Document:

exv10w1

Exhibit 10.1

PHOENIX TECHNOLOGIES LTD.

DIRECTOR COMPENSATION PLAN

(Effective as of April 1, 2008)

     Upon the recommendation of the Compensation Committee of the Board of Directors (the “Board”)
of Phoenix Technologies Ltd. (the “Company”), the Board approved in April 2008 updates to the
Company’s director compensation plan in order to (i) replace per-meeting fees with annual retainers
and (ii) incorporate time-based vesting into all future equity grants to directors. Only members
of the Board who are not employees of the Company (“Outside Directors”) are entitled to receive the
compensation summarized below. All retainers are payable quarterly in arrears.

Board Retainer

     All Outside Directors are entitled to receive an annual retainer of $30,000. The Chairman of
the Board also receives an annual retainer of $20,000. In addition, Outside Directors who serve on
Board committees are entitled to receive the fees set forth below, as applicable.

Board Committee Retainers

     The chairperson of the Audit Committee is entitled to receive an annual retainer of $20,000,
and the other members of the Audit Committee are entitled to receive an annual retainer of $15,000.

     The chairperson of the Compensation Committee is entitled to receive an annual retainer of
$15,000, and the other members of the Compensation Committee are entitled to receive an annual
retainer of $7,500.

     The chairperson of the Nominating and Corporate Governance Committee is entitled to receive an
annual retainer of $10,000, and the other members of the Nominating and Corporate Governance
Committee are entitled to receive an annual retainer of $5,000.

Equity Compensation

     The number of shares underlying the initial stock option grant to a new director remains
unchanged at 40,000 shares, and the number of shares underlying each director’s annual anniversary
option grant remains unchanged at 15,000 shares. However, all such director option grants from and
after April 1, 2008 shall vest over three (3) years in accordance with the following vesting
schedule: 25 percent of the shares subject to the option grant shall vest immediately upon the
date of grant, and 1/36th of the balance of the shares shall vest monthly thereafter.exv10w1

Exhibit 10.1

	 	 	 	 	 
	Harman International Industries, Inc.

	 	281 Tresser Boulevard Suite 1500
	 	Stamford, CT 06901

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (the “Agreement”), dated as of July 28, 2008, is made and entered by and
between Harman International Industries, Incorporated (“Harman” or, including any successor
thereto, the “Company”), a Delaware corporation, and Herbert K. Parker (the “Executive”).

WHEREAS, the Executive is a senior executive of Harman and is expected to make major contributions
to the Company’s short and long-term profitability, growth and financial strength;

WHEREAS, Harman recognizes that: (a) top-quality executives may seek more secure career
opportunities if a Change in Control, as defined below, occurs in the future; and (b) the Company
may encounter difficulties in recruiting qualified senior executives unless it offers an employment
security arrangement, applicable in Change in Control situations;

WHEREAS, Harman desires to assure itself of both present and future continuity of management and
desires to establish certain minimum severance benefits for certain of its senior executives,
including the Executive, applicable in the event of a Change in Control;

WHEREAS, Harman wishes to ensure that its senior executives are not practically disabled from
discharging their duties in respect of a proposed or actual transaction involving a Change in
Control; and

WHEREAS, Harman desires to provide additional inducement for the Executive to continue to remain in
the Company’s employ.

NOW, THEREFORE, Harman and the Executive agree as follows:

1. Certain Defined Terms. In addition to terms defined elsewhere in this Agreement, the
following terms have the following meanings:

	(a)	 	“Base Pay” means the Executive’s annual base salary rate as in effect from time to time;
	 
	(b)	 	“Board” means Harman’s Board of Directors;
	 
	(c)	 	“Cause” means that, prior to any termination pursuant to Section 3(b), the Executive shall
have:

(i) been convicted of a criminal violation involving fraud, embezzlement or theft in
connection with his duties or in the course of his employment with the Company or any
Subsidiary;

