Exhibit 10.3
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
2002 STOCK OPTION AND INCENTIVE PLAN
RESTRICTED SHARE UNIT AGREEMENT
FOR OFFICERS AND KEY EMPLOYEES
          THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of
                    , is entered into between HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED a Delaware corporation (the “Company”), and                     
(“Grantee”). Capitalized terms used herein but not defined shall have the
meanings assigned to those terms in the Company’s 2002 Stock Option and
Incentive Plan (the “Plan”)
WITNESSETH:
          A. Grantee is                      an employee of the Company or a
Subsidiary of the Company; and
          B. The execution of this Agreement in the form hereof has been
authorized by the Compensation and Option Committee of the Board (the
“Committee”);
          NOW, THEREFORE, in consideration of these premises and the covenants
and agreements set forth in this Agreement, the Company and Grantee agree as
follows:

1.   Grant of Restricted Share Units. Subject to and upon the terms, conditions,
and restrictions set forth in this Agreement and in the Plan, the Company hereby
grants to the Grantee,                      Restricted Share Units, (the
“Grant”). Each Restricted Share Unit shall represent the right to receive one
share of the Company’s common stock, par value $0.01 per share (“Common Stock”).
This Agreement constitutes an “Evidence of Award” under the Plan.   2.   Date of
Grant. The effective date of the grant of the Restricted Share Units is
                    .   3.   Restrictions on Transfer of Restricted Share Units.
Neither the Restricted Share Units granted hereby nor any interest therein shall
be transferable other than by will or the laws of descent and distribution.   4.
  Vesting of Restricted Share Units.

  (a)   The Restricted Share Units shall become nonforfeitable on the
                     anniversary of the Date of Grant (the “Vesting Date”)
unless earlier forfeited in accordance with Section 5.     (b)   Notwithstanding
the provisions of Section 4(a) above, all Restricted Share Units shall become
immediately nonforfeitable upon the occurrence of a Change in Control (as
defined below). A “Change in Control” means the

 

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      occurrence, before this Agreement terminates, of any of the following
events:

(i) the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined
voting power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the “Voting Shares”); provided, however,
that for purposes of this Section 4(b)(i), the following acquisitions shall not
constitute a Change in Control: (A) any issuance of Voting Shares directly from
the Company that is approved by the Incumbent Board (as defined in
Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of
Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Subsidiary or
(D) any acquisition of Voting Shares by any Person pursuant to a Business
Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii)
below;
(ii) individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a Director after the date
hereof whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least two-thirds of the Directors then constituting
the Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
director, without objection to such nomination) shall be deemed to have been a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest (within the meaning of Rule 14a-12 of the Exchange
Act) with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board;
(iii) consummation of a reorganization, merger or consolidation, a sale or other
disposition of all or substantially all of the assets of the Company or other
transaction (each, a “Business Combination”), unless, in each case, immediately
following the Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners of Voting Shares
immediately prior to the Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then outstanding
Voting Shares of the entity resulting from the Business Combination (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or

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more subsidiaries), (B) no Person (other than the Company, such entity resulting
from the Business Combination, or any employee benefit plan (or related trust)
sponsored or maintained by the Company, any Subsidiary or such entity resulting
from the Business Combination) beneficially owns, directly or indirectly, 25% or
more of the combined voting power of the then outstanding Voting Shares of the
entity resulting from the Business Combination and (C) at least a majority of
the members of the board of directors of the entity resulting from the Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for the Business
Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company, except pursuant to a Business Combination that
complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5.   Forfeiture of Restricted Share Units.

