<PAGE>
As filed with the Securities and Exchange Commission on June 9, 1997
Registration No. 333-_____
==================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 11-2534306
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1101 Pennsylvania Avenue, N.W., Suite 1010,
Washington, D.C. 20004
(Address of principal executive offices including zip code)
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
DEFERRED COMPENSATION PLAN
(Full title of the plan)
Bernard A. Girod
President
1101 Pennsylvania Avenue, N.W., Suite 1010
Washington, D.C. 20004
(Name and address of agent for service)
(202) 393-1101
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================
TITLE OF PROPOSED PROPOSED AMOUNT OF
SECURITIES AMOUNT MAXIMUM MAXIMUM REGISTRATION
TO BE TO BE OFFERING PRICE AGGREGATE FEE
REGISTERED REGISTERED PER INTEREST OFFERING PRICE(1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Plan $4,000,000 100% $4,000,000 $1,212.12
Interests(2)
==========================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
<PAGE>
(2) The Plan Interests being registered are unsecured obligations of
Harman International Industries, Incorporated to pay deferred
compensation in the future in accordance with the terms of the Harman
International Industries, Incorporated Deferred Compensation Plan.
<PAGE>
PART II.
Item 3. Incorporation of Documents by Reference.
The following documents filed by Harman International Industries,
Incorporated (the "Company") with the Securities and Exchange
Commission are incorporated herein by reference:
(1) Annual Report on Form 10-K for the fiscal year ended
June 30, 1996, filed on September 13, 1996;
(2) Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1996, filed on November 7, 1996;
(3) Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1996, filed on February 7, 1997;
(4) Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997, filed on May 12, 1997;
(5) Current Report on Form 8-K filed on March 17, 1997; and
(6) Current Report on Form 8-K filed on April 3, 1997.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, prior to the filing of a post-effective amendment that indicates
that all securities offered have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that
a statement contained herein or in any other subsequently filed
document that also is incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration
Statement.
Item 6. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation (the "Certificate")
provides, as do the charters of many other publicly held companies, that
the personal liability of directors of the Company to the Company or its
stockholders for acts or omissions in the performance of their duties as
directors is eliminated to the maximum extent permitted by Delaware
law.
II-1
<PAGE>
These provisions of the Certificate protect the Company's directors
against personal liability for monetary damages resulting from breaches
of their fiduciary duty of care, except as set forth below. Under
Delaware law, absent these provisions, directors could be held liable for
gross negligence in the performance of their duty of care, but not for
simple negligence. The Certificate absolves directors of liability for
negligence in the performance of their duties, including gross
negligence. However, the Company's directors remain liable for
breaches of their duty of loyalty to the Company and its stockholders, as
well as for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law and transactions
from which a director derives an improper personal benefit. The
Certificate also does not absolve directors of liability under Section 174
of the Delaware General Corporation Law, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases
or redemptions in certain circumstances and expressly sets forth a
negligence standard with respect to such liability.
In addition, the Company's Bylaws provides that directors, officers,
employees and agents of the Company (or persons serving at the request
of the Company as a director, officer, employee or agent for another
entity) shall be indemnified, including provision for advancement of
expenses by the Company, to the full extent permitted by Delaware law.
Under Delaware law, directors, officers, employees, and other
individuals may be indemnified against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement in connection
with specified actions, suits, or proceedings, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the corporation - a "derivative action") if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was
unlawful. A similar standard of care is applicable in the case of a
derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such an action and Delaware law requires court approval
before there can be any indemnification of expenses where the person
seeking indemnification has been found liable to the Company.
II-2
<PAGE>
Item 8. Exhibits.
4 Harman International Industries, Incorporated
Deferred Compensation Plan
5 Opinion of Counsel
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5)
24 Power of Attorney (set forth at page II-6 of this
Registration Statement)
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to
this registration statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities
offered (if the total dollar value of securities
offered would not exceed that which was
registered) and any deviation from the low or
high end of the estimated maximum offering
range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in
the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
II-3
<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the registration statement is on Form S-3,
Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether
II-4
<PAGE>
such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Registration Statement on Form
S-8 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Northridge, State of California, on this 6th day of June, 1997.
HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
(Registrant)
/s/ Bernard A. Girod
--------------------------
By: Bernard A. Girod
President, Chief Operating
Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, the
Company, as administrator of the Harman International Industries,
Incorporated Deferred Compensation Plan, has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authored, in the City of Northridge, State of California,
on this 6th day of June, 1997.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED DEFERRED COMPENSATION
PLAN
(Plan)
/s/ Frank Meredith
-------------------------
By: Frank Meredith
Vice President - Finance and
Administration and Chief
Financial Officer
II-5
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each of the
directors and officers of the Company whose signatures are set forth
below hereby (1) constitutes and appoints Dr. Sidney Harman and Mr.
Bernard A. Girod, jointly and severally, as his or her agent and attorney-
in-fact with full power of substitution and resubstitution to (a) sign and
file on his or her behalf and in his or her name, place and stead in any
and all capacities any and all (i) amendments, including post-effective
amendments, to this Registration Statement and any and all exhibits
thereto and (ii) other documents to be filed with the Securities and
Exchange Commission with respect to the securities covered by this
Registration Statement and (b) do and perform any and all other lawful
acts and deeds whatsoever that may be necessary or required in the
premises and (2) ratifies and approves any and all lawful actions that
may be taken pursuant hereto by either or both of the above-named
agents and attorneys-in-fact or their substitutes.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date(s) indicated.
<TABLE>
<CAPTION>
Signature Title Date
------------ ------ ------
<S> <C> <C>
/s/ Sidney Harman
- ------------------------------ Chairman of the Board June 6, 1997
Sidney Harman and Chief Executive
Officer (Principal
Executive Officer)
/s/ Frank Meredith
- ------------------------------ Vice President - June 6, 1997
Frank Meredith Finance and Administration
and Chief Financial Officer
(Principal Accounting
Officer)
/s/ Bernard A. Girod
- ------------------------------ Director, President, June 6, 1997
Bernard A. Girod Chief Operating
Officer and Secretary
II-6
<PAGE>
/s/ Shirley M. Hufstedler
- ------------------------------ Director June 6, 1997
Shirley M. Hufstedler
/s/ Edward H. Meyer
- ------------------------------ Director June 6, 1997
Edward H. Meyer
/s/ Ann McLaughlin
- ------------------------------ Director June 6, 1997
Ann McLaughlin
II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
4 Harman International Industries, Incorporated
Deferred Compensation Plan
5 Opinion of Counsel
23.1 Consent of Independent Auditors
23.2 Consent of Counsel
(included in Exhibit 5)
24 Power of Attorney
(set forth at page II-6 of
this Registration Statement)
</TABLE>
<PAGE>
Exhibit 4
Harman International Industries, Inc.
Deferred Compensation Plan
Master Plan Document
Effective June 1, 1997
Copyright 1997
By Compensation Resource Group, Inc.
All Rights Reserved
<PAGE>
Harman International Industries, Inc.
