 1996 through June 26, 1997
<TABLE>
<CAPTION>
Total
------------
<S> <C>
Employer contributions, net $ 5,511,374
Employee contributions 5,884,213
Fund transfers, net -
Other additions (deletions), net 74,113
------------
11,469,700
------------
Investment income:
Interest and dividends 4,083,415
Net appreciation (depreciation) 4,028,660
------------
Net investment income 8,112,075
------------
Benefit payments 7,417,856
Administrative expenses 123,327
------------
7,541,183
------------
Net increase (decrease) 12,040,592
Net assets at beginning of year 66,762,955
------------
Net assets at end of year $ 78,803,547
------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED RETIREMENT SAVINGS PLAN
Notes to Financial Statements
June 26, 1998 and 1997
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements of the Harman International
Industries, Incorporated Retirement Savings Plan (the Plan) have been
presented on an accrual basis and present the net assets available for
Plan benefits and changes in those net assets.
(b) Investments
Investments in guaranteed investment contracts (GIC) are reported at
contract value. Contract value represents contributions plus interest at
the contract rate, less funds used to pay withdrawals and administration
expenses.
The Plan invests in mutual funds managed by Putnam Management
Company, Inc. The investments in mutual funds are reported at fair
value, which is based on quotations obtained from national securities
exchanges.
The Plan also invests in shares of Harman International Industries,
Incorporated (the Company) common stock. The fair value of the
Company stock is determined based on quotations obtained from
national securities exchanges.
The assets of the Participant Loan Fund represent loans to certain
participants (note 2) and are carried at outstanding loan balance, which
approximates market value.
Securities transactions are recorded on the trade-date basis. Net
appreciation or depreciation resulting from revaluation of investments
to fair value is reflected in the statements of changes in net assets
available for Plan benefits and includes investments bought, sold, as
well as held during the year. Dividend income is recorded on the ex-
dividend date. Investments are principally managed by the Plan's
trustee, Putnam Fiduciary Trust Company.
(c) Administrative Expenses
Administrative expenses of the Plan are principally paid by the Plan.
(d) Use of Estimates
Management of the Company has made a number of estimates and
assumptions relating to the reporting of net assets and the changes in net
assets and the disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from these estimates.
(Continued)
6
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED RETIREMENT SAVINGS PLAN
Notes to Financial Statements
June 26, 1998 and 1997
(2) Plan Description
The Plan agreement dated July 1, 1989, amends and restates five
preexisting defined contribution and savings plan agreements for plans
which were merged into the Plan and extends coverage to all eligible
nonunion domestic employees of the Company. Effective July 1, 1995,
the Plan also extends coverage to hourly collective bargaining unit
employees of Harman Motive, Inc. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
The Plan is a defined contribution, savings and profit sharing plan
sponsored by the Company. The Plan covers all eligible employees, as
defined by the Plan, provided they have completed six months of
consecutive service, have worked 500 hours and are at least 21 years of
age. Plan participants should refer to the Plan agreement for more
complete information.
Effective August 28, 1997, AMEK Technology Group, PLC and Oxford
International, Ltd. were included as participating employers of the Plan.
In the case of a participant who became an employee as a result of the
AMEK acquisition, 500 hours of service was substituted for 1,000 hours
of service, for the Plan year ended June 26, 1998.
(a) Contributions
Participants in the Plan may contribute on a tax-deferred basis from 1%
to 12% of their compensation, as defined by the Plan. Participants may
change their deferral percentage as of the first payroll period following
the quarterly valuation date. The Company has made annual basic
contributions equal to 2% of the compensation paid to all eligible
participants active at the end of the Plan year and a matching
contribution equal to 50% of the eligible participant's tax-deferred
contribution percentage for each payroll period up to a maximum
election of 6% per payroll period. In addition, the Company may make
discretionary profit sharing contributions to the Plan, in an amount
determined by the Company's Board of Directors. Company profit
sharing contributions are limited to 15% of the participants'
compensation, less the participants' tax-deferred contributions, the
Company basic contribution and the Company matching contribution.
Total Company and participant contributions may not exceed 15% of
total participants' taxable compensation. Total annual additions to a
participant's account, exclusive of adjustments to the fair market value
of the participants' fund account, may not exceed the lesser of $30,000
or 25% of the participant's taxable compensation.
(b) Vesting
Participants are 100% vested in their salary deferral contribution,
employer's basic contribution and rollover contribution accounts, and
become vested in profit sharing and matching contributions at the rate
of 25% per year after the completion of three years of service, or 100%
after reaching age 65, death or disability.
(Continued)
7
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED RETIREMENT SAVINGS PLAN
Notes to Financial Statements
June 26, 1998 and 1997
(c) Investment Options
Plan participants direct contributions in any increment in any of thirteen
investment options. The options consist of the Company Stock, the
Putnam Stable Value Fund which is invested in high quality guaranteed
Investment Contracts and the following:
The Putnam Growth & Income Fund - Invests in common stocks with
appreciation potential as well as current dividend payouts.
