Document:

ex10_2.htm

    
      

    

    Exhibit
10.2

     

     

    
      HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED

      

      2002
STOCK OPTION AND INCENTIVE PLAN

      PERFORMANCE
BASED RESTRICTED SHARE UNIT AGREEMENT

      FOR
OFFICERS AND KEY EMPLOYEES

      

      THIS
RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of ____________, is
entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware
corporation (the “Company”), and ____________
(“Grantee”).  Capitalized terms used herein but not defined shall have
the meanings assigned to those terms in the Company’s 2002 Stock Option and
Incentive Plan (the “Plan”)

      

      W
I T N E S S E T H:

      

      A.            Grantee
is ____________ an employee of the Company or a Subsidiary of the Company;
and

      

      B.          
  The execution of this Agreement in the form hereof has been
authorized by the Compensation and Option Committee of the Board (the
“Committee”);

      

      NOW,
THEREFORE, in consideration of these premises and the covenants and agreements
set forth in this Agreement, the Company and Grantee agree as
follows:

      

      
        	
                1.

              	
                Grant of Restricted Share
      Units.  Subject to and upon the terms, conditions, and
      restrictions set forth in this Agreement and in the Plan, the Company
      hereby grants to the Grantee, ____________ Restricted Share Units, (the
      “Grant”).  Each Restricted Share Unit shall represent the right
      to receive one share of the Company’s common stock, par value $0.01 per
      share (“Common Stock”).  This Agreement constitutes an “Evidence
      of Award” under the Plan.

              

      

      

      
        	
                2.

              	
                Date of
      Grant.  The effective date of the grant of the Restricted
      Share Units is ____________ (the “Date of
  Grant”).

              

      

      

      
        	
                3.

              	
                Restrictions on Transfer of
      Restricted Share Units.  Neither the Restricted Share
      Units granted hereby nor any interest therein shall be transferable other
      than by will or the laws of descent and
  distribution.

              

      

      

      
        	
                4.

              	
                Vesting of Restricted Share
      Units.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Except
      as otherwise provided in this Agreement, the number of Restricted Share
      Units that shall become nonforfeitable (“Earned RSUs”) on the third
      anniversary of the Date of Grant shall be the number of Restricted Share
      Units indicated in Section 1 above, subject to adjustment based upon the
      Company’s achievement of the performance goals as described on Exhibit A, over
      the three-year period beginning on July 1, 2008 and ending on June 30,
      2011.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (b)

              	
                Notwithstanding
      the provisions of Section 4(a) above, all Restricted Share Units shall
      become immediately nonforfeitable upon the occurrence of a Change in
      Control (as defined below).  A “Change in Control” means the
      occurrence, before this Agreement terminates, of any of the following
      events:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                the
      acquisition by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
      the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
      more of the combined voting power of the then outstanding securities of
      the Company entitled to vote generally in the election of directors (the
      “Voting Shares”); provided, however, that for purposes of this Section
      4(b)(i), the following acquisitions shall not constitute a Change in
      Control:  (A) any issuance of Voting Shares directly from the
      Company that is approved by the Incumbent Board (as defined in Section
      4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of
      Voting Shares, (C) any acquisition of Voting Shares by any employee
      benefit plan (or related trust) sponsored or maintained by the Company or
      any Subsidiary or (D) any acquisition of Voting Shares by any Person
      pursuant to a Business Combination that complies with clauses (A), (B) and
      (C) of Section 4(b)(iii) below;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                individuals
      who, as of the date hereof, constitute the Board (the “Incumbent Board”)
      cease for any reason to constitute at least a majority of the Board;
      provided, however, that any individual becoming a Director after the date
      hereof whose election, or nomination for election by the Company’s
      stockholders, was approved by a vote of at least two-thirds of the
      Directors then constituting the Incumbent Board (either by a specific vote
      or by approval of the proxy statement of the Company in which such person
      is named as a nominee for director, without objection to such nomination)
      shall be deemed to have been a member of the Incumbent Board, but
      excluding, for this purpose, any such individual whose initial assumption
      of office occurs as a result of an actual or threatened election contest
      (within the meaning of Rule 14a-12 of the Exchange Act) with respect to
      the election or removal of Directors or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the Board;

