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<SEC-DOCUMENT>/in/edgar/work/20000911/0000800459-00-000007/0000800459-00-000007.txt : 20000922
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ACCESSION NUMBER: 0000800459-00-000007
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 19
CONFORMED PERIOD OF REPORT: 20000630
FILED AS OF DATE: 20000911
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: HARMAN INTERNATIONAL INDUSTRIES INC /DE/
CENTRAL INDEX KEY: 0000800459
STANDARD INDUSTRIAL CLASSIFICATION: [3651
] IRS NUMBER: 112534306
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0630
</COMPANY-DATA>
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-09764
FILM NUMBER: 719879
</FILING-VALUES>
BUSINESS ADDRESS:
STREET 1: 1101 PENNSYLVANIA AVENUE N W
STREET 2: STE 1010
CITY: WASHINGTON
STATE: DC
ZIP: 20004
BUSINESS PHONE: 2023931101
</BUSINESS-ADDRESS>
MAIL ADDRESS:
STREET 1: 1101 PENNSYLVANIA AVENUE NW
STREET 2: SUITE 1010
CITY: WASHINGTON
STATE: DC
ZIP: 20004
</MAIL-ADDRESS>
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<TEXT>
<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended June 30, 2000
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 (I.R.S. Employer
incorporation or organization) Identification No.)
1101 Pennsylvania Ave., N.W., Ste. 1010, Washington, D.C. 20004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (202) 393-1101
Securities registered pursuant Name of each Exchange on
to section 12(b) of the Act: which registered:
Common Stock, par value $.01 per share New York Stock
(Title of class) Exchange, Inc.
Securities registered pursuant to section 12(g) of the Act: None
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. X Yes No.
The aggregate market value of the voting stock held by nonaffiliates
of the Registrant as of August 28, 2000, was $1,172,395,623.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 16,218,782
shares of Common Stock, par value $.01 per share, as of August 28, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders for the
fiscal year ended June 30, 2000, are incorporated by reference in Part I,
Item 1, and Part II, Items 5, 7 and 8.
Portions of the Registrant's definitive Proxy Statement relating to
the 2000 Annual Meeting of Stockholders are incorporated by reference in
Part III, Items 10 (as related to Directors), 11, 12, and 13.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (229.405 of this chapter) is not contained
herein, and will not be contained, to the best of the registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. X
Page 1 of 311
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TABLE OF CONTENTS
Page
PART I
Item 1. Business...................................... 5
Item 2. Properties.................................... 24
Item 3. Legal Proceedings............................. 25
Item 4. Submission of Matters to a Vote of
Security Holders.......................... 26
Executive Officers of the Registrant...... 26
PART II
Item 5. Market for the Registrant's Common
Equity and Related Stockholder
Matters................................... 28
Item 6. Selected Financial Data....................... 29
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations..................... 29
Item 7A. Quantitative and Qualitative
Disclosures about Market Risk........... 29
Item 8. Consolidated Financial Statements
and Supplementary Data.................... 30
Item 9. Disagreements on Accounting and
Financial Disclosure..................... 30
PART III
Item 10. Directors and Executive Officers of
the Registrant.......................... 31
Item 11. Executive Compensation........................ 31
Item 12. Security Ownership of Certain
Beneficial Owners and Management.31
Item 13. Certain Relationships and Related
Transactions............................ 31
PART IV
Item 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K.31
List of Financial Statements and
Financial Statement Schedules............ 33
Independent Auditor's Report............. 34
Index to Exhibits........................ 37
3
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PART I
ITEM 1. BUSINESS
General Business
Harman International Industries, Incorporated (together with its
subsidiaries, "Harman" or the "Company"), a Delaware corporation
formed in 1980, is a worldwide leader in the manufacture of high-quality
high-fidelity audio products targeted at the consumer and professional
audio markets. For almost 50 years, the Company and its predecessors
have been leaders and innovators in creating loudspeakers and electronic
audio products that deliver superior sound. The Company believes that its
JBL, Mark Levinson, Infinity and Harman Kardon brand names are well-
known worldwide for premium quality and performance.
The Company has developed, internally and through a series of strategic
acquisitions, a broad range of product offerings sold under renowned
brand names in its principal markets. The objective of the Company's
development efforts has been to secure engineering, manufacturing and
marketing leadership and to strengthen the Company's ability to provide
total audio system solutions to its customers.
The Company's businesses are organized by the end-user markets they
serve. The Consumer Systems Group manufactures loudspeakers and
electronics for high fidelity audio reproduction in the home, with
computers and in the car. The Professional Group manufactures
loudspeakers and electronics used by audio professionals in concert hall,
recording, broadcast and cinema applications.
Harman's primary manufacturing facilities are located in California,
Indiana, Utah, Germany, the United Kingdom, Denmark, Mexico, France,
Austria and Hungary.
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Consumer Systems Group
The Consumer Systems Group manufactures loudspeakers and electronics
for high fidelity audio reproduction in the home, with computers and in
the car. These products are marketed under brand names including JBL,
Infinity, Harman Kardon, Mark Levinson, Proceed, Revel and
AudioAccess. The Company has the preeminent portfolio of brand names
and range of product offerings in the consumer audio market. The JBL,
Infinity and Harman Kardon brands are recognized throughout the world
for superior sound quality and good value. High-end products bearing the
Mark Levinson, Proceed and Revel brands are acclaimed for their
superior build quality and state-of-the-art sound reproduction.
The Consumer Systems Group offers premium, branded audio systems to
retail automobile purchasers through OEM supply agreements with
DaimlerChrysler, BMW, Toyota, Mitsubishi, Porsche, Saab, Peugeot and
Ferrari, complemented by non-branded loudspeaker supply agreements
with other automakers including Audi, Volvo, VW, Ford, Renault and
Fiat.
The Company's largest automotive OEM customer, DaimlerChrysler,
offers Infinity branded audio systems in the majority of its Chrysler,
Dodge and Plymouth car, truck and sport-utility vehicle platforms, and
offers Becker head units and navigation systems, as well as non-branded
loudspeaker systems manufactured by Harman Audio Electronic Systems,
in a substantial number of its Mercedes Benz automobiles. Becker also
supplies head units to BMW and Porsche. Toyota offers JBL branded
audio systems in most of its models, and beginning in model year 2001
added our high-end Mark Levinson audio systems in their Lexus line.
The loss of, or a material decrease or delay in purchasing the Company's
products by, any of the Company's significant customers could have a
material adverse effect on the results of operations of the Company. Sales
of the Company's audio products through the automakers are dependent
on automobile industry sales and automobile purchasers' willingness to
pay for the option of a premium branded automotive audio system.
The Consumer Systems Group offers branded audio systems to personal
computer users through OEM supply agreements with Apple, Dell and
Compaq. These audio systems provide high-quality sound and thus
6
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enhance the appeal and capability of the personal computer as an
entertainment device. The JBL, Infinity and Harman Kardon brand
names are all employed in this market.
The Company believes the maturation and broadened acceptance of DVD
and digital television will provide growth opportunities for its consumer
brands. In addition to the contribution of its new Proceed and Harman
Kardon DVD machines, the Company expects DVD and digital television
to stimulate loudspeaker sales due to increased customer traffic in
audio/video dealers' stores and the improved audio quality potential of
DVD and digital television compared to the current analog audio/video
and digital audio technologies. Sales expectations are dependent, to a
substantial extent, on discretionary spending by consumers, which may be
affected by economic conditions.
The Company believes excellent growth opportunities are available in the
automotive OEM channel through higher penetration levels within
existing models, increases in per-vehicle content through the provision of
complete systems, increases in the number of models offering the
Company's audio systems and supply agreements with additional
automakers.
Professional Group
The Company's Professional Group manufactures professional audio
equipment, including loudspeakers, amplifiers, mixing consoles, signal
processing equipment, microphones and effects devices. Such products
are marketed on a worldwide basis under brand names including JBL
Professional, Soundcraft, Allen & Heath, Crown, DOD, Digitech,
Lexicon, AKG, dbx, BSS, AMEK, Spirit and Studer. The Professional
Group is uniquely equipped to provide turnkey systems solutions for
professional audio applications that offer the customer improved
performance, ease of installation and reduced cost. The principal market
segments served by the Professional Group are sound reinforcement,
broadcast and recording and music instrument support.
JBL Professional is a leader in the vibrant cinema market, serving
customers such as Cineplex Odeon and United Artists Theaters.
Stadiums, concert halls, houses of worship and major concert tours rely
on sound reinforcement products from the Professional Group, such as
7
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JBL loudspeakers, JBL, Crown and BSS amplifiers, AKG microphones,
Lexicon, DOD and dbx signal processing equipment, and Soundcraft,
AMEK and Allen & Heath mixing consoles, to produce top quality
sound.
Customers in the recording and broadcast market include radio and
television stations and recording studios. Customers in these markets,
including AMS Westfunk Radio, Abbey Road Studios and The Hit
Factory, are primarily served by Studer, with additional offerings from
JBL, Lexicon, Soundcraft and AKG.
JBL, Crown, DOD, Digitech and Spirit serve the music instrument
support segment of the professional audio market. JBL manufactures and
markets loudspeakers, monitors and amplifiers. Crown manufactures
professional amplifiers. DOD and Digitech sell sound effects and other
signal processors, portable mixing consoles and guitar amplifiers. Spirit
markets portable mixing consoles. Music instrument support products are
sold through music retail stores such as Guitar Center and Sam Ash.
AKG serves certain OEM markets in addition to its professional audio
activities. AKG's expertise in the design and manufacture of miniature
transducers for special microphone applications has led to market
opportunities in the mobile telecommunications equipment and hands-free
automotive communications markets. AKG manufactures the earpiece
and mouthpiece transducer capsules for mobile telephone manufacturers
including Nokia, Kyocera, Ericsson and Sony. AKG also manufactures
miniature transducers for hands-free communications applications in
Mercedes Benz automobiles. And, beginning in model year 2001, AKG
will supply hands-free microphones for the General Motors OnStar
system.
Operating and Geographic Segment Information
Financial information about operating and geographic segments required
to be included hereunder is incorporated by reference to Note 10 of Notes
to Consolidated Financial Statements contained in the Company's Annual
Report to Shareholders for the fiscal year ended June 30, 2000.
8
<PAGE>
Description of Business
The Company's business is conducted through its wholly owned
subsidiaries which include:
<TABLE>
<CAPTION>
Name Principal products
- ---------------------------------- ---------------------------------
<S> <C>
AKG Acoustics GmbH Professional electronics
Audax Industries S.N.C. Consumer home and automotive
loudspeakers
Audio Latina S.A. de C.V. Automotive OEM loudspeakers
Becker GmbH Automotive OEM and automotive
aftermarket electronics
Crown Audio, Inc. Professional electronics
Harman Audio Electronic
Systems GmbH Automotive OEM loudspeakers
Harman Audio Electronic
Systems KFT. Automotive OEM loudspeakers
Harman Music Group, Incorporated Professional electronics
Harman Consumer Manufacturing A/S Components, cabinets and
loudspeaker systems
Harman de Mexico, S.A. de C.V. Loudspeaker cabinets
Harman International Industries, Automotive OEM loudspeakers and
Limited electronics and professional
audio products
Harman-Kardon, Incorporated Consumer home and automotive
electronics
Harman-Motive, Inc. OEM loudspeakers
and electronics
Harman Wisconsin, Inc. OEM loudspeakers
and electronics
Infinity Systems, Inc. Consumer home and automotive
loudspeakers and electronics
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Name Principal products
- ---------------------------------- ---------------------------------
<S> <C>
JBL Incorporated Consumer, professional and
automotive loudspeakers and
electronics
Lexicon, Incorporated Professional electronics
Madrigal Audio Laboratories, Inc. Consumer electronics
Studer Professional Audio AG Professional electronics
</TABLE>
Markets for Products
Based on its knowledge of the audio industry, the Company believes that
the consumer and professional audio markets have grown in recent years.
In 1997 and 1998, the consumer and professional audio markets slowed
somewhat due to uncertainty associated with technology transitions and
weakness in Asia. The transition from analog to digital audio technology
has changed music recording and reproduction and has led to the
development of a new generation of consumer and professional audio
products, including software-driven audio systems with integrated digital
architecture that permits communication among all components.
Although this transition has unsettled markets due to customer confusion
and hesitancy, management believes that the new digital technologies and
standards are stabilizing and Harman's market position will help the
Company to capitalize on the release of pent-up demand as confusion and
hesitancy abate. Sales growth in fiscal year 2000 provided evidence of
this anticipated trend.
Multimedia audio systems has been a growth market for Harman. The
Company has developed branded audio systems for personal computers
marketed by Apple, Dell, Compaq and IBM. The Company also
produces branded aftermarket audio systems for multimedia applications.
The Company believes that the number of personal computers equipped
with multimedia capabilities will continue to increase.
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<PAGE>
We believe significant growth opportunities exist within the automotive
audio market to increase sales by increasing product penetration in
platforms currently supplied on an OEM basis, increasing per-vehicle
content through the provision of systems with additional functions,
expanding the number of automobile models offering our systems and
adding new OEM partners. Becker's radio and navigation system
products complement the Company's JBL, Infinity and Harman Kardon
automotive audio programs and enable the Company to offer fully-
integrated multimedia systems through its automobile manufacturing
partners. The Company has received commitments for integrated systems
on future models from Mercedes, Audi, BMW, Porsche and Renault, and
we believe that these will be followed by commitments from other of the
world's leading automakers.
The professional audio markets served by the Company include sound
reinforcement, broadcast and recording and music instrument support.
The sound reinforcement market includes theaters (cinema and live
performance), stadiums, concert halls, and houses of worship. The
broadcast and recording market includes radio and television stations and
recording studios. The Company serves the music instrument support
market primarily through the provision of portable digital signal
processing components, guitar amplifiers and compact, portable
loudspeaker systems used by touring performers. Much of the
professional audio market is undergoing a transition from analog to digital
audio technology, and the Company is well-equipped for this evolutionary
period with the engineering and marketing expertise of JBL, Crown,
Soundcraft, Studer, Lexicon, Harman Music Group and AKG.
Products
The Company designs, manufactures and markets worldwide a broad
range of high-quality, high-fidelity audio loudspeakers and electronics for
the consumer audio market ( in the home, in the car and with computers)
and the professional audio market (sound reinforcement, broadcast and
recording, and musical instrument support).
CONSUMER PRODUCTS. The Company manufactures loudspeakers
under the JBL, Infinity and Revel brand names for the consumer market.
These loudspeaker lines include models designed for two-channel stereo
and multi-channel surround sound applications in the home in a wide
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range of choices, including floorstanding, bookshelf, powered, low
frequency, in-wall, wireless and all-weather, in styles and finishes ranging
from high gloss lacquers to genuine wood veneers. The JBL and Infinity
product lines also include car loudspeakers, amplifiers and crossovers.
The Company manufactures a broad range of consumer audio electronics.
The Company's consumer electronics products facilitate the marketing of
complete home, car and multimedia systems incorporating the Company's
loudspeakers, such as surround sound home theater installations. The
Company's Harman Kardon home electronics line includes audio-video
receivers featuring Dolby Digital and DTS surround sound processing
capabilities and multi-channel amplifiers. A five-disc DVD machine and
a CD recorder introduced in fiscal 2000 reflect Harman Kardon's
commitment to deliver state-of-the-art audio reproduction equipment to
its customers.
Madrigal designs and manufactures high-end electronics, including
amplifiers, pre-amplifiers, digital signal processors and compact disc
transports and players and a new DVD transport. Madrigal markets its
products under the renowned Mark Levinson and Proceed brand names.
The AudioAccess product line is also part of the Madrigal Group.
AudioAccess products provide in-home, multi-source, multi-zone sound
system controls, serving home theater and multi-room applications.
JBL, Infinity and Harman Kardon branded premium audio systems are
offered with personal computers manufactured by Compaq, IBM and Dell
and Apple, respectively. Harman participates in this market through
design and brand name licensing as well as direct sourcing. These audio
systems provide high-quality sound and thus enhance the appeal and
capability of the personal computer as an entertainment device.
Harman is a leading global manufacturer of premium branded automotive
audio systems offered by automakers as an option to their customers. In
its offering of loudspeakers, head units, amplifiers and multimedia
systems through the automobile manufacturers, the Company leverages
its expertise in the design and manufacture of high-quality loudspeakers,
radios and other electronics, as well as the reputation for quality
associated with its JBL, Infinity, Harman Kardon, Mark Levinson and
Becker brand names. Harman engineers are engaged by the automobile
manufacturers early in the cabin design process to develop systems that
optimize acoustic performance and minimize weight and space
requirements. Harman has developed the technical competencies to offer
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multimedia systems to automobile manufacturers incorporating audio,
video, navigation, telematics, internet access, security and cabin quieting.
Today, the Company primarily supplies car audio, video and navigation
systems products separately. However, the Company has received
commitments for integrated systems on year 2002 and 2003 models from
Mercedes, Audi, BMW, Renault and Porsche in Europe. We believe that
this could be followed by integrated system commitments from other of
the world's leading automakers. The Company's Infinity-branded car
audio systems are offered by DaimlerChrysler's Chrysler, Dodge,
Plymouth and Jeep lines and by Mitsubishi. JBL-branded audio systems
are offered by Toyota, Peugeot and Hyundai. Harman Kardon systems
are offered by BMW, Jaguar and Saab. Mark Levinson systems are now
offered by Lexus, beginning in model year 2001. Becker supplies head
units, navigation systems and other electronics to DaimlerChrysler, BMW
and Porsche.
PROFESSIONAL PRODUCTS. The Company designs, manufactures
and markets products in all significant segments of the professional audio
market, offering complete systems solutions to professional installations
and users around the world.
The Professional Group includes many of the most respected names in the
industry including JBL Professional, Soundcraft, Allen & Heath, Crown,
DOD, Digitech, Lexicon, AKG, BSS, dbx, AMEK and Studer.
Professional installations of Harman products include stadiums, opera
houses, concert halls, recording studios, broadcast studios, theaters,
houses of worship, cinemas and touring performing artists.
Sound systems incorporating components manufactured by JBL, Crown,
Lexicon, AKG, Studer and Soundcraft are in use around the world in such
places as the Experience Music Project in Seattle, the Great Hall of the
People in Beijing, China, the Royal Danish Theater in Copenhagen and
Abbey Road Studio and the Millennium Dome in England. Harman
professional equipment is used on tour by performing artists throughout
the world.
The professional market has advanced rapidly and is heavily involved in
digital technology. Harman's Professional Group is a leader in this
market. The Professional Group derives value from its ability to share
research and development, engineering talent and other digital resources
among its divisions. Soundcraft, Lexicon, Studer and Harman Music
Group each have substantial digital resources and work together to
achieve common goals by sharing resources and technical expertise.
