Document:

Exhibit

Exhibit 10.3

AGREEMENT RE: CHANGE IN CONTROL
 
This AGREEMENT RE: CHANGE IN CONTROL (this “Agreement”) is dated as of October 12, 2015 and is entered into by and between Edward Russell (“Executive”) and Quidel Corporation, a Delaware corporation (the “Company”).
 
Background
 
The Company believes that because of its position in the industry, financial resources and historical operating results there is a possibility that the Company may become the subject of a Change in Control (as defined below), either now or at some time in the future.
 
The Company believes that it is in the best interest of the Company and its stockholders to foster Executive’s objectivity in making decisions with respect to any pending or threatened Change in Control of the Company and to assure that the Company will have the continued dedication and availability of Executive, notwithstanding the possibility, threat or occurrence of a Change in Control. The Company believes that these goals can best be accomplished by alleviating certain of the risks and uncertainties with regard to Executive’s financial and professional security that would be created by a pending or threatened Change in Control and that inevitably would distract Executive and could impair his ability to objectively perform his duties for and on behalf of the Company. Accordingly, the Company believes that it is appropriate and in the best interest of the Company and its stockholders to provide to Executive compensation arrangements upon a Change in Control that lessen Executive’s financial risks and uncertainties and that are reasonably competitive with those of other corporations.
 
With these and other considerations in mind, the Compensation Committee of the Company has authorized the Company to enter into this Agreement with the Executive to provide the protections set forth herein for Executive’s financial security following a Change in Control.
 
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration the receipt of which is hereby acknowledged, it is hereby agreed as follows:
 
Agreement
 
1.    Term of Agreement.  This Agreement shall be effective as of the date of commencement of work and, subject to the provisions of Section 4, shall extend to (and thereupon automatically terminate) one (1) day after Executive’s termination of employment with the Company for any reason. No termination of this Agreement shall limit, alter or otherwise affect Executive’s rights hereunder with respect to a Change in 

Control which has occurred prior to such termination, including without limitation Executive’s right to receive the various benefits hereunder.
 
2.    Purpose of Agreement.  The purpose of this Agreement is to provide that, in the event of a “Change in Control,” Executive may become entitled to receive certain additional benefits, as described herein, in the event of his termination under specified circumstances.
 
3.    Change in Control.  As used in this Agreement, the phrase “Change in Control” shall mean:
 
(i)  Except as provided by subparagraph (iii) hereof, the acquisition (other than from the Company) by any person, 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”) (excluding, for this purpose, the Company or its subsidiaries, or any executive benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either the then outstanding shares of common stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or
 
(ii)  Individuals who, as of the date hereof, constitute the Board of Directors of the Company (as of the date hereof the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of the Company, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, is or was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or
 
(iii)  Approval by the stockholders of the Company of a reorganization, merger or consolidation with any other person, entity or corporation, other than
 
(1)  a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of another entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such merger or consolidation, or
 

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(2)  a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires forty percent (40%) or more of the combined voting power of the Company’s then outstanding voting securities; or
 
(iv)  Approval by the stockholders of the Company of a plan of complete liquidation of the Company or an agreement for the sale or other disposition by the Company of all or substantially all of the Company’s assets.
 
4.    Effect of a Change in Control.  In the event of a Change in Control, Sections 6 through 13 of this Agreement shall become applicable to Executive. These Sections shall continue to remain applicable until the third anniversary of the date upon which the Change in Control occurs.  On such third anniversary date, and provided that the employment of Executive has not been terminated on account of a Qualifying Termination (as defined in Section 5 below), this Agreement shall terminate and be of no further force or effect.
 
