exv10w3



 





Exhibit 10.3




EXHIBIT H




HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED




RESTRICTED SHARE UNIT AGREEMENT




          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”).




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. The Restricted Share Units granted under this Agreement are
not granted under any stock incentive plan adopted by the Company. Notwithstanding the
foregoing, other than as provided herein, this Agreement shall be construed as if such
Restricted Share Units were subject to the terms, conditions, and restrictions set forth in
this Agreement and in the Company’s 2002 Stock Option and Incentive Plan (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”).
	 
	2.	 	Date of Grant. The effective date of the Grant 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 [INSERT APPLICABLE
VESTING DATE] (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 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 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




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	 	 	 	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
the Grantee’s employment; provided, however, that such amounts shall become fully
nonforfeitable if the Grantee’s employment terminates (a “Qualifying Termination”) on
account of his death or Disability, or if his employment is terminated by the Company
without Cause or by the Grantee for Good Reason (each term as defined in the Letter
Agreement, as amended from time to time). 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 Units shall be forfeited under the circumstances described in
Section 17(g) of the Plan.






	6.	 	Payment of Restricted Share Units. Subject to Section 10, the Grantee shall be paid in cash,
on the 30th day following the earliest of (i) the applicable Vesting Date, (ii) the
date of his Qualifying Termination or (iii) a Change in Control, provided that such Change in
Control satisfies the requirements for a change in control under Section 409A(a)(2)(A)(v) of
the Code and, if not, on the earlier of the date specified in clause (i) or (ii) above, an
amount equal the fair market value of the shares of Common Stock underlying such Restricted
Share Units (with such fair market value determined in accordance with the definition under
the Plan as of the date the applicable Restricted Share Units become




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	 	 	nonforfeitable as specified in this Agreement, subject to withholding as provided in Section
8).
	 
	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. From and after the Date of Grant and until the Grantee is paid pursuant to Section 6,
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.	 	Withholding. The cash paid to Grantee pursuant to Section 6 above shall be reduced by any
required tax withholding or other required governmental deduction.
	 
	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. Notwithstanding any provisions of Section 6 to the
contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the
Code (“Section 409A”) and determined pursuant to procedures adopted by the Company) at the
time of his “separation from service” (within the meaning of Section 409A) and if any portion
of the payments to be received by the Grantee under Section 6 upon his separation from service
would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the
following provisions will apply to the relevant portion of the Delayed Payment: (i) Each
portion of such payments that would otherwise be payable pursuant to Section 6 during the
six-month period immediately following the Grantee’s separation from service will instead be
paid or made available on the earlier of (i) the first business day of the seventh month
following the date the Grantee incurs a separation from service and (ii) the Grantee’s death
(such date, the “Permissible Payment Date”). In the event this Section 10 applies, the fair
market value of the Restricted Shares Units shall be the fair market value, as determined in
accordance with the Plan, on the Permissible Payment Date. To the extent applicable, it is
intended that this Agreement and the Plan comply with the provisions of Section 409A and shall
be interpreted consistent with Section 409A.
	 
	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. Capitalized terms used herein without definition shall have the meanings
assigned to them in the Plan. The Committee shall 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.




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	 	 	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: [General
Counsel] [Vice President-Financial Operations]
	 
	 	 	 	 
	 

	 	If to Grantee, at:
	 	Grantee’s most recent address on file with the Company






          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.
	 
	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.	 	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.
	 
	18.	 	Governing Law. This Agreement is made under, and shall be construed in accordance with, the
laws of the State of Delaware.
	 
	19.	 	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 terms and conditions hereinabove set forth.




	 	 	 	 	 	 	 	 	 
	Date:

	 	 
 

	 	 
	 	 
 

Grantee
	 	 







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