HARMAN INTERNATIONAL INDUSTRIES INC /DE/, S-3, 1997-06-06

HARMAN INTERNATIONAL INDUSTRIES INC /DE/
S-3, 1997-06-06
HOUSEHOLD AUDIO & VIDEO EQUIPMENT

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<PAGE>

REGISTRATION NO. 333-
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE , 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

11-2534306
DELAWARE (I.R.S. EMPLOYER
(STATE OR OTHER JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

BERNARD A. GIROD
1101 PENNSYLVANIA AVENUE, N.W., PRESIDENT
SUITE 1010 HARMAN INTERNATIONAL INDUSTRIES,
WASHINGTON, D.C. 20004 INCORPORATED
(202) 393-1101 1101 PENNSYLVANIA AVENUE, N.W., SUITE
(ADDRESS AND TELEPHONE NUMBER OF 1010
REGISTRANT'S WASHINGTON, D.C. 20004
PRINCIPAL EXECUTIVE OFFICES) (202) 393-1101
(NAME, ADDRESS AND TELEPHONE NUMBER OF
AGENT FOR SERVICE)

---------------
COPIES TO:
William F. Henze, II, Esq. Gary L. Sellers, Esq.
Jones, Day, Reavis & Pogue Simpson Thacher & Bartlett
599 Lexington Avenue 425 Lexington Avenue
New York, New York 10022 New York, New York 10017

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
TITLE OF EACH CLASS OF MAXIMUM OFFERING PROPOSED MAXIMUM
AMOUNT OF
SECURITIES TO BE AMOUNT TO BE PRICE PER AGGREGATE REGISTRATION
REGISTERED REGISTERED UNIT(1)(2) OFFERING PRICE(2) FEE
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<S> <C> <C> <C> <C>
Senior Notes............ $150,000,000 100% $150,000,000 $45,455
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</TABLE>
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(1) If any Senior Notes are issued at an original issue discount, such greater
principal amount as shall result in an aggregate initial offering price
equal to the amount to be registered.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, exclusive of accrued interest, if any, on the Senior
Notes.

---------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
+
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
+
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
+
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
+
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
++++

Subject to Completion, dated June , 1997

Prospectus

[LOGO OF HARMAN INTERNATIONAL APPEARS HERE]

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

$150,000,000
% SENIOR NOTES DUE 2007

Harman International Industries, Incorporated ("Harman" or the "Company") is
offering $150,000,000 aggregate principal amount of % Senior Notes due 2007
(the "Senior Notes"). Interest on the Senior Notes is payable on and
of each year, commencing , 1998. The Senior Notes will mature on July
, 2007. The Senior Notes may not be redeemed prior to maturity and are not
subject to any sinking fund.

The Senior Notes will be represented by one or more permanent global Senior
Notes registered in the name of The Depository Trust Company (the "Depositary")
or its nominee. Beneficial interests in the permanent global Senior Notes will
be shown on records maintained by participants, and transfers thereof will be
effected only through the Depositary or any participant. See "Description of
Notes--Book-Entry System." Except as described herein, Senior Notes in
definitive form will not be issued. Settlement for the Senior Notes will be
made in immediately available funds. The Senior Notes will trade in the
Depositary's Same-Day Funds Settlement System, and secondary trading activity
in the Senior Notes will therefore settle in immediately available funds.

The Senior Notes will be general unsecured obligations of the Company and will
rank senior in right of payment to all existing or future indebtedness of the
Company that is by its terms expressly subordinated in right of payment to the
Senior Notes and will rank pari passu with all other existing or future
indebtedness of the Company.

---------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS
A CRIMINAL OFFENSE.

---------------------------------------

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<TABLE>

PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(/1/) DISCOUNT(/2/) COMPANY(/1/)(/3/)
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<S> <C> <C> <C>
PER
SENIOR
NOTE % % %
TOTAL $ $ $
</TABLE>

(1) Plus accrued interest, if any, from , 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."
(3) Before deducting expenses payable by the Company, estimated at $350,000.

---------------------------------------

The Senior Notes are being offered by Chase Securities Inc., NationsBanc
Capital Markets, Inc., Lehman Brothers Inc., Montgomery Securities, and Societe
Generale Securities Corporation (collectively, the "Underwriters"), subject to
prior sale, when, as and if issued by the Company and accepted by the
Underwriters, and subject to certain other conditions. The Underwriters reserve
the right to withdraw, cancel or modify such offers and to reject orders in
whole or in part. It is expected that delivery of the Senior Notes will be made
in book-entry form through the facilities of the Depositary on or about
, 1997.

CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
LEHMAN BROTHERS
MONTGOMERY SECURITIES
SOCIETE GENERALE
SECURITIES CORPORATION

The date of this Prospectus is June , 1997.
<PAGE>

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SENIOR NOTES,
INCLUDING OVERALLOTMENT, STABILIZING TRANSACTIONS AND SYNDICATE SHORT
COVERING
TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the offices of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at certain Regional Offices of the Commission: 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the
Company's Common Stock, $0.01 par value per share, is listed on the New York
Stock Exchange and other information concerning the Company may be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005. The Company is an electronic filer and the Commission
maintains a website (located at http://www.sec.gov) that contains reports,
proxy statements and other information regarding registrants that file
electronically.

The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, referred to herein as the
"Registration Statement") under the Securities Act with respect to the Senior
Notes. This Prospectus, which constitutes part of the Registration Statement,
does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Senior Notes offered hereby, reference is made hereby to the
Registration Statement. The Registration Statement and the exhibits thereto
may be inspected at the public reference facilities of the Commission at the
addresses set forth above.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus:

1. The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1996;

2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1996, December 31, 1996 and March 31, 1997; and

3. The Company's Current Reports on Form 8-K filed March 14, 1997 and April
3, 1997.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing of
such documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, or in any
other subsequently filed document which is also 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 Prospectus.

2
<PAGE>

The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of the documents incorporated herein by reference in this Prospectus
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents). Such requests should be
directed to Harman International Industries, Incorporated, 1101 Pennsylvania
Avenue, N.W., Suite 1010, Washington, D.C. 20004, (telephone number (202) 393-
1101) Attention: Bernard A. Girod, President and Chief Operating Officer.

THE COMPANY

The Company is a worldwide leader in the design, manufacture and marketing
of high-quality, high-fidelity audio products targeted primarily at the
consumer, professional and original equipment manufacturer ("OEM") markets.
For almost 50 years, the Company and its predecessors have been leaders and
innovators in creating loudspeakers and electronic audio products that deliver
superior sound. The Company's JBL, Mark Levinson, Infinity and Harman Kardon
brand names are well-known worldwide for premium quality and performance.
Since its formation in 1980, the Company has developed, internally and through
a series of strategic acquisitions, a broad range of product offerings sold
under renowned brand names in each of its three major markets. Concurrently,
the Company has developed its engineering, manufacturing and distribution
capabilities worldwide to achieve the benefits of vertical integration of
design, manufacturing and marketing.

The Company's total revenues for the fiscal year ended June 30, 1996 were
$1.4 billion. For the nine months ended March 31, 1997, the Company's total
revenues were $1.1 billion, with the Consumer Group, the Professional Group
and the OEM Group accounting for approximately 35%, 32% and 33% of revenues,
respectively.

The key elements of the Company's strategy are to provide superior sound
quality in all of its products, to capitalize on the strength of its brand
names, to leverage the Company's engineering and manufacturing expertise
across all of its businesses and to integrate design, engineering,
manufacturing and marketing.

The Company was incorporated in Delaware in 1980. The Company's principal
executive offices are located at 1101 Pennsylvania Avenue, N.W., Suite 1010,
Washington, D.C. 20004. The Company's telephone number is (202) 393-1101.

FORWARD-LOOKING STATEMENTS

Except for historical information contained in this Prospectus and in the
documents incorporated in this Prospectus by reference, the matters discussed
herein and therein contain forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
suggested in the forward-looking statements, including without limitation, the
effect of economic conditions, product demand, currency exchange rates,
competitive products and other risks detailed herein and in the Company's
other filings with the Commission.

3
<PAGE>

THE OFFERING

Issuer...................... Harman International Industries, Incorporated.

Securities Offered.......... $150,000,000 aggregate principal amount of %
Senior Notes due 2007.

Maturity Date............... July , 2007.

Interest Payment Dates...... and of each year, commencing ,
1998.

Redemption.................. The Senior Notes will not be redeemable prior to
maturity.

Ranking..................... The Senior Notes will be general unsecured
obligations of the Company and will rank senior
in right of payment to all existing or future
indebtedness of the Company that is by its terms
expressly subordinated in right of payment to the
Senior Notes and will rank pari passu with all
other existing or future indebtedness of the
Company.

Same-Day Settlement......... Initial settlement for the Senior Notes will be
made in immediately available funds. While held
in global form, the Senior Notes will settle in
DTC's Same-Day Funds Settlement System, and
settlement for any secondary market trades and
all payments of principal and interest will be
made in immediately available funds.

Book-Entry System and Form
and Denomination of Senior
Notes....................... The Senior Notes will be issued in denominations
of $1,000 or any integral multiple thereof.
Payment of principal of, and interest on, Senior
Notes represented by one or more permanent global
Senior Notes registered in the name of or held by
the Depositary or its nominee will be made in
immediately available funds to the Depositary or
its nominee as the registered owner and holder of
such permanent global Senior Note or Senior
Notes. Senior Notes will not be issued in
definitive form except under certain limited
circumstances described herein. See "Description
of Senior Notes--Book-Entry System."

Certain Covenants........... The indenture under which the Senior Notes will
be issued (the "Indenture") limits: (i) the
creation and existence of liens and (ii) sale and
leaseback transactions.

Use of Proceeds............. The net proceeds from the sale of the Senior
Notes offered hereby will be used to repay
existing indebtedness of the Company and for
working capital and general corporate purposes.
See "Use of Proceeds."

Governing Law............... The Indenture and the Senior Notes will be
governed by, and will be interpreted and
construed in accordance with, the laws of the
State of New York.

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table presents summary consolidated financial and operating
data of the Company for each of the five fiscal years ended June 30, 1996 and
for the nine month periods ended March 31, 1997 and 1996, which have been
derived from, and are qualified by reference to, the Company's consolidated
financial statements and those records incorporated by reference herein into
this Prospectus. In the opinion of management, the unaudited information
reflects all adjustments necessary for a fair presentation of the results for
such periods. The results of operations for such periods are not necessarily
indicative of results that may be expected for any future period or the full
fiscal year.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEAR ENDED JUNE 30, MARCH 31,
---------------------------------------------------- --------------------
(DOLLARS IN THOUSANDS) 1996 1995 1994 1993 1992 1997 1996
---------- ---------- -------- -------- -------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales............... $1,361,595 $1,170,224 $862,147 $664,913 $604,454 $1,097,462 $988,482
Gross profit............ 408,125 364,081 269,162 190,563 164,622 315,930 300,831
Selling, general and
administrative......... 302,747 276,632 202,830 149,308 137,075 242,939 226,414
Operating income........ 105,378 87,449 66,332 41,255 27,547 72,991 74,417
Interest expense........ 27,510 25,284 22,110 23,566 21,075 18,971 21,682
Income before taxes,
minority interest and
extraordinary item..... 75,024 61,157 42,686 18,570 5,893 53,513 51,612
Net income.............. 52,042 41,161 25,664 11,246 3,487 37,449 35,253
OTHER FINANCIAL DATA:
EBITDA(1)............... $ 156,312 $ 131,899 $ 98,591 $ 64,334 $ 49,688 $ 113,026 $113,125
Depreciation and
amortization........... 50,934 44,450 32,259 23,079 22,141 40,035 38,708
Capital expenditures.... 80,554 54,654 40,720 25,563 21,003 50,594 53,175
Net cash provided by
(used in) operating
activities............. (20,390) 37,537 (16,319) 22,694 (6,412) 18,388 (14,558)
Net cash used in
investing activities... 73,845 63,865 38,587 29,895 26,054 34,214 59,708
Net cash provided by
financing activities... 83,286 27,856 62,451 6,561 31,529 20,474 72,890
FINANCIAL RATIOS:
Ratio of EBITDA to
interest expense....... 5.68x 5.22x 4.46x 2.73x 2.36x 5.96x 5.22x
Ratio of earnings to
fixed charges(2)....... 3.05x 2.84x 2.54x 1.67x 1.24x 2.75x 2.97x
Debt/EBITDA............. 1.84x 2.32x 2.29x 3.32x 4.07x * *
<CAPTION>
JUNE 30, MARCH 31,
---------------------------------------------------- --------------------
(DOLLARS IN THOUSANDS) 1996 1995 1994 1993 1992 1997
---------- ---------- -------- -------- -------- --------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......... $ 377,311 $ 257,564 $215,878 $147,492 $102,374 $ 437,463
Total assets............ 996,209 886,872 680,691 431,726 415,909 1,022,177
Short-term debt......... 32,790 40,214 69,254 37,762 69,697 34,572
Long-term debt.......... 254,611 266,021 156,577 175,583 132,675 294,530
Shareholders' equity.... 436,477 289,490 232,021 111,149 111,241 452,087
</TABLE>
- --------
* Not meaningful
(1) "EBITDA" consists of operating income plus depreciation and amortization.
EBITDA is not intended to represent cash flow, or to be used as an
alternative to net income or any other measure of performance in
accordance with generally accepted accounting principles. Reference is
made to the Statement of Cash Flows contained in the Consolidated
Financial Statements of the Company incorporated by reference in this
Prospectus for a complete presentation of cash flows from operating,
investing and financing activities prepared in accordance with generally
accepted accounting principles.
(2) Earnings used in computing the ratio of earnings to fixed charges consist
of income before taxes plus fixed charges charged to income. Fixed charges
consist of interest on indebtedness, amortization of debt issue costs and
that portion of rental expenses representative of interest (deemed to be
one third of rental expenses).

