Document:

har10q0803ex102.htm

    Exhibit
10.2

     

    December
11, 2007

    

    

    Mr.
Richard S. Sorota

    6940
MacNeil Drive

    Dublin,
OH  43017

    

    Dear
Rich:

     

    On behalf
of Harman International Industries, Incorporated (“Harman”), I submit an offer
for the position of President, Harman Consumer Division.  In this
capacity you will report directly to Dinesh Paliwal, President & CEO, and
will be located at our Stamford, Connecticut office.  This offer
provides the following:

     

    Start
Date:  Your start date will be January 21, 2008.

     

    Base
Salary:  Annualized base salary will be $375,000 subject to
review on September 1, 2008, and payable in accordance with our regular payroll
schedule in Stamford, CT.

     

    Signing
Bonus:  Within five business days after your start date, you
will be paid a cash lump sum signing bonus in an aggregate amount of
$80,000.  On the first anniversary of your start date, you will be
paid a second cash lump sum signing bonus in an aggregate amount of
$40,000.

     

    Bonus:  You
will be eligible to participate in the Management Incentive Compensation program
with a target bonus opportunity equal to 55% of your base salary and an 82.5%
maximum.  This bonus program is based upon Harman’s achievement of its
business plan, as well as your achievement of personal performance
goals.   For the current fiscal year ending June 30, 2008, the
annual bonus shall be guaranteed at the target level of 55%, prorated for the
period of employment (i.e., a minimum of $103,125).

     

    Stock
Options:  Subject to the approval of the Compensation and
Option Committee of the Board of Directors, you will receive a one-time stock
option award of 25,000 shares of Harman common stock under the terms of Harman’s
2002 Stock Option and Incentive Plan (“Plan”) at a per share exercise price
equal to the fair market value as of your start date.  The option will
vest 20% per year over five years commencing on the first anniversary of the
grant date, with acceleration and other provisions as provided in the Plan and
your option agreement.  You will also be eligible for a stock option
grant at the next general grant, at a level commensurate with your
position.

     

    Restricted
Stock:  Subject to the approval of the Compensation and Option
Committee of the Board of Directors, you will receive a one-time award of 5,500
shares of restricted Harman common stock under the Plan, vesting on January 2,
2011, provided that you are employed by Harman on that date.

     

    Severance:  If
your employment is terminated by Harman without “Cause” within the first year of
employment, you will receive one year of salary continuation and company-paid
COBRA benefits during the salary continuation period.  In addition,
your restricted stock award will vest upon termination.   “Cause”
is defined in Exhibit A attached hereto.  Such payments will be
subject to the execution by you of a release in substantially the form attached
hereto as Exhibit B.  Harman will furnish you with the release
promptly after your termination of employment.  Your salary
continuation payments will commence on the 60th day
after your termination of employment; provided, however, that if on the due date
for any salary continuation payment, all revocation periods have not then
expired with respect to your release, such payment will be
forfeited.

    

    Company
Car:  You will have use of a company-leased automobile, with a
lease payment of approximately $1,200 per month.  Harman will bear the
car expenses (i.e.,
gasoline, insurance, car tax, repairs) associated with the business use of the
company car.  You may use the company car for private purposes,
however taxes imposed with respect to private usage will be borne by
you.

     

    Temporary
Living:  To accommodate the delayed timing of your move to the
Stamford, CT area we will provide temporary housing in Stamford for up to six
months.   We will also provide for airfare and airport
transportation costs for you to fly home to Ohio during this period, not to
exceed three trips in any one month.

     

    Cost of Living
Adjustment:  You will receive an annual cost-of-living bonus of
$24,000 over the next three years ($72,000 total) to assist you in absorbing the
increased cost of housing in the Stamford area.  The

     

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

    

    Richard
Sorota

    December
11, 2007

    Page
2

     

    initial
bonus will be paid as a lump sum upon your family’s relocation and on each one
year anniversary thereafter.