5.    Qualifying Termination.  If following, or within thirty (30) days prior to, a Change in Control Executive’s employment with the Company and its affiliated companies is terminated, such termination shall be conclusively considered a “Qualifying Termination” unless:
 
(a)    Executive voluntarily terminates his employment with the Company and its affiliated companies.  Executive, however, shall  not  be considered to have voluntarily terminated his employment with the Company and its affiliated companies if, following, or within thirty (30) days prior to, the Change in Control, Executive’s base salary is reduced or adversely modified in any material respect, or Executive’s authority or duties are materially changed, and subsequent to such reduction, modification or change Executive elects to terminate his employment with the Company and its affiliated companies within sixty (60) days following such reduction, modification or change after having given the Company at least thirty (30) days notice of the same and a reasonable opportunity to cure during such 30-day notice period.  For such purposes, Executive’s authority or duties shall conclusively be considered to have been “materially changed” if, without Executive’s express and voluntary written consent, there is any substantial diminution or adverse modification in Executive’s title, status, overall position, responsibilities, reporting relationship, general working environment (including without limitation secretarial and staff support, offices, and frequency and mode of travel), or if, without Executive’s express and voluntary written consent, Executive’s job location is transferred to a site more than twenty-five (25) miles away from his place of employment thirty (30) days prior to the Change in Control.  In this regard as well, Executive’s authority and duties shall conclusively be considered to have been “materially changed” if, without Executive’s express and voluntary written consent, Executive no longer holds the same title or no longer has the same authority 

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and responsibilities or no longer has the same reporting responsibilities, in each case with respect and as to a publicly held parent company which is not controlled by another entity or person.
 
(b)    The termination is on account of Executive’s death or Disability. For such purposes, “Disability” shall mean a physical or mental incapacity as a result of which Executive becomes unable to continue the performance of his responsibilities for the Company and its affiliated companies and which, at least three (3) months after its commencement, is determined to be total and permanent by a physician agreed to by the Company and Executive, or in the event of Executive’s inability to designate a physician, Executive’s legal representative. In the absence of agreement between the Company and Executive, each party shall nominate a qualified physician and the two physicians so nominated shall select a third physician who shall make the determination as to Disability.
 
(c)    Executive is involuntarily terminated for “Cause.” For this purpose, “Cause” shall be limited to only three types of events:
 
(1)    the willful and deliberate refusal of Executive to comply with a lawful, written instruction of the Board of Directors, which refusal is not remedied by Executive within a reasonable period of time after his receipt of written notice from the Company identifying the refusal, so long as the instruction is consistent with the scope and responsibilities of Executive’s position prior to the Change in Control;
 
(2)    an act or acts of personal dishonesty by Executive which were intended to result in substantial personal enrichment of Executive at the expense of the Company; or
 
(3)    Executive’s conviction of any felony involving an act of moral turpitude.
 
6.    Severance Payment.  If Executive’s employment is terminated as a result of a Qualifying Termination, the Company shall pay Executive within thirty (30) days after the Qualifying Termination a cash lump sum equal to two (2) times the Executive’s Compensation (the “Severance Payment”).
 
(a)    For purposes of this Agreement, Executive’s “Compensation” shall equal the sum of (i) Executive’s highest annual salary rate with the Company within the three year period ending on the date of Executive’s Qualifying Termination, plus (ii) a “Bonus Increment.” The Bonus Increment shall equal the annualized average of all bonuses and incentive compensation payments paid to Executive during the two (2) year period immediately before the date of 

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Executive’s Qualifying Termination under all of the Company’s bonus and incentive compensation plans or arrangement.
 
(b)    [Intentionally Deleted.] 
 
(c)    The Severance Payment hereunder is in lieu of any severance payment that Executive might otherwise be entitled to from the Company in the event of a Change in Control under the Company’s applicable severance pay policies, if any, or under any other oral or written agreement;  provided ,  however , that Executive shall continue to be entitled to receive the severance pay benefits under the Company’s applicable policies, if any, or under another written agreement if and to the extent Executive’s termination is not a Qualifying Termination after, or within thirty (30) days prior to, a Change in Control.
 