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The Professional Group's loudspeaker products are well-known for high
quality and superior sound. The JBL Professional portfolio of products
includes studio monitors, loudspeaker systems, power amplifiers, sound
reinforcement systems, bi-radial horns, theater systems, surround systems
and industrial loudspeakers.
The Company is a leading manufacturer and marketer of audio electronics
equipment for professional use. Such products are marketed on a
worldwide basis under various trade names, including Soundcraft, Allen
& Heath, Crown, DOD, Digitech, Lexicon, AMEK, AKG, BSS, dbx and
Studer, and are often sold in conjunction with the Company's professional
loudspeakers.
The AMEK and Soundcraft lines of high-quality sound mixing consoles
extend from automated multi-track consoles for master recording studios
to compact professional mixers for personal recording and home studios.
Soundcraft and AMEK products span four main market areas: sound
reinforcement, recording studios, broadcast studios and musical
instrument dealers. Allen & Heath manufactures cost effective mixing
consoles for use in broadcast studios and for use on stage in smaller
venues.
The Harman Music Group product line is marketed under the DOD, dbx,
Digitech and Audio Logic brand names, and is sold primarily to
professional audio and musical instrument dealers. Harman Music Group
products include signal processing equipment, equalizers, mixers and
special effects devices.
Lexicon is a leader in the design, manufacture and marketing of high-
quality digital audio signal processing equipment for professional use in
the audio, video, musical entertainment and broadcasting markets
worldwide. Lexicon digital signal processing products are used in live
sound applications as well as recording studios to produce sound effects
and refine final mixes. Additionally, Lexicon manufactures and markets a
series of high-end home theater surround sound processors and amplifiers.
AKG is a leading manufacturer of high-quality microphones and
headphones. The AKG product line includes microphones, audio
headphones, surround-sound headphones and other professional audio
products marketed under the AKG brand name. AKG has leveraged its
engineering and manufacturing expertise to enter the telecommunications
market, supplying miniature transducers to mobile phone makers Nokia,
14
<PAGE>
Ericsson, Kyocera and Sony, as well as the automotive hands-free
communications market, supplying microphone arrays to Mercedes Benz
and General Motors.
Crown, acquired in March 2000, is a leading professional amplifier
manufacturer based in Elkhart, Indiana. The addition of Crown to our
professional audio portfolio has enhanced our ability to provide complete
systems solutions to the professional audio market.
Studer Professional Audio is recognized for the high quality and
reliability of its professional products, which include analog and digital
tape recorders, mixing consoles, switching systems, digital audio
workstations, professional compact disc players and recorders and turnkey
broadcasting studio installations.
Manufacturing
The Company believes that its manufacturing capabilities are essential to
maintaining and improving product quality and performance. The
Company manufactures most of the products that it sells other than certain
Harman Kardon electronic components. The Company also produces
some products for other loudspeaker companies on an OEM basis.
The Company's loudspeaker manufacturing capabilities include the
production of its own high-gloss lacquer and wooden veneer loudspeaker
enclosures, wire milling, voice coil winding and the use of computer
controlled lathes and other machine tools to produce its many precision
components. The Company's high degree of manufacturing integration
enables it to maintain consistent quality levels, resulting in reliable, high-
performance products. The Company capitalizes on opportunities to
transfer technology and materials developments across product lines to
maximize the utility of engineering, design, development and
procurement resources.
The Company's principal domestic manufacturing facility in Northridge,
California, manufactures JBL and Infinity loudspeakers and audio
electronics for home, car and professional applications. The Company
manufactures car loudspeakers and assembles car sound systems in
Martinsville, Indiana. Harman Music Group manufactures professional
electronics products at its facility in Salt Lake City, Utah.
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<PAGE>
Lexicon manufactures professional electronics products at its Bedford,
Massachusetts facility. Madrigal manufactures consumer electronics at its
Middletown, Connecticut facility. Crown International manufactures
professional amplifiers at its Elkhart, Indiana facility.
During fiscal year 2000, the Company completed construction of new
facilities in Kentucky, to manufacture audio systems for Toyota, and in
Tijuana, Mexico, to manufacture loudspeaker cabinets. These facilities
are now in production.
The Company has established a strong manufacturing presence in Europe
to better respond to customer demands in that market. European
automotive loudspeaker and electronics manufacturing includes the
production of loudspeakers and amplifiers in the United Kingdom,
Germany, Sweden and Hungary, and car radios, navigation systems,
amplifiers and other electronics at Becker in Germany. Audax Industries
SNC ("Audax"), a manufacturer of high-quality, high-performance
tweeters, woofers and car loudspeaker systems, is located in France, and
the Company's Harman Consumer Manufacturing A/S subsidiary
manufactures cabinet enclosures and assembles complete JBL and Infinity
loudspeakers in Denmark.
European professional electronics manufacturing includes Soundcraft in
the United Kingdom (mixing consoles), Studer in Switzerland
(professional recording and broadcast equipment) and AKG in Austria
(microphones and headphones).
Marketing and Distribution
The Company's products are sold domestically and internationally in the
consumer and professional audio markets. The consumer market for
audio entertainment systems consists of car, home and multimedia. The
professional market includes a wide range of professional uses, including
live music applications, recording facilities, entertainment venues such as
concert halls, stadiums and movie theaters, broadcast facilities and music
instrument support.
The Company primarily markets its home and automotive aftermarket
audio products through audio and audio-video specialty stores and certain
audio-video chain stores, such as Circuit City and Best Buy in North
16
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America and MediaMarkt in Europe. The Company enjoys broad
distribution of its products and selects dealers who emphasize high-
quality audio systems and who are knowledgeable about the features and
capabilities of audio products. Sales and marketing activities for these
products include dealer education programs, point-of-sale displays,
participation in consumer audio trade shows, comprehensive product
literature and mass-media advertising.
The Company's Consumer Systems Group markets its branded OEM
audio products through automobile and personal computer manufacturers
and dealers. Automobile manufacturers offering Harman systems include
DaimlerChrysler, Toyota, BMW, Ford, Mitsubishi, Volkswagen, Volvo,
Audi, Jaguar, Porsche, Range Rover and Saab. Personal computer OEM
customers include Apple, Dell, Compaq and IBM. Sales and marketing
activities for these products include dealer education programs, point-of-
sale displays, participation in consumer audio trade shows and mass-
media advertising.
The Company's professional audio products are marketed worldwide
through professional sound equipment dealers, including sound system
contractors that directly assist major users. The Company's sales and
marketing group for its professional products is separate and independent
from its consumer product sales group. Professional audio sales and
marketing activities include dealer education programs, point-of-sale
displays, participation in professional audio trade shows and professional
audio media advertising.
Suppliers
Products designed by Harman Kardon are manufactured by several
suppliers. In fiscal 1998, Harman Kardon's largest supplier, based in
Korea, experienced difficulties associated with the crisis in Asia.
Production delays at this supplier negatively affected Harman Kardon's
results. Harman Kardon terminated its relationship with this supplier and
other sources were secured to manufacture Harman Kardon products. The
loss of any of Harman Kardon's primary suppliers would not have a
material impact on the consolidated earnings or consolidated financial
position of the Company.
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Northridge Manufacturing relies on several suppliers for a large
percentage of certain parts, such as wood, speaker grilles, plastic molded
parts and magnets. The loss of any one of these suppliers would not have
a material impact on the consolidated earnings or consolidated financial
position of the Company.
The Company utilizes third-party suppliers to manufacture personal
computer audio systems sold to Apple, Dell, Compaq and IBM bearing
the JBL, Harman Kardon and Infinity brand names. Production
difficulties at these third-party suppliers could have a material impact on
the consolidated earnings of the Company.
The Company uses externally-sourced microchips in many of its products.
This industry has experienced capacity constraints recently. A significant
disruption in our microchip supply chain and an inability to obtain
alternative sources would have a material impact on the consolidated sales
and earnings of the Company.
Trademarks and Patents
The Company markets its products under numerous trademarks and
logos, including JBL, Infinity, Harman Kardon, Citation, Concord,
Crown, Audax, Becker, AMEK, Soundcraft, Spirit, DOD, DigiTech,
Lexicon, AKG, Studer, BSS, Sound-Web, dbx, Allen & Heath,
AudioAccess, Mark Levinson, Proceed, Revel, VMAx, EON, Harman,
Control, Compositions, and C-Audio. These trademarks and logos are
registered or otherwise protected in substantially all major industrialized
countries.
The Company's registrations cover use of its trademarks and logos in
connection with various applicable products, such as loudspeakers,
speaker systems, speaker system components and other electrical and
electronic devices. As of June 30, 2000, the Company held
approximately 373 United States and foreign patents covering various
products, product designs and circuits, and had approximately 324 patent
applications pending around the world. The Company vigorously
protects and enforces its trademark and patent rights.
18
<PAGE>
Seasonality
The Company experiences seasonal fluctuations in sales and earnings.
The first fiscal quarter is the weakest due to the automotive model
changeovers and the July and August holidays in Europe. Variations in
seasonal demands among end-user markets may cause operating results to
vary from quarter to quarter.
Customers
Sales to DaimlerChrysler for fiscal year 2000 accounted for 22.3% of the
Company's consolidated net sales. The loss of sales to DaimlerChrysler
would have a material adverse impact on the consolidated sales, earnings
and financial position of the Company.
Backlog Orders
Because the Company's practice is to maintain sufficient inventories of
finished goods to fill orders promptly, the level of backlog is not
considered to be an important index of future performance. The
Company's backlog was approximately $20.9 million at June 30, 2000.
Warranties
Harman generally warrants its home products to be free from defects in
materials and workmanship for a period ranging from 90 days to five
years from the date of purchase, depending on the product. The warranty
is a limited warranty, and it imposes certain shipping costs on the
customer and excludes deficiencies in appearance except for those evident
when the product is delivered. Harman dealers normally perform
warranty service for loudspeakers in the field, using parts supplied on an
exchange basis by the Company.
Warranties in the international markets are generally similar to those in
the domestic market, although claims arising under these warranties are
the responsibility of the distributor.
19
<PAGE>
Competition
In general, the audio industry is fragmented and competitive with many
manufacturers, large and small, domestic and international, offering audio
products that vary widely in price and quality and are distributed through
a variety of channels. Consumer products are offered through various
channels including audio specialty stores, discount stores, department
stores, mail order firms and internet merchants. Consumer products are
also offered as OEM options on automobiles and personal computers
through the automotive and computer dealer channels. Professional
products are offered through music instrument retailers, professional
audio dealers, contractors and installers and on a contract bid basis. The
Company concentrates on the higher-quality, higher-priced segments of
the audio market.
The Company believes that it currently has a significant share of the
consumer market for loudspeakers (home, automotive and computer),
primarily as a result of the strength of its brand names. JBL and Infinity
are two of the most recognized loudspeaker brands in the world. The
development of our high-end loudspeaker brand, Revel, over the past few
years, has extended our market position and complemented our Mark
Levinson and Proceed high-end electronics lines. The Company
competes based upon its strong brand names, the breadth of its product
lines, and its comprehensive marketing, engineering and manufacturing
resources.
The Company's principal competitors in the consumer loudspeaker
market include Bose, Boston Acoustics, B&W, KEF, Celestion,
Paradigm, Klipsch, Cambridge SoundWorks and Polk Audio. Principal
competitors in the high-end loudspeaker market include Wilson Audio,
Snell and B&W.
Competition in the consumer electronic components segment remains
intense, with this market dominated by large Japanese competitors. The
short life cycle of products and a need for continuous design and
development efforts characterize this segment. The Company's
competitive strategy is to compete in the upper segments of this market
and to continue to emphasize the Company's ability to provide systems
solutions to customers, including a combination of loudspeakers and
electronics products, providing integrated surround sound and home
theater systems. Principal electronics competitors for Harman Kardon
include Sony, Denon, Onkyo, Nakamichi, Pioneer and Yamaha. The
20
<PAGE>
Company competes in the high-end consumer electronics market with the
Mark Levinson, Citation and Proceed brands. Principal competitors
include Krell, McIntosh, Audio Research, Meridian, Linn and Accuphase.
In the personal computer audio market, the Company's Harman Kardon,
JBL and Infinity brand names are attached to the premium audio systems
offered by Apple and Dell, Compaq and IBM, respectively. These audio
systems are provided through licensing and sourcing arrangements.
Principal competitors in this segment include Boston Acoustics, Creative
Labs, Altec-Lansing and LabTec.
In OEM automotive audio, the Company's principal competitors include
Bose, Pioneer and Foster Electric in the loudspeaker systems segment and
Alpine, Bosch, Panasonic, Siemens, Delphi, Visteon and Mannesman in
the electronics segment. The Company is the only supplier of branded
loudspeaker systems for Chrysler, Jeep and Mitsubishi automobiles in the
United States, and also supplies branded loudspeaker systems to Toyota,
BMW, Saab and Peugeot. The Company also supplies non-branded
loudspeaker systems to Chrysler, Mercedes Benz, Volkswagen, Audi,
Volvo, Ford of Europe and Fiat. The Company is a primary supplier of
radio head units to Mercedes-Benz, BMW and Porsche, and also supplies
TV tuners, navigation systems and other electronics to Mercedes-Benz,
Porsche and Renault. The Company competes based upon the strength of
its brand name recognition and the quality of its products together with its
technical expertise in designing loudspeaker systems, electronics,
navigation systems, man-machine interfaces and complete multimedia
systems to fit the acoustic properties of each automobile model.
The market for professional sound systems is highly competitive. The
Company has historically held a leading market position in the
professional loudspeaker market and has complemented its professional
loudspeaker line by adding digital professional electronics products and
broadcast and recording equipment. The Company competes using its
ability to provide systems solutions to meet the complete audio
requirements of its professional customers. Harman offers products for
most professional audio applications.
The Company competes in the sound reinforcement market with many of
its brand names, including JBL Professional, AKG, Crown, Soundcraft,
AMEK and BSS. Principal competitors in sound reinforcement include
the Electro Voice division of Telex, Eastern Acoustic Works/Mackie,
QSC, Sennheiser, Tannoy, Peavey, Shure, Audio Technica, Fender, Sony
21
<PAGE>
and Yamaha. The Professional Group competes in the broadcast and
recording areas with its Studer, AKG, Soundcraft, AMEK and Lexicon
brands. Principal recording and broadcast competitors include Sony,
Yamaha, Neve, Sennheiser, Denon, SSL, Shure, Tascam, Alesis and
Audio Technica. In the Music Instrument area, competitors for the
Company's JBL, DOD, Digitech, dbx, Lexicon, Allen & Heath and Spirit
products include Yamaha, Peavey, Rane, Roland, Alesis, Marshall,
Fender, Sony, Mackie and T.C. Electronics.
The Professional Group also competes in the industrial and architectural
sound market. Competitors within this market include Siemens, Peavey,
Tannoy and Bose.
Environmental Matters
The Company is subject to various federal, state, local and international
environmental laws and regulations, including those governing the use,
discharge and disposal of hazardous materials. The Company's
manufacturing facilities are believed to be in substantial compliance with
current laws and regulations. The cost of compliance with current laws
and regulations has not been, and is not expected to be, material.
The Company has been named as a "potentially responsible party" with
respect to the disposal of hazardous wastes at four hazardous waste sites.
In addition, there are other sites to which the Company has sent hazardous
wastes which the Company believes are currently under regulatory
scrutiny. It is possible that additional environmental issues may arise in
the future which the Company cannot now predict. Although ultimate
liability cannot be determined with respect to the sites mentioned above,
and applicable law provides that a potentially responsible party at any site
may be held jointly and severally liable for the total cost of remediation,
the Company believes, based upon internal investigations and information
made available to the Company with regard to its potential liability at
these sites, that its proportionate share of the costs related to the
investigation and remedial work at these sites will not exceed $100,000.
22
<PAGE>
Research, Development and Engineering
The Company's expenditures for research, development and engineering
were $76.2 million, $76.0 million and $65.9 million for the fiscal years
ending June 30, 2000, 1999 and 1998, respectively.
Number of Employees
As of June 30, 2000, the Company had 9,807 full-time employees,
including 3,839 domestic employees and 5,968 international employees,
compared to 8,850 employees at June 30, 1999. The increase in
headcount from June 30, 1999, to June 30, 2000, was primarily due to the
acquisition of Crown International and increased engineering and
manufacturing staffing in our European automotive electronics
operations.
Disclosures about Segments and Related Information
Disclosures about segments and related information to be filed hereunder
is incorporated by reference to Note 10 of Notes to Consolidated
Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations (Effects of Inflation and
Exchange Rates) on pages 34 and 35 and 17 and 18, respectively, in the
Company's Annual Report to Shareholders for the fiscal year ended June
30, 2000.
Forward-Looking Statements
Except for the historical information contained herein, the matters
discussed herein contain forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially from
those suggested in the forward-looking statements, including, without
limitation, the effect of economic conditions, product demand, currency
exchange rates, labor disputes, competitive products and other risks
detailed herein and in the Company's other filings with the Securities and
Exchange Commission.
23
<PAGE>
ITEM 2. PROPERTIES
The Company's principal activities are conducted at the facilities
described in the following table.
<TABLE>
<CAPTION>
Square Owned or Percentage
Location Footage Leased Utilization Division
- -------------------------- ---------- ---------- ------------- ---------------------
<S> <C> <C> <C> <C>
Northridge, California 742,000 Leased 94% JBL, Infinity,
Harman Kardon,
JBL Professional,
Harman Motive
Ittersbach, Germany 550,000 Owned 80% Becker
17,000 Leased 100%
Worth-Schaitt, Germany 377,500 Owned 80% Becker
Martinsville, Indiana 206,000 Owned 100% Harman Motive
40,000 Leased 100%
Straubing, Germany 193,000 Owned 95% Harman Audio
37,000 Leased 100% Elec. Systems
Elkhart, Indiana 222,700 Owned 100% Crown
7,000 Leased 70%
Ringkobing, Denmark 190,000 Owned 90% Harman Consumer
16,000 Leased 90% Manufacturing A/S
Tijuana, Mexico 194,000 Leased 100% JBL, Infinity
Potters Bar, UK 160,000 Leased 100% Soundcraft,
AMEK, BSS,
C-Audio
Chateau du Loir, France 151,000 Owned 100% Audax, JBL,
Infinity,
Harman Kardon
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Square Owned or Percentage
Location Footage Leased Utilization Division
- -------------------------- ---------- ---------- ------------- ---------------------
<S> <C> <C> <C> <C>
Vienna, Austria 129,000 Leased 100% AKG
Sandy, Utah 122,000 Leased 100% Digitech, DOD, dbx
Juarez, Mexico 105,000 Leased 60% Audio Latina
Bridgend, UK 101,000 Leased 100% Harman Motive Ltd
</TABLE>
The company considers its properties to be suitable and adequate for its
present needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in a lawsuit entitled Bose Corporation v.
