exv10w1



 






    Exhibit
10.1

     



 




    HARMAN
    INTERNATIONAL INDUSTRIES, INCORPORATED

    



 




    2007 KEY
    EXECUTIVE OFFICERS BONUS PLAN



 



    1. PURPOSE. The purpose of the 2007 Key Executive Officers
    Bonus Plan (this “Plan”) is to attract and retain key
    executives for Harman International Industries, Incorporated, a
    Delaware corporation (the “Company”), and its
    Subsidiaries and to provide such persons with incentives for
    superior performance. Award Amounts payable under this Plan are
    intended to constitute qualified “performance-based
    compensation” for purposes of Section 162(m) of the
    Internal Revenue Code of 1986, as amended (the “Code”)
    and to comply with the requirements of Section 409A of the
    Code (and any successor provision to either), and this Plan
    shall be construed consistently with such intention.



 



    2. DEFINITIONS. As used in this Plan,



 



    “Award Amount” means, for each Eligible Executive, the
    maximum cash award payable pursuant to Section 5 of this
    Plan.



 



    “Board” means the Board of Directors of the Company.



 



    “Change in Control” means the occurrence of any of the
    following events:



 



    (a) the acquisition by any individual, entity or group
    (within the meaning of Section 13(d)(3) or 14(d)(2) of 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 Voting Stock of
    the Company; provided, however, that for purposes of this
    definition, the following acquisitions shall not constitute a
    Change in Control: (i) any issuance of Voting Stock of the
    Company directly from the Company that is approved by the
    Incumbent Board (as defined below), (ii) any acquisition by
    the Company or a Subsidiary of Voting Stock of the Company,
    (iii) any acquisition of Voting Stock of the Company by any
    employee benefit plan (or related trust) sponsored or maintained
    by the Company or any Subsidiary, or (iv) any acquisition
    of Voting Stock of the Company by any Person pursuant to a
    Business Combination (as defined below) that complies with
    clauses (i), (ii) and (iii) of subsection (c)
    below;



 



    (b) 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 comprising 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-11
    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;



 



    (c) 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 such Business Combination,
    (i) all or substantially all of the individuals and
    entities who were the beneficial owners of Voting




    

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    Stock of the Company immediately prior to such Business
    Combination beneficially own, directly or indirectly, more than
    50% of the combined voting power of the then outstanding shares
    of Voting Stock of the entity resulting from such 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 more subsidiaries), (ii) no Person (other
    than the Company, such entity resulting from such Business
    Combination, or any employee benefit plan (or related trust)
    sponsored or maintained by the Company, any Subsidiary or such
    entity resulting from such Business Combination) beneficially
    owns, directly or indirectly, 25% or more of the combined voting
    power of the then outstanding shares of Voting Stock of the
    entity resulting from such Business Combination, and
    (iii) at least a majority of the members of the Board of
    Directors of the entity resulting from such 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 such Business Combination; or



 



    (d) 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
    (i), (ii) and (iii) of subsection (c) above.



 



    “Committee” means the Compensation and Option
    Committee of the Board or any other committee appointed by the
    Board to administer this Plan; provided, however, that in any
    event the Committee shall be comprised of not less than two
    directors of the Company, each of whom shall qualify as an
    “outside director” for purposes of Section 162(m)
    of the Code (or any successor provision thereto).



 



    “Eligible Executive” means the Company’s Chief
    Executive Officer and any other executive officer of the Company
    that the Committee designates as an Eligible Executive under
    this Plan.



 



    “Exchange Act” means the Securities Exchange Act of
    1934, as amended from time to time.



 



    “Return on Shareholder Equity Goal” means the targeted
    return on shareholder equity goal for the year determined by the
    Committee pursuant to Section 5 of this Plan.



 



    “Subsidiary” means a corporation, partnership, joint
    venture, unincorporated association or other entity in which the
    Company has a direct or indirect ownership or other equity
    interest.



 



    “Voting Stock” means securities entitled to vote
    generally in the election of directors.



 



    3. ADMINISTRATION OF THIS PLAN. This Plan shall be
    administered by the Committee, which shall have full power and
    authority to construe, interpret and administer this Plan and
    shall have the exclusive right to establish the Return on
    Shareholder Equity Goals and the Award Amount payable to each
    Eligible Executive upon the achievement of the Return on
    Shareholder Equity Goals.