(ii) committed intentional wrongful damage to property of Harman or any Harman subsidiary;

(iii) committed intentional wrongful disclosure of secret processes or confidential
information of Harman or any Subsidiary; or

(iv) committed intentional wrongful engagement in any Competitive Activity;
and any such act shall have been demonstrably and materially harmful to Harman. For
purposes of this Agreement, no act or failure to act on the part of the Executive shall be
deemed “intentional” if it was due primarily to an error in judgment or negligence, but
shall be deemed “intentional” only if done or omitted to be done by the Executive not in
good faith and without reasonable belief that the Executive’s action or omission was in the
best interest of Harman. Notwithstanding the foregoing, the Executive shall not be deemed
to have been terminated for “Cause” hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of a
majority of the Committee then in office at a meeting of the Committee called and held for
such purpose, after reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive’s counsel (if the Executive chooses to have counsel present at
such meeting), to be heard before the Committee, finding that, in the good faith opinion of
the Committee, the Executive had committed an act constituting “Cause” as defined in this
Agreement and specifying the particulars thereof in detail. Nothing in this Agreement will
limit the right of the Executive or his beneficiaries to contest the validity or propriety
of any such determination;

	(d)	 	“Change in Control” means the occurrence during the Term 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 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 Section 1(d)(i), the following acquisitions shall not constitute a
Change in Control: (A) any issuance of Voting Stock of the Company directly from the
Company that is approved by the Incumbent Board (as defined in Section 1(d)(ii), below), (B)
any acquisition by the Company or a Subsidiary of Voting Stock of the Company, (C) 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 (D) any acquisition of Voting
Stock of the Company by any Person pursuant to a Business Combination that complies with
clauses (A), (B) and (C) of Section 1(d)(iii), below; or

(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 shareholders, 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; or

(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 such Business
Combination, (A) all or substantially all of the individuals and entities who were the
beneficial owners of Voting 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), (B) 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 (C) 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

(iv) approval by the shareholders 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 1(d)(iii).

(e) “Committee” means the Compensation and Option Committee of the Board or such similar committee
of the Board comprised of non-officer directors and responsible for executive compensation matters
of the Company generally;

(f) “Competitive Activity” means the Executive’s participation, without the Company’s written
consent, in the management of any business enterprise if such enterprise engages in substantial and
direct competition with the Company or a Subsidiary and the enterprise’s sales of any product or
service under the Executive’s supervision competitive with any product or service of the Company or
a Subsidiary amounted to 10% of the enterprise’s net sales for its most recently completed fiscal
year and if the Company’s and its Subsidiary’s net sales of said product or service amounted to 10%
of the Company’s net sales for its most recently completed fiscal year. “Competitive Activity”
will not include (i) the mere ownership of securities in any such enterprise and the exercise of
rights appurtenant thereto or (ii) participation in the management of any such enterprise other
than in connection with the competitive operations of such enterprise;

(g) “Employee Benefits” means the perquisites, benefits and service credit for benefits as provided
under any and all employee retirement income and welfare benefit policies, plans, programs or
arrangements in which Executive is entitled to participate, including without limitation any stock
option,

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performance share, performance unit, stock purchase, stock appreciation, savings, pension,
supplemental executive retirement, or other retirement income or welfare benefit, deferred
compensation, incentive compensation, group or other life, health, medical/hospital or other
insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary),
disability, salary continuation, expense reimbursement and other employee benefit policies, plans,
programs or arrangements that may now exist or any equivalent successor policies, plans, programs
or arrangements that may be adopted by the Company or a Subsidiary, providing perquisites, benefits
and service credit for benefits at least as great in the aggregate as are payable thereunder prior
to a Change in Control;

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time;

(i) “Incentive Pay” means an annual bonus, incentive or other payment of compensation, in addition
to Base Pay, made or to be made in regard to services rendered in any year or other period pursuant
to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement,
policy, plan, program or arrangement (whether or not funded) of the Company or a Subsidiary, or any
successor thereto;