  (a)   Except as otherwise described in this Section 5, any of the Restricted
Share Units that remain forfeitable in accordance with Section 4 hereof shall be
forfeited if Grantee ceases for any reason to be employed by the Company or a
Subsidiary at any time prior to such shares becoming nonforfeitable in
accordance with Section 4 hereof, unless the Committee determines to provide
otherwise at the time of the cessation of Grantee’s employment. For the purposes
of this Agreement, the Grantee’s employment with the Company or a Subsidiary
shall not be deemed to have been interrupted, and Grantee shall not be deemed to
have ceased to be an employee of the Company or a Subsidiary, by reason of
(i) the transfer of Grantee’s employment among the Company and its Subsidiaries,
(ii) an approved leave of absence of not more than 90 days, or (iii) the period
of any leave of absence required to be granted by the Company under any law,
rule, regulation or contract applicable to Grantee’s employment with the Company
or any Subsidiary.     (b)   Any of the Restricted Share Units that remain
forfeitable in accordance with Section 4 shall be forfeited on the date that the
Committee determines that such Restricted Share Unites shall be forfeited under
the circumstances described in Section 17(g) of the Plan.

6.   Payment of Restricted Share Units. At such time as the Restricted Share
Units shall become nonforfeitable as specified in this Agreement, shares of
Common Stock underlying such Restricted Share Units shall be transferred to the
Grantee, except as otherwise provided in Section 8[; provided, however, that the
Committee, in its sole discretion, may settle the award of Restricted Share
Units wholly, or partly in cash].

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7.   Dividend, Voting and Other Rights. The Grantee shall have no rights of
ownership in the Restricted Share Units and shall have no voting rights with
respect to such Restricted Share Units until the date on which the shares of
Common Stock are transferred to the Grantee pursuant to Section 6 above and a
stock certificate representing such shares of Common Stock is issued to the
Grantee. From and after the Date of Grant and until the earlier of (a) the time
when the Grantee receives the shares of Common Stock underlying the Restricted
Share Units in accordance with Section 6 hereof or (b) the time when the
Grantee’s right to receive the Restricted Share Units is forfeited in accordance
with Section 5 hereof, the Company shall pay to the Grantee, whenever a normal
cash dividend is paid on shares of Common Stock, an amount of cash equal to the
product of the per-share amount of the dividend paid times the number of such
Restricted Share Units.   8.   Retention of Common Stock by the Company. The
shares of Common Stock underlying the Restricted Share Units shall be released
to the Grantee by the Company’s transfer agent at the direction of the Company.
At such time as the Restricted Share Units become nonforfeitable as specified in
this Agreement, the Company shall direct the transfer agent to forward all such
nonforfeitable shares of Common Stock to the Grantee except in the event that
the Grantee has notified the Company of his or her election to satisfy any tax
obligations by surrender of a portion of such shares, the transfer agent will be
directed to forward the remaining balance of shares after the amount necessary
for such taxes has been deducted.   9.   Compliance with Law. The Company shall
make reasonable efforts to comply with all applicable federal and state
securities laws; provided, however, notwithstanding any other provision of this
Agreement, the Company shall not be obligated to issue any shares of Common
Stock or other securities pursuant to this Agreement if the issuance thereof
would, in the reasonable opinion of the Company, result in a violation of any
such law.   10.   Compliance with Section 409A of the Code. To the extent
applicable, it is intended that this Agreement and the Plan comply with the
provisions of Section 409A of the Code, so that the income inclusion provisions
of Section 409A(a)(1) do not apply to Grantee. This Agreement and the Plan shall
be administered in a manner consistent with this intent, and any provision that
would cause the Agreement or the Plan to fail to satisfy Section 409A of the
Code shall have no force and effect until amended to comply with Section 409A of
the Code (which amendment may be retroactive to the extent permitted by
Section 409A of the Code and may be made by the Company without the consent of
the Grantee). In particular, to the extent the Restricted Share Units become
nonforfeitable pursuant to Section 4 or Section 5 and the event causing the
Restricted Share Units to become nonforfeitable is the Grantee’s retirement or
an event that does not constitute a permitted distribution event under
Section 409A(a)(2) of the Code, then notwithstanding anything to the contrary in
Section 6 above, issuance of the Common Stock will be made, to the extent
necessary to comply with the provisions of Section 409A of the Code, to the
Grantee on the earlier of (a) the Grantee’s “separation from service” with the
Company (determined in accordance with Section 409A); provided, however, that if
the Grantee is a “specified employee” (within the meaning of Section 409A), the
Grantee’s date of issuance of the Common Stock shall be the date that