JBL, Inc., and Infinity Systems, Inc., United States District Court, District
of Massachusetts. In this case Bose sued JBL and Infinity for
infringement of a U.S. patent owned by Bose relating to the use of
elliptically shaped ports in loudspeaker cabinets. On September 1, 2000,
the court issued a judgement in favor of Bose in the amount of $5.7
million. In addition, the court issued a permanent injunction prohibiting
JBL and Infinity from the manufacture and sale of loudspeakers in the
United States utilizing plastic elliptical ports. Management believes the
court erred in its ruling and intends to appeal this decision. Management
believes that it will ultimately prevail upon appeal.
There are various other legal claims pending against the Company, but in
the opinion of management, liabilities, if any, arising from such claims
will not have a material effect upon the consolidated financial condition
or results of operations of the Company.
25
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Age at
Name August 1, 2000 Position
- ---------------------- ---------------- ---------------------------------------
<S> <C> <C>
Sidney Harman 81 Executive Chairman and
Chairman of the Board of Directors
Bernard A. Girod 58 Vice Chairman of the Board
of Directors and Chief
Executive Officer
Gregory P. Stapleton 53 President, Chief Operating Officer
and Director of the Company
Frank Meredith 43 Executive Vice President and
Chief Financial Officer
William S. Palin 57 Vice President - Controller
Sandra B. Robinson 41 Vice President - Financial Operations
Edwin C. Summers 53 Vice President and General Counsel
Floyd E. Toole 54 Vice President - Acoustics
</TABLE>
Officers are elected annually by the Board of Directors and hold office at
the pleasure of the Board of Directors until the next annual selection of
officers or until their successors are elected and qualified.
Sidney Harman, Ph.D., the Company's founder, was named Executive
Chairman in July 2000. Dr. Harman has been Chairman of the Board,
Chief Executive Officer and a Director of the Company since the Com-
pany's founding in 1980. From 1977 to 1979, Dr. Harman was the Under
Secretary of Commerce of the United States. From 1962 to 1977, Dr.
Harman was an officer and director of the Predecessor of the Company.
26
<PAGE>
Bernard A. Girod was named Vice Chairman and Chief Executive Officer
in July 2000. Mr. Girod has been Chief Executive Officer since
November 1998 and a Director of the Company since 1993. From March
1994 to November 1998, Mr. Girod served as President of the Company.
From November 1992 to November 1998, Mr. Girod served as Secretary
of the Company. From March 1993 to November 1998 Mr. Girod served
as Chief Operating Officer of the Company. From September 1986 to
August 1995, Mr. Girod served as Chief Financial Officer of the
Company. From September 1979 to September 1986, Mr. Girod was the
Vice President and General Manager of Permacel, a subsidiary of Avery
Dennison and Vice President of Planning and Business Development for
Avery Dennison. From 1977 to 1979, Mr. Girod was the Chief Financial
Officer of the predecessor of the Company.
Gregory P. Stapleton was named President and Chief Operating Officer in
July 2000. Mr. Stapleton has been a Director of the Company since
November 1997 and the Chief Operating Officer since November 1998.
From October 1997 to November 1998, Mr. Stapleton served as President
of the Harman OEM Group. Prior to his association with the Company,
Mr. Stapleton was Senior Vice President of General Electric Venture
Capital Corporation from January 1986 to September 1987, and was
General Manager, Industrial Products Section, Factory Automation
Products Division, of General Electric Corporation from October 1982
through December 1985.
Frank Meredith was named Executive Vice President and Chief Financial
Officer in July 2000. Mr. Meredith has been the Chief Financial Officer
of the Company since February 1997 and Secretary of the Company since
November 1998. Mr. Meredith served as Vice President, General
Counsel and Assistant Secretary of the Company from July 1992 to June
1998. Prior to that time, Mr. Meredith held other positions within the
Company since May 1985. Prior to joining the Company, Mr. Meredith
was employed by the accounting firm Touche Ross & Co.
William S. Palin has been Vice President - Controller of the Company
since March 1994. Prior to joining the Company, Mr. Palin was a partner
of MacHardy Palin & Co. from January 1982 to March 1994. From July
1978 to January 1982, Mr. Palin served as an officer of two of the
Company's international subsidiaries.
27
<PAGE>
Sandra B. Robinson has been Vice President - Financial Operations since
November 1992. Prior to that time, Ms. Robinson was Director of
Corporate Accounting and has been employed by the Company since
December 1984.
Edwin C. Summers has been Vice President and General Counsel of the
Company since July 1998. Prior to that time, Mr. Summers was Vice
President, General Counsel and Secretary of First Alliance Corporation
from 1996. From 1991 to 1995, Mr. Summers was Senior Vice President,
General Counsel and Secretary of Transamerica Finance Group.
Floyd E. Toole, Ph.D., joined the Company as Vice President - Acoustics
in November 1991. Prior to joining the Company, Dr. Toole spent 25
years, most recently as Senior Research Officer, with the National
Research Council of Canada's Acoustics and Signal Processing Group,
where he developed psychoacoustic-optimized techniques for improving
loudspeaker performance.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The information required by Part II, Item 5 is incorporated by reference to
the Company's Annual Report to Shareholders for the fiscal year ended
June 30, 2000 (Shareholder Information on page 38).
28
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
Five-Year Summary
(in thousands, except per share data,
for the fiscal years ended June 30)
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $1,677,939 $1,500,135 $1,513,255 $1,474,094 $1,361,595
Operating income 121,722 38,663 100,325 101,973 105,378
Income before taxes 102,829 14,447 75,707 77,901 75,024
Net income 72,838 11,723 50,243 54,832 52,042
Diluted EPS 4.13 0.65 2.67 2.90 3.09
Total assets 1,137,505 1,065,755 1,130,684 1,014,254 996,209
Total debt 277,324 311,575 333,640 306,150 287,401
Shareholders' equity 486,333 468,187 511,899 466,762 436,477
Dividends per share 0.20 0.20 0.20 0.20 0.20
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The information required by Part II, Item 7 is incorporated by reference to
the Company's Annual Report to Shareholders for the fiscal year ended
June 30, 2000 (Management's Discussion and Analysis of Financial
Condition and Results of Operations on pages 17 through 21).
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The Securities and Exchange Commission requires that registrants include
information about potential effects of changes in interest rates and
currency exchange rates in their financial statements. The qualitative
information required by Part II, Item 7A is incorporated by reference to
pages 21 and 36 of the Company's Annual Report to Shareholders for the
29
<PAGE>
fiscal year ended June 30, 2000 (Effects of Inflation and Currency
Exchange Rates and Footnote 13, Fair Value of Financial Instruments,
respectively).
The Company's exposure to interest rate changes is primarily related to its
variable rate debt. To assess exposure to interest rate changes, the
Company has performed a sensitivity analysis assuming a hypothetical
100 basis point increase in interest rates across all maturities. This
analysis indicates that such market movements would reduce fiscal 2001
net income, based on June 2000 positions, by approximately $0.7 million.
Based on June 1999 positions, the effect on fiscal 2000 net income of
such an increase in interest rates was estimated to be $0.9 million.
The Company and its subsidiaries' net unhedged exposure in assets and
liabilities denominated in other than their relevant functional currency as
of June 30, 2000 and 1999 was not material to the consolidated financial
position of the Company.
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 the Company's actual exposure and hedges.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
The information required by Part II, Item 8 is incorporated by reference to
the Company's Annual Report to Shareholders for the fiscal year ended
June 30, 2000 (Consolidated Financial Statements on pages 24 through
38).
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
30
<PAGE>
PART III
With the exception of information relating to the executive officers of the
Company which is provided in Part I hereof, all information required by
Part III (Items 10, 11, 12, and 13) of Form 10-K, including the
information required by Item 405 of Regulation S-K, is incorporated by
reference to the Company's definitive Proxy Statement relating to the
2000 Annual Meeting of Stockholders.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
a) 1. Financial statements required to be filed hereunder
are indexed on page 33 hereof.
2. Financial statement schedules required to be filed
hereunder are indexed on page 33 hereof.
3. The exhibits required to be filed hereunder are
indexed on pages 37 through 44 hereof.
b) Reports on Form 8-K
Form 8-K, dated August 16, 2000, filed on August 18,
2000, containing the following items:
Item 5. Announcement of two-for-one stock split to
be effected in the form of a stock dividend.
Form 8-K, dated August 16, 2000, filed on August 18,
2000, containing the following items:
Item 5. June 2000 earnings release and additional
financial information.
31
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
By: (Signature and Title) /s/ Bernard A. Girod
----------------------
Bernard Girod, Vice Chairman
and Chief Executive Officer
Date: September 8, 2000
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Sidney Harman Executive Chairman and September 8, 2000
- ------------------------------ Chairman of the Board -------------------------
Sidney Harman of Directors
/s/ Bernard A. Girod Vice Chairman, Chief September 8, 2000
- ------------------------------ Executive Officer and -------------------------
Bernard A. Girod Director
/s/ Gregory P. Stapleton President, Chief Operating September 8, 2000
- ------------------------------ Officer and Director -------------------------
Gregory P. Stapleton
/s/ Frank Meredith Executive Vice President September 8, 2000
- ------------------------------ and Chief Financial -------------------------
Frank Meredith Officer (Principal
Accounting Officer)
/s/ Shirley M. Hufstedler Director September 8, 2000
- ------------------------------ -------------------------
Shirley M. Hufstedler
/s/ Ann McLaughlin Director September 8, 2000
- ------------------------------ -------------------------
Ann McLaughlin
/s/ Edward H. Meyer Director September 8, 2000
- ------------------------------ -------------------------
Edward H. Meyer
/s/ Stanley A. Weiss Director September 8, 2000
- ------------------------------ -------------------------
Stanley A. Weiss
</TABLE>
32
<PAGE>
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
Index to Item 14(a)
<TABLE>
<CAPTION>
Page Reference
----------------------------------
Annual
Report to
Form 10-K Shareholders
----------------------------------
<S> <C> <C>
Consolidated Financial Data (pages 24
through 38 of the 2000 Annual Report
to Shareholders herein incorporated
by reference as Exhibit 13.1):
Financial Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . 16
Independent Auditor's Reports . . . . . . . . . . . . . . 34 . . . . . . . . 23
Consolidated Balance Sheets as of
June 30, 2000 and 1999 . . . . . . . . . . . . . . . . . . . . . . . . . 24
Consolidated Statements of
Operations for the years ended
June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . 25
Consolidated Statements of Cash
Flows for the years ended
June 30, 2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . 26
Consolidated Statements of Shareholders'
Equity for the years ended June 30,
2000, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . 28
Schedules for the years ended June 30,
2000, 1999 and 1998:
II Valuation and Qualifying
Accounts and Reserves . . . . . . . . . . . . . . . 35
All other schedules have been omitted because they are not applicable, not required, or
the information has been otherwise supplied in the financial statements or notes to the
financial statements.
</TABLE>
33
<PAGE>
INDEPENDENT AUDITOR'S REPORT ON SCHEDULE
----------------------------------------
The Board of Directors
Harman International Industries, Incorporated
Under the date of August 10, 2000, we reported on the consolidated
balance sheets of Harman International Industries, Incorporated and
subsidiaries as of June 30, 2000 and 1999, and the related consolidated
statements of operations, cash flows and shareholders' equity for each of
the years in the three year period ended June 30, 2000, as contained in the
2000 annual report to shareholders. These consolidated financial
statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year ended June 30, 2000. In
connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related financial statement schedule
as listed in the accompanying index. The financial statement schedule is
the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statement schedule based on our
audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
Los Angeles, California
August 10, 2000
34
<PAGE>
Schedule II
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Valuation and Qualifying Accounts and Reserves
Years Ended June 30, 2000, 1999 and 1998
($000's omitted)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Charged
Balance at Charged to To Other Balance
Beginning Costs and Accounts Deductions at End
Classification of Period Expenses Describe Describe of Period
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended June 30, 1998
Allowance for
doubtful accounts $ 9,116 $ 4,904 $ 152 (1) $ 4,100 (2) $ 10,072
Inventory reserves $ 49,651 $ 3,110 (4) $ (2,013) (1) $ 12,173 (3) $ 38,575
Year Ended June 30, 1999
Allowance for
doubtful accounts $ 10,072 $ 2,662 $ (129) (1) $ 3,873 (2) $ 8,732
Inventory reserves $ 38,575 $ 28,023 (4) $ (1,167) (1) $ 25,315 (3) $ 40,116
Year Ended June 30, 2000
Allowance for
doubtful accounts $ 8,732 $ 6,902 $ (394) (1) $ 3,480 (2) $ 11,760
Inventory reserves $ 40,116 $ 32,611 (4) $ 775 (1) $ 33,278 (3) $ 40,224
</TABLE>
(1) Net effect of acquisitions, dispositions and foreign currency translation.
(2) Deductions for accounts receivable written off net of recoveries.
(3) Deductions for scrapping and markdowns.
(4) Includes net change in intercompany profit elimination.
35
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
36
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
INDEX TO EXHIBITS
The following exhibits are filed as part of this report. Where such
filing is made by incorporation by reference to a previously filed
statement or report, such statement or report is identified in parenthesis.
There are omitted from the exhibits filed with this Annual Report
on Form 10-K certain promissory notes and other instruments and
agreements with respect to long-term debt of the Company, none of which
authorizes securities in a total amount that exceeds 10 percent of the total
assets of the Company and its subsidiaries on a consolidated basis.
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Company hereby
agrees to file with the Securities and Exchange Commission copies of all
such omitted promissory notes and other instruments and agreements as
the Commission requests.
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
3.1, 4.1 Restated Certificate of Incorporation filed with the
Delaware Secretary of State on October 7, 1986,
as amended by the Certificates of Amendment
filed with the Delaware Secretary of State on
November 13, 1986 and on November 9, 1993.
(Filed as Exhibit 4.1 to Amendment 1 to the
Company's Registration Statement on Form S-3
dated November 15, 1993 (File No. 1-9764) and
hereby incorporated by reference.).................................IBR
3.2,4.5 By-Laws of Harman International Industries,
Incorporated, as amended December 13, 1999..........................45
</TABLE>
37
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
4.2 Rights agreement (including a Form of Certificate
of Designation of Series A Junior Participating
Preferred Stock as Exhibit A thereto, a Form Right
Certificate as Exhibit B thereto and a Summary of
Rights to Purchase of Preferred Stock as Exhibit C
thereto) (Incorporated by reference to the Form 8-A
filed by the Company on December 16, 1999).........................IBR
4.3 Certificate of Designation of Series A Junior
Participating Preferred Stock of Harman
International Industries, Incorporated, dated
January 11, 2000....................................................61
10.1 Lease dated as of June 18, 1987 between Harman
International Industries Business Campus Joint
Venture and JBL Inc., as amended. (Filed as Exhibit
10.1 to the Annual Report on Form 10-K for the
fiscal year ended June 30, 1987 (File No. 0-15147)
and hereby incorporated by reference.).............................IBR
10.2 Guaranty dated as of June 18, 1987 by Harman
International Industries, Inc. of Lease dated as of
June 18, 1987 between Harman International
Industries Business Campus Joint Venture and JBL
Inc., as amended. (Filed as Exhibit 10.2 to the
Annual Report on Form 10-K for the fiscal year
ended June 30, 1987 (File No. 0-15147) and hereby
incorporated by reference.)........................................IBR
10.18 Harman International Industries, Inc. 1987 Executive
Incentive Plan (adopted December 8, 1987). (Filed
as Exhibit 10.18 to the Annual Report on Form 10-K
for the fiscal year ended June 30, 1988 (File No.
0-15147), and hereby incorporated by reference.)...................IBR
</TABLE>
38
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
10.19 Form of Incentive Stock Option Agreement under
the 1987 Executive Incentive Plan. (Filed as Exhibit
10.19 to the Annual Report on Form 10-K for the
fiscal year ended June 30, 1988 (File No. 0-15147),
and hereby incorporated by reference.).............................IBR
10.20 Form of Non-Qualified Stock Option Agreement
under the 1987 Executive Incentive Plan. (Filed as
Exhibit 10.20 to the Annual Report on Form 10-K
for the fiscal year ended June 30, 1988 (File No.
0-15147), and hereby incorporated by reference.)...................IBR
10.21 Form of Non-Qualified Stock Option Agreement
with non-officer directors. (Filed as Exhibit 10.21
to the Annual Report on Form 10-K for the fiscal
year ended June 30, 1988 (File No. 0-15147), and
hereby incorporated by reference.).................................IBR
10.23 Lease Agreement dated April 28, 1988, by and
between Harman International Business Campus
Joint Venture and Harman Electronics, Inc. (Filed
as Exhibit 10.23 to the Annual Report on Form
10-K for the fiscal year ended June 30, 1988
(File No. 0-15147), and hereby incorporated by
reference.)........................................................IBR
10.26 Harman International Industries, Incorporated
Retirement Savings Plan. (Filed on Form S-8
Registration Statement on June 16, 1989
(Reg. No. 33-28973), and hereby
incorporated by reference.)........................................IBR
10.27 Amended and Restated Harman International
Industries, Incorporated Supplemental Executive
Retirement Plan dated October 1, 1999...............................69
</TABLE>
39
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
10.30 Form of Restricted Stock Agreement. (Filed as
Exhibit 10.30 to the Annual Report on Form 10-K
for the fiscal year ended June 30, 1989 (File No.