5
<PAGE>

USE OF PROCEEDS

The net proceeds from the offering contemplated hereby are estimated to be
approximately $ million and initially will be used by the Company to repay a
portion of the borrowings outstanding under the $275 million multi-currency,
multi-option credit agreement of the Company and certain of its subsidiaries
(the "Revolving Credit Facility") (of which $158.5 million and $3.1 million
are outstanding under the credit facility and related letters of credit,
respectively, as of April 30, 1997, with interest rates thereon ranging from
0.86% in Japan to 6.44% in the United Kingdom). The Company plans to
thereafter use availability under the Revolving Credit Facility (i) to repay
at maturity the $17.5 million principal amount of its 10.40% Series B Senior
Notes due September 1997, (ii) to redeem in August 1997 the $63.75 million
remaining principal amount outstanding of its 12.00% Senior Subordinated Notes
due 2002 at a redemption price equal to 106% of the principal amount
outstanding, or approximately $67.6 million, and (iii) for working capital and
general corporate purposes. The Company evaluates strategic acquisitions from
time to time to further enhance the Company's competitive position.

6
<PAGE>

CAPITALIZATION

The following table sets forth the short-term debt and capitalization of the
Company (unaudited) as of March 31, 1997 and as adjusted to give effect to the
issuance of the Senior Notes offered hereby, the redemption of the 12.00%
Senior Subordinated Notes due 2002 and the repayment at maturity of the 10.40%
Series B Senior Notes due 1997. See "Use of Proceeds."

<TABLE>
<CAPTION>
MARCH 31, 1997(1)
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable.......................................... $ 11,208 $ 11,208
10.40% Series B Senior Notes due 1997.................. 17,500 0
Other current portion of long-term debt................ 5,864 5,864
-------- --------
Total short-term debt................................ $ 34,572 $ 17,072
======== ========
Long-term debt:
Borrowings under the Revolving Credit Facility......... $170,398 $104,134
Other senior long-term debt............................ 15,382 15,382
Senior Notes, offered hereby........................... 0 150,000
11.20% Senior Subordinated Notes due 1998.............. 45,000 45,000
12.00% Senior Subordinated Notes due 2002.............. 63,750 0
-------- --------
Total long-term debt................................. 294,530 314,516
-------- --------
Shareholders' equity:
Preferred Stock, $0.01 par value; 5,000,000 shares
authorized; none issued and outstanding............... -- --
Common Stock, par value $0.01 per share; 50,000,000
shares authorized; 18,454,068 shares issued and
outstanding........................................... 185 185
Additional paid-in capital............................. 283,908 283,908
Equity adjustment from foreign currency translation.... (13,872) (13,872)
Retained earnings...................................... 181,866 179,380
-------- --------
Total net shareholders' equity....................... 452,087 449,601
-------- --------
Total capitalization............................... $746,617 $764,117
======== ========
</TABLE>
- --------
(1) Underwriters' discounts and other expenses in connection with the issuance
and distribution of the Senior Notes are not included herein.

7
<PAGE>

BUSINESS

OVERVIEW

The Company is a worldwide leader in the design, manufacture and marketing
of high-quality, high-fidelity audio products targeted primarily at the
consumer, professional and original equipment manufacturer ("OEM") markets.
For almost 50 years, the Company and its predecessors have been leaders and
innovators in creating loudspeakers and electronic audio products that deliver
superior sound. The Company's JBL, Mark Levinson, Infinity and Harman Kardon
brand names are well known worldwide for premium quality and performance.
Since its formation in 1980, the Company has developed, internally and through
a series of strategic acquisitions, a broad range of product offerings sold
under renowned brand names in each of its three major markets. Concurrently,
the Company has developed its engineering, manufacturing and distribution
capabilities worldwide to achieve the benefits of vertical integration of
design, manufacturing and marketing.

The Company's operations are organized into three primary groups: the
Consumer Group, the Professional Group and the OEM Group.

CONSUMER GROUP

The Company's Consumer Group designs, manufactures and markets loudspeakers
under the JBL and Infinity brand names for home and automotive audio systems.
The Company also designs, manufactures and markets a broad range of consumer
electronics products under the Harman Kardon, Mark Levinson, Citation,
AudioAccess and Proceed brand names. The Company has the preeminent portfolio
of brand names and range of product offerings in the consumer audio market.
The JBL, Infinity and Harman Kardon brands are recognized throughout the world
for superior sound quality and good value. High-end amplifiers and other
electronic components bearing the Mark Levinson, Citation and Proceed brand
names are acclaimed for their superior build quality and state-of-the-art
sound reproduction.

The Company has leveraged its strong brand names in growing consumer audio
markets such as the home theater/multi-channel arena and the mini-systems
market. Sales of Harman Kardon audio/video receivers, JBL and Infinity
surround sound loudspeaker systems and multi-channel amplifiers and digital
signal processing components from Citation and Proceed have benefited from the
vigorous home theater market. Integrated mini-systems, including the JBL ESC
550 Simply Cinema System and the Harman Kardon Festival line, will capitalize
on the Company's strong brand names in this significant segment of the
consumer audio market.

The Company believes the new Digital Versatile Disc (DVD) technology will
provide additional growth opportunities for its consumer brands. Harman
Kardon, Proceed and Mark Levinson plan to introduce DVD players later this
year. Additionally, the Company expects DVD to stimulate loudspeaker sales due
to increased customer traffic in audio dealers' stores and the improvement in
audio performance from DVD over current analog audio/video and digital audio
components. Sales expectations are dependent, to a substantial extent, on
discretionary spending by consumers, which may be affected by economic
conditions.

8
<PAGE>

The Consumer Group's distribution strategy includes sale of its products
through large, multi-location retailers, such as Circuit City in the United
States (accounting for 5.4% of the Company's consolidated net sales for the
first nine months of fiscal 1997) and MediaMarkt in Germany (the Consumer
Group's two largest customers), and through high-fidelity audio specialists.
The Company operates marketing and distribution subsidiaries in its major
European and Asian markets to enhance responsiveness and service for
international customers.

PROFESSIONAL GROUP

The Company's Professional Group is a leading manufacturer and marketer of
professional audio equipment, including loudspeakers, amplifiers, mixing
consoles, signal processing equipment, microphones and effects devices. Such
products are marketed on a worldwide basis under brand names including JBL,
Soundcraft, Allen & Heath, DOD, Digitech, Lexicon, AKG, dbx, BSS, Turbosound,
Orban, Spirit and Studer. The Professional Group is uniquely equipped to
provide turnkey systems solutions for professional audio applications that
offer the customer improved performance, ease of installation and reduced
cost. The principal market segments served by the Professional Group are sound
reinforcement, broadcast and recording and music instrument support.

JBL is the leader in the vibrant cinema market, holding a dominant share of
Dolby and THX theater sound systems and serving customers such as Cineplex
Odeon and United Artists Theaters. Stadiums, concert halls, houses of worship
and major concert tours rely on sound reinforcement products from the
Professional Group, such as JBL and Turbosound loudspeakers, JBL and BSS
amplifiers, AKG microphones, Lexicon, DOD and dbx signal processing equipment,
and Soundcraft and Allen & Heath mixing consoles, to produce top quality
sound.

Customers in the recording and broadcast segment include radio and
television stations and recording studios. These customers, including AMS
Westfunk Radio, Abbey Road Studios and The Hit Factory, are primarily served
by Studer and Orban, with additional offerings from JBL, Lexicon, Soundcraft
and AKG.

JBL, DOD and Spirit serve the music instrument support segment of the
professional audio market. JBL manufactures and markets loudspeakers, monitors
and amplifiers. DOD manufactures and markets guitar amplifiers, sound effects
processors and portable mixing consoles. Spirit markets portable mixing
consoles. Music instrument support products are sold through music retail
stores such as Guitar Center and Sam Ash.

OEM GROUP

Automotive Audio Systems. Harman is one of the world's largest manufacturers
of premium branded automotive OEM audio systems. The Company believes
excellent growth opportunities are still available in the automotive OEM
market through higher penetration levels within existing models, increases in
the number of models offering the Company's audio systems and the addition of
new automotive OEM customers.

The Company's largest automotive OEM customer, Chrysler, offers Infinity
branded audio systems in the majority of its car, truck and sport-utility
vehicle platforms. Through the first nine months of fiscal 1997, sales to
Chrysler represented 9.6 percent of total Company sales. Becker supplies head
units to Mercedes Benz (the Company's second largest customer), BMW and
Porsche. Harman Kardon branded systems are offered in cars produced by BMW,
Saab, Jaguar and Range Rover. Other customers include Mitsubishi, Rover,
Toyota and Ford. The loss of, or a material decrease or delay in purchasing
the Company's products by, any of the Company's significant customers could
have an adverse effect on the results of operations of the Company. In
addition, sales of the Company's audio products to the automotive OEM market
are dependent on the sales of the automobile industry and automobile
purchasers' willingness to pay for the option of a premium branded automotive
audio system.

9
<PAGE>

In 1995, the Company withdrew Ford's exclusive use of the JBL brand name for
automotive audio and made the brand name available to other automakers.
Although the Company expects that the number of Ford vehicles offering JBL
systems will continue to decline, the Company believes that this reduction
will ultimately be offset by additional volume from other automakers. For
example, the Company recently reached an agreement with Toyota to provide JBL
branded audio systems in the majority of its broad range of vehicles beginning
in fiscal 1999, including vehicles produced by Toyota for sale in Asia. In
fiscal year 1998, the OEM Group will add the BMW 5-Series (Becker radio), the
Toyota Aristo (JBL audio system), the Peugeot 406 (JBL audio system), the
Hyundai Grandeur (JBL audio system), the Chrysler Durango (Infinity audio
system), and the BMW Z3 (Harman Kardon audio system) to its list of offerings.
The OEM Group offers integrated audio systems that provide a platform for
further expansion into associated automotive electronic products such as
communication, security and navigation.

Audio for Computers. The Company manufactures branded audio systems and
loudspeakers for manufacturers of personal computers, including a line of "JBL
Pro" branded audio systems for Compaq Computer Corporation's Presario line of
personal computers and a higher-powered Harman Kardon branded sound system for
Gateway's new Destination "TV Computer." These audio systems provide high-
quality sound and thus enhance the appeal and capability of the personal
computer as an entertainment device.

STRATEGY

The Company utilizes its technical expertise and reputation for creating
superior sound to increase market share in existing markets and to enter new
markets in which Harman's audio engineering capabilities and strong brand
names generate a competitive advantage. The key elements of the Company's
strategy are:

Provide Superior Sound. Harman strives to provide its customers with
products that deliver high-quality, high-fidelity sound. The Company's
subsidiaries have been leaders and innovators in loudspeaker and electronic
production and technology for almost 50 years. Management believes the
Company's research, development and engineering capabilities are among the
most advanced in the audio industry.

Capitalize on Brand Equity. The Company believes that its brand names are
well recognized worldwide for premium quality and performance. Harman believes
that this strong brand name recognition has enabled it to expand its product
offerings and market share in the consumer, professional and OEM audio
markets, and will continue to facilitate such growth in the future.

Leverage Engineering and Manufacturing Expertise. The Company leverages its
engineering and manufacturing expertise across all segments of its businesses
and utilizes its expertise for entry into new markets, such as the OEM audio
for computers market and the market for intellectual property such as audio
software. Additionally, new segments within the consumer and professional
markets, such as home theater in the consumer market and the conversion to
digital technology in the professional market, offer opportunities for growth.
The Company will continue to pursue new opportunities.

Integrate Design, Engineering, Manufacturing and Marketing. Harman has
invested significant resources in developing sophisticated manufacturing
processes and facilities in the United States and Europe. Management believes
that its ability to manufacture innovative, high-quality products is
attributable to the Company's integrated facilities, coupled with its policy
of emphasizing workers' education, training and participation in the decision-
making process. The Company seeks to integrate the disciplines of design,
engineering, manufacturing and marketing. As distinguished from the
traditional separation of these functions, management believes that
communication and cooperation among all functional areas significantly reduces
development time, generates products that can be

10
<PAGE>

more efficiently and competitively produced, and improves the Company's
ability to respond to customer needs.

Market on an International Basis. The Company's subsidiaries have been
actively marketing products worldwide for almost 50 years. Harman strives to
produce products that are responsive to the requirements of different
international markets for functionality, appearance and performance. As a
result, the Company believes that its major brands are well recognized for
high-quality in most major markets worldwide. Approximately 60 percent of the
Company's sales are outside the United States.

OPPORTUNITIES

Within its Consumer, Professional and OEM Groups, the Company foresees
growth opportunities including the following:

Existing and Emerging Market Segments. The Company continues to leverage its
brand names and technical expertise to broaden its product offerings in
existing market segments and enter new segments, including surround sound,
home theater and audio systems for personal computers. The Company continually
seeks to improve its market position in its important loudspeaker business by
introducing new products that offer greater efficiency and reduced size.
Further, the Company's advanced technology in loudspeakers and electronics
permits it to develop integrated systems that offer substantial improvements
in performance, such as loudspeakers with built-in amplifiers. The Company
also intends to pursue opportunities in emerging product categories such as
electronic components that offer simplified digital control, reduced size and
high-quality sound.

