Exhibit 10.1
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE
PLAN
NONQUALIFIED PERFORMANCE STOCK OPTION AGREEMENT
FOR OFFICERS AND KEY EMPLOYEES
THIS
NONQUALIFIED PERFORMANCE STOCK OPTION AGREEMENT (this
"Agreement"), dated as of ___________, is entered into between
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware
corporation (the "Company"), and ____________________
("Optionee"). Capitalized terms used herein but not
defined shall have the meanings assigned to those terms in the
Company's Amended and Restated 2002 Stock Option and Incentive
Plan (the "Plan").
W
I T N E S S E T H:
A. Optionee
is an employee of the Company or a Subsidiary of the Company;
and
B. The
material terms and conditions set forth in this Agreement have
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 Optionee agree as follows:
1.
Grant of Option. The Company hereby grants to
Optionee, effective as of the Date of Grant (as defined in Section
3), an option (the "Option") to purchase ___ shares (the "Option
Shares") of the Company's common stock, par value $0.01 per share
("Common Shares"), at the price of $_________ per share (the
"Option Price"). This Agreement constitutes an
“Evidence of Award” under the Plan.
2.
Type of Option . The Option is intended to be a
nonqualified stock option and shall not be treated as an "incentive
stock option" within the meaning of Section 422 of the
Code.
3.
Date
of Grant. The effective date of the grant
of this Option is ___________ (the “Date of
Grant”).
4.
Date
of Expiration. This Option shall expire on
the ______ anniversary of the Date of Grant (the “Date
of Expiration”), unless earlier terminated under Section
7(a).
5.
Vesting of
Option .
(a)
Except
as otherwise provided in this Agreement, the number of Option
Shares that you will be entitled to purchase (the
“Earned Option Shares”) shall be the number of
shares indicated in Section 1 above, subject to adjustment
based upon the Company’s total stockholder return (the
“Company TSR”) compared to the total stockholder
return of the Company’s peers (“Peer TSR”)
over the three (3) year period beginning on the Date of Grant
and ending on the third anniversary of the Date of Grant (the
“Performance Period”). The peer group shall be
comprised of specific companies as designated by the
Compensation Committee, in its sole discretion with respect
to the Performance Period, subject to adjustment pursuant to
Section 11 (the “Peer Group”). For purposes of
calculating the Company TSR and the Peer TSR, the applicable
beginning and ending stock prices for the Company and each
member of the Peer Group shall be determined by calculating
the average of the per share closing prices, adjusted for
splits, of the Company’s Common Stock and the common
stock of each member of the Peer Group as reported by the
applicable exchange markets for the 20 trading days ending on
___________ for the beginning prices and the 20 trading days
ending on ___________ for the ending prices, each rounded to
the fourth decimal point. At the conclusion of the
Performance Period, the Company’s TSR will be compared
to the Peer TSRs, and the Earned Option Shares will be
determined as follows:
(i)
If the
Company’s TSR over the Performance Period is negative,
the Option shall be cancelled.
(ii) If
the Company's TSR is below the 50th percentile of the Peer
TSRs, the Option shall be cancelled.
(iii) If
the Company’s TSR ranks at the 50th percentile of the
Peer TSRs, the Earned Option Shares shall be equal to 33% of
the Option Shares.
(iv) If
the Company’s TSR ranks at or above the 75th percentile
of the Peer TSRs, the Earned Option Shares shall be equal to
100% of the Option Shares.
(v) If
the Company's TSR ranks above the 50th percentile company in
the Peer Group and below the 75th percentile company in the
Peer Group, the number of Option Shares shall be determined
by straight-line interpolation between 33% of the Option
Shares and 100% of the Option Shares based on the
Company’s TSR relative to the TSR of the 50th
percentile company in the Peer Group and the 75th percentile
company in the Peer Group.
(b) Notwithstanding
the provisions of Section 5(a) above, the Option shall become
immediately exercisable for the full number of Option Shares
upon the occurrence of a Change in Control (as defined below)
on or before the end of the Performance Period. A
"Change in Control" means the occurrence 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 3(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
3(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 3(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
resulti
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