Document:

ex10_1.htm

    
      
        

      
Exhibit 10.1

    [FORM]

    

    SEVERANCE
AGREEMENT

    

    THIS
SEVERANCE AGREEMENT (the “Agreement”), dated as of _______________, is made and
entered by and between Harman International Industries, Incorporated (“Harman”
or, including any successor thereto, the “Company”), a Delaware corporation, and
_________________ (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

    
      
        
        

      

      
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    (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;

    
      
        
        

      

      
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    (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, 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;

    
      
        
        

      

      
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    (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)); provided, however, that if the Termination Date precedes the Change in
Control, then any additional payments and benefits that are due upon a Change in
Control and that are deferred compensation within the meaning of Section 409A
shall be subject to the Section 409A Delay and payable upon the Change in
Control; 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, including without limitation,
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;

    

    (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:

    
      
        
        

      

      
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    (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 a
severance payment or benefit under any other agreement with the Company,
including, without limitation, any employment agreement, if the Executive is
entitled to a comparable payment or benefit hereunder.

    

    4.      
      Severance
Compensation.   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 amount described
in Section 1 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; provided, however, that no
payment that would otherwise be made and no benefit that would otherwise be
provided upon a termination of employment that is deferred compensation for
purposes of Section 409A shall be made or provided, as the case may be, unless
and until such termination of employment also constitutes a separation from
service (within the meaning of Section 409A).

    

    (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.      
      Limitation on Payments and
Benefits.  Notwithstanding any provision of this Agreement to
the contrary, if any amount or benefit to be paid or provided under this
Agreement would be an “excess parachute payment,” within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (“Code”), or any successor
provision thereto, but for the application of this sentence, then the payments
and benefits identified in the last sentence of this Section 5 to be paid or
provided under this Agreement will be reduced to the minimum extent necessary
(but in no event to less than zero) so that no portion of any such payment or
benefit, as so reduced, constitutes an excess parachute payment; provided, however, that no such
reduction shall be made if it is not thereby possible to eliminate all excess
parachute payments under this Agreement; and provided, further, that the
foregoing reduction will be made only if and to the extent that such reduction
would result in an increase in the aggregate payment and benefits to be
provided, determined on an after-tax basis (taking into account the excise tax
imposed pursuant to Section 4999 of the Code, or any successor provision
thereto, any tax imposed by any comparable provision of state law, and any
applicable federal, state and local income and employment
taxes).  Whether requested by the Executive or the Company, the
determination of whether any reduction in such payments or benefits to be
provided under this Agreement or otherwise is required pursuant to the preceding
sentence will be made at the expense of the Company by the Company’s independent
accountants.  The fact that the Executive’s right to payments or
benefits may be reduced by reason of the limitations contained in this Section 5
will not of itself limit or otherwise affect any other rights of the Executive
other than pursuant to this Agreement.  In the event that any payment
or benefit intended to be provided under this Agreement or otherwise is required
to be reduced pursuant to this Section 5, the Company will reduce the
Executive’s payment and/or benefits, to the extent required, in the following
order:  (i) the lump sum payment described in Paragraph (1) of Annex
A; (ii) the lump sum payment described in Paragraph (3) of Annex A; and (iii)
the benefits described in Paragraph (2) of Annex A.

    
      
        
        

      

      
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    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.   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 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.

    
      
        
        

      

      
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    (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.

    

    (c)           The
reimbursement obligations of the Company under Section 7(a) and Section 7(b)
shall be paid no later than December 31 of the calendar year following the
calendar year in which the related expense is incurred; provided that in no
event shall the reimbursement provided by the Company in one taxable year affect
the amount of reimbursement provided in any other taxable year nor shall
Executive’s right to reimbursement be subject to liquidation or exchange for
another benefit.

    

    8.      
      Competitive Activity;
Confidentiality; Nonsolicitation.   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, to the extent feasible, an
opportunity to contest such requirement).