     

    Relocation
Assistance:  To assist you in making a smooth transition to the
Stamford, CT area, we will reimburse you for up to $150,000 of the following
relocation costs, subject to documentation per Company procedures:

     

    
      	
              ·  

            	
              Cost
      of two house hunting trips to Stamford for your family including roundtrip
      airfare, hotel and car rental;

            

    

     

    
      	
              ·  

            	
              Reimbursement
      for the closing costs incurred in selling your home in Washington,
      including real estate commission, attorney fees, filing fees, transfer
      taxes, etc.;

            

    

     

    
      	
              ·  

            	
              Reimbursement
      for similar closing costs incurred in your purchase of a new home located
      within reasonable commuting distance from the office in Stamford,
      CT;

            

    

     

    
      	
              ·  

            	
              Reasonable
      costs of moving your family and physical household goods from your current
      residence to your new residence;

            

    

     

    
      	
              ·  

            	
              Interim
      housing assistance – this is to be used during the period of time that you
      are selling your current home and purchasing a new home and is not to
      exceed 3 months from the time you begin using this assistance;
      and

            

    

     

    
      	
              ·  

            	
              Temporary
      storage of your physical household goods for up to 3 months, if
      needed.

            

    

     

    
      	
              ·  

            	
              Tax
      gross-up for relocation expenses for which no tax deduction is available
      to you.

            

    

     

    Vacation:  You
will be eligible for accrual of four (4) weeks of vacation annually, pro-rated
for 2008 based on your start date.

     

    Other
Benefits:  Additional benefits, as defined by Company policy
and governing plan documents, currently include medical, dental, vision, life
insurance, short and long-term disability insurance, tuition reimbursement,
401(k) Retirement Savings Plan and all Company-paid
holidays.   Eligibility to participate in these benefits
commences thirty (30) days after your date of hire, except for the 401(k) plan
under which participation is available on the first plan enrollment date
following 180 days of employment.

     

    Section 409A: For
purposes of Section 409A of the Internal Revenue Code, each salary continuation
payment will be considered one of a series of separate payments.  If at the time of your
separation from service (within the meaning of Section 409A), (i) you are a
specified employee (within the meaning of Section 409A and using the
identification methodology selected by Harman from time to time) and (ii) Harman
makes a good faith determination that an amount payable hereunder constitutes
deferred compensation (within the meaning of Section 409A) the payment of which
is required to be delayed pursuant to the six-month delay rule set forth in
Section 409A in order to avoid taxes or penalties under Section 409A, then
Harman will not pay such amount on the otherwise scheduled payment date but will
instead pay it, without interest, on the first business day after such six-month
period, subject to the release requirements noted above.

     

    The
Company will, in connection with your employment, withhold from any compensation
and benefits payable to you all federal, state, city or other taxes as the
Company is required to withhold pursuant to any law or government regulation or
ruling.

     

    Harman is
not hereby offering you lifetime employment or employment for a fixed or implied
period of time.  Either you or Harman may terminate your employment at
any time, with or without cause or notice.  The at-will nature of your
employment relationship cannot be changed except in a written document signed by
you and either me or the VP, Human Resources of Harman.  Upon
termination of your employment, Harman will have no further obligations to you
except as provided under “Signing Bonus” (if not already paid) and
“Severance”.

     

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

Richard
Sorota

    December
11, 2007

    Page
3

     

    

    Any
dispute concerning termination of your employment shall be resolved by final and
binding arbitration before a neutral arbitrator.  The arbitrator shall
be selected by mutual agreement or in accordance with the procedures of the
American Arbitration Association and the employment arbitration rules of the
American Arbitration Association shall apply.  Such arbitration shall
be conducted in Stamford, Connecticut or such other location as to which you and
Harman agree.  The law of Connecticut, without regard to its choice of
law rules, shall govern any such dispute, and the arbitrator shall not have
authority to vary or alter the terms of this letter.

     

    You will
be expected to sign the Company’s standard form of Invention and Employee
Secrecy Agreement on your first day.

     

    You
acknowledge and agree that your acceptance of this offer will violate no
agreements or arrangements with other individuals or entities, or duties to your
current employer.  Please sign and return the original of this
letter.  You should retain one copy of this letter for your
files.

     

    We look
forward to having you as part of our team and welcome the contributions you will
bring to this outstanding company.

     

    Sincerely,

    

    

    /s/ Sandra S.
Buchanan                                                      

    Sandra S.
Buchanan

    VP,
Compensation & Benefits

    

    

    

    I accept
your offer of employment and agree to the provisions stated in this
letter.   I acknowledge and agree that this letter constitutes
the entire agreement between Harman and me and supersedes all prior verbal or
written agreements, arrangements or understandings pertaining to my offer of
employment.  I understand that I am employed at will and that my
employment can be terminated at any time, with or without cause, at the option
of either the Company or me.