0-15147), and hereby incorporated by reference.)...................IBR
10.40 Harman International Industries, Incorporated 1992
Incentive Plan, as amended (Filed as Exhibit B to
the Company's Definitive Proxy Statement filed on
September 15, 1999 (File No. 001-09764) and
hereby incorporated by reference)..................................IBR
10.41 Form of Incentive Stock Option Agreement under the
1992 Incentive Plan.................................................87
10.42 Form of Non-Qualified Stock Option Agreement under
the 1992 Incentive Plan.............................................99
10.43 Form of Restricted Stock Agreement under the 1992
Incentive Plan.....................................................111
10.44 Form of Non-Qualified Stock Option Agreement
for Non-Officer Directors under the 1992 Incentive
Incentive Plan.....................................................123
10.45 Harman International Industries, Inc. Deferred
Compensation Plan, effective June 1, 1997 (Filed
on Form S-8 Registration Statement on June 9, 1997
(Reg. No. 333-28793), and hereby incorporated by
reference.)........................................................IBR
10.46 First Amendment to Harman International
Industries, Inc. Deferred Compensation Plan
dated October 1, 1999..............................................135
</TABLE>
40
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
10.53 Multi-Currency, Multi-Option Credit Agreement
dated September 30, 1994, among Harman
International Industries, Incorporated, the Subsidiary
Borrowers and Subsidiary Guarantors, and the
Several Lenders named therein with Chemical
Securities, Inc., as Arranger, NationsBank of North
Carolina, N.A., as Co-Agent and Chemical Bank,
as Administrative Agent. (Filed as Exhibit 10.53
to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994 (File No. 001-09764),
and hereby incorporated by reference.).............................IBR
10.54 First Amendment dated February 15, 1995, to the
Multi-Currency, Multi-Option Credit Agreement
dated September 30, 1994. (Filed as Exhibit 10.54
to the Annual Report on Form 10-K for the fiscal
year ended June 30, 1995 (File No. 001-09764), and
hereby incorporated by reference.).................................IBR
10.55 Second Amendment dated November 9, 1995, to the
Multi-Currency, Multi-Option Credit Agreement
dated September 30, 1994. (Filed as Exhibit 10.55
to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995 (File No. 001-09764),
and hereby incorporated by reference.).............................IBR
10.57 First Amendment to the Lease Agreement by and
between Harman International Business Campus
Joint Venture and Harman Electronics, Inc. dated
October 1995 (Filed as Exhibit 10.57 to the Annual
Report on Form 10-K for the fiscal year ended
June 30, 1996 (File No. 001-09764), and hereby
incorporated by reference.)........................................IBR
</TABLE>
41
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
10.58 First Amendment to the Lease Agreement by and
between Harman International Business Campus
Joint Venture and JBL, Inc. dated October 1995
(Filed as Exhibit 10.58 to the Annual Report on
Form 10-K for the fiscal year ended June 30, 1996
(File No. 001-09764), and hereby incorporated by
reference.)........................................................IBR
10.59 Fourth Amendment dated June 6, 1997, to the
Multi-Currency, Multi-Option Credit Agreement
dated September 30, 1994 (Filed as Exhibit 10.59
to the Annual Report on Form 10-K for the fiscal
year ended June 30, 1997 (File No. 001-09764),
and hereby incorporated by reference.).............................IBR
10.61 Amended and Restated Credit Agreement dated
July 5, 2000, among Harman International
Industries, Incorporated, Becker Holding GmbH,
The Several Lenders from Time to Time Party
Thereto and Commerzbank Aktiengesellschaft.........................141
10.63 Amended and Restated Indenture dated as of July 1, 1997
between Harman International Industries, Incorporated
and PNC Bank, National Association (Filed as
Exhibit 10.63 to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998
(File No. 001-09764), and hereby incorporated by
reference.)........................................................IBR
10.65 Employment Agreement between the Company and
William Palin dated September 1, 1999 (Filed as
Exhibit 10.65 to the Annual Report on Form 10-K
for the year ended June 30, 1999 (File No.
001-09764), and hereby incorporated by reference.).................IBR
</TABLE>
42
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
10.66 Form of Non-Qualified Stock Option Agreement
between the Company and certain executive officers
of the Company dated August 11, 1998 (Filed as
Exhibit 10.66 to the Annual Report on Form 10-K
for the year ended June 30, 1999 (File No.
001-09764), and hereby incorporated by reference.).................IBR
10.67 Equipment Financing Agreement between the
Company and State Street Bank and Trust dated
September 30, 1999 (Filed as Exhibit 10.67
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999 (File No.
001-09764), and hereby incorporated by reference)..................IBR
10.68 Participation Agreement among the Company,
State Street Bank and Trust, Four Winds Funding
Corporation, Commerzbank, Bank of Tokyo -
Mitsubishi Trust Company and BTM Capital
dated September 30, 1999 (Filed as Exhibit 10.68
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999 (File No.
001-09764), and hereby incorporated by reference)..................IBR
10.69 Harman International Industries, Incorporated,
Key Executive Officers Incentive Plan (Filed as
Exhibit A to the Definitive Proxy Statement on
Form 14-A for the year ended June 30, 2000
(File No. 001-09764) and hereby incorporated
by reference.......................................................IBR
10.70 Fifth Amendment dated July 17, 2000 to the
Multi-Currency, Multi-Option Credit Agreement
dated September 30, 1994...........................................215
</TABLE>
43
<PAGE>
INDEX TO EXHIBITS (cont.)
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
10.71 Form of Severance Agreement between the
Company and Sidney Harman, Bernard Girod,
Gregory Stapleton and Frank Meredith...............................233
10.72 Benefit Agreement under the Supplemental
Executive Retirement Plan between Bernard
Girod and Harman International Industries,
Inc., dated June 22, 2000..........................................261
10.73 Benefit Agreement under the Supplemental
Executive Retirement Plan between Gregory
Stapleton and Harman International Industries,
Inc., dated June 20, 2000..........................................265
10.74 Benefit Agreement under the Supplemental
Executive Retirement Plan between Frank
Meredith and Harman International Industries,
Inc., dated June 21, 2000..........................................269
13.1 Pages 16 through inside back cover of Harman
International Industries, Incorporated Annual
Report to Shareholders for the fiscal year ended
June 30, 2000......................................................273
21.1 Subsidiaries of the Company........................................301
23.1 Consent of Independent Auditors....................................307
27.1 EDGAR Financial Data Schedule......................................311
</TABLE>
44
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>
<PAGE>
EXHIBIT 3.2, 4.5
45
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
46
<PAGE>
BY-LAWS
OF
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be in the City
of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such, other places both within and without the State of Delaware as the
Board of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Time and Place of Meetings. All meetings of the
stockholders for the election of directors shall be held in the City of
Northridge, State of California, at such place as may be fixed from time to
time by the Board of Directors, or at such other place either within or
without the State of Delaware as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting. Meetings
of stockholders for any other purpose may be held at such time and place,
within or without the State of Delaware, as shall be stated in the notice of
the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meeting. Annual meetings of stockholders, shall be
held on a business day exclusive of Saturdays, Sundays and holidays,
during the last two weeks of September in each year, as shall be fixed by
the Board of Directors, at 9:00 a.m., or at such other date and time as shall
be designated from time to time by the Board of Directors and stated in the
notice of the meeting, at which they shall elect by a plurality vote a Board
of Directors, or a class of the Board of Directors as otherwise provided,
and transact such other business as may properly be brought before the
meeting.
Section 3. Notice of Annual Meeting. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than ten nor
more than sixty days before the date of the meeting.
Section 4. Stockholder List. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be
47
<PAGE>
specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and
kept at the place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 5. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the Chairman of the Board
(or, if none, the President) and shall be called by the Chairman of the
Board (or, if none, the President) or Secretary at the request in writing of a
majority of the Board of Directors.
Section 6. Notice of Special Meetings. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten
nor more than sixty days before the date of the meeting, to each
stockholder entitled to vote at such meeting. Business transacted at any
special meeting of stockholders shall be limited to the purposes stated in
the notice.
Section 7. Quorum. The holders of a majority of the voting power of
the stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all meetings
of the stockholders for the transaction of business except as otherwise
provided by statute or by the certificate of incorporation. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at
which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 8. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation, each stockholder of any class, in accordance
with the rights of the class, shall be entitled at every meeting of the
stockholders to one vote for each share of stock having voting power
standing in the name of such stockholder on the books of the Corporation
on the record date for the meeting and such votes may be cast either in
person or by written proxy. Each proxy must be duly executed and filed
with the Secretary of the Corporation. A stockholder may revoke any
proxy which is not irrevocable by, attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or another
duly executed proxy bearing a later date with the Secretary of the
Corporation. The vote upon any question brought before a meeting of the
stockholders may be by voice vote, unless the holders of a majority of the
outstanding shares of all classes of stock entitled to vote thereon present in
person or by proxy at such meeting shall so determine. Every vote taken
by written ballot shall be counted by one or more inspectors of election
appointed by the Board of the Directors. When a quorum is present at any
meeting, the vote of the holders of a majority of the voting power of the
stock having voting power present in person or represented by proxy shall
decide any question brought before such meeting, unless the question is
one upon which by express provision of the statutes or of the
48
<PAGE>
certificate of incorporation, a different vote is required, in which
case such express provision shall govern and control the
decision of such question.
Section 9. Conduct of Business. (a) At an annual meeting of
stockholders, only such business will be conducted or considered as is
properly brought before the meeting. To be properly brought before an
annual meeting, business must be (i) specified in the notice of meeting (or
any supplement thereto) given in accordance with Article II, Section 3, (ii)
otherwise properly brought before the meeting by the presiding officer or
by or at the direction of a the Board of Directors, or (iii) otherwise
properly requested to be brought before the meeting by a stockholder of
the Corporation in accordance with Section 9(b) of this Article II.
(b) For business to be properly requested by a stockholder to be
brought before an annual meeting, the stockholder must (i) be a
stockholder of the Corporation of record at the time of the giving of the
notice for such annual meeting, (ii) be entitled to vote at such meeting, and
(iii) have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation
not less than 60 calendar days before first anniversary of the date on which
the Corporation first mailed its proxy materials for the prior year's annual
meeting of stockholders; provided, however, that in the event public
announcement of the date of the annual meeting is not made at least 75
calendar days prior to the date of the annual meeting, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th calendar day following the day on which public
announcement is first made of the date of the annual meeting. A
stockholder's notice to the Secretary must set forth as to each matter the
stockholder proposes to bring before the annual meeting (A) a description
in reasonable detail of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual
meeting, (B) the name and address, as they appear on the Corporation's
books, of the stockholder proposing such business and of the beneficial
owner, if any, on whose behalf the proposal is made, (C) the class and
number of shares of the Corporation that are owned beneficially and of
record by the stockholder proposing such business and by the beneficial
owner, if any, on whose behalf the proposal is made, and (D) any material
interest of such stockholder proposing such business and the beneficial
owner, if any, on whose behalf the proposal is made in such business.
Notwithstanding the foregoing provisions of these By-Laws, a stockholder
must also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 9(b). For
purposes of this Section 9(b), "public announcement" means disclosure in
a press release reported by the Dow Jones News Service, Associated
Press, or comparable national news service or in a document publicly filed
by the Corporation with the Securities and Exchange Commission
pursuant to Sections 13, 14, or 15(d) of the Securities Exchange Act of
1934, as amended, or publicly filed by the Corporation with any national
securities exchange or quotation service through which the Corporation's
stock is listed or traded, or furnished by the Corporation to its
stockholders. Nothing in this Section 9(b) will be deemed to affect any
rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934.
(c) At a special meeting of stockholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought
49
<PAGE>
before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given in accordance
with Article II, Section 6 or (ii) otherwise brought before the
meeting by the presiding officer or by or at the direction the Board of
Directors.
(d) The determination of whether any business sought to be brought
before any annual or special meeting of the stockholders is properly
brought before such meeting in accordance with this Section 9 will be
made by the presiding officer of such meeting. If the presiding officer
determines that any business is not properly brought before such meeting,
he or she will so declare to the meeting and any such business will not be
conducted or considered.
ARTICLE III
DIRECTORS
Section 1. Powers. The business of the Corporation shall be managed
by or under the direction of its Board of Directors which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by statute or by the certificate of incorporation or by these By-
Laws directed or required to be exercised or done by the stockholders.
Section 2. Number, Election and Terms of Directors. Directors shall
be elected to hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their election and
until their successors are elected and qualified. The number of directors
shall be fixed from time to time exclusively by the Board of Directors
pursuant to a resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in
previously authorized directorships at the time such resolution is presented
to the Board for adoption).
Section 3. Newly Created Directorships and Vacancies. Vacancies
and newly created directorships resulting from any increase in the
authorized number of directors which occur between annual meetings of
the stockholders may be filled by a majority of the directors then in office,
though less than a quorum, or by a sole remaining director, and the
directors so elected shall hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year of their
election and until their successors are elected and qualified, except as
required by law.
Section 4. Removal. Subject to the rights, if any, of the holders of any
class or series of stock having preference over the Common Stock as to
dividends or upon liquidation to elect additional Directors under specified,
circumstances, any Director may be removed from office only for cause
and by the affirmative vote of the holders of at least two-thirds of the
combined voting power of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of Directors, voting
together as a single class.
Section 5. Place of Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware.
50
<PAGE>
Section 6. Annual Meeting. The first meeting of each newly elected
Board of Directors shall be held immediately following, and at the same
place as, the annual meeting of stockholders at which such directors were
elected, or at such other time and place as shall be fixed by the vote of the
stockholders at such annual meeting, and no notice of such meeting of the
Board of Directors shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall be
present. In the event such meeting is not held at the time and place
prescribed by the preceding sentence, the meeting may be held at such
time and place as shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors, or as shall be
specified in a written waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as
shall from time to time be determined by the board.
Section 8. Special Meetings. Special meetings of the board may be
called by the Chairman of the Board (or, if none, the President) on one
days' notice to each director, either personally or by mail or by telegram;
special meetings shall be called by the Chairman of the Board (or, if none,
the President) or Secretary in like manner and on like notice on the written
request of two directors unless the board consists of only one director; in
which case special meeting shall be called by the Chairman of the Board
(or, if none, the President) or Secretary in like manner and on like notice
on the written request of the sole director.
Section 9. Quorum. At all meetings of the board a majority in number
of the whole board shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except
as may be otherwise specifically provided by statute or by the certificate
of incorporation. If a quorum shall not be present at any meeting of the
Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
Section 10. Written Action. Unless otherwise restricted by the
certificate of incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the
board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the board
or committee.
Section 11. Participation in Meetings by Conference Telephone.
Unless otherwise restricted by the certificate of incorporation or these By-
Laws, members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of
Directors, or any committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
Section 12. Committees. The Board of Directors may, by resolution
passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the directors of
the Corporation. The board may designate one or more directors
51
<PAGE>
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether
or not such member, or members constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in
the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to
all papers which may require it; but no such committee shall have the
power or authority in reference to amending the certificate of
incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or adopting, amending or repealing the By-Laws of the
Corporation; and, unless the resolution or the certificate of incorporation
expressly so provide, no such committee shall have the power or authority
to declare a dividend or to authorize the issuance of stock. Such committee
or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Directors. Each
committee shall keep regular minutes of its meetings and report the same
to the Board, of Directors when required.
Section 13. Compensation. Unless otherwise restricted by the
certificate of incorporation or these By-Laws, the Board of Directors shall
have the authority to fix the compensation of directors. The directors may
be paid their expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance at each meeting
of the Board of Directors or a stated salary as director. No such payment
shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending
committee meetings.
Section 14. Nomination of Director Candidates. Subject to the rights
of any holders of Preferred Stock, nominations for the election of directors
may be made by the Board of Directors or a proxy committee appointed
by the Board of Directors or by any stockholder entitled to vote generally
in the election of directors. However, any stockholder entitled to vote
generally in the election of directors may nominate one or more persons
for election as directors at a meeting only if written notice of such
stockholder's intent to make such nomination has been given, either by
personal, delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than (i) with respect to an election to
be held at an annual meeting of stockholders, 90 days in advance of such
meeting, and (ii) with respect to an election to be held at a special meeting
of stockholders for the election of directors, the close of business on the
seventh day following the date on which notice of such meeting is first
given to stockholders. Each such notice shall set forth: (a) the name and
address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the stockholder and each
nominee and any other person or persons (naming such person or persons)
pursuant to which the
52
<PAGE>
nomination or nominations are to be made by the stockholder;
(d) such other information regarding each nominee proposed by such
stockholder as would have been required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of each nominee
to serve as a director of the Corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not
made in compliance with the foregoing procedure.
ARTICLE IV
NOTICES
Section 1. Generally. Whenever by law or under the provisions of the
certificate of incorporation or these By-Laws, notice is required to be
given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail,
addressed to such director or stockholder, at his address as it appears on
the records of the Corporation, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given
by telegram or telephone.
Section 2. Waivers. Whenever any notice is required to be given by
law or under the provisions of the certificate of incorporation or these By-
Laws, a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time of the event, for which
notice is to be given, shall be deemed equivalent to such notice.
Attendance of a person at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.
ARTICLE V
OFFICERS
Section 1. Generally. The officers of the Corporation shall be chosen
by the Board of Directors and shall be a Chairman of the Board, president,
a vice-president, a secretary and a treasurer. The Board of Directors may
also choose additional officers of the Corporation, including a chief
executive officer, a chief operating officer, a chief financial officer,
additional vice-presidents and one or more assistant secretaries and
assistant treasurers. Any number of offices may be held by the same
person, unless the certificate of incorporation or these By-Laws otherwise
provide. The officer designated as chief financial officer of the
Corporation shall be the treasurer unless another officer is chosen to be the
treasurer.
Section 2. Annual Selection of Officers. The Board of Directors at its
first meeting after each annual meeting of stockholders shall choose a
president, one or more vice-presidents, a secretary and a treasurer.
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Section 3. Other Officers. The Board of Directors may appoint such
other officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board.
Section 4. Compensation. The salaries and other compensation of all
officers of the Corporation shall be fixed by the Board of Directors, except
to the extent such authority is delegated to one of its committees or to an
officer of the Corporation.
Section 5. Succession. The officers of the Corporation shall hold
office until their successors are chosen and qualified. Any officer elected
or appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy
occurring in any office of the Corporation shall be filled by the Board of
Directors.
Section 6. Authority and Duties. Each of the officers of the
Corporation shall have such authority and shall perform such duties as are
stated in these By-Laws or as may be specified from time to time by the
Board of Directors in a resolution which is not inconsistent with these By-
Laws.
Section 7. Chairman. The Chairman of the Board (or, if none, the
President) shall be the chief executive officer of the Corporation, and
subject to the control of the Board of Directors, shall have general and
active management of the business of the Corporation. The Chairman of
the Board shall, if present, preside at all meetings of stockholders and the
Board of Directors.
Section 8. President. Subject to the control of the Chairman of the
Board and the Board of Directors, the President shall have responsibility
for the operations of the Corporation. The President shall also have the
powers and duties delegated to him by these By-Laws and such other
powers and duties as the Board of Directors may from time to time
prescribe.
Section 9. Execution of Documents and Action with Respect to
Securities of Other Corporations. The President shall have and is hereby
given, full power and authority, except as otherwise required by law or
directed by the Board of Directors, (a) to execute, on behalf of the
Corporation, all duly authorized contracts, agreements, deeds,
conveyances or other obligations of the Corporation, applications,
consents, proxies and other powers of attorney, and other documents and
instruments, and (b) to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of stockholders (or
with respect to any action of such stockholders) of any other corporation
in which the Corporation may hold securities and otherwise to exercise
any and all rights and powers which the Corporation may possess by
reason of its ownership of securities of such other corporation. In
addition, the President may delegate to other officers, employees and
agents of the Corporation the power and authority to take any action which
the President is authorized to take under this Section 9, with such
limitations as the President may specify; such authority so delegated by
the President shall not be re-delegated by the person to whom such
execution authority has been delegated.