(j) “Retirement Plans” means the retirement income, supplemental executive retirement, excess
benefits and retiree medical, life and similar benefit plans providing retirement perquisites,
benefits and service credit for benefits at least as great in the aggregate as are payable
thereunder prior to a Change in Control;

(k) “Severance Period” means the period of time commencing six (6) months prior to the date of the
first occurrence of a Change in Control and continuing until the earlier of (i) the second
anniversary of the occurrence of the Change in Control, or (ii) the Executive’s death;
provided, however, that commencing on each anniversary of the Change in Control,
the Severance Period will automatically be extended for an additional year unless, not later than
90 calendar days before the anniversary date, either the Company or the Executive shall have given
written notice to the other that the Severance Period is not to be so extended.

(l) “Subsidiary” means an entity in which the Company, directly or indirectly, beneficially owns
50% or more of the outstanding Voting Stock;

(m) “Term” means the period commencing as of the date hereof and expiring as of the later of
(i) the close of business on December 31, 2012, or (ii) the expiration of the Severance Period.
However, commencing on January 1, 2012 and each January 1 thereafter, the term of this Agreement
will automatically be extended for an additional year unless, not later than September 30 of the
immediately preceding year, the Company or the Executive shall have given notice that it or the
Executive, as the case may be, does not wish to have the Term extended. Furthermore, if prior to
the date which is six (6) months prior to a Change in Control, the Executive ceases for any reason
to be an officer of the Company or any Subsidiary, thereupon without further action the Term shall
be deemed to have expired and this Agreement will immediately terminate and be of no further
effect. For purposes of this Section, the Executive shall not be deemed to have ceased to be an
officer of the Company and any Subsidiary by reason of the transfer of Executive’s employment
between the Company and any Subsidiary, or among any Subsidiaries;

(n) “Termination Date” means the date on which the Executive’s employment is terminated (the
effective date of which shall be the date of termination, or such other date that may be specified
by the Executive if the termination is pursuant to Section 3(b)); and

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

2. Operation of Agreement. This Agreement will be effective and binding immediately upon
its execution, but anything in this Agreement to the contrary notwithstanding, this Agreement will
not be operative unless and until the date which is six (6) months prior to a Change in Control
occurs. If a Change in Control occurs at any time during the Term, this Agreement shall become
operative immediately and retroactively, notwithstanding that the Term may have since expired.

3. Termination Following a Change in Control. (a) In the event of the occurrence of a
Change in Control, the Executive’s employment may be terminated by the Company or a Subsidiary
during the Severance Period and the Executive shall be entitled to the benefits provided by
Section 4 as a result thereof or of any termination within six (6) months prior to a Change in
Control unless such termination is the result of the occurrence of one or more of the following
events:

(i) The Executive’s death;

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(ii) The Executive becoming permanently disabled within the meaning of, and begins actually
receiving disability benefits pursuant to, the long-term disability plan in effect for, or
applicable to, Executive immediately prior to the Change in Control; or

(iii) Cause.

If, during the Severance Period, the Executive’s employment is terminated by the Company or any
Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be
entitled to the benefits provided by Section 4 hereof.

(b) In the event of the occurrence of a Change in Control, the Executive may terminate employment
with the Company and any Subsidiary during the Severance Period with the right to severance
compensation as provided in Section 4 upon the occurrence of one or more of the following events
(regardless of whether any other reason, other than Cause, for such termination exists or has
occurred, including without limitation other employment) and shall also have such severance
compensation in the event he had terminated employment upon the occurrence of one or more of the
following events within six (6) months prior to the Change in Control:

(i) Failure to elect or reelect or otherwise to maintain the Executive in the office or the
position, or a substantially equivalent office or position, of or with the Company and/or a
Subsidiary (or any successor thereto by operation of law or otherwise), as the case may be,
which the Executive held immediately prior to a Change in Control, or the removal of the
Executive as a Director of the Company and/or a Subsidiary (or any successor thereto) if the
Executive shall have been a Director of the Company and/or a Subsidiary immediately prior to
the Change in Control;