    

    ACCEPTED
AND AGREED:

    

    

    /s/ Richard S.
Sorota                                                                              December 31,
2007                                                      

    Richard
S.
Sorota                                                                                    Date

    

    

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
Richard
Sorota

    December
11, 2007

    Page
4

    Exhibit
A

    

    Termination
Definitions

    

    “Cause”
means:

    

    
      	
              (i)  

            	
              You
      have been convicted of a felony:

            

    

    
      	
              (ii)  

            	
              You
      have engaged in conduct that constitutes willful gross neglect or willful
      gross misconduct with respect to your employment duties which results in
      material economic harm to Harman.

            

    

    

    No act or
omission on your part shall be considered “willful” unless it is done by you in
bad faith and without reasonable belief that your action was in the best
interests of Harman.har10q0803ex103.htm

    Exhibit
10.3

    

    

    January
11, 2008

    

    

    Mr. John
Stacey

    18
Wintergreen Drive

    Monroe,
CT 06468

    

    Dear
John:

     

    On behalf
of Harman International Industries, Incorporated (“Harman”), I submit an offer
for the position of VP of HR and Chief Human Resources Officer.  In
this capacity you will report directly to me and be a member of the Harman
Executive Committee.  You will be located at our Stamford, Connecticut
office.  This offer provides the following:

     

    Start
Date:  Your start date will be March 3, 2008 or an earlier date
should your employment with your current employer be terminated before February
29, 2008.

     

    Base
Salary:  Annualized base salary will be $360,000 subject to
review on September 1, 2008, and payable in accordance with our regular payroll
schedule in Stamford, CT.

     

    Signing
Bonus:  Within five business days after your start date, you
will be paid a cash lump sum signing bonus in an aggregate amount of
$100,000.  You will be paid a second cash lump sum signing bonus in an
aggregate amount of $45,000 on the first anniversary of your start date, if you
are employed by Harman on that date.

     

    Bonus:  You
will be eligible to participate in the Management Incentive Compensation program
with a target bonus opportunity equal to 55% of your base salary and an 82.5%
maximum.  This bonus program is based upon Harman’s achievement of its
business plan, as well as your achievement of personal performance
goals.   For the current fiscal year ending June 30, 2008, the
annual bonus shall be guaranteed at the target level of 55%, prorated for the
period of employment (i.e., a minimum of $66,000).

     

    Stock
Options:  Subject to the approval of the Compensation and
Option Committee of the Board of Directors, you will receive a one-time stock
option award of 25,000 shares of Harman common stock under the terms of Harman’s
2002 Stock Option and Incentive Plan (“Plan”) at a per share exercise price
equal to the fair market value as of your start date.  The option will
vest 20% per year over five years commencing on the first anniversary of the
grant date, with acceleration and other provisions as provided in the Plan and
your option agreement.  You will also be eligible for a stock option
grant at the next general grant, at a level commensurate with your
position.

     

    Restricted
Stock:  Subject to the approval of the Compensation and Option
Committee of the Board of Directors, you will receive a one-time award of 5,500
shares of restricted Harman common stock under the Plan, vesting on April 1,
2011, if you are employed by Harman on that date.

     

    Severance:  If
your employment is terminated by Harman without “Cause” within the first year of
employment, you will receive one year of salary continuation and company-paid
COBRA benefits during the salary continuation period.  Subject to the
approval of the Compensation and Option Committee of the Board of Directors,
your initial stock option grant and restricted stock award will vest upon such
termination and you would have ninety (90) days thereafter within which you may
exercise, in accordance with the terms of the Plan, those stock options that are
vested as of the Termination Date.    “Cause” is defined in
Exhibit A attached hereto.  Such payments will be subject to the
execution by you of a release in substantially the form attached hereto as
Exhibit B.  Harman will furnish you with the release promptly after
your termination of employment.  Your salary continuation payments
will commence on the 60th day
after your termination of employment; provided, however, that if on the due date
for any salary continuation payment, all revocation periods have not then
expired with respect to your release, such payment will be
forfeited.

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      John
Stacey

      January
11, 2008

      Page
2

    

     

    Company
Car:  You will have use of a company-leased automobile with a
value of $48,000 not including tax.  Harman will bear the car expenses
(i.e., gasoline,
insurance, car tax, repairs) associated with the business use of the company
car.  You may use the company car for private purposes, however taxes
imposed with respect to private usage will be borne by you.