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Section 10. Vice President. In the absence of the President or in the
event of his inability or refusal to act, the Vice-President (or in the event
there be more than one vice-president, the Vice-Presidents in the order
designated by the directors, or in the absence of any designation, then in
the order of their election) shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. The Vice-President or Vice-Presidents
shall perform such other duties and have such other powers as the Board
of Directors may from time to time prescribe.
Section 11. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the Board of
Directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. The Secretary shall
give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or the Chairman of
the Board, under whose supervision the Secretary shall be. The Secretary
shall have custody of the corporate seal of the Corporation and the
Secretary, or an Assistant Secretary, shall have authority to affix the same
to any instrument requiring it and when so affixed, it may be attested by
the Secretary's signature or by the signature of such Assistant Secretary.
The Board of Directors may give general authority to any other officer to
affix the seal of the Corporation and to attest the affixing by such other
officer's signature.
Section 12. Assistant Secretary. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the
Board of Directors (or if there be no such determination, then. in the order
of their election) shall, in the absence of the Secretary or in the event of
the Secretary's inability or refusal to act, perform the duties and exercise
the powers of the Secretary and shall perform such other duties and have
such other powers as the Board of Directors may from time to time
prescribe.
Section 13. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the
Board of Directors. The Treasurer shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the President and the
Board of Directors, at its regular meetings, or when the Board of Directors
so requires, an account of all the Treasurer's transactions as Treasurer and
of the financial condition of the Corporation.
Section 14. Surety Bond. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond (which shall be renewed every
six years) in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of the Treasurer's office and for the restoration to the Corporation,
in case of the Treasurer's death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in the Treasurer's possession or under the Treasurer's
control belonging to the Corporation.
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Section 15. Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors (or if there be no such determination, then in the
order of their election) shall, in the absence of the Treasurer or in the event
of the Treasurer's inability or refusal to act, perform the duties and
exercise the powers of the Treasurer and shall perform such other duties
and have such other powers as the Board of Directors may from time to
time prescribe.
ARTICLE VI
STOCK
Section 1. Certificates. (a) Every holder of stock in the Corporation
shall be entitled to have a certificate, signed by, or in the name of the
Corporation by, the chairman or vice-chairman of the Board of Directors,
or the President or a Vice-President and the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation. If
the Corporation shall be authorized to issue more than one class of stock
or more than one series of any class, the powers, designations, preferences
and relative, participating, optional or other special rights of such class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights shall be set forth in full or summarized on
the face or back of the certificate which the Corporation shall issue to
represent such class or series of stock, provided that, except as otherwise
provided in Section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or
back of the certificate which the Corporation shall issue to represent such
class or series of stock, a statement that the Corporation will furnish
without charge to each stockholder who so requests the owners,
designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions off such preference and/or rights; and (b) any of
or all the signatures on a certificate may be facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if such officer, transfer agent or
registrar were such officer, transfer agent or registrar at the date of issue.
Section 2. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate
or certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or such owner's legal
representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 3. Transfer. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of
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succession, assignation or authority to transfer, it shall be
the duty of the Corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. Record Date. (a) In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of Directors
may fix, in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than sixty
days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting; and (b) the
Corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to
vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or
in shares of the capital stock, subject to the provisions of the certificate of
incorporation.
Section 2. Special Purpose Reserves. Before payment of any dividend,
there may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the directors from time to time, in their,
absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purpose as the directors
shall think conducive to the interest of' the Corporation, and the directors
may modify or abolish any such reserve in the manner in which it was
created.
Section 3. Statement to Stockholders. The Board of Directors shall
present at each annual meeting, and at any special meeting of the
stockholders when called for by vote of the stockholders, a full and clear
statement of the business and condition of the Corporation.
Section 4. Authorized Signatories. All checks or demands for money
and notes of the Corporation shall, be signed by such officer or officers or
such other person or persons as the Board of Directors may from time to
time designate.
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Section 5. Fiscal Year. The fiscal year of the Corporation shall end on
June 30 each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 6. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the
words "Corporate Seal, Delaware." The seal may be used by causing it or
a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Reliance upon Books, Reports and Records. Each director,
each member of a committee designated by the Board of Directors, and
each officer of the Corporation shall, in the performance of his or her
duties, be fully protected in relying in good faith upon the records of the
Corporation and upon such information, opinions, reports or statements
presented to the Corporation by any of the Corporation's officers or
employees, or committees of the Board of Directors, or by any other
person as to matters the director, committee member or officer believes
are within such other person's professional or expert competence and who
has been selected with reasonable care by or on behalf of the Corporation.
Section 8. Time Periods. In applying any provision of these By-Laws
which requires that an act be done or not be done a specified number of
days prior to an event or that an act be done during a period of a specified
number of days prior to an event, calendar days shall be used, the day of
the doing of the act shall be excluded and the day of the event shall be
included.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
Each person who is or was or had agreed to become a Director or
officer of the Corporation, or each such person who is or was serving or
had agreed to serve at the request of the Board of Directors or an officer of
the Corporation as an employee or agent of the Corporation or as a
Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise (including the heirs, executors,
administrators or estate of such person), shall be indemnified (including
provision for advancement of expenses) by the Corporation to the full
extent permitted by the General Corporation Law of the State of Delaware
or any other applicable laws as presently or hereafter in effect.
ARTICLE IX
AMENDMENTS
These By-Laws may be amended or repealed or new By-Laws may be
adopted by the stockholders or by the Board of Directors, when such
power is conferred upon the Board of Directors by the certificate of
incorporation, at any regular meeting of the stockholders or of the Board
of Directors or at any special meeting of the stockholders or of the Board
of Directors if notice of such amendment, repeal or adoption of new By-
Laws be contained in the notice of such special meeting; provided,
however, that, notwithstanding any other provision of these By-Laws or
any other provision of law which might otherwise permit a lesser vote or
no vote, but in
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addition to any affirmative vote of the holders of any particular
class or series of the capital stock of the Corporation entitled to
vote generally in the election of directors which is required by law, the
certificate of incorporation, any designation of the relative powers,
preferences, rights, qualifications and limitations of any class or series of
Preferred Stock made pursuant to the certificate of incorporation of the
Corporation or these By-Laws, the affirmative vote of the holders of at
least two-thirds of the voting power of all the then outstanding shares of
capital stock entitled to vote generally for the election of directors, voting
together as a single class, shall be required to amend or repeal, or adopt
any provisions inconsistent with Sections 2, 3, 4 and 14 of Article III, or
this proviso to Article IX of these By-Laws.
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EXHIBIT 4.3
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CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
of
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
Harman International Industries, Incorporated, a corporation organized
and existing under the General Corporation Law of the State of Delaware
(hereinafter called the "Company"), DOES HEREBY CERTIFY:
That, pursuant to authority vested in the Board of Directors of the
Company by its Certificate of Incorporation, and pursuant to the
provisions of Section 151 of the General Corporation Law, the Board of
Directors of the Company has adopted the following resolution providing
for the issuance of a series of Preferred Stock:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company (hereinafter called the
"Board of Directors" or the "Board") by the Certificate of Incorporation of
the Company, a series of Preferred Stock, par value $.01 per share (the
"Preferred Stock"), of the Company be, and it hereby is, created, and that
the designation and amount thereof and the powers, designations, preferences
and relative, participating, optional and other special rights of the shares
of such series, and the qualifications, limitations or restrictions
thereof are as follows:
I. Designation and Amount
The shares of such series will be designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred") and the number of
shares constituting the Series A Preferred is 500,000. Such number of
shares may be increased or decreased by resolution of the Board;
provided, however, that no decrease will reduce the number of shares of
Series A Preferred to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Company convertible into
Series A Preferred.
II. Dividends and Distributions
(a) Subject to the rights of the holders of any shares of any series of
Preferred Stock ranking prior to the Series A Preferred with respect to
dividends, the holders of shares of Series A Preferred, in preference to the
holders of Common Stock, par value $.01 per share (the
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"Common Stock"), of the Company, and of any other junior stock, will be
entitled to receive, when, as and if declared by the Board out of funds
legally available for the purpose, dividends payable in cash (except as other-
wise provided below) on such dates as are from time to time established
for the payment of dividends on the Common Stock (each such date being
referred to herein as a "Dividend Payment Date"), commencing on the
first Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred (the "First Dividend Payment Date"), in
an amount per share (rounded to the nearest cent) equal to the greater of
(i) $1.00 or (ii) subject to the provision for adjustment hereinafter set
forth, one hundred times the aggregate per share amount of all cash
dividends, and one hundred times the aggregate per share amount (payable
in kind) of all non-cash dividends, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Dividend Payment Date or, with respect
to the First Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred. In the event that the Company at
any time (i) declares a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivides the outstanding
shares of Common Stock, (iii) combines the outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues any shares
of its capital stock in a reclassification of the outstanding shares of
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then, in each such case and regardless of whether
any shares of Series A Preferred are then issued or outstanding, the
amount to which holders of shares of Series A Preferred would otherwise
be entitled immediately prior to such event under clause (ii) of the
preceding sentence will be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Company will declare a dividend on the Series A Preferred as
provided in the immediately preceding paragraph immediately after it
declares a dividend on the Common Stock (other than a dividend payable
in shares of Common Stock). Each such dividend on the Series A
Preferred will be payable immediately prior to the time at which the
related dividend on the Common Stock is payable.
(c) Dividends will accrue on outstanding shares of Series A Preferred
from the Dividend Payment Date next preceding the date of issue of such
shares, unless (i) the date of issue of such shares is prior to the record date
for the First Dividend Payment Date, in which case dividends on such
shares will accrue from the date of the first issuance of a share of Series A
Preferred or (ii) the date of issue is a Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A
Preferred entitled to receive a dividend and before such Dividend Payment
Date, in either of which events such dividends will accrue from such
Dividend Payment Date. Accrued but unpaid dividends will cumulate
from the applicable Dividend Payment Date but will not bear interest.
Dividends paid on the shares of Series A Preferred in an amount less than
the total amount of such dividends at the time accrued and payable on
such shares will be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board may fix a record date for
the determination of holders of shares of Series A Preferred entitled to
receive payment of a dividend or distribution declared
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thereon, which record date will not be more than 60 calendar days
prior to the date fixed for the payment thereof.
III. Voting Rights
The holders of shares of Series A Preferred will have the following voting
rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred will entitle the holder thereof to one hundred
votes on all matters submitted to a vote of the stockholders of the
Company. In the event the Company at any time (i) declares a dividend
on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivides the outstanding shares of Common Stock, (iii)
combines the outstanding shares of Common Stock into a smaller number
of shares, or (iv) issues any shares of its capital stock in a reclassification
of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such
case and regardless of whether any shares of Series A Preferred are then
issued or outstanding, the number of votes per share to which holders of
shares of Series A Preferred would otherwise be entitled immediately prior
to such event will be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided herein, in any other Preferred Stock
Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred and the holders of shares
of Common Stock and any other capital stock of the Company having
general voting rights will vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(c) Except as set forth in the Certificate of Incorporation or herein, or as
otherwise provided by law, holders of shares of Series A Preferred will
have no voting rights.
IV. Certain Restrictions
(a) Whenever dividends or other dividends or distributions payable on
the Series A Preferred are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Preferred outstanding have been paid in full, the Company will
not:
(i) Declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the shares of Series A Preferred;
(ii) Declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the shares of Series A
Preferred, except dividends paid ratably on the
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shares of Series A Preferred and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) Redeem, purchase or otherwise acquire for consideration shares of
any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the shares of Series A Preferred; provided,
however, that the Company may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the shares of Series A Preferred;
or
(iv) Redeem, purchase or otherwise acquire for consideration any
shares of Series A Preferred, or any shares of stock ranking on a parity
with the shares of Series A Preferred, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board) to all holders of such shares upon such terms as the Board, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, may determine
in good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Company will not permit any majority-owned subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under paragraph (a) of
this Article IV, purchase or otherwise acquire such shares at such time and
in such manner.
V. Reacquired Shares
Any shares of Series A Preferred purchased or otherwise acquired by the
Company in any manner whatsoever will be retired and cancelled
promptly after the acquisition thereof. All such shares will upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation of the Company, or in any other Preferred Stock
Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of the Company, no
distribution will be made (a) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the shares of Series A Preferred unless, prior thereto, the holders of
shares of Series A Preferred have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment; provided, however, that the
holders of shares of Series A Preferred will be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to one hundred times the aggregate amount to
be distributed per share to holders of shares of Common Stock or (b) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the shares of Series A
Preferred, except distributions made ratably on the shares of Series A
Preferred and all such
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parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Company at any time (i)
declares a dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivides the outstanding shares of
Common Stock, (iii) combines the outstanding shares of Common Stock
into a smaller number of shares, or (iv) issues any shares of its capital
stock in a reclassification of the outstanding shares of Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
then, in each such case and regardless of whether any shares of Series A
Preferred are then issued or outstanding, the aggregate amount to which
each holder of shares of Series A Preferred would otherwise be entitled
immediately prior to such event under the proviso in clause (a) of the
preceding sentence will be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
VII. Consolidation, Merger, Etc.
In the event that the Company enters into any consolidation, merger,
combination or other transaction in which the shares of Common Stock
are exchanged for or changed into other stock or securities, cash and/or
any other property, then, in each such case, each share of Series A
Preferred will at the same time be similarly exchanged for or changed into
an amount per share, subject to the provision for adjustment hereinafter set
forth, equal to one hundred times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Company at any time (a) declares a
dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (b) subdivides the outstanding shares of Common Stock,
(c) combines the outstanding shares of Common Stock in a smaller
number of shares, or (d) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), then, in
each such case and regardless of whether any shares of Series A Preferred
are then issued or outstanding, the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A
Preferred will be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
VIII. Redemption
The shares of Series A Preferred are not redeemable.
IX. Rank
The Series A Preferred rank, with respect to the payment of dividends and
the distribution of assets, junior to all other series of the Company's
Preferred Stock.
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X. Amendment
Notwithstanding anything contained in the Certificate of Incorporation of
the Company to the contrary and in addition to any other vote required by
applicable law, the Certificate of Incorporation of the Company may not
be amended in any manner that would materially alter or change the
powers, preferences or special rights of the Series A Preferred so as to
affect them adversely without the affirmative vote of the holders of at least
80% of the outstanding shares of Series A Preferred, voting together as a
single series.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Company by its Secretary and attested by its Chief Executive
Officer this 11th day of January, 2000.
HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
/s/Frank Meredith
- ----------------------
Frank Meredith
Vice President - Finance and
Administration, Chief Financial Officer and
Secretary
Attest:
/s/Bernard A. Girod
- -------------------------
Bernard A. Girod
Chief Executive Officer
68
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>0004.txt
<TEXT>
<PAGE>
EXHIBIT 10.27
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Amended and Restated as of October 1, 1999)
71
<PAGE>
TABLE OF CONTENTS
Section Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. FUNDING OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4. CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5. RETIREMENT INCOME BENEFITS . . . . . . . . . . . . . . . . . . 6
SECTION 6. PRE-RETIREMENT DEATH BENEFITS . . . . . . . . . . . . . . . . . 8
SECTION 7. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . 9
SECTION 8. AMENDMENT, SUSPENSION, AND TERMINATION . . . . . . . . . . . . 11
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 12
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Harman International Industries, Incorporated adopted the Supplemental
Executive Retirement Plan (the "Plan"), effective as of July 1, 1989. The
Plan provides supplemental retirement benefits for certain Executives and
death benefits to their Beneficiaries. The Plan is hereby amended and
restated, effective October 1, 1999, to incorporate prior amendments, to
clarify certain provisions, and to add additional features. The terms of the
amended and restated Plan apply only to Participants who are employed on
or after October 1, 1999. The Plan is designed to be exempt from the
provisions of Parts 2, 3 and 4 of Title I of the Act.
SECTION 1. DEFINITIONS
Unless the context clearly requires otherwise, the following terms have
their respective meanings throughout the Plan.
1.01. "Act" means the Employee Retirement Income Security Act of
1974 ("ERISA"), as amended.
1.02. "Affiliate" means any entity in which the Company, directly or
indirectly, beneficially owns 50% or more of the outstanding Voting Stock.
1.03. "Average Compensation" means the average of a Participant's
Compensation for the five (5) consecutive Years of Service in which his
Compensation is the highest. If a Participant is not credited with five (5)
consecutive Years of Service for the Employers, Average Compensation is
the average of his total Compensation for all his Years of Service over his
total number of Years of Service.
1.04. "Beneficiary" means a person entitled to receive Plan benefits in
the event of a Participant's death.
1.05. "Benefit Agreement" means the document executed by an
Executive evidencing his agreement to the terms on which he is eligible to
participate in the Plan. The terms of a Benefit Agreement may differ from
the otherwise applicable terms of the Plan. The terms of a Benefit
Agreement prevail over any conflicting term in the Plan, but only if the
conflicting term is included in the Plan as in effect on the date the Benefit
Agreement is executed. The Committee will provide a Benefit Agreement
to an Executive within sixty (60) days of the date on which the Executive is
designated an Executive. Subject to the limitations imposed under Section
8.01, the Committee may revoke a Benefit Agreement at any time, in which
case the Executive must enter into a new Benefit Agreement, which shall be
controlling.
1.06. "Board" or "Board of Directors" means the Board of Directors of
the Company.
1.07. "Business Combination" means a reorganization, merger or
consolidation, a sale or other disposition of all or substantially all of the
assets of the Company, or any other transaction having a similar effect on
the Company.
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1.08. "Change in Control" means the occurrence of any of the
following events:
(a) The acquisition by any 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 1.08(a),
the following acquisitions shall not constitute a Change in Control: (i) any
issuance of Voting Stock of the Company directly from the Company that is
approved by the Incumbent Board, (ii) any acquisition by the Company or
an Affiliate of Voting Stock of the Company, (iii) any acquisition of Voting
Stock of the Company by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliate, or (iv) any
acquisition of Voting Stock of the Company by any Person pursuant to a
Business Combination that complies with clauses (i), (ii) and (iii) of Section
1.08(c), below; or
(b) Individuals who as of the Effective Date constitute 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
Effective Date 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
(c) Consummation of a Business Combination, unless immediately
following such Business Combination, (i) 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 share 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),
(ii) 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 Affiliate 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 (iii) 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
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(d) 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 (i), (ii) and (iii) of Section 1.08(c).
1.09. "Code" means the Internal Revenue Code of 1986, as amended.
1.10. "Committee" means the Supplemental Benefit Plan
Administrative Committee.
1.11. "Company" means Harman International Industries,
Incorporated, a Delaware corporation, its successors and assigns.
1.12. "Compensation" means the base salary and bonuses paid by an
Employer to an Executive during a Year of Service for an Employer,
excluding commissions, overtime, reimbursements, updates, corporate
provided fringe benefits, gain on exercise of stock options, or any
contributions or benefits under any pension, profit-sharing, deferred
compensation, accident, or health plan adopted by the Employer, but
including amounts excluded from salary by reason of Code Sections
402(e)(3) or 125 or on account of an election to defer such amounts under
the Company's Deferred Compensation Plan. If an Executive dies or
suffers a Disability during a calendar year, his Compensation for that year
will be the greater of: (i) the actual Compensation he received during that
year; or (ii) his Compensation for the immediately prior year.