(ii) (A) A significant adverse change in the nature or scope of the authorities, powers,
functions, responsibilities or duties attached to the position with the Company and any
Subsidiary which the Executive held immediately prior to the Change in Control, (B) a
reduction in the aggregate of the Executive’s Base Pay and Incentive Pay received from the
Company and any Subsidiary, or (C) the termination or denial of the Executive’s rights to
Employee Benefits or a reduction in the scope or value thereof, any of which is not remedied
by the Company within 10 calendar days after receipt by the Company of written notice from
the Executive of such change, reduction or termination, as the case may be;

(iii) A determination by the Executive (which determination will be conclusive and binding
upon the parties to this Agreement, provided that the determination has been made in good
faith and in all events will be presumed to have been made in good faith unless otherwise
shown by the Company by clear and convincing evidence) that a change in circumstances has
occurred following a Change in Control, including, without limitation, a change in the scope
of the business or other activities for which the Executive was responsible immediately
prior to the Change in Control, which has rendered the Executive substantially unable to
carry out, has substantially hindered Executive’s performance of, or has caused Executive to
suffer a substantial reduction in, any of the authorities, powers, functions,
responsibilities or duties attached to the position held by the Executive immediately prior
to the Change in Control, which situation is not remedied within 10 calendar days after the
Company receives written notice from the Executive of such determination;

(iv) The liquidation, dissolution, merger, consolidation or reorganization of the Company or
transfer of all or substantially all of its business and/or assets, unless the successor or
successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) to
which all or substantially all of its business and/or assets have been transferred (by
operation of law or otherwise) assumed all duties and obligations of the Company under this
Agreement pursuant to Section 11(a);

(v) The Company relocates its principal executive offices (if such offices are the principal
location of Executive’s work), or requires the Executive to have his principal location of
work changed, to any location that, in either case, is in excess of 50 miles from the
principal executive office’s location immediately prior to the Change in Control, or
requires the Executive to travel away from his office in the course of discharging his
responsibilities or duties at least 20% more (in terms of aggregate days in any calendar
year or in any calendar quarter when annualized for purposes of comparison to any prior
year) than was required of Executive in any of the three full years immediately prior to the
Change in Control without, in either case, his prior written consent; or

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(vi) Without limiting the generality or effect of the foregoing, any material breach of this
Agreement by the Company or any successor thereto which is not remedied by the Company
within 10 calendar days after receipt by the Company of written notice from the Executive of
such breach.

(c) A termination by the Company pursuant to Section 3(a) or by the Executive pursuant to Section
3(b) will not affect any rights that the Executive may have pursuant to any agreement, policy,
plan, program or arrangement of the Company or any Subsidiary providing Employee Benefits, which
rights shall be governed by the terms thereof; provided that the Executive shall not be entitled to
severance pay under his employment agreement with the Company, if any, if entitled to it hereunder
and any such amounts received thereunder shall be offset against the amounts hereunder.

4. Severance Compensation. (a) If the Company or Subsidiary terminates the Executive’s
employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or
3(a)(iii), or if the Executive terminates his employment pursuant to Section 3(b), the Company will
pay to the Executive, subject to Section 18 hereof as to the Section 409A Delay the amounts
described in Sections 1 and 4 of Annex A within five business days after the Termination Date and
will continue to provide to the Executive the benefits described in Sections 2 and 3 of Annex A for
the periods described therein.

(b) Without limiting the rights of the Executive at law or in equity, if the Company fails to make
any payment or provide any benefit required to be made or provided under this Agreement on a timely
basis, the Company will pay interest on the amount or value thereof at an annualized rate of
interest equal to the so-called composite “prime rate” as quoted from time to time during the
relevant period in The Wall Street Journal , plus 2%. Such interest will be payable as it
accrues on demand. Any change in such prime rate will be effective on and as of the date of such
change.