    
      
        
        

      

      
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    (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 employment
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

        
          

        

      

      
        
        

      

    

    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.

    
      
        
        

      

      
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    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.  The intent of the parties is that payments and benefits
under this Agreement comply with or be exempt from Internal Revenue Code
Section 409A and the regulations and guidance promulgated thereunder
(collectively “Section 409A”) and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted and administered to be in
compliance therewith.  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 Section 409A, the Company 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.  The Company shall
use its best efforts to ensure ongoing compliance with Section
409A.  Notwithstanding any provision in this Agreement to the
contrary, no payment or benefit that is deferred compensation for purposes of
Section 409A and that is due upon the Executive’s termination of employment
will be paid or provided unless such termination is also a separation from
service (within the meaning of Section 409A).  For purposes of
Section 409A, the Executive’s right to receive any installment payments
pursuant to this Agreement shall be treated as a right to receive a series of
separate and distinct payments.  Whenever a payment under this
Agreement specifies a payment period with reference to a number of days (e.g., “payment shall
be made within thirty (30) days following the date of termination”), the actual
date of payment within the specified period shall be within the sole discretion
of the Company.

    
      
        
        

      

      
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    18.           Section 409A
Delay.  If the Executive is at the time of the Executive’s
separation from service (as defined in Section 409A) with the Company (other
than as a result of the Executive’s death) a “Specified Employee”, as such term
is defined under Section 409A and using the identification methodology selected
by the Company from time to time, then with regard to any payment or the
provision of any benefit that is considered deferred compensation under
Section 409A and that is payable on account of a separation from service
shall be delayed until the earlier of the Executive’s death or six (6) months
after the Executive’s separation from service (the “Section 409A Delay”)
and shall then be promptly paid to the Executive in a lump sum, together with
interest for the period of delay, compounded annually, equal to the prime rate
(as published in The
Wall Street Journal) and in effect as of the date the payment should
otherwise have been provided, and any remaining payments and benefits due under
this letter shall be paid or provided in accordance with the normal payment
dates specified for them herein.

    

    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.

    

    
      
        
        

      

      
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    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:

                                              
	 	 
      	 
	 	 	 
	 	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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    Annex
A

    

     

    Severance
Compensation

    

    

    (1)           A
lump sum payment in an amount equal to 1.5 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 (and his dependents)
with coverage under the Company’s medical, dental or other health plan, but only
to the extent that the Executive makes a payment to the Company in an amount
equal to the monthly COBRA premium payments on a timely basis required to
maintain such coverage commencing with the first calendar month following the
Termination Date and the Company shall reimburse the Executive on an after-tax
basis for the amount of such premiums, if any, in excess of any employee
contributions necessary to maintain such coverage for the Continuation Period
(the “COBRA Reimbursement”).  The COBRA Reimbursement shall be subject
to Section 18 and shall be made within 30 days following the date on which
Executive incurs the expense but no later than December 31 of the year following
the year in which Executive incurs the related expense; provided, that in no
event shall the reimbursements or in-kind benefits to be provided by the Company
in one taxable year affect the amount of reimbursements or in-kind benefits to
be provided in any other taxable year, nor shall Executive’s right to
reimbursement or in-kind benefits be subject to liquidation or exchange for
another benefit.

    

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

     

     

    A -
1Unassociated Document

    
      

    

    Exhibit
10.2

     

    AMENDED AND RESTATED

    SEVERANCE
AGREEMENT

    

    THIS
AMENDED AND RESTATED SEVERANCE AGREEMENT (the “Agreement”), dated as of December
26, 2008, is made and entered by and between Harman International Industries,
Incorporated (“Harman” or, including any successor thereto, the “Company”), a
Delaware corporation, and Dinesh Paliwal (the “Executive”).

    

    WHEREAS,
the Executive is or will be 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”
shall have the meaning set forth in Executive’s employment letter dated
May 8, 2007.

    

    (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).