Deferred Compensation Plan
TABLE OF CONTENTS
Page
Purpose 1
ARTICLE 1 Definitions 1
ARTICLE 2 Selection, Enrollment, Eligibility 6
2.1 Selection by Committee 6
2.2 Enrollment Requirements 7
2.3 Eligibility; Commencement of Participation 7
2.4 Termination of Participation and/or Deferrals 7
ARTICLE 3 Deferral Commitments/Rollover/Crediting/Taxes 7
3.1 Minimum Deferral 7
3.2 Maximum Deferral 8
3.3 Election to Defer; Effect of Election Form 8
3.4 Withholding of Annual Deferral Amounts 8
3.5 Annual Company Contribution Amount 9
3.6 Rollover Account 9
3.7 Investment of Trust Assets 9
3.8 Vesting 9
3.9 Crediting/Debiting of Account Balances 10
3.10 FICA, Withholding and Other Taxes 13
3.11 Distributions 13
ARTICLE 4 Short-Term Payout; Unforeseeable Financial
Emergencies; Withdrawal Election 13
4.1 Short-Term Payout 13
4.2 Other Benefits Take Precedence Over
Short-Term Payout 14
4.3 Withdrawal Payout/Suspensions for Unforeseeable
Financial Emergencies 14
4.4 Withdrawal Election 14
ARTICLE 5 Retirement Benefit 15
5.1 Retirement Benefit 15
5.2 Payment of Retirement Benefit 15
5.3 Death Prior to Completion of Retirement Benefit 15
<PAGE>
Harman International Industries, Inc.
Deferred Compensation Plan
ARTICLE 6 Pre-Retirement Survivor Benefit 15
6.1 Pre-Retirement Survivor Benefit 15
6.2 Payment of Pre-Retirement Survivor Benefit 15
ARTICLE 7 Termination Benefit 16
7.1 Termination Benefit 16
7.2 Payment of Termination Benefit 16
ARTICLE 8 Disability Waiver and Benefit 17
8.1 Disability Waiver 17
8.2 Continued Eligibility; Disability Benefit 17
ARTICLE 9 Beneficiary Designation 18
9.1 Beneficiary 18
9.2 Beneficiary Designation; Change; Spousal Consent 18
9.3 Acknowledgment 18
9.4 No Beneficiary Designation 18
9.5 Doubt as to Beneficiary 18
9.6 Discharge of Obligations 18
ARTICLE 10 Leave of Absence 19
10.1 Paid Leave of Absence 19
10.2 Unpaid Leave of Absence 19
ARTICLE 11 Termination, Amendment or Modification 19
11.1 Termination 19
11.2 Amendment 20
11.3 Plan Agreement 20
11.4 Effect of Payment 20
ARTICLE 12 Administration 21
12.1 Committee Duties 21
12.2 Agents 21
12.3 Binding Effect of Decisions 21
12.4 Indemnity of Committee 21
12.5 Employer Information 21
ARTICLE 13 Other Benefits and Agreements 21
13.1 Coordination with Other Benefits 21
<PAGE>
Harman International Industries, Inc.
Deferred Compensation Plan
ARTICLE 14 Claims Procedures 22
14.1 Presentation of Claim 22
14.2 Notification of Decision 22
14.3 Review of a Denied Claim 22
14.4 Decision on Review 23
14.5 Legal Action 23
ARTICLE 15 Trust 23
15.1 Establishment of the Trust 23
15.2 Interrelationship of the Plan and the Trust 23
15.3 Distributions From the Trust 23
ARTICLE 16 Miscellaneous 24
16.1 Status of Plan 24
16.2 Unsecured General Creditor 24
16.3 Employer's Liability 24
16.4 Nonassignability 24
16.5 Not a Contract of Employment 24
16.6 Furnishing Information 24
16.7 Terms 25
16.8 Captions 25
16.9 Governing Law 25
16.10 Notice 25
16.11 Successors 25
16.12 Spouse's Interest 25
16.13 Validity 25
16.14 Incompetent 26
16.15 Court Order 26
16.16 Distribution in the Event of Taxation 26
16.17 Insurance 26
16.18 Legal Fees To Enforce Rights After Change
in Control 27
HARMAN INTERNATIONAL INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
Effective June 1, 1997
Purpose
Effective September 1, 1993, Harman International Industries,
Incorporated, a Delaware corporation (the "Company"), established the
Harman International Industries, Inc. Executive Deferred Compensation
Plan (the "Plan"). The purpose of the Plan is to provide specified
benefits to a select group of management and highly compensated
employees who contribute materially to the continued growth,
development, and future business success of the Company and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded
for tax purposes and for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
The Plan is hereby amended and restated effective June 1, 1997 (the
"Restatement Date"). This amendment and restatement supersedes and
replaces all prior amendments and restatements of the Plan, and
amendments thereto. The provisions of the Plan as so amended and
restated shall apply to all Participants on or after the Restatement Date.
Except as provided herein, the rights and benefits of any former
employee who terminated prior to the Restatement Date shall be
determined under the Plan as in effect as of the such former employee's
date of termination.
ARTICLE 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following
indicated meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a
credit on the records of the Employer equal to the sum of (i) the
Deferral Account balance, (ii) the vested Company Contribution
Account balance and (iii) the Rollover Account balance. The Account
Balance, and each other specified account balance, shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a
Participant, or his or her designated Beneficiary, pursuant to this Plan.
1.2 "Annual Bonus" shall mean any management incentive bonus
award, which excludes stock options.
1.3 "Annual Company Contribution Amount" shall mean, for any one
Plan Year, the amount determined in accordance with Section 3.5.
1.4 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary and Annual Bonus that a Participant elects to have,
and is deferred, in accordance with Article 3, for
<PAGE>
any one Plan Year. In the event of a Participant's Retirement, Disability
(if deferrals cease in accordance with Section 8.1), death or a
Termination of Employment prior to the end of a Plan Year, such year's
Annual Deferral Amount shall be the actual amount withheld prior to
such event.
1.5 "Base Annual Salary" shall mean the annual cash compensation
relating to services performed during any calendar year, whether or not
paid in such calendar year or included on the Federal Income Tax Form
W-2 for such calendar year, excluding the annual management incentive
bonuses, commissions, overtime, fringe benefits, stock options,
relocation expenses, incentive payments, non-monetary awards,
directors fees and other fees, automobile and other allowances paid to a
Participant for employment services rendered (whether or not such
allowances are included in the Employee's gross income). Base Annual
Salary shall be calculated before reduction for compensation voluntarily
deferred or contributed by the Participant pursuant to all qualified or
non-qualified plans of any Employer and shall be calculated to include
amounts not otherwise included in the Participant's gross income under
Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans
established by any Employer; provided, however, that all such amounts
will be included in compensation only to the extent that, had there been
no such plan, the amount would have been payable in cash to the
Employee.
1.6 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 9, that are entitled
to receive benefits under this Plan upon the death of a Participant.
1.7 "Beneficiary Designation Form" shall mean the form established
from time to time by the Committee that a Participant completes, signs
and returns to the Committee to designate one or more Beneficiaries.
1.8 "Board" shall mean the board of directors of the Company.
1.9 "Change in Control" shall mean the first to occur of any of the
following events:
(a) Any "person" (as that term is used in Section 13 and 14(d)(2) of the
Securities Exchange Act of 1934 ("Exchange Act")) becomes the
beneficial owner (as that term is used in Section 13(d) of the Exchange
Act), directly or indirectly, of 50% or more of the Company's capital
stock entitled to vote in the election of directors;
(b) During any period of not more than two consecutive years, not
including any period prior to the adoption of this Plan, individuals who
at the beginning of such period constitute the board of directors of the
Company, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c), (d) or (e) of this Section 1.10)
whose election by the board of directors or nomination for election by
the Company's stockholders was approved by a vote of at least three-
fourths (3/4ths) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute at least a majority thereof;
<PAGE>
(c The shareholders of the Company approve any consolidation or
merger of the Company, other than a consolidation or merger of the
Company in which the holders of the common stock of the Company
immediately prior to the consolidation or merger hold more than 50% of
the common stock of the surviving corporation immediately after the
consolidation or merger;
(d) The shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(e) The shareholders of the Company approve the sale or transfer of all
or substantially all of the assets of the Company to parties that are not
within a "controlled group of corporations" (as defined in Code Section
1563) in which the Company is a member.