 



    4. ELIGIBILITY. Eligibility under this Plan is limited to
    Eligible Executives.



 



    5. AWARDS.



 



    (a) No later than September 28 of each fiscal year, the
    Committee shall meet in order to establish (i) the Return
    on Shareholder Equity Goal for the fiscal year and (ii) the
    Award Amount payable to each Eligible Executive if the Return on
    Shareholder Equity Goal for the fiscal year is met. “Return
    on shareholder equity” shall mean net income for the fiscal
    year determined in accordance with generally accepted accounting
    principles as reported in the Company’s annual report
    divided by the average shareholder equity for such year.
    “Average shareholder equity” shall mean the sum of the
    shareholder equity at the beginning of the year and the
    shareholder equity at the end of the year, with such sum divided
    by two. In connection with establishing the Return on




    

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    Shareholder Equity Goal for the fiscal year, the Committee shall
    express whether the Return on Shareholder Equity Goal for such
    year shall be applied before or after the application of
    “extraordinary items” (as determined in accordance
    with generally accepted accounting principles).



 



    (b) After the end of each fiscal year, the Committee shall
    meet to determine and certify whether the Return on Shareholder
    Equity Goal for the fiscal year has been met. In the event that
    the goal has been met, the Committee shall establish the Award
    Amount for each Eligible Executive for the fiscal year,
    exercising discretion only to reduce the amount of the maximum
    cash award if in its judgment such a reduction is appropriate.



 



    (c) Notwithstanding any other provision of this Plan to the
    contrary, in no event shall the Award Amount paid to an Eligible
    Executive under this Plan for a fiscal year exceed $3,000,000.



 



    6. COMMITTEE CERTIFICATION. As soon as reasonably
    practicable after the end of each fiscal year of the Company,
    the Committee shall determine whether the Return on Shareholder
    Equity Goal has been achieved and the amount of the Award Amount
    to be paid to each Eligible Executive for such fiscal year and
    shall certify such determinations in writing.



 



    7. PAYMENT OF AWARD AMOUNTS. Subject to a valid election
    made by an Eligible Executive with respect to the deferral of
    all or a portion of his or her Award Amount in compliance with
    Section 409A of the Code, Award Amounts shall be paid
    within 30 days after written certification pursuant to
    Section 6 of this Plan, but in no event later than the end
    of the calendar year in which the Company’s fiscal year has
    terminated.



 



    8. CHANGE IN CONTROL. In the event of a Change in Control,
    each Eligible Executive shall be entitled to the Award Amount
    for the year (without proration or any other reduction),
    provided that the Eligible Executive is (a) employed by the
    Company at the time of the Change in Control or (b) if the
    Eligible Executive has been terminated or removed from his or
    her office or position with the Company, such action occurred
    (i) not more than 180 days prior to the date on which
    a Change in Control occurs, and (ii) following the
    commencement of any discussion with a third person that
    ultimately results in a Change in Control. Any payment under
    this Section 8 shall be made no later than 30 days
    after the effective date of the Change in Control and shall
    constitute payment in full of all obligations of the Company
    under this Plan for such year.



 



    9. NO RIGHT TO BONUS OR CONTINUED EMPLOYMENT. Neither the
    establishment of this Plan, the provision for or payment of any
    amounts hereunder nor any action of the Company, the Board or
    the Committee with respect to this Plan shall be held or
    construed to confer upon any person (a) any legal right to
    receive, or any interest in, an Award Amount or any other
    benefit under this Plan or (b) any legal right to continue
    to serve as an officer or employee of the Company or any
    Subsidiary of the Company.



 



    10. WITHHOLDING. The Company shall have the right to
    withhold, or require an Eligible Executive to remit to the
    Company, an amount sufficient to satisfy any applicable federal,
    state, local or foreign withholding tax requirements imposed
    with respect to the payment of any Award Amount.



 



    11. NONTRANSFERABILITY. Except as expressly provided by the
    Committee, the rights and benefits under this Plan shall not be
    transferable or assignable other than by will or the laws of
    descent and distribution.



 



    12. AMENDMENT. The Committee may amend the Plan from time
    to time, provided that any such amendment complies with the
    requirements of Sections 162(m) and 409A of the Code (or
    any successor provision to either).




    

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    13. EFFECTIVE DATE. Subject to approval by the stockholders
    of the Company, this Plan shall become effective as of
    July 1, 2007, and shall remain effective until the fifth
    anniversary of the date of such approval, subject to any further
    stockholder approvals (or reapprovals) mandated for
    performance-based compensation under Section 162(m) of the
    Code (or any successor provision thereto), and subject to the
    right of the Board to terminate this Plan, on a prospective
    basis only, at any time. All awards under this Plan shall be
    null and void if this Plan is not approved by the stockholders
    of the Company.



 



    14. AMENDMENT AND RESTATEMENT OF 2002 PLAN. This Plan is an
    amendment and restatement of the Company’s 2002 Key
    Executive Officers Bonus Plan.




    

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