HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED RESTRICTED STOCK AGREEMENT
Exhibit 10.6
Exhibit D
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”), dated as of July 1, 2007, is
entered into between XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (the
“Company”), and Xxxxxx Xxxxxxx (“Grantee”).
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 Shares. The Company hereby grants to Grantee 16,004 shares
(the “Restricted Shares”) of the Company’s common stock, par value $0.01 per share
(“Common Shares”), (the “Grant”). The Restricted Shares shall be fully paid and
nonassessable and shall be represented by a certificate or certificates registered in the name of
Grantee. Certificates evidencing Restricted Shares, and any certificates for Common Shares issued
as dividends on, in exchange of, or as replacements for, certificates evidencing Restricted Shares,
shall bear legends referring to the restrictions set forth herein and any other restrictive legends
as the Company’s counsel may deem necessary or advisable.
2. Inducement Grant. The Restricted Shares covered by this Grant are granted as an
inducement grant, not under any stock incentive plan adopted by the Company. Notwithstanding, this
Agreement shall be construed as if such Restricted Shares had been granted under the Company’s 2002
Stock Option and Incentive Plan (the “Plan”) in accordance and consistent with, and subject to, the
provisions of the Plan (the provisions of which are incorporated herein by reference) and, except
as otherwise expressly set forth herein, except for any limitations therein that are inconsistent
with this grant. Capitalized terms used herein but not defined shall have the meanings assigned to
those terms in the Plan.
3. Date of Grant. The effective date of the grant of the Restricted Shares is July 1,
2007.
4. Restrictions on Transfer. The Restricted Shares may not be transferred, sold,
pledged, exchanged, assigned or otherwise encumbered or disposed of by Grantee unless and until
they have become nonrestricted and nonforfeitable in accordance with Section 5 hereof; provided,
however, that Grantee’s interest in the Restricted Shares may be transferred by will or the laws of
descent and distribution. Any purported transfer, encumbrance or other disposition of the
Restricted Shares that is in violation of this Section 4 shall be null and void, and the other
party to any such purported transaction shall not obtain any rights to or interest in the
Restricted Shares.
5. Lapse of Restrictions.
(a) The Restricted Shares shall become nonrestricted and nonforfeitable as follows, unless
earlier forfeited in accordance with Section 6:
(i) 5,169 shares shall become nonrestricted and nonforfeitable on March 1, 2008;
(ii) 5,418 shares shall become nonrestricted and nonforfeitable on March 1, 2009;
(iii) 5,417 shares shall become nonrestricted and nonforfeitable on March 1, 2010.
(b) Notwithstanding the provisions of Section 5(a) above, all Restricted Shares shall become
immediately nonrestricted and 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 5(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 5(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 5(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
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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 5(b)(iii) hereof.
(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 Xxxxxx
International Industries, Incorporated, dated as of April 26, 2007, shall not constitute a
Change in Control for purposes of this Agreement.
6. Forfeiture of Restricted Shares.
(a) Any of the Restricted Shares that remain forfeitable in accordance with Section 5 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 5 hereof,
unless the Committee determines to provide otherwise at the time of the cessation of Grantee’s
employment; provided, however, that if the Grantee is terminated by the Company without Cause or
terminates for Good Reason (each as defined in the Letter Agreement between Grantee and the
Company, dated as of May 8, 2007 (the “Letter Agreement”)), all of the Restricted Shares shall
become nonrestricted and nonforfeitable immediately. 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, (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
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with the Company or any Subsidiary, or (iv) while Executive is incapacitated and his
employment has not been terminated for Disability.
(b) Any of the Restricted Shares that remain forfeitable in accordance with Section 4 shall be
forfeited on the date that the Committee determines that such Restricted Shares shall be forfeited
under the circumstances described in Section 17(g) of the Plan.
(c) In the event of a forfeiture, the certificate(s) representing Restricted Shares that have
been forfeited shall be cancelled.
7. Dividend, Voting and Other Rights. Grantee shall have all of the rights of a
stockholder with respect to the Restricted Shares, including the right to vote the Restricted
Shares and receive any dividends that may be paid thereon; provided, however, that any additional
Common Shares, other equity or debt securities or other consideration, including cash, that Grantee
may become entitled to receive pursuant to a share dividend or a merger or reorganization or any
other change in the capital structure of the Company shall be subject to the same restrictions as
the Restricted Shares.
8. Compliance with Law. The Company shall make reasonable efforts to comply with all
applicable federal or state securities laws; provided, however, that notwithstanding any other
provision of this Agreement, the Company shall not be obligated to issue any restricted or
nonrestricted Common Shares or other securities pursuant to this Agreement if the issuance thereof
would result in a violation of any such laws.
9. 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.
10. 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: | 0000 Xxxxxxxxxxxx Xxxxxx, X.X. | |||
| Xxxxx 0000 | ||||
| Xxxxxxxxxx, X.X. 00000 | ||||
| Attention: Vice President-Financial Operations | ||||
| If to Grantee, at: | Grantee’s address on the books of the Company |
Either the Company or Grantee may change the above designated address by written notice to the
other specifying such new address.
11. Interpretation. The interpretation and construction of this Agreement by the
Committee shall be final and conclusive; provided, however, that the definitions of Cause, Good
Reason, and Disability and any other provision covered in the Letter Agreement or the Severance
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Agreement
between the Company and the Grantee dated as of May 8, 2007 (the “Severance
Agreement”) shall be interpreted in a manner set forth in the Letter Agreement or the Severance
Agreement, as applicable. No member of the Committee shall be liable for any such action or
determination made in good faith.
12. Amendment in Writing. This Agreement may be amended as provided in the Plan;
provided, however, that all such amendments shall be in writing.
13. Integration. This Agreement, the Letter Agreement and the Severance Agreement
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 Shares.
14. 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.
15. Withholding. The Grantee may reduce the Restricted Shares that have become
nonforfeitable in order to cover minimum required tax withholding.
16. Governing Law. This Agreement is made under, and shall be construed in accordance
with, the laws of the State of Delaware.
17. 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.
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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the
Company on the day and year first above written.
| XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
The undersigned Grantee acknowledges
receipt of an executed original of
this Agreement and accepts the
Restricted Shares subject to the terms
and conditions hereinabove set forth.
Date: |
||||||
| Grantee |
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