Comprehensive, Integrated Professional Product Offerings. Management
believes that the ability to offer professional customers complete turnkey
systems across its principal market segments, including broadcast and
recording, sound reinforcement and musical instrument support, will allow the
Company to continue increasing sales in these segments. The Company believes
that advances in motion picture audio and recording technology will continue
to drive demand for loudspeakers and electronics in movie theaters and
recording studios. Management also expects that emerging markets in Eastern
Europe and Asia will increase demand for its professional audio products and
recording and broadcast equipment to satisfy infrastructure needs.

Fully-Integrated Automotive Audio Systems. The Company believes significant
growth opportunities exist within the automotive audio market to increase
sales by increasing product penetration in OEM models currently supplied,
expanding the number of automobile models offering its systems, adding new OEM
customers and increasing content. The Company now has the capability to
provide fully-integrated automotive audio systems that incorporate a head
unit, amplifiers, loudspeakers and associated electronics. These integrated
systems make possible a potential increase in the unit price of the Company's
audio systems, and they also provide a platform for the Company's expansion
into additional automotive electronic products such as communications and
security and navigation, thereby providing the opportunity for further
increases in system content.

New Technology. Through the extensive development of digital signal
processing capabilities by its electronic engineering organization, the
Company is generating a substantial body of intellectual property, including
proprietary software, titled VMAx(TM), which produces virtual surround audio
from only two speakers. The Company has signed licensing agreements with
Microsoft for the inclusion of VMAx(TM) in Windows and with Medianix
Semiconductor for inclusion of VMAx(TM) on its multimedia chip. Further, the
Company sold its Smart TV software to Intel in fiscal 1997. The Company's 6-
axis(TM) surround sound system employed in the Harman Kardon Citation
Processor is of interest to a number of advanced technology users. These and
other technological developments form a body of intellectual property around
which the Company believes it can develop new revenue sources.

11
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Comparison of the Three-Month and Nine-Month Periods Ended March 31, 1997 and
1996.

Net sales for the quarter ended March 31, 1997 totaled $358.1 million, a 6
percent increase over the comparable period in the prior year. Exclusive of
currency effects, sales rose 10 percent for the quarter ended March 31, 1997,
over the comparable period in the prior year. For the first nine months of
fiscal 1997, sales increased 11 percent to $1.1 billion. Exclusive of currency
effects, sales rose 14 percent in the nine month period ended March 31, 1997,
over the comparable period in the prior year.

The Consumer Group reported sales increases for the quarter ended March 31,
1997 and for the first nine months of fiscal 1997 compared to the same periods
in the prior year, excluding currency effects. JBL sales were particularly
strong in the face of soft market conditions in the United States.

The Professional Group reported sales for the quarter ended March 31, 1997
matching the same period in the prior year and higher sales for the first nine
months of fiscal 1997. Strong gains at JBL Professional, Lexicon and the
Harman Music Group were offset by lower sales at Studer due to delays in
shipment of automated broadcast equipment to customers in emerging nations,
and lower sales at AKG to a large OEM customer.

The OEM Group reported higher sales for the quarter ended March 31, 1997 and
the first nine months of fiscal 1997. Shipments of high-fidelity systems to
the automakers increased over the prior year, reflecting the addition of new
models and growing penetration rates. The addition of the Toyota Camry to the
OEM Group's customer base and higher audio system shipments for Dodge's pickup
truck line contributed to the growth. Sales for the quarter and the first nine
months included shipments to Compaq for its new Presario line.

The gross profit margin for the quarter ended March 31, 1997 was 28.9
percent ($103.5 million) compared to 30.5 percent ($103.4 million) for the
same period in the prior year. The gross profit margin for the first nine
months of fiscal 1997 was 28.8 percent ($315.9 million) compared to 30.4
percent ($300.8 million) in the previous year. The decrease in the gross
profit margin rate for the quarter and the first nine months resulted from the
Studer and AKG third quarter sales shortfalls, the effect of the strong dollar
on the Company's European and Asian distribution companies' profit margins,
and lower than anticipated sales volume and higher factory start-up costs for
the Audio for Computers unit.

Operating income as a percentage of sales was 5.8 percent ($20.7 million)
for the quarter ended March 31, 1997, compared to 8.2 percent ($27.7 million)
for the same period in the prior year. Selling, general and administrative
expenses were 23.1 percent of sales for the third quarter of fiscal 1997
compared to 22.3 percent for the same period in the prior year. The operating
income percentage decreased in the third quarter of fiscal 1997 due to lower
gross profit margins and higher selling, general and administrative expenses
as a percentage of sales. The increase in the selling, general and
administrative cost percentage for the third quarter of fiscal 1997 reflected
a $2.5 million (18 percent) increase in research and development expenditures
over the prior year and lower than anticipated

12
<PAGE>

sales volume. Major product development efforts included new Harman Kardon
products featuring Dolby Digital (AC-3), home mini-systems and the OEM Group's
development of automotive audio/navigation systems.

For the first nine months of fiscal 1997, operating income as a percentage
of sales was 6.7 percent ($73.0 million) compared to 7.5 percent ($74.4
million) in the prior year. Selling, general and administrative expenses were
22.1 percent of sales for the first nine months of fiscal 1997, down from 22.9
percent for the same period in the prior year. The lower operating income
percentage for the first nine months of fiscal 1997 was due to lower gross
profit margins, partially offset by lower selling, general and administrative
expenses as a percentage of sales resulting from overhead reductions at
Becker.

Interest expense for the quarter ended March 31, 1997 of $6.1 million was
down from $7.2 million in the same period in the prior year. For the nine
months ended March 31, 1997, interest expense was $19.0 million, down from
$21.7 million in the prior year. Average borrowings outstanding were $327.9
million for the third quarter of fiscal 1997 and $320.5 million for the first
nine months of fiscal 1997, down from $379.7 million and $354.6 million,
respectively, for the same periods in the prior year. Lower average borrowings
resulted from the May 1996 secondary stock offering, partially offset by
increased working capital requirements and the January 1997 retirement of
220,000 shares of Common Stock of the Company.

The average interest rate on borrowings was 7.4 percent for the quarter
ended March 31, 1997 and 7.9 percent for the nine months ended March 31, 1997.
The average interest rates for the comparable periods in the prior year were
7.6 percent and 8.2 percent, respectively. The decrease in average interest
rates resulted from lower interest rates in Europe and a decrease in the
percentage of borrowings under the Revolving Credit Facility drawn in the
United States, which generally carry higher interest rates than borrowings in
European currencies and Japanese yen. Also, the interest rate on the Revolving
Credit Facility was reduced in fiscal 1997 from LIBOR plus 0.30 percent to
LIBOR plus 0.25 percent due to the Company's achievement of certain financial
performance criteria. Interest expense as a percentage of sales was 1.7
percent for the third quarter and the first nine months of fiscal 1997, down
from 2.1 percent and 2.2 percent for the same periods in the previous year,
respectively.

Income before income taxes and minority interest for the quarter ended March
31, 1997 was $14.6 million, compared to $20.3 million for the same period in
the prior year. For the nine months ended March 31, 1997, income before income
taxes and minority interest was $53.5 million, compared with $51.6 million in
the prior year.

The effective tax rate for the third quarter of fiscal 1997 was 29.1 percent
compared with 31.5 percent in the same period in the prior year. The effective
tax rate for the first nine months of fiscal 1997 was 29.9 percent compared
with 31.6 percent in the prior year. The lower effective tax rate is due to
the restructuring of certain foreign subsidiaries to realize the benefit of
current and prior year tax losses and the utilization of tax loss
carryforwards at certain foreign subsidiaries. The Company calculates its
effective tax rate based upon its current estimate of annual results.

Net income for the quarter ended March 31, 1997 was $10.3 million, or $0.56
per share, compared with $13.9 million, or $0.86 per share, for the same
period in the prior year. Net income for the first nine months of fiscal 1997
was $37.4 million, or $2.02 per share, compared with $35.3 million, or $2.17
per share, in the prior year. Earnings per share is based on an additional 2.2
million (14 percent) shares outstanding compared to the prior year due to the
May 1996 stock offering.

The Company has assets located outside the United States and a substantial
portion of the Company's sales and earnings are attributable to operations
conducted abroad and to export sales.

13
<PAGE>

In the nine months ended March 31, 1997, approximately 60 percent of the
Company's gross revenues consisted of sales made outside the United States.
The Company's international operations subject the Company to certain risks,
including exposure to currency exchange rate fluctuations. The Company also
relies on foreign suppliers and sells products it manufactures domestically to
foreign markets. The Company's international operations are subject to other
risks, including adverse political and economic developments in the countries
in which it conducts business, dividend restrictions, tariffs and potential
adverse tax consequences, including payment of taxes in jurisdictions that
have higher tax rates than the United States. There can be no assurance that
one or more of these factors of doing business in an international market will
not have a material effect on the Company's financial position or results of
operations in the future.

FINANCIAL CONDITION

Net working capital at March 31, 1997 was $437.5 million, compared with
$377.3 million at June 30, 1996. Working capital increased primarily due to
higher inventories ($308.1 million at June 30, 1996 and $330.2 million at
March 31, 1997) and lower accounts payable and accrued liabilities ($241.9
million at June 30, 1996 and $213.3 million at March 31, 1997). Inventories
have increased primarily to support sales to new OEM customers (Compaq and
Toyota) and to support generally higher sales volumes. Lower accounts payable
and accrued liabilities reflect the timing of payments to vendors and the
timing of payments for interest and taxes.

Borrowings under the Revolving Credit Facility on March 31, 1997 were $175.5
million, comprised of swing-line borrowings of $5.1 million, which are
included in notes payable, and competitive advance borrowings and revolving
credit borrowings of $170.4 million. Borrowings under the Revolving Credit
Facility at June 30, 1996 were $120.9 million, comprised of swing-line
borrowings of $12.9 million and competitive advance borrowings and revolving
credit borrowings of $108.0 million. Increased borrowings reflect the
financing of higher working capital requirements, the retirement in January
1997 of 220,000 shares of Common Stock and capital expenditures. The Company
is entering into an amendment to the Revolving Credit Facility with the
lending banks (including affiliates of the Underwriters) to extend the
maturity to September 2002, release subsidiary guarantees and delete and/or
limit certain negative covenant restrictions.

The Company's borrowings at March 31, 1997 include $63.75 million of
subordinated debt callable on August 1, 1997 and $17.5 million of senior debt
due on September 30, 1997. The Company intends to repay these obligations
using the net proceeds from this offering.

RECENT DEVELOPMENTS

The Company announced in an April 3, 1997 press release that in the second
half of calendar 1998 it will begin supplying JBL branded audio systems to
Toyota. Toyota will offer the JBL systems in the dominant portion of its
United States models and in some vehicles produced for sale in Asia. The
Company currently supplies non-branded audio systems for the Toyota Avalon and
Camry.

The strike at Chrysler's Mound Road Engine Plant, which began on April 10,
1997 and was settled on May 9, 1997, resulted in reduced demand for the
Company's Infinity automotive music systems during the fourth quarter of
fiscal 1997. The Company estimates a reduction in fourth quarter earnings, due
to the impact of lower shipments to Chrysler, of approximately $0.15 per
share, after taxes.

14
<PAGE>

MANAGEMENT

The following table sets forth the names, ages and positions of the
Directors and Executive Officers of the Company as of June 6, 1997.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Sidney Harman................... 78 Chairman of the Board of Directors and
Chief Executive Officer
Bernard A. Girod................ 55 President, Chief Operating Officer,
Secretary and Director
Shirley Mount Hufstedler........ 71 Director
Ann McLaughlin.................. 55 Director
Edward H. Meyer................. 70 Director
Thomas Jacoby................... 42 President--Harman Consumer Group
Philip Hart..................... 52 President--Harman Professional Group
Gregory P. Stapleton............ 50 President--Harman OEM Group
Frank Meredith.................. 40 Vice President, Chief Financial Officer and
Assistant Secretary
Jerome H. Feingold.............. 55 Vice President--Quality
Sandra B. Robinson.............. 37 Vice President--Financial Operations
Floyd E. Toole.................. 58 Vice President--Engineering
William S. Palin................ 54 Vice President--Controller
</TABLE>

The principal occupation of each Director and Executive Officer for at least
the last five years is set forth below.

Sidney Harman, Ph.D., the Company's founder, has been Chairman of the Board
and Chief Executive Officer since the Company's formation in 1980. Dr. Harman
served as Under Secretary of Commerce of the United States from 1977 through
1978.

Bernard A. Girod has been President of the Company since March 1994, Chief
Operating Officer of the Company since March 1993, Secretary of the Company
since November 1992 and a Director of the Company since 1993. From September
1986 to August 1995, Mr. Girod served as Chief Financial Officer of the
Company. From September 1979 to September 1986, Mr. Girod was the Vice
President and General Manager of Permacel, a subsidiary of Avery International
and Vice President of Planning and Business Development for Avery
International. From 1977 to 1979, Mr. Girod was the Chief Financial Officer of
the predecessor of the Company.

