10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

T QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2008

Commission File Number:  1-9764

Harman International Industries, Incorporated

(Exact name of registrant as specified in its charter)

Delaware	11-2534306
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
400 Atlantic Street, Suite 1500 Stamford, CT	06901
(Address of principal executive offices)	(Zip code)

(203) 328-3500

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   T Yes £No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	T		Accelerated filer  £
Non-accelerated filer	£	(Do not check if a smaller reporting company)	Smaller reporting company£

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).           £ Yes           T No

As of January 31, 2009, 58,573,699 shares of the registrant’s common stock, par value $.01, were outstanding.

Harman International Industries, Incorporated

FORM 10-Q

Table of Contents

		Page
	Forward-Looking Statements	i
Part I	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets	1
	December 31, 2008 (unaudited) and June 30, 2008
	Condensed Consolidated Statements of Operations (unaudited)	2
	Three and six months ended December 31, 2008 and 2007
	Condensed Consolidated Statements of Cash Flows (unaudited)	3
	Six months ended December 31, 2008 and 2007
	Notes to Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
Part II	OTHER INFORMATION
Item 1	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 4.	Submission of Matters to a Vote of Security Holders	34
Item 6.	Exhibits	35
	Signatures	36

References to “Harman International,” the “Company,” “we,” “us,” and “our” in this Form 10-Q refer to Harman International Industries, Incorporated and its subsidiaries unless the context requires otherwise.

Forward–Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). You should not place undue reliance on these statements. Forward-looking statements include information concerning possible or assumed future results of operations, capital expenditures, the outcome of pending legal proceedings and claims, goals and objectives for future operations, including descriptions of our business strategies and purchase commitments from customers. These statements are typically identified by words such as “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate” and similar expressions. We base these statements on particular assumptions that we have made in light of our industry experience, as well as our perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read and consider the information in this report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. In light of these risks and uncertainties, we cannot assure you that the results and events contemplated by the forward-looking statements contained in, or incorporated by reference into, this report will in fact transpire.

You should carefully consider the risks described below and the other information in this report.  Our operating results may fluctuate significantly and may not meet our expectations or those of securities analysts or investors.  The price of our stock would likely decline if this occurs.  Factors that may cause fluctuations in our operating results include, but are not limited to, the following:

· our ability to successfully implement our strategic initiatives and to achieve the intended benefits of those initiatives;

· automobile industry sales and production rates and the willingness of automobile purchasers to pay for the option of a premium audio system and/or a multi-function infotainment system;

· changes in consumer confidence and spending, the impact of the current credit markets and worsening economic conditions worldwide;

· the loss of one or more significant customers, including our automotive manufacturer customers, or the loss of a significant platform with an automotive customer;

· changes in interest rates and the availability of financing affecting corporate and consumer spending, including the effects of continued volatility and further deterioration in the financial and credit markets;

· fluctuations in currency exchange rates, including the recent increase of the U.S. dollar compared to the Euro, and other risks inherent in international trade and business transactions;

· warranty obligations for defects in our products;

· our ability to satisfy contract performance criteria, including our ability to meet technical specifications and due dates on our new automotive platforms;

· our ability to design, engineer and manufacture our products profitably under our long-term supply arrangements with automakers;

· competition in the automotive, consumer or professional markets in which we operate, including pricing pressure in the market for personal navigation devices (“PNDs”);

· our ability to achieve cost reductions and other benefits in connection with the restructuring of our manufacturing, engineering and administrative organizations;

· model-year changeovers in the automotive industry;

· our ability to enforce or defend our ownership and use of intellectual property;

· our ability to maintain a competitive technological advantage within the systems, services and products we provide into the market place;

i

Forward–Looking Statements (continued)

· our ability to effectively integrate acquisitions made by our Company or manage restructuring and cost migration initiatives;

· the valuation of certain assets, including goodwill, investments and deferred tax assets, considering recent market conditions;

· strikes, work stoppages and labor negotiations at our facilities, or at a facility of one of our significant customers; or work stoppages at a common carrier or a major shipping location;

· commodity price fluctuations;

· the outcome of pending or future litigation and other claims, including, but not limited to the current stockholder and ERISA lawsuits or any claims or litigation arising out of our business, labor disputes at our facilities and those of our customers or common carriers;

· changes in general economic conditions; and

· world political stability.

Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and results of operations, and could cause actual results to differ materially from those expressed in the forward-looking statements. As a result, the foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this and other reports we file with the Securities and Exchange Commission, including the information in Item 1A, “Risk Factors” of Part I to our Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and Item 1A, “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and Item 1A of Part II of this report.  We undertake no obligation to publicly update or revise any forward-looking statement.

ii

PART I FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets

Harman International Industries, Incorporated and Subsidiaries

($000s omitted except share amounts)

	December 31,			June 30,
	2008			2008
Assets	(Unaudited)
Current assets
Cash and cash equivalents	$	182,016			223,109
Receivables (less allowance for doubtful accounts of $11,923 at December 31, 2008 and $7,082 at June 30, 2008)		395,226			574,195
Inventories, net		449,883			390,638
Other current assets		231,732			251,139
Total current assets		1,258,857			1,439,081
Property, plant and equipment, net		551,872			640,042
Goodwill		80,054			436,447
Deferred income taxes		252,008			216,511
Other assets		68,787			94,844
Total assets	$	2,211,578			2,826,925
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt		585			639
Accounts payable		231,345			343,780
Accrued liabilities		349,668			413,645
Accrued warranties		116,217			126,977
Income taxes payable		3,086			21,911
Total current liabilities		700,901			906,952
Borrowings under revolving credit facility		42,500			25,000
Convertible senior notes		400,000			400,000
Other senior debt		1,842			2,313
Minority interest		---			34
Other non-current liabilities		139,991			152,780
Total liabilities		1,285,234			1,487,079
Shareholders’ equity
Preferred stock, $.01 par value.  Authorized 5,000,000 shares; none issued and outstanding		---			---
Common stock, $.01 par value.  Authorized 200,000,000 shares; issued 84,238,926 at December 31, 2008 and 84,117,883 at June 30, 2008		842			841
Additional paid-in capital		628,337			628,324
Accumulated other comprehensive income (loss):
Unrealized (loss) on available-for-sale securities		(4,630	)		---
Unrealized gain (loss) on hedging derivatives		5,839			(1,328	)
Pension benefits		(12,115	)		(11,947	)
Cumulative foreign currency translation adjustment		84,013			204,806
Retained earnings		1,271,628			1,566,720
Less common stock held in treasury (25,599,817 shares at December 31, 2008 and June 30, 2008)		(1,047,570	)		(1,047,570	)
Total shareholders’ equity		926,344			1,339,846
Total liabilities and shareholders’ equity	$	2,211,578			2,826,925

See accompanying notes to condensed consolidated financial statements.

1

Condensed Consolidated Statements of Operations

Harman International Industries, Incorporated and Subsidiaries

(000s omitted except per share amounts)

(Unaudited)

	Three months ended						Six months ended
	December 31,						December 31,
	2008			2007			2008			2007
Net sales	$	755,875			1,065,610			1,625,065			2,012,572
Cost of sales		579,018			764,486			1,206,278			1,446,873
Gross profit		176,857			301,124			418,787			565,699
Selling, general and administrative expenses		217,955			240,285			427,428			463,419
Goodwill impairment		325,445			---			325,445			---
Operating (loss) income		(366,543	)		60,839			(334,086	)		102,280
Other expenses:
Interest (income) expense, net		(757	)		2,907			(852	)		4,317
Miscellaneous, net		39			982			1,028			1,653
(Loss) income before income taxes and minority interest		(365,825	)		56,950			(334,262	)		96,310
Income tax (benefit) expense, net		(48,951	)		14,596			(40,600	)		18,253
Minority interest		---			(526	)		(34	)		(1,352	)
Net (loss) income	$	(316,874	)		42,880			(293,628	)		79,409
(Loss) earnings per share:
Basic	$	(5.41	)		0.69			(5.02	)		1.25
Diluted	$	(5.41	)		0.68			(5.02	)		1.23
Weighted average shares outstanding – basic		58,555			62,051			58,539			63,646
Weighted average shares outstanding – diluted		58,555			62,882			58,539			64,623

See accompanying notes to condensed consolidated financial statements.

2

Condensed Consolidated Statements of Cash Flows

Harman International Industries, Incorporated and Subsidiaries

($000s omitted)   (Unaudited)

	Six months ended
	December 31,
	2008			2007
Cash flows from operating activities:
Net (loss) income	$	(293,628	)		79,409
Reconcile net (loss) income to net cash provided by operating activities:
Goodwill impairment		325,445			---
Depreciation and amortization		75,835			71,904
Deferred income taxes		(37,990	)		---
Loss on disposition of assets		246			393
Share-based compensation expense		60			11,604
Excess tax benefits from share-based payment arrangements		---			(1,454	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables		137,564			(28,554	)
Inventories		(88,997	)		38,538
Other current assets		33,033			(961	)
Increase (decrease) in:
Accounts payable		(88,632	)		(90,957	)
Accrued warranty liabilities		(10,760	)		20,953
Accrued other liabilities		(24,606	)		16,674
Income taxes payable		(16,438	)		(90,760	)
Other operating activities		1,857			(769	)
Net cash provided by operating activities	$	12,989			26,020
Cash flows from investing activities:
Contingent purchase price consideration	$	(6,172	)		(6,475	)
Proceeds from asset dispositions		100			334
Capital expenditures		(41,601	)		(62,173	)
Other items, net		5,656			(1,346	)
Net cash used in investing activities	$	(42,017	)		(69,660	)
Cash flows from financing activities:
Net decrease in short-term borrowings	$	---			(1,838	)
Net borrowings under revolving credit facility		17,500			117,066
Repayments of long-term debt		(496	)		(18,195	)
Proceeds from issuance of convertible debt		---			400,000
Repurchase of common stock		---			(400,287	)
Dividends paid to shareholders		(1,464	)		(1,572	)
Share-based payment arrangements		101			1,675
Debt issuance costs		---			(4,750	)
Excess tax benefits from share-based payment arrangements		---			1,454
Net cash provided by financing activities	$	15,641			93,553
Effect of exchange rate changes on cash		(27,706	)		3,221
Net increase (decrease) in cash and cash equivalents		(41,093	)		53,134
Cash and cash equivalents at beginning of period	$	223,109			106,141
Cash and cash equivalents at end of period	$	182,016			159,275
Supplemental disclosure of cash flow information:
Interest (received) paid	$	(1,365	)		3,887
Income tax (received) paid	$	(17,501	)		90,223

See accompanying notes to condensed consolidated financial statements.

3

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1.  Basis of Presentation

Our unaudited, condensed consolidated financial statements at December 31, 2008 and for the three and six months ended December 31, 2008 and 2007, have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”).  These unaudited condensed consolidated financial statements do not include all information and footnote disclosures included in our audited financial statements.  In the opinion of management, the accompanying unaudited, condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments and accruals, necessary to present fairly, in all material respects, the consolidated financial position, results of operations and cash flows for the periods presented.  Operating results for the three and six months ended December 31, 2008 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2009 due to seasonal, economic and other factors.

Where necessary, information for prior periods has been reclassified to conform to the consolidated financial statement presentation for the corresponding periods in the current fiscal year. During the first quarter of fiscal 2009, we revised our business segments to align with our strategic approach to the markets and customers we serve.  We now report the financial information for our QNX business in our “Other” segment.  The QNX business was previously reported in our Automotive segment.  As a result, segment information for the prior period has been reclassified to reflect the new presentation.  See Note 13, Business Segment Data, for further discussion.

The methods, estimates and judgments we use in applying our accounting policies, in conformity with generally accepted accounting principles in the United States (“GAAP”), have a significant impact on the results we report in our financial statements.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.  The estimates affect the carrying values of assets and liabilities.  Actual results may differ from these estimates under different assumptions or conditions.

These unaudited, condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008.

Note 2.  Inventories

Inventories consist of the following:

	December 31,		June 30,
($000s omitted)	2008		2008
Finished goods	$	210,183		150,634
Work in process		60,631		60,045
Raw materials		179,069		179,959
Total	$	449,883		390,638

Inventories are stated at the lower of cost or market. Cost is determined principally by the first-in, first-out method. The valuation of inventory requires us to make judgments and estimates regarding obsolete, damaged or excess inventory as well as current and future demand for our products. The estimates of future demand and product pricing that we use in the valuation of inventory are the basis for our inventory reserves and have an effect on our results of operations. We calculate inventory reserves using a combination of lower of cost or market analysis, analysis of historical usage data, forecast demand data and historical disposal rates. Specific product valuation analysis is applied, if practicable, to those items of inventory representing a higher portion of the value of inventory on-hand.

4

Note 3.  Property, Plant and Equipment

Property, plant and equipment are composed of the following:

	December 31,			June 30,
($000s omitted)	2008			2008
Land	$	13,465			14,659
Buildings and improvements		288,472			311,336
Machinery and equipment		1,006,480			1,082,359
Furniture and fixtures		44,648			46,749
		1,353,065			1,455,103
Less accumulated depreciation and amortization		(801,193	)		(815,061	)
Property, plant and equipment, net	$	551,872			640,042

Note 4.  Warranty Liabilities

We warrant our products to be free from defects in materials and workmanship for periods ranging from six months to six years from the date of purchase, depending on the business segment and product. Our dealers and warranty service providers normally perform warranty service in field locations and regional service centers, using parts and replacement finished goods we supply on an exchange basis.  Our dealers and warranty service providers also install updates we provide to correct defects covered by our warranties.  Estimated warranty liabilities are based upon past experience with similar types of products, the technological complexity of certain products, replacement cost and other factors. If estimates of warranty provisions are no longer adequate based on our analysis of current activity, incremental provisions are recorded.  We take these factors into consideration when assessing the adequacy of our warranty provision for periods still open to claim.

Details of the estimated warranty liabilities are as follows:

	Six months ended
	December 31,
($000s omitted)	2008			2007
Beginning balance  (June 30)	$	126,977			48,148
Warranty provisions		36,268			36,170
Warranty payments (cash or in-kind)		(34,107	)		(15,217	)
Other(1)		(12,920	)		2,160
Ending balance	$	116,217			71,261

(1) Includes adjustments to the liability for foreign currency translation.

Note 5. Revenue Recognition

Revenue is generally recognized at the time of product shipment or delivery, depending on when the passage of title to goods transfers to unaffiliated customers, when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or determinable and collection is reasonably assured.  We record estimated reductions to revenue for customer sales programs, returns and incentive offerings including: rebates, price protection, promotions and volume-based incentives.  The reductions to revenue are based on estimates and judgments using historical experience and expectation of future conditions.

5

Note 6.  Comprehensive (Loss) Income

The components of comprehensive (loss) income are as follows:

	Three months ended						Six months ended
	December 31,						December 31,
($000s omitted)	2008			2007			2008			2007
Net (loss) income	$	(316,874	)		42,880			(293,628	)		79,409
Other comprehensive (loss) income:
Foreign currency translation		(22,019	)		12,521			(120,793	)		49,168
Unrealized loss on available-for-sale-securities		(3,542	)		---			(4,630	)		---
Unrealized gains (losses) on hedging		2,486			722			7,167			(2,558	)
Change in pension benefits		138			(4	)		(168	)		(13	)
Total comprehensive (loss) income	$	(339,811	)		56,119			(412,052	)		126,006

At December 31, 2008, we had $7.4 million of investments included in other current assets that have been classified as available-for-sale securities under the provisions of Statement of Financial Accounting Standards (“SFAS”) 115, Accounting for Certain Investments in Debt and Equity Securities.  Under the provisions of this statement, these securities are recorded at fair value with realized gains or losses recorded in income and unrealized gains and losses recorded in other comprehensive income, net of taxes.

Note 7.  (Loss) Earnings Per Share

The following table presents the calculation of basic and diluted (loss) earnings per common share outstanding:

	Three months ended December 31,
($000s omitted except per share amounts)	2008						2007
	Basic			Diluted			Basic		Diluted
Net (loss) income	$	(316,874	)		(316,874	)		42,880		42,880
Weighted average shares outstanding		58,555			58,555			62,051		62,051
Employee stock options		---			---			---		831
Total weighted average shares outstanding		58,555			58,555			62,051		62,882
(Loss) earnings per share	$	(5.41	)		(5.41	)		0.69		0.68

	Six months ended December 31,
($000s omitted except per share amounts)	2008						2007
	Basic			Diluted			Basic		Diluted
Net (loss) income	$	(293,628	)		(293,628	)		79,409		79,409
Weighted average shares outstanding		58,539			58,539			63,646		63,646
Employee stock options		---			---			---		977
Total weighted average shares outstanding		58,539			58,539			63,646		64,623
(Loss) earnings per share	$	(5.02	)		(5.02	)		1.25		1.23

Options to purchase 2,828,419 shares of our common stock with exercise prices ranging from $11.00 to $126.94 per share during the three months ended December 31, 2008, and options to purchase 1,794,723 shares of our common stock at prices ranging from $73.53 to $126.94 per share during the three months ended December 31, 2007, were outstanding and not included in the computation of diluted earnings per share because they would have had an antidilutive effect.  For the three months ended December 31, 2008 and 2007, 478,354 and 48,575 restricted shares, respectively, were outstanding and not included in the computation of diluted earnings per share because they would have had an antidilutive effect.

6

Options to purchase 2,720,520 shares of our common stock with exercise prices ranging from $11.00 to $126.94 per share during the six months ended December 31, 2008, and options to purchase 1,091,031 shares of common stock at prices ranging from $73.53 to $126.94 per share during the six months ended December 31, 2007, were outstanding and not included in the computation of diluted earnings per share because they would have had an antidilutive effect.  For the six months ended December 31, 2008 and 2007, 321,617 and 48,311 restricted shares, respectively, were outstanding and not included in the computation of diluted earnings per share because they would have had an antidilutive effect.

The conversion terms of our 1.25 percent Convertible Senior Notes due 2012 (the “Notes”) will affect the calculation of diluted earnings per share if the price of our common stock exceeds the conversion price of the Notes.  The initial conversion price of the Notes was approximately $104 per share, subject to adjustment in specified circumstances as described in the indenture related to the Notes.  Upon conversion, a holder of Notes will receive an amount per Note in cash equal to the lesser of $1,000 or the conversion value of the Notes, determined in the manner set forth in the indenture.  If the conversion value exceeds $1,000, we will deliver $1,000 in cash and at our option, cash or common stock or a combination of cash and common stock for the conversion price in excess of $1,000.  The conversion option is indexed to our common stock and therefore is classified as equity.  The conversion option will not result in an adjustment to net income in calculating diluted earnings per share.  The dilutive effect of the conversion option will be calculated using the treasury stock method.  Therefore, conversion settlement shares will be included in diluted shares outstanding if the price of our common stock exceeds the conversion price of the Notes.

Note 8.  Convertible Senior Notes

On October 23, 2007, we issued $400 million aggregate principal amount of the Notes.  The initial conversion rate is 9.6154 shares of common stock per $1,000 principal amount of the Notes (which is equal to an initial conversion price of approximately $104 per share).  The conversion rate is subject to adjustment in specified circumstances described in the indenture.

The Notes are convertible at the option of the holders:

· during any calendar quarter commencing after December 31, 2007, if the closing price of our common stock exceeds 130% of the conversion price for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter;

· during the five business-day-period immediately after any five-day trading period in which the trading price per $1,000 principal amount of the Notes for each day of the trading period was less than 98% of the product of (1) the closing price of our common stock on such date and (2) the conversion rate on such date;

· upon the occurrence of specified corporate transactions that are described in the indenture; or

· at any time after June 30, 2012 until the close of business on the business day immediately prior to October 15, 2012.

Upon conversion, a holder will receive in respect of each $1,000 of principal amount of Notes to be converted an amount in cash equal to the lesser of (a) $1,000 or (b) the conversion value, determined in the manner set forth in the indenture.  If the conversion value per Note exceeds $1,000, we will also deliver, at our election, cash or common stock or a combination of cash and common stock for the conversion value in excess of $1,000.

Debt issuance costs of $4.8 million associated with this transaction were capitalized and are being amortized over the term of the Notes.  The unamortized balance at December 31, 2008 was $3.6 million.

On October 23, 2007, we entered into a Registration Rights Agreement requiring us to register the Notes and the shares contingently issuable upon conversion of the Notes.  On October 23, 2008, we filed an automatically effective registration statement with the SEC to meet this requirement.  We are required to keep the registration statement effective until the earlier of (a) such time as the Notes and the shares contingently issuable under the Notes (1) are sold under an effective registration statement or Rule 144 of the Securities Act of 1933, (2) are freely transferable under Rule 144 more than one year following October 23, 2007, or (3) cease to be outstanding, and (b) five years and three months following October 23, 2007.  In the event we fail to keep the registration statement effective as required under the Registration Rights Agreement, additional interest will accrue on the Notes at the rate of 0.25% per annum.  We do not believe it is probable that we will fail to comply with the Registration Rights Agreement.  Therefore, no liability for additional interest has been recorded.

7

Note 9.  Income Taxes

Our provision for income taxes is based on an estimated annual tax rate for the year applied to federal, state and foreign income.  Income tax benefit for the three months ended December 31, 2008 was $49.0 million, compared to income tax expense of $14.6 million for the same period in the prior year.  The effective rate for the three months ended December 31, 2008 was 13.4 percent, compared to 25.6 percent in the prior year period. The income tax benefit resulted from a deferred tax benefit due to operating losses, including goodwill impairment, and the retroactive reinstatement of the federal research credit, which was effective October 2008.  For the six months ended December 31, 2008, income tax benefit was $40.6 million, compared to income tax expense of $18.3 million for the same period last year.  The effective tax rate for the six months ended December 31, 2008 of 12.2 percent was lower than the comparable period rate of 19.0 percent due to the deferred tax benefit and the retroactive reinstatement of the federal research credit.

As of December 31, 2008, unrecognized tax benefits and the related interest were $9.7 million and $2.4 million, respectively, all of which would affect the tax rate if recognized.  During the three and six months ended December 31, 2008, we recorded uncertain tax positions of $1.1 million and $1.4 million, respectively.

Note 10.  Share-Based Compensation

On December 31, 2008, we had one share-based compensation plan with shares available for future grants, the Amended and Restated 2002 Stock Option and Incentive Plan (the “2002 Plan”).  The 2002 Plan permits the grant of stock options, stock appreciation rights, restricted stock and restricted stock units for up to 6,760,000 shares of our common stock.  During the six months ended December 31, 2008, options to purchase 721,735 shares of our common stock, 5,000 shares of restricted stock and 491,677 restricted stock units were granted under the 2002 Plan.  In addition, 28,344 restricted stock units were granted outside the 2002 Plan during the same period.

Share-based compensation expense was $3.5 million and $6.7 million for the three months ended December 31, 2008 and 2007, respectively, and $0.1 million and $11.6 million for the six months ended December 31, 2008 and 2007, respectively.  Share-based compensation expense for the three and six months ended December 31, 2008 was reduced due to stock option forfeitures recorded in connection with the retirement of senior executives. The total income tax (expense) benefit recognized in the consolidated statements of operations for share-based compensation arrangements was $0.8 million and $1.4 million for the three months ended December 31, 2008 and 2007, respectively, and ($1.0) million and $2.7 million for the six months ended December 31, 2008 and 2007, respectively.

Fair Value Determination

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model, which uses the assumptions noted in the following table.

8

	Six months ended December 31,
	2008			2007
Expected volatility		42.0% - 58.6	%		35.1% - 41.0	%
Weighted-average volatility		49.0	%		37.5	%
Expected annual dividend	$	0.05		$	0.05
Expected term (in years)		1.91 – 6.51			1.69 – 6.71
Risk-free rate		1.3% - 3.6	%		3.3% - 5.0	%

Groups of option holders (directors, executives and non-executives) that have similar historical behavior are considered separately for valuation purposes. Expected volatilities are based on historical closing prices of our common stock over the expected option term. We use historical data to estimate option exercises and employee terminations within the valuation model. The expected term of options granted is derived using the option valuation model and represents the estimated period of time from the date of grant that the option is expected to remain outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Stock Option Activity

A summary of option activity under our stock option plans as of December 31, 2008 and changes during the six months ended December 31, 2008 is presented below:

	Shares			Weighted average exercise price		Weighted average remaining contractual term(years)		Aggregate intrinsic value ($000s)
Outstanding at June 30, 2008		2,636,627		$	73.40
Granted		721,735			32.39
Exercised		(47,220	)		11.19
Forfeited or expired		(591,320	)		80.58
Outstanding at December 31, 2008		2,719,822			62.04		7.91	$	359
Exercisable at December 31, 2008		729,074		$	64.47		5.23	$	359

The weighted-average grant-date fair value of options granted during the three months ended December 31, 2008 and 2007 was $6.70 and $30.66, respectively. The weighted-average grant-date fair value of options granted during the six months ended December 31, 2008 and 2007 was $11.64 and $36.10, respectively. The total intrinsic value of options exercised during the three months ended December 31, 2008 and 2007 was $0.3 million and $4.0 million, respectively.  The total intrinsic value of options exercised during the six months December 31, 2008 and 2007 was $0.3 million and $4.5 million, respectively.

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A summary of the status of our nonvested restricted stock as of December 31, 2008 and changes during the six months ended December 31, 2008, is presented below:

	Shares			Weighted average grant-date fair value
Nonvested at June 30, 2008		92,910		$	95.23
Granted		5,000			32.83
Vested		(15,000	)		88.93
Forfeited		---			---
Nonvested at December 31, 2008		82,910		$	92.61

As of December 31, 2008, there was $2.9 million of total unrecognized compensation cost related to nonvested restricted stock-based compensation arrangements. The weighted average recognition period was 1.66 years.

Grant of Stock Options with Market Conditions

We granted 330,470 stock options containing a market condition to employees on March 21, 2008.  The options vest three years from the date of grant based on a comparison of our total shareholder return (“TSR”) to the TSR of a selected peer group of publicly listed multinational companies.  TSR will be measured as the annualized increase in the aggregate value of a company’s stock price plus the value of dividends, assumed to be reinvested into shares of the company’s stock at the time of dividend payment.  The base price to be used for the TSR calculation of $42.19 is the 20-day trading average from February 6, 2008 through March 6, 2008.  The ending price to be used for the TSR calculation will be the 20-day trading average prior to and through March 6, 2011.  The grant date fair value of $4.2 million was calculated using a combination of Monte Carlo simulation and lattice-based models.  Share-based compensation expense for these awards was $0.7 million for the six months ended December 31, 2008.

Restricted Stock Units

In January and September 2008, we granted 34,608 and 28,344 cash-settled restricted stock units, respectively, outside the 2002 Plan.  These restricted stock units are accounted for as liability awards and are recorded at the fair value at the end of the reporting period in accordance with their vesting schedules.  On July 2, 2008, 1,608 of these restricted stock units were settled at a cost of approximately $0.1 million.

We granted 133,507 restricted stock units with performance conditions in the six months ended December 31, 2008 under the 2002 Plan.  The restricted stock units vest three years from the date of grant based on attainment of certain performance targets in fiscal 2011.  The targets are consistent with our current business plans, and therefore it was deemed probable that 100% vesting would be achieved, requiring ratable accrual of share-based compensation expense over the three-year vesting period based on grant date fair value.

For the six months ended December 31, 2008, we also granted 358,170 restricted stock units under the 2002 Plan that vest three years from the date of grant.

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A summary of equity classified restricted stock unit activity as of December 31, 2008 and changes during the six months ended December 31, 2008 is presented below:

	Shares
Nonvested at June 30, 2008		25,000
Granted		491,677
Vested		---
Forfeited		(3,160	)
Nonvested at December 31, 2008		513,517

At December 31, 2008, the aggregate intrinsic value of equity classified restricted stock units was $8.6 million.  As of December 31, 2008, there was $10.3 million of total unrecognized compensation cost related to equity classified restricted stock unit compensation arrangements. The weighted average recognition period was 2.65 years.

Chief Executive Officer Special Enterprise Value Bonus

Our Chief Executive Officer was granted a special bonus award in November 2007.  The award will be settled in cash based on a comparison of our enterprise value at November 2012 to our enterprise value at the grant date in November 2007.  The award is classified as a liability award.  As a result, the fair value is required to be measured each quarter.  The fair value of this award at December 31, 2008 was $0.2 million, calculated using a Monte Carlo simulation.  During the six months ended December 31, 2008 we recognized a benefit of $0.1 million due to the decrease in the award’s computed fair value since June 30, 2008.

Note 11.  Restructuring Program

We announced a restructuring program in June 2006 designed to increase efficiency in our manufacturing, engineering and administrative organizations.  During the third quarter of fiscal 2008, we expanded our restructuring actions to improve our global footprint, cost structure, technology portfolio, human resources and internal processes.  These actions will reduce the number of our manufacturing, engineering and operating locations and are all included in our cost savings and productivity program called Step Change.

In the prior fiscal year we announced plant closings in Northridge, California and Martinsville, Indiana and closed a plant in South Africa and a small facility in Massachusetts.  In fiscal 2009, we completed the transition of our corporate headquarters from Washington D.C. to Stamford, Connecticut and have initiated numerous other actions to reduce cost and improve operating efficiency in our businesses.

For the six months ended December 31, 2008, selling, general and administrative (“SG&A”) expenses included $27.1 million for our restructuring program, of which $20.9 million was recorded for employee termination benefits.  Cash paid for restructuring actions for the six months ended December 31, 2008 totaled $17.6 million.  We also recorded $8.7 million primarily in cost of sales for accelerated depreciation and the reclassification of the Martinsville property from held and used to held for sale, both of which were recorded in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

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Below is a rollforward of our restructuring accrual, accounted for in accordance with SFAS 88, SFAS 112 and SFAS 146:   

	Six months ended December 31,
($000s omitted)	2008			2007
Beginning accrued liability	$	35,601			7,527
Expense		27,147			706
Utilization(1)		(18,852	)		(4,429	)
Ending accrued liability	$	43,896			3,804

(1) Includes amounts representing adjustments to the liability for changes in foreign currency exchange rates.

Restructuring expenses by reporting segment are as follows:

	Three months ended					Six months ended
	December 31,					December 31,
($000s omitted)	2008		2007			2008		2007
Automotive	$	4,770		396			8,388		716
Consumer		5,013		(63	)		5,428		(74	)
Professional		5,622		12			5,641		64
Other		6,874		--			7,691		--
Total	$	22,278		345			27,147		706

Note 12. Retirement Benefits

We provide defined pension benefits to certain eligible employees.  The measurement date used for determining pension benefits is the last day of our fiscal year, June 30. We have certain business units in Europe that maintain defined benefit pension plans for many of our current and former employees. The coverage provided and the extent to which the retirees’ share in the cost of the program vary by business unit. Generally, plan benefits are based on age, years of service and average compensation during the final years of service.  In the United States, we have a Supplemental Executive Retirement Plan (“SERP”) that provides retirement, death and termination benefits, as defined, to certain key executives designated by the Board of Directors.

Our retirement benefits are more fully disclosed in Note 16, Retirement Benefits, to our consolidated financial statements included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2008.

The following table presents the components of net periodic benefit costs:

	Three months ended
	December 31,
($000s omitted)	2008		2007
Service cost	$	1,043		876
Interest cost		1,562		1,649
Amortization of prior service cost		439		215
Amortization of net loss		59		303
Net periodic benefit cost	$	3,103		3,043

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	Six months ended
	December 31,
($000s omitted)	2008		2007
Service cost	$	1,649		1,793
Interest cost		3,752		3,237
Amortization of prior service cost		957		430
Amortization of net loss		127		606
Net periodic benefit cost	$	6,485		6,066

During the six months ended December 31, 2008, we made contributions of $3.6 million to the defined benefit pension plans which were paid to participants.  We expect to make approximately $5.4 million in contributions for the remainder of the fiscal year ending June 30, 2009.  

Note 13.  Business Segment Data

We design, manufacture and market high-quality, high fidelity audio products and electronic systems for the automotive, consumer and professional markets.  We organize our businesses into reporting segments by the end-user markets we serve.  Our chief operating decision makers evaluate performance and allocate resources primarily based on net sales, operating income and working capital in each of the reporting segments.  Our reportable segments are Automotive, Consumer and Professional.

During the first quarter of fiscal 2009, we revised our business segments to align with our strategic approach to the markets and customers we serve.  We now report financial information for the QNX business in our “Other” segment.  The QNX business was previously reported in our Automotive segment.  Segment information for the prior period has been reclassified to reflect the new presentation.