(d)    Notwithstanding any provision of this Agreement to the contrary, if, at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and one or more of the payments or benefits received or to be received by Executive pursuant to this Agreement (or any portion thereof) would become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (the “Section 409A Taxes”) if provided at the time otherwise required under this Agreement, no such payment or benefit will be provided under this Agreement until the earlier of (a) the date which is six (6) months after Executive’s “separation from service” or (b) the date of Executive’s death, or such shorter period that, as determined by the Company, is sufficient to avoid the imposition of Section 409A Taxes.  The provisions of this Section 6(d) shall only apply to the minimum extent required to avoid Executive’s incurrence of any Section 409A Taxes.  In addition, if any provision of this Agreement would cause Executive to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.
 
7.    Additional Benefits.
 
(a)    In the event of a Qualifying Termination, any and all unvested stock options of Executive shall immediately become fully vested and exercisable and any and all restrictions on Executive’s restricted stock shall immediately and automatically lapse (except as otherwise expressly agreed to, in writing, by both parties, including whether prior to or after the execution of this Agreement).
 

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(b)    In the event of a Qualifying Termination, Executive shall be entitled to continue to participate in the following executive benefit programs which had been made available to Executive (including his family) before the Qualifying Termination: group medical insurance, group dental insurance, and group vision insurance. These programs shall be continued at no cost to Executive, except to the extent that tax rules require the inclusion of the value of such benefits in Executive’s income. The programs shall be continued in the same way and at the same level as immediately prior to the Qualifying Termination.  The programs shall continue for Executive’s benefit for two (2) years after the date of the Qualifying Termination;  provided ,  however , that Executive’s participation in each of such programs shall be earlier terminated or reduced, as applicable, if and to the extent Executive receives benefits as a result of concurrent coverage through another program.
 
(c)    In the event of a Qualifying Termination, Executive shall be entitled to receive from the Company, upon such Termination, the sum of $25,000 to help defray legal fees, tax and accounting fees, executive outplacement services, and other costs associated with transitional matters.
 
8.    Limitation on Payments.  Notwithstanding anything to the contrary herein, in the event that the sum aggregate present value of (i) the Severance Payment payable under Section 6 hereof, (ii) any and all additional amount or benefits which may be paid or conferred to or on behalf of Executive in accordance with Section 7 hereof, and (iii) any and all other amounts or benefits paid or conferred to or on behalf of Executive would constitute a “parachute payment” (“parachute payment” as used in this Agreement shall be defined in accordance with Section 280G(b)(2), or any successor thereto, of the Code), the payments under this Agreement shall be reduced (by the minimum possible amounts) until no amount payable to Executive under this Agreement constitutes a parachute payment; provided ,  however, that no such reduction under this Section 8 shall be made if the net after-tax payment (after taking into account, Federal, state, local or other income and excise taxes) to which Executive would otherwise be entitled without such reduction would be greater than the net after-tax payment (after taking into account Federal, state, local or other income and excise taxes) to Executive resulting from the receipt of such payments with such reduction. If, as a result of subsequent events or conditions (including a subsequent payment or absence of a subsequent payment under this Agreement), it is determined that payments hereunder have been reduced by more than the minimum amount required under this Section 8, then an additional payment shall be promptly made to Executive in an amount equal to the excess reduction. All determinations required to be made under this Section 8, including whether a payment would result in a parachute payment and the assumptions to be utilized in arriving at such determination, shall be made and approved within fifteen (15) days after the Qualifying Termination by both (1) accountants selected by the Company and (2) Executive’s designated financial or legal advisor.
 