Shirley Mount Hufstedler has been a Director of the Company since September
1986. Ms. Hufstedler is and has been for the past fifteen years in private law
practice. She served as Secretary of Education of the United States from 1979
to 1981 and as a judge on the United States Court of Appeals for the Ninth
Circuit from 1968 to 1979. Ms. Hufstedler is a Director of U S WEST, Inc. and
Director Emeritus of Hewlett-Packard Company. She is currently with the firm
of Morrison & Foerster in Los Angeles, California and, from 1981 to March
1995, was with the firm of Hufstedler & Kaus.

Ann McLaughlin has been a Director of the Company since November 1995. She
served as Secretary of Labor of the United States under President Reagan from
1987 until 1989. Ms. McLaughlin is a director of AMR, General Motors
Corporation, Kellogg Company and Nordstrom, Inc. She is a member of the Board
of Overseers of the Wharton School of the University of Pennsylvania and a
member of the Board of the Nixon Center for Peace and Freedom.

Edward H. Meyer, who was elected a Director of the Company in July 1990, has
been the Chairman of the Board, Chief Executive Officer and President of Grey
Advertising, Inc., New York,

15
<PAGE>

New York, an advertising firm, since 1972. Mr. Meyer serves as a Director for
May Department Stores Company, Bowne & Co., Inc., Ethan Allen Interiors, Inc.,
and as a Director/trustee of 35 mutual funds advised by Merrill Lynch Asset
Management, Inc.

Thomas Jacoby has been President of the Harman Consumer Group since February
1993. Prior to that time, Mr. Jacoby served as President of JBL Consumer since
August 1990. From July 1988 to August 1990, Mr. Jacoby served as Executive
Vice President of Harman Kardon.

Philip J. Hart has been President of the Harman Professional Group since
November 1993. Prior to that time, Mr. Hart served as President of Soundcraft
since its 1988 acquisition by Harman.

Gregory P. Stapleton has been President of the Harman OEM Group since
October 1987. Prior to his association with the Company, he was Senior Vice
President of General Electric Venture Capital Corporation from January 1986 to
September 1987, and was General Manager, Industrial Products Section, Factory
Automation Products Division of General Electric Corporation from October 1982
through December 1985.

Frank Meredith has been the Chief Financial Officer of the Company since
February 1997. Mr. Meredith has served as the Vice President, General Counsel
and Assistant Secretary of the Company since July 1992. Prior to that time,
Mr. Meredith held other positions within the Company since May 1985.

Jerome H. Feingold has been the Vice President-Quality of the Company since
January 1992. Prior to that time, Mr. Feingold served as President of Harman
Speaker Manufacturing since July 1985. Prior to 1985, Mr. Feingold held
various management positions within the manufacturing division of the Company.

Sandra B. Robinson has been Vice President-Financial Operations since
November 1992. Prior to that time, Ms. Robinson was Director of Corporate
Accounting and has been employed by the Company since December 1984.

Floyd E. Toole, Ph.D., joined the Company as Vice President-Acoustic
Research in November 1991. Prior to joining the Company, Dr. Toole spent 25
years, most recently as Senior Research Officer, with the National Research
Council of Canada's Acoustics and Signal Processing Group. At the National
Research Council, Dr. Toole worked to develop psychoacoustic-optimized
adaptive digital techniques for improving loudspeaker performance.

William S. Palin has been Vice President-Controller of the Company since
March 1994. Prior to joining the Company, Mr. Palin was a partner of MacHardy
Palin & Co. from July 1978 to March 1994. From July 1978 to January 1982, Mr.
Palin served as an officer of two of the Company's international subsidiaries.

16
<PAGE>

DESCRIPTION OF SENIOR NOTES

The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all provisions of the Indenture, including the definitions of
certain terms contained in the Indenture. Copies of the Indenture have been or
will be filed as exhibits to the Registration Statement with the Commission.
Capitalized terms not otherwise defined herein shall have the respective
meanings given to them in the Indenture.

GENERAL

The Senior Notes will be issued under an indenture to be dated as of ,
1997 (the "Indenture"), between the Company and PNC Bank, National
Association, as trustee (the "Trustee").

The Senior Notes will be issued in denominations of $1,000 or any integral
multiple thereof. As discussed below, payment of principal of, and interest
on, Senior Notes represented by one or more permanent global Senior Notes
registered in the name of or held by the Depositary or its nominee will be
made in immediately available funds to the Depositary or its nominee as the
registered owner and holder of such permanent global Senior Note or Senior
Notes ("Global Notes").

The Senior Notes will be general unsecured obligations of the Company
limited to $150,000,000 aggregate principal amount and will rank senior in
right of payment to all existing or future indebtedness of the Company which
is by its terms expressly subordinated in right of payment to the Senior Notes
and will rank pari passu with all other existing or future indebtedness of the
Company. See "--Priority."

The Senior Notes will be exchangeable, and transfers thereof will be
registerable, at the office or agency of the Company designated for that
purpose in Washington, D.C., or any other office or agency of the Company
designated for that purpose, provided that, at the option of the Company,
payment of any interest may be made by check mailed to the address of the
person entitled thereto as it appears in the Senior Note register.

The Company will from time to time execute and deliver Senior Notes to the
Trustee for authentication and delivery, and the Trustee will authenticate and
deliver such Senior Notes upon written order of the Company. No service charge
will be made for any transfer or exchange of the Senior Notes, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

TERMS OF THE NOTES

Interest on the Senior Notes will be payable semi-annually on and
of each year, commencing , 1998, to holders of record on the
preceding and , respectively, at the per annum rate set forth on
the cover page of this Prospectus, with respect to interest accrued (based on
a 360-day year of twelve 30-day months) from the preceding interest payment
date (or from the date of issuance in the case of the first interest payment)
to the current interest payment date.

The Senior Notes are not redeemable prior to maturity and no sinking fund
will be established with respect to the Senior Notes.

PRIORITY

The Senior Notes offered hereby will rank equally with the Company's other
general unsecured and unsubordinated indebtedness, including indebtedness from
time to time outstanding to banks and other unaffiliated lenders. The Senior
Notes will be effectively subordinated to any and all existing and future
secured indebtedness of the Company (to the extent of the value of the related
collateral). In addition, because the Company is a holding company whose
operations are conducted through its operating subsidiaries, the Senior Notes
will be structurally subordinated to any and all

17
<PAGE>

existing and future indebtedness (whether or not secured) of any subsidiary of
the Company. As of March 31, 1997, after giving pro forma effect to the sale
of the Senior Notes offered hereby and the use of proceeds described under
"Use of Proceeds," the Company and its subsidiaries would have had
approximately $286.6 million of total unsubordinated indebtedness,
approximately $18.9 million of which was secured indebtedness and $139.6
million of which was indebtedness of the subsidiaries of the Company
(including letters of credit, but excluding subsidiary guarantees of Company
indebtedness). See "Capitalization." The Indenture does not prohibit the
Company or its subsidiaries from issuing additional debt securities or
incurring bank or other loans that may rank pari passu in right of payment to
the Senior Notes offered hereby, nor does it prohibit subsidiaries of the
Company from issuing additional debt Securities or incurring bank or other
loans that may be structurally Senior in right of payment to the Senior Notes
offered hereby.

CERTAIN COVENANTS
Liens. The Indenture provides that so long as any Senior Notes are
outstanding, the Company will not, and will not permit any Principal
Subsidiary to, create, incur, assume or suffer to exist any Lien upon any
property or assets of the Company or any Principal Subsidiary to secure any
Indebtedness, without making effective provision whereby outstanding Senior
Notes shall (so long as such other Indebtedness shall be so secured) be
equally and ratably secured.

Under the terms of the Indenture, the foregoing limitation does not apply to
(a) Liens for taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Company or its Principal Subsidiaries, as
the case may be, in conformity with generally accepted accounting principles
(or, in the case of foreign subsidiaries, generally accepted accounting
principles in effect from time to time in their respective jurisdictions of
incorporation), (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 60 days or that are being
contested in good faith by appropriate proceedings, (c) pledges or deposits in
connection with workers' compensation, unemployment insurance and other social
security legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements, (d) deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business, (e)
easements, rights-of-way, restrictions and other similar encumbrances incurred
in the ordinary course of business that, in the aggregate, are not substantial
in amount and that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Company or such Principal Subsidiary, (f) Liens in
existence on the closing date, provided that no such Lien is spread to cover
any additional property after the closing date and that the amount of
Indebtedness secured thereby is not increased, (g) Liens arising in connection
with trade letters of credit issued for the account of the Company or a
Principal Subsidiary securing the reimbursement obligations in respect of such
letters of credit, provided, that such Liens encumber only the property being
acquired through payments made under such letters of credit or the documents
of title and shipping and insurance documents relating to such property, (h)
Liens on intellectual property acquired by the Company or a Principal
Subsidiary (such as software) securing the obligation of the Company or such
Principal Subsidiary to make royalty or similar payments to the seller of such
intellectual property, provided, that such Liens encumber only the
intellectual property to which such payments relate, (i) any Lien upon any
property or assets created at the time of the acquisition of such property or
assets by the Company or any Principal Subsidiary or within one year after
such time to secure all or a portion of the purchase price for such property
or assets, (j) any Lien upon any property or assets existing thereon at the
time of the acquisition thereof by the Company or any Principal Subsidiary
(whether or not the obligations secured thereby are assumed by the Company or
any Principal Subsidiary), (k) any Lien in favor of the Company or any
Principal Subsidiary, (l) any Lien created or assumed by the Company or any
Principal Subsidiary in connection with the issuance of debt securities the
interest on which is excludable from gross income of the holder of such
security pursuant to the Internal Revenue Code of

18
<PAGE>

1986, as amended (the "Code"), for the purpose of financing, in whole or in
part, the acquisition or construction of property or assets to be used by the
Company or any Principal Subsidiary, (m) any Lien securing any Indebtedness in
an amount which, together with (1) all other Indebtedness secured by a Lien
that is not otherwise permitted by the foregoing provisions, and (2) any Sale
and Leaseback Transaction permitted only under clause (e) below, that does not
at the time of the incurrence of the Indebtedness so secured exceed 10% of the
Company's Consolidated Net Tangible Assets, and (n) any extension, renewal or
refunding of any Lien permitted by the foregoing clauses (f) through (m),
inclusive, on substantially the same property or assets theretofore subject
thereto.

Sale and Leaseback Transactions. The Indenture provides that so long as any
Senior Notes are outstanding, the Company will not, and will not permit any
Principal Subsidiary to, enter into any Sale and Leaseback Transaction with
respect to any property or assets of the Company or any Principal Subsidiary,
unless (a) such Sale and Leaseback Transaction involves a lease for a term of
not more than three years, (b) such Sale and Leaseback Transaction is between
the Company and its Principal Subsidiaries or between Principal Subsidiaries,
(c) the Company or a Principal Subsidiary would be entitled to incur
Indebtedness secured by a Lien on such property or assets involved in such
Sale and Leaseback Transaction without equally and ratably securing the Senior
Notes pursuant to the covenant concerning future Liens described above, (d)
the cash proceeds of such Sale and Leaseback Transaction are at least equal to
the fair market value thereof or to the debt attributable thereto and the
Company applies the amount equal to the greater of the net proceeds of such
sale or the Indebtedness with respect to such Sale and Leaseback Transaction
within 180 days of such sale to either (or a combination) of (1) the
retirement (other than the mandatory retirement, mandatory prepayment or
sinking fund payment or by payment at maturity) of long-term debt of the
Company (other than long-term debt that is subordinated to the Senior Notes)
or (2) the purchase, construction or development of other comparable property,
or (e) any Sale and Leaseback Transaction in an amount which, together with
(1) all other Sale and Leaseback Transactions under this clause (e), and (2)
all other Indebtedness secured by a Lien that is not otherwise permitted by
the provisions at clauses (a) through (l) above, does not at the time of such
transaction exceed 10% of the Company's Consolidated Net Tangible Assets.

For purposes of the Indenture:

"Consolidated Net Tangible Assets" means total assets (less applicable
reserves and other properly deductible items) after deducting therefrom (a)
all current liabilities and (b) all goodwill, trade names, trademarks,
patents, organization expenses and other like intangibles, all as set forth on
the most recent balance sheet of the Company and its consolidated subsidiaries
and computed in accordance with generally applicable accounting principles.

"Indebtedness" of any Person at any date means all indebtedness or
obligations of such Person, as reflected on the balance sheet of such Person
prepared in accordance with generally accepted accounting principles, other
than current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices.

"Lien" means any mortgage, pledge, hypothecation, encumbrance, lien or other
security interest.

"Principal Subsidiary" means (a) each Subsidiary of the Company existing on
the closing date and (b) any Subsidiary created or acquired after the closing
date which meets either of the following conditions: (1) the Company and its
other subsidiaries' investments in and advances to the Subsidiary exceeds 10%
of the total assets of the Company and its subsidiaries consolidated as of the
end of the most recently completed fiscal year (for a proposed business
combination to be accounted for as a pooling of interests, this condition is
also met when the number of common shares exchanged by the Company exceeds 10%
of its total common shares outstanding at the date the combination is
initiated) or (2) the Company and its other subsidiaries' proportionate share
of the total assets (after intercompany eliminations) of the Subsidiary
exceeds

19
<PAGE>

10% of the total assets of the Company and its subsidiaries consolidated as of
the end of the most recently completed fiscal year.

"Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Principal Subsidiary of real
or personal property that is to be sold or transferred by the Company or such
Principal Subsidiary to such Person or to any other Person to whom funds have
been or are to be advanced by such Person on the security of such property or
rental obligations of the Company or such Principal Subsidiary.

"Subsidiary" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of capital stock, entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (b) any partnership (1) the sole general
partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (2) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination
thereof).

LIMITATION ON MERGERS AND CONSOLIDATIONS
The Indenture provides that the Company will not consolidate or merge with
or into any Person, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets, or assign any of its obligations under the
Indenture or the Senior Notes, to any Person, unless: (i) the Person formed by
or surviving such consolidation or merger (if other than the Company), or to
which such sale, lease, conveyance or other disposition or arrangement shall
be made (collectively, the "Successor"), is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and the Successor assumes by supplemental indenture in a
form reasonably satisfactory to the Trustee all of the obligations of the
Company under the Indenture and under the Senior Notes; and (ii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing.

EVENTS OF DEFAULT AND NOTICE THEREOF
The Indenture defines an Event of Default as being any one of the following
events: (a) failure to pay interest on the Senior Notes when due, which
failure continues for 30 days, (b) failure to pay principal of the Senior
Notes when due, (c) failure to observe or perform any other covenant of the
Company set forth in the Indenture for the Senior Notes, which failure
continues for 60 days after notice as provided in the Indenture, (d) certain
events of bankruptcy, insolvency or reorganization in respect of the Company,
(e) any default or event of default under any Indebtedness of the Company or
any of its Subsidiaries (other than any indebtedness of the Company or any
Subsidiary to the seller of a business or asset incurred in connection with
the purchase thereof) which default or event of default results in at least
$20 million of aggregate principal amount of such Indebtedness being declared
due and payable prior to maturity, and (f) failure by the Company or any of
its Subsidiaries to pay at maturity at least $20 million aggregate principal
amount of such Indebtedness at any one time, which failure continues for 15
days after notice from the Trustee or the holders of 25% of the Senior Notes.

Within 60 days after the occurrence of a Default known to the Trustee, the
Trustee is required to transmit notice thereof to the holders of the Senior
Notes. Except in the case of a default in the payment of the principal of or
interest on the Senior Notes, the Trustee may withhold such notice if and so
long as the Trustee, in good faith, determines that the withholding of such
notice is in the interests of the holders of the Senior Notes. If an Event of
Default shall occur and be continuing, the Trustee or the holders of not less
than 25% in aggregate principal amount of the Senior Notes outstanding may
declare the principal immediately due and payable. However, if prior to the
entry of any judgment or decree for the accelerated amount, the Company shall
pay or deposit with the Trustee all principal and interest arrearage, the
holders of not less than a majority in aggregate principal amount of the
Senior Notes shall have the right to waive all defaults and the consequences
of having all principal payments due. Such waiver will not, however, be
operative as against nor impair

20
<PAGE>

any rights arising as a result of any subsequent Event of Default. The Trustee
will not be charged with knowledge of any Event of Default other than the
Company's failure to make principal and interest payments unless actual
written notice thereof is received by the Trustee.

The Indenture contains provisions regarding limitations on the right to
institute legal proceedings. No holder of Senior Notes shall have the right to
institute an action or proceeding for rights arising under the Indenture
unless (a) such holder has given written notice of default to the Trustee, (b)
the holders of not less than 25% of the aggregate principal amount of Senior
Notes outstanding shall have made a written request to the Trustee to
institute an action and offered the Trustee such indemnification satisfactory
to it, (c) the Trustee shall have not commenced such action within 60 days of
receipt of such notice and indemnification offer, and (d) no direction
inconsistent with such request has been given to the Trustee by the holders of
not less than a majority of the aggregate principal amount of the Senior Notes
then outstanding. Notwithstanding the foregoing, subject to applicable law,
nothing shall prevent the holders of Senior Notes from enforcing payment of
the principal of or interest on their Senior Notes.

The holders of a majority in aggregate principal amount of the Senior Notes
outstanding at the time may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided, however, that the Trustee shall
have the right to decline to follow such direction if, being advised by
counsel, the Trustee determines that the action so directed may not lawfully
be taken, or if the Trustee in good faith determines that the action so
directed would be unduly prejudicial to the holders of the Senior Notes not
taking part in such action, or that such action would involve the Trustee in
personal liability.

The Indenture provides that, in case an Event of Default shall occur (which
shall not have been cured or waived), the Trustee will be required to use the
degree of care a prudent person would use in the conduct of their own affairs.
Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
of the holders of the Senior Notes unless they shall have offered the Trustee
security or indemnity satisfactory to it.

The Company will be required to furnish to the Trustee annually a statement
as to the fulfillment by the Company of all its obligations under the
Indenture.

BOOK-ENTRY SYSTEM

Upon issuance, the Senior Notes will be represented by one or more Global
Notes. Each Global Note will be deposited with, or on behalf of, the
Depositary and registered in the name of a nominee of the Depositary. Except
under the limited circumstances described below, Global Notes will not be
exchangeable for definitive certificated Senior Notes.

Ownership of beneficial interests in Global Notes will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") or persons that may hold interests through participants. In
addition, ownership of beneficial interests by participants in such Global
Notes will be evidenced only by, and the transfer of that ownership will be
effected only through, records maintained by the Depositary or its nominee for
such Global Notes. Ownership of beneficial interests in such Global Notes by
persons that hold through participants will be evidenced only by, and the
transfer of that ownership interest within such participant will be effected
only through, records maintained by such participant. The Depositary has no
knowledge of the actual beneficial owners of the Senior Notes. Beneficial
owners will not receive written confirmation from the Depositary of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the participants though which the beneficial owners entered the
transaction. The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in such Global Notes.

The Company has been advised by the Depositary that upon the issuance of
Global Notes and the deposit of such Global Notes with the Depositary, the
Depositary will immediately credit, on its

21
<PAGE>

book-entry registration and transfer system, the respective principal amounts
represented by such Global Notes to the accounts of participants.

Payment of principal of, and interest on, Senior Notes represented by Global
Notes registered in the name of or held by the Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the
registered owner and holder of the Global Notes representing such Senior
Notes. The Company has been advised by the Depositary that upon receipt of any
payment of principal of, or interest on, a Global Note, the Depositary will
immediately credit, on its book-entry registration and transfer system,
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note as
shown in the records of the Depositary. Payments by participants to owners of
beneficial interests in a Global Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the sole responsibility of such
participants subject to any statutory or regulatory requirements as may be in
effect from time to time.

None of the Company, the Trustee or any other agent of the Company or the
Trustee will have any responsibility or liability for any aspect of the
records of the Depositary, any nominee or any participant relating to, or
payments made on account of, beneficial interests in a Global Note or for
maintaining, supervising or reviewing any of the records of the Depositary,
any nominee or any participant relating to such beneficial interests.

A Global Note is exchangeable for definitive Senior Notes registered in the
name of, and a transfer of a Global Note may be registered to, any person
other than the Depositary or its nominee, only if:

(a) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note or if at any time the
Depositary ceases to be registered or in good standing under the Exchange
Act;

(b) The Company in its sole discretion determines that such Global Note
shall be exchangeable for definitive Senior Notes in registered form; or

(c) there shall have occurred and be continuing an Event of Default or an
event which, with the giving of notice or lapse of time or both, would
constitute and Event of Default under the Senior Notes.

Any Global Note that is exchangeable pursuant to the preceding sentence will
be exchangeable in whole for definitive Senior Notes in registered form, of
like tenor and of an equal aggregate principal amount as the Global Note, in
denominations of $1,000 and integral multiples thereof. Such definitive Senior
Notes will be registered in the name or names of such persons as the
Depositary shall instruct the Trustee. It is expected that such instructions
may be based upon directions received by the Depositary from its participants
with respect to ownership of beneficial interests in such Global Note. Any
principal and interest will be payable, the transfer of the definitive Senior
Notes will be registerable and the definitive Senior Notes will be
exchangeable at the office or agency of the Company in the Borough of
Manhattan, the City of New York (which will initially be the Trustee), except
that, at the option of the Company, interest may be paid by mailing a check to
the address of the person entitled thereto as it appears in the Senior Note
register.

Except as provided above, owners of beneficial interests in such Global
Notes will not be entitled to receive physical delivery of Senior Notes in
definitive form and will not be considered the holders thereof for any purpose
under the Indenture, and no Global Note shall be exchangeable except for
another Global Note of like denomination and tenor to be registered in the
name of the Depositary or its nominee. Accordingly, each person owning a
beneficial interest in such Global Note must rely on

22
<PAGE>

the procedures of the Depositary and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a holder under the Global Note or the Indenture.

The Company understands that, under existing industry practices, in the
event that the Company requests any action of holders, or an owner of a
beneficial interest in such Global Notes desires to give or take any action
that a holder is entitled to give or take under the Indenture, the Depositary
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.

The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The
Depositary is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the Depositary's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly. The rules applicable to the Depositary and its
participants are on file with the Securities and Exchange Commission.

SAME-DAY SETTLEMENT AND PAYMENT

Settlement for the Senior Notes will be made in immediately available funds.
So long as the Senior Notes are represented by one or more permanent Global
Notes, all payments of principal and interest will be made by the Company in
immediately available funds.

So long as the Senior Notes are represented by one or more Global Notes
registered in the name of the Depositary or its nominee, the Senior Notes will
trade in the Depositary's Same-Day Funds Settlement System, and secondary
market trading activity in the Senior Notes will therefore be required by the
Depositary to settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on the
trading activity in the Senior Notes.

DEFEASANCE

The Company at any time may terminate all its obligations under the Senior
Notes and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register
the transfer or exchange of the Senior Notes, to replace mutilated, destroyed,
lost or stolen Senior Notes and to maintain a registrar and paying agent in
respect of the Senior Notes. The Company at any time may also terminate its
obligations under the covenants described under "--Certain Covenants" (other
than "--Limitations on Mergers and Consolidations"), the operation of the
cross acceleration provision, the bankruptcy provisions (but only with respect
to a Subsidiary) and the other Indebtedness default provision described under
"--Events of Default and Notice Thereof" above ("covenant defeasance").

23
<PAGE>

The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Senior Notes may not be accelerated
because of an Event of Default with respect thereto. If the Company exercises
its covenant defeasance option, payment of the Senior Notes may not be
accelerated because of an Event of Default specified in clauses (c) through
(f) under "--Events of Default and Notice Thereof" above.

In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or non-
callable U.S. Government Obligations sufficient to pay all remaining principal
and interest on the Senior Notes, and must comply with certain other
conditions, including delivery to the Trustee of an Opinion of Counsel (as
specified in the Indenture) to the effect that holders of such Senior Notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance (and in the case of legal defeasance only, such
Opinion of Counsel must be based on a ruling of the Internal Revenue Service
or other change in applicable Federal income tax law). Purchasers of such
Senior Notes should consult their own advisors with respect to the tax
consequences to them of defeasance, including the applicability and effect of
tax laws other than the Federal income tax law.

MODIFICATION OF THE INDENTURE

With the consent of the holders of not less than a majority in the aggregate
principal amount of the outstanding Senior Notes, the Indenture, the rights
and obligations of the Company and the rights of the holders of Senior Notes
may be modified by the Company and the Trustee. However, without the consent
of each holder of an outstanding Senior Note affected thereby, no modification
may, among other things, (i) modify the terms of payment of principal or
interest on the Senior Notes, or (ii) reduce the percentage of outstanding
Senior Notes required for modification. The Company and the Trustee may also
enter into supplemental indentures, without obtaining the consent of the
holders of the Senior Notes, to cure any ambiguity or to correct or supplement
any provisions of the Indenture or any supplemental indenture which may be
defective or inconsistent with any other provision, to pledge any property to
or with the Trustee or to make any other provisions with respect to matters or
questions arising under the Indenture, provided that such action shall not
adversely affect the interests of the holders of the Senior Notes. Such
supplemental indentures may also be entered into without the consent of
holders of the Senior Notes to evidence the succession of another person to
the Company or to add to the covenants of the Company.

CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE

The Indenture provides that, in addition to such other certificates or
opinions as may be specifically required by other provisions of the Indenture,
every application by the Company for action by the Trustee thereunder shall be
accompanied by a certificate of certain officers of the Company and an opinion
of counsel for the Company stating that, in the opinion of the signers, all
conditions precedent to such action have been complied with.

REPORT TO HOLDERS OF SENIOR NOTES

The Trustee is required to submit an annual report to the holders of the
Senior Notes regarding, among other things, the Trustee's eligibility to serve
as such, the priority of the Trustee's claims regarding certain advances made
by it, and any action taken by the Trustee materially affecting the Senior
Notes.

THE TRUSTEE

PNC Bank, National Association, whose Corporate Trust Office is currently
located at 1600 Market Street, Philadelphia, Pennsylvania, will be the Trustee
under the Indenture.

24
<PAGE>

The Company and its affiliates maintain other banking relationships in the
ordinary course of business with the Trustee and its affiliates.

The Trustee may resign or be removed by the Company and a successor trustee
may be appointed. The holders of a majority in aggregate principal amount of
the Senior Notes then outstanding may remove the Trustee.

The Indenture contains certain limitations on the rights of the Trustee
thereunder, in the event that it becomes a creditor of the Company, to obtain
payment of claims in certain cases, or to realize on certain property received
in respect of any such claim as security or otherwise.