     

    Vacation:  You
will be eligible for accrual of four (4) weeks of vacation annually, pro-rated
for 2008 based on your start date.

     

    Other
Benefits:  Additional benefits, as defined by Company policy
and governing plan documents, currently include medical, dental, vision, life
insurance, short and long-term disability insurance, tuition reimbursement,
401(k) Retirement Savings Plan and all Company-paid
holidays.   Eligibility to participate in these benefits
commences thirty (30) days after your date of hire, except for the 401(k) plan
under which participation is available on the first plan enrollment date
following 180 days of employment.

     

    Section 409A: For
purposes of Section 409A of the Internal Revenue Code, each salary continuation
payment will be considered one of a series of separate payments.  If at the time of your
separation from service (within the meaning of Section 409A), (i) you are a
specified employee (within the meaning of Section 409A and using the
identification methodology selected by Harman from time to time) and (ii) Harman
makes a good faith determination that an amount payable hereunder constitutes
deferred compensation (within the meaning of Section 409A) the payment of which
is required to be delayed pursuant to the six-month delay rule set forth in
Section 409A in order to avoid taxes or penalties under Section 409A, then
Harman will not pay such amount on the otherwise scheduled payment date but will
instead pay it, without interest, on the first business day after such six-month
period, subject to the release requirements noted above.

     

    The
Company will, in connection with your employment, withhold from any compensation
and benefits payable to you all federal, state, city or other taxes as requested
by you or that the Company is required to withhold pursuant to any law or
government regulation or ruling.

     

    Harman is
not hereby offering you lifetime employment or employment for a fixed or implied
period of time.  Either you or Harman may terminate your employment at
any time, with or without cause or notice.  The at-will nature of your
employment relationship cannot be changed except in a written document signed by
you and me.  Upon termination of your employment, Harman will have no
further obligations to you except as provided under “Severance”.

     

    Any
dispute concerning termination of your employment shall be resolved by final and
binding arbitration before a neutral arbitrator.  The arbitrator shall
be selected by mutual agreement or in accordance with the procedures of the
American Arbitration Association and the employment arbitration rules of the
American Arbitration Association shall apply.  Such arbitration shall
be conducted in Stamford, Connecticut or such other location as to which you and
Harman agree.  The law of Connecticut, without regard to its choice of
law rules, shall govern any such dispute, and the arbitrator shall not have
authority to vary or alter the terms of this letter.

     

    You will
be expected to sign the Company’s standard form of Invention and Employee
Secrecy Agreement (see copy attached) on your first day.

     

    You
acknowledge and agree that your acceptance of this offer will violate no
agreements or arrangements with other individuals or entities, or duties to your
current employer.  The effectiveness of this agreement is subject to
successful completion of the background and previous employment
investigation.  Please sign and return the original of this
letter.  You should retain one copy of this letter for your
files.

     

    I look
forward to working with you and welcome the contributions you will bring to this
outstanding company.

     

    Sincerely,

    

    

    /s/ Dinesh C.
Paliwal

    Dinesh C.
Paliwal

    President,
CEO & Vice-Chairman

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    John
Stacey

    January
11, 2008

    Page
3

     

    I accept
your offer of employment and agree to the provisions stated in this
letter.   I acknowledge and agree that this letter constitutes
the entire agreement between Harman and me and supersedes all prior verbal or
written agreements, arrangements or understandings pertaining to my offer of
employment.  I understand that I am employed at will and that my
employment can be terminated at any time, with or without cause, at the option
of either the Company or me.

    

    ACCEPTED
AND AGREED:

    

    

    /s/ John
Stacey                                                         January 15,
2008

    John
Stacey                                                               Date

    

    

    

    Cc:           S.
Buchanan

    

    DP/jb

    

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    John
Stacey

    January
11, 2008

    Page
4

    

 

    Exhibit
A

    

    Termination
Definitions

    

    “Cause”
means:

    

    
      	
              (i)  

            	
              You
      have been convicted of a felony:

            

    

    
      	
              (ii)  

            	
              You
      have engaged in conduct that constitutes willful gross neglect or willful
      gross misconduct with respect to your employment duties which results in
      material economic harm to Harman.

            

    

    

    No act or
omission on your part shall be considered “willful” unless it is done by you in
bad faith and without reasonable belief that your action was in the best
interests of Harman.

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