The George Putnam Fund of Boston - Invests in stock and bonds to
balance current return with long-term growth potential.
The Putnam Investors Fund - Invests primarily in the stocks of well
established companies that provide opportunity for growth over time.
The Putnam Voyager Fund - Invests primarily in the stocks of small,
high growth companies with capital appreciation potential rather than
those that pay current dividends.
The Putnam OTC Fund - Invests primarily in over-the-counter stocks of
small to medium sized emerging growth companies.
The Putnam Diversified Income & Trust Fund - Invests in a combination
of U.S. Government, high yield and international bonds.
The Putnam Overseas Growth Fund - Invests in a diversified portfolio of
stocks of companies located outside North America.
The Putnam New Opportunities Fund - Invests primarily in the stocks of
certain emerging industry groups that offer above average long-term
growth potential.
The Putnam Asset Allocation Growth Portfolio - Invests among
different types of stock with some investments in bonds and money
market funds.
The Putnam Asset Allocation Balanced Portfolio - Invests in stocks and
bonds to balance between the relative stability of bonds and the
fluctuation of stocks.
The Putnam Asset Allocation Conservative Portfolio - Invests in
investment-grade bonds designed to reduce overall risk, while a portion
remains in stocks to help investments stay ahead of inflation.
(d) Participant Account Balances
Separate accounts are maintained for each participant's salary deferral,
rollover, employer profit sharing, basic and matching contribution
balances. Earnings or losses of the Plan are allocated to the participant
account balances by investment fund on a daily basis according to the
number of shares in the participant account balances. Company profit
sharing and basic contributions are allocated based on participant
compensation. Company matching contributions are allocated based
upon each participant's tax-deferred contribution percentage.
(Continued)
8
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED RETIREMENT SAVINGS PLAN
Notes to Financial Statements
June 26, 1998 and 1997
(e) Participant Loans
The Plan does not allow for any participant loans. The loans discussed
in note 1 arose from the mergers of related plans and no further loans
will be granted after their repayment is completed.
(f) Benefits
Upon separation from service, retirement at age 65, disability retirement
or death, participants or their beneficiaries are entitled to receive their
vested balances in a lump sum distribution. However, participants from
prior merged plans, whose plans allowed distributions of plan benefits
to be made in forms other than lump sum, may elect payment of benefit
balances which were available prior to the mergers. Contributions made
subsequent to the merger may only be distributed in a lump sum
payment.
(g) Forfeitures
Effective April 15, 1998, all distributions from the Plan shall commence
as soon as practicable after the Participant's termination date, and all
unvested amounts shall be forfeited as of the date of distribution.
Amounts forfeited by Plan participants are used to reduce the employer
contributions. Forfeitures were $1,195,988 and $260,003 for the years
ended June 26, 1998 and 1997, respectively.
Effective April 15, 1998, amounts provisionally forfeited will be
restored, if the participant returns to service prior to the occurrence of a
60 consecutive month period of separation. Effective June 27, 1997, the
amount of a participants account which may be cashed out without his
or her consent, was raised to $5,000 from $3,500.
(3) Investments
Investments in any single entity which represent 5% or more of the fair
value of net assets available for benefits at June 26, 1998 and 1997 are
as follows:
Description Fair value
- ------------------------------ -----------------
1998:
The Putnam Fund for Growth and Income $ 23,658,142
Putnam Voyager Fund 17,304,275
George Putnam Fund of Boston 7,468,023
Putnam Stable Value Fund, which is invested in
contracts with various companies, maturity dates
ranging from March 28, 1996 through
May 1, 2001, and interest rates ranging
from 4.4% to 8.4% 23,359,736
Harman International Industries,
Incorporated common stock (198,164 shares) 7,654,103
Putnam New Opportunities Fund 6,925,659
-----------------
(Continued)
9
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED RETIREMENT SAVINGS PLAN
Notes to Financial Statements
June 26, 1998 and 1997
Description Fair value
- ------------------------------ ------------------
1997:
The Putnam Fund for Growth and Income $ 19,792,594
Putnam Voyager Fund 11,877,940
George Putnam Fund of Boston 6,360,375
Putnam Stable Value Fund, which is invested in
contracts with various companies, maturity dates
ranging from January 6, 1997 through
May 20, 2002, and interest rates ranging
from 4.4% to 8.4% 22,045,554
Harman International Industries,
Incorporated common stock (222,395 shares) 9,284,984
------------------
(4) Federal Income Taxes
On October 23, 1998, the Plan received an updated favorable
determination letter from the Internal Revenue Service (IRS). Although
the IRS did not address certain operational defects, these defects were
corrected and a separate filing was made with the IRS under the
Voluntary Compliance Resolution (VCR) Program. The Company
believes that the VCR filing will also be approved and will enable the
Plan to continue to constitute a qualified Plan under Sections 401(a) and
401(k) of the Internal Revenue Code (IRC) and the Trust will continue
to be exempt from income tax under Section 501(a) of the IRC.
