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Employment Agreement - Harman International Industries Inc. and VP of HR and Chief Human Resources Officer

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January 11, 2008

* * * * *

Dear * * * * *:
On behalf of Harman International Industries, Incorporated (“Harman”), I submit an offer for the position of VP of HR and Chief Human Resources Officer.  In this capacity you will report directly to me and be a member of the Harman Executive Committee.  You will be located at our Stamford, Connecticut office.  This offer provides the following:
Start Date:  Your start date will be March 3, 2008 or an earlier date should your employment with your current employer be terminated before February 29, 2008.
Base Salary:  Annualized base salary will be $360,000 subject to review on September 1, 2008, and payable in accordance with our regular payroll schedule in Stamford, CT.
Signing Bonus:  Within five business days after your start date, you will be paid a cash lump sum signing bonus in an aggregate amount of $100,000.  You will be paid a second cash lump sum signing bonus in an aggregate amount of $45,000 on the first anniversary of your start date, if you are employed by Harman on that date.
Bonus:  You will be eligible to participate in the Management Incentive Compensation program with a target bonus opportunity equal to 55% of your base salary and an 82.5% maximum.  This bonus program is based upon Harman’s achievement of its business plan, as well as your achievement of personal performance goals.   For the current fiscal year ending June 30, 2008, the annual bonus shall be guaranteed at the target level of 55%, prorated for the period of employment (i.e., a minimum of $66,000).
Stock Options:  Subject to the approval of the Compensation and Option Committee of the Board of Directors, you will receive a one-time stock option award of 25,000 shares of Harman common stock under the terms of Harman’s 2002 Stock Option and Incentive Plan (“Plan”) at a per share exercise price equal to the fair market value as of your start date.  The option will vest 20% per year over five years commencing on the first anniversary of the grant date, with acceleration and other provisions as provided in the Plan and your option agreement.  You will also be eligible for a stock option grant at the next general grant, at a level commensurate with your position.
Restricted Stock:  Subject to the approval of the Compensation and Option Committee of the Board of Directors, you will receive a one-time award of 5,500 shares of restricted Harman common stock under the Plan, vesting on April 1, 2011, if you are employed by Harman on that date.
Severance:  If your employment is terminated by Harman without “Cause” within the first year of employment, you will receive one year of salary continuation and company-paid COBRA benefits during the salary continuation period.  Subject to the approval of the Compensation and Option Committee of the Board of Directors, your initial stock option grant and restricted stock award will vest upon such termination and you would have ninety (90) days thereafter within which you may exercise, in accordance with the terms of the Plan, those stock options that are vested as of the Termination Date.    “Cause” is defined in Exhibit A attached hereto.  Such payments will be subject to the execution by you of a release in substantially the form attached hereto as Exhibit B.  Harman will furnish you with the release promptly after your termination of employment.  Your salary continuation payments will commence on the 60th day after your termination of employment; provided, however, that if on the due date for any salary continuation payment, all revocation periods have not then expired with respect to your release, such payment will be forfeited.



* * * * *
January 11, 2008
Page 2
Company Car:  You will have use of a company-leased automobile with a value of $48,000 not including tax.  Harman will bear the car expenses (i.e., gasoline, insurance, car tax, repairs) associated with the business use of the company car.  You may use the company car for private purposes, however taxes imposed with respect to private usage will be borne by you.
Vacation:  You will be eligible for accrual of four (4) weeks of vacation annually, pro-rated for 2008 based on your start date.
Other Benefits:  Additional benefits, as defined by Company policy and governing plan documents, currently include medical, dental, vision, life insurance, short and long-term disability insurance, tuition reimbursement, 401(k) Retirement Savings Plan and all Company-paid holidays.   Eligibility to participate in these benefits commences thirty (30) days after your date of hire, except for the 401(k) plan under which participation is available on the first plan enrollment date following 180 days of employment.
Section 409A: For purposes of Section 409A of the Internal Revenue Code, each salary continuation payment will be considered one of a series of separate payments.  If at the time of your separation from service (within the meaning of Section 409A), (i) you are a specified employee (within the meaning of Section 409A and using the identification methodology selected by Harman from time to time) and (ii) Harman makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then Harman will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the first business day after such six-month period, subject to the release requirements noted above.
The Company will, in connection with your employment, withhold from any compensation and benefits payable to you all federal, state, city or other taxes as requested by you or that the Company is required to withhold pursuant to any law or government regulation or ruling.
Harman is not hereby offering you lifetime employment or employment for a fixed or implied period of time.  Either you or Harman may terminate your employment at any time, with or without cause or notice.  The at-will nature of your employment relationship cannot be changed except in a written document signed by you and me.  Upon termination of your employment, Harman will have no further obligations to you except as provided under “Severance”.
Any dispute concerning termination of your employment shall be resolved by final and binding arbitration before a neutral arbitrator.  The arbitrator shall be selected by mutual agreement or in accordance with the procedures of the American Arbitration Association and the employment arbitration rules of the American Arbitration Association shall apply.  Such arbitration shall be conducted in Stamford, Connecticut or such other location as to which you and Harman agree.  The law of Connecticut, without regard to its choice of law rules, shall govern any such dispute, and the arbitrator shall not have authority to vary or alter the terms of this letter.
You will be expected to sign the Company’s standard form of Invention and Employee Secrecy Agreement (see copy attached) on your first day.
You acknowledge and agree that your acceptance of this offer will violate no agreements or arrangements with other individuals or entities, or duties to your current employer.  The effectiveness of this agreement is subject to successful completion of the background and previous employment investigation.  Please sign and return the original of this letter.  You should retain one copy of this letter for your files.
I look forward to working with you and welcome the contributions you will bring to this outstanding company.

/s/ Dinesh C. Paliwal
Dinesh C. Paliwal
President, CEO & Vice-Chairman



* * * * *
January 11, 2008
Page 3
I accept your offer of employment and agree to the provisions stated in this letter.   I acknowledge and agree that this letter constitutes the entire agreement between Harman and me and supersedes all prior verbal or written agreements, arrangements or understandings pertaining to my offer of employment.  I understand that I am employed at will and that my employment can be terminated at any time, with or without cause, at the option of either the Company or me.


/s/ * * * * *                                                         January 15, 2008
* * * * *                                                               Date

Cc:           S. Buchanan




* * * * *
January 11, 2008
Page 4

Exhibit A

Termination Definitions

“Cause” means:

You have been convicted of a felony:
You have engaged in conduct that constitutes willful gross neglect or willful gross misconduct with respect to your employment duties which results in material economic harm to Harman.

No act or omission on your part shall be considered “willful” unless it is done by you in bad faith and without reasonable belief that your action was in the best interests of Harman.