(c) Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights
and obligations under this Section 4 and under Sections 5, 7 and 8 will survive any termination or
expiration of this Agreement or the termination of the Executive’s employment following a Change in
Control for any reason whatsoever.

5. Certain Additional Payments by the Company. (a) Anything in this Agreement to the
contrary notwithstanding, in the event that this Agreement shall become operative and it shall be
determined (as hereafter provided) that any payment (other than the Gross-Up payments provided for
in this Section 5) or distribution by the Company or any of its affiliates to or for the benefit of
the Executive, whether paid or payable or distributed or distributable under the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, performance share, performance unit,
stock appreciation right or similar right, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any
successor provision thereto) by reason of being considered “contingent on a change in ownership or
control” of the Company, within the meaning of Section 280G of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local law, or any interest or penalties with
respect to such tax (such tax or taxes, together with any such interest and penalties, being
hereafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to
receive, and the Company shall be required to pay, an additional payment or payments (collectively,
a “Gross-Up Payment”); provided, however, that no Gross-up Payment shall be made
with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined
by Section 422 of the Code (“ISO”) granted prior to the execution of this Agreement, or (ii) any
stock appreciation or similar right, whether or not limited, granted in tandem with any ISO
described in clause (i). The Gross-Up Payment shall be in an amount such that, after payment by
the Executive of all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

(b) Subject to the provisions of Section 5(f), all determinations required to be made under this
Section 5, including whether an Excise Tax is payable by the Executive and the amount of such
Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive
and the amount of such Gross-Up Payment, if any, shall be made by a nationally recognized
accounting firm (the “Accounting Firm”) selected by the Executive in his sole discretion. The
Executive shall direct the Accounting Firm to submit its determination and detailed supporting
calculations to both the Company and the Executive within 30 calendar days after the Termination
Date, if applicable, and any such other

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time or times as may be requested by the Company or the
Executive. If the Accounting Firm determines that any Excise Tax is payable by the Executive, the
Company shall pay the required Gross-Up Payment to the Executive within five business days after
receipt of such determination and calculations with respect to any Payment to the Executive. If
the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the Company and the Executive an opinion that the
Executive has substantial authority not to report any Excise Tax on his federal, state or local
income or other tax return. As a result of the uncertainty in the application of Section 4999 of
the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding
applicable state or local tax law at the time of any determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made by the Company
should have been made (an “Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to
Section 5(f) and the Executive thereafter is required to make a payment of any Excise Tax, the
Executive shall direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to both the Company
and the Executive as promptly as possible. Any such Underpayment shall be promptly paid by the
Company to, or for the benefit of, the Executive within five business days after receipt of such
determination and calculations.

(c) The Company and the Executive shall each provide the Accounting Firm access to and copies of
any books, records and documents in the possession of the Company or the Executive, as the case may
be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm
in connection with the preparation and issuance of the determinations and calculations contemplated
by Section 5(b). Any determination by the Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive.

(d) The federal, state and local income or other tax returns filed by the Executive shall be
prepared and filed on a consistent basis with the determination of the Accounting Firm with respect
to the Excise Tax payable by the Executive. The Executive shall make proper payment of the amount
of any Excise Tax, and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of the applicable portions of his federal income tax return as filed
with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other documents reasonably requested by the
Company, evidencing such payment. If prior to the filing of the Executive’s federal income tax
return, or corresponding state or local tax return, if relevant, the Accounting Firm determines
that the amount of the Gross-Up Payment should be reduced, the Executive shall within five business
days pay to the Company the amount of such reduction.

(e) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Section 5(b) shall be borne by the Company. If
such fees and expenses are initially paid by the Executive, the Company shall reimburse the
Executive the full amount of such fees and expenses within five business days after receipt from
the Executive of a statement therefore and reasonable evidence of Executive’s payment thereof.