Our Automotive segment designs, manufactures and markets audio, electronic and infotainment systems for vehicle applications primarily to be installed as original equipment by automotive manufacturers.  Our Automotive products and systems are marketed worldwide under brand names including JBL, Infinity, Harman/Kardon, Becker, Logic 7 and Mark Levinson.  Our premium branded audio, video, navigation and infotainment systems are offered to automobile manufacturers through engineering and supply agreements.  See Note 14, Significant Customers.

Our Consumer segment designs, manufactures and markets loudspeaker and electronic systems for home, computer and multimedia applications and mobile applications.  Our Consumer home products and systems are marketed worldwide under brand names including JBL, Infinity, Harman/Kardon, Lexicon, Mark Levinson, Revel and AKG.  Our loudspeaker and electronic products are offered through audio specialty and retail chain stores.  Our branded products for computer and multimedia applications are focused on retail customers with products designed to enhance sound for computers, Apple’s iPod and similar devices.

Our Professional segment designs, manufactures and markets loudspeakers and electronic systems used by audio professionals in concert halls, stadiums, airports and other buildings and for recording, broadcast, cinema and music reproduction applications.  Our Professional products are marketed worldwide under brand names including JBL Professional, AKG, Crown, Soundcraft, Lexicon, DigiTech, dbx and Studer.  We provide high-quality products to the sound reinforcement, music instrument support and broadcast and recording segments of the professional audio market.  We offer complete systems solutions for professional installations and users around the world.

Our Other segment includes the operations of the QNX business, which offers embedded operating system software and related development tools and consulting services used in a variety of products and industries.  Our Other segment also includes compensation, benefit and occupancy costs for corporate employees.

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The following table reports net sales and operating (loss) income by each reporting segment:

	Three months ended						Six months ended
	December 31,						December 31,
($000s omitted)	2008			2007			2008			2007
Net sales:
Automotive	$	517,187			719,778			1,134,110			1,393,012
Consumer		119,959			183,752			225,877			303,190
Professional		108,851			151,625			245,710			296,846
Other		9,878			10,455			19,368			19,524
Total	$	755,875			1,065,610			1,625,065			2,012,572
Operating (loss) income:
Automotive	$	(320,168	)		33,972			(299,704	)		78,509
Consumer		(24,639	)		17,434			(25,638	)		14,341
Professional		6,023			23,044			26,814			43,432
Other		(27,759	)		(13,611	)		(35,558	)		(34,002	)
Total	$	(366,543	)		60,839			(334,086	)		102,280

We recorded goodwill impairment charges of $290.0 million for Automotive, $22.7 million for Consumer and $7.8 million for QNX, reported in Other, in the three months ended December 31, 2008.  See Note 19, Goodwill Impairment.

Note 14.  Significant Customers

Presented below are the percentages of net sales to and receivables due from customers who represent ten percent or more of our net sales or accounts receivable for the periods presented:

	Net Sales						Accounts Receivable
	Six months ended December 31,						As of December 31,
	2008			2007			2008			2007
Daimler AG		10	%		20	%		3	%		10	%
Audi/VW		15	%		10	%		5	%		5	%
BMW		13	%		9	%		4	%		5	%
Other customers		62	%		61	%		88	%		80	%
Total		100	%		100	%		100	%		100	%

We anticipate that Daimler AG, Audi/VW and BMW will continue to account for a significant portion of our net sales and accounts receivable for the foreseeable future.  Our automotive customers are not obligated to any long-term purchase of our products.

Note 15.  Commitments and Contingencies

At December 31, 2008, we were subject to legal claims and litigation arising in the ordinary course of business, including the matters described below.  The outcome of these legal actions cannot be predicted with certainty; however, management, based upon advice from legal counsel, believes such actions are either without merit or will not have a material adverse effect on our financial position or results of operations.

In re Harman International Industries, Inc. Securities Litigation

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On October 1, 2007, a purported class action lawsuit was filed by Cheolan Kim (the “Kim Plaintiff”) against Harman and certain of our officers in the United States District Court for the District of Columbia seeking compensatory damages and costs on behalf of all persons who purchased Harman common stock between April 26, 2007 and September 24, 2007 (the “Class Period”).  The original complaint purported to allege claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “1934 Act”) and Rule 10b-5 promulgated thereunder.

The complaint alleged that defendants omitted to disclose material adverse facts about Harman’s financial condition and business prospects.  The complaint contended that had these facts not been concealed at the time the merger agreement with Kohlberg Kravis Roberts & Co. (“KKR”) and GS Capital Partners VI Fund, L.P. and its related funds (“GSCP”) was entered into, there would not have been a merger agreement, or it would have been at a much lower price, and the price of Harman’s common stock therefore would not have been artificially inflated during the Class Period.  The Kim Plaintiff alleged that, following the reports that the proposed merger was not going to be completed, the price of our common stock declined, causing the plaintiff class significant losses.

On November 30, 2007, the Boca Raton General Employees’ Pension Plan (the “Boca Raton Plaintiff”) filed a purported class action lawsuit against Harman and certain of our officers in the United States District Court for the District of Columbia seeking compensatory damages and costs on behalf of all persons who purchased our common stock between April 26, 2007 and September 24, 2007.  The allegations in the Boca Raton complaint are essentially identical to the allegations in the original Kim complaint, and like the original Kim complaint, the Boca Raton complaint alleges claims for violations of Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 promulgated thereunder.

On January 16, 2008, the Kim Plaintiff filed an amended complaint.  The amended complaint, which extended the Class Period through January 11, 2008, contended that, in addition to the violations alleged in the original complaint, Harman also violated Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 by knowingly failing to disclose “significant problems” relating to its PND “sales forecasts, production, pricing, and inventory” prior to January 14, 2008.  The amended complaint claimed that when “Defendants revealed for the first time on January 14, 2008 that shifts in PND sales would adversely impact earnings per share by more than $1.00 per share in fiscal 2008,” that led to a further decline in our share value and additional losses to the plaintiff class.

On February 15, 2008, the Court ordered the consolidation of the Kim action with the Boca Raton action, the administrative closing of the Boca Raton action, and designated the short caption of the consolidated action as In re Harman International Industries, Inc. Securities Litigation, civil action no. 1:07-cv-01757 (RWR).  That same day, the Court appointed Arkansas Public Retirement System as Lead Plaintiff and approved the law firm Cohen, Milstein, Hausfeld and Toll, P.L.L.C. to serve as Lead Counsel.

On March 24, 2008, the Court ordered, for pretrial management purposes only, the consolidation of Patrick Russell v. Harman International Industries, Incorporated, et al. with In re Harman International Industries, Inc. Securities Litigation.

On May 2, 2008, Lead Plaintiff filed a Consolidated Class Action Complaint (the “Consolidated Complaint”).  The Consolidated Complaint, which extends the Class Period through February 5, 2008, contends that Harman and certain of our officers and directors violated Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 by issuing false and misleading disclosures regarding our financial condition in fiscal 2007 and fiscal 2008.  In particular, the Consolidated Complaint alleges that defendants knowingly or recklessly failed to disclose material adverse facts about MyGIG radios, PNDs and our capital expenditures.  The Consolidated Complaint alleges that when Harman’s true financial condition became known to the market, the price of our stock declined significantly, causing losses to the plaintiff class.

On July 3, 2008, defendants moved to dismiss the Consolidated Complaint in its entirety.  Lead Plaintiff opposed defendants’ motion to dismiss on September 2, 2008, and defendants filed a reply in further support of their motion to dismiss on October 2, 2008.  The motion is now fully briefed.

15

Patrick Russell v. Harman International Industries, Incorporated, et al.

Patrick Russell (the “Russell Plaintiff”) filed a complaint on December 7, 2007 in the United States District Court for the District of Columbia and an amended purported putative class action complaint on June 2, 2008 against Harman and certain of our officers and directors alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) and seeking, on behalf of all participants in and beneficiaries of the Harman International Industries, Incorporated Retirement Savings Plan  (the “Plan”), compensatory damages for losses to the Plan as well as injunctive relief, imposition of a constructive trust, restitution, and other monetary relief.  The amended complaint alleges that from April 26, 2007 to the present, defendants failed to prudently and loyally manage the Plan’s assets, thereby breaching their fiduciary duties in violation of ERISA, by causing the Plan to invest in Harman stock notwithstanding that the stock allegedly was “no longer a prudent investment for the Participants’ retirement savings.”  The amended complaint further claims that, during the Class Period, defendants failed to monitor the Plan fiduciaries, and failed to provide the Plan fiduciaries with, and to disclose to Plan participants, adverse facts regarding Harman and our businesses and prospects.  The Russell Plaintiff also contends that defendants breached their duties to avoid conflicts of interest and to serve the interests of participants in and beneficiaries of the Plan with undivided loyalty.  As a result of these alleged fiduciary breaches, the complaint asserts that the Plan has “suffered substantial losses, resulting in the depletion of millions of dollars of the retirement savings and anticipated retirement income of the Plan’s Participants.”

On March 24, 2008, the Court ordered, for pretrial management purposes only, the consolidation of Patrick Russell v. Harman International Industries, Incorporated, et al. with In re Harman International Industries, Inc. Securities Litigation.

Defendants moved to dismiss the complaint in its entirety on August 5, 2008.  The Russell Plaintiff opposed defendants’ motion to dismiss on September 19, 2008, and defendants filed a reply in further support of their motion to dismiss on October 20, 2008.  The motion is now fully briefed.

Siemens vs. Harman Becker Automotive Systems GmbH.

In October 2006, Harman Becker received notice of a complaint filed against it by Siemens AG with the Regional Court in Düsseldorf in August 2006 alleging that certain of Harman Becker’s infotainment products including both radio receiver and Bluetooth hands free telephony functionality, infringe upon a patent owned by Siemens.  In November 2006 Harman Becker filed suit with the German Federal Patent Court in Munich to nullify the claims of this patent.

On August 14, 2007, the court of first instance in Düsseldorf ruled that the patent in question had been infringed and ordered Harman Becker to cease selling the products in question in Germany, and to compile and submit data to Siemens concerning its prior sales of such products.  Harman Becker has appealed that ruling.

Despite the pending appeal, Siemens AG provisionally enforced the ruling against Harman Becker.  Accordingly, in December 2007, Harman Becker ceased selling aftermarket products covered by the patent in Germany, and submitted the required data to Siemens AG.

On June 4, 2008, the German Federal Patent Court nullified all relevant claims of Siemens’ patent.  As a result, Harman Becker resumed selling the affected products, and Siemens suspended further attempts to enforce the patent.  Siemens also requested that Harman Becker suspend its appeal of the Düsseldorf court’s ruling of infringement until the German Federal Patent Court’s nullity ruling has become final.  Harman has consented to this suspension.  Harman Becker received the written decision of the German Federal Patent Court on August 18, 2008, and Siemens has appealed the decision to the German Federal Supreme Court. We expect these appellate proceedings to take at least three years until a final decision is rendered.

16

Automotive Supply Arrangements

We have arrangements with our automotive customers to provide products that meet predetermined technical specifications and delivery dates.  In the event that we do not satisfy the performance obligations under these arrangements, we may be required to indemnify the customer.  We accrue for any loss that we expect to incur under these arrangements when that loss is probable and can be reasonably estimated. For the three and six months ended December 31, 2008, we incurred $2.6 million of costs relating to delayed delivery of product to an automotive customer.  An inability to meet performance obligations on automotive platforms to be delivered in future periods could adversely affect our results of operations and financial condition in future periods.

Note 16.  Fair Value Measurements

In the first quarter of fiscal 2009, we adopted SFAS 157, Fair Value Measurements (“SFAS 157”).  The adoption of SFAS 157 did not have a material impact on our consolidated financial statements.

SFAS 157 establishes a three-tier fair value hierarchy to prioritize the inputs used in measuring fair value.  The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3).  The three levels are defined as follows:

Level 1: Observable inputs, such as unadjusted quoted market prices in active markets for the identical asset or liability.

Level 2: Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3: Unobservable inputs reflecting the entity’s own assumptions in measuring the asset or liability at fair value.

The following table provides the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

($000s omitted)	Fair Value at December 31, 2008
Description	Level 1		Level 2		Level 3
Assets:
Money market funds	$	---		34,621		---
Available-for-sale securities		---		7,407		---
Foreign currency forward contracts		---		2,100		---
Interest rate swap contract		---		1,169		---
Total	$	---		45,297		---

Money market funds and available-for-sale-securities are classified as Level 2 as the fair value was determined from market quotes obtained from financial institutions in active markets.

We use foreign currency forward contracts and an interest rate swap contract to hedge market risks relating to possible adverse changes in foreign currency exchange rates and interest rates.  Our foreign currency forward contracts were measured at fair value using Level 2 inputs.  Such inputs include foreign currency spot and forward rates for similar transactions in actively quoted markets.

We have elected to use the income approach to value our interest rate swap contract, which uses observable Level 2 inputs at the measurement date and standard valuation techniques to convert future amounts to a single present amount (discounted).  Level 2 inputs for the swap contract valuation are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR cash and swap rates) at commonly quoted intervals, and credit risk.  These key inputs, including the LIBOR cash rates for very short-term, futures rates for up to two years, and LIBOR swap rates beyond the derivative maturity are used to construct the swap yield curve and discount the future cash flows to present value at the measurement date.  As the interest rate swap contract is a derivative asset, a credit default swap basis available at commonly quoted intervals has been collected from Bloomberg and applied to all cash flows. If the interest rate swap contract was determined to be a derivative liability, we would be required to reflect potential credit risk to lenders using a borrowing rate specific to our Company.  See Note 17, Derivatives, for further discussion regarding our derivative financial instruments.

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In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115 (“SFAS 159”), which allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on an instrument-by-instrument basis.  Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings.  We did not elect fair value measurement for financial assets and liabilities.  Therefore, SFAS 159 did not impact our results of operations.

In February 2008, the FASB issued FASB Staff Position (“FSP”) No. 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”) which delays the effective date of SFAS 157 by one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.  The provisions of SFAS 157 for nonfinancial assets and liabilities will be adopted by us in the first quarter of fiscal 2010.

Note 17.  Derivatives

We use foreign currency forward contracts to hedge a portion of our foreign denominated forecasted purchase transactions.  These forward contracts are designated as foreign currency cash flow hedges and recorded at fair value in the accompanying consolidated balance sheet with a corresponding entry to accumulated other comprehensive income (loss) until the underlying forecasted foreign currency transaction occurs.

When the transaction occurs, the gain or loss from the derivative designated as a hedge of the transaction is reclassified from accumulated other comprehensive income (loss) to either cost of goods sold or SG&A expenses depending upon the nature of the underlying transaction.  When it becomes apparent that an underlying forecasted transaction will not occur, the amount recorded in accumulated other comprehensive income (loss) related to the hedge is reclassified to the miscellaneous, net line item of the consolidated statement of operations in the then-current period.

Changes in the fair value of the derivatives are highly effective in offsetting changes in the cash flows of the hedged items because the amounts and the maturities of the derivatives approximate those of the forecasted exposures.  Any ineffective portion of the derivative is recognized in current earnings to the same line item of the consolidated statement of operations in which the foreign currency gain or loss on the underlying hedged transactions is recorded.  When it has been determined that a hedge has become ineffective, the ineffective portion of the hedge is recorded in current earnings. For the three and six months ended December 31, 2008 and 2007, we recognized no ineffectiveness for foreign currency forward contracts.

We elected to exclude forward points from the effectiveness assessment.  At the end of the period we calculate the excluded amount, which is the fair value relating to the change in forward points that is recorded to current earnings as miscellaneous, net.  For the three and six months ended December 31, 2008, we recognized $0.6 million and $0.7 million, respectively, in net gains related to the change in forward points.

At December 31, 2008, we had forward contracts maturing through June 2009 to sell Euros and buy U.S. dollars totaling approximately $32.1 million, and through June 2009 to buy Canadian dollars and sell US dollars of approximately $10.9 million to hedge future foreign currency purchases.  At December 31, 2008, the amount associated with these hedges that was expected to be reclassified from accumulated other comprehensive income (loss) to earnings within the following twelve months was a gain of approximately $3.5 million.  The fair market value of the forward contracts as of December 31, 2008 was $2.6 million. In the six months ended December 31, 2008, we recognized a gain of $3.8 million from cash flow hedges of forecasted foreign currency transactions compared to $1.8 million in net losses in the same period last year.

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When forward contracts do not meet the requirements of hedge accounting, we recognize the gain or loss on the associated contracts directly in current period earnings in cost of goods sold as unrealized exchange gains/(losses).  In the six months ended December 31, 2008, we recognized a loss of less than $0.1 million from matured forward contracts that do not meet the requirements of hedge accounting.  At December 31, 2008, we had forward contracts maturing through February 2010 to sell Japanese Yen and buy U.S. dollars of approximately $4.6 million to hedge foreign currency denominated purchases that were not eligible for hedge accounting.  For the three and six months ended December 31, 2008, we recognized a loss on these hedge contracts of $0.9 million and $1.0 million, respectively.

As of December 31, 2008, we had forward contracts maturing through May 2009 to purchase and sell the equivalent of $31.6 million of various currencies to hedge foreign currency denominated inter-company loans.  At December 31, 2008, the fair value of these contracts was $0.3 million.  Adjustments to the carrying value of the foreign currency forward contracts offset the gains and losses on the underlying loans in other non-operating income.

In February 2007, we entered into an interest rate swap contract to effectively convert interest on an operating lease from a variable rate to a fixed rate.  The objective of the swap is to offset changes in rent expenses caused by interest rate fluctuations.  The interest rate swap contract is designated as a cash flow hedge. At the end of each reporting period, the discounted fair value of the swap contract is calculated and recorded to other comprehensive income.  The accrued but unpaid net interest on the swap contract is recorded in rent expense, which is included in SG&A expenses in our consolidated statement of operations.  If the hedge is determined to be ineffective, the ineffective portion will be reclassified from other comprehensive income and recorded as rent expense. For the three months ended December 31, 2008, we recognized ineffectiveness.  As of December 31, 2008, the notional amount of the swap contract was $26.5 million and the amount recorded in other comprehensive income was a gain of $1.2 million.  The amount associated with the swap contract that is expected to be recorded as rent expense through December 31, 2009 is a gain of $0.3 million.

Note 18.  Recent Accounting Pronouncements

In December 2007, the FASB issued Statement No. 141R, Business Combinations (“SFAS 141R”), which requires the recognition of assets acquired, liabilities assumed and any noncontrolling interests at the acquisition date fair value with limited exceptions.  SFAS 141R will change the accounting treatment for certain specific items and include a substantial number of new disclosure requirements.  These changes include (a) the “acquirer” recording all assets and liabilities of the acquired business, including goodwill, generally at their fair values, (b) contingent consideration arrangements being recorded at fair value on the date of acquisition, with changes in fair value recognized in earnings until settled, and (c) acquisition-related transaction and restructuring costs being expensed rather than treated as part of the cost of the acquisition and included in the amount recorded for assets acquired.  SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008.  SFAS 141R will apply to any acquisitions consummated by us on or after July 1, 2009.  We are currently evaluating the impact of the adoption of SFAS 141R on future acquisitions.

In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133  (“SFAS 161”), which requires expanded disclosures about a company’s derivative instruments including how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS 133, and how derivative instruments and related hedged items affect a company’s financial position, financial performance and cash flows.  The required disclosures also include the location and fair value of derivative instruments and their gains or losses in tabular format, information about credit-risk-related contingent features in derivative agreements, counterparty credit risk, and the company’s strategies and objectives for using derivative instruments.  SFAS 161 is effective prospectively for fiscal years and interim periods beginning on or after November 15, 2008 with early adoption permitted.  SFAS 161 is effective for us beginning January 1, 2009.  We will begin to provide the additional disclosures required by SFAS 161 in our Quarterly Report on Form 10-Q for the period ending March 31, 2009.

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In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”).  FSP APB 14-1 requires the issuer of convertible debt instruments with cash settlement features to account separately for the liability and equity components of the instrument. The debt would be recognized at the present value of its cash flows discounted using the issuer’s nonconvertible debt borrowing rate at the time of issuance. The equity component would be recognized as the difference between the proceeds from the issuance of the note and the fair value of the liability. FSP APB 14-1 will also require an accretion of the resultant debt discount over the expected life of the debt. The proposed transition guidance requires retrospective application to all periods presented, and does not grandfather existing instruments. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008.  Early adoption is not permitted.  FSP APB 14-1 is effective for us beginning July 1, 2009.  We expect the implementation of FSP APB 14-1 will have a material impact on our consolidated financial statements and will result in higher non-cash interest expense from fiscal 2008 through October 23, 2012 and be dilutive to earnings per share.  We are currently evaluating our non-convertible borrowing rate and the fair value of the conversion privilege with respect to the Notes.

In June 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”).  This FSP provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.  This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years.  Upon adoption, a company is required to retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform to the provisions in this FSP.  Early application of this FSP is prohibited.  FSP EITF 03-6-1 is effective for us beginning July 1, 2009.  We are currently evaluating the impact of FSP EITF 03-6-1 on our consolidated financial statements.

Note 19.  Goodwill Impairment

SFAS No. 142, Goodwill and Other Intangible Assets, (“SFAS 142”) requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. At June 30, 2008, our goodwill balance was $436.4 million.  We tested goodwill for impairment during the fourth quarter of fiscal 2008.  At that time, we concluded that the fair value of each reporting unit was in excess of its carrying value.

During the three months ended December 31, 2008, we experienced a significant decline in our market capitalization as deteriorating economic conditions and negative industry trends adversely affected our business.  We concluded that events had occurred and circumstances had changed during the three months ended December 31, 2008 which required us to perform an interim period goodwill impairment test in accordance with SFAS 142.

The impairment test for goodwill is a two step process.  The first step involved comparing the fair value of each reporting unit to its carrying value. The fair value of each reporting unit was determined using established valuation techniques, specifically the market and income approaches. The preliminary results of the first step indicated that the fair value of our Professional reporting unit was in excess of its carrying value, and thus, we concluded no impairment existed for this reporting unit.  The preliminary results of the first step for the Consumer, Automotive and QNX reporting units indicated fair value was less than carrying value, and thus, we proceeded to the second step of the goodwill impairment test for these units.

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In the second step of the goodwill impairment test, we determined the amount of impairment by comparing the implied fair value of our goodwill to the recorded amount of goodwill for the Consumer, Automotive and QNX reporting units.  The implied fair value of goodwill is calculated as the excess of fair value of the reporting unit over the amounts assigned to its assets and liabilities.  Based on the preliminary results of the second step, we recognized a non-cash goodwill impairment charge of $325.4 million, $289.9 million net of taxes, which represented the balance of goodwill for the Automotive and Consumer units and a portion of the goodwill for the QNX unit.  The impairment charge was recorded in loss from continuing operations for the six months ended December 31, 2008.  This non-cash charge does not affect our debt covenant compliance, cash flows or ongoing results of operations.  Due to the complexity of the analysis, involving the completion of fair value analyses and the resolution of certain significant assumptions, we will finalize the goodwill impairment charge in the three months ending March 31, 2009.

The changes in the carrying amount of goodwill for the six months ended December 31, 2008 were as follows:

($000s omitted)	Automotive			Consumer			Professional			Other			Total
Balance at June 30, 2008	$	367,492			23,369			45,586			---			436,447
Realignment of business segments (Note 13)		(52,497	)		---			---			52,497			---
Contingent purchase price consideration associated with the acquisition of Innovative Systems GmbH		6,172			---			---			---			6,172
Impairment charge		(289,962	)		(22,663	)		---			(12,820	)		(325,445	)
Other adjustments(1)		(31,205	)		(706	)		(5,209	)		---			(37,120	)
Balance at December 31, 2008	$	---			---			40,377			39,677			80,054

(1) The other adjustments to goodwill primarily consist of foreign currency translation adjustments.

Note 20.  Investment in Joint Venture

In October 2005, we formed Harman Navis Inc., a joint venture located in Korea, to engage in the design and development of navigation systems for Asian markets.  We evaluated the joint venture agreement under FIN No. 46R, Consolidation of Variable Interest Entities (“FIN 46R”), and determined that the newly formed joint venture was a variable interest entity.  Because Harman contributed the majority of capital to the joint venture, we concluded that we were most likely to absorb the majority of losses incurred by the entity, thus requiring us to consolidate the joint venture.  We have consolidated the joint venture since inception.

We own a 50 percent equity interest in the joint venture.  We are not obligated to fund any joint venture losses beyond our investment, and we have not done so since inception of the joint venture.  At December 31, 2008, the net assets of the joint venture were $4.8 million.  Due to the effect of accumulated losses, there is no minority interest recorded in our balance sheet as of December 31, 2008.

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Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report on Form 10-Q, together with Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended June 30, 2008 (“2008 Form 10-K”).  This discussion contains forward-looking statements which are based on our current expectations and experience and our perception of historical trends, current market conditions, including customer acceptance of our new products, current economic data, expected future developments, including foreign currency exchange rates, and other factors that we believe are appropriate under the circumstances.  These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements.  Unless otherwise indicated, “Harman,” “the company,” “we,” “our,” and “us” are used interchangeably to refer to Harman International Industries, Incorporated and its consolidated subsidiaries.

We begin our discussion with an overview of our company to give you an understanding of our business and the markets we serve.  We then discuss our critical accounting policies.  This is followed by a discussion of our results of operations for the three and six months ended December 31, 2008 and 2007.  We include in this discussion an analysis of certain significant period-to-period variances in our condensed consolidated statements of operations and an analysis of our restructuring program.  We also provide specific information regarding our three reportable business segments: Automotive, Consumer and Professional.  We then discuss our financial condition at December 31, 2008 with a comparison to June 30, 2008.  This section contains information regarding our liquidity, capital resources and cash flows from operating, investing and financing activities.  We complete our discussion with an update on recent developments and a business outlook.

Overview

We design, manufacture and market high-quality, high-fidelity audio products and electronic systems for the automotive, consumer and professional markets. We have developed, both internally and through a series of strategic acquisitions, a broad range of product offerings sold under renowned brand names in our principal markets. These brand names have a heritage of technological leadership and product innovation.  Our reportable business segments, Automotive, Consumer and Professional, are based on the end-user markets we serve.

During the first quarter of fiscal 2009, we revised our business segments to align our strategic approach to the markets and customers we serve.  We now report financial information for the QNX business in our “Other” segment.  The QNX business was previously reported in our Automotive segment.  The realignment reflects our focus to grow the QNX business in other, non-automotive industries, including networking, medical, instrumentation and industrial control.  Segment information for the prior period has been reclassified to conform to the new presentation.

Automotive designs, manufactures and markets audio, electronic and infotainment systems for vehicle applications. Our systems are generally shipped directly to our automotive customers for factory installation. Infotainment systems are a combination of information and entertainment components that may include or control GPS navigation, traffic information, voice-activated telephone and climate control, rear seat entertainment, wireless Internet access, hard disk recording, MP3 playback and a premium branded audio system.  We expect future infotainment systems to also provide driver safety capabilities such as lane guidance, pre-crash emergency braking, adaptive cruise control, and night vision. Automotive also provides aftermarket products such as personal navigation devices (“PNDs”) to customers primarily in Europe.

Consumer designs, manufactures and markets loudspeaker and electronic systems for multimedia, home and mobile applications. Multimedia applications include innovative accessories for portable electronic devices including music-enabled cell phones such as the iPhone, and MP3 players including the iPod.  Our multimedia applications also include audio systems for personal computers.  Home applications include systems to provide high-quality audio throughout the home and to enhance home theatres.  Aftermarket mobile products include speakers and amplifiers that deliver audio entertainment in the vehicle.  Consumer products are primarily distributed through retail outlets.

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Professional designs, manufactures and markets loudspeakers and electronic systems used by audio professionals in concert halls, stadiums, airports, houses of worship and other public spaces.  We also develop products for recording, broadcast, cinema, touring and music reproduction applications.  In addition, we have leading products in both the portable PA market and musician vertical markets serving small bands, DJs and other performers.  A growing number of our products are enabled by our proprietary HiQnet protocol which provides centralized monitoring and control of both complex and simple professional audio systems.

Our Other segment includes the operations of the QNX business, which offers embedded operating system software and related development tools and consulting services used in a variety of products and industries.  Our Other segment also includes compensation, benefit and occupancy costs for corporate employees.

Our products are sold worldwide, with the largest markets being the United States and Germany. In the United States, our primary manufacturing facilities are located in California, Kentucky, Missouri, Indiana and Utah. Outside of the United States, we have significant manufacturing facilities in Germany, Austria, the United Kingdom, Mexico, Hungary, France and China.  During fiscal 2008, we announced an expansion of our restructuring program that will reduce our manufacturing footprint and result in the closure of our Automotive manufacturing facilities in California and Indiana.

Our sales and earnings may vary due to the production schedules of our automotive customers, customer acceptance of our products, the timing of new product introductions, product offerings by our competitors and general economic conditions.  Since our businesses operate using local currencies, our reported sales and earnings may also fluctuate due to foreign currency exchange rates, especially for the Euro.

Critical Accounting Policies

For the three and six months ended December 31, 2008, there were no significant changes to our critical accounting policies and estimates from those disclosed in the consolidated financial statements and the related notes included in our 2008 Form 10-K or our Quarterly Report on Form 10-Q for the three months ended September 30, 2008.

Results of Operations

Net Sales

Our net sales for the three months ended December 31, 2008 were $755.9 million, compared to $1.066 billion in the same period last year, a decrease of 29 percent.  For the six months ended December 31, 2008, net sales were $1.625 billion, compared to net sales of $2.013 billion in the same prior year period, a decrease of 19 percent.  Foreign currency translation had an unfavorable impact on net sales of $66.7 million and $18.4 million, respectively, when compared to the same three and six month periods in the prior year.  For the three and six months ended December 31, 2008, each of our reporting segments reported lower sales compared to the same period in the prior year.  The decline in overall net sales was attributable to continued weakness in the automotive market as automakers cut production in response to weak economic conditions.  Our Professional and Consumer segments were also negatively affected by the financial and economic crisis, where reductions in the availability of credit and lower consumer spending resulted in lower net sales.

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Presented below is a summary of our net sales by reporting segment:

($000s omitted)	Three months ended December 31,										Six months ended December 31,
	2008		%			2007		%			2008		%			2007		%
Net sales:
Automotive	$	517,187		68	%		719,778		68	%	$	1,134,110		70	%		1,393,012		69	%
Consumer		119,959		16	%		183,752		17	%		225,877		14	%		303,190		15	%
Professional		108,851		15	%		151,625		14	%		245,710		15	%		296,846		15	%
Other		9,878		1	%		10,455		1	%		19,368		1	%		19,524		1	%
Total	$	755,875		100	%		1,065,610		100	%	$	1,625,065		100	%		2,012,572		100	%

Automotive - Net sales for the three months ended December 31, 2008 decreased $202.6 million, or 28 percent compared to the same period in the prior year.  Foreign currency translation adversely affected net sales by $52.4 million compared to the same three month period last year.  Net sales for the six months ended December 31, 2008 decreased $258.9 million, or 19 percent compared to the same period in the prior year.  Foreign currency translation adversely affected sales by $11.2 million compared to the same period in the prior year.

For both the three and six months ended December 31, 2008, the reduction in net sales was primarily attributable to Daimler’s strategic decision to move to dual sourcing on select Mercedes models, as well as reduced production by some of our major automotive customers, including Chrysler and Toyota.  These reductions were partially offset by higher sales relating to the launch of our products in various new Audi, BMW and Hyundai models.

Consumer - Net sales for the three months ended December 31, 2008 decreased $63.8 million, or 35 percent, compared to the same three month period last year.  Foreign currency translation adversely affected sales by $9.2 million compared to the same three month period last year.  Net sales for the six months ended December 31, 2008 decreased $77.3 million, or 26 percent, compared to the same period in the prior year.  Foreign currency translation adversely affected sales by $3.6 million compared to the same period in the prior year.

The consumer retail environment continues to be challenging as consumer spending has slowed and resulted in lower sales.  Sales were also lower due to Consumer’s exit of the PND business and other unprofitable products.

Professional - Net sales for the three months ended December 31, 2008 decreased $42.8 million, or 28 percent compared to the same period in the prior year.  Foreign currency translation adversely affected sales by $5.0 million compared to the same period last year.  Net sales for the six months ended December 31, 2008 decreased $51.1 million, or 17 percent, compared to the same period in the prior year.  Foreign currency translation adversely affected sales by $3.6 million when compared to the same period in the prior year.