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                consummation
      of a reorganization, merger or consolidation, a sale or other disposition
      of all or substantially all of the assets of the Company or other
      transaction (each, a “Business Combination”), unless, in each case,
      immediately following the Business Combination, (A) all or substantially
      all of the individuals and entities who were the beneficial owners of
      Voting Shares immediately prior to the Business Combination beneficially
      own, directly or indirectly, more than 50% of the combined voting power of
      the then outstanding Voting Shares of the entity resulting from the
      Business Combination (including, without limitation, an entity which as a
      result of such transaction owns the Company or all or substantially all of
      the Company’s assets either directly or through one or more subsidiaries),
      (B) no Person (other than the Company, such entity resulting from the
      Business Combination, or any employee benefit plan (or related trust)
      sponsored or maintained by the Company, any Subsidiary or such entity
      resulting from the Business Combination) beneficially owns, directly or
      indirectly, 25% or more of the combined voting power of the then
      outstanding Voting Shares of the entity resulting from the Business
      Combination and (C) at least a majority of the members of the board of
      directors of the entity resulting from the Business Combination were
      members of the Incumbent Board at the time of the execution of the initial
      agreement or of the action of the Board providing for the Business
      Combination; or

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (iv)

              	
                approval
      by the stockholders of the Company of a complete liquidation or
      dissolution of the Company, except pursuant to a Business Combination that
      complies with clauses (A), (B) and (C) of Section 4(b)(iii)
      hereof.

              

      

      

      
        	
                5.

              	
                Forfeiture of Restricted Share
      Units.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Except
      as otherwise described in this Section 5, any of the Restricted Share
      Units that remain forfeitable in accordance with Section 4 hereof shall be
      forfeited if Grantee ceases for any reason to be employed by the Company
      or a Subsidiary at any time prior to such shares becoming nonforfeitable
      in accordance with Section 4 hereof, unless the Committee determines to
      provide otherwise at the time of the cessation of Grantee’s
      employment.   For the purposes of this Agreement, the
      Grantee’s employment with the Company or a Subsidiary shall not be deemed
      to have been interrupted, and Grantee shall not be deemed to have ceased
      to be an employee of the Company or a Subsidiary, by reason of (i) the
      transfer of Grantee’s employment among the Company and its Subsidiaries,
      (ii) an approved leave of absence of not more than 90 days, or (iii) the
      period of any leave of absence required to be granted by the Company under
      any law, rule, regulation or contract applicable to Grantee’s employment
      with the Company or any Subsidiary.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Any
      of the Restricted Share Units that remain forfeitable in accordance with
      Section 4 shall be forfeited on the date that the Committee determines
      that such Restricted Share Unites shall be forfeited under the
      circumstances described in Section 17(g) of the
  Plan.

              

      

      

      
        	
                6.

              	
                Payment of Restricted Share
      Units.  At such time as the Restricted Share Units shall
      become nonforfeitable as specified in this Agreement, shares of Common
      Stock underlying such Restricted Share Units shall be transferred to the
      Grantee, except as otherwise provided in Section 8[; provided, however,
      that the Committee, in its sole discretion, may settle the award of
      Restricted Share Units wholly, or partly in
  cash].

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                7.