25
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement") dated , 1997 among the Company and
the several Underwriters named below, the Company has agreed to sell to the
Underwriters, and the Underwriters have severally agreed to purchase from the
Company, the following respective principal amounts of the Senior Notes:

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER SENIOR NOTES
----------- ------------
<S> <C>
Chase Securities Inc........................................ $
NationsBanc Capital Markets, Inc............................
Lehman Brothers Inc.........................................
Montgomery Securities.......................................
Societe Generale Securities Corporation.....................
------------
Total..................................................... $150,000,000
============
</TABLE>

In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Senior Notes
offered hereby if any of the Notes are purchased.

The Company has been advised by the Underwriters that the Underwriters
propose to offer the Senior Notes to the public initially at the respective
public offering price set forth on the cover page of this Prospectus, and to
certain dealers initially at such price less a discount not in excess of %
of the principal amount of the Senior Notes. The Underwriters may allow, and
such dealers may reallow, a concession to certain other dealers not in excess
of % of the principal amount on sales to certain other dealers. After the
public offering, the public offering price and such concessions may be
changed.

Chase Securities Inc. is an affiliate of The Chase Manhattan Bank which is
the agent for and a lender to the Company under the Company's Revolving Credit
Facility. NationsBanc Capital Markets, Inc. is an affiliate of NationsBank,
N.A. which also is a lender to the Company under the Company's Revolving
Credit Facility. Societe Generale Securities Corporation is an affiliate of
Societe Generale which also is a lender to the Company under the Company's
Revolving Credit Facility. In addition, The Chase Manhattan Bank, NationsBank,
N.A., Societe Generale and their respective affiliates participate on a
regular basis in various general financing and banking transactions for the
Company and its affiliates.

The Company expects to use a portion of the net proceeds from the sale of
the Senior Notes to repay outstanding borrowings under the Revolving Credit
Facility. See "Use of Proceeds." The Chase Manhattan Bank, NationsBank, N.A.
and Societe Generale will receive their proportionate share of such repayment.
Because more than 10% of the net proceeds of the offering will be paid to
affiliates of members of the National Association of Securities Dealers, Inc.
(the "NASD") which are participating in the distribution of the Senior Notes,
the offering is being conducted pursuant to the provisions of Rule 2710(c)(8)
of the Conduct Rules of the NASD.

The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act, and to contribute
to payments which the Underwriters might be required to make in respect
thereof.

In connection with the offering and sale of the Senior Notes, Chase
Securities Inc., on behalf of the Underwriters, may engage in overallotment,
stabilizing transactions and syndicate covering

26
<PAGE>

transactions in accordance with Regulation M under the Exchange Act.
Overallotment involves sales in excess of the offering size, which creates a
short position for the Underwriters. Stabilizing transactions permit bids to
purchase the Senior Notes in the open market for the purpose of pegging,
fixing or maintaining the price of the Senior Notes. Syndicate covering
transactions involve purchases of the Senior Notes in the open market after
the distribution has been completed in order to cover short positions. Such
stabilizing transactions and syndicate covering transactions may cause the
price of the Senior Notes to be higher than it would otherwise be in the
absence of such transactions. Such activities, if commenced, may be
discontinued at any time.

The Senior Notes are a new series of securities with no established trading
market and will not be listed on any securities exchange. The Underwriters
have advised the Company that they intend to make a market in the Senior
Notes, but are under no obligations to do so and such market making may be
terminated at any time. Therefore, no assurance can be given as to the
liquidity of, or the trading market for, the Senior Notes.

EXPERTS

The consolidated financial statements and schedules of Harman International
Industries, Incorporated and subsidiaries as of June 30, 1996 and 1995, and
for each of the years in the three-year period ended June 30, 1996, have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference, and upon the authority of said firm as
experts in accounting and auditing.

LEGAL MATTERS

The validity of the Senior Notes offered hereby will be passed upon for the
Company by Jones, Day, Reavis & Pogue, Washington, D.C. Certain legal matters
will be passed upon for the Underwriters by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York.

27
<PAGE>

NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR
INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF
OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE.

- -------------------------------------------------------------------------------
TABLE OF CONTENTS

<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Certain Information
by Reference............................................................... 2
The Company................................................................. 3
Forward-Looking Statements.................................................. 3
The Offering................................................................ 4
Summary Consolidated Financial
and Operating Data......................................................... 5
Use of Proceeds............................................................. 6
Capitalization.............................................................. 7
Business.................................................................... 8
Management's Discussion and
Analysis of Financial Condition and
Results of Operations...................................................... 12
Management.................................................................. 15
Description of Senior Notes................................................. 17
Underwriting................................................................ 26
Experts..................................................................... 27
Legal Matters............................................................... 27
</TABLE>
PROSPECTUS

HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
$150,000,000
% SENIOR NOTES DUE 2007

[LOGO OF HARMAN INTERNATIONAL]

CHASE SECURITIES INC.

NATIONSBANC CAPITAL
MARKETS, INC.

LEHMAN BROTHERS

MONTGOMERY SECURITIES

SOCIETE GENERALE
SECURITIES CORPORATION

Dated June , 1997

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Estimated expenses in connection with the issuance and distribution of the
securities to be registered are as follows:

<TABLE>
<CAPTION>
ITEM AMOUNT
---- --------
<S> <C>
SEC Registration Fee............................................ $ 45,455
Rating Agency Fees.............................................. 97,500
Trustee's Fees and Expenses..................................... 5,000
Blue Sky Fees................................................... 3,750
Legal Fees and Expenses......................................... 150,000
Accounting Fees and Expenses.................................... 20,000
Printing and Engraving Expenses................................. 25,000
Miscellaneous Expenses.......................................... 3,295
--------
Total......................................................... $350,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation of the Company, as amended (the "Certificate"),
the Bylaws of the Company (the "Bylaws") and the General Corporation Law of
the State of Delaware (the "DGCL"), as such provisions relate to the
indemnification of directors, officers, employees and agents of the Company.
This description is intended only as a summary and is qualified in its
entirety by reference to the Certificate, the Bylaws and the DGCL.

ELIMINATION OF LIABILITY IN CERTAIN CIRCUMSTANCES

Article Tenth of the Certificate provides that to the fullest extent
provided by law a director will not be personally liable for monetary damages
to the Company or its stockholders for or with respect to any acts or
omissions in the performance of his or her duties as a director. The DGCL
provides that a corporation may limit or eliminate a director's personal
liability for monetary damages to the corporation or its stockholders, except
for liability (i) for any breach of the director's duty of loyalty to such
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
for paying a dividend or approving a stock repurchase in violation of Section
174 of the DGCL or (iv) for any transaction from which the director derived an
improper personal benefit.

While Article Tenth of the Certificate provides directors with protection
from awards for monetary damages for breaches of the duty of care, it does not
eliminate the directors' duty of care. Accordingly, the Certificate will have
no effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of the duty of care. The provisions of
Article Tenth as described above apply to officers of the Company only if they
are directors of the Company and are acting in their capacity as directors,
and does not apply to officers of the Company who are not directors.

INDEMNIFICATION AND INSURANCE

Section 145 of the DGCL provides that a corporation may indemnify directors
and officers as well as other employees and agents of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, in connection with specified actions, suits or

II-1
<PAGE>

proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation, as 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 corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of actions
by or in the right of the corporation, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action, and no
indemnification shall be made where the person seeking indemnification has
been found liable to the corporation, unless and only to the extent that a
court determines is fair and reasonable in view of all circumstances.

Article Tenth of the Certificate and Article VIII of the Bylaws provide to
directors, officers, employees and agents of the Company indemnification to
the fullest extent provided by Delaware law, thereby affording such persons
the protections available to directors, officers, employees and agents of
Delaware corporations as summarized above. The Company maintains directors'
and officers' liability insurance which insures against liabilities that
directors or officers of the Company may incur in such capacities.

ITEM 16. EXHIBITS

<TABLE>
<C> <S>
1.1* Underwriting Agreement dated , 1997 among Registrant and the
Underwriters
4.1 Restated Certificate of Incorporation of the Company (filed as Exhibit
4.1 to Registrant's Form S-3 Registration Statement No. 33-50683, and
incorporated herein by reference)
4.2 By-Laws of the Company (filed as Exhibit 4(b) to Registrant's Form S-8
Registration Statement No. 33-60236, and incorporated herein by
reference)
4.3* Form of Indenture between Registrant and the Trustee relating to the
Senior Notes
5.1* Opinion of Jones, Day, Reavis & Pogue
23.1 Consent of KPMG Peat Marwick LLP
23.2* Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)
24.1 Power of Attorney (set forth at page II-4 of this Registration
Statement)
25.1 Form T-1 Statement of Eligibility under Trust Indenture Act of PNC
Bank, National Association
</TABLE>
- --------
* To be filed by amendment

ITEM 17. UNDERTAKINGS

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;

II-2
<PAGE>

(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;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission 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.

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 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.

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 Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 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
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

The undersigned Registrant hereby undertakes that, (i) for purposes of
determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as of the time
it was declared effective and (ii) for the purpose of determining any
liability under the Securities Act, each post-effective amendment that
contains a form of prospectus 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.

The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act of 1939.

II-3
<PAGE>

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 on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 6th day
of June 1997.

HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED

By: /s/ Bernard A. Girod
----------------------------------
Bernard A. Girod
President, Chief Operating Officer
and Secretary

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, (ii) any registration statement for the same
offering that is to be effective under Rule 462(b) of the Securities Act, and
(iii) 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 dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
/s/ Sidney Harman Chairman of the Board and June 6, 1997
- ------------------------------------ Chief Executive Officer
Sidney Harman (Principal Executive
Officer)
/s/ Bernard A. Girod Director, President, Chief June 6, 1997
- ------------------------------------ Operating Officer and
Bernard A. Girod Secretary

/s/ Frank Meredith Vice President, Chief June 6, 1997
- ------------------------------------ Financial Officer and
Frank Meredith Assistant Secretary
(Principal Financial and
Accounting Officer)

/s/ Shirley M. Hufstedler Director June 6, 1997
- ------------------------------------
Shirley M. Hufstedler

/s/ Ann McLaughlin Director June 6, 1997
- ------------------------------------
Ann McLaughlin

/s/ Edward H. Meyer Director June 6, 1997
- ------------------------------------
Edward H. Meyer
</TABLE>

II-4
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
PAGE NUMBER
IN
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT DESCRIPTION NUMBERED COPY
------- ------------------- -------------
<C> <S> <C>
1.1* Underwriting Agreement dated , 1997 among
Registrant and the Underwriters
4.1 Restated Certificate of Incorporation of the Company
(filed as Exhibit 4.1 to Registrant's Form S-3
Registration Statement No. 33-50683 and incorporated
herein by reference)
4.2 By-Laws of the Company (filed as Exhibit 4(b) to
Registrant's Form S-8 Registration Statement No. 33-
60236 and incorporated herein by reference)
4.3* Form of Indenture between Registrant and the Trustee
relating to the Senior Notes
5.1* Opinion of Jones, Day, Reavis & Pogue
23.1 Consent of KPMG Peat Marwick LLP
23.2* Consent of Jones, Day, Reavis & Pogue (included in
Exhibit 5.1)
24.1 Power of Attorney (set forth at page II-4 of this
Registration Statement)
25.1 Form T-1 Statement of Eligibility under Trust
Indenture Act of PNC Bank, National Association
</TABLE>
- --------
* To be filed by amendment

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITOR

The Board of Directors
Harman International Industries, Incorporated:

We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.

Los Angeles, California /s/ KPMG Peat Marwick LLP
June 6, 1997 KPMG Peat Marwick LLP

<PAGE>
Exhibit 25.1
============================================================================
====

FORM T-1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) X
----

PNC BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)

NOT APPLICABLE
(Jurisdiction of incorporation or
organization if not a U.S. national bank)

25-1197336
(I.R.S. Employer Identification No.)

One PNC Plaza
Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices - Zip code)

F. J. Deramo, Vice President, PNC Bank, National Association
27th Floor, One Oliver Plaza, Pittsburgh, Pennsylvania 15222-2602
(412) 762-3666
(Name, address and telephone number of agent for service)

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
(Exact name of obligor as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

11-2534306
(I.R.S. Employer Identification No.)

1101 Pennsylvania Avenue, N. W. Suite 1010
Washington D.C. 20004

(Address of principal executive offices - Zip code)

Senior Notes due 2007
(Title of the indenture securities)

============================================================================
====
<PAGE>

ITEM 1. GENERAL INFORMATION.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to
which it is subject.

Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes. (See Exhibit T-1-3)

ITEM 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.

If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.

Neither the obligor nor any underwriter for the obligor is an
affiliate of the trustee.

ITEM 3 THROUGH ITEM 14.

The issuer currently is not in default under any of its outstanding
securities for which PNC Bank is trustee. Accordingly, responses to Items
3 through 14 of Form T-1 are not required pursuant to Form T-1 General
Instructions B.

ITEM 15. FOREIGN TRUSTEE.

Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under the indentures qualified or to be
qualified under the Act.

Not applicable (trustee is not a foreign trustee).

ITEM 16. LIST OF EXHIBITS.

List below all exhibits filed as part of this statement of eligibility.