The decrease in sales compared to the same periods last year was due to continued softness in the small project contracting business and the effect of the weak economy on both our distributors’ liquidity and market demand.

Gross Profit

Gross profit as a percentage of net sales decreased 4.9 percentage points to 23.4 percent for the three months ended December 31, 2008 compared to 28.3 percent of net sales in the same prior year period.  Gross profit as a percentage of net sales decreased 2.3 percentage points to 25.8 percent for the six months ended December 31, 2008 compared to 28.1 percent of net sales in the same prior year period.  Gross profit margins were lower than the same periods in the prior year due to decreased factory utilization associated with lower sales and increased restructuring costs.

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Presented below is a summary of our gross profit by reporting segment:

($000s omitted)	Three months ended December 31,										Six months ended December 31,
	2008		Percent of net sales			2007		Percent of net sales			2008		Percent of net sales			2007		Percent of net sales
Gross Profit:
Automotive	$	101,295		19.6	%		185,198		25.7	%	$	254,882		22.5	%		359,740		25.8	%
Consumer		27,429		22.9	%		48,534		26.4	%		54,406		24.1	%		76,641		25.3	%
Professional		41,879		38.5	%		60,140		39.7	%		96,712		39.4	%		116,022		39.1	%
Other		6,254		63.3	%		7,252		69.4	%		12,787		66.0	%		13,296		68.1	%
Total	$	176,857		23.4	%		301,124		28.3	%	$	418,787		25.8	%		565,699		28.1	%

Automotive – Gross profit as a percentage of net sales decreased 6.1 percentage points to 19.6 percent for the three months ended December 31, 2008 compared to the same period in the prior year.  Gross profit as a percentage of net sales decreased 3.3 percentage points to 22.5 percent for the six months ended December 31, 2008 compared to the same period last year.  The gross margin decline was due to lower factory utilization associated with the decrease in sales, changes in sales mix and restructuring costs incurred in connection with the announced plant closings in Northridge, California and Martinsville, Indiana.  Restructuring costs recorded at these locations relate to accelerated depreciation on machinery and equipment and the classification of the Martinsville property as held for sale from held and used.

Consumer – Gross profit as a percentage of net sales decreased 3.5 percentage points to 22.9 percent for the three months ended December 31, 2008 compared to the same period in the prior year.  Gross profit as a percentage of net sales decreased 1.2 percentage points to 24.1 percent for the six months ended December 31, 2008 compared to the same prior year period.  Gross profit margins for the three and six months ended December 31, 2008 declined primarily due to PND inventory write-downs associated with Consumer’s exit of the PND business.

Professional – Gross profit as a percentage of net sales decreased 1.2 percentage points to 38.5 percent for the three months ended December 31, 2008 compared to the same period in the prior year.  Gross profit as a percentage of net sales increased 0.3 percentage points to 39.4 percent for the six months ended December 31, 2008 compared to the same prior year period.  Lower factory utilization associated with the sales decline reduced gross margins for the three months ended December 31, 2008 compared to the same period in the prior year.  For the six months ended December 31, 2008, favorable product mix and lower factory overhead costs offset the effect of the volume shortfall.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) were $218.0 million for the three months ended December 31, 2008 compared to $240.3 million in the same period in the prior year.  Despite the decline in the amount of SG&A expense, SG&A as a percentage of net sales for the three months ended December 31, 2008 increased 6.3 percentage points to 28.8 percent compared to the same prior year period due to the decrease in sales.  Foreign currency translation contributed $14.4 million to the decrease in SG&A expenses during the quarter.  Other factors contributing to the decrease in SG&A included $9.1 million of merger costs incurred in the three months ended December 31, 2007 and a $3.2 million reduction in share-based compensation expense compared to the same prior year period.  The decrease also reflects a reduction in research and development (“R&D”) costs.  R&D, a significant component of our SG&A expenses, decreased to $84.3 million for the quarter compared to $100.4 million in the same period last year.

We continue to incur costs relating to our restructuring program, which is designed to address our global footprint, cost structure, technology portfolio, human resources and internal processes.  We recorded restructuring charges in SG&A of $22.3 million in the three months ended December 31, 2008.  Restructuring costs are further described under the caption Restructuring Programs later in this discussion.

For the six months ended December 31, 2008, SG&A expenses were $427.4 million compared to $463.4 million in the same period in the prior year.  As a percentage of net sales, SG&A increased 3.3 percentage points to 26.3 percent for the six months ended December 31, 2008 compared to the same prior year period due to the decrease in sales.  Foreign currency translation contributed $4.4 million to the decrease in SG&A expenses when compared to the prior year period.  For the six months ended December 31, 2008, SG&A expenses included $27.1 million of restructuring costs, $17.2 million lower R&D costs, and $11.5 million lower share-based compensation expenses, primarily reflecting a benefit from stock option forfeitures due to executive retirements.  SG&A expenses for the six months ended December 31, 2007 included $13.8 million in merger costs.

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Presented below is a summary of SG&A expenses by reporting segment:

($000s omitted)	Three months ended December 31,										Six months ended December 31,
	2008		Percent of net sales			2007		Percent of net sales			2008		Percent of net sales			2007		Percent of net sales
SG&A Expenses:
Automotive	$	131,501		25.4	%		151,226		21.0	%	$	264,624		23.3	%		281,231		20.2	%
Consumer		29,405		24.5	%		31,100		16.9	%		57,381		25.4	%		62,300		20.5	%
Professional		35,856		32.9	%		37,096		24.5	%		69,898		28.5	%		72,590		24.5	%
Other		21,193		---			20,863		---			35,525		---			47,298		---
Total	$	217,955		28.8	%		240,285		22.5	%	$	427,428		26.3	%		463,419		23.0	%

Automotive – SG&A expenses were $131.5 million for the three months ended December 31, 2008, compared to $151.2 million for the same period in the prior year.  As a percentage of net sales, SG&A expenses increased 4.4 percentage points to 25.4 percent for the three months ended December 31, 2008 compared to the same period in the prior year.  Foreign currency translation contributed $11.6 million to the decrease in SG&A expenses during the quarter.  R&D expenses decreased to $68.1 million, or 13.2 percent of net sales, for the quarter ended December 31, 2008 compared to $82.4 million, or 11.4 percent of net sales, in the same prior year period.  Approximately $7 million of the decrease in R&D expenses was due to changes in currency exchange rates.

SG&A expenses were $264.6 million for the six months ended December 31, 2008 compared to $281.2 million for the same period in the prior year.  As a percentage of net sales, SG&A expenses increased 3.1 percentage points to 23.3 percent for the six months ended December 31, 2008 compared to the same period in the prior year.  Foreign currency translation contributed $3.5 million to the decrease in SG&A expenses when compared to the prior year period.   R&D expenses decreased to $137.7 million, or 12.1 percent of net sales, for the quarter ended December 31, 2008 compared to $151.1 million, or 10.9 percent of net sales, in the same prior year period.  The decrease in R&D expenses primarily occurred in the three months ended December 31, 2008 as noted above.

Consumer – SG&A expenses were $29.4 million for the three months ended December 31, 2008 compared to $31.1 million for the same period in the prior year.  As a percentage of net sales, SG&A expenses increased 7.6 percentage points to 24.5 percent for the three months ended December 31, 2008 compared to the same period in the prior year. R&D expenses were $5.4 million for the quarter ended December 31, 2008 compared to $8.7 million in the same period last year.  SG&A as a percent of sales increased due to the decrease in net sales, partially offset by lower R&D expenses and currency translation effects.

SG&A expenses were $57.4 million for the six months ended December 31, 2008 compared to $62.3 million for the same period in the prior year.  As a percentage of net sales, SG&A expenses increased 4.9 percentage points to 25.4 percent for the six months ended December 31, 2008 compared to the same period in the prior year.  The decrease in SG&A expenses was primarily due to lower R&D expenses, which decreased to $11.2 million compared to $17.5 million for the same period in the prior year.

Professional – SG&A expenses were $35.9 million for the three months ended December 31, 2008, compared to $37.1 million for the same period in the prior year.  SG&A expenses as a percentage of net sales increased 8.4 percentage points to 32.9 percent for the three months ended December 31, 2008 compared to the same period in the prior year.  The increase as a percentage of net sales resulted primarily from higher R&D expenses related to new product launches and lower sales results.  R&D expenses were $9.4 million for the quarter ended December 31, 2008 compared to $8.9 million in the same period last year.

SG&A expenses were $69.9 million for the six months ended December 31, 2008 compared to $72.6 million in the same period last year.  As a percentage of net sales, SG&A expenses increased 4.0 percentage points to 28.5 percent for the six months ended December 31, 2008 compared to the same period in the prior year, primarily due to the decrease in net sales.  R&D expenses were $18.7 million for the six months ended December 31, 2008 compared to $18.1 million for the same period last year.

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Other – SG&A expenses of $21.2 million for the three months ended December 31, 2008 approximated the amount in the prior year period of $20.9 million.  Increases in the current year due to restructuring costs were offset by the prior year effect of merger costs.

SG&A expenses were $35.5 million for the six months ended December 31, 2008 compared to $47.3 million in the same period last year, primarily reflecting an $11.5 million reduction in share-based compensation expense due to stock option forfeitures associated with executive retirements.

Restructuring Program – Weannounced a restructuring program in June 2006 designed to increase efficiency in our manufacturing, engineering and administrative organizations.  During the third quarter of fiscal 2008, we expanded our restructuring actions to improve our global footprint, cost structure, technology portfolio, human resources and internal processes.  These actions will reduce the number of our manufacturing, engineering and operating locations.

In the prior fiscal year we announced plant closings in Northridge, California and Martinsville, Indiana and closed a plant in South Africa and a small facility in Massachusetts.  We have completed the transition of our corporate headquarters from Washington D.C. to Stamford, Connecticut and have initiated numerous other actions to reduce cost and improve operating efficiency in our businesses.

For the six months ended December 31, 2008, SG&A expenses included $27.1 million for our restructuring program, of which $20.9 million was recorded for employee termination benefits.  Cash paid for restructuring actions for the six months ended December 31, 2008 totaled $17.6 million.  We also recorded $8.7 million primarily in cost of sales for accelerated depreciation and the reclassification of the Martinsville property from held and used to held for sale, both of which were recorded in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Below is a rollforward of our restructuring accrual, accounted for in accordance with SFAS 88, SFAS 112 and SFAS 146:

	Six months ended December 31,
($000s omitted)	2008			2007
Beginning accrued liability	$	35,601			7,527
Expense		27,147			706
Utilization(1)		(18,852	)		(4,429	)
Ending accrued liability	$	43,896			3,804

(1) Includes amounts representing adjustments to the liability for changes in foreign currency exchange rates.

Please also see Note 11, Restructuring Program, for additional information.

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Goodwill Impairment

Presented below is a summary of goodwill impairment charges by reporting segment:

($000s omitted)	Three months ended December 31,									Six months ended December 31,
	2008		%			2007		%		2008		%			2007		%
Goodwill Impairment Charges:
Automotive	$	289,962		89.0	%		---		---	$	289,962		89.0	%		---		---
Consumer		22,663		7.1	%		---		---		22,663		7.1	%		---		---
Professional		---		---			---		---		---		---			---		---
Other		12,820		3.9	%		---		---		12,820		3.9	%		---		---
Total	$	325,445		100.0	%		---		---	$	325,445		100.0	%		---		---

During the three months ended December 31, 2008, we performed an interim period goodwill impairment test.  Based on the preliminary results, as discussed in Note 19, we recognized a non-cash goodwill impairment charge of $325.4 million.  Due to the complexity of the analysis, involving the completion of fair value analyses and the resolution of certain significant assumptions, we will finalize the goodwill impairment charge in the three months ending March 31, 2009.  Please also see Note 19, Goodwill Impairment, for additional information.

Operating (Loss) Income

Operating loss for the three months ended December 31, 2008 was $366.5 million compared to operating income of $60.8 million, or 5.7 percent of net sales, in the same period in the prior year.  Operating loss for the six months ended December 31, 2008 was $334.1 million compared to operating income of $102.3 million, or 5.1 percent of net sales, in the same prior year period.  The decrease in operating income was primarily due to the goodwill impairment charges and lower net sales due to weak economic conditions.

Interest (Income) Expense, Net

Interest income, net, for the three and six months ended December 31, 2008 was $0.8 million and $0.9 million, respectively, compared to interest expense, net of $2.9 million and $4.3 million for the three and six month periods ended December 31, 2007.  For the three months ended December 31, 2008, interest income, net included $2.3 million of interest expense and $3.1 million of interest income.  For the same three month period in the prior year, interest expense, net included $5.3 million of interest expense and $2.4 million of interest income.  For the six months ended December 31, 2008, interest income, net included $4.4 million of interest expense and $5.3 million of interest income.  For the same six month period in the prior year, interest expense, net, included $8.3 million of interest expense and $4.0 million of interest income.

The weighted average interest rate on our borrowings was 2.0 percent for the three months ended December 31, 2008 compared to 3.4 percent in the same period last year.  The weighted average interest rate for the six months ended December 31, 2008 was 2.0 percent, compared to 4.4 percent in the same period last year.  The decrease was due primarily to our October 2007 issuance of the Notes, which have an interest rate of 1.25 percent.

Miscellaneous, Net

Net miscellaneous expenses were $0.1 million for the three months ended December 31, 2008 and $1.0 million for the six months ended December 31, 2008, compared to $1.0 million and $1.7 million, respectively, in the same periods last year.  For each three and six month period, miscellaneous expenses were primarily comprised of bank charges.

Income Tax (Benefit) Expense, Net

Our provision for income taxes is based on an estimated annual tax rate for the year applied to federal, state and foreign income.  Income tax benefit for the three months ended December 31, 2008 was $49.0 million, compared to income tax expense of $14.6 million for the same period in the prior year.  The effective rate for the three months ended December 31, 2008 was a benefit of 13.4 percent, compared to an expense of 25.6 percent in the same prior year period. The income tax benefit resulted from a deferred tax benefit due to operating losses, including goodwill impairment, and the retroactive reinstatement of the federal research credit, which was effective October 2008.  For the six months ended December 31, 2008, income tax benefit was $40.6 million, compared to $18.3 million of income tax expense for the same period last year.  The effective tax rate for the six months ended December 31, 2008 of 12.2 percent benefit was lower than the comparable period rate of 19.0 percent expense due to the deferred tax benefit and the retroactive reinstatement of the federal research credit.

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As of December 31, 2008, unrecognized tax benefits and the related interest were $9.7 million and $2.4 million respectively, all of which would affect the tax rate if recognized.  During the three and six months ended December 31, 2008, we recorded uncertain tax positions of $1.1 million and $1.4 million, respectively.

Financial Condition

Liquidity and Capital Resources

We primarily finance our working capital requirements through cash generated by operations, borrowings under our revolving credit facility and trade credit.  Cash and cash equivalents were $182.0 million at December 31, 2008 compared to $223.1 million at June 30, 2008.  During the six months ended December 31, 2008, cash was used to make investments in our manufacturing facilities, fund product development and restructuring programs, and meet the working capital needs of our business segments.

We will continue to have cash requirements to support seasonal working capital needs, investments in our manufacturing facilities, interest and principal payments and dividend payments.  We intend to use cash on hand, cash generated by operations and borrowings under our revolving credit facility to meet these requirements.  The credit markets have recently experienced adverse conditions.  Our existing cash and cash equivalents may decline and our ability to refinance our existing credit facility may be adversely affected in the event of continued volatility in the credit markets or further economic deterioration.  We expect that market conditions will continue to be weak in the near future.  However, we believe that in this difficult environment our cash on hand of $182.0 million as of December 31, 2008, our available revolving credit facility capacity of $251.5 million as of December 31, 2008 and our operating cash flows will be adequate to meet our cash requirements for operations, restructuring and necessary capital expenditures over the next twelve months.  Below is a more detailed discussion of our cash flow activities during the six months ended December 31, 2008.

Operating Activities

For the six months ended December 31, 2008, our net cash provided by operations was $13.0 million compared to net cash provided by operations of $26.0 million in the same period last year.  Operating cash flows decreased due to higher inventories and reduction of accounts payable, offset by a reduction in tax payments, primarily in Germany, and collections of receivables.  At December 31, 2008, working capital, excluding cash and short-term debt, was $376.5 million, compared with $309.7 million at June 30, 2008.  The increase was primarily due to lower accounts payable and accrued liabilities, partially offset by reductions in accounts receivable.

Investing Activities

Net cash used in investing activities was $42.0 million for the six months ended December 31, 2008 compared to $69.7 million in the same period last year.  Capital expenditures for the six months ended December 31, 2008 were $41.6 million compared to $62.2 million for the same period last year.  Capital spending was lower because the prior year included more significant expenditures relating to the launch of new automotive platforms and a new manufacturing facility in China.  We expect capital expenditures in fiscal 2009 to be below fiscal 2008 levels.

Financing Activities

Our total debt at December 31, 2008 was $444.9 million, primarily comprised of $42.5 million of borrowings under our revolving credit facility and $400.0 million of the Notes issued in October 2007.  Also included in total debt are capital leases and other borrowings of $2.4 million.

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We are party to a $300 million committed multi-currency revolving credit facility with a group of banks.  This facility expires in June 2010.   The maximum principal amount of borrowings permitted under the credit facility is $300 million. The credit facility includes our conditional option to increase the maximum aggregate revolving commitment amount to $550 million. At December 31, 2008, we had borrowings of $42.5 million and outstanding letters of credit of $6.0 million under this facility.  Unused availability under the revolving credit facility was $251.5 million at December 31, 2008.

On October 23, 2007, we issued $400 million of 1.25 percent Convertible Senior Notes due 2012.  The initial conversion rate is 9.6154 shares of common stock per $1,000 principal amount of Notes (which is equal to an initial conversion price of approximately $104 per share). The conversion rate is subject to adjustment in specified circumstances as described in the indenture for the Notes.  The Notes are convertible under the specified circumstances set forth in the indenture for the Notes.

Upon conversion, a holder will receive for each $1,000 of principal amount of Notes to be converted an amount in cash equal to the lesser of (1) $1,000 and (2) the conversion value, determined in the manner set forth in the indenture for the Notes.  If the conversion value per Note exceeds $1,000, we will also deliver, at our election, cash or common stock or a combination of cash and common stock for the conversion value in excess of $1,000.

In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”).  FSP APB 14-1 requires the issuer of convertible debt instruments with cash settlement features to account separately for the liability and equity components of the instrument. The debt is recognized at the present value of its cash flows discounted using the issuer’s nonconvertible debt borrowing rate at the time of issuance. The equity component is recognized as the difference between the proceeds from the issuance of the note and the fair value of the liability. FSP APB 14-1 also requires an accretion of the resultant debt discount over the expected life of the debt. The proposed transition guidance requires retrospective application to all periods presented, and does not grandfather existing instruments. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008.  Early adoption is not permitted.  FSP APB 14-1 is effective for us beginning in the first quarter of fiscal 2010.  We expect the implementation of FSP APB 14-1 will have a material impact on our consolidated financial statements and will result in higher non-cash interest expense for fiscal 2008 through the first half of fiscal 2013 and a corresponding reduction in our reported net income.  We are currently evaluating our non-convertible borrowing rate and the fair value of the conversion privilege with respect to the Notes.

Our long-term debt agreements contain financial and other covenants that, among other things, limit our ability to incur additional indebtedness, restrict subsidiary dividends and distributions, limit our ability to encumber certain assets and restrict our ability to issue capital stock of our subsidiaries.  Our long-term debt agreements permit us to pay dividends or repurchase our capital stock without any dollar limitation provided that we would be in compliance with the financial covenants in our revolving credit facility after giving effect to such dividend or repurchase.  At December 31, 2008, we were in compliance with the terms of our long-term debt agreements.

Equity

Total shareholders’ equity at December 31, 2008 was $926.3 million compared with $1.340 billion at June 30, 2008.  The decrease is primarily due to the goodwill impairment charges totaling $325.4 million.  There were no shares of our common stock repurchased during the six months ended December 31, 2008.

Business Outlook

With the current turmoil in the global credit and financial markets, investor and consumer confidence have been negatively affected.  We began to see more significant effects to our results in the quarter ended December 31, 2008, and our future outlook may continue to be impacted by the contraction in consumer discretionary spending. Our outlook could also be affected by changes in foreign currency exchange rates (primarily the Euro compared to the U.S. dollar), potentially resulting in reduced sales.

To mitigate the potential impacts of the declining economic markets, we have accelerated many of the strategic initiatives begun in the prior fiscal year.  We also approved additional restructuring actions during the quarter ended December 31, 2008.  We continue to focus on improving our global footprint, cost structure, technology portfolio, human resources and internal processes.  We have successfully completed the definition phase of our 24-month cost improvement and productivity program called STEP Change.  This program is designed to yield $400 million in sustainable savings by 2011.  We have accelerated the timing of severance actions in order to help us improve our cost structure to enable us to remain competitive and mitigate the negative effects of this challenging environment.

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Item 3.   Quantitative and Qualitative Disclosures About Market Risk

We are required to include information about potential effects of changes in interest rates and currency exchange rates in our periodic reports filed with the SEC.  Since June 30, 2008, there have been no material changes in the quantitative or qualitative aspects of our market risk profile.  See Item 7A, Quantitative and Qualitative Disclosure About Market Risk included in our 2008 Form 10-K.

Interest Rate Sensitivity/Risk

At December 31, 2008, interest on approximately 90 percent of our borrowings was determined on a fixed rate basis.  The interest rates on the balance of our debt are subject to changes in U.S. and European short-term interest rates.  To assess exposure to interest rate changes, we have performed a sensitivity analysis assuming a hypothetical 100 basis point increase or decrease in interest rates across all outstanding debt and investments.  Our analysis indicates that the effect on net income at December 31, 2008 of such an increase or decrease in interest rates would be approximately $0.3 million.

Foreign Currency Risk

We maintain significant operations in Germany, the United Kingdom, France, Austria, Hungary, Mexico, China and Switzerland.  As a result, we are subject to market risks arising from changes in foreign currency exchange rates, principally changes in the value of the Euro versus the U.S. dollar.  Our subsidiaries purchase products and raw materials in various currencies.  As a result, we may be exposed to cost changes relative to local currencies in the markets to which we sell our products.  To mitigate these transactional risks, we enter into foreign currency forward contracts.  Also, foreign currency positions are partially offsetting and are netted against one another to reduce exposure.

Changes in currency exchange rates, principally the change in the value of the Euro compared to the U.S. dollar, have an impact on our reported results when the financial statements of foreign subsidiaries are translated into U.S. dollars.  Over half of our sales are denominated in Euros.  The fluctuation in currency exchange rates, specifically the Euro versus the U.S. dollar, had a significant impact on earnings for the six months ended December 31, 2008 compared to the same prior year period due to the strengthening of the Euro relative to the U.S. dollar.  The average exchange rate for the Euro versus the U.S. dollar for the six months ended December 31, 2008 decreased 0.2 percent from the same period in the prior year.  In recent months, the U.S. dollar has strengthened against the Euro.  To the extent the U.S. dollar continues to strengthen against the Euro, our results of operations may be negatively affected.

To assess exposure to changes in currency exchange rates, we prepared an analysis assuming a hypothetical 10 percent change in currency exchange rates across all currencies used by our subsidiaries.  This analysis indicated that a 10 percent increase in exchange rates would have decreased income before income taxes by approximately $29 million and a 10 percent decrease in exchange rates would have increased income before income taxes by approximately $5 million for the six months ended December 31, 2008.

Competitive conditions in the markets in which we operate may limit our ability to increase prices in the event of adverse changes in currency exchange rates.  For example, certain products made in Europe are sold in the U.S.  Sales of these products are affected by the value of the U.S. dollar relative to the Euro.  Any weakening of the U.S. dollar could depress the demand for these European manufactured products in the U.S. and reduce sales.  However, due to the multiple currencies involved in our business and the netting effect of various simultaneous transactions, our foreign currency positions are partially offsetting.  In addition, our foreign currency hedging program is designed to limit our exposure.  

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Actual gains and losses in the future may differ materially from the hypothetical gains and losses discussed above based on changes in the timing and amount of interest rate and foreign currency exchange rate movements and our actual exposure and hedging transactions.

Item 4.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated by the SEC under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.  We note that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions.

Change in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) as promulgated by the SEC under the Securities Exchange Act of 1934) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of our material pending legal proceedings, see Note 15, Commitments and Contingencies.

Other Legal Actions

At December 31, 2008, we were involved in several other legal actions.  The outcome of these legal actions cannot be predicted with certainty; however, management, based upon advice from legal counsel, believes such actions are either without merit or will not have a material adverse effect on our financial position or results of operations.

Item 1A. Risk Factors

There have been no material changes with respect to Harman’s risk factors previously disclosed in the Annual Report on Form 10-K for the year ended June 30, 2008 except as described below.

The current economic environment may adversely affect the availability and cost of credit and consumer spending patterns.

Our ability to make scheduled payments or to refinance our obligations with respect to indebtedness will depend on our operating and financial performance, which in turn is subject to prevailing economic conditions.  The subprime mortgage crisis and disruptions in the financial markets, including the bankruptcy and restructuring of major financial institutions, may adversely impact the availability of credit already arranged, and the availability and cost of credit in the future.  The disruptions in the financial markets may also have an adverse effect on the United States and the world economy, which could negatively impact consumer spending patterns.  This could result in reductions in sales of our products, longer sales cycles, slower adoption of new technologies and increase price competition.  There can be no assurances that government responses to the disruptions in the financial markets will restore consumer confidence, stabilize the markets or increase liquidity and the availability of credit.

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Decreased demand from our customers in the automotive industry may adversely affect our results of operations.

For the fiscal year ended June 30, 2008, approximately 72 percent of our sales were to automobile manufacturers.  As a result, our financial performance depends, in large part, on conditions in the automotive industry, which has recently experienced significant financial difficulty.  In particular, during the three months ended December 31, 2008, Chrysler LLP, one of our automotive customers, publicly announced its financial difficulties and later received temporary financial assistance from the U.S. federal government to prevent Chrysler from filing bankruptcy.  If Chrysler continues to experience, or one or more of our other significant automotive customers experiences, continued or increased financial difficulty, this may have an adverse effect on our business due to decreased demand, the potential inability of these companies to make full payment on amounts owed to us, or both.

The financial distress of our suppliers could harm our results of operations

Automotive industry conditions have adversely affected our supplier base.  Lower production levels for some of our key customers and increases in certain raw material, commodity and energy costs have resulted in severe financial distress among many companies within the automotive supply base.  Several large suppliers have filed for bankruptcy protection or ceased operations.  The continuation of financial distress within the supplier base may lead to increased commercial disputes and possible supply chain interruptions.  The continuation or worsening of these industry conditions may have a negative effect on our business.

 Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds

We acquired shares from certain members of our Board of Directors during the six months ended December 31, 2008 in connection with the surrender of shares to pay option exercise prices totaling 24,087 shares at an average price of $17.71 per share, as shown in the table below.

Period	Total Number of Shares Acquired During Period		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
October 1 – October 31		—		—		—		—
November 1 – November 30		24,087	$	17.71		—		—
December 1 – December 31		—		—		—		—
Total		24,087	$	17.71		—		—

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Item 4. Submission of Matters to a Vote of Security Holders

We held our 2008 Annual Meeting of Stockholders on December 3, 2008.  Stockholders were asked to vote on the election of two directors to serve three-year terms expiring at the 2011 Annual Meeting of Stockholders, to approve amendments to the 2002 Stock Option and Incentive Plan and to approve the 2008 Key Executive Officers Bonus Plan.

The results with respect to the election of directors were as follows:

Name	Total Vote for Each Director	Total Vote Withheld from Each Director
Brian Carroll	46,260,279	7,434,629
Hellene S. Runtagh	53,188,621	506,287

Dinesh Paliwal, Dr. Harald Einsmann, Ann McLaughlin Korologos, Edward H. Meyer, Kenneth Reiss and Gary G. Steel will continue to serve as directors of Harman.  On January 29, 2009, Rajat K. Gupta was appointed to the Board of Directors to fill a vacancy on the Board.  Mr. Gupta’s term as a director will expire at the Company’s 2011 Annual Meeting of Stockholders.

The results with respect to the approval of the amendments to the 2002 Stock Option and Incentive Plan were as follows:

Shares Voted For	Shares Voted Against	Shares Withheld	Broker Non-Votes
42,647,702	6,216,849	194,933	4,635,424

The results with respect to the approval of the 2008 Key Executive Officers Bonus Plan were as follows:

Shares Voted For	Shares Voted Against	Shares Withheld	Broker Non-Votes
46,774,066	2,089,447	195,972	4,635,423

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Item 6.       Exhibits

Exhibit No.	Exhibit Description
10.1	Form of Severance Agreement between Harman International Industries, Incorporated and Blake Augsburger, David Karch, John Stacey and Todd Suko, Sachin Lawande and David Slump.
10.2	Amended and Restated Severance Agreement between Harman International Industries, Incorporated and Dinesh Paliwal dated December 31, 2008.
10.3	Amended and Restated Severance Agreement between Harman International Industries, Incorporated and Herbert Parker dated December 22, 2008.
10.4	Amendment to Letter Agreement dated December 31, 2008 between Harman International Industries, Incorporated and Dinesh Paliwal.
10.5	Form of Performance Based Restricted Share Unit Agreement for Officers and Key Employees under the Amended and Restated Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.
10.6	Form of Restricted Share Unit Agreement for Officers and Key Employees under the Amended and Restated Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.
10.7	Form of Restricted Share Unit Agreement for Non-Officer Directors under the Amended and Restated Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.
10.8	Form of Restricted Share Unit Agreement, related to Dinesh Paliwal’s annual equity awards, under the Amended and Restated Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.
10.9	Form of Nonqualified Stock Option Agreement, related to Dinesh Paliwal’s annual equity awards, under the Amended and Restated Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.
10.10	Restricted Share Unit Agreement between Harman International Industries, Incorporated and Dinesh Paliwal, related to a January 2008 award.
10.11	Restricted Share Unit Agreement between Harman International Industries, Incorporated and Dinesh Paliwal, related to a September 2008 award under the Amended and Restated Harman International Industries, Incorporated 2002 Stock Option and Incentive Plan.
10.12	Restricted Share Unit Agreement between Harman International Industries, Incorporated and Herbert Parker, related to a September 2008 award.
10.13	Letter Agreement dated January 9, 2009, between Harman International Industries, Incorporated and Sachin Lawande.
10.14	Letter Agreement dated January 9, 2009, between Harman International Industries, Incorporated and David Slump.
10.15	Separation Letter Agreement dated January 11, 2009, between Harman International Industries, Incorporated and Richard Sorota.
31.1	Certification of Dinesh Paliwal pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Herbert Parker pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Dinesh Paliwal and Herbert Parker, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Harman International Industries, Incorporated has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Harman International Industries, Incorporated
Date:  February 6, 2009	By:/s/ Herbert Parker
	Herbert Parker
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

[FORM]

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (the “Agreement”), dated as of _______________, is made and entered by and between Harman International Industries, Incorporated (“Harman” or, including any successor thereto, the “Company”), a Delaware corporation, and _________________ (the “Executive”).

WHEREAS, the Executive is a senior executive of Harman and is expected to make major contributions to the Company’s short and long-term profitability, growth and financial strength;

WHEREAS, Harman recognizes that: (a) top-quality executives may seek more secure career opportunities if a Change in Control, as defined below, occurs in the future; and (b) the Company may encounter difficulties in recruiting qualified senior executives unless it offers an employment security arrangement, applicable in Change in Control situations;

WHEREAS, Harman desires to assure itself of both present and future continuity of management and desires to establish certain minimum severance benefits for certain of its senior executives, including the Executive, applicable in the event of a Change in Control;

WHEREAS, Harman wishes to ensure that its senior executives are not practically disabled from discharging their duties in respect of a proposed or actual transaction involving a Change in Control; and

WHEREAS, Harman desires to provide additional inducement for the Executive to continue to remain in the Company’s employ.