(5) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan subject to the provisions of the Employee
Retirement Income Security Act of 1974. Upon Plan termination, all
participant accounts immediately become 100% vested.
(6) Commitments and Reconciliation to Form 5500
Included in net assets available for Plan benefits in the accompanying
financial statements is $3,648,490 and $3,548,200 at June 26, 1998 and
1997, respectively, of amounts related to Plan participants and
participants who have terminated their service with the Company as of
the end of the Plan year. These amounts are shown as liabilities on the
Form 5500, Annual Return/Report of Employee Benefit Plans, which is
filed with the Internal Revenue Service as shown in the following
reconciliation:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Net assets per financial statements $ 96,453,130 78,803,547
Benefits payable (3,648,490) (3,548,200)
Rounding - 1
------------ ------------
Net assets per Form 5500 $ 92,804,640 75,255,348
------------ ------------
</TABLE>
10
<PAGE>
Schedule 1
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Line 27a - Schedule of Investments Held at End of Plan Year
June 26, 1998
<TABLE>
<CAPTION>
Description of investment,
including maturity date,
Identity of issuer, rate of interest, par or
borrower or similar party maturity date Cost Current value
- -------------------------------- -------------------------- ----------- -------------
<S> <C> <C> <C>
Putnam Asset Allocation -
Growth Portfolio 15,718 units $ 210,195 212,974
Putnam Asset Allocation -
Balanced Portfolio 11,070 units 132,310 132,623
Putnam Asset Allocation -
Conservative Portfolio 1,119 units 11,675 11,697
*Putnam Stable Value Fund Invested in contracts
with various companies,
maturity dates ranging from
January 1, 1998 through
December 2, 2002 and
interest rates ranging from
4.4% to 8.4% 23,359,736 23,359,736
*George Putnam Fund of
Boston 391,611 units 6,366,200 7,468,023
*Putnam Voyager Fund 782,291 units 12,448,999 17,304,275
*The Putnam Fund for
Growth and Income 1,114,898 units 18,854,426 23,658,142
*Putnam Investors Fund 123,680 units 1,434,279 1,693,184
*Putnam OTC Fund 59,517 units 957,410 1,089,764
*Putnam Diversified Income
and Trust Fund 49,926 units 624,961 623,075
*Putnam Overseas
Growth Fund 49,743 units 855,382 986,906
*Harman International
Industries, Incorporated
common stock 198,164 shares 7,188,981 7,654,103
*New Opportunities Fund 120,803 units 5,425,895 6,925,659
*Putnam Money Market
Fund 960,229 units 960,229 960,229
Participant loans Interest rates ranging
from 6.5% to 8.5% - 5,836
----------- -------------
$78,830,678 92,086,226
----------- -------------
</TABLE>
*Party-in-interest investment.
See accompanying independent auditors' report.
11
<PAGE>
Schedule 2
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions
Year ended June 26, 1998
<TABLE>
<CAPTION>
Description of Purchase Selling
Description of asset transactions price price
- ------------------------- -------------- ----------- ----------
<S> <C> <C> <C>
The George Putnam Fund Purchases $ 2,267,533 -
Sales - 1,559,765
The Putnam Fund for
Growth and Income Purchases 8,093,391 -
Sales - 4,983,997
Putnam Voyager Fund Purchases 5,360,354 -
Sales 3,079,048 -
Putnam New Opportunities
Fund Purchases 3,301,253 -
Sales - 1,634,875
Putnam Stable Value Fund Purchases 8,988,737 -
Sales - 7,754,790
Investment in Company Stock Purchases 6,371,732 -
Sales - 8,032,289
</TABLE>
<TABLE>
<CAPTION>
Current
value of
Description of Cost of asset on Net gain or
Description of asset transactions asset trade date (loss)
- ------------------------- -------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
The George Putnam Fund Purchases 2,267,533 2,267,533 -
Sales 1,360,691 1,559,765 199,074
The Putnam Fund for Growth
and Income Purchases 8,093,391 8,093,391 -
Sales 4,140,524 4,983,997 843,473
Putnam Voyager Fund Purchases 5,360,354 5,360,354 -
Sales 2,509,049 3,079,048 569,999
Putnam New Opportunities
Fund Purchases 3,301,253 3,301,253 -
Sales 1,437,817 1,634,875 197,058
Putnam Stable Value Fund Purchases 8,988,737 8,988,737 -
Sales 7,754,790 7,754,790 -
Investment in Company Stock Purchases 6,371,732 6,371,732 -
Sales 6,670,738 8,032,289 1,361,551
</TABLE>
See accompanying independent auditors' report.
12