1.10 "Claimant" shall have the meaning set forth in Section 14.1.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time.
1.12 "Committee" shall mean the committee described in Article 12.
1.13 "Company" shall mean Harman International Industries, Inc., a
Delaware corporation, and any successor to all or substantially all of the
Company's assets or business.
1.14 "Company Contribution Account" shall mean (i) the sum of the
Participant's Annual Company Contribution Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting provisions of
this Plan that relate to the Participant's Company Contribution Account,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
Company Contribution Account.
1.15 "Deduction Limitation" shall mean the following described
limitation on a benefit that may otherwise be distributable pursuant to
the provisions of this Plan. Except as otherwise provided, this
limitation shall be applied to all distributions that are "subject to the
Deduction Limitation" under this Plan. If an Employer determines in
good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable year
of the Employer would not be deductible by the Employer solely by
reason of the limitation under Code Section 162(m), then to the extent
deemed necessary by the Employer to ensure that the entire amount of
any distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible, the Employer may defer all or any
portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.9 below, even if such
amount is being paid out in installments. The amounts so deferred and
amounts credited thereon shall be distributed to the Participant or his or
her Beneficiary (in the event of the Participant's death) at the earliest
possible date, as determined by the Employer in good faith, on which
the deductibility of compensation
<PAGE>
paid or payable to the Participant for the taxable year of the Employer
during which the distribution is made will not be limited by Section
162(m), or if earlier, the effective date of a Change in Control.
Notwithstanding anything to the contrary in this Plan, the Deduction
Limitation shall not apply to any distributions made after a Change in
Control.
1.16 "Deferral Account" shall mean (i) the sum of all of a Participant's
Annual Deferral Amounts, plus (ii) amounts credited in accordance with
all the applicable crediting provisions of this Plan that relate to the
Participant's Deferral Account, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to
his or her Deferral Account.
1.17 "Director" shall mean any member of the board of directors of the
Company.
1.18 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a Participant
does not participate in such a plan, a period of disability during which
the Participant would have qualified for permanent disability benefits
under such a plan had the Participant been a participant in such a plan,
as determined in the sole discretion of the Committee. If the
Participant's Employer does not sponsor such a plan, or discontinues to
sponsor such a plan, Disability shall be determined by the Committee in
its sole discretion.
1.19 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.20 "Election Form" shall mean the form established from time to time
by the Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
1.21 "Employee" shall mean a person who is an employee of any
Employer.
1.22 "Employer(s)" shall mean the Company and/or any of its
subsidiaries (now in existence or hereafter formed or acquired) that have
been selected by the Board to participate in the Plan and have adopted
the Plan as a sponsor.
1.23 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.
1.24 "First Plan Year" shall mean the period beginning June 1, 1997
and ending December 31, 1997.
1.25 "Annual Installment Method" shall be an annual installment
payment over the number of years selected by the Participant in
accordance with this Plan, calculated as follows: The Account Balance
of the Participant shall be calculated as of the close of business three
business days prior to the last business day of the month. The annual
installment shall be calculated by multiplying this balance by a fraction,
the numerator of which is one, and the denominator of which is the
remaining number of, annual payments due the Participant. By way of
example, if the Participant elects a 10 year Annual Installment Method,
the first payment shall be 1/10 of the Account
<PAGE>
Balance, calculated as described in this definition. The following year,
the payment shall be 1/9 of the Account Balance, calculated as
described in this definition.
1.26 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan, (iii) who
signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election and
Beneficiary Designation forms are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose Plan Agreement
has not terminated. A spouse or former spouse of a Participant shall not
be treated as a Participant in the Plan or have an account balance under
the Plan, even if he or she has an interest in the Participant's benefits
under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.
1.27 "Plan" shall mean the Company's Deferred Compensation Plan,
which shall be evidenced by this instrument and by each Plan
Agreement, as they may be amended from time to time.
1.28 "Plan Agreement" shall mean a written agreement, as may be
amended from time to time, which is entered into by and between an
Employer and a Participant. Each Plan Agreement executed by a
Participant and the Participant's Employer shall provide for the entire
benefit to which such Participant is entitled under the Plan; should there
be more than one Plan Agreement, the Plan Agreement bearing the
latest date of acceptance by the Employer shall supersede all previous
Plan Agreements in their entirety and shall govern such entitlement.
The terms of any Plan Agreement may be different for any Participant,
and any Plan Agreement may provide additional benefits not set forth in
the Plan or limit the benefits otherwise provided under the Plan;
provided, however, that any such additional benefits or benefit
limitations must be agreed to by both the Employer and the Participant.
1.29 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.30 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth
in Article 6.
1.31 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to
an Employee, severance from employment from all Employers for any
reason other than a leave of absence, death or Disability on or after the
earlier of the attainment of (a) age sixty-five (65) or (b) age fifty-five
(55) with five (5) Years of Service.
1.32 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.33 "Rollover Account" shall mean (i) the sum of the Participant's
Rollover Amount, plus (ii) amounts credited in accordance with all the
applicable crediting provisions of this Plan that relate to the Participant's
Rollover Account, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to this Plan that relate to the Participant's
Rollover Account.
<PAGE>
1.34 "Rollover Amount" shall be the amount determined in accordance
with Section 3.6.
1.35 "Short-Term Payout" shall mean the payout set forth in Section
4.1.
1.36 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.37 "Termination of Employment" shall mean the severing of
employment with all Employers; voluntarily or involuntarily, for any
reason other than Retirement, Disability, death or an authorized leave of
absence.
1.38 "Trust" shall mean one or more trusts established pursuant to that
certain Master Trust Agreement, dated as of June 1, 1997 between the
Company and the trustee named therein, as amended from time to time.
1.39 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or
accident of the Participant or a dependent of the Participant, (ii) a loss of
the Participant's property due to casualty, or (iii) such other
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined in the
sole discretion of the Committee.
1.40 "Years of Plan Participation" shall mean the total number of full
Plan Years a Participant has been a Participant in the Plan prior to his or
her Termination of Employment (determined without regard to whether
deferral elections have been made by the Participant for any Plan Year).
Any partial year shall not be counted. Notwithstanding the previous
sentence, a Participant's first Plan Year of participation shall be treated
as a full Plan Year for purposes of this definition, even if it is only a
partial Plan Year of participation.
1.41 "Years of Service" shall mean the total number of full years in
which a Participant has been employed by one or more Employers. For
purposes of this definition, a year of employment shall be a 365 day
period (or 366 day period in the case of a leap year) that, for the first
year of employment, commences on the Employee's date of hiring and
that, for any subsequent year, commences on an anniversary of that
hiring date. Any partial year of employment shall not be counted.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee. Participation in the Plan shall be limited
to a select group of management and highly compensated Employees of
the Company, as determined by the Committee in its sole discretion.
From that group, the Committee shall select, in its sole discretion,
Employees and Directors to participate in the Plan.
<PAGE>
2.2 Enrollment Requirements. As a condition to participation, each
selected Employee shall complete, execute and return to the Committee
a Plan Agreement, an Election Form and a Beneficiary Designation
Form (collectively the "Enrollment Materials"), all within 60 days after
he or she is selected to participate in the Plan. Each employee who will
participate as of the Restatement Date shall submit new Enrollment
Materials. In addition, the Committee shall establish from time to time
such other enrollment requirements as it determines in its sole discretion
are necessary.