NOW, THEREFORE, Harman and the Executive agree as follows:

1.             Certain Defined Terms.  In addition to terms defined elsewhere in this Agreement, the following terms have the following meanings:

(a)           “Base Pay” means the Executive’s annual base salary rate as in effect from time to time;

(b)           “Board” means Harman’s Board of Directors;

(c)           “Cause” means that, prior to any termination pursuant to Section 3(b), the Executive shall have:

(i)             been convicted of a criminal violation involving fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company or any Subsidiary;

(ii)            committed intentional wrongful damage to property of Harman or any Harman subsidiary;

(iii)           committed intentional wrongful disclosure of secret processes or confidential information of Harman or any Subsidiary; or

(iv)           committed intentional wrongful engagement in any Competitive Activity;

and any such act shall have been demonstrably and materially harmful to Harman.  For purposes of this Agreement, no act or failure to act on the part of the Executive shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of Harman.  Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of a majority of the Committee then in office at a meeting of the Committee called and held for such purpose, after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel (if the Executive chooses to have counsel present at such meeting), to be heard before the Committee, finding that, in the good faith opinion of the Committee, the Executive had committed an act constituting “Cause” as defined in this Agreement and specifying the particulars thereof in detail.  Nothing in this Agreement will limit the right of the Executive or his beneficiaries to contest the validity or propriety of any such determination;

(d)           “Change in Control” means the occurrence during the Term of any of the following events:

(i)            The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding Voting Stock of the Company; provided, however, that for purposes of this Section 1(d)(i), the following acquisitions shall not constitute a Change in Control:  (A) any issuance of Voting Stock of the Company directly from the Company that is approved by the Incumbent Board (as defined in Section 1(d)(ii), below), (B) any acquisition by the Company or a Subsidiary of Voting Stock of the Company, (C) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (D) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(d)(iii), below; or

(ii)            individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

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(iii)           consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company, or other transaction (each, a “Business Combination”), unless, in each case, immediately following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(iv)           approval by the shareholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(d)(iii).

(e)           “Committee” means the Compensation and Option Committee of the Board or such similar committee of the Board comprised of non-officer directors and responsible for executive compensation matters of the Company generally;

(f)           “Competitive Activity” means the Executive’s participation, without the Company’s written consent, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company or a Subsidiary and the enterprise’s sales of any product or service under the Executive’s supervision competitive with any product or service of the Company or a Subsidiary amounted to 10% of the enterprise’s net sales for its most recently completed fiscal year and if the Company’s and its Subsidiary’s net sales of said product or service amounted to 10% of the Company’s net sales for its most recently completed fiscal year.  “Competitive Activity” will not include (i) the mere ownership of securities in any such enterprise and the exercise of rights appurtenant thereto or (ii) participation in the management of any such enterprise other than in connection with the competitive operations of such enterprise;

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(g)           “Employee Benefits” means the perquisites, benefits and service credit for benefits as provided under any and all employee retirement income and welfare benefit policies, plans, programs or arrangements in which Executive is entitled to participate, including without limitation any stock option, performance share, performance unit, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder prior to a Change in Control;

(h)           “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time;

(i)            “Incentive Pay” means an annual bonus, incentive or other payment of compensation, in addition to Base Pay, made or to be made in regard to services rendered in any year or other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company or a Subsidiary, or any successor thereto;

(j)            “Retirement Plans” means the retirement income, supplemental executive retirement, excess benefits and retiree medical, life and similar benefit plans providing retirement perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder prior to a Change in Control;

(k)           “Severance Period” means the period of time commencing six (6) months prior to the date of the first occurrence of a Change in Control and continuing until the earlier of (i) the second anniversary of the occurrence of the Change in Control, or (ii) the Executive’s death; provided, however, that commencing on each anniversary of the Change in Control, the Severance Period will automatically be extended for an additional year unless, not later than 90 calendar days before the anniversary date, either the Company or the Executive shall have given written notice to the other that the Severance Period is not to be so extended;

(l)            “Subsidiary” means an entity in which the Company, directly or indirectly, beneficially owns 50% or more of the outstanding Voting Stock;

(m)          “Term” means the period commencing as of the date hereof and expiring as of the later of (i) the close of business on December 31, 2012, or (ii) the expiration of the Severance Period.  However, commencing on January 1, 2012 and each January 1 thereafter, the term of this Agreement will automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, the Company or the Executive shall have given notice that it or the Executive, as the case may be, does not wish to have the Term extended.  Furthermore, if prior to the date which is six (6) months prior to a Change in Control, the Executive ceases for any reason to be an officer of the Company or any Subsidiary, thereupon without further action the Term shall be deemed to have expired and this Agreement will immediately terminate and be of no further effect.  For purposes of this Section, the Executive shall not be deemed to have ceased to be an officer of the Company and any Subsidiary by reason of the transfer of Executive’s employment between the Company and any Subsidiary, or among any Subsidiaries;

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(n)           “Termination Date” means the date on which the Executive’s employment is terminated (the effective date of which shall be the date of termination, or such other date that may be specified by the Executive if the termination is pursuant to Section 3(b)); provided, however, that if the Termination Date precedes the Change in Control, then any additional payments and benefits that are due upon a Change in Control and that are deferred compensation within the meaning of Section 409A shall be subject to the Section 409A Delay and payable upon the Change in Control; and

(o)           “Voting Stock” means securities entitled to vote generally in the election of directors.

2.            Operation of Agreement.  This Agreement will be effective and binding immediately upon its execution, but anything in this Agreement to the contrary notwithstanding, this Agreement will not be operative unless and until the date which is six (6) months prior to a Change in Control occurs.  If a Change in Control occurs at any time during the Term, this Agreement shall become operative immediately and retroactively, including without limitation, notwithstanding that the Term may have since expired.

3.            Termination Following a Change in Control.  (a) In the event of the occurrence of a Change in Control, the Executive’s employment may be terminated by the Company or a Subsidiary during the Severance Period and the Executive shall be entitled to the benefits provided by Section 4 as a result thereof or of any termination within six (6) months prior to a Change in Control unless such termination is the result of the occurrence of one or more of the following events:

(i)             The Executive’s death;

(ii)            The Executive becoming permanently disabled within the meaning of, and begins actually receiving disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, Executive immediately prior to the Change in Control; or

(iii)           Cause.

If, during the Severance Period, the Executive’s employment is terminated by the Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be entitled to the benefits provided by Section 4 hereof.

(b)           In the event of the occurrence of a Change in Control, the Executive may terminate employment with the Company and any Subsidiary during the Severance Period with the right to severance compensation as provided in Section 4 upon the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause, for such termination exists or has occurred, including without limitation other employment) and shall also have such severance compensation in the event he had terminated employment upon the occurrence of one or more of the following events within six (6) months prior to the Change in Control:

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(i)             Failure to elect or reelect or otherwise to maintain the Executive in the office or the position, or a substantially equivalent office or position, of or with the Company and/or a Subsidiary (or any successor thereto by operation of law or otherwise), as the case may be, which the Executive held immediately prior to a Change in Control, or the removal of the Executive as a Director of the Company and/or a Subsidiary (or any successor thereto) if the Executive shall have been a Director of the Company and/or a Subsidiary immediately prior to the Change in Control;

(ii)            (A) A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and any Subsidiary which the Executive held immediately prior to the Change in Control, (B) a reduction in the aggregate of the Executive’s Base Pay and Incentive Pay received from the Company and any Subsidiary, or (C) the termination or denial of the Executive’s rights to Employee Benefits or a reduction in the scope or value thereof, any of which is not remedied by the Company within 10 calendar days after receipt by the Company of written notice from the Executive of such change, reduction or termination, as the case may be;

(iii)           A determination by the Executive (which determination will be conclusive and binding upon the parties to this Agreement, provided that the determination has been made in good faith and in all events will be presumed to have been made in good faith unless otherwise shown by the Company by clear and convincing evidence) that a change in circumstances has occurred following a Change in Control, including, without limitation, a change in the scope of the business or other activities for which the Executive was responsible immediately prior to the Change in Control, which has rendered the Executive substantially unable to carry out, has substantially hindered Executive’s performance of, or has caused Executive to suffer a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Executive immediately prior to the Change in Control, which situation is not remedied within 10 calendar days after the Company receives written notice from the Executive of such determination;

(iv)           The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or substantially all of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) to which all or substantially all of its business and/or assets have been transferred (by operation of law or otherwise) assumed all duties and obligations of the Company under this Agreement pursuant to Section 11(a);

(v)            The Company relocates its principal executive offices (if such offices are the principal location of Executive’s work), or requires the Executive to have his principal location of work changed, to any location that, in either case, is in excess of 50 miles from the principal executive office’s location immediately prior to the Change in Control, or requires the Executive to travel away from his office in the course of discharging his responsibilities or duties at least 20% more (in terms of aggregate days in any calendar year or in any calendar quarter when annualized for purposes of comparison to any prior year) than was required of Executive in any of the three full years immediately prior to the Change in Control without, in either case, his prior written consent; or

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(vi)           Without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto which is not remedied by the Company within 10 calendar days after receipt by the Company of written notice from the Executive of such breach.

(c)           A termination by the Company pursuant to Section 3(a) or by the Executive pursuant to Section 3(b) will not affect any rights that the Executive may have pursuant to any agreement, policy, plan, program or arrangement of the Company or any Subsidiary providing Employee Benefits, which rights shall be governed by the terms thereof; provided that the Executive shall not be entitled to a severance payment or benefit under any other agreement with the Company, including, without limitation, any employment agreement, if the Executive is entitled to a comparable payment or benefit hereunder.

4.             Severance Compensation.   If the Company or Subsidiary terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates his employment pursuant to Section 3(b), the Company will pay to the Executive, subject to Section 18 hereof as to the Section 409A Delay, the amount described in Section 1 of Annex A within five business days after the Termination Date and will continue to provide to the Executive the benefits described in Sections 2 and 3 of Annex A for the periods described therein; provided, however, that no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment that is deferred compensation for purposes of Section 409A shall be made or provided, as the case may be, unless and until such termination of employment also constitutes a separation from service (within the meaning of Section 409A).

(b)           Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided under this Agreement on a timely basis, the Company will pay interest on the amount  or value thereof at an annualized rate of interest equal to the so-called composite “prime rate” as quoted from time to time during the relevant period in The Wall Street Journal , plus 2%.  Such interest will be payable as it accrues on demand.  Any change in such prime rate will be effective on and as of the date of such change.

(c)           Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights and obligations under this Section 4 and under Sections 5, 7 and 8 will survive any termination or expiration of this Agreement or the termination of the Executive’s employment following a Change in Control for any reason whatsoever.

5.             Limitation on Payments and Benefits.  Notwithstanding any provision of this Agreement to the contrary, if any amount or benefit to be paid or provided under this Agreement would be an “excess parachute payment,” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Code”), or any successor provision thereto, but for the application of this sentence, then the payments and benefits identified in the last sentence of this Section 5 to be paid or provided under this Agreement will be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes an excess parachute payment; provided, however, that no such reduction shall be made if it is not thereby possible to eliminate all excess parachute payments under this Agreement; and provided, further, that the foregoing reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income and employment taxes).  Whether requested by the Executive or the Company, the determination of whether any reduction in such payments or benefits to be provided under this Agreement or otherwise is required pursuant to the preceding sentence will be made at the expense of the Company by the Company’s independent accountants.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 5 will not of itself limit or otherwise affect any other rights of the Executive other than pursuant to this Agreement.  In the event that any payment or benefit intended to be provided under this Agreement or otherwise is required to be reduced pursuant to this Section 5, the Company will reduce the Executive’s payment and/or benefits, to the extent required, in the following order:  (i) the lump sum payment described in Paragraph (1) of Annex A; (ii) the lump sum payment described in Paragraph (3) of Annex A; and (iii) the benefits described in Paragraph (2) of Annex A.

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6.             No Mitigation Obligation.  The Company hereby acknowledges that it will be difficult and may be impossible for the Executive to find reasonably comparable employment following the Termination Date and that the non-competition covenant contained in Section 8 will further limit the employment opportunities for the Executive.  In addition, the Company acknowledges that its severance pay plans applicable in general to its salaried employees do not provide for mitigation, offset or reduction of any severance payment received thereunder.  Accordingly, the payment of the severance compensation by the Company to the Executive in accordance with the terms of this Agreement is hereby acknowledged by the Company to be reasonable, and the Executive will not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of the Executive under this agreement or otherwise.

7.             Legal Fees and Expenses.   The Executive shall not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of Executive’s rights under this Agreement by litigation or otherwise because such costs substantially would detract from the Executive’s benefits under this Agreement.  Accordingly, if it should appear to the Executive that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Executive the benefits provided or intended to be provided to the Executive hereunder, the Company irrevocably  authorizes the Executive from time to time to retain counsel of Executive’s choice, at the expense of the Company as hereafter provided, to advise and represent the Executive in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any litigation or other legal action, whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.  Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Executive’s entering into an attorney-client relationship with such counsel, and in that connection the Company and the Executive agree that a confidential relationship shall exist between the Executive and such counsel.  Without respect to whether the Executive prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by the Executive in connection with any of the foregoing.  However, if the Executive brings an action in bad faith, or with no colorable claim of success, the Company shall not pay for any of Executive’s attorneys’ fees or related expenses.

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(b)           Without limiting the obligations of the Company under Section 7(a) of this Agreement, in the event a Change in Control occurs, the performance of the Company’s obligations under this Section 7 shall be secured by amounts deposited or to be deposited in trust pursuant to certain trust agreements to which the Company shall be a party, which amounts deposited shall in the aggregate be not less than $1,000,000,providing that the fees and expenses of counsel selected from time to time by the Executive pursuant to Section 7(a) shall be paid, or reimbursed to the Executive if paid by the Executive, either in accordance with the terms of such trust agreements, or, if not so provided, on a regular, periodic basis upon presentation by the Executive to the trustee of a statement or statements prepared by such counsel in accordance with its customary practices.  Any failure by the Company to satisfy any of its obligations under this Section 7(b) shall not limit the rights of the Executive hereunder.  Subject to the foregoing, the Executive shall have the status of a general unsecured creditor of the Company and shall have no right to, or security interest in, any assets of the Company or any Subsidiary.

(c)           The reimbursement obligations of the Company under Section 7(a) and Section 7(b) shall be paid no later than December 31 of the calendar year following the calendar year in which the related expense is incurred; provided that in no event shall the reimbursement provided by the Company in one taxable year affect the amount of reimbursement provided in any other taxable year nor shall Executive’s right to reimbursement be subject to liquidation or exchange for another benefit.

8.             Competitive Activity; Confidentiality; Nonsolicitation.   For a period ending one year following the Termination Date, if the Executive shall have received or shall be receiving benefits under Section 4, the Executive shall not, without the prior written consent of the Company, which consent shall not be unreasonably withheld, engage in any Competitive Activity; provided that the foregoing shall not apply if the Termination Date was prior to the Change in Control and Executive had already commenced such activity.

(b)           During the Term, the Company agrees that it will disclose to Executive its confidential or proprietary information (as defined in this Section 8(b)) to the extent necessary for Executive to carry out his obligations to the Company.  The Executive hereby covenants and agrees that he will not, without the prior written consent of the Company, during the Term or thereafter disclose to any person not employed by the Company, or use in connection with engaging in competition with the Company, any confidential or proprietary information of the Company.  For purposes of this Agreement, the term “confidential or proprietary information” will include all information of any nature and in any form that is owned by the Company and that is not publicly available (other than by Executive’s breach of this Section 8(b)) or generally known to persons engaged in businesses similar or related to those of the Company.  Confidential or proprietary information will include, without limitation, the Company’s financial matters, customers, employees, industry contracts, strategic business plans, product development (or other proprietary product data), marketing plans, and all other secrets and all other information of a confidential or proprietary nature.  For purposes of the preceding two sentences, the term “Company” will also include any Subsidiary (collectively, the “Restricted Group”).  The foregoing obligations imposed by this Section 8(b) will not apply (i) during the Term, in the course of the business of and for the benefit of the Company, (ii) if such confidential or proprietary information will have become, through no fault of the Executive, generally known to the public or (iii) if the Executive is required by law to make disclosure (after giving the Company notice and, to the extent feasible, an opportunity to contest such requirement).

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(c)           The Executive hereby covenants and agrees that during the Term and for one year thereafter Executive will not, without the prior written consent of the Company, which consent shall not unreasonably be withheld,on behalf of Executive or on behalf of any person, firm or company, directly or indirectly, attempt to influence, persuade or induce, or assist any other person in so persuading or inducing, any management employee of the Restricted Group to give up employment with the Restricted Group, provided the foregoing shall not be violated by advertising or searches not specifically targeted at the management employees of the Restricted Group, or serving as a reference.

(d)           Executive and the Company agree that the covenants contained in this Section 8 are reasonable under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction any such covenant is not reasonable in any respect, such court will have the right, power and authority to excise or modify any provision or provisions of such covenants as to the court will appear not reasonable and to enforce the remainder of the covenants as so amended.  Executive acknowledges and agrees that the remedy at law available to the Company for breach of any of his obligations under this Section 8 would be inadequate and that damages flowing from such a breach may not readily be susceptible to being measured in monetary terms.  Accordingly, Executive acknowledges, consents and agrees that, in addition to any other rights or remedies that the Company may have at law, in equity or under this Agreement, upon adequate proof of his violation of any such provision of this Agreement, the Company will be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach, without the necessity of proof of actual damage.

9.             Employment Rights.  Nothing expressed or implied in this Agreement will create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any Subsidiary prior to or following any Change in Control.

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10.           Withholding of Taxes.  The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any applicable law, regulation or ruling.

11.           Successors and Binding Agreement.

(a)           The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.  This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by the Company.

(b)           This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

(c)           This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 11(a) and 11(b).  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 11(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

12.           Notices.  For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as FedEx, UPS, or Purolator, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his address on the books of the Company, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

13.           Governing Law.  The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

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14.           Consent to Jurisdiction.  Any disputes, litigation, proceedings or other legal actions by any party to this Agreement in connection with or relating to this Agreement or any matters described or contemplated in this Agreement may be instituted in the courts of the State of Delaware or of the United States sitting in the State of Delaware.  Each party to this Agreement irrevocably submits to the jurisdiction of the courts of the State of Delaware and of the United States sitting in the State of Delaware in connection with any such dispute, litigation, proceeding or other legal action arising out of or relating to this Agreement.

15.           Validity.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of  such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal.

16.           Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.  No waiver by either party to this Agreement at any time of any breach by the other contracting party or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.  References to Sections are to references to Sections of this Agreement.

17.           Code Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  To the extent that there is a material risk that any payments under this Agreement may result in the imposition of an additional tax to the Executive under Section 409A, the Company will reasonably cooperate with the Executive to amend this Agreement such that payments hereunder comply with Section 409A without materially changing the economic value of this Agreement to either party.  The Company shall use its best efforts to ensure ongoing compliance with Section 409A.  Notwithstanding any provision in this Agreement to the contrary, no payment or benefit that is deferred compensation for purposes of Section 409A and that is due upon the Executive’s termination of employment will be paid or provided unless such termination is also a separation from service (within the meaning of Section 409A).  For purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

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18.           Section 409A Delay.  If the Executive is at the time of the Executive’s separation from service (as defined in Section 409A) with the Company (other than as a result of the Executive’s death) a “Specified Employee”, as such term is defined under Section 409A and using the identification methodology selected by the Company from time to time, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A and that is payable on account of a separation from service shall be delayed until the earlier of the Executive’s death or six (6) months after the Executive’s separation from service (the “Section 409A Delay”) and shall then be promptly paid to the Executive in a lump sum, together with interest for the period of delay, compounded annually, equal to the prime rate (as published in The Wall Street Journal) and in effect as of the date the payment should otherwise have been provided, and any remaining payments and benefits due under this letter shall be paid or provided in accordance with the normal payment dates specified for them herein.

19.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

HARMAN INTERNATIONAL

INDUSTRIES, INCORPORATED

By:

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Annex A

Severance Compensation

(1)           A lump sum payment in an amount equal to 1.5 times the sum of (A) Base Pay (at the highest rate in effect for any period prior to the Termination Date), plus (B) Incentive Pay (in an amount equal to not less than the highest aggregate Incentive Pay earned in any of the three fiscal years immediately preceding the year in which the Change in Control occurred).

(2)           For a period of eighteen months following the Termination Date (the “Continuation Period”), the Company will arrange to provide the Executive (and his dependents) with coverage under the Company’s medical, dental or other health plan, but only to the extent that the Executive makes a payment to the Company in an amount equal to the monthly COBRA premium payments on a timely basis required to maintain such coverage commencing with the first calendar month following the Termination Date and the Company shall reimburse the Executive on an after-tax basis for the amount of such premiums, if any, in excess of any employee contributions necessary to maintain such coverage for the Continuation Period (the “COBRA Reimbursement”).  The COBRA Reimbursement shall be subject to Section 18 and shall be made within 30 days following the date on which Executive incurs the expense but no later than December 31 of the year following the year in which Executive incurs the related expense; provided, that in no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(3)           Outplacement services for one year after the Termination Date by a firm selected by the Executive, at the expense of the Company in an amount up to $50,000.

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EX-10.2

Exhibit 10.2

AMENDED AND RESTATED

SEVERANCE AGREEMENT

THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (the “Agreement”), dated as of December 26, 2008, is made and entered by and between Harman International Industries, Incorporated (“Harman” or, including any successor thereto, the “Company”), a Delaware corporation, and Dinesh Paliwal (the “Executive”).

WHEREAS, the Executive is or will be a senior executive of Harman, and is expected to make major contributions to the Company’s short and long-term profitability, growth and financial strength;

WHEREAS, Harman recognizes that:  (a) top-quality executives may seek more secure career opportunities if a Change in Control, as defined below, occurs in the future; and (b) the Company may encounter difficulties in recruiting qualified senior executives unless it offers an employment security arrangement, applicable in Change in Control situations;

WHEREAS, Harman desires to assure itself of both present and future continuity of management and desires to establish certain minimum severance benefits for certain of its senior executives, including the Executive, applicable in the event of a Change in Control;

WHEREAS, Harman wishes to ensure that its senior executives are not practically disabled from discharging their duties in respect of a proposed or actual transaction involving a Change in Control; and

WHEREAS, Harman desires to provide additional inducement for the Executive to continue to remain in the Company’s employ.

NOW, THEREFORE, Harman and the Executive agree as follows:

1.             Certain Defined Terms.  In addition to terms defined elsewhere in this Agreement, the following terms have the following meanings:

(a)           “Base Pay” means the Executive’s annual base salary rate as in effect from time to time;

(b)           “Board” means Harman’s Board of Directors;

(c)           “Cause” shall have the meaning set forth in Executive’s employment letter dated May 8, 2007.

(d)           “Change in Control” means the occurrence during the Term of any of the following events:

(i)            The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding Voting Stock of the Company; provided, however, that for purposes of this Section 1(d)(i), the following acquisitions shall not constitute a Change in Control:  (A) any issuance of Voting Stock of the Company directly from the Company that is approved by the Incumbent Board (as defined in Section 1(d)(ii), below), (B) any acquisition by the Company or a Subsidiary of Voting Stock of the Company, (C) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (D) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(d)(iii), below; or

(ii)            individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii)           consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company, or other transaction (each, a “Business Combination”), unless, in each case, immediately following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(iv)           approval by the shareholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(d)(iii).

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(v)           Notwithstanding anything in the foregoing to the contrary, the consummation of the Agreement and Plan of Merger among KHI Parent Inc., KHI Merger Sub Inc. and Harman International Industries, Incorporated, dated April 26, 2007 (the “KKR Transaction”) shall not constitute a Change in Control.

(e)           “Committee” means the Compensation and Option Committee of the Board or such similar committee of the Board comprised of non-officer directors and responsible for executive compensation matters of the Company generally;

(f)            “Competitive Activity” means the Executive’s participation, without the Company’s written consent, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company or a Subsidiary and the enterprise’s sales of any product or service under the Executive’s supervision competitive with any product or service of the Company or a Subsidiary amounted to 10% of the enterprise’s net sales under the Executive’s supervision for its most recently completed fiscal year and if the Company’s and its Subsidiary’s net sales of said product or service amounted to 10% of the Company’s net sales for its most recently completed fiscal year. “Competitive Activity” will not include (i) the mere ownership of securities in any such enterprise and the exercise of rights appurtenant thereto or (ii) participation in the management of any such enterprise other than in connection with the competitive operations of such enterprise;

(g)           “Employee Benefits” means the perquisites, benefits and service credit for benefits as provided under any and all employee retirement income and welfare benefit policies, plans, programs or arrangements in which Executive is entitled to participate, including without limitation any stock option, performance share, performance unit, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder prior to a Change in Control;

(h)           “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time;

(i)            “Incentive Pay” means an annual bonus, incentive or other payment of compensation, in addition to Base Pay, made or to be made in regard to services rendered in any year or other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company or a Subsidiary, or any successor thereto;

(j)            “Retirement Plans” means the retirement income, supplemental executive retirement, excess benefits and retiree medical, life and similar benefit plans providing retirement perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder prior to a Change in Control;

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(k)           “Severance Period” means the period of time commencing six (6) months prior to the date of the first occurrence of a Change in Control and continuing until the earlier of (i) the second anniversary of the occurrence of the Change in Control, or (ii) the Executive’s death; provided, however, that commencing on each anniversary of the Change in Control, the Severance Period will automatically be extended for an additional year unless, not later than 90 calendar days before the anniversary date, either the Company or the Executive shall have given written notice to the other that the Severance Period is not to be so extended.

(l)            “Subsidiary” means an entity in which the Company, directly or indirectly, beneficially owns 50% or more of the outstanding Voting Stock;

(m)          “Term” means the period commencing as of the date hereof and expiring as of the later of (i) the close of business on December 31, 2012, or (ii) the expiration of the Severance Period.  However, commencing on January 1, 2012 and each January 1 thereafter, the term of this Agreement will automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, the Company or the Executive shall have given notice that it or the Executive, as the case may be, does not wish to have the Term extended.  Furthermore, if, prior to the date which is six (6) months prior to a Change in Control, the Executive ceases for any reason to be an officer of the Company or any Subsidiary, thereupon without further action the Term shall be deemed to have expired and this Agreement will immediately terminate and be of no further effect. For purposes of this Section, the Executive shall not be deemed to have ceased to be an officer of the Company and any Subsidiary by reason of the transfer of Executive’s employment between the Company and any Subsidiary, or among any Subsidiaries;

(n)           “Termination Date” means the date on which the Executive’s employment is terminated (the effective date of which shall be the date of termination, or such other date that may be specified by the Executive if the termination is pursuant to Section 3(b)); provided, however, that if the Termination Date precedes the Change in Control, then any additional payments and benefits that are due upon a Change in Control and that are deferred compensation within the meaning of Section 409A shall be subject to the Section 409A Delay and payable upon the Change in Control; and

(o)           “Voting Stock” means securities entitled to vote generally in the election of directors.

2.             Operation of Agreement.  This Agreement will be effective and binding immediately upon its execution, but, except for Section 5 (Certain Additional Payments By The Company) (which shall be effective upon execution), anything in this Agreement to the contrary notwithstanding, this Agreement will not be operative unless and until the date which is six (6) months prior to a Change in Control occurs.  If a Change in Control occurs at any time during the Term, this Agreement shall become operative immediately and retroactively including without limitation, notwithstanding that the Term may have since expired.

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3.             Termination Following a Change in Control.

(a)           In the event of the occurrence of a Change in Control, the Executive’s employment may be terminated by the Company or a Subsidiary during the Severance Period and the Executive shall be entitled to the benefits provided by Section 4 as a result thereof or any termination within six (6) months prior to a Change in Control unless such termination is the result of the occurrence of one or more of the following events:

(i)            The Executive’s death;

(ii)           The Executive becoming permanently disabled within the meaning of, and begins actually receiving disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, Executive immediately prior to the Change in Control; and has been deemed to incur a Disability pursuant to the letter agreement dated May 8, 2007 (the “Employment Agreement”).

(iii)           Cause.

If, during the Severance Period, the Executive’s employment is terminated by the Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be entitled to the benefits provided by Section 4 hereof.

(b)           In the event of the occurrence of a Change in Control, the Executive may terminate employment with the Company and any Subsidiary during the Severance Period with the right to severance compensation as provided in Section 4 upon the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause, for such termination exists or has occurred, including without limitation other employment) and shall also have such severance compensation in the event he had terminated within six (6) months prior to the Change in Control for Good Reason (as defined in the Employment Agreement):

(i)            Failure to elect or reelect or otherwise to maintain the Executive in the office or the position, or a substantially equivalent office or position, of or with the Company and/or a Subsidiary (or any successor thereto by operation of law or otherwise), as the case may be, which the Executive held immediately prior to a Change in Control, or the removal of the Executive as a Director of the Company and/or a Subsidiary (or any successor thereto) if the Executive shall have been a Director of the Company and/or a Subsidiary immediately prior to the Change in Control;

(ii)           (A)           A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and any Subsidiary which the Executive held immediately prior to the Change in Control, (B) a reduction in the aggregate of the Executive’s Base Pay and Incentive Pay received from the Company and any Subsidiary, or (C) the termination or denial of the Executive’s rights to Employee Benefits or a reduction in the scope or value thereof, any of which is not remedied by the Company within 10 calendar days after receipt by the Company of written notice from the Executive of such change, reduction or termination, as the case may be;

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(iii)           A determination by the Executive (which determination will be conclusive and binding upon the parties to this Agreement, provided that the determination has been made in good faith and in all events will be presumed to have been made in good faith unless otherwise shown by the Company by clear and convincing evidence) that a change in circumstances has occurred following a Change in Control, including, without limitation, a change in the scope of the business or other activities for which the Executive was responsible immediately prior to the Change in Control, which has rendered the Executive substantially unable to carry out, has substantially hindered Executive’s performance of, or has caused Executive to suffer a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Executive immediately prior to the Change in Control, which situation is not remedied within 10 calendar days after the Company receives written notice from the Executive of such determination;

(iv)           The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or substantially all of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) to which all or substantially all of its business and/or assets have been transferred (by operation of law or otherwise) assumed all duties and obligations of the Company under this Agreement pursuant to Section 11(a);

(v)           The Company relocates its principal executive offices (if such offices are the principal location of Executive’s work), or requires the Executive to have his principal location of work changed, to any location that, in either case, is in excess of 50 miles from the principal executive office’s location immediately prior to the Change in Control, or requires the Executive to travel away from his office in the course of discharging his responsibilities or duties at least 20% more (in terms of aggregate days in any calendar year or in any calendar quarter when annualized for purposes of comparison to any prior year) than was required of Executive in any of the three full years immediately prior to the Change in Control without, in either case, his prior written consent;

(vi)           For any reason, or no reason during the thirteenth calendar month following the Change in Control;

(vii)          Any reason that is Good Reason under the Employment Agreement;

(viii)         Without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto which is not remedied by the Company within 10 calendar days after receipt by the Company of written notice from the Executive of such breach.

(c)           A termination by the Company pursuant to Section 3(a) or by the Executive pursuant to Section 3(b) will not affect any rights that the Executive may have pursuant to any agreement, policy, plan, program or arrangement of the Company or any Subsidiary providing Employee Benefits, which rights shall be governed by the terms thereof; provided that the Executive shall not be entitled to severance payments under Paragraph 11(iii) of the Employment Agreement if the Executive is entitled to the severance payments provided hereunder.

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4.             Severance Compensation.

(a)           If the Company or Subsidiary terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates his employment pursuant to Section 3(b), the Company will pay to the Executive, subject to Section 18 hereof as to the Section 409A Delay, the amounts described in Sections 1, 2 and 4 of Annex A on the date that is six (6) months and one (1) day after the Termination Date and will continue to provide to the Executive the benefits described in Section 3 of Annex A for the period described therein; provided, however, that no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment that is deferred compensation for purposes of Section 409A shall be made or provided, as the case may be, unless and until such termination of employment also constitutes a separation from service (within the meaning of Section 409A).

(b)           Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided under this Agreement on a timely basis, the Company will pay interest on the amount  or value thereof at an annualized rate of interest equal to the so-called composite “prime rate” as quoted from time to time during the relevant period in The Wall Street Journal , plus 2%.  Such interest will be payable as it accrues on demand.  Any change in such prime rate will be effective on and as of the date of such change.

(c)           Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights and obligations under this Section 4 and under Sections 5, 7 and 8 will survive any termination or expiration of this Agreement or the termination of the Executive’s employment following a Change in Control for any reason whatsoever.