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9.    Nonsolicitation Covenant. In consideration of the payments to be made to Executive hereunder, Executive hereby covenants, for a period of two (2) years following the Qualifying Termination, that he will not, directly or indirectly (whether as an officer, director, employee, individual proprietor, control shareholder, consultant, partner or otherwise) (i) solicit, recruit or hire-away any employee of the Company or successor of the Company or (ii) solicit, influence or attempt to influence any person or entity to terminate such person’s or entity’s contractual and/or business relationship with the Company or successor of the Company. With regard to this Section 9, Executive acknowledges that the provisions herein are reasonable in both scope and duration and necessary to protect the business of the Company or its successor.
 
10.    Rights and Obligations Prior to a Change in Control. Prior to the date which is thirty (30) days before a Change in Control, the rights and obligations of Executive with respect to his employment by the Company shall be determined in accordance with the policies and procedures adopted from time to time by the Company and the provisions of any written employment contract in effect between the Company and Executive from time to time. This Agreement deals only with certain rights and obligations of Executive subsequent, or within thirty (30) days prior to, a Change in Control, and the existence of this Agreement shall not be treated as raising any inference with respect to what rights and obligations exist prior to the date which is thirty (30) days before a Change in Control. Unless otherwise expressly set forth in a separate written employment agreement between Executive and the Company, the employment of Executive is expressly at-will, and Executive or the Company may terminate Executive’s employment with the Company at any time and for any reason, with or without cause, provided that if such termination occurs within thirty (30) days prior to or three (3) years after a Change in Control and constitutes a Qualifying Termination (as defined in Section 5 above) the provisions of this Agreement shall govern the payment of the Severance Payment and certain other benefits as provided herein.
 
11.    Non-Exclusivity of Rights. Subject to Section 6(c) hereof, nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company or any of its affiliated companies and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any stock option or other agreements with the Company or any of its affiliated companies. Except as otherwise provided in Section 6(c) hereof, amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan or program of the Company or any of its affiliated companies at or subsequent to the date of any Qualified Termination shall be payable in accordance with such plan or program.
 
12.    Full Settlement.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counter-claim, recoupment, defense or other claim, right, or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or to take any other action by way of 

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mitigation of the amounts payable to Executive under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which Executive may reasonably incur as a result of Executive’s successful collection efforts to receive amounts payable hereunder, or as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Section).
 
13.    Successors.
 
(a)    This Agreement is personal to Executive, and without the prior written consent of the Company shall not be assignable by Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
 
(b)    The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company.
 
14.    Governing Law. This Agreement is made and entered into in the State of California, and the internal laws of California shall govern its validity and interpretation in the performance by the parties hereto of their respective duties and obligations hereunder.
 
15.    Modifications.  This Agreement may be amended or modified only by an instrument in writing executed by all of the parties hereto.
 
16.    Dispute Resolution. 

(a)Any controversy or dispute between the parties involving the construction, interpretation, application or performance of the terms, covenants, or conditions of this Agreement or in any way arising under this Agreement (a “covered Dispute”) shall, on demand by either of the parties by written notice served on the other party in the manner prescribed in Section 17 hereof, be referenced pursuant to the procedures described in California code of Civil Procedure (“CCP”) Sections 638, et seq., as they may be amended from time to time (the “Reference Procedures”), to a retired Judge from the Superior Court for the County of San Diego or the County of Orange for a decision. 

(b)The Reference Procedures shall be commenced by either party by the filing in the Supervisor Court of the State of California for the County of San Diego or the County of Orange of a petition pursuant to CCP Section 638(a) (a “Petition”).  Said Petition shall designate as a referee a Judge from the list of retired San Diego County and Orange County Superior Court Judges who have 

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made themselves available for trail or settlement of civil litigation under said Reference Procedures. If the parties hereto are unable to agree on the designation of a particular retired San Diego County or Orange County Superior Court Judge or the designated Judge is unavailable or unable to serve in such capacity, request shall be made in said Petition that the Presiding or Assistant Presiding Judge of the San Diego County Superior Court or the Orange County Superior Court, as relevant, appoint as referee a retired San Diego County or Orange County Superior Court Judge from the aforementioned list.