    
      
         

      

      
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    (v)           Notwithstanding
anything in the foregoing to the contrary, the consummation of the Agreement and
Plan of Merger among KHI Parent Inc., KHI Merger Sub Inc. and Harman
International Industries, Incorporated, dated April 26, 2007 (the “KKR
Transaction”) shall not constitute a Change in Control.

    

    (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 under the
Executive’s supervision 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, 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;

    
      
         

      

      
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    (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)); provided, however, that if the Termination Date precedes the Change in
Control, then any additional payments and benefits that are due upon a Change in
Control and that are deferred compensation within the meaning of
Section 409A shall be subject to the Section 409A Delay and payable
upon the Change in Control; 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, except for Section 5 (Certain Additional
Payments By The Company) (which shall be effective upon execution), 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
including without limitation, notwithstanding that the Term may have since
expired.

    
      
         

      

      
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    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 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;

    

    (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; and has been deemed to incur a Disability pursuant to the letter
agreement dated May 8, 2007 (the “Employment Agreement”).

    

    (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 within six (6) months prior to the Change in Control
for Good Reason (as defined in the Employment Agreement):

    

    (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;

    
      
         

      

      
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    (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;

    

    (vi)           For
any reason, or no reason during the thirteenth calendar month following the
Change in Control;

    

    (vii)     
    Any reason that is Good Reason under the Employment
Agreement;

    

    (viii)         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
payments under Paragraph 11(iii) of the Employment Agreement if the
Executive is entitled to the severance payments provided
hereunder.

    
      
         

      

      
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    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, 2 and 4 of Annex A
on the date that is six (6) months and one (1) day after the
Termination Date and will continue to provide to the Executive the benefits
described in Section 3 of Annex A for the period described therein;
provided, however, that no payment that would otherwise be made and no benefit
that would otherwise be provided upon a termination of employment that is
deferred compensation for purposes of Section 409A shall be made or provided, as
the case may be, unless and until such termination of employment also
constitutes a separation from service (within the meaning of Section
409A).

    

    (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 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.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (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 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.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (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 therefor 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

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (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” provision of the Sarbanes-Oxley Act, such
obligation shall be treated as null and void ab initio.

    

    (i)       
    For the avoidance of any doubt, the Company’s
obligations to Executive under this Section 5 remain in full force and effect
with respect to the KKR Transaction regardless of Executive’s agreement to
exclude the KKR Transaction from the definition of Change in Control
hereunder.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (j)         
  Notwithstanding the foregoing provisions of Section 5,
(i) a Gross-Up Payment, or portion thereof, attributable to Section 1
or Section 4 of Annex A will be subject to the Section 409A
Delay, (ii) Gross-Up Payments will be paid no later than the time
prescribed therefor by Section 1.409A-3(i)(1)(v) of the Treasury
Regulations; and (iii) reimbursements under Section 5(e) and
Section 5(f) shall be paid no later than December 31 of the calendar
year following the calendar year in which the related expense is incurred;
provided that in no event shall the reimbursement provided by the Company in one
taxable year affect the amount of reimbursement provided in any other taxable
year nor shall Executive’s right to reimbursement be subject to liquidation or
exchange for another benefit.

    

    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 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.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (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.

    

    (c)           The
reimbursement obligations of the Company under Section 7(a) and
Section 7(b) will be subject to the requirements of
Section 5(j)(iii).

    

    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, to the extent feasible, an
opportunity to contest such requirement).

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (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 employment
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.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (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.