(f) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service
or any other taxing authority that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notification shall be given as promptly as practicable but no later than
10 business days after the Executive actually receives notice of such claim and the Executive shall
further apprise the Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by the Executive). The Executive shall not
pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following
the date on which he gives such notice to the Company and (ii) the date that any payment of amount
with respect to such claim is due. If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive shall:

(i) provide the Company with any written records or documents in his possession relating to
such claim reasonably requested by the Company;

(ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation accepting
legal representation with respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim;
and

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(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including interest and penalties) incurred in connection with such contest and
shall indemnify and hold harmless the Executive, on an after-tax basis, for and against any
Excise Tax or income tax, including interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs and expenses. Without limiting the
foregoing provisions of this Section 5(f), the Company shall control all proceedings taken
in connection with the contest of any claim contemplated by this Section 5(f) and, at its
sole option, may pursue or forego any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim (provided, however, that
the Executive may participate therein at his own cost and expense) and may, at its option,
either direct the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay the tax claimed and sue
for a refund, the Company shall advance the amount of such payment to the Executive on an
interest — free basis and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income or other tax, including interest or penalties with
respect thereto, imposed with respect to such advance; and provided further,
however, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the Company’s
control of any such contested claim shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

(g) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section
5(f), the Executive receives any refund with respect to such claim, the Executive shall (subject to
the Company’s complying with the requirements of Section 5(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after any taxes
applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(f), a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the expiration of 30 calendar days after such
determination, then such advance shall be forgiven and shall not be required to be repaid and the
amount of any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid by the Company to the Executive pursuant to this Section 5.

(h) In the event any obligation of the Executive to repay any amounts due hereunder would be a
violation of the “loan” provisions of the Sarbanes-Oxley Act, such obligation shall be treated as
null and void ab initio.

6. No Mitigation Obligation. The Company hereby acknowledges that it will be difficult and
may be impossible for the Executive to find reasonably comparable employment following the
Termination Date and that the non-competition covenant contained in Section 8 will further limit
the employment opportunities for the Executive. In addition, the Company acknowledges that its
severance pay plans applicable in general to its salaried employees do not provide for mitigation,
offset or reduction of any severance payment received thereunder. Accordingly, the payment of the
severance compensation by the Company to the Executive in accordance with the terms of this
Agreement is hereby acknowledged by the Company to be reasonable, and the Executive will not be
required to mitigate the amount of any payment provided for in this Agreement by seeking other
employment or otherwise, nor will any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other obligation on the part of the
Executive under this agreement or otherwise.

7. Legal Fees and Expenses. (a) The Executive shall not be required to incur legal fees
and the related expenses associated with the interpretation, enforcement or defense of Executive’s
rights under this Agreement by litigation or otherwise because such costs substantially would
detract from the Executive’s benefits under this Agreement. Accordingly, if it should appear to
the Executive that the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or threatens to take any
action to declare this Agreement void or

7

 

unenforceable, or institutes any litigation or other
action or proceeding designed to deny, or to recover from, the Executive the benefits provided or
intended to be provided to the Executive hereunder, the Company irrevocably authorizes the
Executive from time to time to retain counsel of Executive’s choice, at the expense of the Company
as hereafter provided, to advise and represent the Executive in connection with any such
interpretation, enforcement or defense, including without limitation the initiation or defense of
any litigation or other legal action, whether by or against the Company or any Director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Executive’s entering into an attorney-client relationship with such
counsel, and in that connection the Company and the Executive agree that a confidential
relationship shall exist between the Executive and such counsel. Without respect to whether the
Executive prevails, in whole or in part, in connection with any of the foregoing, the Company will
pay and be solely financially responsible for any and all attorneys’ and related fees and expenses
incurred by the Executive in connection with any of the foregoing. However, if the Executive
brings an action in bad faith, or with no colorable claim of success, the Company shall not pay for
any of Executive’s attorneys’ fees or related expenses.