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(c)Except as hereafter agreed by the parties, the referee shall apply the internal law of California in deciding the issues submitted hereunder.  Unless formal pleadings are waived by agreement among the parties and the referee, the moving party shall file and serve its complaint within 15 days from the date a referee is designated as provided herein, and the other party shall have 15 days thereafter in which to plead to said complaint. Each of the parties reserves its respective rights to allege and assert in such pleadings all claims, causes of action, contentions and defenses which it may have arising out of or relating to the general subject matter of the Covered Dispute that is being determined pursuant to the Reference Procedures. Reasonable notice of any motions before the referee shall be given, and all matters shall be set at the convenience of the referee.  Discovery shall be conducted as the parties agree or as allowed by the referee. Unless waived by each of the parties, a reporter shall be present at all proceedings before the referee.

(d)It is the parties’ intention by this Section 16 that all issues of fact and law and all matters of a legal and equitable nature related to any Covered Dispute will be submitted for determination by a referee designated as provided herein.  Accordingly, the parties hereby stipulate that a referee designated as provided herein shall have all powers of a Judge of the Superior Court including, without limitation, the power to grant equitable and interlocutory and permanent injunctive relief.

(e)Each of the parties specifically (1) consents to the exercise of jurisdiction over his person by a referee designated as provided herein with respect to any and all Covered Disputes; and (ii) consents to the personal jurisdiction of the California courts with respect to any appeal or review of the decision of any such referee.

(f)Each of the parties acknowledges that the decision by a referee designated as provided herein shall be a basis for a judgment as provided in CCP Section 644 and shall be subject to exception and review as provided in CCP Section 645.
 
17.    Notices.  Any notice or communications required or permitted to be given to the parties hereto shall be delivered personally or be sent by United States registered or certified mail, postage prepaid and return receipt requested, and addressed or delivered as follows, or at such other addresses the party addressed may have substituted by notice pursuant to this Section:
 

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	Quidel Corporation
	 
	Edward Russell

	12544 High Bluff Drive, Suite 200
	 
	437 B Avenue 
San Diego, CA 92118

	San Diego, CA 92130
	 
	San Diego, CA  92118

	Attn: President & CEO
	 
	 

 
18.    Captions.  The captions of this Agreement are inserted for convenience and do not constitute a part hereof.

19.    Severability.  In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein and there shall be deemed substituted for such invalid, illegal or unenforceable provision such other provision as will most nearly accomplish the intent of the parties to the extent permitted by the applicable law. In case this Agreement, or any one or more the provisions hereof, shall be held to be invalid, illegal or unenforceable within any governmental jurisdiction or subdivision thereof, this Agreement or any such provision thereof shall not as a consequence thereof be deemed to be invalid, illegal or unenforceable in any other governmental jurisdiction or subdivision thereof.
 
20.    Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one in the same Agreement.
 
[Remainder of page left blank intentionally, signatures on following page]
 

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IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first written above in San Diego, California.
 

QUIDEL CORPORATION, a Delaware corporation
	
		
	 
	 

	 
	 

	 
	 

	By:
	/s/ Douglas C. Bryant

	 
	Douglas C. Bryant

	 
	President & CEO

	 
	Quidel Corporation

	 
	 

	 
	 

	 
	 

	 
	EDWARD RUSSELL

	 
	 

	 
	 

	By:
	/s/ Edward K. Russell

	 
	Edward Russell

	 
	 

12EX-10.1

 Exhibit 10.1 

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED 

2012 STOCK OPTION AND INCENTIVE PLAN 

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
Dinesh Paliwal (“Grantee”). Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s 2012 Stock Option and Incentive Plan (the “Plan”). 

W I T N E S S E T H: 
 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 “Award Certificate” under the Plan.  