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    is six months after the date of the Grantee’s separation of service with the
Company, (b) the end of the Restriction Period, or (c) the Grantee’s death.
Reference to Section 409A of the Code is to Section 409A of the Internal Revenue
Code of 1986, as amended, and will also include any proposed, temporary or final
regulations, or any other guidance, promulgated with respect to such Section by
the U.S. Department of the Treasury or the Internal Revenue Service. This
Section 10 applies only if the Grantee is a citizen or resident of the United
Sates or if the compensation is for services performed in the United States that
is not otherwise exempt from United States federal income taxation.

11.   Relation to Other Benefits. Any economic or other benefit to the Grantee
under this Agreement shall not be taken into account in determining any benefits
to which the Grantee may be entitled.   12.   Relation to Plan. This Agreement
is subject to the terms and conditions of the Plan. In the event of any
inconsistent provisions between this Agreement and the Plan, the Plan shall
govern. Capitalized terms used herein without definition shall have the meanings
assigned to them in the Plan. The Committee, acting pursuant to the Plan shall,
except as expressly provided otherwise herein, have the right to determine any
questions which arise in connection with this grant.   13.   Employment Rights.
This Agreement shall not confer on Grantee any right with respect to the
continuance of employment or other services with the Company or any Subsidiary.
No provision of this Agreement shall limit in any way whatsoever any right that
the Company or a Subsidiary may otherwise have to terminate the employment of
Grantee at any time.   14.   Communications. All notices, demands and other
communications required or permitted hereunder or designated to be given with
respect to the rights or interests covered by this Agreement shall be deemed to
have been properly given or delivered when delivered personally or sent by
certified or registered mail, return receipt requested, U.S. mail or reputable
overnight carrier, with full postage prepaid and addressed to the parties as
follows:

         
 
  If to the Company, at:   1101 Pennsylvania Avenue, N.W.
Suite 1010
Washington, D.C. 20004
Attention: Vice President-Financial Operations
 
       
 
  If to Grantee, at:   Grantee’s address provided by Grantee on the last page
hereof

          Either the Company or Grantee may change the above designated address
by written notice to the other specifying such new address.

15.   Interpretation. The interpretation and construction of this Agreement by
the Committee shall be final and conclusive. No member of the Committee shall be
liable for any such action or determination made in good faith.

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16.   Amendment in Writing. This Agreement may be amended as provided in the
Plan; provided, however, that all such amendments shall be in writing.   17.  
Integration. The Restricted Share Units are granted pursuant to the Plan.
Notwithstanding anything in this Agreement to the contrary, this Agreement is
subject to all of the terms and conditions of the Plan, a copy of which is
available upon request and which is incorporated herein by reference. As such,
this Agreement and the Plan embody the entire agreement and understanding of the
Company and Grantee and supersede any prior understandings or agreements,
whether written or oral, with respect to the Restricted Share Units.   18.  
Severance. In the event that one or more of the provisions of this Agreement
shall be invalidated for any reason by a court of competent jurisdiction, any
provision so invalidated shall be deemed to be separable from the other
provisions hereof and the remaining provisions hereof shall continue to be valid
and fully enforceable.   19.   Governing Law. This Agreement is made under, and
shall be construed in accordance with, the laws of the State of Delaware.   20.
  Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.

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     IN WITNESS WHEREOF, this Agreement is executed by a duly authorized
representative of the Company on the day and year first above written.

                  HARMAN INTERNATIONAL         INDUSTRIES, INCORPORATED    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

     The undersigned Grantee acknowledges receipt of an executed original of
this Agreement and accepts the Restricted Share Units subject to the applicable
terms and conditions of the Plan and the terms and conditions hereinabove set
forth.

                 
Date:
               
 
 
 
     
 
Grantee    

          GRANTEE: Please complete/update the following information.
 
       
Name:
       
 
       
 
       
Home Address:
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
Social Security Number:
       
 
       
 
       
Date of Hire:
       
 
       
 
       
Subsidiary or Division:
       
 
       

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