              	
                Dividend, Voting and Other
      Rights.  The Grantee shall have no rights of ownership in
      the Restricted Share Units and shall have no voting rights with respect to
      such Restricted Share Units until the date on which the shares of Common
      Stock are transferred to the Grantee pursuant to Section 6 above and a
      stock certificate representing such shares of Common Stock is issued to
      the Grantee.  From and after the Date of Grant and until the
      earlier of (a) the time when the Grantee receives the shares of Common
      Stock underlying the Restricted Share Units in accordance with Section 6
      hereof or (b) the time when the Grantee’s right to receive the Restricted
      Share Units is forfeited in accordance with Section 5 hereof, the Company
      shall not pay to the Grantee any dividends with respect to the Restricted
      Share Units.

              

      

      

      
        	
                8.

              	
                Retention of Common Stock by
      the Company.  The shares of Common Stock underlying the
      Restricted Share Units shall be released to the Grantee by the Company’s
      transfer agent at the direction of the Company.  At such time as
      the Restricted Share Units become nonforfeitable as specified in this
      Agreement, the Company shall direct the transfer agent to forward all such
      nonforfeitable shares of Common Stock to the Grantee except in the event
      that the Grantee has notified the Company of his or her election to
      satisfy any tax obligations by surrender of a portion of such shares, the
      transfer agent will be directed to forward the remaining balance of shares
      after the amount necessary for such taxes has been
    deducted.

              

      

      

      
        	
                9.

              	
                Compliance with
      Law.  The Company shall make reasonable efforts to comply
      with all applicable federal and state securities laws; provided, however,
      notwithstanding any other provision of this Agreement, the Company shall
      not be obligated to issue any shares of Common Stock or other securities
      pursuant to this Agreement if the issuance thereof would, in the
      reasonable opinion of the Company, result in a violation of any such
      law.

              

      

      

      
        	
                10.

              	
                Compliance with Section 409A of
      the Code.  To the extent applicable, it is intended that
      this Agreement and the Plan comply with the provisions of Section 409A of
      the Code, so that the income inclusion provisions of Section 409A(a)(1) do
      not apply to Grantee.  This Agreement and the Plan shall be
      administered in a manner consistent with this
  intent.

              

      

      

      
        	
                11.

              	
                Relation to Other
      Benefits.  Any economic or other benefit to the Grantee
      under this Agreement shall not be taken into account in determining any
      benefits to which the Grantee may be
entitled.

              

      

      

      
        	
                12.

              	
                Relation to
      Plan.  This Agreement is subject to the terms and
      conditions of the Plan.  In the event of any inconsistent
      provisions between this Agreement and the Plan, the Plan shall
      govern.  Capitalized terms used herein without definition shall
      have the meanings assigned to them in the Plan.  The Committee,
      acting pursuant to the Plan shall, except as expressly provided otherwise
      herein, have the right to determine any questions which arise in
      connection with this grant.

              

      

      

      
        	
                13.

              	
                Employment
      Rights.  This Agreement shall not confer on Grantee any
      right with respect to the continuance of employment or other services with
      the Company or any Subsidiary.  No provision of this Agreement
      shall limit in any way whatsoever any right that the Company or a
      Subsidiary may otherwise have to terminate the employment of Grantee at
      any time.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                14.

              	
                Communications.  All
      notices, demands and other communications required or permitted hereunder
      or designated to be given with respect to the rights or interests covered
      by this Agreement shall be deemed to have been properly given or delivered
      when delivered personally or sent by certified or registered mail, return
      receipt requested, U.S. mail or reputable overnight carrier, with full
      postage prepaid and addressed to the parties as
  follows:

              

      

      

      
        	
              	
                If
      to the Company, at:

              	
                400
      Atlantic Blvd., 15th
      Floor

              

      

      Stamford,
CT  06901

      Attention:  Vice
President-Financial Operations

      

      
        	
                 
      

              	
                If
      to Grantee, at:

              	
                Grantee’s
      address provided by Grantee on the last page
  hereof

              

      

      

      Either
the Company or Grantee may change the above designated address by written notice
to the other specifying such new address.

      

      
        	
                15.

              	
                Interpretation.  The
      interpretation and construction of this Agreement by the Committee shall
      be final and conclusive.  No member of the Committee shall be
      liable for any such action or determination made in good
      faith.