2. Date of Grant. The effective date of the Grant is
[                    ] (the “Date of Grant”).  

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) Except as otherwise provided in this Agreement, the Restricted Share Units shall become
nonforfeitable as to 33 1/3% of the Grant on each of the first anniversary, the second anniversary and the third 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, to the extent not previously forfeited, shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below). A “Change in Control” means
the occurrence, while the Grantee remains employed by the Company or a Subsidiary, 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 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 

  
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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. 

(c) In consideration for the Grant, the Grantee agrees to be subject to and bound by the terms of the restrictive covenants set
forth in Annex A of this Agreement, and, further agrees (without limitation of any other remedies available to the Company or any affiliate) that the Grant and vesting of the Restricted Share Units shall be subject to the Grantee’s continued
compliance with such terms. 
 5. Forfeiture of Restricted Share Units. 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 units 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 between Grantee and the Company, dated as of May 8, 2007, as amended on November 27, 2007, December 26, 2008 and September 1, 2009 (the “Letter Agreement”)). 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. 
 6. Payment of Restricted Share
Units. Subject to Section 10, the shares of Common Stock underlying any Restricted Share Units that become non-forfeitable as specified in this Agreement shall be transferred to the Grantee on the earlier of (i) the Vesting Date,
(ii) a Change in Control that satisfies the requirements for a change in control under Section 409A(a)(2)(A)(v) of the Code or (iii) the date that is 30 days following a Qualifying Termination; provided, however, that the Committee in
its sole discretion may settle the award of Restricted Share Units wholly or partly in cash, in which case the fair market value of the Restricted Share Units shall be equal to 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 such shares would have been transferred under this Agreement but for the Committee’s discretion to settle the
Restricted Share Units in cash, subject to withholding as provided in Section 8). 

  
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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 or the underlying shares of Common Stock. 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. Such payment
shall be made within 30 days after the corresponding dividend payment is made to the stockholders of the Company.  
 8.
Retention of Common Stock by the Company; Withholding. The shares of Common Stock underlying any Restricted Share Units that become nonforfeitable shall, at the time set forth in Section 6 hereof, 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 payable as specified in this Agreement, the Company shall direct the transfer agent to forward all such shares of Common Stock to the
Grantee; provided, however, that if the Grantee has notified the Company of his 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. The cash, if any, 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.
To the extent applicable, it is intended that this Agreement and the Plan comply with, or be exempt from, the provisions of Section 409A of the Code and be interpreted consistent with Section 409A of the Code. 

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.  

  
 4 

 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:	  	400 Atlantic Street, Suite 1500
		  	Stamford, CT 06901
		  	Attention: General Counsel
		
	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; provided, however, that the definitions of Cause, Good Reason and Disability and any other provision covered in the Letter Agreement shall be interpreted in the manner set forth in the Letter Agreement. 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. 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, the Plan and the Letter Agreement 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.  

  
 5 

 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. 

  
 6 

 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:	 	John G. Stacey
	Title:	 	Executive Vice President and Chief Human Resources Officer
		
	By:	 	  

	Name:	 	Edward H. Meyer
	Title:	 	Chairman of the Compensation Committee

 The undersigned Grantee acknowledges receipt of an executed copy of this Agreement and accepts the
Restricted Share Units subject to the applicable terms and conditions hereinabove set forth. If Grantee does not accept the Restricted Share Units by
[                    ] through countersignature of this Agreement, the Restricted Share Units shall be forfeited. 

 

									
	Date:	 	  
	 		 		 	  