2.3 Eligibility; Commencement of Participation. Provided an
Employee selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, that Employee shall commence participation in
the Plan on the first day of the month following the month in which the
Employee completes all enrollment requirements. If an Employee fails
to meet all such requirements within the period required, in accordance
with Section 2.2, that Employee shall not be eligible to participate in the
Plan until the first day of the Plan Year following the delivery to and
acceptance by the Committee of the required documents.
2.4 Termination of Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated
employees, as membership in such group is determined in accordance
with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee
shall have the right, in its sole discretion, to (i) terminate any deferral
election the Participant has made for the remainder of the Plan Year in
which the Participant's membership status changes, (ii) prevent the
Participant from making future deferral elections and/or (iii)
immediately distribute the Participant's then Account Balance as a
Termination Benefit and terminate the Participant's participation in the
Plan.
ARTICLE 3
Deferral Commitments/Rollover/Crediting/Taxes
Minimum Deferrals.
(a) Base Annual Salary and Annual Bonus. For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral Amount,
Base Annual Salary, Annual Bonus and/or Director's Fees in the
following minimum amounts for each deferral elected:
Deferral Minimum Amount
---------- ------------------------
Base Annual Salary $3,000
Annual Bonus $2,500
If an election is made for less than stated minimum amounts, or if no
election is made, the amount deferred shall be zero.
(b) Short Plan Year. Notwithstanding the foregoing, if a Participant
first becomes a Participant after the first day of a Plan Year, the
minimum Base Annual Salary deferral
<PAGE>
shall be an amount equal to the minimum set forth above, multiplied by
a fraction, the numerator of which is the number of complete months
remaining in the Plan Year and the denominator of which is 12. In the
case of the first Plan Year of the Plan itself, the minimum base annual
salary deferral shall be $1,500.00.
3.2 Maximum Deferral
(a) Base Annual Salary and Annual Bonus. For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral Amount,
Base Annual Salary and Annual Bonus up to the following maximum
percentages for each deferral elected:
Deferral Maximum Amount
---------- ----------------------
Base Annual Salary 100%
Annual Bonus 100%
(b) Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, or in the case of the first
Plan Year of the Plan itself, the maximum Annual Deferral Amount,
with respect to Base Annual Salary and Annual Bonus shall be limited
to the amount of compensation not yet earned by the Participant as of
the date the Participant submits a Plan Agreement and Election Form to
the Committee for acceptance.
3.3 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's commencement
of participation in the Plan, the Participant shall make an irrevocable
deferral election for the Plan Year in which the Participant commences
participation in the Plan, along with such other elections as the
Committee deems necessary or desirable under the Plan. For these
elections to be valid, the Election Form must be completed and signed
by the Participant, timely delivered to the Committee (in accordance
with Section 2.2 above) and accepted by the Committee. A Participant
who participated in the Plan prior to the Restatement Date and is
required to submit new Enrollment Materials pursuant to Section 2.2
may not alter any election of an annual deferral amount in effect with
respect to the first Plan Year.
(b) Subsequent Plan Years. For each succeeding Plan Year, an
irrevocable deferral election for that Plan Year, and such other elections
as the Committee deems necessary or desirable under the Plan, shall be
made by timely delivering to the Committee, in accordance with its
rules and procedures, before the end of the Plan Year preceding the Plan
Year for which the election is made, a new Election Form. If no such
Election Form is timely delivered for a Plan Year, the Annual Deferral
Amount shall be zero for that Plan Year.
<PAGE>
3.4 Withholding of Annual Deferral Amounts. For each Plan Year, the
Base Annual Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Annual Salary payroll in
equal amounts, as adjusted from time to time for increases and
decreases in Base Annual Salary. The Annual Bonus and/or Directors
Fees portion of the Annual Deferral Amount shall be withheld at the
time the Annual Bonus or Directors Fees are or otherwise would be paid
to the Participant, whether or not this occurs during the Plan Year itself.
3.5 Annual Company Contribution Amount. For each Plan Year, an
Employer, in its sole discretion, may, but is not required to, credit any
amount it desires to any Participant's Company Contribution Account
under this Plan, which amount shall be for that Participant the Annual
Company Contribution Amount for that Plan Year. The amount so
credited to a Participant may be smaller or larger than the amount
credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other
Participants receive an Annual Company Contribution Amount for that
Plan Year. The Annual Company Contribution Amount, if any, shall be
credited per the direction of the Committee.
3.6 Rollover Amount. If a Participant participated in the Plan prior to
the Restatement Date and has an Account Balance in the Plan as of the
Restatement Date, that Account Balance, determined as of the
Restatement Date, shall be part of the Participant's Account Balance and
shall be referred to as the Rollover Amount. The Rollover Amount
shall be governed by the terms and conditions of this Plan provided,
however, that any election made by a Participant with respect to his or
her Rollover Amount shall remain in effect, unless and to the extent
modified in accordance with the provisions of the Plan.
3.7 Investment of Trust Assets. The Trustee of the Trust shall be
authorized, upon written instructions received from the Committee or
investment manager appointed by the Committee, to invest and reinvest
the assets of the Trust in accordance with the applicable Trust
Agreement, including the disposition of stock and reinvestment of the
proceeds in one or more investment vehicles designated by the
Committee.
3.8 Vesting
(a) A Participant shall at all times be 100% vested in his or her Deferral
Account and Rollover Account.
(b) A Participant shall be vested in his or her Company Contribution
Account in accordance with the schedule contained in the Participant's
Plan Agreement.
(c Notwithstanding anything to the contrary contained in this Section
3.8, in the event of a Change in Control, a Participant's Company
Contribution Account shall immediately become 100% vested (if it is
not already vested in accordance with the above vesting schedules).
<PAGE>
(d) Notwithstanding subsection (c), the vesting schedule for a
Participant's Company Contribution Account shall not be accelerated to
the extent that the Committee determines that such acceleration would
cause the deduction limitations of Section 280G of the Code to become
effective. In the event that all of a Participant's Company Contribution
Account and/or Rollover Account is not vested pursuant to such a
determination, the Participant may request independent verification of
the Committee's calculations with respect to the application of Section
280G. In such case, the Committee must provide to the Participant
within 15 business days of such a request an opinion from a nationally
recognized accounting firm selected by the Participant (the "Accounting
Firm"). The opinion shall state the Accounting Firm's opinion that any
limitation in the vested percentage hereunder is necessary to avoid the
limits of Section 280G and contain supporting calculations. The cost of
such opinion shall be paid for by the Company.
3.9 Crediting/Debiting of Account Balances. In accordance with, and
subject to, the rules and procedures that are established from time to
time by the Committee, in its sole discretion, amounts shall be credited
or debited to a Participant's Account Balance in accordance with the
following rules:
(a) Election of Measurement Funds. A Participant, in connection with
his or her initial deferral election in accordance with Section 3.3(a)
above, shall elect, on the Election Form, one or more Measurement
Fund(s) (as described in Section 3.9(c) below) to be used to determine
the additional amounts to be credited to his or her Account Balance for
the first day in which the Participant commences participation in the
Plan and continuing thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in accordance with
the next sentence. The Participant may (but is not required to) elect, by
submitting an Election Form to the Committee that is accepted by the
Committee, to add or delete one or more Measurement Fund(s) to be
used to determine the additional amounts to be credited to his or her
Account Balance, or to change the portion of his or her Account
Balance allocated to each previously or newly elected Measurement
Fund. If an election is made in accordance with the previous sentence, it
shall apply within no more than thirty days and continue thereafter for
each day in which the Participant participates in the Plan, unless
changed in accordance with the previous sentence. No more than two
such elections may be made by a Participant in any one Plan Year.