5.             Certain Additional Payments by the Company.

(a)           Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined (as hereafter provided) that any payment (other than the Gross-Up payments provided for in this Section 5) or distribution by the Company or any of its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable under the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or  taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive, and the Company shall be required to pay, an additional payment or payments (collectively, a “Gross-Up Payment”); provided, however, that no Gross-up Payment shall be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code (“ISO”) granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i).  The Gross-Up Payment shall be in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

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(b)           Subject to the provisions of Section 5(f), all determinations required to be made under this Section 5, including whether an Excise Tax is payable by the Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive and the amount of such Gross-Up Payment, if any, shall be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Executive in his sole discretion.  The Executive shall direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and the Executive within 30 calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by the Company or the Executive.  If the Accounting Firm determines that any Excise Tax is payable by the Executive, the Company shall pay the required Gross-Up Payment to the Executive within five business days after receipt of such determination and calculations with respect to any Payment to the Executive.  If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall, at the same time as it makes such determination, furnish the Company and the Executive an opinion that the Executive has substantial authority not to report any Excise Tax on his federal, state or local income or other tax return.  As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder.  In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 5(f) and the Executive thereafter is required to make a payment of any Excise Tax, the Executive shall direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and the Executive as promptly as possible.  Any such Underpayment shall be promptly paid by the Company to, or for the benefit of, the Executive within five business days after receipt of such determination and calculations.

(c)           The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 5(b).  Any determination by the Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon the Company and the Executive.

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(d)           The federal, state and local income or other tax returns filed by the Executive shall be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by the Executive.  The Executive shall make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of the applicable portions of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment.  If prior to the filing of the Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, the Executive shall within five business days pay to the Company the amount of such reduction.

(e)           The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section 5(b) shall be borne by the Company.  If such fees and expenses are initially paid by the Executive, the Company shall reimburse the Executive the full amount of such fees and expenses within five business days after receipt from the Executive of a statement therefor and reasonable evidence of Executive’s payment thereof.

(f)            The Executive shall notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of a Gross-Up Payment.  Such notification shall be given as promptly as practicable but no later than 10 business days after the Executive actually receives notice of such claim and the Executive shall further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by the Executive).  The Executive shall not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due.  If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i)            provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;

(ii)           take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;

(iii)           cooperate with the Company in good faith in order effectively to contest such claim; and

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(iv)           permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and shall indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses.  Without limiting the foregoing provisions of this Section 5(f), the Company shall control all proceedings taken in connection with the contest of any claim contemplated by this Section 5(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided, however, that the Executive may participate therein at his own cost and expense) and may, at its option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay the tax claimed and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of any such contested claim shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(g)           If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(f), the Executive receives any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 5(f)), promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto).  If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(f), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the Company to the Executive pursuant to this Section 5.

(h)           In the event any obligation of the Executive to repay any amounts due hereunder would be a violation of the “loan” provision of the Sarbanes-Oxley Act, such obligation shall be treated as null and void ab initio.

(i)            For the avoidance of any doubt, the Company’s obligations to Executive under this Section 5 remain in full force and effect with respect to the KKR Transaction regardless of Executive’s agreement to exclude the KKR Transaction from the definition of Change in Control hereunder.

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(j)            Notwithstanding the foregoing provisions of Section 5, (i) a Gross-Up Payment, or portion thereof, attributable to Section 1 or Section 4 of Annex A will be subject to the Section 409A Delay, (ii) Gross-Up Payments will be paid no later than the time prescribed therefor by Section 1.409A-3(i)(1)(v) of the Treasury Regulations; and (iii) reimbursements under Section 5(e) and Section 5(f) shall be paid no later than December 31 of the calendar year following the calendar year in which the related expense is incurred; provided that in no event shall the reimbursement provided by the Company in one taxable year affect the amount of reimbursement provided in any other taxable year nor shall Executive’s right to reimbursement be subject to liquidation or exchange for another benefit.

6.             No Mitigation Obligation.  The Company hereby acknowledges that it will be difficult and may be impossible for the Executive to find reasonably comparable employment following the Termination Date and that the non-competition covenant contained in Section 8 will further limit the employment opportunities for the Executive.  In addition, the Company acknowledges that its severance pay plans applicable in general to its salaried employees do not provide for mitigation, offset or reduction of any severance payment received thereunder.  Accordingly, the payment of the severance compensation by the Company to the Executive in accordance with the terms of this Agreement is hereby acknowledged by the Company to be reasonable, and the Executive will not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of the Executive under this agreement or otherwise.

7.             Legal Fees and Expenses.

(a)            The Executive shall not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of Executive’s rights under this Agreement by litigation or otherwise because such costs substantially would detract from the Executive’s benefits under this Agreement.  Accordingly, if it should appear to the Executive that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Executive the benefits provided or intended to be provided to the Executive hereunder, the Company irrevocably  authorizes the Executive from time to time to retain counsel of Executive’s choice, at the expense of the Company as hereafter provided, to advise and represent the Executive in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any litigation or other legal action, whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.  Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Executive’s entering into an attorney-client relationship with such counsel, and in that connection the Company and the Executive agree that a confidential relationship shall exist between the Executive and such counsel.  Without respect to whether the Executive prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by the Executive in connection with any of the foregoing.  However, if the Executive brings an action in bad faith, or with no colorable claim of success, the Company shall not pay for any of Executive’s attorneys’ fees or related expenses.

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(b)           Without limiting the obligations of the Company under Section 7(a) of this Agreement, in the event a Change in Control occurs, the performance of the Company’s obligations under this Section 7 shall be secured by amounts deposited or to be deposited in trust pursuant to certain trust agreements to which the Company shall be a party, which amounts deposited shall in the aggregate be not less than $1,000,000, providing that the fees and expenses of counsel selected from time to time by the Executive pursuant to Section 7(a) shall be paid, or reimbursed to the Executive if paid by the Executive, either in accordance with the terms of such trust agreements, or, if not so provided, on a regular, periodic basis upon presentation by the Executive to the trustee of a statement or statements prepared by such counsel in accordance with its customary practices.  Any failure by the Company to satisfy any of its obligations under this Section 7(b) shall not limit the rights of the Executive hereunder.  Subject to the foregoing, the Executive shall have the status of a general unsecured creditor of the Company and shall have no right to, or security interest in, any assets of the Company or any Subsidiary.

(c)           The reimbursement obligations of the Company under Section 7(a) and Section 7(b) will be subject to the requirements of Section 5(j)(iii).

8.           Competitive Activity; Confidentiality; Nonsolicitation.

(a)           For a period ending one year following the Termination Date, if the Executive shall have received or shall be receiving benefits under Section 4, the Executive shall not, without the prior written consent of the Company, which consent shall not be unreasonably withheld, engage in any Competitive Activity; provided that the foregoing shall not apply if the Termination Date was prior to the Change in Control and Executive had already commenced such activity.

(b)           During the Term, the Company agrees that it will disclose to Executive its confidential or proprietary information (as defined in this Section 8(b)) to the extent necessary for Executive to carry out his obligations to the Company.  The Executive hereby covenants and agrees that he will not, without the prior written consent of the Company, during the Term or thereafter disclose to any person not employed by the Company, or use in connection with engaging in competition with the Company, any confidential or proprietary information of the Company.  For purposes of this Agreement, the term “confidential or proprietary information” will include all information of any nature and in any form that is owned by the Company and that is not publicly available (other than by Executive’s breach of this Section 8(b)) or generally known to persons engaged in businesses similar or related to those of the Company.  Confidential or proprietary information will include, without limitation, the Company’s financial matters, customers, employees, industry contracts, strategic business plans, product development (or other proprietary product data), marketing plans, and all other secrets and all other information of a confidential or proprietary nature.  For purposes of the preceding two sentences, the term “Company” will also include any Subsidiary (collectively, the “Restricted Group”).  The foregoing obligations imposed by this Section 8(b) will not apply (i) during the Term, in the course of the business of and for the benefit of the Company, (ii) if such confidential or proprietary information will have become, through no fault of the Executive, generally known to the public or (iii) if the Executive is required by law to make disclosure (after giving the Company notice and, to the extent feasible, an opportunity to contest such requirement).

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(c)           The Executive hereby covenants and agrees that during the Term and for one year thereafter Executive will not, without the prior written consent of the Company, which consent shall not unreasonably be withheld, on behalf of Executive or on behalf of any person, firm or company, directly or indirectly, attempt to influence, persuade or induce, or assist any other person in so persuading or inducing, any management employee of the Restricted Group to give up employment with the Restricted Group, provided the foregoing shall not be violated by advertising or searches not specifically targeted at the management employees of the Restricted Group; or serving as a reference.

(d)           Executive and the Company agree that the covenants contained in this Section 8 are reasonable under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction any such covenant is not reasonable in any respect, such court will have the right, power and authority to excise or modify any provision or provisions of such covenants as to the court will appear not reasonable and to enforce the remainder of the covenants as so amended.  Executive acknowledges and agrees that the remedy at law available to the Company for breach of any of his obligations under this Section 8 would be inadequate and that damages flowing from such a breach may not readily be susceptible to being measured in monetary terms.  Accordingly, Executive acknowledges, consents and agrees that, in addition to any other rights or remedies that the Company may have at law, in equity or under this Agreement, upon adequate proof of his violation of any such provision of this Agreement, the Company will be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach, without the necessity of proof of actual damage.

9.             Employment Rights.  Nothing expressed or implied in this Agreement will create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any Subsidiary prior to or following any Change in Control.

10.           Withholding of Taxes.  The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any applicable law, regulation or ruling.

11.           Successors and Binding Agreement.

(a)           The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.  This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by the Company.

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(b)           This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

(c)           This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 11(a) and 11(b).  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 11(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

12.           Notices.  For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as FedEx, UPS, or Purolator, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his address on the books of the Company, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

13.           Governing Law.  The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

14.           Consent to Jurisdiction.  Any disputes, litigation, proceedings or other legal actions by any party to this Agreement in connection with or relating to this Agreement or any matters described or contemplated in this Agreement may be instituted in the courts of the State of Delaware or of the United States sitting in the State of Delaware.  Each party to this Agreement irrevocably submits to the jurisdiction of the courts of the State of Delaware and of the United States sitting in the State of Delaware in connection with any such dispute, litigation, proceeding or other legal action arising out of or relating to this Agreement.

15.           Validity.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of  such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal.

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16.           Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.  No waiver by either party to this Agreement at any time of any breach by the other contracting party or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.  References to Sections are to references to Sections of this Agreement.

17.           Code Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  To the extent that there is a material risk that any payments under this Agreement may result in the imposition of an additional tax to the Executive under Section 409A, the Company will reasonably cooperate with the Executive to amend this Agreement such that payments hereunder comply with Section 409A without materially changing the economic value of this Agreement to either party.  The Company shall use its best efforts to ensure ongoing compliance with Section 409A.  Notwithstanding any provision in this Agreement to the contrary, no payment or benefit that is deferred compensation for purposes of Section 409A and that is due upon the Executive’s termination of employment will be paid or provided unless such termination is also a separation from service (within the meaning of Section 409A).  For purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

18.           Section 409A Delay.  If the Executive is at the time of his separation from service (as defined in Section 409A) with the Company (other than as a result of his death) a “Specified Employee”, as such term is defined under Section 409A and using the identification methodology selected by the Company from time to time, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A and that is payable on account of a separation from service shall be delayed until the earlier of his death or six (6) months after his separation from service (the “Section 409A Delay”) and shall then be promptly paid to the Executive in a lump sum, together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) and in effect as of the date the payment should otherwise have been provided, and any remaining payments and benefits due under this letter shall be paid or provided in accordance with the normal payment dates specified for them herein.

19.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

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20.           Prior Agreement.  This Agreement amends and restates the Agreement dated as of May 8, 2008 (the “Prior Agreement”) between the Company and the Executive, which Prior Agreement will, without further action, be superseded as of the date first above written.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
By:	/s/ John Stacey
	John Stacey
	Chief Human Resources Officer
EXECUTIVE:
/s/ Dinesh Paliwal
Dinesh Paliwal

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ANNEX A

SEVERANCE COMPENSATION

(1) (i) A lump sum payment in an amount equal to three times the sum of (A) Base Pay (at the highest rate in effect for any period prior to the Termination Date), plus (B) Incentive Pay (in an amount equal to not less than the highest aggregate Incentive Pay earned in any of the three fiscal years immediately preceding the year in which the Change in Control occurred, but in no event less than the Target Bonus under the Executive’s Employment Agreement).

(2) For a period of eighteen months following the Termination Date (the “Continuation Period”), the Company will arrange to provide the Executive (and his dependents) with coverage under the Company’s medical, dental or other health plan, but only to the extent that the Executive makes a payment to the Company in an amount equal to the monthly COBRA premium payments on a timely basis required to maintain such coverage commencing with the first calendar month following the Termination Date and the Company shall reimburse the Executive on an after-tax basis for the amount of such premiums, if any, in excess of any employee contributions necessary to maintain such coverage for the Continuation Period (the “COBRA Reimbursement”).  The COBRA Reimbursement shall be subject to Section 18 and shall be made within 30 days following the date on which Executive incurs the expense but no later than December 31 of the year following the year in which Executive incurs the related expense; provided, that in no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(3) Outplacement services for one year after the Termination Date by a firm selected by the Executive, at the expense of the Company in an amount up to 20% of the Executive’s Base Pay.

(4) A lump sum payment in the amount of $30,000 representing the cost of welfare benefits for two years (less those provided under (2)) above plus a gross up so the Executive has no after tax cost therefor.  Any tax gross-up payment provided will be made no later than the end of the calendar year immediately following the calendar year in which the Executive remits the related taxes.

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EX-10.3

Exhibit 10.3

AMENDED AND RESTATED

SEVERANCE AGREEMENT

THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (the “Agreement”), dated as of December 22, 2008, is made and entered by and between Harman International Industries, Incorporated (“Harman” or, including any successor thereto, the “Company”), a Delaware corporation, and Herbert K. Parker (the “Executive”).

WHEREAS, the Executive is a senior executive of Harman and is expected to make major contributions to the Company’s short and long-term profitability, growth and financial strength;

WHEREAS, Harman recognizes that: (a) top-quality executives may seek more secure career opportunities if a Change in Control, as defined below, occurs in the future; and (b) the Company may encounter difficulties in recruiting qualified senior executives unless it offers an employment security arrangement, applicable in Change in Control situations;

WHEREAS, Harman desires to assure itself of both present and future continuity of management and desires to establish certain minimum severance benefits for certain of its senior executives, including the Executive, applicable in the event of a Change in Control;

WHEREAS, Harman wishes to ensure that its senior executives are not practically disabled from discharging their duties in respect of a proposed or actual transaction involving a Change in Control; and

WHEREAS, Harman desires to provide additional inducement for the Executive to continue to remain in the Company’s employ.

NOW, THEREFORE, Harman and the Executive agree as follows:

1.             Certain Defined Terms.  In addition to terms defined elsewhere in this Agreement, the following terms have the following meanings:

(a)           “Base Pay” means the Executive’s annual base salary rate as in effect from time to time;

(b)           “Board” means Harman’s Board of Directors;

(c)           “Cause” means that, prior to any termination pursuant to Section 3(b), the Executive shall have:

(i)            been convicted of a criminal violation involving fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company or any Subsidiary;

(ii)           committed intentional wrongful damage to property of Harman or any Harman subsidiary;

(iii)           committed intentional wrongful disclosure of secret processes or confidential information of Harman or any Subsidiary; or

(iv)          committed intentional wrongful engagement in any Competitive Activity;

and any such act shall have been demonstrably and materially harmful to Harman.  For purposes of this Agreement, no act or failure to act on the part of the Executive shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of Harman.  Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of a majority of the Committee then in office at a meeting of the Committee called and held for such purpose, after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel (if the Executive chooses to have counsel present at such meeting), to be heard before the Committee, finding that, in the good faith opinion of the Committee, the Executive had committed an act constituting “Cause” as defined in this Agreement and specifying the particulars thereof in detail.  Nothing in this Agreement will limit the right of the Executive or his beneficiaries to contest the validity or propriety of any such determination;

(d)           “Change in Control” means the occurrence during the Term of any of the following events:

(i)            The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding Voting Stock of the Company; provided, however, that for purposes of this Section 1(d)(i), the following acquisitions shall not constitute a Change in Control:  (A) any issuance of Voting Stock of the Company directly from the Company that is approved by the Incumbent Board (as defined in Section 1(d)(ii), below), (B) any acquisition by the Company or a Subsidiary of Voting Stock of the Company, (C) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (D) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination (as defined in Section 1(d)(iii) below) that complies with clauses (A), (B) and (C) of Section 1(d)(iii), below; or

(ii)            individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the Directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

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(iii)           consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company, or other transaction (each, a “Business Combination”), unless, in each case, immediately following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(iv)           approval by the shareholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 1(d)(iii).

(e)           “Committee” means the Compensation and Option Committee of the Board or such similar committee of the Board comprised of non-officer directors and responsible for executive compensation matters of the Company generally;

(f)           “Competitive Activity” means the Executive’s participation, without the Company’s written consent, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company or a Subsidiary and the enterprise’s sales of any product or service under the Executive’s supervision competitive with any product or service of the Company or a Subsidiary amounted to 10% of the enterprise’s net sales for its most recently completed fiscal year and if the Company’s and its Subsidiary’s net sales of said product or service amounted to 10% of the Company’s net sales for its most recently completed fiscal year.  “Competitive Activity” will not include (i) the mere ownership of securities in any such enterprise and the exercise of rights appurtenant thereto or (ii) participation in the management of any such enterprise other than in connection with the competitive operations of such enterprise;

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(g)           “Employee Benefits” means the perquisites, benefits and service credit for benefits as provided under any and all employee retirement income and welfare benefit policies, plans, programs or arrangements in which Executive is entitled to participate, including without limitation any stock option, performance share, performance unit, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder prior to a Change in Control;

(h)           “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time;

(i)            “Incentive Pay” means an annual bonus, incentive or other payment of compensation, in addition to Base Pay, made or to be made in regard to services rendered in any year or other period pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan, program or arrangement (whether or not funded) of the Company or a Subsidiary, or any successor thereto;

(j)            “Retirement Plans” means the retirement income, supplemental executive retirement, excess benefits and retiree medical, life and similar benefit plans providing retirement perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable thereunder prior to a Change in Control;

(k)           “Severance Period” means the period of time commencing six months prior to the date of the first occurrence of a Change in Control and continuing until the earlier of (i) the second anniversary of the occurrence of the Change in Control, or (ii) the Executive’s death; provided, however, that commencing on each anniversary of the Change in Control, the Severance Period will automatically be extended for an additional year unless, not later than 90 calendar days before the anniversary date, either the Company or the Executive shall have given written notice to the other that the Severance Period is not to be so extended;

(l)            “Subsidiary” means an entity in which the Company, directly or indirectly, beneficially owns 50% or more of the outstanding Voting Stock;

(m)           “Term” means the period commencing as of the date hereof and expiring as of the later of (i) the close of business on December 31, 2012, or (ii) the expiration of the Severance Period.  However, commencing on January 1, 2012 and each January 1 thereafter, the term of this Agreement will automatically be extended for an additional year unless, not later than September 30 of the immediately preceding year, the Company or the Executive shall have given notice that it or the Executive, as the case may be, does not wish to have the Term extended.  Furthermore, if prior to the date which is six months prior to a Change in Control, the Executive ceases for any reason to be an officer of the Company or any Subsidiary, thereupon without further action the Term shall be deemed to have expired and this Agreement will immediately terminate and be of no further effect.  For purposes of this Section, the Executive shall not be deemed to have ceased to be an officer of the Company and any Subsidiary by reason of the transfer of Executive’s employment between the Company and any Subsidiary, or among any Subsidiaries;

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(n)           “Termination Date” means the date on which the Executive’s employment is terminated (the effective date of which shall be the date of termination, or such other date that may be specified by the Executive if the termination is pursuant to Section 3(b)); provided, however, that if the Termination Date precedes the Change in Control, then any additional payments and benefits that are due upon a Change in Control and that are deferred compensation within the meaning of Section 409A shall be subject to the Section 409A Delay, as defined below, and payable upon the Change in Control; and

(o)           “Voting Stock” means securities entitled to vote generally in the election of directors.

2.             Operation of Agreement.  This Agreement will be effective and binding immediately upon its execution, but anything in this Agreement to the contrary notwithstanding, this Agreement will not be operative unless and until the date which is six months prior to a Change in Control occurs.  If a Change in Control occurs at any time during the Term, this Agreement shall become operative immediately and retroactively, including without limitation, notwithstanding that the Term may have since expired.

3.             Termination Following a Change in Control.  (a) In the event of the occurrence of a Change in Control, the Executive’s employment may be terminated by the Company or a Subsidiary during the Severance Period and the Executive shall be entitled to the benefits provided by Section 4 as a result thereof or of any termination within six months prior to a Change in Control unless such termination is the result of the occurrence of one or more of the following events:

(i)            The Executive’s death;

(ii)           The Executive becoming permanently disabled within the meaning of, and begins actually receiving disability benefits pursuant to, the long-term disability plan in effect for, or applicable to, Executive immediately prior to the Change in Control; or

(iii)           Cause.

If, during the Severance Period, the Executive’s employment is terminated by the Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be entitled to the benefits provided by Section 4 hereof.

(b)           In the event of the occurrence of a Change in Control, the Executive may terminate employment with the Company and any Subsidiary during the Severance Period with the right to severance compensation as provided in Section 4 upon the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause, for such termination exists or has occurred, including without limitation other employment) and shall also have such severance compensation in the event he had terminated employment upon the occurrence of one or more of the following events within six months prior to the Change in Control:

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(i)            Failure to elect or reelect or otherwise to maintain the Executive in the office or the position, or a substantially equivalent office or position, of or with the Company and/or a Subsidiary (or any successor thereto by operation of law or otherwise), as the case may be, which the Executive held immediately prior to a Change in Control, or the removal of the Executive as a Director of the Company and/or a Subsidiary (or any successor thereto) if the Executive shall have been a Director of the Company and/or a Subsidiary immediately prior to the Change in Control;

(ii)           (A) A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and any Subsidiary which the Executive held immediately prior to the Change in Control, (B) a reduction in the aggregate of the Executive’s Base Pay and Incentive Pay received from the Company and any Subsidiary, or (C) the termination or denial of the Executive’s rights to Employee Benefits or a reduction in the scope or value thereof, any of which is not remedied by the Company within 10 calendar days after receipt by the Company of written notice from the Executive of such change, reduction or termination, as the case may be;

(iii)           A determination by the Executive (which determination will be conclusive and binding upon the parties to this Agreement, provided that the determination has been made in good faith and in all events will be presumed to have been made in good faith unless otherwise shown by the Company by clear and convincing evidence) that a change in circumstances has occurred following a Change in Control, including, without limitation, a change in the scope of the business or other activities for which the Executive was responsible immediately prior to the Change in Control, which has rendered the Executive substantially unable to carry out, has substantially hindered Executive’s performance of, or has caused Executive to suffer a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Executive immediately prior to the Change in Control, which situation is not remedied within 10 calendar days after the Company receives written notice from the Executive of such determination;

(iv)          The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or substantially all of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization, transfer or otherwise) to which all or substantially all of its business and/or assets have been transferred (by operation of law or otherwise) assumed all duties and obligations of the Company under this Agreement pursuant to Section 11(a);

(v)           The Company relocates its principal executive offices (if such offices are the principal location of Executive’s work), or requires the Executive to have his principal location of work changed, to any location that, in either case, is in excess of 50 miles from the principal executive office’s location immediately prior to the Change in Control, or requires the Executive to travel away from his office in the course of discharging his responsibilities or duties at least 20% more (in terms of aggregate days in any calendar year or in any calendar quarter when annualized for purposes of comparison to any prior year) than was required of Executive in any of the three full years immediately prior to the Change in Control without, in either case, his prior written consent; or

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(vi)           Without limiting the generality or effect of the foregoing, any material breach of this Agreement by the Company or any successor thereto which is not remedied by the Company within 10 calendar days after receipt by the Company of written notice from the Executive of such breach.

(c)           A termination by the Company pursuant to Section 3(a) or by the Executive pursuant to Section 3(b) will not affect any rights that the Executive may have pursuant to any agreement, policy, plan, program or arrangement of the Company or any Subsidiary providing Employee Benefits, which rights shall be governed by the terms thereof; provided that the Executive shall not be entitled to a severance payment or benefit under any other agreement with the Company, including, without limitation, any employment agreement, if the Executive is entitled to a comparable payment or benefit hereunder.

4.             Severance Compensation.  a) If the Company or Subsidiary terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates his employment pursuant to Section 3(b), the Company will pay to the Executive, subject to Section 18 hereof as to the Section 409A Delay, the amount described in Paragraph (a) of Annex A within five business days after the Termination Date and will continue to provide to the Executive the benefits described in Paragraphs (b) and (c) of Annex A for the periods described therein; provided, however, that no payment that would otherwise be made and no benefit that would otherwise be provided upon a termination of employment that is deferred compensation for purposes of Section 409A shall be made or provided, as the case may be, unless and until such termination of employment also constitutes a separation from service (within the meaning of Section 409A).

(b)           Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided under this Agreement on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the so-called composite “prime rate” as quoted from time to time during the relevant period in The Wall Street Journal , plus 2%.  Such interest will be payable as it accrues on demand.  Any change in such prime rate will be effective on and as of the date of such change.

(c)           Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights and obligations under this Section 4 and under Sections 5, 7 and 8 will survive any termination or expiration of this Agreement or the termination of the Executive’s employment following a Change in Control for any reason whatsoever.

5.             Certain Additional Payments by the Company.  b) Anything in this Agreement to the contrary notwithstanding,in the event that this Agreement shall become operative and it shall be determined (as hereafter provided) that any payment (other than the Gross-Up Payments provided for in this Section 5) or distribution by the Company or any of its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable under the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan,program or arrangement, including without limitation any stock option, performance share, performance unit, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or  taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive, and the Company shall be required to pay, an additional payment or payments (collectively, a “Gross-Up Payment”); provided, however, that no Gross-Up Payment shall be made with respect to the Excise Tax, if any, attributable to (i) any incentive stock option, as defined by Section 422 of the Code (“ISO”) granted prior to the execution of this Agreement, or (ii) any stock appreciation or similar right, whether or not limited, granted in tandem with any ISO described in clause (i).  The Gross-Up Payment shall be in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

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(b)           Subject to the provisions of Section 5(f), all determinations required to be made under this Section 5, including whether an Excise Tax is payable by the Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid by the Company to the Executive and the amount of such Gross-Up Payment, if any, shall be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Executive in his sole discretion.  The Executive shall direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and the Executive within 30 calendar days after the Termination Date, if applicable, and any such other time or times as may be requested by the Company or the Executive.  If the Accounting Firm determines that any Excise Tax is payable by the Executive, the Company shall pay the required Gross-Up Payment to the Executive within five business days after receipt of such determination and calculations with respect to any Payment to the Executive.  If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall, at the same time as it makes such determination, furnish the Company and the Executive an opinion that the Executive has substantial authority not to report any Excise Tax on his federal, state or local income or other tax return.  As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder.  In the event that the Company exhausts or fails to pursue its remedies pursuant to Section 5(f) and the Executive thereafter is required to make a payment of any Excise Tax, the Executive shall direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and the Executive as promptly as possible.  Any such Underpayment shall be promptly paid by the Company to, or for the benefit of, the Executive within five business days after receipt of such determination and calculations.

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(c)           The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Section 5(b).  Any determination by the Accounting Firm as to the amount of the Gross-Up Payment shall be binding upon the Company and the Executive.

(d)           The federal, state and local income or other tax returns filed by the Executive shall be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by the Executive.  The Executive shall make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of the applicable portions of his federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment.  If prior to the filing of the Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, the Executive shall within five business days pay to the Company the amount of such reduction.

(e)           The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section 5(b) shall be borne by the Company.  If such fees and expenses are initially paid by the Executive, the Company shall reimburse the Executive the full amount of such fees and expenses within five business days after receipt from the Executive of a statement therefor and reasonable evidence of Executive’s payment thereof.

(f)           The Executive shall notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of a Gross-Up Payment.  Such notification shall be given as promptly as practicable but no later than 10 business days after the Executive actually receives notice of such claim and the Executive shall further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by the Executive).  The Executive shall not pay such claim prior to the earlier of (i) the expiration of the 30 calendar day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due.  If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i)             provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company;

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(ii)            take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company;

(iii)           cooperate with the Company in good faith in order effectively to contest such claim; and

(iv)           permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and shall indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses.  Without limiting the foregoing provisions of this Section 5(f), the Company shall control all proceedings taken in connection with the contest of any claim contemplated by this Section 5(f) and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided, however, that the Executive may participate therein at his own cost and expense) and may, at its option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay the tax claimed and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or other tax, including interest or penalties with respect thereto, imposed with respect to such advance; and provided further, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which the contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of any such contested claim shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(g)           If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(f), the Executive receives any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 5(f)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any taxes applicable thereto).  If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(f), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of any such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid by the Company to the Executive pursuant to this Section 5.

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(h)           In the event any obligation of the Executive to repay any amounts due hereunder would be a violation of the “loan” provisions of the Sarbanes-Oxley Act, such obligation shall be treated as null and void ab initio.

(i)            Notwithstanding the foregoing provisions of Section 5, (i) a Gross-Up Payment, or portion thereof, attributable to Paragraph (1) of Annex A will be subject to the Section 409A Delay; (ii) Gross-Up Payments will be paid no later than the time prescribed therefor by Section 1.409A-3(i)(1)(v) of the Treasury Regulations; and (iii) reimbursements under Sections 5(e) and 5(f) shall be paid no later than December 31 of the calendar year following the calendar year in which the related expense is incurred; provided that in no event shall the reimbursement provided by the Company in one taxable year affect the amount of reimbursement provided in any other taxable year nor shall Executive’s right to reimbursement be subject to liquidation or exchange for another benefit.

6.             No Mitigation Obligation.  The Company hereby acknowledges that it will be difficult and may be impossible for the Executive to find reasonably comparable employment following the Termination Date and that the non-competition covenant contained in Section 8 will further limit the employment opportunities for the Executive.  In addition, the Company acknowledges that its severance pay plans applicable in general to its salaried employees do not provide for mitigation, offset or reduction of any severance payment received thereunder.  Accordingly, the payment of the severance compensation by the Company to the Executive in accordance with the terms of this Agreement is hereby acknowledged by the Company to be reasonable, and the Executive will not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of the Executive under this Agreement or otherwise.

7.             Legal Fees and Expenses.  c) The Executive shall not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of Executive’s rights under this Agreement by litigation or otherwise because such costs substantially would detract from the Executive’s benefits under this Agreement.  Accordingly, if it should appear to the Executive that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Executive the benefits provided or intended to be provided to the Executive hereunder, the Company irrevocably authorizes the Executive from time to time to retain counsel of Executive’s choice, at the expense of the Company as hereafter provided, to advise and represent the Executive in connection with any such interpretation, enforcement or defense, including without limitation the initiation or defense of any litigation or other legal action, whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.  Notwithstanding any existing or prior attorney-client relationship between the Company and such counsel, the Company irrevocably consents to the Executive’s entering into an attorney-client relationship with such counsel, and in that connection the Company and the Executive agree that a confidential relationship shall exist between the Executive and such counsel.  Without respect to whether the Executive prevails, in whole or in part, in connection with any of the foregoing, the Company will pay and be solely financially responsible for any and all attorneys’ and related fees and expenses incurred by the Executive in connection with any of the foregoing.  However, if the Executive brings an action in bad faith, or with no colorable claim of success, the Company shall not pay for any of Executive’s attorneys’ fees or related expenses.

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(b)           Without limiting the obligations of the Company under Section 7(a) of this Agreement, in the event a Change in Control occurs, the performance of the Company’s obligations under this Section 7 shall be secured by amounts deposited or to be deposited in trust pursuant to certain trust agreements to which the Company shall be a party, which amounts deposited shall in the aggregate be not less than $1,000,000,providing that the fees and expenses of counsel selected from time to time by the Executive pursuant to Section 7(a) shall be paid, or reimbursed to the Executive if paid by the Executive, either in accordance with the terms of such trust agreements, or, if not so provided, on a regular, periodic basis upon presentation by the Executive to the trustee of a statement or statements prepared by such counsel in accordance with its customary practices.  Any failure by the Company to satisfy any of its obligations under this Section 7(b) shall not limit the rights of the Executive hereunder.  Subject to the foregoing, the Executive shall have the status of a general unsecured creditor of the Company and shall have no right to, or security interest in, any assets of the Company or any Subsidiary.