1.13. "Deferred Retirement Date" means the first day of any month
after the month in which a Participant who has worked beyond his Normal
Retirement Date terminates employment with an Employer or an Affiliate.
Consent of the Board of Directors is required to participate in the Plan
beyond age 70.
1.14. "Director" means a member of the Board.
1.15. "Disability" means the inability of a Participant to do
substantially all the material duties of his regular job, as determined by the
Committee, which must also determine that the inability is (i) caused by
disease or bodily injury originating at a time a Participant is an Executive,
and (ii) expected to be permanent. However, after the inability has
continued for two years, the Executive will be considered to be suffering a
Disability: (i) only if the Committee determines that he cannot work for
pay or profit at another job for which he is reasonably fitted by education,
training, or experience; and (ii) only for those periods during which he is
not working for pay or profit.
1.16. "Effective Date" means October 1, 1999.
1.17. "Employer" means the Company and those of its Affiliates that
have adopted the Plan with the approval of the Board.
1.18. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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1.19. "Executive" means a management or highly compensated
employee of an Employer or an Affiliate who has been specifically
designated by the Board of Directors as eligible to become a Participant, but
only so long as the designation is in effect.
1.20. "Incumbent Board" means the Board as constituted on the
Effective Date, as it may be modified pursuant to Section 1.08(b).
1.21. "In Pay Status" means, with respect to a benefit under the Plan,
that a Participant or Beneficiary has met all of the requirements to receive
such benefit and it is being paid or that the date on which such benefit is to
commence has passed.
1.22. "Leave" means any period during which an Executive is absent
from work pursuant to a leave of absence granted by his Employer.
1.23. "Normal Retirement Date" means the first day of the month
following the month in which the Participant attains age 65.
1.24. "Participant" means an Executive who has executed a Benefit
Agreement. A former Executive will continue to be a Participant only if he
is Vested in a Retirement Income Benefit or would so Vest upon a
subsequent termination of employment.
1.25. "Person" means any individual, entity, or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
1.26. "Plan" means the Harman International Industries, Incorporated
Supplemental Executive Retirement Plan, as set forth herein and as
hereafter amended.
1.27. "Pre-Retirement Death Benefit" means the benefit described in
Section 6.02.
1.28. "Retirement Income Benefit" means a benefit described in
Section 5.01 through 5.04.
1.29. "Rules" means the Commercial Arbitration Rules of the
American Arbitration Association, as in effect at the relevant time.
1.30. "Vest" or "Vested" means to acquire a right to a benefit
under the Plan that cannot be forfeited due to (i) a subsequent
termination of employment, (ii) revocation of an Executive's status
as an Executive, or (iii) amendment or termination of the Plan.
No Participant or Beneficiary has any right to a benefit under the
Plan prior to the date the Participant Vests in a Retirement Income
Benefit or would so Vest upon a subsequent termination of employment.
A Vested Participant who dies prior to being In Pay Status shall
forfeit any right to a Retirement Income Benefit; and his Beneficiary,
if any, shall be entitled solely to a Pre-Retirement Death Benefit.
1.31. "Voting Stock" means securities entitled to vote generally
in the election of directors.
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1.32. "Year of Service" means: (i) for purposes of determining
Compensation or Average Compensation, a calendar year during which the
Participant is a full-time employee of an Employer; and (ii) for all other
Plan purposes, a 12-consecutive month period commencing on a
Participant's date of hire by an Employer, or by an Affiliate at a time it
is an Affiliate, and anniversaries thereof, during which period the
Participant is a full-time employee of an Employer or an Affiliate.
Iin no case, however, will an Executive be credited with Years of Service
for any purpose under the Plan after the Board of Directors has revoked
his status as an Executive.
SECTION 2. PARTICIPATION
2.01. Eligibility. An Executive begins to participate in the
Plan on the date he executes a Benefit Agreement. The Executive may continue
to participate in the Plan until the date he is no longer employed by an
Employer for any reason, including death or retirement, or the Board, in its
discretion, revokes his status as an Executive. However, unless the Board
revokes his status, an Executive who is employed by an Affiliate that is not
an Employer will be credited with Years of Service for all purposes under
the Plan other than determining Compensation and Average Compensation,
but only for the period the Affiliate is so affiliated with the Company.
2.02. Eligibility for Benefits. An Executive or former Executive is
eligible for benefits under the Plan only if he Vests prior to or in connection
with his termination of employment.
2.03. Eligibility for Pre-Retirement Death Benefits. The Beneficiary
of a Participant who dies prior to being In Pay Status is eligible to receive a
Pre-Retirement Death Benefit only if the Participant, at the time of his
death, either is an Executive or is Vested in a Retirement Income Benefit.
Once a Participant is In Pay Status, his Beneficiary shall cease to be entitled
to a Pre-Retirement Death Benefit and shall be entitled solely to the benefit,
if any, provided under the form in which the Participant's benefit is
distributed. The Board of Directors may at any time, in its sole discretion,
revoke an Executive's right, if any, to provide a Pre-Retirement Death
Benefit to a Beneficiary.
SECTION 3. FUNDING OF BENEFITS
3.01. Unfunded Plan. The Plan is, and must remain, unfunded, but the
Company may, in its discretion, establish the type of grantor trust
commonly known as a rabbi trust in connection with the Plan. All benefits
payable under the Plan will be paid from the Employers' general assets. No
Employer is required to set aside or hold in trust any funds for the benefit of
a Participant or Beneficiary, who has the status of a general unsecured
creditor with respect to any Employer's obligation to make benefit
payments pursuant to the Plan. Any assets of an Employer available to pay
Plan benefits are subject to the claims of the Employer's general creditors
and may be used by the Employer in its sole discretion for any purpose.
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SECTION 4. CLAIMS PROCEDURE
4.01. Benefit Claims Procedure. All applications for benefits
under the Plan must be submitted to a Committee member at the Company's
principal place of business. Applications must be in writing and signed by
the Participant or, in the case of a Pre-Retirement Death Benefit, by his
Beneficiary. The Committee will approve or disapprove each application
within ninety (90) days of its receipt. If the Committee denies any
application, in whole or in part, it must provide the applicant with a written
notice that includes the following: the reasons for the denial, references to
the Plan provisions on which the denial is based, a description of any
additional material or information necessary to perfect the application, an
explanation of why such material or information is necessary, and an
explanation of the Plan's review procedure.
4.02. Appeals Procedure. Any person whose application for benefits
is denied, in whole or in part, or his duly authorized representative, may
appeal such denial to the Committee. The appeal must be in writing,
submitted to a Committee member within ninety (90) days after the date the
Committee provided notice of the denial, and include a written statement
that provides the basis of his request for review. The Committee will
conduct a full and fair review of each such request for review and may
require the Employer or the applicant to submit additional facts and
documents. The Committee will make an independent determination of the
applicant's eligibility for benefits under the Plan within sixty (60) days
after receiving the applicant's request for review. If the Committee denies
an application on review, in whole or in part, it will notify the applicant
in writing and explain the reasons for the denial. The decision of the
Committee on appeal is final and conclusive upon all persons, if supported
by substantial evidence in the record.
SECTION 5. RETIREMENT INCOME BENEFITS
5.01. Normal Retirement Benefit. A Participant who retires from an
Employer or an Affiliate at his Normal Retirement Date will Vest in an
annual benefit equal to fifty percent (50%) of the Participant's Average
Compensation, payable in the form specified in Section 5.05. If, however,
the Participant is credited with fewer than 15 Years of Service, such amount
be reduced by a fraction, the numerator of which is 15 minus the number of
Years of Service with which the Participant is credited and the denominator
of which is 15. The normal retirement benefit will commence on the
Participant's Normal Retirement Date.
5.02. Termination Benefit. A Participant who is credited with at
least 15 Years of Service, and who is not otherwise entitled to a Retirement
Income Benefit, will Vest in an annual benefit equal to the applicable
percentage of the Participant's Average Compensation, payable in the form
specified in Section 5.05, and based upon the number of the Participant's
Years of Service at such retirement or termination as set forth below:
Years of Service Applicable Percentage
15 30
16 34
17 38
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18 42
19 46
20 or more 50
The termination benefit will commence on the first day of the month
following the month in which occurs the later of the date the Participant
attains age 55 or terminates employment from the Company and all of its
Affiliates for any reason other than death.
5.03. Deferred Retirement Benefit. A Participant who retires from
an Employer or an Affiliate at his Deferred Retirement Date will Vest in an
annual benefit equal to fifty percent (50%) of the Participant's Average
Compensation, payable in the form specified in section 5.05. If the
Participant is credited with fewer than 15 Years of Service, such amount
will be reduced by a fraction, the numerator of which is 15 minus the
number of Years of Service which the Participant has completed and the
denominator of which is 15. The deferred retirement benefit will
commence on the Participant's Deferred Retirement Date.
5.04. Change in Control Benefit. A Participant who is an Executive
on the date of a Change in Control and who, within three years thereafter,
voluntarily or involuntarily terminates employment from the Company and
all of its Affiliates for any reason other than death will Vest in an annual
benefit equal to fifty percent (50%) of the Participant's Average
Compensation, payable in the form specified in section 5.05, which he may
elect in lieu of any other Retirement Income Benefit. The Change in
Control benefit will commence on the Participant's Normal Retirement
Date or, if later, the date he terminates employment.
5.05. Standard Form of Benefit. Unless the Committee consents to
the election of an optional form of benefit, the Retirement Income Benefit will
be paid in the form of a life annuity payable monthly. If the Participant dies
In Pay Status, but prior to receiving 120 monthly benefit payments, such
payments will continue to his Beneficiary until an aggregate of 120
payments have been made.
5.06. Optional Forms of Benefit. Not less than one year prior to
the date his Retirement Income Benefit is to begin, a Participant may request
the Committee to authorize payment in any optional form which is the
actuarial equivalent of the benefit payable in the form provided under
Section 5.05. Actuarial equivalence for purposes of this Section and
Section 6.02 will be determined using interest and mortality factors adopted
from time to time by the Committee. As of the Effective Date, the factors
are an interest rate of 8% per annum and a mortality assumption based upon
the 1983 Group Annuity Table for males (to be used for both males and
females). Not less than thirty days prior to the date payment is to begin, the
Committee must notify the Participant whether it has approved his request.
5.07. Disability. An Executive who suffers a Disability will be
deemed to be an Executive for the duration of the Disability, without effect
on his eligibility for Retirement Income Benefits and the eligibility of his
Beneficiary for Pre-Retirement Death Benefits, if any, in the event of the
Participant's death. The Executive will not be credited with Compensation
or Years of Service during the period of Disability. However, his status as
an Executive may not be revoked, and the period will be disregarded for
purposes of determining Average Compensation.
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5.08. Leave. For purposes of Sections 5 and 6, an Executive who
is on Leave with salary shall be deemed to remain an Executive for the duration
of the Leave. An Executive who is on Leave without salary shall be
deemed to remain an Executive if the Leave does not exceed six (6) months.
Once the period exceeds six months, the Executive will be deemed to have
voluntarily terminated his employment with the Employer without the
consent of the Board of Directors. An Executive will not otherwise be
credited with Compensation or Years of Service during the period of Leave,
but such period shall be disregarded for purposes of determining Average
Compensation.
5.09. Suicide. Notwithstanding any other Plan provision, no benefits
will be paid with respect to a Participant who dies as a result of suicide or
self-inflicted injury within two (2) years of executing a Benefit Agreement.
5.10. Comparable Plan Offset. Any benefits otherwise payable to,
or with respect to, a Participant under the Plan shall be reduced by the amount
of benefits payable to the Participant from a comparable nonqualified
defined benefit plan maintained by an Employer or an Affiliate. The Board
of Directors shall determine whether a plan constitutes a comparable plan
for purposes of this Section and the extent, if any, of the reduction.
5.11. No Duplication of Benefits. No Participant may receive more
than one Retirement Income Benefit: a Participant entitled to more than
one such benefit under the terms of the Plan may elect one, and only one.
Likewise, no Beneficiary of a Participant who is In Pay Status may receive
a Pre-Retirement Death Benefit.
SECTION 6. PRE-RETIREMENT DEATH BENEFITS
6.01. Designation of Beneficiary. Unless precluded by the terms of
a Benefit Agreement, at any time prior to the earlier of his death or his being
In Pay Status, a Participant may designate a Beneficiary and contingent
Beneficiary for a Pre-Retirement Death Benefit. To do so, the Participant
must deliver to the Committee a completed form provided by the
Committee for that purpose. The Participant may revoke or change the
designated Beneficiary without the Beneficiary's consent by delivering to
the Committee a replacement form at any time prior to his death. However,
a married Participant who wishes to designate any person other than his
spouse must furnish to the Committee the written consent of such spouse to
such designation in such form as the Committee may require. If the
Participant has not designated a Beneficiary, or if no such Beneficiary
survives him, the Plan's death benefits will be paid to the person who is the
spouse of the Participant at the Participant's death, or if none, the estate of
the Participant.
6.02. Pre-Retirement Death Benefit. The Beneficiary of a Participant
who dies prior to the Participant's being In Pay Status, but at a time he
(i) is an Executive, or (ii) is Vested in a Retirement Income Benefit, shall
receive a benefit equal to three hundred percent (300%) of the Participant's
Compensation for the Year of Service in which his Compensation was the
highest. The Pre-Retirement Death Benefit shall be paid to the Beneficiary
in a single lump sum as soon as practicable after the Participant's death. At
the request of the Beneficiary and with the consent of the Committee, the
Pre-Retirement Death Benefit may be paid in another optional form which
is the actuarial equivalent of the benefit payable as a single lump sum
distribution.
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SECTION 7. ADMINISTRATION OF THE PLAN
7.01. Appointment of Committee. The Board of Directors will initially
serve as the Committee. Thereafter, the Board may appoint a Committee
consisting of any specifically named persons, each of whom serve at the
pleasure of the Board. Any vacancy on the Committee will be filled by the
Board.
7.02. Duties and Powers. The Committee is responsible for the general
administration of the Plan. The Committee has full and absolute authority
to interpret the Plan in its discretion and to determine all questions arising
thereunder, including, without limitation, all questions of fact. It shall
maintain all necessary books of accounts and records. It may establish,
interpret, enforce, amend, and revoke, from time to time, such rules and
regulations for the administration of the Plan and the conduct of its business
as it deems appropriate, and has the right to remedy ambiguities,
inconsistencies and omissions (provided such rules and regulations are
uniformly applied to all persons similarly situated). Any action taken by the
Committee is final and binding upon each and every person who is or may
become a Participant or Beneficiary, subject to the claims procedure set
forth in Section 4.
7.03. Conduct. The Committee may act by a majority of its members
in office. It may elect one of its own members to act as Chairman and a
different person, who may but need not be a member of the Committee, to
act as Secretary. It may authorize any one or more of its members to
execute and deliver any documents on behalf of the Committee. A
Committee member may not vote on any matter which directly affects him.
7.04. Allocation of Responsibilities. The Board of Directors appoints
the Committee, but, unless acting as the Committee, has no responsibility
for the operation and administration of the Plan. The Committee may
allocate to one or more of its members and may delegate to any other
person or organization any of its rights, powers, duties, and responsibilities
with respect to the operation and administration of the Plan. Any such
allocation and delegation must be reviewed at least annually by the
Committee and be terminable upon reasonable notice.
7.05. Bonding and Compensation. The members of the Committee
serve without bond, and without compensation for services as Committee
members, except as an Employer may provide in its discretion. The
Employers will pay the expenses of the Committee.
7.06. Information. The Employers must supply whatever information
the Committee may require, and must maintain such records as the
Committee may determine are necessary. The Committee may rely on such
records as conclusive with respect to the matters set forth therein.
7.07. Notices and Reports. The Company is the "administrator" of the
Plan as defined in Section 3(16)(A) of the Act for purposes of the reporting
and disclosure requirements imposed by the Act and the Code. The
Committee will assist the Company, as requested, in complying with such
reporting and disclosure requirements.
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7.08. Service of Process. The Company will be the agent of the Plan
for the service of legal process, unless the Committee designates another
agent.
7.09. Insurance. The Company, in its discretion, may maintain a
policy or policies insuring the Committee members, the Directors, and other
employees to whom any responsibility with respect to the administration of
the Plan has been delegated against any and all costs, expenses, and
liabilities (including attorneys' fees) incurred by such persons as a result of
any act, or omission to act, in connection with the performance of their
duties, responsibilities and obligations under the Plan and any applicable
law.
7.10. Indemnity. If the Company does not maintain the type of
insurance referred to in Section 7.09, or if such insurance is provided, but
any of the parties referred to in Section 7.09 incur any costs or expenses that
are not covered under such policies, then the Company shall indemnify and
hold such parties harmless in the same manner and to the same extent as
directors and officers of the Company pursuant to its bylaws.
7.11. Arbitration. All disputes arising under or in connection with
the Plan (including, without limitation, disputes arising from nonpayment by
the Company of any payments or benefits provided for herein) shall be
resolved by arbitration to be conducted in Los Angeles, California under the
Rules. Each party will appoint one arbitrator within 10 days after receipt by
the respondent of a demand for arbitration, and the two arbitrators
appointed by the parties will, within 10 days after their appointment,
appoint a third arbitrator who shall preside. If either party fails to
nominate an arbitrator, or the two arbitrators appointed by the parties are
unable to appoint a presiding arbitrator within the stated periods, the second
or presiding arbitrator, as the case may be, shall be appointed according to
the procedures of Rule 13 of the Rules. The costs to Participants and
Beneficiaries of any such proceeding commenced after a Change in Control
shall be paid or reimbursed as provided in Section 7.12. Any award in such
proceedings shall be enforceable and may be confirmed by the judgment of
a court of competent jurisdiction.
7.12. Indemnification of Legal Fees and Expenses; Security for
Payment.
(a) Indemnification of Legal Fees. The Company intends that no
Participant or Beneficiary be required to incur the expenses associated with
the enforcement of his rights under the Plan after a Change in Control.
Accordingly, if any Participant or Beneficiary believes that an Employer,
following a Change in Control, has failed to comply with any of its
obligations under the Plan or in the event that, following a Change of
Control, an Employer or any other person takes any action to declare the
Plan void or unenforceable, or institutes any arbitration or other legal action
designed to deny, or to recover from, any Participant or Beneficiary the
benefits intended to be provided to such Participant or Beneficiary
hereunder, the Company irrevocably authorizes such Participant or
Beneficiary from time to time to retain counsel of his or her choice, at the
expense of the Company as hereafter provided, to represent such Participant
or Beneficiary in connection with the initiation or defense of such
arbitration or other legal action, whether by or against the Company or any
director, officer, stockholder or other person affiliated with the Company.