(b) Proportionate Allocation. In making any election described in
Section 3.9(a) above, the Participant shall specify on the Election Form,
in increments of five percentage points (5%), the percentage of his or
her Account Balance to be allocated to a Measurement Fund (as if the
Participant was making an investment in that Measurement Fund with
that portion of his or her Account Balance).
<PAGE>
(c Measurement Funds. The Participant may elect one or more of the
following measurement funds, based on certain mutual funds (the
"Measurement Funds"), for the purpose of crediting additional amounts
to his or her Account Balance:
<TABLE>
<CAPTION>
Fund Type Fund Name Fund Description
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Putnam New Seeks long-term capital appreciation
Opportunities Fund primarily through common stocks of
companies within certain emerging
industry groups.
Putnam International Seeks capital appreciation through a
Growth Fund diversified portfolio of stocks of
companies located outside North
America.
Putnam Voyager Fund Seeks aggressive capital appreciation
through a combination of stocks of
small companies expected to grow over
time as well as stocks of larger, more
established corporations.
Putnam Investors Fund Seeks long-term growth of capital
primarily through stocks of well-
established companies that provide
opportunities for growth over time.
- ------------------------------------------------------------------------------------------------------
Growth & Income The Putnam Fund for Seeks capital growth and current
Growth and Income income primarily through a
portfolio of income-producing common
stocks of large companies.
The George Putnam Seeks a balance of capital growth and
Fund of Boston current income through a well-
diversified portfolio composed of both
stocks and bonds.
- ------------------------------------------------------------------------------------------------------
Income Putnam Diversified Seeks current income consistent with
Income Trust capital preservation through a
combination of U.S. government, high-
yield, and international bonds.
- ------------------------------------------------------------------------------------------------------
Capital The Putnam Money Seeks to provide current income
Preservation Market Fund consistent with capital preservation,
stability of principal, and liquidity.
</TABLE>
<PAGE>
As necessary, the Committee may, in its sole discretion, discontinue,
substitute or add a Measurement Fund. Each such action will take effect
as of the first day of the calendar quarter that follows by thirty (30) days
the day on which the Committee gives Participants advance written
notice of such change.
(d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be determined by
the Committee, in its reasonable discretion, based on the performance of
the Measurement Funds themselves. A Participant's Account Balance
shall be credited or debited on a daily basis based on the performance of
each Measurement Fund selected by the Participant, as determined by
the Committee in its reasonable discretion, as though (i) a Participant's
Account Balance were invested in the Measurement Fund(s) selected by
the Participant, in the percentages applicable to such calendar quarter, as
of the close of business on the first business day of such calendar
quarter, at the closing price on such date; (ii) the portion of the Annual
Deferral Amount that was actually deferred during any calendar quarter
were invested in the Measurement Fund(s) selected by the Participant,
in the percentages applicable to such calendar quarter, no later than the
close of business on the third business day after the day on which such
amounts are actually deferred from the Participant's Base Annual Salary
through reductions in his or her payroll, at the closing price on such
date; and (iii) any distribution made to a Participant that decreases such
Participant's Account Balance ceased being invested in the
Measurement Fund(s), in the percentages applicable to such calendar
quarter, no earlier than three business days prior to the distribution, at
the closing price on such date. The Participant's Rollover Amount shall
be credited to his or her Rollover Account for purposes of this Section
3.9(d) as of June 1, 1997.
(e) No Actual Investment. Notwithstanding any other provision of this
Plan that may be interpreted to the contrary, the Measurement Funds are
to be used for measurement purposes only, and a Participant's election
of any such Measurement Fund, the allocation to his or her Account
Balance thereto, the calculation of additional amounts and the crediting
or debiting of such amounts to a Participant's Account Balance shall not
be considered or construed in any manner as an actual investment of his
or her Account Balance in any such Measurement Fund. In the event
that the Company or the Trustee (as that term is defined in the Trust), in
its own discretion, decides to invest funds in any or all of the
Measurement Funds, no Participant shall have any rights in or to such
investments themselves. Without limiting the foregoing, a Participant's
Account Balance shall at all times be a bookkeeping entry only and
shall not represent any investment made on his or her behalf by the
Company or the Trust; the Participant shall at all times remain an
unsecured creditor of the Company.
<PAGE>
3.10 FICA and Other Taxes
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant's
Employer(s) shall withhold from that portion of the Participant's Base
Annual Salary and Bonus that is not being deferred, in a manner
determined by the Employer(s), the Participant's share of FICA and
other employment taxes on such Annual Deferral Amount. If necessary,
the Committee may reduce the Annual Deferral Amount in order to
comply with this Section 3.10.
(b) Company Contribution Amounts. When a participant becomes
vested in a portion of his or her Company Contribution Account, the
Participant's Employer(s) shall withhold from the Participant's Base
Annual Salary and/or Bonus that is not deferred, in a manner
determined by the Employer(s), the Participant's share of FICA and
other employment taxes. If necessary, the Committee may reduce the
vested portion of the Participant's Company Contribution Account in
order to comply with this Section 3.10.
3.11 Distributions. The Participant's Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other taxes
required to be withheld by the Employer(s), or the trustee of the Trust,
in connection with such payments, in amounts and in a manner to be
determined in the sole discretion of the Employer(s) and the trustee of
the Trust.
ARTICLE 4
Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal
Election
4.1 Short-Term Payout. In connection with each election to defer an
Annual Deferral Amount, a Participant may irrevocably elect to receive
a future "Short-Term Payout" from the Plan with respect to such Annual
Deferral Amount. Subject to the Deduction Limitation, the Short-Term
Payout shall be a lump sum payment in an amount that is equal to the
Annual Deferral Amount plus amounts credited or debited in the
manner provided in Section 3.9 above on that amount, determined at the
time that the Short-Term Payout becomes payable (rather than the date
of a Termination of Employment). Subject to the Deduction Limitation
and the other terms and conditions of this Plan, each Short-Term Payout
elected shall be paid out during a period beginning 1 day and ending 60
days after the last day of any Plan Year designated by the Participant
that is at least three Plan Years after the Plan Year in which the Annual
Deferral Amount is actually deferred. By way of example, if a three
year Short-Term Payout is elected for Annual Deferral Amounts that are
deferred in the Plan Year commencing January 1, 1997, the three year
Short-Term Payout would become payable during a 60 day period
commencing January 1, 2001.
<PAGE>
4.2 Other Benefits Take Precedence Over Short-Term. Should an event
occur that triggers a benefit under Article 5, 6, 7 or 8, any Annual
Deferral Amount, plus amounts credited or debited thereon, that is
subject to a Short-Term Payout election under Section 4.1 shall not be
paid in accordance with Section 4.1 but shall be paid in accordance with
the other applicable Article.
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial
Emergencies. If the Participant experiences an Unforeseeable Financial
Emergency, the Participant may petition the Committee to (i) suspend
any deferrals required to be made by a Participant and/or (ii) receive a
partial or full payout from the Plan. The payout shall not exceed the
lesser of the Participant's Account Balance, calculated as if such
Participant were receiving a Termination Benefit, or the amount
reasonably needed to satisfy the Unforeseeable Financial Emergency.
If, subject to the sole discretion of the Committee, the petition for a
suspension and/or payout is approved, suspension shall take effect upon
the date of approval and any payout shall be made within 60 days of the
date of approval. The payment of any amount under this Section 4.3
shall not be subject to the Deduction Limitation.