Exhibit T-1-1 - Articles of Association of the trustee, with all
amendments thereto, as presently in effect, filed as
Exhibit 1 to Trustee's Statement of Eligibility and
Qualification, Registration No. 33-58107 and
incorporated herein by reference.

Exhibit T-1-2 - Copy of Certificate of the Authority of the Trustee to
Commence Business, filed as Exhibit 2 to Trustee's
Statement of Eligibility and Qualification,
Registration No. 2-58789 and incorporated herein by
reference.

Exhibit T-1-3 - Copy of Certificate as to Authority of the Trustee to
Exercise Trust Powers, filed as Exhibit 3 to Trustee's

-2-
<PAGE>

Statement of Eligibility and Qualification,
Registration No. 2-58789, and incorporated herein by
reference.

Exhibit T-1-4 - The By-Laws of the trustee.

Exhibit T-1-5 - The consent of the trustee required by Section 321(b)
of the Act.

Exhibit T-1-6 - The copy of the Balance Sheet taken from the latest
Report of Condition of the trustee published in
response to call made by Comptroller of the Currency
under Section 5211 U.S. Revised Statutes.

NOTE

The answers to this statement, insofar as such answers relate to (a) what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or are owners of 10% or more
of the voting securities of the obligor, or are affiliates or directors or
executive officers of the obligor, and (b) the voting securities of the trustee
owned beneficially by the obligor and each director and executive officer of the
obligor, are based upon information furnished to the trustee by the obligor and
also, in the case of (b) above, upon an examination of the trustee's records.
While the trustee has no reason to doubt the accuracy of any such information
furnished by the obligor, it cannot accept any responsibility therefor.

-------------------

Signature appears on next page

-3-
<PAGE>

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
PNC Bank, National Association, a corporation organized and existing under the
laws of the United States of America, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania on
June 4, 1997.

PNC BANK, NATIONAL ASSOCIATION
(Trustee)

By /s/ Fred J. Deramo
-----------------------------
Fred J. Deramo
Vice President

-4-
<PAGE>

Exhibit T-1-4

PNC BANK, NATIONAL ASSOCIATION
BY-LAWS
(as amended and restated on April 9, 1996)

Article I. Meetings of Shareholders
- ---------- ------------------------

Section 1. Annual Meeting. The annual meeting of the shareholders of the Bank
- ---------------------------
for the election of Directors and the transaction of all other business that may
properly come before the meeting shall be held at the Pittsburgh National
Building or other convenient place selected by the Directors, on the Tuesday
that next follows the annual meeting of the shareholders of PNC Bank Corp. If
for any reason no such election of Directors is made on that day, the Board of
Directors shall order the election to be held on some subsequent day, as soon
thereafter as practicable.

Section 2. Special Meetings. Special meetings of the shareholders shall be
- -----------------------------
held when called by the Board of Directors or when called in writing by one or
more shareholders owning in the aggregate not less than ten per centum of the
outstanding shares of stock of the Bank.

Section 3. Notice and Record Date. Notice of shareholders' meetings shall be
- -----------------------------------
given in the manner set forth in Article VIII, Section 5, not less than ten days
nor more than sixty prior to the meeting. The Board of Directors may fix a date
not less than ten nor more than forty days prior to the annual meeting or any
special meeting of the shareholders as the record date for the determination of
shareholders entitled to notice of and to vote at any such meeting, or any
adjournment thereof, and only shareholders of record on the date so fixed shall
be entitled to notice of and to vote at any meeting, or any adjournment thereof.
In no event shall the record date as fixed by the Board of Directors be prior to
the date on which the action is taken fixing such record date.

Section 4. Quorum, Shareholder Action. A majority of the shares outstanding
- ---------------------------------------
represented in person or by proxy shall constitute a quorum. Less than a quorum
may adjourn any meeting from time to time and the meeting may be held as
adjourned without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any duly convened
meeting unless otherwise provided by law. Shareholders may vote in person or by
proxy duly authorized in writing, but no officer or employee of the Bank may act
as proxy.

Section 5. Written Action of Shareholders. Any action which may be taken at a
- -------------------------------------------
meeting of the shareholders of the Bank may be taken without a meeting if a
consent in writing setting forth the action so taken, signed by all the
shareholders who would be entitled to vote at a meeting for such purpose, and
such written consent shall be filed with the Secretary of the Bank.

Article II. Directors
- ----------- ---------

Section 1. Board of Directors. The Board of Directors shall have the power to
- -------------------------------
manage and administer the business and affairs of the Bank. Except as expressly
limited by law, all corporate powers of the Bank shall be vested in and may be
exercised by the Board of Directors.

Section 2. Number. The Board of Directors shall consist of not less than five
- -------------------
nor more than twenty-five individuals, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a
majority of the Board or by resolution of a majority of the shareholders.
Between annual meetings of shareholders, the Board of Directors, by vote of

-5-
<PAGE>

a majority of the Board, may increase the membership of the Board, within the
maximum above prescribed, by not more than four members and, by like vote,
appoint individuals to fill the vacancies created thereby.

Section 3. Election; Term of Office. The Board of Directors shall be elected
- -------------------------------------
at each annual meeting of the shareholders. Each Director shall hold office
from the time of his election and his qualification to serve as such and until
the election and qualification of his successor or until such Director's earlier
death, resignation, disqualification or removal.

Section 4. Organization Meeting. A meeting of the Board of Directors for the
- ---------------------------------
purpose of organizing the new Board, appointing the officers of the Bank for the
ensuing year and transacting other business shall be held without notice
immediately following the annual election of the Directors or as soon thereafter
as is practicable at such time and place as the Secretary may designate.

Section 5. Regular Meetings. The regular meetings of the Board of Directors
- -----------------------------
shall be held, without notice, at such times and places as the Board of
Directors shall by resolution determine.

Section 6. Special Meetings. Special meetings of the Board of Directors may be
- -----------------------------
called by the Chairman of the Board or the President and shall be called at the
request of any three Directors. Notice of special meetings shall be given in
the manner set forth in Article VIII, Section 5.

Section 7. Quorum; Board Action. A majority of the Directors then in office
- ---------------------------------
shall constitute a quorum for the transaction of business at any meeting.
Unless otherwise provided by law, any action of the Board of Directors may be
taken upon the affirmative vote of a majority of the Directors present at a duly
convened meeting.

Section 8. Vacancies. Any vacancy in the Board of Directors may be filled by
- ----------------------
appointment by a majority of the remaining Directors at any regular meeting or
at a special meeting called for that purpose.

Section 9. Participation Other Than By Attendance. To the extent permitted by
- ---------------------------------------------------
law, any Director may participate in any regular or special meeting of the Board
of Directors or of any committee of the Board of Directors by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting are able to hear each other.

Section 10. Written Action of Directors. Any action which may be taken by the
- -----------------------------------------
Directors at a duly convened meeting may be taken upon the unanimous written
consent of the Directors.

Section 11. Compensation. Each director, advisory director, and member of an
- --------------------------
Advisory Board of a branch office, who is not a salaried officer, shall receive
compensation in such amount and in such manner as the Board of Directors may
from time to time determine.

Section 12. Resignation; Removal. Any Director may resign by submitting his
- ----------------------------------
resignation to the Chief Executive Officer, the Chairman, the President or the
Secretary. Such resignation shall become effective upon its submission or at
any later time specified. Any Director may be removed from office by action of
the shareholders or the Board taken in accordance with applicable law.

-6-
<PAGE>

Section 13. Personal Liability for Monetary Damages.
- -----------------------------------------------------

(a) To the fullest extent permitted by applicable law, each Director shall
be indemnified and held harmless by the Bank for all actions taken by him or her
and for all failures to take action to the fullest extent permitted by
Pennsylvania law against all expense, liability and loss (including without
limitation attorneys' fees, judgments, fines, taxes, penalties, and amounts paid
or to be paid in settlement) reasonably incurred or suffered by him or her. No
indemnification pursuant to this Section 13 shall be made, however, in any case
where the act or failure to act giving rise to the claim for indemnification is
determined by a court of competent jurisdiction to have constituted willful
misconduct or recklessness.

(b) This Section 13 shall not apply to any administrative proceeding or
action instituted by a federal bank regulatory agency which proceeding or action
results in a final order assessing civil money penalties or requiring
affirmative action by the Director in the form of making payments to the Bank.

(c) The provisions of this Section 13 shall be deemed to be a contract with
each Director of the Bank who serves as such at any time while this Section 13
is in effect and each such Director shall be deemed to be doing so in reliance
on the provisions of this Section 13. Any amendment or repeal of this Section
13 or adoption of any other provision of the By-Laws or the Articles of the
Association which has the effect of increasing Director liability shall operate
prospectively only and shall not affect any action taken, or any failure to act,
prior to the adoption of such amendment, repeal or other provision.

Section 14. Corporate Governance Procedures. The Board of Directors and each
- ---------------------------------------------
committee thereof shall have the authority to adopt or otherwise avail itself of
such corporate governance procedures as may be included from time to time in the
Pennsylvania Business Corporation Law of 1988, provided that any such procedure
complies with, or is not inconsistent with, applicable federal banking statutes
and regulations, and safe and sound banking practices.

Article III. Committees
- ------------ ----------

Section 1. Appointment; Powers. In addition to the Committees described in
- --------------------------------
this Article III, the Board may appoint one or more standing or temporary
committees consisting of two or more Directors. The Board may invest such
committees with such power and authority, subject to such conditions, as it may
see fit.

Section 2. Executive Committee. The Board may appoint from among its members
- --------------------------------
an Executive Committee which, to the maximum extent permitted by law or as
otherwise provided herein shall have and exercise in the intervals between the
meetings of the Board of Directors all the powers of the Board of Directors.
All acts done and powers conferred by the Executive Committee from time to time
shall be deemed to be, and may be certified as being, done and conferred under
authority of the Board of Directors. Four directors shall constitute a quorum
regardless of whether the directors present shall have been formally appointed
to the Executive Committee, and the action of a majority of the directors
present at a meeting, unless a majority of such Directors are officers of the
Bank, shall decide any matter or question submitted to the Executive Committee.

Section 3. Examining Committee. The Board shall appoint from among its members
- --------------------------------
an Examining Committee which shall be composed of not less than three directors,
none of whom shall be officers

-7-
<PAGE>

of the Bank. The Board of Directors shall select a Chairman from the
Committee's membership and the Committee may appoint a Secretary who need not be
a director. The Committee shall meet on call of its Chairman. The duties and
responsibilities of the Committee shall be as required by law and as assigned
from time to time by the Board of Directors.

Section 4. CRA Policy Committee. The Board of Directors shall appoint from
- ---------------------------------
among its members a Community Reinvestment Act Policy Committee which shall
consist of not less than three directors, and such other officers who shall from
time to time be appointed by the Board of Directors. The duties and
responsibilities of the Committee shall be as assigned from time to time by the
Board of Directors.

Section 5. Personnel and Compensation Committee. The Board may appoint from
- -------------------------------------------------
among its members a Personnel and Compensation Committee. The duties and
responsibilities of the Committee shall be as assigned by the Board of
Directors.

Section 6. Nominating Committee. The Board may appoint from among its members
- ---------------------------------
a Nominating Committee. The duties and responsibilities of the Committee shall
be as assigned by the Board of Directors.

Section 7. Fiduciary Committee. The Board may appoint from among its members a
- --------------------------------
Fiduciary Committee. The duties and responsibilities of the Committee shall be
as assigned by the Board of Directors.

Section 8. Credit Committee. The Board may appoint from among its members a
- -----------------------------
Credit Committee. The duties and responsibilities of the Committee shall be as
assigned by the Board of Directors.

Section 9. Asset and Liability Management Committee. The Board may appoint from
- ----------------------------------------------------
among its members an Asset and Liability Management Committee. The duties and
responsibilities of the Committee shall be as assigned by the Board of
Directors.

Section 10. Organization. All committees shall determine their own
- --------------------------
organization, procedures and times and places of meeting, unless otherwise
directed by the Board and except as otherwise provided in these By-Laws. A
majority of the Directors appointed to a committee shall constitute a quorum for
the transaction of business at any meeting unless as otherwise provided in these
By-Laws. In the case of committees with an even number of Directors appointed
to the committees, one-half of the Directors shall constitute a quorum. Unless
otherwise prevented by law or by the procedures established by the committee,
any action of a committee may be taken upon the affirmative vote of a majority
or one-half, as the case may be, of the Directors present at a duly convened
meeting or upon the unanimous written consent of all Director members.

Section 11. Advisory Boards. Any branch office, with the approval of the Board
- -----------------------------
of Directors or the Chief Executive Officer, may have an Advisory Board
consisting of Directors, officers or members of the public, who may from time to
time be appointed by the Board of Directors or the Chief Executive Officer or
his designee. The Chairman of each Advisory Board shall be designated by the
Board of Directors or the Chief Executive Officer. Each Advisory Board shall
meet at such time or times as shall be determined by the Chairman of such
Advisory Board. Advisory Boards shall be established for informational and
marketing purposes only and shall not have any duties, powers or
responsibilities.

-8-
<PAGE>

Article IV. Officers
- ----------- --------

Section 1. Officers Generally. The officers of the Bank, in order of
- -------------------------------
precedence or rank, shall be a Chairman of the Board; one or more Vice Chairmen,
if any; a President; one or more Vice Presidents, of whom one or more may be
designated, in order of precedence or rank, Senior Executive, Executive or
Senior Vice Presidents, and one of whom may be designated as responsible to
direct, manage and supervise all fiduciary activities; a Cashier; a Secretary; a
Controller; an Audit Director; and such other officers and functional officer
titles, as the Board of Directors, the Chairman, the Vice Chairman or the
President may from time to time designate. The Board of Directors shall from
time to time designate from among the Chairman of the Board, the Vice Chairmen
and the President, one of these officers to be the Chief Executive Officer.