              

      

      

      
        	
                16.

              	
                Amendment in
      Writing.  This Agreement may be amended as provided in
      the Plan; provided, however, that all such amendments shall be in
      writing.

              

      

      

      
        	
                17.

              	
                Integration.  The
      Restricted Share Units are granted pursuant to the
      Plan.  Notwithstanding anything in this Agreement to the
      contrary, this Agreement is subject to all of the terms and conditions of
      the Plan, a copy of which is available upon request and which is
      incorporated herein by reference.  As such, this Agreement and
      the Plan embody the entire agreement and understanding of the Company and
      Grantee and supersede any prior understandings or agreements, whether
      written or oral, with respect to the Restricted Share
    Units.

              

      

      

      
        	
                18.

              	
                Severance.  In
      the event that one or more of the provisions of this Agreement shall be
      invalidated for any reason by a court of competent jurisdiction, any
      provision so invalidated shall be deemed to be separable from the other
      provisions hereof and the remaining provisions hereof shall continue to be
      valid and fully enforceable.

              

      

      

      
        	
                19.

              	
                Governing
      Law.  This Agreement is made under, and shall be
      construed in accordance with, the laws of the State of
      Delaware.

              

      

      

      
        	
                20.

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

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, this Agreement is executed by a duly authorized representative
of the Company on the day and year first above written.

      

      
        
          
            
              
                
                  	 
      	
                          HARMAN
      INTERNATIONAL INDUSTRIES,

                        
	 
      	
                          INCORPORATED

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	 
      	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      

                

              

            

          

        

      

      

      The
undersigned Grantee acknowledges receipt of an executed original of this
Agreement and accepts the Restricted Share Units subject to the applicable terms
and conditions of the Plan and the terms and conditions hereinabove set
forth.

      

      
        
          
            	
                    Date:

                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                    Grantee

                  	 
      

          

        

      

      

      GRANTEE:           Please
complete/update the following information.

      
        
          	
                  Name:

                	 
      	 
      
	 
      	 
      	 
      
	
                  Home
      Address:

                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  Social
      Security Number:

                	 
      	 
      
	 
      	 
      	 
      
	
                  Date
      of Hire:

                	 
      	 
      

        

      

      

      Subsidiary
or
Division:           ______

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      Performance
Goals

      

      Upon
vesting, the number of Earned RSUs shall be determined as follows:

      

      (a) Operating
Income.  Of the Restricted Share Units subject to the Grant
(the “Grant RSUs”), 50% will be subject to adjustment based on the Company’s
operating income for fiscal 2011 (the “Operating Income”), as reported in the
Company’s audited financial statements included in the Company’s Annual Report
on Form 10-K.  The performance target for Operating Income is
$478,050,000 (the “Target Operating Income”).  None of the Grant RSUs
subject to adjustment based on Operating Income will be payable if Operating
Income is below $223,388,250 (the “Threshold Operating Income”), which
represents 25% of the difference between the Target Operating Income and the
Company’s fiscal 2008 operating income.  The number of Earned RSUs
based on Operating Income shall be determined as follows:

      

      (i) if
Operating Income is below the Threshold Operating Income, 50% of the Grant RSUs
will be cancelled;

      

      (ii) if
Operating Income is at the Threshold Operating Income, the Earned RSUs shall
include 12.5% of the Grant RSUs;

      

      (iii) if
Operating Income is at or above Target Operating Income, the Earned RSUs shall
include 50% of the Grant RSUs; and

      

      (iv) if
Operating Income is above the Threshold Operating Income and below the Target
Operating Income, the Earned RSUs shall include a number of the Grant RSUs to be
determined by straight-line interpolation between 12.5% and 50% of the Grant
RSUs based on the Operating Income relative to the Threshold Operating Income
and the Target Operating Income.