4.4 Withdrawal Election. A Participant (or, after the Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw all or any
portion of his or her Account Balance other than the portion of the
Participant's Account Balance that relates to the Company Contribution
Account, if any, calculated as if there had occurred a Termination of
Employment as of the day of the election, less a withdrawal penalty
equal to 10% of such amount (the net amount shall be referred to as the
"Withdrawal Amount"). This election can be made at any time before
or after Retirement, Disability, death or Termination of Employment,
and whether or not the Participant (or Beneficiary) is in the process of
being paid pursuant to an installment payment schedule. If made before
Retirement, Disability or death, a Participant's available Withdrawal
Amount shall be ninety percent (90%) of the eligible portion of his or
her Account Balance calculated as if there had occurred a Termination
of Employment as of the day of the election. No partial withdrawals of
the Withdrawal Amount shall be allowed, unless the Withdrawal
Amount is at least $10,000. The Participant (or his or her Beneficiary)
shall make this election by giving the Committee advance written notice
of the election in a form determined from time to time by the
Committee. The Participant (or his or her Beneficiary) shall be paid the
Withdrawal Amount within 60 days of his or her election. Once the
Withdrawal Amount is paid, the Participant's active participation in the
Plan shall terminate and the Participant shall not be eligible to actively
participate in the Plan during the remainder of the Plan Year in which
the Withdrawal Amount is paid. The payment of this Withdrawal
Amount shall not be subject to the Deduction Limitation.
<PAGE>
ARTICLE 5
Retirement Benefit
5.1 Retirement Benefit. Subject to the Deduction Limitation, a
Participant who Retires shall receive, as a Retirement Benefit, his or her
Account Balance.
5.2 Payment of Retirement Benefit. A Participant, in connection with
his or her commencement of participation in the Plan, shall elect on an
Election Form to receive the Retirement Benefit in a lump sum or
pursuant to the Annual Installment Method of 5, 10 or 15 years. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that any such Election Form is submitted at least 2
years prior to the Participant's Retirement and is accepted by the
Committee in its sole discretion. The Election Form most recently
accepted by the Committee shall govern the payout of the Retirement
Benefit. If a Participant does not make any election with respect to the
payment of the Retirement Benefit, then such benefit shall be payable in
a lump sum. Despite the foregoing, if the Participant's Account Balance
at the time of his or her Retirement is less than $25,000, payment of the
Retirement Benefit may be made, in the sole discretion of the
Committee, in a lump sum or pursuant to a Annual Installment Method
of not more than 5 years. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the
date the Participant Retires. Any payment made shall be subject to the
Deduction Limitation.
5.3 Death Prior to Completion of Retirement Benefit. If a Participant
dies after Retirement but before the Retirement Benefit is paid in full,
the Participant's unpaid Retirement Benefit payments shall continue and
shall be paid to the Participant's Beneficiary (a) over the remaining
number of years and in the same amounts as that benefit would have
been paid to the Participant had the Participant survived, or (b) in a
lump sum, if requested by the Beneficiary and allowed in the sole
discretion of the Committee, that is equal to the Participant's unpaid
remaining Account Balance.
ARTICLE 6
Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction
Limitation, the Participant's Beneficiary shall receive a Pre-Retirement
Survivor Benefit equal to the Participant's Account Balance if the
Participant dies before he or she Retires, experiences a Termination of
Employment or suffers a Disability.
6.2 Payment of Pre-Retirement Survivor Benefit. A Participant, in
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form whether the Pre-Retirement Survivor
Benefit shall be received by his or her Beneficiary in a lump sum or
pursuant to a Annual Installment Method of 5, 10 or 15 years. The
Participant may annually change this election to an allowable alternative
payout period by submitting a new Election
<PAGE>
Form to the Committee, which form must be accepted by the
Committee in its sole discretion. The Election Form most recently
accepted by the Committee prior to the Participant's death shall govern
the payout of the Participant's Pre-Retirement Survivor Benefit. If a
Participant does not make any election with respect to the payment of
the Pre-Retirement Survivor Benefit, then such benefit shall be paid in a
lump sum. Despite the foregoing, if the Participant's Account Balance
at the time of his or her death is less than $25,000, payment of the Pre-
Retirement Survivor Benefit may be made, in the sole discretion of the
Committee, in a lump sum or pursuant to a Annual Installment Method
of not more than 5 years. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the
date the Committee is provided with proof that is satisfactory to the
Committee of the Participant's death. Any payment made shall be
subject to the Deduction Limitation.
ARTICLE 7
Termination Benefit
7.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal to
the Participant's Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 Payment of Termination Benefit. A Participant, in connection with
his or her commencement of participation in the Plan, shall elect on an
Election Form to receive the Termination Benefit in a lump sum or
pursuant to a Annual Installment Method of 3 or 5 years. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that any such Election Form is submitted at least 2
years prior to the Participant's Termination of Employment and is
accepted by the Committee in its sole discretion. The Election Form
most recently accepted by the Committee shall govern the payout of the
Termination Benefit. Despite the foregoing, if the Participant's Account
Balance at the time of his or her Termination of Employment is less
than $25,000, then his or her Termination Benefit shall be payable in a
lump sum. If a Participant does not make any election with respect to
the payment of the Termination Benefit, then his or her Termination
Benefit shall be payable in a lump sum. The lump sum payment shall be
made, or installment payments shall commence, no later than 60 days
after the date the Participant experiences a Termination of Employment.
Any payment made shall be subject to the Deduction Limitation.
<PAGE>
ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount commitment that
would otherwise have been withheld from a Participant's Base Annual
Salary or Annual Bonus for the Plan Year during which the Participant
first suffers a Disability. During the period of Disability, the Participant
shall not be allowed to make any additional deferral elections, but will
continue to be considered a Participant for all other purposes of this
Plan.
(b) Return to Work. If a Participant returns to employment after a
Disability ceases, the Participant may elect to defer an Annual Deferral
Amount for the Plan Year following his or her return to employment or
service and for every Plan Year thereafter while a Participant in the
Plan; provided such deferral elections are otherwise allowed and an
Election Form is delivered to and accepted by the Committee for each
such election in accordance with Section 3.3 above.
8.2 Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits
provided for in Articles 4, 5, 6 or 7 in accordance with the provisions of
those Articles. Notwithstanding the above, the Committee shall have
the right to, in its sole and absolute discretion and for purposes of this
Plan only, and must in the case of a Participant who is otherwise eligible
to Retire, deem the Participant to have experienced a Termination of
Employment, or in the case of a Participant who is eligible to Retire, to
have Retired, at any time (or in the case of a Participant who is eligible
to Retire, as soon as practicable) after such Participant is determined to
be suffering a Disability, in which case the Participant shall receive a
Disability Benefit equal to his or her Account Balance at the time of the
Committee's determination; provided, however, that should the
Participant otherwise have been eligible to Retire, he or she shall be
paid in accordance with Article 5. The Disability Benefit shall be paid
in a lump sum within 60 days of the Committee's exercise of such right.
Any payment made shall be subject to the Deduction Limitation.
<PAGE>
ARTICLE 9
Beneficiary Designation
9.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary
designation under any other plan of an Employer in which the
Participant participates.
9.2 Beneficiary Designation; Change; Spousal Consent. A Participant
shall designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules
and procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by
that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of a new Beneficiary Designation Form,
all Beneficiary designations previously filed shall be canceled. The
Committee shall be entitled to rely on the last Beneficiary Designation
Form filed by the Participant and accepted by the Committee prior to his
or her death.
9.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
9.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the Participant's
designated Beneficiary shall be deemed to be his or her surviving
spouse. If the Participant has no surviving spouse, the benefits
remaining under the Plan to be paid to a Beneficiary shall be payable to
the executor or personal representative of the Participant's estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to cause the
Participant's Employer to withhold such payments until this matter is
resolved to the Committee's satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan
to a Beneficiary shall fully and completely discharge all Employers and
the Committee from all further
<PAGE>
obligations under this Plan with respect to the Participant, and that
Participant's Plan Agreement shall terminate upon such full payment of
benefits.