Notwithstanding any existing or prior attorney-client relationship between
the Company and such counsel, the Company
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irrevocably consents to such Participant's or Beneficiary's entering into an
attorney-client relationship with such counsel, and in that connection the
Company and such Participant or Beneficiary agree that a confidential
relationship shall exist between such Participant or Beneficiary and such
counsel. The Company shall pay or cause to be paid and shall be solely
responsible for any and all attorneys' and related fees and expenses incurred
by such Participant or Beneficiary as a result of an Employer's failure to
fulfill its obligations under the Plan or any provision hereof or as a result
of an Employer or any person contesting the validity or enforceability of the
Plan or any provision hereof as aforesaid.
(b) Trust Agreement. To ensure that the Participants and Beneficiaries are
able to enforce their right under the Plan following a Change in Control, a
trust agreement ("Trust Agreement") dated as of April 2, 1996, has been
established with a trustee (the "Trustee"). The Trust Agreement sets forth
the terms and conditions relating to payment pursuant to the Plan of
attorneys' and related fees and expenses pursuant to subsection (a) hereof
(and the comparable provisions in certain severance agreements entered into
by the Company, certain of its Affiliates and certain of their executives). A
Participant or Beneficiary shall make demand on the Company for any
payments due to him or her pursuant to subsection (a) hereof prior to
making demand on the Trustee under the Trust Agreement. Payments by
such Trustee shall discharge the Company's liability under subsection (a)
hereof only to the extent that trust assets are used to satisfy such liability.
(c) Obligation of the Company to Fund Legal Fees Trust. Upon the
earlier to occur of a Change in Control or a declaration by the Board of
Directors that a Change in Control is imminent, the Company must
promptly, to the extent it has not previously done so, and in any event
within five (5) business days, transfer to the Trustee a minimum sum of
$500,000 to be added to the principal of the trust under the Trust
Agreement. Any payments of attorneys' and related fees and expenses,
which are the obligation of the Company under subsection (a) hereof, by the
Trustee pursuant to the Trust Agreement shall, to the extent thereof,
discharge the Company's obligation hereunder, it being the intent of the
Company that such assets in such Trust Agreement be held as security for
the Company's obligation under subsection (a), provided however, that, to
the extent provided in the Trust Agreement, such assets shall also be
available for payment of attorneys' and related fees and expenses in
connection with enforcement of the rights of certain executives under one or
more severance agreements.
SECTION 8. AMENDMENT, SUSPENSION, AND TERMINATION
8.01. Right to Amend or Terminate. The Company may amend,
modify, or terminate this Plan at any time and for any reason, provided that
no such termination, amendment, or modification may have the effect of
(i) reducing a benefit hereunder which is In Pay Status, has Vested, or is
protected under Section 5.07, or (ii) modifying Section 5.04 or Section 7.12
after a Change in Control.
8.02. Right to Suspend. If the Employer determines that payments
under the Plan would have a materially adverse impact on the Employer's
ability to conduct its business, the
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employer may suspend such payments for any period not in excess of one
(1) year. The Employer shall pay such suspended payments immediately
upon the expiration of the period of suspension.
8.03. Right to Accelerate. The Board of Directors in its sole
discretion may accelerate all Vested Retirement Income Benefits upon
termination of the Plan, and may pay such benefits in a single, actuarial
equivalent lump sum. The factors to be used for this purpose shall be an
interest rate of 8% per annum and a mortality assumption based upon the
1983 Group Annuity Table for males (to be used for both males and females).
SECTION 9. MISCELLANEOUS
9.01. Right to Continued Employment. Nothing in the Plan provides
any right of employment. Each Employer has the right to dismiss any
person at any time, with or without cause, without liability for the effect
such dismissal might have upon him as a Participant.
9.02. Prohibition Against Alienation. Except as otherwise provided in
the Plan, no right or benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void. No such right or benefit
shall be liable for or subject to the debts, contracts, liabilities,
engagements, or torts of the person entitled to such right or benefit.
9.03. Savings Clause. If any provision of this instrument is finally
held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
9.04. Payment of Benefit of Incompetent. If the Committee finds that
a Participant or Beneficiary is unable to care for his affairs for any reason,
any benefit payable may, unless claim has been made therefor by a duly
appointed legal representative, be paid to any person who incurred expenses
for the support and maintenance of such Participant or Beneficiary; and any
such payments so made shall be a complete discharge of all liability
therefor.
9.05. Withholding. Benefit payments shall be subject to applicable
federal, state, and local withholding for taxes.
9.06. Successors. In the event of any consolidation, merger,
acquisition or reorganization of an Employer, the obligations of the
Employer under this Plan shall continue and be binding upon the Employer
and its successors.
9.07. Gender, Tense, and Headings. Any words used herein in the
masculine gender shall be construed as though they were also used in the
feminine gender in all cases where they would so apply. Any words used
herein in the singular form shall be construed as though they were also used
in the plural form in all cases where they would so apply. Headings of
Sections and subsections as used herein are inserted solely for convenience
and constitute no part of the Plan.
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9.08. Choice of Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware to the extent not
superseded by applicable federal statutes or regulations.
IN WITNESS WHEREOF, HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED has caused this Plan to be executed this
20th day of June, 2000, but effective October 1, 1999.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By /s/ Stanley Weiss
----------------------
Its Chairman - Compensation and
Option Committee
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EXHIBIT 10.41
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (the
"Agreement") dated as of __________, by and between HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware
Corporation (the "Company"), and __________ (the "Optionee"):
W I T N E S S E T H:
WHEREAS, the Optionee is an employee of [__________, a
Subsidiary of] the Company;
WHEREAS, the execution of an incentive stock option agreement in
the form hereof has been duly authorized by a resolution of the
Compensation and Option Committee (the "Committee") of the Board of
Directors (the "Board") of the Company duly adopted on __________,
(the "Date of Grant"); and
WHEREAS, the option granted hereunder is intended to be an
"incentive stock option" within the meaning of that term under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements set forth in this Agreement, the Company and
the Optionee agree as follows:
1. Grant of Option. Pursuant to the terms and conditions of the Harman
International Industries, Incorporated 1992 Incentive Plan (the "Plan"), the
Company hereby grants to the Optionee an option (the "Option") to
purchase __________ shares (the "Option Shares") of the Company's
Common Stock, par value $0.01 per share ("Common Stock"), at the price
of $__________ per share, which is the closing price of the Common
Stock on the Date of Grant (the "Exercise Price"), and agrees to cause
certificates for any Option Shares purchased
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hereunder to be delivered to the Optionee upon full payment of the
Exercise Price, subject to the applicable terms and conditions of the Plan
and the terms and conditions hereinafter set forth.
2. Type of Option. This Option is intended to qualify as an "incentive
stock option" within the meaning of that term under Section 422 of the
Code.
3. Vesting of Option. (a) Unless and until terminated as hereinafter
provided, the Option shall become exercisable to the extent of _____
percent of the Common Shares hereinabove specified on each of the first
_____ anniversaries of the Date of Grant for so long as the Optionee
remains in the continuous employ of the Company or a Subsidiary. For
the purposes of this Agreement, the continuous employment of the
Optionee with the Company or a Subsidiary shall not be deemed to have
been interrupted, and the 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 the Optionee's employment among the Company and its
Subsidiaries or (ii) a leave of absence approved by the Board of not more
than 90 days, unless the Optionee has a statutory or contractual right to
reemployment with the Company or a Subsidiary following an approved
leave of absence of more than 90 days.
(b) Notwithstanding the provisions of paragraph 3(a) above, the Option
shall become immediately exercisable in full (unless previously terminated
as hereinafter provided) upon the occurrence of a change in control of the
Company. A "change in control of the Company" means the occurrence,
before the 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 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 Stock"); provided,
however, that for purposes of this Section 3(b)(i), the following
acquisitions
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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 3(b)(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 3(b)(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
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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 3(b)(iii).
(c) Notwithstanding the provisions of paragraph 3(a) above, the
Committee may, in its sole discretion, permit the Option to become
immediately exercisable in full if the Optionee (i) should die or become
permanently disabled while in the employ of the Company or a Subsidiary
or (ii) should retire under a retirement plan of the Company or a
Subsidiary at or after the earliest voluntary retirement age provided for in
such retirement plan or at an earlier age with the consent of the Board.
4. Manner of Exercise. (a) To the extent that the Option shall have
become exercisable in accordance with Section 3 hereof, the Option may
be exercised by the Optionee at
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any time, or from time to time, in whole or in part, during the term thereof,
but only in multiples of fifty (50) shares.
(b) The 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 Exercise Price for the number of Option Shares specified for purchase.
(c) The Exercise Price shall be payable (i) in cash or by check
acceptable to the Company, (ii) by transfer to the Company of Common
Stock that has been owned by the Optionee for (A) more than one year
prior to the date of exercise and for more than two years from the Date of
Grant of the Option, if they were originally acquired by the Optionee
pursuant to the exercise of an incentive stock option, or (B) more than six
months prior to the date of exercise if they were originally acquired by the
Optionee other than pursuant to the exercise of an incentive stock option,
or (iii) by a combination of any of the foregoing methods of payment.
5. Termination. (a) The Option shall terminate on the earliest of the
following dates:
(i) The date written notice is given by the Optionee or by the Company
or a Subsidiary relating to Optionees termination of employment for any
reason other than death or permanent disability; provided, however, that
the Executive Committee or the "Committee" (if the Optionee is an
executive officer) may, in its sole discretion, determine it is in the best
interests of the Company and allow Optionee up to 90 days from the date
of termination to exercise the Option;
(ii) One year after the death or permanent disability of the Optionee, if
the Optionee dies or becomes permanently disabled while an employee of
the Company or a Subsidiary;
(iii) Ten years after the Date of Grant.
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(b) During the period of 90 days referred to in Section 5(a)(i) above
and the period of one year referred to in Section 5(a)(ii) above, the Option
may be exercised only to the extent that it shall have become exercisable
pursuant to Section 3 hereof at the time that the Optionee ceases to be an
employee of the Company.
(c) In the event that the Optionee commits an act that the Board
determines to have been intentionally committed and materially inimical
to the interests of the Company, the Option shall terminate as of the time
of the commission of that act, notwithstanding any other provision of this
Agreement.
6. Share Certificates. All certificates evidencing Option Shares
purchased pursuant hereto (and any certificates for Common Stock
attributable to the shares acquired by exercise of the Option which, in the
opinion of counsel for the Company, are subject to similar legal
requirements) shall have endorsed thereon before issuance such legends as
the Company's counsel may deem necessary or advisable. The Company
and any transfer agent shall not be required to transfer any such shares
unless and until the Company or its transfer agent shall have received from
counsel to the Optionee, in a form satisfactory to the Company, an opinion
that any such transfer will not be in violation of any applicable law or
regulation. Optionee agrees not to sell, assign, pledge, or otherwise
dispose of any shares without the Company first receiving such an
opinion.
7. Transfer. The Option may not be transferred except by will or the
laws of descent and distribution and may not be exercised during the
lifetime of the Optionee except by the Optionee or the Optionee's
guardian or legal representative acting on behalf of the Optionee in a
fiduciary capacity under state law and court supervision.
8. Disqualifying Dispositions. If within one year of exercising the
Option to purchase Common Stock, Optionee sells, assigns or transfers
such Common Stock, Optionee agrees to provide immediate written
notice to the Company of such disposition including the
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date, number of shares and consideration received for such disposition. If
the Optionee fails to provide the notice required hereunder, the Committee
may, in its sole discretion, terminate any remaining Options held by
Optionee.
9. 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 involve a violation of
any such laws.
10. Adjustments. The Committee may make such adjustments in the
Exercise Price and the number and kind of shares of stock or other
securities covered by the Option as the Committee may in good faith
determine to be equitably required in order to prevent any dilution or
expansion of the rights of the Optionee that otherwise would result from
any:
(a) stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company,
(b) merger, consolidation, spin-off, reorganization or partial or complete
liquidation, or
(c) other corporate transaction or event having an effect similar to any
of the foregoing;
provided, however, that no adjustment may be made without the prior
written consent of the Optionee if the adjustment would constitute a
"modification" within the meaning of Section 425(h) of the Code.
11. Fractional Shares. The Company shall not be required to issue any
fractional share of Common Stock pursuant to the Option. The Board of
Directors may provide for the elimination of fractions or for the settlement
of fractions in cash.
12. Withholding Taxes. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with the exercise of
the Option, it shall be a condition of
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the exercise of the Option that Optionee pay to the Company the balance
of such tax required to be withheld or make provisions that are satisfactory
to the Company for the payment thereof.
13. Right to Terminate Employment. 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 the
Optionee at any time.
14. Definition of Subsidiary. For the purposes of this Agreement, the
term "Subsidiary" means any corporation in which the Company directly
or indirectly owns or controls more than 50 percent of the total combined
voting power of all classes of stock issued by the corporation.
15. 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 the 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: 1101 Pennsylvania Avenue, N.W.
Suite 1010
Washington, D.C. 20004
Attention: Vice President-
Financial Operations
If to the Optionee: Optionee's address provided by
Optionee on the last page hereof
Either the Company or Optionee may change the above designated address
by written notice to the other specifying such new address.
16. Interpretation. The interpretation and construction by the Board of
Directors of the Agreement shall be final and conclusive. No member of
the Board of Directors shall be liable for any such action or determination
made in good faith.
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17. Amendment in Writing. In accordance with its terms, this
Agreement may be amended, but only in a writing which specifically
references this Section and is signed by each of the parties hereto.
18. Integration. The Option is granted pursuant to the Plan, and this
Agreement and the Option are subject to all of the terms and conditions of
the Plan, a copy of which is available upon request and incorporated
herein by reference. As such, this Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the
Option, and supersedes any prior understandings or agreements, whether
written or oral, with respect to the Option.
19. 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.
20. Governing Law. This agreement is made under, and shall be
construed in accordance with, the laws of the District of Columbia.
21. 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.
[SIGNATURE PAGE APPEARS ON NEXT PAGE]
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IN WITNESS WHEREOF, this Agreement is executed by the Company
on the day and year first above written.
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
By _________________
Name:
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Incentive Stock Option Agreement and accepts the Option
subject to the applicable terms and conditions of the Plan and the terms
and conditions hereinabove set forth.
___________________ Date:_________________
Optionee
OPTIONEE: Please complete/update the following information.
Name: ___________________________
Home Address: ___________________________
___________________________
___________________________
Social Security Number: ___________________________
Date of Hire: ___________________________
Company or Division: ____________________________
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EXHIBIT 10.42
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the
"Agreement") dated as of __________, by and between HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware
Corporation (the "Company"), and __________ (the "Optionee"):
W I T N E S S E T H:
WHEREAS, the Optionee is an employee of [__________, a
Subsidiary of] the Company; and
WHEREAS, the execution of a nonqualified stock option agreement in
the form hereof has been duly authorized by a resolution of the
Compensation and Option Committee (the "Committee") of the Board of
Directors (the "Board") of the Company duly adopted on __________ (the
"Date of Grant");
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements set forth in this Agreement, the Company and
the Optionee agree as follows:
1. Grant of Option. Pursuant to the terms and conditions of the Harman
International Industries, Incorporated 1992 Incentive Plan (the "Plan"), the
Company hereby grants to the Optionee an option (the "Option") to
purchase __________ shares (the "Option Shares") of the Company's
Common Stock, par value $0.01 per share ("Common Stock"), at the price
of $__________ per share, which is the closing price of the Common
Stock on the Date of Grant (the "Exercise Price"), and agrees to cause
certificates for the Option Shares purchased hereunder to be delivered to
the Optionee upon full payment of the Exercise Price, subject to the
applicable terms and conditions of the Plan and the terms and conditions
set forth herein.
2. Type of Option. This Option is intended to be a nonqualified stock
option and shall not be treated as an "incentive stock option" within the
meaning of that term under Section 422 of the Internal Revenue Code of
1986, as amended.
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3. Vesting of Option. (a) Unless and until terminated as hereinafter
provided, the Option shall become exercisable to the extent of _____
percent of the Option Shares on each of the first _____ anniversaries of
the Date of Grant for so long as the Optionee remains in the continuous
employ of the Company or a Subsidiary. For the purposes of this
Agreement, the continuous employment of the Optionee with the
Company or a Subsidiary shall not be deemed to have been interrupted,
and the 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 the
Optionee's employment among the Company and its Subsidiaries or (ii) a
leave of absence approved by the Board.
(b) Notwithstanding the provisions of Section 3(a) above, the Option
shall become immediately exercisable in full (unless previously terminated
as hereinafter provided) upon the occurrence of a change in control of the
Company. A "change in control of the Company" means the occurrence,
before the 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 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 Stock"); provided,
however, that for purposes of this Section 3(b)(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 3(b)(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 3(b)(iii), below; or
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(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,
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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 3(b)(iii).
(c) Notwithstanding the provisions of paragraph 3(a) above, the
Committee may determine, in its sole discretion, to permit the Option to
become immediately exercisable in full if the Optionee (i) should die or
become permanently disabled while in the employ of the Company or a
Subsidiary or (ii) should retire under a retirement plan of the Company or
a Subsidiary at or after the earliest voluntary retirement age provided for
in such retirement plan or at an earlier age with the consent of the Board.
4. Manner of Exercise. (a) To the extent that the Option shall have
become exercisable in accordance with Section 3 hereof, the Option may
be exercised by the Optionee at any time, or from time to time, in whole or
in part, during the term thereof, but only in multiples of fifty (50) shares.
(b) The 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 Exercise Price for the number of Option Shares specified for purchase.
(c) The Exercise Price shall be payable (i) in cash or by check
acceptable to the Company, (ii) by transfer to the Company of Common
Stock that has been owned by the
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Optionee for more than six months prior to the date of exercise or (iii) by a
combination of any of the foregoing methods of payment.
5. Termination. (a) The Option shall terminate on the earliest of the
following dates:
(i) The date written notice is given by the Optionee or by the Company
or a Subsidiary relating to Optionees termination of employment for any
reason other than death or permanent disability; provided, however, that
the Executive Committee or the "Committee" (if the Optionee is an
executive officer) may, in its sole discretion, determine it is in the best
interests of the Company and allow Optionee up to 90 days from the date
of termination to exercise the Option;
(ii) One year after the death or permanent disability of the Optionee, if
the Optionee dies or becomes permanently disabled while an employee of
the Company or a Subsidiary;
(iii) _____ years after the Date of Grant.
(b) During the period of 90 days referred to in Section 5(a)(i) above
and the period of one year referred to in Section 5(a)(ii) above, the Option
may be exercised only to the extent that it shall have become exercisable
pursuant to Section 3 hereof at the time that the Optionee ceases to be an
employee of the Company or a Subsidiary.