		 		 		 		 	Dinesh Paliwal

  
 7 

 Annex A 

Restrictive Covenants 
 a.
The Grantee shall be bound by the restrictive covenants contained in this Annex A. 
 b. The Grantee shall not, without the prior
written consent of the Company, while employed by the Company and its affiliates or thereafter, disclose to any person not employed by the Company any confidential or proprietary information of the Company or of any of its affiliates. For purposes
of this Agreement, the term “confidential or proprietary information” will include all information of any nature and in any form that is owned by the Company and that is not publicly available (other than by Grantee’s breach of this
provision) or generally known to persons engaged in businesses similar or related to those of the Company. Confidential or proprietary information will include, without limitation, the financial matters, customers, employees, industry contracts,
strategic business plans, product development (or other proprietary product data), marketing plans, and all other secrets and all other information of a confidential or proprietary nature, of the Company or of any of its affiliates. The foregoing
obligations will not apply (i) while Grantee is employed by the Company, to actions taken in the ordinary course of the business of, and for the benefit of, the Company, (ii) if such confidential or proprietary information will have
become, through no fault of Grantee, generally known to the public, or (iii) if Grantee is required by law to make disclosure (after giving the Company prompt written notice of the receipt of such legal process and cooperating with the Company
to seek a protective order if it elects to do so). 
 c. While Grantee is employed by the Company and its affiliates and for a period of
12 months after Grantee ceases (for any reason) to be employed by the Company or one of its affiliates (together, the “Restricted Period”), Grantee will not, without the Company’s prior written consent, become an employee,
officer, director or investor (other than a minority shareholder or other equity interest of not more than 1% of a company whose equity interests are publicly traded on a nationally recognized stock exchange or over-the-counter) in any business or
enterprise, anywhere in the world, that directly or indirectly competes with the business of the Company or any affiliate and is set forth on the list of competitors (the “Competitive List”) as provided to Grantee on or about the date
hereof, as it may be modified by the Company from time to time by written notice to Grantee, provided that any modification shall not be effective until ninety (90) days after provided to Grantee and only if Grantee is then employed by the
Company. The Competitive List may not contain more than fifteen (15) entities. 
 d. During the Restricted Period, Grantee shall not
(i) employ, retain, solicit or recruit for employment or retention or assist any other person or entity in employing, retaining, soliciting or recruiting, directly or indirectly, any individual employed by the Company or one of its affiliates,
or who had been so employed in the prior six (6) months; provided that this provision shall not be violated solely by advertising or searches not specifically targeted at the employees of the Company or one of its affiliates, or solely by
serving as a reference upon request to an entity with which Grantee is not affiliated, or (ii) interfere with the Company’s or any of its affiliate’s relationships with any of its or their suppliers, vendors, joint venturers or
independent contractors. 

 e. Grantee acknowledges that, because of and during the course of Grantee’s employment by
the Company or any of its affiliates, Grantee will learn or develop confidential information relating to the Company’s sales, marketing or servicing, and relating to the Company’s or any of its affiliate’s customers. Grantee
recognizes that the Company’s and each of its affiliate’s relationships with its customers are extremely valuable to it and thus the protection of the Company’s and each of its affiliate’s relationships with its customers is
essential. Accordingly, Grantee agrees not to solicit or attempt to solicit, directly or through another, during the Restricted Period, for the purpose of providing services or products that are the same or similar to those offered for sale by the
Company or any of its affiliates at the time of Grantee’s termination and which services or products group represents more than 10 percent (10%) of the revenues of the Company and its affiliates for its most recently completed fiscal year
or is expected to do so in the current or next fiscal year, any existing or prospective customer of the Company or any one of its affiliates which Grantee solicited or with whom Grantee had direct contact while employed by the Company or any of its
affiliates, provided that the foregoing shall not apply to retail consumers of the Company or any of its affiliates. 
 f. Nothing herein
shall prevent or limit Grantee from reporting a possible violation of applicable laws or regulations to any governmental or regulatory agency, including the Securities and Exchange Commission, or making other disclosures that are protected under
so-called whistleblower laws or regulations. Such disclosures may be made without notice to the Company or consent of the legal department of the Company. 

g. The Grantee acknowledges that a remedy at law for any breach or attempted breach of this Annex A will be inadequate, agrees that that the
Company and any other affiliate shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach (in addition to any remedies at law) and further agrees to waive (to the extent
legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief). 

  
 9

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