ARTICLE 10
Leave of Absence
10.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral
Amount shall continue to be withheld during such paid leave of absence
in accordance with Section 3.3.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Participant shall be
excused from making deferrals until the earlier of the date the leave of
absence expires or the Participant returns to a paid employment status.
Upon such expiration or return, deferrals shall resume for the remaining
portion of the Plan Year in which the expiration or return occurs, based
on the deferral election, if any, made for that Plan Year. If no election
was made for that Plan Year, no deferral shall be withheld.
ARTICLE 11
Termination, Amendment or Modification
11.1 Termination. Although each Employer anticipates that it will
continue the Plan for an indefinite period of time, there is no guarantee
that any Employer will continue the Plan or will not terminate the Plan
at any time in the future. Accordingly, each Employer reserves the right
to discontinue its sponsorship of the Plan and/or to terminate the Plan at
any time with respect to any or all of its participating Employees by
action of its board of directors. Upon the termination of the Plan with
respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer shall terminate and
their Account Balances, determined as if they had experienced a
Termination of Employment on the date of Plan termination or, if Plan
termination occurs after the date upon which a Participant was eligible
to Retire, then with respect to that Participant as if he or she had Retired
on the date of Plan termination, shall be paid to the Participants as
follows: Prior to a Change in Control, if the Plan is terminated with
respect to all of its Participants, an Employer shall have the right, in its
sole discretion, and notwithstanding any elections made by the
Participant, to pay such benefits in a lump sum or pursuant to a Annual
Installment Method of up to 15 years, with amounts credited and
debited during the installment period as provided herein. If the Plan is
terminated with respect to less than all of its Participants, an Employer
shall be required to pay such benefits in a lump sum. After a Change in
Control,
<PAGE>
the Employer shall be required to pay such benefits in a lump sum. The
termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits
under the Plan as of the date of termination; provided however, that the
Employer shall have the right to accelerate installment payments
without a premium or prepayment penalty by paying the Account
Balance in a lump sum or pursuant to a Annual Installment Method
using fewer years (provided that the present value of all payments that
will have been received by a Participant at any given point of time under
the different payment schedule shall equal or exceed the present value
of all payments that would have been received at that point in time
under the original payment schedule).
11.2 Amendment. Any Employer may, at any time, amend or modify
the Plan in whole or in part with respect to that Employer by the action
of its board of directors; provided, however, that no amendment or
modification shall be effective to decrease or restrict the value of a
Participant's Account Balance in existence at the time the amendment or
modification is made, calculated as if the Participant had experienced a
Termination of Employment as of the effective date of the amendment
or modification or, if the amendment or modification occurs after the
date upon which the Participant was eligible to Retire, the Participant
had Retired as of the effective date of the amendment or modification.
The amendment or modification of the Plan shall not affect any
Participant or Beneficiary who has become entitled to the payment of
benefits under the Plan as of the date of the amendment or modification;
provided, however, that the Employer shall have the right to accelerate
installment payments by paying the Account Balance in a lump sum or
pursuant to the Annual Installment Method using fewer years (provided
that the present value of all payments that will have been received by a
Participant at any given point of time under the different payment
schedule shall equal or exceed the present value of all payments that
would have been received at that point in time under the original
payment schedule).
11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2
above, if a Participant's Plan Agreement contains benefits or limitations
that are not in this Plan document, the Employer may only amend or
terminate such provisions with the consent of the Participant.
11.4 Effect of Payment. The full payment of the applicable benefit
under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under
this Plan and the Participant's Plan Agreement shall terminate.
<PAGE>
ARTICLE 12
Administration
12.1 Committee Duties. This Plan shall be administered by a
Committee which shall consist of the Board, or such committee as the
Board shall appoint. Members of the Committee may be Participants
under this Plan. The Committee shall also have the discretion and
authority to (i) make, amend, interpret, and enforce all appropriate rules
and regulations for the administration of this Plan and (ii) decide or
resolve any and all questions including interpretations of this Plan, as
may arise in connection with the Plan. Any individual serving on the
Committee who is a Participant shall not vote or act on any matter
relating solely to himself or herself. When making a determination or
calculation, the Committee shall be entitled to rely on information
furnished by a Participant or the Company.
12.2 Agents. In the administration of this Plan, the Committee may,
from time to time, employ agents and delegate to them such
administrative duties as it sees fit (including acting through a duly
appointed representative) and may from time to time consult with
counsel who may be counsel to any Employer.
12.3 Binding Effect of Decisions. The decision or action of the
Committee with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and
the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Plan.
12.4 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, and any Employee to whom
the duties of the Committee may be delegated, against any and all
claims, losses, damages, expenses or liabilities arising from any action
or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee or any of its members or any such
Employee.
12.5 Employer Information. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement, Disability,
death or Termination of Employment of its Participants, and such other
pertinent information as the Committee may reasonably require.
ARTICLE 13
Other Benefits and Agreements
13.1 Coordination with Other Benefits. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in addition
to any other benefits available to such Participant under any other plan
or program for employees of the Participant's Employer. The Plan shall
supplement
<PAGE>
and shall not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.
ARTICLE 14
Claims Procedures
14.1 Presentation of Claim. Any Participant or Beneficiary of a
deceased Participant (such Participant or Beneficiary being referred to
below as a "Claimant") may deliver to the Committee a written claim
for a determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days
after such notice was received by the Claimant. All other claims must
be made within 180 days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.
14.2 Notification of Decision. The Committee shall consider a
Claimant's claim within a reasonable time, and shall notify the Claimant
in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or
in part, to the Claimant's requested determination, and such notice must
set forth in a manner calculated to be understood by the Claimant:
(i) the specific reason(s) for the denial of the claim, or any part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon which
such denial was based;
(iii) a description of any additional material or information necessary
for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary; and
(iv) an explanation of the claim review procedure set forth in Section
14.3 below.
14.3 Review of a Denied Claim. Within 60 days after receiving a
notice from the Committee that a claim has been denied, in whole or in
part, a Claimant (or the Claimant's duly authorized representative) may
file with the Committee a written request for a review of the denial of
the claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
<PAGE>
(b) may submit written comments or other documents; and/or
(c may request a hearing, which the Committee, in its sole discretion,
may grant.
14.4 Decision on Review. The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's
decision must be rendered within 120 days after such date. Such
decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which the
decision was based; and
(c such other matters as the Committee deems relevant.
14.5 Legal Action. A Claimant's compliance with the foregoing
provisions of this Article 14 is a mandatory prerequisite to a Claimant's
right to commence any legal action with respect to any claim for
benefits under this Plan.
ARTICLE 15
Trust
15.1 Establishment of the Trust. The Company shall establish the
Trust, and each Employer shall at least annually transfer over to the
Trust such assets as the Employer determines, in its sole discretion, are
necessary to provide, on a present value basis, for its respective future
liabilities created with respect to the Annual Deferral Amounts, Annual
Company Contribution Amounts, and Rollover Amounts for such
Employer's Participants for all periods prior to the transfer, as well as
any debits and credits to the Participants' Account Balances for all
periods prior to the transfer, taking into consideration the value of the
assets in the trust at the time of the transfer.
15.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Plan Agreement shall govern the rights of a Participant to
receive distributions pursuant to the Plan. The provisions of the Trust
shall govern the rights of the Employers, Participants and the creditors
of the Employers to the assets transferred to the Trust. Each Employer
shall at all times remain liable to carry out its obligations under the
Plan.
15.3 Distributions From the Trust. Each Employer's obligations under
the Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the Employer's
obligations under this Plan.