(b) Without limiting the obligations of the Company under Section 7(a) of this Agreement, in the
event a Change in Control occurs, the performance of the Company’s obligations under this Section 7
shall be secured by amounts deposited or to be deposited in trust pursuant to certain trust
agreements to which the Company shall be a party, which amounts deposited shall in the aggregate be
not less than $1,000,000, providing that the fees and expenses of counsel selected from time to
time by the Executive pursuant to Section 7(a) shall be paid, or reimbursed to the Executive if
paid by the Executive, either in accordance with the terms of such trust agreements, or, if not so
provided, on a regular, periodic basis upon presentation by the Executive to the trustee of a
statement or statements prepared by such counsel in accordance with its customary practices. Any
failure by the Company to satisfy any of its obligations under this Section 7(b) shall not limit
the rights of the Executive hereunder. Subject to the foregoing, the Executive shall have the
status of a general unsecured creditor of the Company and shall have no right to, or security
interest in, any assets of the Company or any Subsidiary.

8. Competitive Activity; Confidentiality; Nonsolicitation. (a) For a period ending one
year following the Termination Date, if the Executive shall have received or shall be receiving
benefits under Section 4, the Executive shall not, without the prior written consent of the
Company, which consent shall not be unreasonably withheld, engage in any Competitive Activity;
provided that the foregoing shall not apply if the Termination Date was prior to the Change in
Control and Executive had already commenced such activity.

(b) During the Term, the Company agrees that it will disclose to Executive its confidential or
proprietary information (as defined in this Section 8(b)) to the extent necessary for Executive to
carry out his obligations to the Company. The Executive hereby covenants and agrees that he will
not, without the prior written consent of the Company, during the Term or thereafter disclose to
any person not employed by the Company, or use in connection with engaging in competition with the
Company, any confidential or proprietary information of the Company. 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 Executive’s breach of this Section 8(b)) 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 Company’s 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. For
purposes of the preceding two sentences, the term “Company” will also include any Subsidiary
(collectively, the “Restricted Group”). The foregoing obligations imposed by this Section 8(b)
will not apply (i) during the Term, in the 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
the Executive, generally known to the public or (iii) if the Executive is required by law to make
disclosure (after giving the Company notice and an opportunity to contest such requirement).

(c) The Executive hereby covenants and agrees that during the Term and for one year thereafter
Executive will not, without the prior written consent of the Company, which consent shall not
unreasonably be withheld, on behalf of Executive or on behalf of any person, firm or company,
directly or indirectly, attempt to influence, persuade or induce, or assist any other person in so
persuading or inducing, any management employee of the Restricted Group to give up, or not to
commence,

8

 

employment or a business relationship with the Restricted Group, provided the foregoing
shall not be violated by advertising or searches not specifically targeted at the management
employees of the Restricted Group, or serving as a reference.

(d) Executive and the Company agree that the covenants contained in this Section 8 are reasonable
under the circumstances, and further agree that if in the opinion of any court of competent
jurisdiction any such covenant is not reasonable in any respect, such court will have the right,
power and authority to excise or modify any provision or provisions of such covenants as to the
court will appear not reasonable and to enforce the remainder of the covenants as so amended.
Executive acknowledges and agrees that the remedy at law available to the Company for breach of any
of his obligations under this Section 8 would be inadequate and that damages flowing from such a
breach may not readily be susceptible to being measured in monetary terms. Accordingly, Executive
acknowledges, consents and agrees that, in addition to any other rights or remedies that the
Company may have at law, in equity or under this Agreement, upon adequate proof of his violation of
any such provision of this Agreement, the Company will be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened or further breach, without the
necessity of proof of actual damage.

9. Employment Rights. Nothing expressed or implied in this Agreement will create any right
or duty on the part of the Company or the Executive to have the Executive remain in the employment
of the Company or any Subsidiary prior to or following any Change in Control.