(c)           The reimbursement obligations of the Company under Section 7(a) and Section 7(b) will be subject to the requirements of Section 5(i)(iii).

8.             Competitive Activity; Confidentiality; Nonsolicitation.  d) For a period ending one year following the Termination Date, if the Executive shall have received or shall be receiving benefits under Section 4, the Executive shall not, without the prior written consent of the Company, which consent shall not be unreasonably withheld, engage in any Competitive Activity; provided that the foregoing shall not apply if the Termination Date was prior to the Change in Control and Executive had already commenced such activity.

(b)           During the Term, the Company agrees that it will disclose to Executive its confidential or proprietary information (as defined in this Section 8(b)) to the extent necessary for Executive to carry out his obligations to the Company.  The Executive hereby covenants and agrees that he will not, without the prior written consent of the Company, during the Term or thereafter disclose to any person not employed by the Company, or use in connection with engaging in competition with the Company, any confidential or proprietary information of the Company.  For purposes of this Agreement, the term “confidential or proprietary information” will include all information of any nature and in any form that is owned by the Company and that is not publicly available (other than by Executive’s breach of this Section 8(b)) or generally known to persons engaged in businesses similar or related to those of the Company.  Confidential or proprietary information will include, without limitation, the Company’s financial matters, customers, employees, industry contracts, strategic business plans, product development (or other proprietary product data), marketing plans, and all other secrets and all other information of a confidential or proprietary nature.  For purposes of the preceding two sentences, the term “Company” will also include any Subsidiary (collectively, the “Restricted Group”).  The foregoing obligations imposed by this Section 8(b) will not apply (i) during the Term, in the course of the business of and for the benefit of the Company, (ii) if such confidential or proprietary information will have become, through no fault of the Executive, generally known to the public or (iii) if the Executive is required by law to make disclosure (after giving the Company notice and, to the extent feasible, an opportunity to contest such requirement).

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(c)           The Executive hereby covenants and agrees that during the Term and for one year thereafter Executive will not, without the prior written consent of the Company, which consent shall not unreasonably be withheld,on behalf of Executive or on behalf of any person, firm or company, directly or indirectly, attempt to influence, persuade or induce, or assist any other person in so persuading or inducing, any management employee of the Restricted Group to give up employment with the Restricted Group, provided the foregoing shall not be violated by advertising or searches not specifically targeted at the management employees of the Restricted Group, or serving as a reference.

(d)           Executive and the Company agree that the covenants contained in this Section 8 are reasonable under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction any such covenant is not reasonable in any respect, such court will have the right, power and authority to excise or modify any provision or provisions of such covenants as to the court will appear not reasonable and to enforce the remainder of the covenants as so amended.  Executive acknowledges and agrees that the remedy at law available to the Company for breach of any of his obligations under this Section 8 would be inadequate and that damages flowing from such a breach may not readily be susceptible to being measured in monetary terms.  Accordingly, Executive acknowledges, consents and agrees that, in addition to any other rights or remedies that the Company may have at law, in equity or under this Agreement, upon adequate proof of his violation of any such provision of this Agreement, the Company will be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach, without the necessity of proof of actual damage.

9.             Employment Rights.  Nothing expressed or implied in this Agreement will create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any Subsidiary prior to or following any Change in Control.

10.           Withholding of Taxes.  The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any applicable law, regulation or ruling.

11.           Successors and Binding Agreement.

(a)           The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.  This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by the Company.

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(b)           This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

(c)           This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 11(a) and 11(b).  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 11(c), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

12.           Notices.  For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as FedEx, UPS, or Purolator, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his address on the books of the Company, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

13.           Governing Law.  The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

14.           Consent to Jurisdiction.  Any disputes, litigation, proceedings or other legal actions by any party to this Agreement in connection with or relating to this Agreement or any matters described or contemplated in this Agreement may be instituted in the courts of the State of Delaware or of the United States sitting in the State of Delaware.  Each party to this Agreement irrevocably submits to the jurisdiction of the courts of the State of Delaware and of the United States sitting in the State of Delaware in connection with any such dispute, litigation, proceeding or other legal action arising out of or relating to this Agreement.

15.           Validity.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of  such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal.

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16.           Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.  No waiver by either party to this Agreement at any time of any breach by the other contracting party or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.  References to Sections are to references to Sections of this Agreement.

17.           Code Section 409A.  The intent of the parties hereto is that payments and benefits under this Agreement comply with or be exempt from Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  To the extent that there is a material risk that any payments under this Agreement may result in the imposition of an additional tax to the Executive under Section 409A, the Company will reasonably cooperate with the Executive to amend this Agreement such that payments hereunder comply with Section 409A without materially changing the economic value of this Agreement to either party.  The Company shall use its best efforts to ensure ongoing compliance with Section 409A.  Notwithstanding any provision in this Agreement to the contrary, no payment or benefit that is deferred compensation for purposes of Section 409A and that is due upon the Executive’s termination of employment will be paid or provided unless such termination is also a separation from service (within the meaning of Section 409A).  For purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within 30 days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

18.           Section 409A Delay.  If the Executive is at the time of his separation from service (as defined in Section 409A) with the Company (other than as a result of his death) a “Specified Employee,” as such term is defined under Section 409A and using the identification methodology selected by the Company from time to time, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A and that is payable on account of a separation from service shall be delayed until the earlier of his death or six months after his separation from service (the “Section 409A Delay”) and shall then be promptly paid to the Executive in a lump sum, together with interest for the period of delay, compounded annually, equal to the prime rate (as published in The Wall Street Journal) and in effect as of the date the payment should otherwise have been provided, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

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19.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

20.           Prior Agreement.  This Agreement amends and restates the Agreement, dated as of July 28, 2008 (the “Prior Agreement”), between the Company and the Executive, which Prior Agreement will, without further action, be superseded as of the date first above written.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
By:	/s/ John Stacey
Name:	John Stacey
Title:	Vice President and Chief Human Resources Officer
/s/ Herbert K. Parker
Herbert K. Parker

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Annex A

Severance Compensation

(1)           (i) A lump sum payment in an amount equal to two times the sum of (A) Base Pay (at the highest rate in effect for any period prior to the Termination Date), plus (B) Incentive Pay (in an amount equal to not less than the highest aggregate Incentive Pay earned in any of the three fiscal years immediately preceding the year in which the Change in Control occurred).

(2)           For a period of 18 months following the Termination Date (the “Continuation Period”), the Company will arrange to provide the Executive (and his dependents) with coverage under the Company’s medical, dental or other health plan, but only to the extent that the Executive makes a payment to the Company in an amount equal to the monthly COBRA premium payments on a timely basis required to maintain such coverage commencing with the first calendar month following the Termination Date and the Company shall reimburse the Executive on an after-tax basis for the amount of such premiums, if any, in excess of any employee contributions necessary to maintain such coverage for the Continuation Period (the “COBRA Reimbursement”).  The COBRA Reimbursement shall be subject to Section 18 and shall be made within 30 days following the date on which Executive incurs the expense but no later than December 31 of the year following the year in which Executive incurs the related expense; provided, that in no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

(3)           Outplacement services for one year after the Termination Date by a firm selected by the Executive, at the expense of the Company in an amount up to $50,000.

A-1

EX-10.4

Exhibit 10.4

December 26, 2008

Mr. Dinesh Paliwal

[Address Intentionally Omitted]

Dear Dinesh:

Reference is made to the Letter Agreement dated as of May 8, 2007, as amended by the Letter Agreement dated as of November 29, 2007, each by and between Harman International Industries, Incorporated (the “Company”) and you (collectively, the “Letter Agreement”).

The purpose of this letter is to make certain revisions to the Letter Agreement in order to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.  Capitalized terms not defined herein shall have the meanings ascribed to such terms in the Letter Agreement.

1.             Paragraph 5 of the Letter Agreement shall be amended by adding the following at the end thereof:

Bonuses will be paid in accordance with the terms of the applicable plans.

2.             Paragraph 11 of the Letter Agreement is amended in the following respects:

(a) By amending clause (iii) thereof in its entirety to read as follows:

(iii) a severance payment equal to twice the sum of (X) your annual Base Salary at the time of your termination plus (Y) your target annual bonus at the time of your termination paid in a lump sum on the date that is six (6) months and one (1) day after your separation from service (within the meaning of Section 409A).

(b)  By deleting the last sentence thereof and adding the following:

Notwithstanding the foregoing, (A) no payments shall be made to you under clause (iii) above unless your termination of employment is also a separation from service (within the meaning of Section 409A), (B) your right to receive the payments under this Paragraph 11 will be subject to your execution and delivery of a release, substantially in the form annexed hereto as Exhibit F, to the Company within 60 days following your separation from service, (C) the Company shall deliver an executed release to you within five business days following your separation from service and (D) if the Company does not execute and deliver the release to you within five business days following your separation from service, then any requirement for you to execute, deliver and not revoke the release as a condition of receiving any payments under this Paragraph 11 will have no effect, and you shall be entitled to receive any payments to which you otherwise qualify under this Paragraph 11.  Notwithstanding the foregoing, (x) the payment under clause (iii) shall be subject to Section 3(c) of your Severance Agreement and (y) the termination benefits provided by Paragraph 7(f) shall be provided in accordance with such Paragraph 7.

Mr. Dinesh Paliwal

December 26, 2008

Page 2

3.             Paragraph 14 of the Letter Agreement is amended by adding immediately after the phrase “On any termination of your employment” the following phrase:

or, if later, your separation from service (within the meaning of Section 409A),

4.             Paragraph 14 of the Letter Agreement is further amended by adding immediately after the parenthetical phrase “(“Accrued Amounts”)” the following:

, in each case, to be paid in accordance with the terms of the applicable Company benefit or equity plan or program.

5.             Paragraph 16 of the Letter Agreement is amended by deleting the last two sentences thereof and adding the following:

Your employment shall automatically terminate at the end of such six (6) month period unless you and the Company agree otherwise.  Upon any such termination or, if later, your separation from service (as defined under Section 409A), you shall receive your Accrued Amounts, your Pro Rata Bonus and your Prior Year Bonus.  Notwithstanding the foregoing, in the event that as a result of earlier absence because of mental or physical incapacity you incur a separation from service (within the meaning of Section 409A), you shall on such date automatically be terminated from employment as a Disability termination.

6.             Paragraph 17 of the Letter Agreement is amended by adding the following at the end thereof:

Any such reimbursement will be made no later than December 31 of the year following the year in which the expense was incurred; provided, however, that in no event will the reimbursements in one taxable year affect the amount of reimbursements in any other taxable year, nor shall the right to reimbursement be subject to liquidation or exchange for another benefit.  Any tax gross-up payment provided in this Paragraph 17 will be made no later than the end of the calendar year immediately following the calendar year in which you remit the related taxes.

Mr. Dinesh Paliwal

December 26, 2008

Page 3

7.             Paragraph 18 of the Letter Agreement is amended in its entirety to read as follows:

Code Section 409A.  The intent of the parties is that payments and benefits under this letter comply with or be exempt from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this letter shall be interpreted and administered to be in compliance therewith.  To the extent that there is a material risk that any payments under this letter, the Severance Agreement or any grant may result in the imposition of an additional tax to you under Section 409A, Harman will reasonably cooperate with you to amend this letter and related documents such that such documents and payments thereunder comply with Section 409A without materially changing the economic value of this letter or the arrangements hereunder to either party.  The Company shall use its best efforts to ensure ongoing compliance with Section 409A.  Notwithstanding any provision in this letter to the contrary, no payment or benefit that is deferred compensation for purposes of Section 409A and that is due upon your termination of employment will be paid or provided unless such termination is also a separation from service (within the meaning of Section 409A).  For purposes of Section 409A, your right to receive any installment payments pursuant to this letter shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this letter specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of Harman.

8.             Paragraph 19 of the Letter Agreement is amended in its entirety to read as follows:

Section 409A Delay.  If you are at the time of your separation from service (as defined in Section 409A) with Harman (other than as a result of your death) a “Specified Employee”, as such term is defined under Section 409A and using the identification methodology selected by the Company from time to time, then any payment or the provision of any benefit that is considered deferred compensation under Section 409A and that is payable on account of a separation from service shall be delayed until the earlier of your death or six (6) months after your separation from service (the “Section 409A Delay”) and shall then be promptly paid to you in a lump sum, together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the date the payment should otherwise have been provided, and any other payments and benefits due under the letter shall be paid or provided in accordance with the normal payment dates specified for them herein.

Mr. Dinesh Paliwal

December 26, 2008

Page 4

9.             Paragraph 20 of the Letter Agreement is amended by following at the end of such paragraph.

Any such reimbursement will be made no later than December 31 of the year following the year in which the expense was incurred; provided, however, that in no event will the reimbursements in one taxable year affect the amount of reimbursements in any other taxable year, nor shall the right to reimbursement be subject to liquidation or exchange for another benefit.

10.           The second paragraph of Paragraph 21 of the Letter Agreement is amended by substituting “Paragraph 11” for “Section 10” in the first and second sentences thereof.

11.           The last sentence of the sixth paragraph of Paragraph 21 of the Letter Agreement is amended to read as follows:

In the event the arbitrator determines that you are the prevailing party in any arbitration, Harman shall pay your legal fees and disbursements incurred in connection therewith on the 70th day after such determination, as well as all costs of the AAA and the arbitrator.

12.           Paragraph 7 of Exhibit F (General Release) to the Letter Agreement is amended by adding the following immediately after the second sentence thereof:

Any such reimbursement will be made no later than December 31 of the year following the year in which the expense was incurred; provided, however, that in no event will the reimbursements in one taxable year affect the amount of reimbursements in any other taxable year, nor shall the right to reimbursement be subject to liquidation or exchange for another benefit.

Mr. Dinesh Paliwal

December 26, 2008

Page 5

13.           Exhibit H (Restricted Share Unit Agreement) to the Letter Agreement is amended in the following respects.

(a) Clause (ii) of Section 6 is amended to read as follows:

the date of his Qualifying Termination, provided that such Qualifying Termination constitutes a “separation from service” (within the meaning of Section 409A) or

(b) The second sentence of Section 7 is amended in its entirety to read as follows:

From and after the Date of Grant and until the Grantee is paid pursuant to Section 6, the Company shall pay to the Grantee on the 30th day following the date on which a normal cash dividend is paid on shares of Common Stock, an amount of cash equal to the product of the per-share amount of the dividend paid times the number of such Restricted Stock Units.

14.           Each award of Restricted Share Units granted prior to the date hereof by the Company to you shall be considered to have been amended in the same manner as set forth in Paragraph 13 of this letter.

This letter is intended to constitute an amendment to the Letter Agreement which, subject to the provisions hereof, shall otherwise remain in full force and effect.  In order to evidence your agreement to the foregoing, please sign and return the enclosed copy of this document, which shall constitute a binding agreement between the Company and you.

[signature page follows]

Mr. Dinesh Paliwal

December 26, 2008

Page 6

IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this amendment to the Letter Agreement as of the date set forth below:

	HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
/s/ Dinesh Paliwal	By:	John Stacey
		Name: John Stacey
		Title: Chief Human Resources Officer
Date: :December 26, 2008		Date: December 26, 2008

EX-10.5

Exhibit 10.5

[FORM]

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN

PERFORMANCE BASED RESTRICTED SHARE UNIT AGREEMENT

FOR OFFICERS AND KEY EMPLOYEES

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of ____________, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and ____________ (“Grantee”).  Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”)

W I T N E S S E T H:

A.            Grantee is an employee of the Company or a Subsidiary of the Company; and

B.            The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”);

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units.  Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Plan, the Company hereby grants to the Grantee, ____________ Restricted Share Units (the “Grant”).  Each Restricted Share Unit shall represent the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”).  This Agreement constitutes an “Evidence of Award” under the Plan.

2. Date of Grant.  The effective date of the grant of the Restricted Share Units is ____________ (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units.  Neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, unless earlier forfeited in accordance with Section 5, the number of Restricted Share Units that shall become nonforfeitable (“Earned RSUs”) on the third anniversary of the Date of Grant shall be the number of Restricted Share Units indicated in Section 1 above, subject to adjustment based upon the Company’s achievement of the performance goals as described on Exhibit A, over the period beginning on _________ and ending on _________.

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below).  A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control:  (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5. Forfeiture of Restricted Share Units.

(a) Except as otherwise described in this Section 5, any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee ceases for any reason to be employed by the Company or a Subsidiary at any time prior to such shares becoming nonforfeitable in accordance with Section 4 hereof, unless the Committee determines to provide otherwise at the time of the cessation of the Grantee’s employment.   For the purposes of this Agreement, the Grantee’s employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Grantee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Grantee’s employment with the Company or any Subsidiary.

(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units.  Subject to Section 10, on the 70th day after such time as the Restricted Share Units shall become nonforfeitable as specified in this Agreement, shares of Common Stock underlying such Restricted Share Units shall be transferred to the Grantee, except as otherwise provided in Section 8[; provided, however, that the Committee, in its sole discretion, may settle the award of Restricted Share Units wholly or partly in cash].

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7. Dividend, Voting and Other Rights.  The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units until the date on which the shares of Common Stock are transferred to the Grantee pursuant to Section 6 above and a stock certificate representing such shares of Common Stock is issued to the Grantee.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall not pay to the Grantee any dividends with respect to the Restricted Share Units.

8. Retention of Common Stock by the Company; Withholding.  The shares of Common Stock underlying the Restricted Share Units shall be released to the Grantee by the Company’s transfer agent at the direction of the Company.  At such time as the Restricted Share Units become nonforfeitable and payable as specified in this Agreement, the Company shall direct the transfer agent to forward all such nonforfeitable shares of Common Stock to the Grantee; provided, however, that if the Grantee has notified the Company of his or her election to satisfy any tax obligations by surrender of a portion of such shares, the transfer agent will be directed to forward the remaining balance of shares after the amount necessary for such taxes has been deducted.  [The cash, if any, paid to Grantee pursuant to Section 6 above shall be reduced by any required tax withholding or other required governmental deduction.]  The foregoing provisions of this Section 8 are in all events subject to Section 10.

9. Compliance with Law.  The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.

10. Compliance with Section 409A of the Code.

(a) Notwithstanding any provision of this Agreement to the contrary, including Exhibit A, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment.  Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death.  In the event this Section 10(a) applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

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(b) Subject to Section 10(a), if (i) Restricted Share Units become nonforfeitable due to the application of Section 4(b), (ii) the Change in Control is not described by Section 409A(a)(2)(A)(v) of the Code and (iii) any payment that would otherwise be received by the Grantee would be considered deferred compensation under Section 409A, then such payment will instead be paid on the 30th day after the earliest of (x) the applicable date set forth in Section 4(a) on which the Restricted Share Units would otherwise have become nonforfeitable, (y) the Grantee’s separation from service, and (z) a Change in Control that is described by Section 409A(a)(2)(A)(v) of the Code.  In the event this Section 10(b) applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the 30th day after the earliest of the dates specified in clauses (i), (ii) and (iii) above.

11. Relation to Other Benefits.  Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled.

12. Relation to Plan.  This Agreement is subject to the terms and conditions of the Plan.  In the event of any inconsistent provisions between this Agreement and the Plan, the Plan shall govern.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan.  The Committee, acting pursuant to the Plan shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with this grant.

13. Employment Rights.  This Agreement shall not confer on Grantee any right with respect to the continuance of employment or other services with the Company or any Subsidiary.  No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14. Communications.  All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

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If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention:  General Counsel

If to Grantee, at: Grantee’s address provided by Grantee on the last page hereof

Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

15. Interpretation.  The interpretation and construction of this Agreement by the Committee shall be final and conclusive.  No member of the Committee shall be liable for any such action or determination made in good faith.

16. Amendment in Writing.  This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

17. Integration.  The Restricted Share Units are granted pursuant to the Plan.  Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to all of the terms and conditions of the Plan, a copy of which is available upon request and which is incorporated herein by reference.  As such, this Agreement and the Plan embody the entire agreement and understanding of the Company and Grantee and supersede any prior understandings or agreements, whether written or oral, with respect to the Restricted Share Units.

18. Severance.  In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

19. Governing Law.  This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

20. Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES,

INCORPORATED

By:

Name:

Title:

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions of the Plan and the terms and conditions hereinabove set forth.

Date:
		Grantee
GRANTEE:	Please complete/update the following information.
Name:
Home Address:
Social Security Number:
Date of Hire:
Subsidiary or Division:

EX-10.6

Exhibit 10.6

[FORM]

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN

RESTRICTED SHARE UNIT AGREEMENT

FOR OFFICERS AND KEY EMPLOYEES

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of __________, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and _________ (“Grantee”).  Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”).

W I T N E S S E T H:

A.            Grantee is an employee of the Company or a Subsidiary of the Company; and

B.            The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”);

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and the Plan, the Company hereby grants to the Grantee __________ Restricted Share Units (the “Grant”). Each Restricted Share Unit shall represent the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”). This Agreement constitutes an “Evidence of Award” under the Plan.

2. Date of Grant. The effective date of the grant of the Restricted Share Units is _____________________ (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units. Neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, unless earlier forfeited in accordance with Section 5, the Restricted Share Units shall become nonforfeitable on __________(each, a “Vesting Date”).

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below). A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i)             the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control: (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii)            individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii)           consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv)           approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5. Forfeiture of Restricted Share Units.

(a) Except as otherwise described in this Section 5, any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee ceases for any reason to be employed by the Company or a Subsidiary at any time prior to such shares becoming nonforfeitable in accordance with Section 4 hereof, unless the Committee determines to provide otherwise at the time of the cessation of the Grantee’s employment. For the purposes of this Agreement, the Grantee’s employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Grantee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Grantee’s employment with the Company or any Subsidiary.

(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units. Subject to Section 10, on the 70th day after such time as the Restricted Share Units shall become nonforfeitable as specified in this Agreement, shares of Common Stock underlying such Restricted Share Units shall be transferred to the Grantee, except as otherwise provided in Section 8 [; provided, however, that the Committee, in its sole discretion, may settle the award of Restricted Share Units wholly or partly in cash].

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7. Dividend, Voting and Other Rights.  The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units until the date on which the shares of Common Stock are transferred to the Grantee pursuant to Section 6 above and a stock certificate representing such shares of Common Stock is issued to the Grantee.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall not pay to the Grantee any dividends with respect to the Restricted Share Units.

8. Retention of Common Stock by the Company; Withholding. The shares of Common Stock underlying the Restricted Share Units shall be released to the Grantee by the Company’s transfer agent at the direction of the Company.  At such time as the Restricted Share Units become nonforfeitable and payable as specified in this Agreement, the Company shall direct the transfer agent to forward all such nonforfeitable shares of Common Stock to the Grantee; provided, however, that if the Grantee has notified the Company of his or her election to satisfy any tax obligations by surrender of a portion of such shares, the transfer agent will be directed to forward the remaining balance of shares after the amount necessary for such taxes has been deducted. [The cash, if any, paid to Grantee pursuant to Section 6 above shall be reduced by any required tax withholding or other required governmental deduction.]  The foregoing provisions of this Section 8 are in all events subject to Section 10.

9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.

10. Compliance with Section 409A of the Code.

(a) Notwithstanding any provision of this Agreement to the contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment.  Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death.  In the event this Section 10(a) applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

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(b) Subject to Section 10(a), if (i) Restricted Share Units become nonforfeitable due to the application of Section 4(b), (ii) the Change in Control is not described by Section 409A(a)(2)(A)(v) of the Code and (iii) any payment that would otherwise be received by the Grantee would be considered deferred compensation under Section 409A, then such payment will instead be paid on the 30th day after the earliest of (x) the applicable date set forth in Section 4(a) on which the Restricted Share Units would otherwise have become nonforfeitable, (y) the Grantee’s separation from service, and (z) a Change in Control that is described by Section 409A(a)(2)(A)(v) of the Code.  In the event this Section 10(b) applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the 30th day after the earliest of the dates specified in clauses (i), (ii) and (iii) above.

11. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled.

12. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistent provisions between this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee, acting pursuant to the Plan shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with this grant.

13. Employment Rights. This Agreement shall not confer on Grantee any right with respect to the continuance of employment or other services with the Company or any Subsidiary.  No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14. Communications. All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention:  General Counsel

If to Grantee, at: Grantee’s address provided by Grantee on the last page hereof

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Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

15. Interpretation. The interpretation and construction of this Agreement by the Committee shall be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith.

16. Amendment in Writing. This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

17. Integration.  The Restricted Share Units are granted pursuant to the Plan.  Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to all of the terms and conditions of the Plan, a copy of which is available upon request and which is incorporated herein by reference.  As such, this Agreement and the Plan embody the entire agreement and understanding of the Company and Grantee and supersede any prior understandings or agreements, whether written or oral, with respect to the Restricted Share Units.

18. Severance. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

19. Governing Law. This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES,

INCORPORATED

By:

Name:

Title:

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions of the Plan and the terms and conditions hereinabove set forth.

Date:
		Grantee
GRANTEE:	Please complete/update the following information.
Name:
Home Address:
Social Security Number:
Date of Hire:
Subsidiary or Division:

EX-10.7

Exhibit 10.7

[FORM]

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN

RESTRICTED SHARE UNIT AGREEMENT

FOR NON-OFFICER DIRECTORS

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of __________, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and __________ (“Grantee”).  Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”)

W I T N E S S E T H:

A.           The Plan provides for an automatic grant of Restricted Share Units to each Non-Officer director on the date of the annual meeting of the Company’s stockholders or, with respect to a newly elected Non-Officer Director, upon the date of such director’s election to the Board (such date, the “Date of Grant”);

B.            Grantee is a Non-Officer Director of the Company; and

C.            The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”).

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units.  Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee __________ Restricted Share Units (the “Grant”).  This Agreement constitutes an “Evidence of Award” under the Plan.

2. Date of Grant.  The effective date of the Grant is ________ (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units.  Other than as provided herein, neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, one-third of the Restricted Share Units shall become nonforfeitable on each of the first three anniversaries of the Date of Grant (each applicable date, a “Vesting Date”), unless earlier forfeited in accordance with Section 5.

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below).  A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control:  (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

(c) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall immediately become nonforfeitable upon Grantee’s termination of service from the Board (i) after Grantee has both attained age 65 and completed at least five years of service as a Director, (ii) because of the Grantee’s death, or (iii) because the Grantee has become permanently disabled.

5. Forfeiture of Restricted Share Units.

(a) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee’s service as a non-officer director ceases for any reason, other than subsequently becoming an officer or employee of the Company or a Subsidiary while remaining a director, prior to the applicable Vesting Date and prior to such shares becoming nonforfeitable in accordance with Section 4 hereof.

(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units.  The restrictions on transfer on the Restricted Share Units imposed by Section 3 shall lapse and the shares of Common Stock underlying the Restricted Share Units shall be transferred to the Grantee (or to the Grantee’s estate as the case may be), except as otherwise provided in Section 8 and Section 10, upon the first to occur of the following events[; provided, however, that the Committee, in its sole discretion, may settle the award of Restricted Share Units wholly, or partly in cash]:

(a) the death of the Grantee;

(b) the disability of the Grantee, as the term “disability” is defined for purposes of Section 409A of the Code;

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(c) a Change in Control, provided that such event constitutes a “change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation,” as that term is defined for purposes of Section 409A of the Code; and

(d) the separation from service from the Company of the Grantee, as the term “separation from service” is defined for purposes of Section 409A of the Code.

7. Dividend, Voting and Other Rights.  The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units until the date on which the shares of Common Stock are transferred to the Grantee pursuant to Section 6 above.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall pay to the Grantee whenever a normal cash dividend is paid on shares of Common Stock, an amount of cash equal to the product of the per-share amount of the dividend paid times the number of such Restricted Share Units.  Such payment shall be made within 30 days after the corresponding dividend payment is made to the stockholders of the Company.

8. Retention of Common Stock by the Company.  At such time as the Restricted Share Units become payable as specified in this Agreement, the Company shall direct the transfer agent to forward all such payable shares of Common Stock to the Grantee, except in the event that the Grantee has notified the Company of his or her election to satisfy any tax obligations by surrender of a portion of such shares, the transfer agent will be directed to forward the remaining balance of shares after the amount necessary for such taxes has been deducted.

9. Compliance with Law.  The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.  In such case, the Company shall comply with Treasury Regulation section 1.409A-2(b)(7)(ii).

10. Compliance with Section 409A of the Code.  Notwithstanding any provision of this Agreement to the contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment.  Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death.  In the event this Section 10 applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

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11. Communications.  All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention:  General Counsel

If to Grantee, at: Grantee’s address provided by Grantee on the last page hereof

Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

12. Interpretation.  The interpretation and construction of this Agreement by the Committee shall be final and conclusive.  No member of the Committee shall be liable for any such action or determination made in good faith.

13. Amendment in Writing.  This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

14. Integration.  The Restricted Share Units are granted pursuant to the Plan.  Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to all of the terms and conditions of the Plan, including but not limited to Section 10 of the Plan.  A copy of the Plan is available upon request and is incorporated herein by reference.  As such, this Agreement and the Plan embody the entire agreement and understanding of the Company and Grantee and supersede any prior understandings or agreements, whether written or oral, with respect to the Restricted Share Units.

15. Severance.  In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

16. Governing Law.  This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

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17. Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

By:

Name:

Title:

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions of the Plan and the terms and conditions hereinabove set forth.

Date:
	Grantee

GRANTEE:    Please complete/update the following information.

Name:

Home Address:

Social Security Number:

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EX-10.8

Exhibit 10.8

[FORM]

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN

RESTRICTED SHARE UNIT AGREEMENT

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of ________________, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and Dinesh Paliwal (“Grantee”).  Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”).

W I T N E S S E T H:

A.           Grantee is an employee of the Company or a Subsidiary of the Company; and

B.            The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”).

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee ___________ Restricted Share Units (the “Grant”). Each Restricted Share Unit shall represent the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”). This Agreement constitutes an “Evidence of Award” under the Plan.

2. Date of Grant. The effective date of the Grant is _________________ (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units. Neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, the Restricted Share Units shall become nonforfeitable on the third anniversary of the Date of Grant (the “Vesting Date”), unless earlier forfeited in accordance with Section 5.

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below). A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control: (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5. Forfeiture of Restricted Share Units.

(a) Except as otherwise described in this Section 5, any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee ceases for any reason to be employed by the Company or a Subsidiary at any time prior to such shares becoming nonforfeitable in accordance with Section 4 hereof, unless the Committee determines to provide otherwise at the time of the cessation of the Grantee’s employment; provided, however, that such amounts shall become fully nonforfeitable if the Grantee’s employment terminates (a “Qualifying Termination”) on account of his death or Disability, or if his employment is terminated by the Company without Cause or by the Grantee for Good Reason (each term as defined in the letter agreement between Grantee and the Company, dated as of May 8, 2007, as amended from time to time (the “Letter Agreement”)). For the purposes of this Agreement, the Grantee’s employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Grantee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Grantee’s employment with the Company or any Subsidiary.

(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units. Subject to Section 10, at such time as the Restricted Share Units shall become nonforfeitable as specified in this Agreement, shares of Common Stock underlying such Restricted Share Units shall be transferred to the Grantee on the 30th day following the earliest of (i) the applicable Vesting Date, (ii) the date of his Qualifying Termination, provided that such Qualifying Termination constitutes a “separation from service” (within the meaning of Section 409A) or (iii) a Change in Control, provided that such Change in Control satisfies the requirements for a change in control under Section 409A(a)(2)(A)(v) of the Code and, if not, on the earlier of the date specified in clause (i) or (ii) above; provided, however, that the Committee in its sole discretion may settle the award of Restricted Share Units wholly or partly in cash, in which case the fair market of the Restricted Share Units shall be equal to the fair market value of the shares of Common Stock underlying such Restricted Share Units (with such fair market value determined in accordance with the definition under the Plan as of the date such shares would have been transferred under this Agreement but for the Committee’s discretion to settle the Restricted Share Units in cash, subject to withholding as provided in Section 8).