<PAGE>
ARTICLE 16
Miscellaneous
16.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employee" within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
interpreted to the extent possible in a manner consistent with that intent.
16.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer. For
purposes of the payment of benefits under this Plan, any and all of an
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under
the Plan shall be merely that of an unfunded and unsecured promise to
pay money in the future.
16.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer
shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.
16.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are
expressly declared to be, unassignable and non-transferable. No part of
the amounts payable shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or
any other person, be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise.
16.5 Not a Contract of Employment. The terms and conditions of this
Plan shall not be deemed to constitute a contract of employment
between any Employer and the Participant. Such employment is hereby
acknowledged to be an "at will" employment relationship that can be
terminated at any time for any reason, or no reason, with or without
cause, and with or without notice, unless expressly provided in a written
employment agreement. Nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of any Employer, either
as an Employee or a Director, or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.
16.6 Furnishing Information. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all
information requested by the Committee and take such other actions as
may be requested in order to facilitate the administration of the Plan and
the payments of
<PAGE>
benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
16.7 Terms. Whenever any words are used herein in the masculine,
they shall be construed as though they were in the feminine in all cases
where they would so apply; and whenever any words are used herein in
the singular or in the plural, they shall be construed as though they were
used in the plural or the singular, as the case may be, in all cases where
they would so apply.
16.8 Captions. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
16.9 Governing Law. Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the internal laws of the
State of California without regard to its conflicts of laws principles.
16.10 Notice. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and hand-
delivered, or sent by registered or certified mail, to the address below:
Corporate Director, Human Resources
Harman International Industries, Inc.
8500 Balboa Blvd.
Northridge, CA 91329
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
16.11 Successors. The provisions of this Plan shall bind and inure to
the benefit of the Participant's Employer and its successors and assigns
and the Participant and the Participant's designated Beneficiaries.
16.12 Spouse's Interest. The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's
will, nor shall such interest pass under the laws of intestate succession.
16.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as
if such illegal or invalid provision had never been inserted herein.
16.14 Incompetent. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition
<PAGE>
of that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care
and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account of
the Participant and the Participant's Beneficiary, as the case may be, and
shall be a complete discharge of any liability under the Plan for such
payment amount.
16.15 Court Order. The Committee is authorized to make any
payments directed by court order in any action in which the Plan or the
Committee has been named as a party. In addition, if a court determines
that a spouse or former spouse of a Participant has an interest in the
Participant's benefits under the Plan in connection with a property
settlement or otherwise, the Committee, in its sole discretion, shall have
the right, notwithstanding any election made by a Participant, to
immediately distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
16.16 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a Participant's
benefits under this Plan becomes taxable to the Participant prior to
receipt, a Participant may petition the Committee before a Change in
Control, or the trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has become taxable.
Upon the grant of such a petition, which grant shall not be
unreasonably withheld (and, after a Change in Control, shall be
granted), a Participant's Employer shall distribute to the Participant
immediately available funds in an amount equal to the taxable portion
of his or her benefit (which amount shall not exceed a Participant's
unpaid Account Balance under the Plan). If the petition is granted, the
tax liability distribution shall be made within 90 days of the date when
the Participant's petition is granted. Such a distribution shall affect and
reduce the benefits to be paid under this Plan.
(b) Trust. If the Trust terminates in accordance with Section 3.6(e) of
the Trust and benefits are distributed from the Trust to a Participant in
accordance with that Section, the Participant's benefits under this Plan
shall be reduced to the extent of such distributions.
16.17 Insurance. The Employers, on their own behalf or on behalf of
the trustee of the Trust, and, in their sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and in
such forms as the Trust may choose. The Employers or the trustee of
the Trust, as the case may be, shall be the sole owner and beneficiary of
any such insurance. The Participant shall have no interest whatsoever in
any such policy or policies, and at the request of the Employers shall
submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company
or companies to whom the Employers have applied for insurance.
<PAGE>
16.18 Legal Fees To Enforce Rights After Change in Control. The
Company and each Employer is aware that upon the occurrence of a
Change in Control, the Board or the board of directors of a Participant's
Employer (which might then be composed of new members) or a
shareholder of the Company or the Participant's Employer, or of any
successor corporation might then cause or attempt to cause the
Company, the Participant's Employer or such successor to refuse to
comply with its obligations under the Plan and might cause or attempt
to cause the Company or the Participant's Employer to institute, or may
institute, litigation seeking to deny Participants the benefits intended
under the Plan. In these circumstances, the purpose of the Plan could be
frustrated. Accordingly, if, following a Change in Control, it should
appear to any Participant that the Company, the Participant's Employer
or any successor corporation has failed to comply with any of its
obligations under the Plan or any agreement thereunder or, if the
Company, such Employer or any other person takes any action to
declare the Plan void or unenforceable or institutes any litigation or
other legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and
the Participant's Employer irrevocably authorize such Participant to
retain counsel of his or her choice at the expense of the Company and
the Participant's Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense of
any litigation or other legal action, whether by or against the Company,
the Participant's Employer or any director, officer, shareholder or other
person affiliated with the Company, the Participant's Employer or any
successor thereto in any jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document
as of May 2, 1997.
"Company"
Harman International Industries, Inc., a Delaware
corporation
By: /s/ Frank Meredith
Title: Vice President
<PAGE>
Exhibit 5
June 9, 1997
Harman International Industries, Incorporated
1101 Pennsylvania Avenue, N.W., Suite 1010
Washington, D.C. 20004
Re: Registration Statement on Form S-8 for Harman
International Industries, Incorporated Relating to
its Deferred Compensation Plan
__________________________________________________
Ladies and Gentlemen:
We are acting as counsel to Harman International Industries,
Incorporated, a Delaware corporation (the "Company"), in connection
with the registration of the deferred compensation payment obligations
("Plan Interests") arising under the Harman International Industries,
Incorporated Deferred Compensation Plan (the "Plan").
We have examined such documents, records, and matters of law as
we have deemed necessary for purposes of this opinion. Based on such
examination and on the assumptions, qualifications and limitations set
forth below, we are of the opinion that:
1. The Plan Interests, when issued in accordance with the provisions
of the Plan, will be valid and binding obligations of the Company,
except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
subject to general equity principles.
<PAGE>
2. The provisions of the written Plan documents comply with the
applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
Our opinion expressed in paragraph 2 applies only as to the form of
the written Plan documents. Accordingly, but without limitation of the
preceding sentence, we express no opinion as to whether the employees
eligible to participate in the Plan constitute a select group of
management or highly compensated employees, which is a factual issue
depending upon the facts and circumstances in existence from time to
time.
In rendering the foregoing opinions, we have relied as to certain
factual matters upon information provided by officers of the Company,
and we have not independently checked or verified the accuracy of such
information. In8 addition, our examination of matters of law has been
limited to the General C8orporation Law of the State of Delaware and
the federal laws of the United States of America, in each case as in
effect on the date hereof.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Company's Registration Statement on Form S-8 with respect to the Plan
Interests.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT
AUDITORS
The Board of Directors
Harman International Industries, Incorporated
We consent to incorporation by reference in the Registration Statement
on Form S-8 of Harman International Industries, Incorporated of our
report dated August 15, 1996, relating to the consolidated balance sheets
of Harman International Industries, Incorporated and subsidiaries as of
June 30, 1996 and 1995, and the related consolidated statements of
operations, cash flows and shareholders' equity and related schedule for
each of the years in the three year period ending June 30, 1996, which
report appears in the June 30, 1996 annual report on Form 10-K of
Harman International Industries, Incorporated.
/s/ KPMG Peat Marwick LLP
June 6, 1997