    

    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.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    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.  The intent of the parties is that payments and benefits
under this Agreement comply with or be exempt from Internal Revenue Code
Section 409A and the regulations and guidance promulgated thereunder
(collectively “Section 409A”) and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted and administered to be in
compliance therewith.  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 Section 409A, the Company 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.  The Company shall
use its best efforts to ensure ongoing compliance with Section
409A.  Notwithstanding any provision in this Agreement to the
contrary, no payment or benefit that is deferred compensation for purposes of
Section 409A and that is due upon the Executive’s termination of employment
will be paid or provided unless such termination is also a separation from
service (within the meaning of Section 409A).  For purposes of
Section 409A, the Executive’s right to receive any installment payments
pursuant to this Agreement shall be treated as a right to receive a series of
separate and distinct payments.  Whenever a payment under this
Agreement specifies a payment period with reference to a number of days (e.g., “payment shall
be made within thirty (30) days following the date of termination”), the actual
date of payment within the specified period shall be within the sole discretion
of the Company.

    

    18.           Section 409A
Delay.  If the Executive is at the time of his separation from
service (as defined in Section 409A) with the Company (other than as a result of
his death) a “Specified Employee”, as such term is defined under Section 409A
and using the identification methodology selected by the Company from time to
time, then with regard to any payment or the provision of any benefit that is
considered deferred compensation under Section 409A and that is payable on
account of a separation from service shall be delayed until the earlier of his
death or six (6) months after his separation from service (the
“Section 409A Delay”) and shall then be promptly paid to the Executive in a
lump sum, together with interest for the period of delay, compounded annually,
equal to the prime rate (as published in the Wall Street Journal) and in effect
as of the date the payment should otherwise have been provided, and any
remaining payments and benefits due under this letter shall be paid or provided
in accordance with the normal payment dates specified for them
herein.

    

    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.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    20.           Prior
Agreement.  This Agreement amends and restates the Agreement
dated as of May 8, 2008 (the “Prior Agreement”) between the Company and the
Executive, which Prior Agreement will, without further action, be superseded as
of the date first above written.

    

    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

                                                  	 
	 
      	 	
                                                    Chief
      Human Resources Officer

                                                  
	 
      	 	 
      	 
	 
      	EXECUTIVE:	 
	 	 	 	 
	 	 	 	 
	 	/s/ Dinesh Paliwal
	 
      	Dinesh
      Paliwal	 

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    ANNEX
A

    

    SEVERANCE
COMPENSATION

    

    
      	
              (1)

            	
              (i)
      A lump sum payment in an amount equal to three 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,
      but in no event less than the Target Bonus under the Executive’s
      Employment Agreement).

            

    

    
      	
              (2)

            	
              For
      a period of eighteen months following the Termination Date (the
      “Continuation Period”), the Company will arrange to provide the Executive
      (and his dependents) with coverage under the Company’s medical, dental or
      other health plan, but only to the extent that the Executive makes a
      payment to the Company in an amount equal to the monthly COBRA premium
      payments on a timely basis required to maintain such coverage commencing
      with the first calendar month following the Termination Date and the
      Company shall reimburse the Executive on an after-tax basis for the amount
      of such premiums, if any, in excess of any employee contributions
      necessary to maintain such coverage for the Continuation Period (the
      “COBRA Reimbursement”).  The COBRA Reimbursement shall be
      subject to Section 18 and shall be made within 30 days following the date
      on which Executive incurs the expense but no later than December 31 of the
      year following the year in which Executive incurs the related expense;
      provided, that in no event shall the reimbursements or in-kind benefits to
      be provided by the Company in one taxable year affect the amount of
      reimbursements or in-kind benefits to be provided in any other taxable
      year, nor shall Executive’s right to reimbursement or in-kind benefits be
      subject to liquidation or exchange for another
  benefit.

            

    

    
      	
              (3)

            	
              Outplacement
      services for one year after the Termination Date by a firm selected by the
      Executive, at the expense of the Company in an amount up to 20% of the
      Executive’s Base Pay.

            

    

    
      	
              (4)

            	
              A
      lump sum payment in the amount of $30,000 representing the cost of welfare
      benefits for two years (less those provided under (2)) above plus a gross
      up so the Executive has no after tax cost therefor.  Any tax
      gross-up payment provided will be made no later than the end of the
      calendar year immediately following the calendar year in which the
      Executive remits the related taxes.

            

    

     

    17

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