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7. Dividend, Voting and Other Rights.  The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall pay to the Grantee whenever a normal cash dividend is paid on shares of Common Stock, an amount of cash equal to the product of the per-share amount of the dividend paid times the number of such Restricted Share Units.  Such payment shall be made within 30 days after the corresponding dividend payment is made to the stockholders of the Company.

8. Retention of Common Stock by the Company; Withholding. The shares of Common Stock underlying the Restricted Share Units shall be released to the Grantee by the Company’s transfer agent at the direction of the Company.  At such time as the Restricted Share Units become nonforfeitable and payable as specified in this Agreement, the Company shall direct the transfer agent to forward all such shares of Common Stock to the Grantee; provided, however, that if the Grantee has notified the Company of his election to satisfy any tax obligations by surrender of a portion of such shares, the transfer agent will be directed to forward the remaining balance of shares after the amount necessary for such taxes has been deducted.  The cash, if any, paid to Grantee pursuant to Section 6 above shall be reduced by any required tax withholding or other required governmental deduction.

9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.

10. Compliance with Section 409A of the Code.  Notwithstanding any provision of this Agreement to the contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment.  Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death.  In the event this Section 10 applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

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11. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled.

12. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistent provisions between this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee, acting pursuant to the Plan shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with this grant.

13. Employment Rights. This Agreement shall not confer on Grantee any right with respect to the continuance of employment or other services with the Company or any Subsidiary.  No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14. Communications. All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention:  General Counsel

If to Grantee, at: Grantee’s most recent address on file with the Company

Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

15. Interpretation. The interpretation and construction of this Agreement by the Committee shall be final and conclusive; provided, however, that the definitions of Cause, Good Reason and Disability and any other provision covered in the Letter Agreement shall be interpreted in the manner set forth in the Letter Agreement.  No member of the Committee shall be liable for any such action or determination made in good faith.

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16. Amendment in Writing. This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

17. Integration.  The Restricted Share Units are granted pursuant to the Plan.  Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to all of the terms and conditions of the Plan, a copy of which is available upon request and which is incorporated herein by reference.  As such, this Agreement, the Plan and the Letter Agreement embody the entire agreement and understanding of the Company and Grantee and supersede any prior understandings or agreements, whether written or oral, with respect to the Restricted Share Units.

18. Severance. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

19. Governing Law. This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
By:
Name:
Title:
By:
Name:
Title:	Chairman – Compensation and Option Committee

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions hereinabove set forth.

Date:
	Dinesh Paliwal

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EX-10.9

Exhibit 10.9

[FORM]

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”), dated as of ________________, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (the “Company”), and Dinesh Paliwal (“Optionee”). Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”).

W I T N E S S E T H:

A.           Optionee is an employee of the Company or a Subsidiary of the Company; and

B.           The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”).

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Optionee agree as follows:

1. Grant of Option.  The Company hereby grants to Optionee, effective as of the Date of Grant (as defined in Section 3), an option (the “Option”) to purchase __________ shares (the “Option Shares”) of the Company’s common stock, par value $0.01 per share (“Common Shares”), at the price of $_____ per share (the “Option Price”).  This Agreement constitutes an “Evidence of Award” under the Plan.

2. Type of Option.  The Option is intended to be a nonqualified stock option and shall not be treated as an “incentive stock option” within the meaning of Section 422 of the Code.

3. Date of Grant.  The effective date of the grant of this Option is ____________ (the “Date of Grant”).

4. Date of Expiration.  This Option shall expire on the 10th anniversary of the Date of Grant (the “Date of Expiration”), unless earlier terminated under Section 7(a).

5. Vesting of Option.

(a)           Except as otherwise provided in this Agreement, the Option shall become vested and exercisable to the extent of one-third of the Option Shares on each of the first three anniversaries of the Date of Grant.

(b)           Notwithstanding the provisions of Section 5(a) above, the Option shall become immediately exercisable in full upon the occurrence of a Change in Control (as defined below) on or before the Termination Date.  A “Change in Control” means the occurrence of any of the following events:

(i)            the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 5(b)(i), the following acquisitions shall not constitute a Change in Control: (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 5(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 5(b)(iii) below;

(ii)            individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a 12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii)          consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv)           approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 5(b)(iii) hereof.

(v)           Notwithstanding the provisions of Section 5(a) above, (i) the Option shall become immediately exercisable in full if Optionee dies or becomes permanently disabled while in the employ of the Company or a Subsidiary, or in the event that the Optionee is terminated by the Company without Cause or terminates for Good Reason (each as defined in the Letter Agreement between Optionee and the Company, dated as of May 8, 2007, as amended from time to time (the “Letter Agreement”)), and (ii) the Committee, in its sole discretion, may determine that all or any portion of the Option shall become immediately exercisable if Optionee retires while in the employ of the Company or a Subsidiary.

6. Manner of Exercise.

(a)           To the extent the Option is exercisable in accordance with Section 5, the Option may be exercised by Optionee at any time, or from time to time, in whole or in part on or prior to the Termination Date; provided, however, that Optionee must exercise the Option in multiples of 50 Option Shares unless fewer than 50 Option Shares are available for purchase by Optionee under this Agreement at the time of exercise.

(b)           Optionee shall exercise the Option by delivering a signed written notice to the Company, which notice shall specify the number of Option Shares to be purchased and be accompanied by payment in full of the Option Price and any required taxes (as provided in the Plan) for the number of Option Shares specified for purchase.

(c)           Upon full payment of the Option Price and any required taxes, and subject to the applicable terms and conditions of the Plan and the terms and conditions of this Agreement, the Company will cause certificates for the Option Shares purchased hereunder to be delivered to Optionee.

(d)           The Optionee may reduce options to cover minimum required tax withholding and, if there has been a Change in Control, to pay the Option Price.

7. Termination.

(a)           The Option shall terminate on the earliest of the following dates (such date, the “Termination Date”):

(i)            the date that Optionee’s employment with the Company terminates for any reason other than death or permanent disability; provided, however, that the Optionee shall have 90 days from the date of termination of employment to exercise the portion of the Option that had vested on or prior to the termination of Optionee’s employment; provided further, that the Optionee shall have 180 days from the date of termination to exercise the portion of the Option that is vested on or prior to the termination of Optionee’s employment if such termination is by the Company without Cause or by the Optionee for Good Reason (each as defined in the Letter Agreement, or if the Severance Agreement dated as of May 8, 2007 between the Company and the Optionee, or any successor agreement (the “Severance Agreement”) is operative, as defined in the Severance Agreement).

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(ii)           one year after the death or permanent disability of Optionee, if Optionee dies or becomes permanently disabled while an employee of the Company or a Subsidiary, or

(iii)           the Date of Expiration.

(b)           During the periods referred to in Section 7(a)(i) above and the one year period referred to in Section 7(a)(ii) above, the Option may be exercised only to the extent that, at the time that Optionee ceases to be an employee of the Company or a Subsidiary, it is exercisable pursuant to Section 5 hereof.

(c)           For the purposes of this Agreement, the continuous employment of Optionee with the Company or a Subsidiary shall not be deemed to have been interrupted, and Optionee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Optionee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Optionee’s employment with the Company or any Subsidiary.

(d)           Notwithstanding anything elsewhere to the contrary, in no event shall Section 17(g) of the Plan be applicable to the Option.

8. Share Certificates.  All certificates evidencing Option Shares purchased pursuant hereto, and any certificates for Common Shares issued as dividends on, in exchange of, or as replacements for, certificates evidencing Option Shares which, in the opinion of counsel for the Company, are subject to similar legal requirements, shall have endorsed thereon before issuance such restrictive or other legends as the Company’s counsel may deem necessary or advisable.  The Company and any transfer agent shall not be required to register or record the transfer of any such shares unless and until the Company or its transfer agent shall have received from Optionee’s counsel an opinion, in a form satisfactory to the Company, that any such transfer will not be in violation of any applicable law, rule or regulation.  Optionee agrees not to sell, assign, pledge or otherwise dispose of any Option Shares or any Common Shares that are subject to restrictions on transfer described in this Section 8 without the Company first receiving such an opinion.

9. Transfer.  The Option may not be transferred by Optionee except by will or the laws of descent and distribution and may not be exercised during the lifetime of Optionee except by Optionee or Optionee’s guardian or legal representative acting on behalf of Optionee in a fiduciary capacity under state law and court supervision.

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10. Compliance with Law.  The Company shall make reasonable efforts to comply with all applicable federal or state securities laws; provided, however, that notwithstanding any other provision of this Agreement, the Option shall not be exercisable if the exercise would result in a violation of any such laws.

11. Employment Rights.  This Agreement shall not confer on Optionee any right with respect to the continuance of employment or other service with the Company or any Subsidiary.  No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Optionee at any time.

12. Communications.  All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention: General Counsel

If to Optionee, at: Optionee’s most recent address on file with the Company

Either the Company or Optionee may change the above designated address by written notice to the other specifying such new address.

13. Interpretation.  The interpretation and construction of this Agreement by the Committee shall be final and conclusive; provided, however, that the definitions of Cause, Good Reason, and Disability and any other provision covered in the Letter Agreement or Severance Agreement shall be interpreted in the manner set forth in the Letter Agreement or the Severance Agreement, as applicable. No member of the Committee shall be liable for any such action or determination made in good faith.

14. Amendment in Writing.  This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

15. Integration.  The Option is granted pursuant to the Plan. Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to all of the terms and conditions of the Plan, a copy of which is available upon request and which is incorporated herein by reference, the Letter Agreement and the Severance Agreement.  As such, this Agreement, the Plan, the Letter Agreement and the Severance Agreement embody the entire agreement and understanding of the Company and Optionee and supersede any prior understandings or agreements, whether written or oral, with respect to the Option.

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16. Severance.  In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

17. Governing Law.  This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

18. Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
By:
Name:
Title:
By:
Name:
Title:	Chairman – Compensation and Option Committee

The undersigned Optionee hereby acknowledges receipt of an executed original of this Agreement and accepts the Option subject to the applicable terms and conditions of the Plan and the terms and conditions hereinabove set forth.

Date:
	Dinesh Paliwal

7

EX-10.10

Exhibit 10.10

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

RESTRICTED SHARE UNIT AGREEMENT

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of January 2, 2008, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and Dinesh Paliwal (“Grantee”).

W I T N E S S E T H:

A.           Grantee is an employee of the Company or a Subsidiary of the Company; and

B.            The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”).

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units. The Restricted Share Units granted under this Agreement are not granted under any stock incentive plan adopted by the Company. Notwithstanding the foregoing, other than as provided herein, this Agreement shall be construed as if such Restricted Share Units were subject to the terms, conditions, and restrictions set forth in this Agreement and in the Company’s 2002 Stock Option and Incentive Plan, as amended (the “Plan”). The Company hereby grants to the Grantee 34,608 Restricted Share Units (the “Grant”). Each Restricted Share Unit shall represent the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”).

2. Date of Grant. The effective date of the Grant is January 2, 2008 (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units. Neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, the Restricted Share Units shall become nonforfeitable as follows (each applicable date, a “Vesting Date”), unless earlier forfeited in accordance with Section 5:

(i) 2,770 Restricted Share Units shall become nonforfeitable on March 1, 2008;

(ii) one-fifth of 8,039 Restricted Share Units shall become nonforfeitable on each of first five anniversaries of the Date of Grant;

(iii) 2,903 Restricted Share Units shall become nonforfeitable on March 1, 2009;

(iv) 12,857 Restricted Share Units shall become nonforfeitable on March 1, 2010; and

(v) 8,039 Restricted Share Units shall become nonforfeitable on July 1, 2010.

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below). A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control: (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

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(iii) consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5. Forfeiture of Restricted Share Units.

(a) Except as otherwise described in this Section 5, any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee ceases for any reason to be employed by the Company or a Subsidiary at any time prior to such shares becoming nonforfeitable in accordance with Section 4 hereof, unless the Committee determines to provide otherwise at the time of the cessation of the Grantee’s employment; provided, however, that such amounts shall become fully nonforfeitable if the Grantee’s employment terminates (a “Qualifying Termination”) on account of his death or Disability, or if his employment is terminated by the Company without Cause or by the Grantee for Good Reason (each term as defined in the Letter Agreement between Grantee and the Company, dated as of May 8, 2007, as amended from time to time (the “Letter Agreement”)). For the purposes of this Agreement, the Grantee’s employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Grantee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Grantee’s employment with the Company or any Subsidiary.

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(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units. Subject to Section 10, the Grantee shall be paid in cash, on the 30th day following the earliest of (i) the applicable Vesting Date, (ii) the date of his Qualifying Termination, provided that such Qualifying Termination constitutes a “separation from service” (within the meaning of Section 409A) or (iii) a Change in Control, provided that such Change in Control satisfies the requirements for a change in control under Section 409A(a)(2)(A)(v) of the Code and, if not, on the earlier of the date specified in clause (i) or (ii) above, an amount equal the fair market value of the shares of Common Stock underlying such Restricted Share Units (with such fair market value determined in accordance with the definition under the Plan as of the date the applicable Restricted Share Units become nonforfeitable as specified in this Agreement, subject to withholding as provided in Section 8).

7. Dividend, Voting and Other Rights. The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall pay to the Grantee whenever a normal cash dividend is paid on shares of Common Stock, an amount of cash equal to the product of the per-share amount of the dividend paid times the number of such Restricted Share Units.  Such payment shall be made within 30 days after the corresponding dividend payment is made to the stockholders of the Company.

8. Withholding. The cash paid to Grantee pursuant to Section 6 above shall be reduced by any required tax withholding or other required governmental deduction.

9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.

10. Compliance with Section 409A of the Code.  Notwithstanding any provision of this Agreement to the contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment. Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death. In the event this Section 10 applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above.  To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

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11. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled.

12. Relation to Plan. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee, acting pursuant to the Plan shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with this grant.

13. Employment Rights. This Agreement shall not confer on Grantee any right with respect to the continuance of employment or other services with the Company or any Subsidiary. No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14. Communications. All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention: General Counsel

If to Grantee, at: Grantee’s most recent address on file with the Company

Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

15. Interpretation. The interpretation and construction of this Agreement by the Committee shall be final and conclusive; provided, however, that the definitions of Cause, Good Reason and Disability and any other provision covered in the Letter Agreement shall be interpreted in the manner set forth in the Letter Agreement. No member of the Committee shall be liable for any such action or determination made in good faith.

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16. Amendment in Writing. This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

17. Severance. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

18. Governing Law. This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
By:	/s/ John Stacey
Name:	John Stacey
Title:	Chief Human Resources Officer
By:	/s/ Edward Meyer
Name:	Edward Meyer
Title:	Chairman – Compensation and Option Committee

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions hereinabove set forth.

Date:	December 26, 2008	/s/ Dinesh Paliwal
		Dinesh Paliwal

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EX-10.11

Exhibit 10.11

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN

RESTRICTED SHARE UNIT AGREEMENT

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of December 3, 2008, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and Dinesh Paliwal (“Grantee”). Capitalized terms used herein but not defined shall have the meanings assigned to those terms in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”).

W I T N E S S E T H:

A.           Grantee is an employee of the Company or a Subsidiary of the Company; and

B.           The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”).

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee 73,814 Restricted Share Units (the “Grant”). Each Restricted Share Unit shall represent the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”). This Agreement constitutes an “Evidence of Award” under the Plan.

2. Date of Grant. The effective date of the Grant is December 3, 2008 (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units. Neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, the Restricted Share Units shall become nonforfeitable as follows (each applicable date, a “Vesting Date”), unless earlier forfeited in accordance with Section 5:

(i) 12,913 Restricted Share Units shall become nonforfeitable on December 3, 2009;

(ii) 32,460 Restricted Share Units shall become nonforfeitable on March 1, 2010;

(iii) 20,911 Restricted Share Units shall become nonforfeitable on July 1, 2010;

(iv) 3,765 Restricted Share Units shall become nonforfeitable on July 1, 2011; and

(v) 3,765 Restricted Share Units shall become nonforfeitable on July 1, 2012.

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below). A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control: (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5. Forfeiture of Restricted Share Units.

(a) Except as otherwise described in this Section 5, any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee ceases for any reason to be employed by the Company or a Subsidiary at any time prior to such shares becoming nonforfeitable in accordance with Section 4 hereof, unless the Committee determines to provide otherwise at the time of the cessation of the Grantee’s employment; provided, however, that such amounts shall become fully nonforfeitable if the Grantee’s employment terminates (a “Qualifying Termination”) on account of his death or Disability, or if his employment is terminated by the Company without Cause or by the Grantee for Good Reason (each term as defined in the letter agreement between Grantee and the Company, dated as of May 8, 2007, as amended from time to time (the “Letter Agreement”)). For the purposes of this Agreement, the Grantee’s employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Grantee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Grantee’s employment with the Company or any Subsidiary.

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(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units. Subject to Section 10, at such time as the Restricted Share Units shall become nonforfeitable as specified in this Agreement, shares of Common Stock underlying such Restricted Share Units shall be transferred to the Grantee on the 30th day following the earliest of (i) the applicable Vesting Date, (ii) the date of his Qualifying Termination, provided that such Qualifying Termination constitutes a “separation from service” (within the meaning of Section 409A) or (iii) a Change in Control, provided that such Change in Control satisfies the requirements for a change in control under Section 409A(a)(2)(A)(v) of the Code and, if not, on the earlier of the date specified in clause (i) or (ii) above; provided, however, that the Committee in its sole discretion may settle the award of Restricted Share Units wholly or partly in cash, in which case the fair market of the Restricted Share Units shall be equal to the fair market value of the shares of Common Stock underlying such Restricted Share Units (with such fair market value determined in accordance with the definition under the Plan as of the date such shares would have been transferred under this Agreement but for the Committee’s discretion to settle the Restricted Share Units in cash, subject to withholding as provided in Section 8).

7. Dividend, Voting and Other Rights.  The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall pay to the Grantee whenever a normal cash dividend is paid on shares of Common Stock, an amount of cash equal to the product of the per-share amount of the dividend paid times the number of such Restricted Share Units.  Such payment shall be made within 30 days after the corresponding dividend payment is made to the stockholders of the Company.

8. Retention of Common Stock by the Company; Withholding. The shares of Common Stock underlying the Restricted Share Units shall be released to the Grantee by the Company’s transfer agent at the direction of the Company. At such time as the Restricted Share Units become nonforfeitable and payable as specified in this Agreement, the Company shall direct the transfer agent to forward all such shares of Common Stock to the Grantee; provided, however, that if the Grantee has notified the Company of his election to satisfy any tax obligations by surrender of a portion of such shares, the transfer agent will be directed to forward the remaining balance of shares after the amount necessary for such taxes has been deducted. The cash, if any, paid to Grantee pursuant to Section 6 above shall be reduced by any required tax withholding or other required governmental deduction.

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9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.

10. Compliance with Section 409A of the Code.  Notwithstanding any provision of this Agreement to the contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment. Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death. In the event this Section 10 applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

11. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled.

12. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistent provisions between this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee, acting pursuant to the Plan shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with this grant.

13. Employment Rights. This Agreement shall not confer on Grantee any right with respect to the continuance of employment or other services with the Company or any Subsidiary. No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14. Communications. All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

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If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention: General Counsel

If to Grantee, at: Grantee’s most recent address on file with the Company

Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

15. Interpretation. The interpretation and construction of this Agreement by the Committee shall be final and conclusive; provided, however, that the definitions of Cause, Good Reason and Disability and any other provision covered in the Letter Agreement shall be interpreted in the manner set forth in the Letter Agreement. No member of the Committee shall be liable for any such action or determination made in good faith.

16. Amendment in Writing. This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

17. Integration. The Restricted Share Units are granted pursuant to the Plan. Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to all of the terms and conditions of the Plan, a copy of which is available upon request and which is incorporated herein by reference. As such, this Agreement, the Plan and the Letter Agreement embody the entire agreement and understanding of the Company and Grantee and supersede any prior understandings or agreements, whether written or oral, with respect to the Restricted Share Units.

18. Severance. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

19. Governing Law. This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By:	/s/ John Stacey
Name:  John Stacey
Title:  Chief Human Resources Officer
By:	/s/ Edward Meyer
Name:  Edward Meyer
Title:  Chairman - Compensation and Option Committee

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions hereinabove set forth.

Date:	December 26, 2008	/s/ Dinesh Paliwal
		Dinesh Paliwal

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EX-10.12

Exhibit 10.12

HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

RESTRICTED SHARE UNIT AGREEMENT

THIS RESTRICTED SHARE UNIT AGREEMENT (this “Agreement”), dated as of September 17, 2008, is entered into between HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED a Delaware corporation (the “Company”), and Herbert Parker (“Grantee”).

W I T N E S S E T H:

A.           Grantee is an employee of the Company or a Subsidiary of the Company; and

B.           The execution of this Agreement in the form hereof has been authorized by the Compensation and Option Committee of the Board (the “Committee”).

NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth in this Agreement, the Company and Grantee agree as follows:

1. Grant of Restricted Share Units. The Restricted Share Units granted under this Agreement are not granted under any stock incentive plan adopted by the Company. Notwithstanding the foregoing, other than as provided herein, this Agreement shall be construed as if such Restricted Share Units were subject to the terms, conditions, and restrictions set forth in this Agreement and in the Company’s Amended and Restated 2002 Stock Option and Incentive Plan, as amended (the “Plan”). The Company hereby grants to the Grantee 28,344 Restricted Share Units (the “Grant”). Each Restricted Share Unit shall represent the right to receive one share of the Company’s common stock, par value $0.01 per share (“Common Stock”).

2. Date of Grant. The effective date of the Grant is September 17, 2008 (the “Date of Grant”).

3. Restrictions on Transfer of Restricted Share Units. Neither the Restricted Share Units granted hereby nor any interest therein shall be transferable other than by will or the laws of descent and distribution.

4. Vesting of Restricted Share Units.

(a) Except as otherwise provided in this Agreement, the Restricted Share Units shall become nonforfeitable as follows (each applicable date, a “Vesting Date”), unless earlier forfeited in accordance with Section 5:

(i) 23,595 Restricted Share Units shall become nonforfeitable on February 2, 2009; and

(ii) 4,749 Restricted Share Units shall become nonforfeitable on May 13, 2010.

(b) Notwithstanding the provisions of Section 4(a) above, all Restricted Share Units shall become immediately nonforfeitable upon the occurrence of a Change in Control (as defined below). A “Change in Control” means the occurrence, before this Agreement terminates, of any of the following events:

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Voting Shares”); provided, however, that for purposes of this Section 4(b)(i), the following acquisitions shall not constitute a Change in Control: (A) any issuance of Voting Shares directly from the Company that is approved by the Incumbent Board (as defined in Section 4(b)(ii) below), (B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any acquisition of Voting Shares by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary or (D) any acquisition of Voting Shares by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) below;

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director after the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the Directors then constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-12 of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company or other transaction (each, a “Business Combination”), unless, in each case, immediately following the Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Shares immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from the Business Combination, or any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from the Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding Voting Shares of the entity resulting from the Business Combination and (C) at least a majority of the members of the board of directors of the entity resulting from the Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for the Business Combination; or

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(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 4(b)(iii) hereof.

5. Forfeiture of Restricted Share Units.

(a) Except as otherwise described in this Section 5, any of the Restricted Share Units that remain forfeitable in accordance with Section 4 hereof shall be forfeited if Grantee ceases for any reason to be employed by the Company or a Subsidiary at any time prior to such shares becoming nonforfeitable in accordance with Section 4 hereof, unless the Committee determines to provide otherwise at the time of the cessation of the Grantee’s employment. For the purposes of this Agreement, the Grantee’s employment with the Company or a Subsidiary shall not be deemed to have been interrupted, and Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer of Grantee’s employment among the Company and its Subsidiaries, (ii) an approved leave of absence of not more than 90 days, or (iii) the period of any leave of absence required to be granted by the Company under any law, rule, regulation or contract applicable to Grantee’s employment with the Company or any Subsidiary.

(b) Any of the Restricted Share Units that remain forfeitable in accordance with Section 4 shall be forfeited on the date that the Committee determines that such Restricted Share Units shall be forfeited under the circumstances described in Section 17(g) of the Plan.

6. Payment of Restricted Share Units. Subject to Section 10, the Grantee shall be paid in cash, on the 30th day following the earlier of (i) the applicable Vesting Date or (ii) a Change in Control, provided that such Change in Control satisfies the requirements for a change in control under Section 409A(a)(2)(A)(v) of the Code and, if not, on the earlier of the date specified in clause (i) above, or the date of his “separation from service” (within the meaning of Section 409A of the Code), an amount equal the fair market value of the shares of Common Stock underlying such Restricted Share Units (with such fair market value determined in accordance with the definition under the Plan as of the date the applicable Restricted Share Units become nonforfeitable as specified in this Agreement, subject to withholding as provided in Section 8).

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7. Dividend, Voting and Other Rights.  The Grantee shall have no rights of ownership in the Restricted Share Units and shall have no voting rights with respect to such Restricted Share Units.  From and after the Date of Grant and until the earlier of (a) the time when the Grantee receives the shares of Common Stock underlying the Restricted Share Units in accordance with Section 6 hereof or (b) the time when the Grantee’s right to receive the Restricted Share Units is forfeited in accordance with Section 5 hereof, the Company shall pay to the Grantee whenever a normal cash dividend is paid on shares of Common Stock, an amount of cash equal to the product of the per-share amount of the dividend paid times the number of such Restricted Share Units.  Such payment shall be made within 30 days after the corresponding dividend payment is made to the stockholders of the Company.

8. Withholding. The cash paid to Grantee pursuant to Section 6 above shall be reduced by any required tax withholding or other required governmental deduction.

9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would, in the reasonable opinion of the Company, result in a violation of any such law.

10. Compliance with Section 409A of the Code.  Notwithstanding any provision of this Agreement to the contrary, if the Grantee is a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”) and determined pursuant to procedures adopted by the Company from time to time) at the time of his “separation from service” (within the meaning of Section 409A) and if any payment to be received by the Grantee under Section 6 or Section 8 upon his separation from service would be considered deferred compensation (the “Delayed Payment”) under Section 409A, then the following provisions will apply to the Delayed Payment. Each such payment of deferred compensation that would otherwise be payable pursuant to Section 6 or Section 8 during the six-month period immediately following the Grantee’s separation from service will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date the Grantee incurs a separation from service and (ii) the Grantee’s death. In the event this Section 10 applies, the fair market value of the Restricted Share Units shall be the fair market value, as determined in accordance with the Plan, on the earlier of the dates specified in clauses (i) and (ii) above. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A and shall be interpreted consistent with Section 409A.

11. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled.

12. Relation to Plan. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee, acting pursuant to the Plan shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with this grant.

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13. Employment Rights. This Agreement shall not confer on Grantee any right with respect to the continuance of employment or other services with the Company or any Subsidiary. No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of Grantee at any time.

14. Communications. All notices, demands and other communications required or permitted hereunder or designated to be given with respect to the rights or interests covered by this Agreement shall be deemed to have been properly given or delivered when delivered personally or sent by certified or registered mail, return receipt requested, U.S. mail or reputable overnight carrier, with full postage prepaid and addressed to the parties as follows:

If to the Company, at: 400 Atlantic Street, Suite 1500

Stamford, CT  06901

Attention: General Counsel

If to Grantee, at: Grantee’s most recent address on file with the Company

Either the Company or Grantee may change the above designated address by written notice to the other specifying such new address.

15. Interpretation. The interpretation and construction of this Agreement by the Committee shall be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith.

16. Amendment in Writing. This Agreement may be amended as provided in the Plan; provided, however, that all such amendments shall be in writing.

17. Severance. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof and the remaining provisions hereof shall continue to be valid and fully enforceable.

18. Governing Law. This Agreement is made under, and shall be construed in accordance with, the laws of the State of Delaware.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Agreement is executed by a duly authorized representative of the Company on the day and year first above written.

HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By:	/s/ John Stacey
Name:	John Stacey
Title:	Chief Human Resources Officer

The undersigned Grantee acknowledges receipt of an executed original of this Agreement and accepts the Restricted Share Units subject to the applicable terms and conditions hereinabove set forth.

Date:	12/22/2008	/s/ Herbert K. Parker
		Grantee

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EX-10.13

Exhibit 10.13

 Harman International

400 Atlantic Street, Suite 1500 Stamford, Connecticut 06901 USA 203.328.3500

Dinesh C. Paliwal

Chairman and

Chief Executive Officer

January 9, 2009

Mr. Sachin Lawande

[Address Intentionally Omitted]

Dear Sachin:

On behalf of Harman International Industries, Incorporated (“Harman”) and subject to Compensation Committee approval, I would like to submit an offer to you for the position of President, Chief Technology Officer.  In this capacity you will report directly to me.  You will be located at our Stamford, Connecticut office.  This offer provides the following:

Start Date:  Your start date will be January 12, 2009.

Base Salary:  Your annual base salary will be $360,000 and payable in accordance with our regular payroll schedule in Stamford, CT.

Bonus:  You will be eligible to participate in the Management Incentive Compensation (MIC) program with a target bonus opportunity equal to 65% of your base salary and a 97.5% maximum bonus.  This bonus program is based upon Harman’s achievement of its business plan, as well as your achievement of personal performance goals.  Bonus payment will be prorated for fiscal 2009 to reflect time spent in your most recent role as Chief Innovation Officer and time spent in your new role.

Stock Options:  You will receive on your February 2, 2009 a one-time stock option award of 25,000 shares of Harman common stock under the terms of the Plan at a per share exercise price equal to the fair market value on the grant date.  The option will vest 20% per year over five years commencing on the first anniversary of the grant date, with acceleration and other provisions as provided in the Plan and your option agreement.  You will also be eligible for a stock option grant at the next general grant, at a level commensurate with your position.

Restricted Stock:  You will receive a one-time award of 5,000 shares of restricted Harman common stock under the Plan, vesting on February 2, 2012, if you are employed by Harman on that date.

Relocation: You will be eligible for relocation benefits in accordance with Harman’s Relocation policy (copy attached).

Severance:  If your employment is terminated by Harman without “Cause” within the first year of employment, you will receive one year of salary continuation and company-paid COBRA benefits during the salary continuation period.  Subject to the approval of the Compensation and Option Committee of the Board of Directors, your initial stock option grants and restricted stock award will vest upon such termination and you would have ninety (90) days thereafter within which to exercise, in accordance with the terms of the Plan, those stock options that are vested as of the Termination Date.    “Cause” is defined in Attachment A attached hereto.  Such payments will be subject to the execution by you of a release substantially in the form attached hereto as Attachment B.  Your salary continuation payments would commence on the 60th day after your termination of employment; provided, however, that if on the due date for any salary continuation payment, all revocation periods have not then expired with respect to your release, such payment will be forfeited.

Company Car:  You will be provided with a car allowance of $1,500 per month gross. Harman will also reimburse you for gas expenses.

Vacation:  As per company policy.

Other Benefits:  Your current participation will continue in the Harman benefit plans, as defined by Company policy and governing plan documents, currently including medical, dental, vision, life insurance, short and long-term disability insurance, tuition reimbursement, 401(k) Retirement Savings Plan and all Company-paid holidays.

Section 409A:  For purposes of Section 409A of the Internal Revenue Code, each salary continuation payment and Company-paid COBRA benefit will be considered one of a series of separate payments. If at the time of your separation from service (within the meaning of Section 409A), (i) you are a specified employee (within the meaning of Section 409A and using the identification methodology selected by Harman from time to time) and (ii) Harman makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then Harman will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the first business day after such six-month period, subject to the release requirements noted above.  To the extent that there is a material risk that any payments under this letter or any grant may result in the imposition of an additional tax to you under Section 409A, the company will reasonably cooperate with you to amend this letter and related documents such that such documents and payments thereunder comply with Section 409A without materially changing the economic value of this letter or the arrangements hereunder to either party.

The Company will, in connection with your employment, withhold from any compensation and benefits payable to you all federal, state, city and other taxes as requested by you or that the Company is required to withhold pursuant to any law or government regulation or ruling. Harman is not hereby offering you lifetime employment or employment for a fixed or implied period of time.  Either you or Harman may terminate your employment at any time, with or without cause or notice.  The at-will nature of your employment relationship cannot be changed except in a written document signed by you and me.  Upon termination of your employment, Harman will have no further obligations to you under this letter agreement except to the extent provided under “Severance” above.