      

      (b) Global Footprint
Index.  Of the Grant RSUs, 50% will be subject to adjustment
based on an index equal to the sum of (1) the percentage of the Company’s
capital expenditures for fiscal 2011 in lower cost countries, (2) the percentage
of the Company’s sourcing in lower cost countries in fiscal 2011 and (3) the
percentage of the Company’s employees in lower cost countries in fiscal 2011
(the “Global Footprint Index”).  The performance target for the Global
Footprint Index is 152% (the “Target Footprint Index”).  None of the
Grant RSUs subject to adjustment based on the Global Footprint Index will be
payable if the Global Footprint Index is below 96.5% (the “Threshold Footprint
Index”), which represents 25% of the difference between the Target Footprint
Index and an index for fiscal 2008 calculated in the same manner.  The
number of Earned RSUs based on Global Footprint Index shall be determined as
follows:

      

      (i) if
the Global Footprint Index is below the Threshold Footprint Index, 50% of the
Grant RSUs will be cancelled;

      

      (ii) if
the Global Footprint Index is at the Threshold Footprint Index, the Earned RSUs
shall include 12.5% of the Grant RSUs;

      

      (iii) if
the Global Footprint Index is at or above the Target Footprint Index, the Earned
RSUs shall include 50% of the Grant RSUs; and

      

      (iv) if
the Global Footprint Index is above the Threshold Footprint Index and below the
Target Footprint Index, the Earned RSUs shall include a number of Grant RSUs to
be determined by straight-line interpolation between 12.5% and 50% of the Grant
RSUs based on the Global Footprint Index relative to the Threshold Footprint
Index and the Target Footprint Index.ex10_3.htm

    
      

    

    Exhibit
10.3

     

     

    Summary
of Equity Awards Granted to Mr. Paliwal and Mr. Parker

     

    In
September 2008, the Compensation and Option Committee (the “Committee”) of the
Board of Directors of Harman International Industries, Incorporated (the
“Company”) approved, among other things, long-term equity grants for the
Company’s executive officers, including Dinesh Paliwal, the Company’s Chairman
and Chief Executive Officer.  The grants to Mr. Paliwal included a
total of 72,748 stock options and 78,757 restricted stock units, all under the
Company’s 2002 Stock Option and Incentive Plan (the “Incentive Plan”).1  The stock options
vest ratably over three years, subject to Mr. Paliwal’s continued employment
with the Company, and have an exercise price equal to the market price of the
Company’s common stock on the date of grant.  For each restricted
stock unit, Mr. Paliwal is entitled to one share of the Company’s common
stock.  The restricted stock units vest three years from the date of
grant, subject to Mr. Paliwal’s continued employment with the
Company.  Mr. Paliwal’s letter agreement, which entitles him to
receive these annual equity awards, provides for award agreements with
provisions that are inconsistent with the applicable award agreements under the
Incentive Plan and previously approved by the Committee.  As a result,
at its next meeting in December 2008, the Committee intends to approve new award
agreements under the Incentive Plan for these awards, consistent with the terms
described above and the terms provided for in Mr. Paliwal’s letter
agreement.

     

    In
September 2008, the Committee also approved a one-time grant to Mr. Parker of
28,344 restricted stock units outside of the Incentive Plan.  For each
restricted stock unit, Mr. Parker will be entitled to receive one share of the
Company’s common stock.  Of the 28,344 restricted stock units, 23,595
vest on February 2, 2009 and 4,749 vest on May 13, 2010, subject to Mr. Parker’s
continued employment with the Company.  At its next meeting in
December 2008, the Committee intends to approve an award agreement that will set
forth the terms of Mr. Parker’s award, consistent with those described
above.

     

     

    ___________________________

    1 Of the
78,757 restricted stock units, 28,757 are subject to stockholder approval of
amendments to the Incentive Plan, as set forth in the Company’s proxy statement
mailed to stockholders on or about October 22, 2008.

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