10. Withholding of Taxes. The Company may withhold from any amounts payable under this
Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant
to any applicable law, regulation or ruling.

11. Successors and Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company, by agreement in form and substance reasonably satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place. This Agreement
will be binding upon and inure to the benefit of the Company and any successor to the Company,
including without limitation any persons acquiring directly or indirectly all or substantially all
of the business or assets of the Company whether by purchase, merger, consolidation, reorganization
or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by the Company.

(b) This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees and legatees.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the
consent of the other, assign, transfer or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 11(a) and 11(b). Without limiting the
generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not
be assignable, transferable or delegable, whether by pledge, creation of a security interest, or
otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution
and, in the event of any attempted assignment or transfer contrary to this Section 11(c), the
Company shall have no liability to pay any amount so attempted to be assigned, transferred or
delegated.

12. Notices. For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be given hereunder
will be in writing and will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return receipt requested,
postage prepaid, or three business days after having been sent by a nationally recognized overnight
courier service such as FedEx, UPS, or Purolator, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive office and to the Executive at his address on
the books of the Company, or to such other address as any party may have furnished to the other in
writing and in accordance herewith, except that notices of changes of address shall be effective
only upon receipt.

13. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the State of
Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of another jurisdiction.

9

 

14. Consent to Jurisdiction. Any disputes, litigation, proceedings or other legal actions
by any party to this Agreement in connection with or relating to this Agreement or any matters
described or contemplated in this Agreement may be instituted in the courts of the State of
Delaware or of the United States sitting in the State of Delaware. Each party to this Agreement
irrevocably submits to the jurisdiction of the courts of the State of Delaware and of the United
States sitting in the State of Delaware in connection with any such dispute, litigation, proceeding
or other legal action arising out of or relating to this Agreement.

15. Validity. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it
enforceable, valid or legal.

16. Miscellaneous. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by the Executive and
the Company. No waiver by either party to this Agreement at any time of any breach by the other
contracting party or compliance with any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement. References to Sections are to references to
Sections of this Agreement.

17. Code Section 409A. To the extent that there is a material risk that any payments under
this Agreement may result in the imposition of an additional tax to the Executive under Internal
Revenue Code Section 409A (“Section 409A”), Harman will reasonably cooperate with the Executive to
amend this Agreement such that payments hereunder comply with Section 409A without materially
changing the economic value of this Agreement to either party.

18. Section 409A Delay. If the Executive is at the time of his separation from service (as
defined under Section 409A) with Harman (other than as a result of his death) a “specified
employee”, as such term is defined under Section 409A, any payment due to the Executive hereunder
that indicates it is subject to the “Section 409A Delay” shall be delayed until the earlier of his
death or six (6) months after such separation from service and shall then be promptly paid to the
Executive in a lump sum.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
agreement.

10

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of
the date first above written.

	 	 	 	 	 
	 	HARMAN INTERNATIONAL

INDUSTRIES, INCORPORATED

 	 
	 	By:  	/s/ John Stacey
 	 
	 	 	John Stacey  	 
	 	 	Vice President and

Chief Human Resources Officer 	 
	 
	 	 	 
	 	 	/s/ Herbert K. Parker
 	 
	 	 	Herbert K. Parker 	 
	 	 	 

11

 

Annex A

Severance Compensation

     (1) (i) A lump sum payment in an amount equal to two times the sum of (A) Base Pay (at the
highest rate in effect for any period prior to the Termination Date), plus (B) Incentive Pay (in an
amount equal to not less than the highest aggregate Incentive Pay earned in any of the three fiscal
years immediately preceding the year in which the Change in Control occurred).

     (2) For a period of eighteen months following the Termination Date (the “Continuation
Period”), the Company will arrange to provide the Executive with coverage under the Company
medical, dental or other health plan.

     (3) Outplacement services for one year by a firm selected by the Executive, at the expense of
the Company in an amount up to $50,000.

12

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