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Any dispute concerning termination of your employment shall be resolved by final and binding arbitration before a neutral arbitrator.  The arbitrator shall be selected by mutual agreement or in accordance with the procedures of the American Arbitration Association and the employment arbitration rules of the American Arbitration Association shall apply.  Such arbitration shall be conducted in Stamford, Connecticut or such other location as to which you and Harman agree.  The law of Connecticut, without regard to its choice of law rules, shall govern any such dispute, and the arbitrator shall not have authority to vary or alter the terms of this letter.

You will be expected to sign the Company’s standard form of Invention and Secrecy Agreement on your start date.

Your acceptance of this offer and subsequent employment in this new position at Harman will be conditional upon Harman’s receipt of an acceptable background screening report which must be completed prior to your start date.  Upon your acceptance of this offer you will be contacted by human resources related to the background screening process.

You acknowledge and agree that your acceptance of this offer will violate no agreements or arrangements with other individuals or entities, or duties related to your current Harman role.  Please sign and return the original of this letter.  You should retain one copy of this letter for your files.

I look forward to working with you and welcome the contributions you will bring to this outstanding company.

Best regards,

/s/ Dinesh Paliwal

Dinesh C. Paliwal

Chairman & Chief Executive Officer

Harman International

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

ACCEPTED AND AGREED:

/s/ Sachin Lawande	01/09/2009
Sachin Lawande	Date

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Attachment  “A”

Termination Definitions

“Cause” means:

(i) You have been convicted of a felony; or

(ii) You have engaged in conduct that constitutes willful gross neglect or willful gross misconduct with respect to your employment duties which results in material economic harm to Harman, as determined by the Company’s Board of Directors in its reasonable discretion.

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Attachment “B”

 SAMPLE RELEASE (“Release”)

In consideration of the agreement by Harman International Industries, Inc. (the “Company” or “Employer”) to provide the benefits described in the above agreement between me and the Company dated __________ (the “Agreement”) and in consideration for the Company’s other promises in the Agreement and herein, I agree as follows:

1. Release of Known and Unknown Claims by Me.

a) I hereby release and forever discharge the Company and each of its associates, owners, stockholders, affiliates, divisions, subsidiaries, predecessors, successors, heirs, assigns, agents, directors, officers, partners, employees, representatives, and insurers (collectively, the “Company Releasees”) of and from any and all manner of action or actions, cause or causes of actions, in law or in equity, suits, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent, which I now have or may have against the Company or any Company Releasee to the extent acting by, through, under or in concert with the Company, by reason of any matter, cause or thing whatsoever from the beginning of time to the Effective Date.  The claims released herein include, without limitation, claims arising out of, based upon, or relating to the hire, employment, remuneration or termination of my employment and any claims constituting, arising out of, based upon, or relating to any tort theory, any express or implied contract, Title VII of the Civil Rights Act of 1964, the Civil Rights of 1866, the Civil Rights Act of 1991, the Age Discrimination in Employment Act (29 U.S.C. §§621 et seq.), the Equal Pay Act, the Fair Labor Standards Act,  the Consolidated Omnibus Budget Reconciliation Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Americans with Disabilities Act, and any other local, state or federal law governing the employment relationship.  Notwithstanding anything herein to the contrary, nothing herein or otherwise shall release the Company from any claims, rights or damages that I may have  (i) under the Agreement or this Release; (ii) as a stockholder in the Company; or (iii) that may not be released or waived as a matter of law.

b) I expressly acknowledge, agree and recite that (i) the release and waiver set forth in subsection 1(a) above are written in a manner I understand; (ii) in executing this Release, I am not waiving rights or claims that may arise after the date that this Release becomes effective; (iii) I am waiving rights or claims only in exchange for consideration in addition to anything to which I am otherwise entitled; (iv) I have entered into and executed this Release knowingly and voluntarily; (v) I have read and understand this Release in its entirety; and (vi) I have not been forced to sign this Release by any employee or agent of Employer.

c) I represent and warrant that there has been no assignment or other transfer of any interest in any claims released hereunder, and I agree to indemnify and hold the Company Releasees harmless from any liability, claims, demands, damages, reasonable costs, reasonable expenses and reasonable attorney’s fees incurred by the Company Releasees as a result of any person asserting any such assignment or transfer.  It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Company Releasees against me under this indemnity.

d) I agree that, except for claims made to or brought by the Equal Employment Opportunity Commission (“EEOC”), if I hereafter commence, join in, or in any manner seek relief through any suit arising out of, based upon or relating to any of the claims released hereunder, or in any manner assert against the Company Releasees any of the claims released hereunder, I shall pay to the Company Releasees in addition to any other damages caused to the Company Releasees thereby, all reasonable attorneys fees incurred by the Company Releasees in defending or otherwise responding to said suit or claim.

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e) It is my intention that my execution of this Release will forever bar every claim, demand, cause of action, charge and grievance released above.

2. Assumption of Risk. Each of the parties fully understands that if any fact with respect to any matter covered by this Release is found hereafter to be other than, or different from, the facts now believed by any of the parties to be true, each of the parties expressly accepts and assumes the risk of such possible difference in fact and agrees that the release provisions hereof shall be and remain effective notwithstanding any such difference in fact.

3. No Pending Actions.  I represent that I do not presently have on file any complaint, charge or claim (civil, administrative or criminal) against the Company in any court or administrative forum, or before any governmental agency or entity.  I represent that I will not hereafter file any complaints, charges or claims (civil, administrative or criminal) against the Company with any administrative, state, federal or other governmental entity, agency, board or court (except the EEOC) with respect to the claims released in Section 1 above.

4. Proprietary and Privileged Information.  I agree and acknowledge that during the course of my employment with Company, I received confidential and/or proprietary information relating to, without limitation, Company and its subsidiaries’ and affiliates’ business and marketing strategies, finances, benefit plans, systems, products and employees.  I agree on the date upon which I sign this Release to return to the Company any and all documents, papers and material (including any of the same stored on electronic media such as diskettes or tapes) containing such confidential and/or proprietary information which has not theretofore been returned to the Company, although I may retain the laptop computer as provided in the Agreement.  I further agree that, following my signing of this Release and for so long thereafter as such information is not in the public domain through no fault of mine, I will not use or disclose any such confidential and/or proprietary information, either directly or indirectly, to or for the benefit of any other person, firm or corporation.  The provisions of this Section 4 supplement, but do not replace, my legal and other contractual obligations (if any) relating to confidential Company information.

5. No Admission of Liability.  I understand and agree that neither the execution of this Release nor the performance of any term hereof shall constitute or be construed as an admission of any liability whatsoever by either the Company or me, as both the Company and I have consistently taken the position that it/I have no liability whatsoever to the other.

6. Confidentiality.  The terms and conditions of this Release shall be kept confidential by the Company as well as by me; provided, that it shall not be a breach of this Release for me to present this Release under seal to any court called upon to enforce it, and, so long as such disclosure is accompanied by a warning that the recipient must keep the information confidential, it also shall not be a breach of this Release for me to disclose any part of this Release or the information contained herein to a member of my immediate family or to my legal counsel or tax or financial advisor(s); provided further, that it shall not be a breach of this Release for me to comply with a valid court order or subpoena requiring the disclosure of any information about this Release, or as otherwise required by law.

7. Arbitration.  The parties hereby agree to submit any claim or dispute arising out of the terms of the Agreement or this Release to private and confidential arbitration by a single neutral arbitrator.  Subject to the terms of this paragraph, the arbitration proceedings shall be governed by the then current Rules of the American Arbitration Association (“AAA”) and shall be conducted in New York, N.Y., or such other location upon which Company and I agree.  The arbitrator shall be appointed by agreement of the Company and me or, if no agreement can be reached within two weeks of the matter’s first submission to the AAA, by the AAA pursuant to its Rules.  The decision of the arbitrator shall be final and binding on the Company and me, and judgment thereon may be entered in any court having jurisdiction.  All costs of the arbitration proceeding, including reasonable attorneys’ fees and witness expenses, shall be paid by the party against whom the arbitrator rules.  This arbitration procedure is intended to be the exclusive method of resolving any claim for breach of the Agreement or this Release; provided, however, that nothing in this Section 7 shall prohibit either the Company or me from requesting a court of law to issue any injunction to prohibit future breaches of Section 4 or any obligation referred to in the last sentence of Section 4.  This Release and the Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (excluding the choice of law rules thereof).

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8. Attorneys’ Fees.  If the Company or I bring an action or proceeding for breach of the Agreement or this Release or to enforce its or my rights hereunder or thereunder, the prevailing party shall be entitled to recover its costs and expenses, including court and/or arbitration costs and reasonable attorneys’ fees, if any, incurred in connection with such action.

9. Return of Employer Property.  I represent that I have returned to the Company all Company products, samples, equipment, parts, inventory, manuals, technical information and other Company materials in my possession or under my control, except those with respect to which I have made arrangements with the Company to pick up or otherwise deliver to the Company and except as otherwise provided in the Agreement.  Company’s receipt of all such items which I am obligated to return is a condition of its obligation to provide me the benefits described in the above Agreement.

10. Construction of Agreement and Release.  The Agreement and this Release shall be construed as a whole in accordance with their fair meaning and in accordance with the laws of the State of New York.  Neither the language of the Agreement nor that of this Release shall be construed for or against any particular party, solely by reason of authorship.  Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.  The headings used herein and in the Agreement are for reference only and shall not affect the construction of any of them.

11. Sole Agreement.  The Agreement, this Release, and the obligations referred to in the last sentence of Section 4 above (if any), represent the sole and entire agreement between the parties and supersede all prior agreements, negotiations and discussions between the parties and/or their respective counsel with respect to the subject matters covered hereby.

12. Severability.  In the event that any one or more of the provisions contained in the Agreement and this Release shall, for any reason, by held to be invalid, void, illegal or unenforceable in any respect, such invalidity, voidness, illegality or lack of enforceability shall not affect any other provision of the Agreement or this Release, as the case may be, and the remaining portions shall remain in full force and effect.

13. Amendment to Agreement.

a) Any amendment or modification of the Agreement or this Release must be made in a writing signed by me and a duly authorized representative of the Company and stating the intent of both parties to amend the Agreement or the Release, as applicable.

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b) Notices.  All notices, requests, demands and other communications hereunder must be in writing, marked “Personal and Confidential,” and shall be deemed to have been given if delivered by hand or mailed by first class, postage and registry fees prepaid, and addressed as follows:

(1)     If to Employee: XXXXXX

(2)     If to Company: Attn:  Chief Executive Officer

Harman International Industries, Inc.

400 Atlantic Street, 15th Floor

Stamford, CT 06901

14. Revocation; Effectiveness.  I understand that I have the right to revoke this Release within seven (7) calendar days after I sign it.  This Release will become effective and enforceable only after I have signed it and upon expiration of the seven-day revocation period with no revocation taking place (the “Effective Date”).  I understand that if I desire to revoke this Release, I must give actual, written notice of revocation to the above person at the above address before the seven-day revocation period expires.

The date indicated and my signature below acknowledge my review, understanding and full, knowing and voluntary acceptance of the terms and conditions set forth in this Release.

IN WITNESS WHEREOF, I, intending to be legally bound hereby, have executed this Release.

XXXXXXXXX (“Employee”, “me”, or “I”) Date

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EX-10.14

Exhibit 10.14

 Harman International

400 Atlantic Street, Suite 1500 Stamford, Connecticut 06901 USA 203.328.3500

Dinesh C. Paliwal

Chairman and

Chief Executive Officer

January 9th, 2009

Mr. David Slump

[Address Intentionally Omitted]

Dear David:

On behalf of Harman International Industries, Incorporated (“Harman”), I would like to submit an offer to you for the position of President, Consumer Division/Vp Corporate Development.  In this capacity you will report directly to me.  You will be located at our Stamford, Connecticut office.  This offer provides the following:

Start Date:  Your start date will be January 12, 2009 or an earlier date if possible.

Base Salary:  Your annual base salary will be $380,000, subject to annual review commencing on September, 2009, and payable in accordance with our regular payroll schedule in Stamford, CT.

Bonus:  You will be eligible to participate in the Management Incentive Compensation (MIC) program with a target bonus opportunity equal to 75% of your base salary and a 112.5% maximum.  This bonus program is based upon Harman’s achievement of its business plan, as well as your achievement of personal performance goals.  Bonus payment will be prorated for fiscal 2009.

Stock Options:  You will receive on your February 2. 2009 a one-time stock option award of 50,000 shares of Harman common stock under the terms of the Plan at a per share exercise price equal to the fair market value on the grant date.  The option will vest 20% per year over five years commencing on the first anniversary of the grant date, with acceleration and other provisions as provided in the Plan and your option agreement.  You will also be eligible for a stock option grant at the next general grant, at a level commensurate with your position.

Restricted Stock:  You will receive a one-time award of 10,000 shares of restricted Harman common stock under the Plan, vesting on February 2, 2012, if you are employed by Harman on that date.

Relocation: You will be eligible for relocation benefits in accordance with Harman’s Relocation policy (copy attached).

Severance:  If your employment is terminated by Harman without “Cause” within the first year of employment, you will receive one year of salary continuation and company-paid COBRA benefits during the salary continuation period.  Subject to the approval of the Compensation and Option Committee of the Board of Directors, your initial stock option grants and restricted stock award will vest upon such termination and you would have ninety (90) days thereafter within which to exercise, in accordance with the terms of the Plan, those stock options that are vested as of the Termination Date.    “Cause” is defined in Attachment A attached hereto.  Such payments will be subject to the execution by you of a release substantially in the form attached hereto as Attachment B.  Your salary continuation payments would commence on the 60th day after your termination of employment; provided, however, that if on the due date for any salary continuation payment, all revocation periods have not then expired with respect to your release, such payment will be forfeited.

Company Car:  You will have use of a company-leased automobile, with a lease payment of approximately $1,500 per month.  Harman will bear the car expenses (i.e., gasoline, insurance, car tax, repairs) associated with the business use of the company car.  You may use the company car for private purposes, however taxes imposed with respect to private usage will be borne by you.

Vacation:  You will be eligible for accrual of four (4) weeks of vacation annually.

Other Benefits:  Additional benefits, as defined by Company policy and governing plan documents, currently include medical, dental, vision, life insurance, short and long-term disability insurance, tuition reimbursement, 401(k) Retirement Savings Plan and all Company-paid holidays.   Eligibility to participate in these benefits commences thirty (30) days after your date of hire, except for the 401(k) plan under which participation is available on the first plan enrollment date following 180 days of employment.

Section 409A:  For purposes of Section 409A of the Internal Revenue Code, each salary continuation payment and Company-paid COBRA benefit will be considered one of a series of separate payments. If at the time of your separation from service (within the meaning of Section 409A), (i) you are a specified employee (within the meaning of Section 409A and using the identification methodology selected by Harman from time to time) and (ii) Harman makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then Harman will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the first business day after such six-month period, subject to the release requirements noted above.  To the extent that there is a material risk that any payments under this letter or any grant may result in the imposition of an additional tax to you under Section 409A, the company will reasonably cooperate with you to amend this letter and related documents such that such documents and payments thereunder comply with Section 409A without materially changing the economic value of this letter or the arrangements hereunder to either party.

The Company will, in connection with your employment, withhold from any compensation and benefits payable to you all federal, state, city and other taxes as requested by you or that the Company is required to withhold pursuant to any law or government regulation or ruling. Harman is not hereby offering you lifetime employment or employment for a fixed or implied period of time.  Either you or Harman may terminate your employment at any time, with or without cause or notice.  The at-will nature of your employment relationship cannot be changed except in a written document signed by you and me.  Upon termination of your employment, Harman will have no further obligations to you under this letter agreement except to the extent provided under “Severance” above.

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Any dispute concerning termination of your employment shall be resolved by final and binding arbitration before a neutral arbitrator.  The arbitrator shall be selected by mutual agreement or in accordance with the procedures of the American Arbitration Association and the employment arbitration rules of the American Arbitration Association shall apply.  Such arbitration shall be conducted in Stamford, Connecticut or such other location as to which you and Harman agree.  The law of Connecticut, without regard to its choice of law rules, shall govern any such dispute, and the arbitrator shall not have authority to vary or alter the terms of this letter.

You will be expected to sign the Company’s standard form of Invention and Secrecy Agreement on your start date.

Your acceptance of this offer and subsequent employment at Harman will be conditional upon Harman’s receipt of an acceptable background screening report which must be completed prior to your start date.  Upon your acceptance of this offer you will be contacted by human resources related to the background screening process.

You acknowledge and agree that your acceptance of this offer will violate no agreements or arrangements with other individuals or entities, or duties to your current employer.  Please sign and return the original of this letter.  You should retain one copy of this letter for your files.

I look forward to working with you and welcome the contributions you will bring to this outstanding company.

Best regards,

/s/ Dinesh Paliwal

Dinesh C. Paliwal

Chairman & Chief Executive Officer

Harman International

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

ACCEPTED AND AGREED:

/s/ David Slump	01/12/2009
David Slump	Date

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Attachment  “A”

Termination Definitions

“Cause” means:

(i) You have been convicted of a felony; or

(ii) You have engaged in conduct that constitutes willful gross neglect or willful gross misconduct with respect to your employment duties which results in material economic harm to Harman, as determined by the Company’s Board of Directors in its reasonable discretion.

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Attachment “B”

SAMPLE RELEASE (“Release”)

In consideration of the agreement by Harman International Industries, Inc. (the “Company” or “Employer”) to provide the benefits described in the above agreement between me and the Company dated __________ (the “Agreement”) and in consideration for the Company’s other promises in the Agreement and herein, I agree as follows:

1. Release of Known and Unknown Claims by Me.

a) I hereby release and forever discharge the Company and each of its associates, owners, stockholders, affiliates, divisions, subsidiaries, predecessors, successors, heirs, assigns, agents, directors, officers, partners, employees, representatives, and insurers (collectively, the “Company Releasees”) of and from any and all manner of action or actions, cause or causes of actions, in law or in equity, suits, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent, which I now have or may have against the Company or any Company Releasee to the extent acting by, through, under or in concert with the Company, by reason of any matter, cause or thing whatsoever from the beginning of time to the Effective Date.  The claims released herein include, without limitation, claims arising out of, based upon, or relating to the hire, employment, remuneration or termination of my employment and any claims constituting, arising out of, based upon, or relating to any tort theory, any express or implied contract, Title VII of the Civil Rights Act of 1964, the Civil Rights of 1866, the Civil Rights Act of 1991, the Age Discrimination in Employment Act (29 U.S.C. §§621 et seq.), the Equal Pay Act, the Fair Labor Standards Act,  the Consolidated Omnibus Budget Reconciliation Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Americans with Disabilities Act, and any other local, state or federal law governing the employment relationship.  Notwithstanding anything herein to the contrary, nothing herein or otherwise shall release the Company from any claims, rights or damages that I may have  (i) under the Agreement or this Release; (ii) as a stockholder in the Company; or (iii) that may not be released or waived as a matter of law.

b) I expressly acknowledge, agree and recite that (i) the release and waiver set forth in subsection 1(a) above are written in a manner I understand; (ii) in executing this Release, I am not waiving rights or claims that may arise after the date that this Release becomes effective; (iii) I am waiving rights or claims only in exchange for consideration in addition to anything to which I am otherwise entitled; (iv) I have entered into and executed this Release knowingly and voluntarily; (v) I have read and understand this Release in its entirety; and (vi) I have not been forced to sign this Release by any employee or agent of Employer.

c) I represent and warrant that there has been no assignment or other transfer of any interest in any claims released hereunder, and I agree to indemnify and hold the Company Releasees harmless from any liability, claims, demands, damages, reasonable costs, reasonable expenses and reasonable attorney’s fees incurred by the Company Releasees as a result of any person asserting any such assignment or transfer.  It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Company Releasees against me under this indemnity.

d) I agree that, except for claims made to or brought by the Equal Employment Opportunity Commission (“EEOC”), if I hereafter commence, join in, or in any manner seek relief through any suit arising out of, based upon or relating to any of the claims released hereunder, or in any manner assert against the Company Releasees any of the claims released hereunder, I shall pay to the Company Releasees in addition to any other damages caused to the Company Releasees thereby, all reasonable attorneys fees incurred by the Company Releasees in defending or otherwise responding to said suit or claim.

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e) It is my intention that my execution of this Release will forever bar every claim, demand, cause of action, charge and grievance released above.

2. Assumption of Risk. Each of the parties fully understands that if any fact with respect to any matter covered by this Release is found hereafter to be other than, or different from, the facts now believed by any of the parties to be true, each of the parties expressly accepts and assumes the risk of such possible difference in fact and agrees that the release provisions hereof shall be and remain effective notwithstanding any such difference in fact.

3. No Pending Actions.  I represent that I do not presently have on file any complaint, charge or claim (civil, administrative or criminal) against the Company in any court or administrative forum, or before any governmental agency or entity.  I represent that I will not hereafter file any complaints, charges or claims (civil, administrative or criminal) against the Company with any administrative, state, federal or other governmental entity, agency, board or court (except the EEOC) with respect to the claims released in Section 1 above.

4. Proprietary and Privileged Information.  I agree and acknowledge that during the course of my employment with Company, I received confidential and/or proprietary information relating to, without limitation, Company and its subsidiaries’ and affiliates’ business and marketing strategies, finances, benefit plans, systems, products and employees.  I agree on the date upon which I sign this Release to return to the Company any and all documents, papers and material (including any of the same stored on electronic media such as diskettes or tapes) containing such confidential and/or proprietary information which has not theretofore been returned to the Company, although I may retain the laptop computer as provided in the Agreement.  I further agree that, following my signing of this Release and for so long thereafter as such information is not in the public domain through no fault of mine, I will not use or disclose any such confidential and/or proprietary information, either directly or indirectly, to or for the benefit of any other person, firm or corporation.  The provisions of this Section 4 supplement, but do not replace, my legal and other contractual obligations (if any) relating to confidential Company information.

5. No Admission of Liability.  I understand and agree that neither the execution of this Release nor the performance of any term hereof shall constitute or be construed as an admission of any liability whatsoever by either the Company or me, as both the Company and I have consistently taken the position that it/I have no liability whatsoever to the other.

6. Confidentiality.  The terms and conditions of this Release shall be kept confidential by the Company as well as by me; provided, that it shall not be a breach of this Release for me to present this Release under seal to any court called upon to enforce it, and, so long as such disclosure is accompanied by a warning that the recipient must keep the information confidential, it also shall not be a breach of this Release for me to disclose any part of this Release or the information contained herein to a member of my immediate family or to my legal counsel or tax or financial advisor(s); provided further, that it shall not be a breach of this Release for me to comply with a valid court order or subpoena requiring the disclosure of any information about this Release, or as otherwise required by law.

7. Arbitration.  The parties hereby agree to submit any claim or dispute arising out of the terms of the Agreement or this Release to private and confidential arbitration by a single neutral arbitrator.  Subject to the terms of this paragraph, the arbitration proceedings shall be governed by the then current Rules of the American Arbitration Association (“AAA”) and shall be conducted in New York, N.Y., or such other location upon which Company and I agree.  The arbitrator shall be appointed by agreement of the Company and me or, if no agreement can be reached within two weeks of the matter’s first submission to the AAA, by the AAA pursuant to its Rules.  The decision of the arbitrator shall be final and binding on the Company and me, and judgment thereon may be entered in any court having jurisdiction.  All costs of the arbitration proceeding, including reasonable attorneys’ fees and witness expenses, shall be paid by the party against whom the arbitrator rules.  This arbitration procedure is intended to be the exclusive method of resolving any claim for breach of the Agreement or this Release; provided, however, that nothing in this Section 7 shall prohibit either the Company or me from requesting a court of law to issue any injunction to prohibit future breaches of Section 4 or any obligation referred to in the last sentence of Section 4.  This Release and the Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (excluding the choice of law rules thereof).

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8. Attorneys’ Fees.  If the Company or I bring an action or proceeding for breach of the Agreement or this Release or to enforce its or my rights hereunder or thereunder, the prevailing party shall be entitled to recover its costs and expenses, including court and/or arbitration costs and reasonable attorneys’ fees, if any, incurred in connection with such action.

9. Return of Employer Property.  I represent that I have returned to the Company all Company products, samples, equipment, parts, inventory, manuals, technical information and other Company materials in my possession or under my control, except those with respect to which I have made arrangements with the Company to pick up or otherwise deliver to the Company and except as otherwise provided in the Agreement.  Company’s receipt of all such items which I am obligated to return is a condition of its obligation to provide me the benefits described in the above Agreement.

10. Construction of Agreement and Release.  The Agreement and this Release shall be construed as a whole in accordance with their fair meaning and in accordance with the laws of the State of New York.  Neither the language of the Agreement nor that of this Release shall be construed for or against any particular party, solely by reason of authorship.  Each and every covenant, term, provision and agreement herein contained shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.  The headings used herein and in the Agreement are for reference only and shall not affect the construction of any of them.

11. Sole Agreement.  The Agreement, this Release, and the obligations referred to in the last sentence of Section 4 above (if any), represent the sole and entire agreement between the parties and supersede all prior agreements, negotiations and discussions between the parties and/or their respective counsel with respect to the subject matters covered hereby.

12. Severability.  In the event that any one or more of the provisions contained in the Agreement and this Release shall, for any reason, by held to be invalid, void, illegal or unenforceable in any respect, such invalidity, voidness, illegality or lack of enforceability shall not affect any other provision of the Agreement or this Release, as the case may be, and the remaining portions shall remain in full force and effect.

13. Amendment to Agreement.

a) Any amendment or modification of the Agreement or this Release must be made in a writing signed by me and a duly authorized representative of the Company and stating the intent of both parties to amend the Agreement or the Release, as applicable.

-8 - -

b) Notices.  All notices, requests, demands and other communications hereunder must be in writing, marked “Personal and Confidential,” and shall be deemed to have been given if delivered by hand or mailed by first class, postage and registry fees prepaid, and addressed as follows:

(1)     If to Employee: XXXXXX

(2)     If to Company: Attn:  Chief Executive Officer

Harman International Industries, Inc.

400 Atlantic Street, 15th Floor

Stamford, CT 06901

14. Revocation; Effectiveness.  I understand that I have the right to revoke this Release within seven (7) calendar days after I sign it.  This Release will become effective and enforceable only after I have signed it and upon expiration of the seven-day revocation period with no revocation taking place (the “Effective Date”).  I understand that if I desire to revoke this Release, I must give actual, written notice of revocation to the above person at the above address before the seven-day revocation period expires.

The date indicated and my signature below acknowledge my review, understanding and full, knowing and voluntary acceptance of the terms and conditions set forth in this Release.

IN WITNESS WHEREOF, I, intending to be legally bound hereby, have executed this Release.

XXXXXXXXX (“Employee”, “me”, or “I”) Date

-9 -

EX-10.15

Exhibit 10.15

 Harman International

400 Atlantic Street, Suite 1500 Stamford, Connecticut 06901 USA 203.328.3500

January 11, 2009

Rich Sorota

[Address Intentionally Omitted]

Dear Rich:

This letter will serve to confirm that your employment with Harman International Industries, Incorporated (the “Company”) is being terminated effective January 12, 2009 (the “Separation Date”).  This letter will outline for you the important details and items that are associated with your termination including, but not limited to, certain benefits that you may be entitled to under your employment offer letter dated December 11, 2007, copy attached (the “Offer Letter”).

1) All accrued salary and accrued and unused vacation pay will be paid to you on the Separation Date.

2) You are 100% vested in your employee contributions and the “basic” employer contribution related to your 401(k) account.  No distribution need be made from the account until age 70 ½ unless you have less than $1,000.00 in your account. If your account balance is less than $1,000.00 you will receive an automatic distribution from the 401(k) plan. If you have any questions regarding your 401(k) account please call Mercer, the Harman 401(k) administrator, at 1-800-685-6542.

3) The basic and supplemental life insurance benefit and the disability insurance benefits that you were entitled to receive during your employment terminate on the Separation Date.

4) Medical, dental and vision benefits under current employee benefit plans in which you now participate will continue through the Separation Date.  As required by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), you and your dependents will be given an opportunity to continue to participate in the health benefit plans you and your dependents are participating in today.  Please note that the usual limitations of COBRA will apply with respect to the maximum continuation period (usually 18 months).  You will receive a COBRA election form from the Company’s COBRA administrator, ADP.  Unless otherwise stated below, you will be required to pay the full monthly premium cost plus a 2% administrative charge for any COBRA benefit that you elect to continue participating in.  This is not a guaranty or commitment not to change the terms of any such plans.  The Company reserves the right to make any changes in such benefit plans it deems appropriate.

5) Salary Continuation Pay, Benefits & Career Planning:  The Company will initiate for you the following salary continuation pay and benefits as outlined under your Offer Letter once we have received the signed enclosed General Release and Agreement for Receipt of Salary Continuation Pay and Benefits (“Release”).  [Please note that you will not be entitled to the following salary continuation pay & benefits unless you sign the enclosed Release within twenty-one (21) calendar days after you receive it and the seven (7) day revocation period following your execution of the Release has expired.]

· Salary Continuation Pay: Total salary continuation pay of $415,000 will be provided and paid to you in two (2) installment payments.   The first installment will be $227,500 (less applicable withholdings and deductions) comprised of one half of your yearly base pay equaling $187,500 plus an additional $40,000.  The second payment will equal $187,500 (less applicable withholdings and deductions), the second half of your yearly base pay.  The first salary continuation payment will be made within 14 days after we receive your signed Release and the revocation period expires.  The second payment will be made on or near July 1, 2009 yet no later than July 15, 2009.

· Benefits:  Full premium payment coverage for COBRA participation through the end of the month in which the Salary Continuation Pay Period ends, provided you make a timely election to continue to participate in the Company’s medical, dental and vision plan(s) pursuant to COBRA for the plans.  The Company’s payment of the COBRA premiums does not extend the coverage period.  If you elect to continue COBRA coverage beyond this period, you will be solely responsible for the payment of any and all premiums for medical, dental and vision insurance.

· Outplacement or Retraining Services:  The Company will provide you with access to outplacement services or retraining services at the Company’s expense.  You may elect to receive either outplacement services or retraining services, but not both.  Your election of this service must be made within 30 days after receipt by the Company of your signed Release.  The Company will provide you with further details on these services.

6) You will be asked to participate in an exit interview process that will assist you and the Company with finalizing the above details of your separation.  At this exit interview you will also be asked to return all Company property such as laptop, blackberry, cell phone, corporate credit cards, security access badges, parking permits, etc.

7) Please provide a copy of your current automobile lease as we are required to add additional inputted income to your 2008 W-2 which was not included in your earnings during the last three (3) months of 2008.  You will receive an adjusted W-2, a W-2c, at the same time you receive your 2008 Harman W-2 around the end of January of 2009.

8) Your restricted stock award of 5,500 shares will automatically fully vest.

9) The Offer Letter shall be terminated as of the Separation Date.

You have twenty-one (21) calendar days to consider whether or not to sign the enclosed Release and should consult with legal counsel before signing it, but may not sign the Release until on or after your last day of work.  The signed Release is to be addressed and sent or hand-delivered to the attention of Michael Scarpa, VP Corporate HR & Global Rewards at 400 Atlantic Street, 15th floor, Stamford, CT 06901.

We thank you for your service to the Company and wish you the best in your future endeavors.

Very truly yours,

/s/ Michael Scarpa

E. Michael Scarpa

Vice President – Corporate HR and Global Rewards

Harman International

2

ACCEPTED AND AGREED:

/s/ Richard Sorota

Richard Sorota

01/29/09

Date:

3

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dinesh C. Paliwal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Harman International Industries, Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2009	/s/	Dinesh C. Paliwal
		Dinesh C. Paliwal
		Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Herbert K. Parker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Harman International Industries, Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances  under which such statements were made, not misleading with respect to the period covered by this  report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the  registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,  including its consolidated subsidiaries, is made known to us by others within those entities,  particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this  report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end  of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that  occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the  case of an annual report) that has materially affected, or is reasonably likely to materially affect, the  registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of  internal control over financial reporting, to the registrant’s auditors and the audit committee of the  registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over  financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,  process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a  significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2009	/s/	Herbert K. Parker
		Herbert K. Parker
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Harman International Industries, Incorporated (the "Company") for the period ended December 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date:  February 6, 2009

/s/ Dinesh C. Paliwal
Name:	Dinesh C. Paliwal
Title:	Chairman and Chief Executive Officer
	(Principal Executive Officer)
/s/ Herbert K. Parker
Name:	Herbert K. Parker
Title:	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.