Exhibit 10.6
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
AMENDED AND RESTATED 2002 STOCK
OPTION AND INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED
SHARE UNIT AGREEMENT
THIS RESTRICTED SHARE UNIT AGREEMENT
(this “Agreement”), dated as of September 1, 2009,
is entered into between HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED, a Delaware corporation (the “Company”),
and Dinesh Paliwal (“Grantee”). Capitalized terms used
herein but not defined shall have the meanings assigned to those
terms in the Company’s Amended and Restated 2002 Stock Option
and Incentive Plan, as amended (the “Plan”).
W I T N E S S E T
H:
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A.
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Grantee is an
employee of the Company or a Subsidiary of the Company;
and
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B.
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The execution
of this Agreement in the form hereof has been authorized by the
Compensation and Option Committee of the Board (the
“Committee”).
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NOW, THEREFORE, in consideration of
these premises and the covenants and agreements set forth in this
Agreement, the Company and Grantee agree as follows:
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1.
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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 163,934 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.
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2.
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Date of
Grant . The effective
date of the Grant is September 1, 2009 (the “Date of
Grant”).
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3.
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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.
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4.
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Vesting of
Restricted Share Units .
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(a)
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Except as
otherwise provided in this Agreement, a number of Restricted Share
Units equal to the Performance-Earned Units (determined in
accordance with Exhibit A) shall become nonforfeitable on the third
anniversary of the Date of Grant (the “Vesting Date”),
unless earlier forfeited in accordance with
Section 5.
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(b)
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Notwithstanding the provisions of
Section 4(a) above, (i) if a Change in Control occurs
prior to June 30, 2012, 60% of the Restricted Share Units plus
a pro-rata portion of the remaining 40% of the Restricted Share
Units, with such pro-ration based on a fraction, the numerator of
which is the number of days from the Date
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of Grant through the date of such
Change in Control, and the denominator of which is 1095, to the
extent not previously forfeited, shall become immediately
nonforfeitable upon the occurrence of a Change in Control (as
defined below and (ii) if a Change in Control occurs on or
subsequent to June 30, 2012, the number of Restricted Share
Units that become nonforfeitable upon such Change in Control shall
instead be the number of Performance-Earned Units (determined in
accordance with Exhibit A). A “Change in Control” means
the occurrence, while the Grantee remains employed by the Company
or a Subsidiary, of any of the following events:
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(i)
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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;
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(ii)
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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;
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(iii)
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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,
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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
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(iv)
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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.
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5.
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Forfeiture
of Restricted Share Units .
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(a)
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Except as otherwise described in
this Section 5, any of the Restricted Share Units that remain
forfeitable in accordance with Section 4 hereof shall be
forfeited if Grantee ceases for any reason to be employed by the
Company or a Subsidiary at any time prior to such units becoming
nonforfeitable in accordance with Section 4 hereof, unless the
Committee determines to provide otherwise at the time of the
cessation of the Grantee’s employment; provided ,
however , that (i) if the Grantee’s employment
terminates (a “Qualifying Termination”) on account of
his death or Disability, or if his employment is terminated by the
Company without Cause or by the Grantee for Good Reason (each term
as defined in the letter agreement between Grantee and the Company,
dated as of May 8, 2007, as amended on November 27,
2007, December 26, 2008 and September 1, 2009 (the
“Letter Agreement”)) on or prior to the date that is
six months after the date of grant, a number of Restricted Share
Units equal to 50% of the number of Performance Earned Units
determined in accordance with Exhibit A shall become fully
nonforfeitable, and (ii) if the Grantee’s employment
terminates under circumstances constituting a Qualifying
Termination following the date that is six months after the Date of
Grant, a number of Restricted Share Units equal to 100% of the
number of Performance Earned Units determined in accordance with
Exhibit A shall become fully nonforfeitable, in either case, as of
the date of determination of the number of Performance Earned Units
and subject to Section 5(c) below. 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
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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.
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(b)
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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 Units shall be forfeited
under the circumstances described in Section 17(g) of the
Plan.
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(c)
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Prior to the
occurrence of a Change in Control, the Committee may, at any time
between the determination of the Performance-Earned Amount and the
Vesting Date, exercise negative discretion to reduce the
Performance-Earned Amount, but only based on a determination by the
Committee in good faith that the Performance-Earned Amount
calculated pursuant to Exhibit A was inflated by excessive risk
taking or other manipulative conduct by the Grantee or other
members of the Company’s management team intended to increase
the Performance-Earned Amount.
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(d)
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Upon the final
determination of Performance-Earned Amount contemplated by Exhibit
A, all Restricted Share Units that are (as a result of such
determination) no longer capable of becoming nonforfeitable shall
be immediately forfeited.
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6.
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Payment of
Restricted Share Units .
Subject to Section 10, the shares of Common Stock underlying
any Restricted Share Units that become non-forfeitable as specified
in this Agreement shall be transferred to the Grantee on the
earlier of (i) January 18, 2013, or (ii) a Change in
Co
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