Section 2. Elections; Appointment. All officers having the rank of Senior Vice
- -----------------------------------
President or higher, shall be elected by the Board of Directors and shall hold
office during the pleasure of the Board of Directors. All other Vice Presidents
and other officers shall be appointed by the Chairman of the Board, a Vice
Chairman or President or other officer authorized by the Board of Directors to
appoint officers, and such action shall be reported to the Board of Directors.

Section 3. Chief Executive Officer. The Chief Executive Officer shall have the
- ------------------------------------
general supervision of the policies, business and operations of the Bank; shall
have general executive powers as well as those duties and powers as may be
assigned by the Board of Directors; and shall have all other powers and duties
as are usually incident to the chief executive officer of a national bank. In
the absence of the Chief Executive Officer his powers and duties shall be
performed by such other officer or officers as shall be designated by the Board
of Directors.

Section 4. Chairman. The Chairman of the Board shall have general executive
- ---------------------
powers, shall preside at all meetings of the shareholders and shall have such
other powers and duties as may be assigned to him from time to time by the Board
of Directors.

Section 5. Vice Chairman. A Vice Chairman shall have general executive powers
- --------------------------
and shall have such duties and powers as shall be assigned from time to time by
the Board of Directors or the Chief Executive Officer.

Section 6. President. The President shall have general executive powers and
- ----------------------
shall have such duties and powers as may be assigned to him from time to time by
the Board of Directors.

Section 7. Senior Officers; Vice Presidents. The Senior Executive, Executive,
- ---------------------------------------------
and Senior Vice Presidents as well as all other Vice Presidents shall have such
duties and powers as may from time to time be assigned to them by the Board of
Directors or by the Chief Executive Officer. Any reference in these By-Laws to
a Vice President shall apply equally to a Senior Executive, Executive, or a
Senior Vice President unless the context otherwise requires.

Section 8. Vice President in Charge of Trusts. The Vice President in Charge of
- -----------------------------------------------
Trusts, if any, under the direction of the Chief Executive Officer, shall
direct, manage and supervise all fiduciary activities of the Bank and shall be
responsible to the Board of Directors, the Chief Executive Officer and the
Fiduciary Committee for the administration of the Bank's fiduciary powers. He
shall have such other duties and powers as may be assigned to him by the Board
of Directors or the Chief Executive Officer.

-9-
<PAGE>

Section 9. Cashier. Unless otherwise delegated to another officer or officers
- --------------------
by the Board of Directors, the Cashier shall be responsible for all moneys,
funds, securities, fidelity and indemnity bonds and other valuables belonging to
the Bank, exclusive of the assets held by the Bank in a fiduciary capacity;
shall cause to be kept proper records of the transactions of the Bank; and shall
perform such other duties as may be assigned to him by the Board of Directors or
the Chief Executive Officer.

Section 10. Secretary. The Secretary shall attend the meetings of the
- -----------------------
shareholders, of the Board of Directors, and of the Executive Committee, if any,
and shall keep minutes thereof in suitable minute books. He shall have charge
of the corporate records, papers, and the corporate seal of the Bank. He shall
have charge of the stock and transfer records of the Bank and shall keep a
record of all shareholders and give notices of all meetings of shareholders and
special meetings of the Board of Directors. He shall perform such other duties
as may be assigned to him by the Board of Directors or the Chief Executive
Officer.

Section 11. Trust Officers. The Officers performing fiduciary functions, being
- ----------------------------
all officers assigned to the Trust, Trust and Investment Management or other
Fiduciary Department, Division, or other unit of the Bank, shall execute and
perform all actions desirable to carry out the fiduciary functions of the Bank,
and shall perform such other duties as may be assigned by the Board of
Directors, the Chief Executive Officer, or the Vice President in Charge of
Trusts, if any.

Section 12. Controller. The Controller shall be the chief accounting officer
- ------------------------
and shall supervise systems and accounting records and shall be responsible for
the preparation of financial reports.

Section 13. Audit Director. The Audit Director shall have charge of auditing
- ----------------------------
the books, records and accounts of the Bank. He shall report directly to the
Board of Directors or a committee thereof.

Section 14. Assistant Officers. Each Assistant Officer shall assist in the
- --------------------------------
performance of the duties of the officer to whom he is assistant and shall
perform such duties in the absence of the officer. He shall perform such
additional duties as the Board of Directors, the Chief Executive Officer, or the
officer to whom he is assistant, may from time to time assign to him.

Section 15. Tenure of Office. The Chief Executive Officer, the Chairman, and
- ------------------------------
the President shall each hold office for the year for which the Board was
elected and until the appointment and qualification of his successor or until
his earlier death, resignation, disqualification or removal by the Board of
Directors. All other officers and employees shall hold office at the pleasure
of the appropriate appointing authority.

Section 16. Resignation. An officer may resign at any time by delivering
- -------------------------
written notice to the Bank. A resignation is effective when the notice is given
unless the notice specifies a later effective date.

Article V. Fidelity Bonds
- ---------- --------------

Section 1. Fidelity Bonds, for the faithful performance of their duties, shall
- ----------
be carried on all officers and employees in such form and amounts as the Board
of Directors or Chief Executive Officer may require.

-10-
<PAGE>

Article VI. General Powers of Officers
- ----------- --------------------------

Section 1. The corporate seal of the Bank may be imprinted or affixed by any
- ----------
process. The Secretary and any other officers authorized by resolution of the
Board of Directors shall have authority to affix and attest the corporate seal
of the Bank.

Section 2. The authority of officers and employees of this Bank to execute
- ----------
documents and instruments on its behalf in cases not specifically provided for
in these By-Laws shall be as determined from time to time by the Board of
Directors, or, in the case of employees, by officers in accordance with
authority given them by the Board of Directors.

Section 3. Each of the Chairman of the Board, any Vice Chairman, the President,
- ----------
any one of the Vice Presidents, the Cashier or the Secretary of this Bank is
hereby authorized to pledge assets of the Bank as security for the safekeeping
and prompt payment of deposits of public funds, or other funds, as required or
permitted by law. Such officers may also pledge assets of the Bank as may be
authorized from time to time by the Board of Directors;

Article VII. Stock Certificates
- ------------ ------------------

Section 1. Certificates of stock of the Bank shall be signed by the Chairman of
- ----------
the Board, or a Vice Chairman, or the President, or a Vice President, and
countersigned by the Cashier or an Assistant Cashier, or by the Secretary or an
Assistant Secretary, and shall be sealed with the seal of the Bank. The seal
may be a facsimile. Where any such certificate is manually countersigned by two
authorized officers, or is manually countersigned by one authorized officer and
manually signed by a Registrar, the signature of the Chairman of the Board, or a
Vice Chairman, or the President, or Vice President upon such certificate may be
a facsimile. In case any such officer who has signed or countersigned, or whose
facsimile signature has been placed upon such certificate shall have ceased to
be an officer before such certificate is issued, it may be issued by the Bank
with the same effect as if such officer were still an officer at the time of
this issue.

Section 2. The shares of stock of the Bank shall be transferable only on its
- ----------
books upon surrender of the stock certificate for such shares properly endorsed.

Section 3. Transfers of stock shall not be suspended preparatory to the
- ----------
declaration of dividends, but dividends shall be paid to the shareholders in
whose name the stock is standing on the records of the Bank at the close of
business on such day subsequent to the date of declaration of the dividend as
the Board of Directors may designate.

Section 4. If a stock certificate shall be lost, stolen, or destroyed, the
- ----------
shareholder may file with the Bank an affidavit stating the circumstances of the
loss, theft or destruction and may request the issuance of a new certificate.
He shall give to the Bank a bond which shall be in such sum, contain such terms
and provisions and have such surety or sureties as the Board of Directors may
direct. The Bank may thereupon issue a new certificate replacing the
certificate lost, stolen or destroyed.

Article VIII. General
- ------------- -------

Section 1. Exercise of Authority During Emergencies. The Board of Directors or
- -----------------------------------------------------
the Executive Committee may from time to time adopt resolutions authorizing
certain persons and entities to

-11-
<PAGE>

exercise authority on behalf of this Bank in time of emergency, and in the time
of emergency any such resolutions will be applicable, notwithstanding any
provisions to the contrary contained in these By-Laws.

Section 2. Charitable Contributions. The Board of Directors may authorize
- -------------------------------------
contributions to community funds, or to charitable, philanthropic, or benevolent
instrumentalities conducive to public welfare in such sums as the Board of
Directors may deem expedient and in the interest of the Bank.

Section 3. Fiscal Year. The fiscal year of the Bank shall be the calendar
- ------------------------
year.

Section 4. Amendments. These By-Laws may be altered, amended, added to or
- -----------------------
repealed by a vote of a majority of the Board of Directors at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors called for that purpose.

Section 5. Notice; Waiver of Notice. Any notice required to be given to any
- -------------------------------------
shareholder or Director may be given either personally or by sending a copy
thereof through the mail, or by telegram, charges prepaid, or by facsimile to
his or her address or telephone number, as the case may be, appearing on the
books of the Bank, or supplied by him or her to the Bank for the purpose of
notice. If the notice is sent by mail or by telegraph, it shall be deemed to
have been given to the person entitled thereto when deposited in the United
States mail or with a telegraph office for transmission to such person. Each
notice shall specify the place, day, and hour of the meeting, and, in the case
of a special meeting, the general nature of the business to be transacted.
Unless otherwise provided by law, whenever any notice is required to be given to
any shareholder or Director under the provisions of these By-Laws or under the
provisions of the Articles of Association, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, will be deemed equivalent to the given of such notice.
Except in the case of a special meeting of shareholders or Directors, neither
the business to be transacted nor the purpose of the meeting need by specified
in the waiver of notice of such meeting. Attendance of a person either in
person or by proxy, when permitted, will constitute a waiver of notice of such
meeting, except where such person attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting was not
lawfully called or convened.

-12-
<PAGE>

EXHIBIT T-1-5

CONSENT OF TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, in connection
with the proposed issuance by Harman International Industries, Incorporated, of
its Senior Notes Due 2007, we hereby consent that reports of examination by
Federal, State, Territorial, or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.

PNC BANK, NATIONAL ASSOCIATION
(Trustee)

By /s/ Fred J. Deramo
---------------------------
Fred J. Deramo
Vice President

Dated: June 5, 1997

-13-
<PAGE>

EXHIBIT T-1-6

SCHEDULE RC - BALANCE SHEET
FROM
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
PNC BANK, NATIONAL ASSOCIATION
of PITTSBURGH in the state of PENNSYLVANIA
at the close of business on
March 31, 1997
filed in response to call made by
Comptroller of the Currency,
under title 12, United States Code, Section 161
Charter Number 540
Comptroller of the Currency Northeastern District

BALANCE SHEET

Thousands
of Dollars
------------
<S> <C>
ASSETS

Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coin....... $ 2,524,213
Interest-Bearing Balances................................ 117,850
Securities
Held-to-maturity securities.............................. 0
Available-for-sale securities............................ 6,962,689
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold and
Securities purchased under agreements to resell.......... 866,265
Loans and lease financing receivables:
Loans and leases, net of unearned income $42,866,431
LESS: Allowance for loan and lease losses 897,836
LESS: Allocated transfer risk reserve 0
Loans and leases, net of unearned income,
allowance and reserve.................................. 41,968,595
Trading assets............................................ 8,675
Premises and fixed assets (including capitalized leases).. 705,309
Other real estate owned................................... 61,989
Investments in unconsolidated subsidiaries and
associated companies..................................... 2,748
Customers' liability to this bank on acceptances
outstanding.............................................. 64,352
Intangible assets......................................... 1,583,204
Other assets.............................................. 1,425,139
-----------
Total Assets............................................. $56,291,028
===========
</TABLE>

-14-
<PAGE>

LIABILITIES
<TABLE>

<S> <C>
Deposits:
In domestic offices.......................................... $34,169,641
Noninterest-bearing $ 6,552,333
Interest-bearing 27,617,308
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................... 1,270,511
Noninterest-bearing $ 3,437
Interest-bearing 1,267,074
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased and
Securities sold under agreements to repurchase............. 2,094,580
Demand notes issued to U.S. Treasury.......................... 1,399,999
Trading Liabilities........................................... 13,630
Other borrowed money
With original maturity of one year or less................... 8,356,521
With original maturity of more than one year................. 2,406,745
Bank's liability on acceptances executed and outstanding...... 64,352
Subordinated notes and debentures............................. 495,684
Other liabilities............................................. 1,308,684
-----------
Total liabilities............................................. 51,580,347

</TABLE>

EQUITY CAPITAL
<TABLE>

<S> <C>
Perpetual preferred stock and related surplus................. 0
Common Stock.................................................. 218,919
Surplus....................................................... 1,979,150
Undivided profits and capital reserves........................ 2,624,332
Net unrealized holding gains (losses) on
available-for-sale securities................................ (111,720)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 4,710,681
-----------

Total liabilities and equity capital.......................... $56,291,028
===========

</TABLE>

-15-