(c) In the event that the Optionee commits an act that the Board
determines to have been intentionally committed and materially inimical
to the interests of the Company, the Option shall terminate as of the time
of the commission of that act, notwithstanding any other provision of this
Agreement.
6. Share Certificates. All certificates evidencing Option Shares
purchased pursuant hereto (and any certificates for Common Stock
attributable to the shares acquired by exercise of the Option which, in the
opinion of counsel for the Company, are subject to similar legal
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requirements) shall have endorsed thereon before issuance such legends as
the Company's counsel may deem necessary or advisable. The Company
and any transfer agent shall not be required to transfer any such shares
unless and until the Company or its transfer agent shall have received from
counsel to the Optionee, in a form satisfactory to the Company, an opinion
that any such transfer will not be in violation of any applicable law or
regulation. Optionee agrees not to sell, assign, pledge, or otherwise
dispose of any shares without the Company first receiving such an
opinion.
7. Transfer. The Option may not be transferred except by will or the
laws of descent and distribution and may not be exercised during the
lifetime of the Optionee except by the Optionee or the Optionee's
guardian or legal representative acting on behalf of the Optionee in a
fiduciary capacity under state law and court supervision.
8. Compliance with Law. The Company shall make reasonable efforts
to comply with all applicable federal and state securities laws; provided,
however, that notwithstanding any other provision of this Agreement, the
Option shall not be exercisable if the exercise would involve a violation of
any such laws.
9. Adjustments. (a) The Committee may make such adjustments in the
number and kind of shares of stock or other securities covered by this
Agreement as the Committee may in good faith determine to be equitably
required in order to prevent any dilution or expansion of the Optionee's
rights under this Agreement that otherwise would result from any:
(i) stock dividend, stock split, combination of shares, recapitalization
or other change in the capital structure of the Company;
(ii) merger, consolidation, spin-off, reorganization, partial or complete
liquidation or issuance of rights or warrants to purchase securities of the
Company; or
(iii) other corporate transaction or event having an effect similar to any
of the foregoing.
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(b) In the event that any transaction or event described or referred
to in Section 8(a) above shall occur, the Committee may provide in substitution
of any or all of the Grantee's rights under this Agreement such alternative
consideration as the Committee may in good faith determine to be
equitable under the circumstances.
10. Fractional Shares. The Company shall not be required to issue any
fractional share of Common Stock pursuant to the Option. The Board of
Directors may provide for the elimination of fractions or for the settlement
of fractions in cash.
11. Withholding Taxes. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with the exercise of
the Option, it shall be a condition of the exercise of the Option that
Optionee pay to the Company the balance of such tax required to be
withheld or make provisions that are satisfactory to the Company for the
payment thereof.
12. Right to Terminate Employment. 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 the
Optionee at any time.
13. Definition of Subsidiary. For the purposes of this Agreement, the
term "Subsidiary" means any corporation in which the Company directly
or indirectly owns or controls more than 50 percent of the total combined
voting power of all classes of stock issued by the corporation.
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 the 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: 1101 Pennsylvania Avenue, N.W.
Suite 1010
Washington, D.C. 20004
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Attention: Vice President-
Financial Operations
If to the Optionee: Optionee's address provided by
Optionee on the last page hereof
Either the Company or Optionee may change the above designated address
by written notice to the other specifying such new address.
15. Interpretation. The interpretation and construction by the Board of
Directors of the Agreement shall be final and conclusive. No member of
the Board of Directors shall be liable for any such action or determination
made in good faith.
16. Amendment in Writing. In accordance with its terms, this
Agreement may be amended, but only in a writing which specifically
references this Section and is signed by each of the parties hereto.
17. Integration. The Option is granted pursuant to the Plan, and this
Agreement and the Option are subject to all of the terms and conditions of
the Plan, a copy of which is available upon request and incorporated
herein by reference. As such, this Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the
Option, and supersedes any prior understandings or agreements, whether
written or oral, with respect to the Option.
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 District of Columbia.
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 the Company
on the day and year first above written.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By ________________________
Name:
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Nonqualified Stock Option Agreement and accepts the
Option subject to the applicable terms and conditions of the Plan and the
terms and conditions hereinabove set forth.
___________________ Date:______________
Optionee
OPTIONEE: Please complete/update the following information.
Name: _________________________
Home Address: _________________________
_________________________
_________________________
Social Security Number: _________________________
Date of Hire: _________________________
Company or Division: __________________________
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EXHIBIT 10.43
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (the "Agreement") dated
as of ___________, by and between HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED, a Delaware Corporation (the
"Company"), and ___________ (the "Grantee"):
W I T N E S S E T H:
WHEREAS, the Grantee is an employee of [___________, a
Subsidiary of] the Company; and
WHEREAS, the execution of a restricted stock agreement in the form
hereof has been authorized by a resolution of the Compensation and
Option Committee (the "Committee") of the Board of Directors (the
"Board") of the Company duly adopted on ___________, (the "Date of
Grant");
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements set forth in this Agreement, the Company and
the Grantee agree as follows:
1. Grant of Restricted Shares. Pursuant to the terms and conditions of
the Harman International Industries, Incorporated 1992 Incentive Plan (the
"Plan"), the Company hereby grants to Grantee _________ shares (the
"Restricted Shares") of the Company's Common Stock, par value $0.01
per share (the "Common Stock"), [at the price of $_____ per share (the
"Purchase Price"),] subject to the applicable terms and conditions of the
Plan and the terms, conditions, limitations and restrictions set forth herein.
[Upon payment in full of the Purchase Price] [T]he Restricted Shares shall
be fully paid and nonassessable and shall be represented by a certificate(s)
registered in the name of the Grantee and bearing a legend referring to the
restrictions set forth herein.
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2. Restrictions on Transfer of Restricted Shares. The Restricted Shares
may not be transferred, sold, pledged, exchanged, assigned or otherwise
encumbered or disposed of by the Grantee unless and until they have
become nonrestricted and nonforfeitable in accordance with Section 3
hereof; provided, however, that the Grantee's interest in the Restricted
Shares may be transferred at any time by will or the laws of descent and
distribution. Any purported transfer, encumbrance or other disposition of
the Restricted Shares that is in violation of this Section 2 shall be null and
void, and the other party to any such purported transaction shall not obtain
any rights to or interest in the Restricted Shares.
3. Vesting of Restricted Shares. (a) The Restricted Shares shall
become nonrestricted and nonforfeitable at the rate of _____ percent
thereof on each of the first __________ anniversaries of the Date of Grant
for so long as the Grantee remains in the continuous employ of the
Company or a Subsidiary. For the purposes of this Agreement, the
continuous employment of the Grantee with the Company or a Subsidiary
shall not be deemed to have been interrupted, and the 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 his employment among the Company and
its Subsidiaries or (ii) a leave of absence approved by the Board.
(b) Notwithstanding the provisions of paragraph 3(a) hereof, all of the
Restricted Shares shall immediately become nonrestricted and
nonforfeitable upon the occurrence of a change in control of the Company.
A "change in control of the Company" means the occurrence, before the
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 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 Stock");
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provided, however, that for purposes of this Section 3(b)(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 3(b)(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 3(b)(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
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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 3(b)(iii).
(c) Notwithstanding the provisions of paragraph 3(a) hereof, the
Committee may, in its sole discretion, determine that all of the Restricted
Shares shall immediately become nonrestricted and nonforfeitable if the
Grantee dies or becomes permanently disabled while in the employ of the
Company or a Subsidiary.
4. Forfeiture of Restricted Shares. (a) Any of the Restricted Shares that
have not become nonforfeitable in accordance with Section 3 hereof shall
be forfeited if the Grantee ceases for any reason to be employed by the
Company or a Subsidiary at any time prior to
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__________ years from the Date of Grant, unless the Committee
determines to provide otherwise at the time of the cessation of the
Grantee's employment.
(b) In the event that the Grantee commits an act that the Board
determines to have been intentionally committed and materially inimical
to the interests of the Company, any Restricted Shares that have not
become nonforfeitable in accordance with Section 3 hereof as of the time
of the commission of that act shall be forfeited, notwithstanding any other
provision of this Agreement. In the event of a forfeiture, the certificate(s)
representing Restricted Shares that have not become nonforfeitable in
accordance with Section 3 hereof shall be cancelled.
5. Dividend, Voting and Other Rights. The Grantee shall have all of the
rights of a stockholder with respect to the Restricted Shares, including the
right to vote the Restricted Shares and receive any dividends that may be
paid thereon; provided, however, that (a) any cash dividends and other
cash distributions that may be paid on any Restricted Shares that have not
become nonrestricted and nonforfeitable in accordance with Section 3
hereof shall be automatically sequestered and reinvested in additional
shares of Common Stock, which shall be subject to the same restrictions
hereunder as the forfeitable Restricted Shares on which the cash dividends
or other cash distributions are paid, and (b) any additional shares of
Common Stock that the Grantee may become entitled to receive pursuant
to a share dividend or a merger or reorganization in which the Company is
the surviving corporation or any other change in the capital structure of the
Company shall be subject to the same restrictions as the Restricted Shares.
6. Retention of Stock Certificate(s) by the Company. The certificate(s)
representing the Restricted Shares shall be held in custody by the
Company, together with a stock power endorsed in blank by the Grantee
with respect thereto, until the Restricted Shares have become nonrestricted
and nonforfeitable in accordance with Section 3 hereof.
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7. Compliance with Law. The Company shall make reasonable efforts
to comply with all applicable federal and state securities laws; provided,
however, that notwithstanding any other provision of this Agreement, the
Company shall not be obligated to issue any restricted or nonrestricted
shares of Common Stock or other securities pursuant to this Agreement if
the issuance thereof would result in a violation of any such law.
8. Adjustments. (a) The Committee may make such adjustments in the
number and kind of shares of stock or other securities covered by this
Agreement as the Committee may in good faith determine to be equitably
required in order to prevent any dilution or expansion of the Grantee's
rights under this Agreement that otherwise would result from any:
(i) stock dividend, stock split, combination of shares, recapitalization
or other change in the capital structure of the Company;
(ii) merger, consolidation, spin-off, reorganization, partial or complete
liquidation or issuance of rights or warrants to purchase securities of the
Company; or
(iii) other corporate transaction or event having an effect similar to any
of the foregoing.
(b) In the event that any transaction or event described or referred to in
Section 8(a) above shall occur, the Committee may provide in substitution
of any or all of the Grantee's rights under this Agreement such alternative
consideration as the Committee may in good faith determine to be
equitable under the circumstances.
9. Fractional Shares. The Company shall not be required to issue any
fractional share of restricted or unrestricted Common Stock pursuant to the
Restricted Shares. The Board of Directors may provide for the elimination
of fractions or for the settlement of fractions in cash.
10. Withholding Taxes. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with any issuance of
restricted or nonrestricted shares of
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Common Stock or other securities pursuant to this Agreement, it shall be a
condition to the issuance that the Grantee pay to the Company the balance
of such tax required to be withheld or make provisions that are satisfactory
to the Company for the payment thereof.
11. Right to Terminate Employment. 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 the
Grantee at any time.
12. Definition of Subsidiary. For the purposes of this Agreement, the
term "Subsidiary" means any corporation in which the Company directly
or indirectly owns or controls more than 50 percent of the total combined
voting power of all classes of stock issued by the corporation.
13. 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 the 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: 1101 Pennsylvania Avenue, N.W.
Suite 1010
Washington, D.C. 20004
Attention: Vice President-
Financial Operations
If to the Grantee: 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.
14. Interpretation. The interpretation and construction by the Board of
Directors of the Agreement shall be final and conclusive. No member of
the Board of Directors shall be liable for any such action or determination
made in good faith.
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15. Amendment in Writing. In accordance with its terms, this
Agreement may be amended, but only in writing which specifically
references this Section and is signed by each of the parties hereto.
16. Integration. The Restricted Shares are granted pursuant to the Plan,
and this Agreement and the Restricted Shares are subject to all of the
terms and conditions of the Plan, a copy of which is available upon request
and incorporated herein by reference. As such, this Agreement embodies
the entire agreement and understanding of the parties hereto with respect
to the Restricted Shares, and supersedes any prior understandings or
agreements, whether written or oral, with respect to the Restricted Shares.
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 District of Columbia.
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.
[SIGNATURE PAGE APPEARS ON NEXT PAGE]
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IN WITNESS WHEREOF, this Agreement is executed by the Company
on the day and year first above written.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By ______________________
Name:
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Nonqualified Stock Option Agreement and accepts the
Option subject to the applicable terms and conditions of the Plan and the
terms and conditions hereinabove set forth.
_____________________ Date:_________________________
Optionee
OPTIONEE: Please complete/update the following information.
Name: _________________________
Home Address: _________________________
_________________________
_________________________
Social Security Number: _________________________
Date of Hire: _________________________
Company or Division: _________________________
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HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
NONQUALIFIED STOCK OPTION AGREEMENT
FOR NON-OFFICER DIRECTORS
THIS STOCK OPTION AGREEMENT (the "Agreement") dated as of
__________, by and between HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED, a Delaware Corporation (the
"Company"), and __________ (the "Optionee"):
W I T N E S S E T H:
WHEREAS, the Optionee is a non-officer director of the Board of
Directors (the "Board") of the Company; and
WHEREAS, pursuant to the terms of the Harman International
Industries, Incorporated 1992 Incentive Plan (the "Plan"), on __________,
(the "Date of Grant"), Optionee was granted automatically a nonqualified
option (the "Option") to purchase __________ shares (the "Option
Shares") of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), at a price per share of $__________, which is the
closing price of the Common Stock on the Date of Grant (the "Exercise
Price");
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements set forth in this Agreement, the Company and
the Optionee agree as follows:
1. Grant of Option. In accordance with and pursuant to the terms and
conditions of the Plan, the Company hereby grants to the Optionee the
Option to purchase the Option Shares at the Exercise Price, and agrees to
cause certificates for any Option Shares purchased hereunder to be
delivered to the Optionee upon full payment of the Exercise Price, subject
to the applicable terms and conditions of the Plan and the terms and
conditions set forth herein.
2. Type of Option. This Option is intended to be a nonqualified stock
option and shall not be treated as an "incentive stock option" within the
meaning of that term under Section 422 of the Internal Revenue Code of
1986, as amended.
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3. Vesting of Option. (a) Unless and until terminated as hereinafter
provided, the Option shall become exercisable to the extent of one-fifth of
the Option Shares on each of the first five anniversaries of the Date of
Grant.
(b) Notwithstanding the provisions of paragraph 3(a) above, the Option
shall become immediately exercisable in full (unless previously terminated
as hereinafter provided) upon the occurrence of a change in control of the
Company. A "change in control of the Company" means the occurrence,
before the 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 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 Stock"); provided,
however, that for purposes of this Section 3(b)(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 3(b)(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 3(b)(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
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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
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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 3(b)(iii).
4. Manner of Exercise. (a) To the extent that the Option shall have
become exercisable in accordance with Section 3 hereof, the Option may
be exercised by the Optionee at any time, or from time to time, in whole or
in part, during the term thereof, but only in multiples of fifty (50) shares.
(b) The 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 Exercise Price for the number of Option Shares specified for purchase.
(c) The Exercise Price shall be payable (i) in cash or by check
acceptable to the Company, (ii) by transfer to the Company of Common
Stock that has been owned by the Optionee for more than six months prior
to the date of exercise or (iii) by a combination of any of the foregoing
methods of payment.
5. Termination. (a) The Option shall terminate on the earliest of the
following dates:
(i) Ninety days after the Optionee ceases to be a director of the
Company for any reason other than death or permanent disability;
(ii) One year after the death or permanent disability of the Optionee, if
the Optionee dies or becomes permanently disabled while a director of the
Company or within the period of 90 days referred to in paragraph 3(a)
above; or
(iii) Ten years from the Date of Grant.
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(b) During the period of 90 days referred to in Section 5(a)(i) above
and the period of one year referred to in Section 5(a)(ii) above, the Option
may be exercised only to the extent that it shall have become exercisable
pursuant to Section 3 hereof at the time that the Optionee ceases to be a
director of the Company.
(c) In the event that the Optionee commits an act that a majority of the
remaining members of the Board determines to have been intentionally
committed and materially inimical to the interests of the Company, the
Option shall terminate as of the time of the commission of that act,
notwithstanding any other provision of this Agreement.
6. Share Certificates. All certificates evidencing Option Shares
purchased pursuant hereto (and any certificates for Common Stock
attributable to the shares acquired by exercise of the Option which, in the
opinion of counsel for the Company, are subject to similar legal
requirements) shall have endorsed thereon before issuance such legends as
the Company's counsel may deem necessary or advisable. The Company
and any transfer agent shall not be required to transfer any such shares
unless and until the Company or its transfer agent shall have received from
counsel to the Optionee, in a form satisfactory to the Company, an opinion
that any such transfer will not be in violation of any applicable law or
regulation. Optionee agrees not to sell, assign, pledge, or otherwise
dispose of any shares without the Company first receiving such an
opinion.
7. Transfer. The Option may not be transferred except by will or the
laws of descent and distribution and may not be exercised during the
lifetime of the Optionee except by the Optionee or the Optionee's
guardian or legal representative acting on behalf of the Optionee in a
fiduciary capacity under state law and court supervision.
8. Compliance with Law. The Company shall make reasonable efforts
to comply with all applicable federal or state securities laws; provided,
however, that notwithstanding any
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other provision of this Agreement, the Option shall not be exercisable if
the exercise would involve a violation of any such laws.
9. Adjustments. The committee(s) of the Board of Directors of the
Company described in Section 16(a) of the Plan may make such
adjustments in the number and kind of shares of securities covered by this
Agreement as the committee(s) may determine to be equitably required in
order to prevent any dilution or expansion of the rights of the Optionee
that otherwise would result from any:
(a) stock dividend, stock split, combination of shares, recapitalization
or other change in the capital structure of the Company;
(b) merger, consolidation, spin-off, reorganization, partial or complete
liquidation or issuance of rights or warrants to purchase securities of the
Company; or
(c) other corporate transaction or event having an effect similar to any
of the foregoing.
10. Fractional Shares. The Company shall not be required to issue any
fractional share of Common Stock pursuant to the Option. The Board of
Directors may provide for the elimination of fractions or for the settlement
of fractions in cash.
11. Withholding Taxes. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with the exercise of
the Option, it shall be a condition of the exercise of the Option that
Optionee pay to the Company the balance of such tax required to be
withheld or make provisions that are satisfactory to the Company for the
payment thereof.
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 the 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: 1101 Pennsylvania Avenue, N.W.
Suite 1010
Washington, D.C. 20004
Attention: Vice President-
Financial Operations
If to the Optionee: Optionee's address provided by
Optionee on the last page hereof
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 by the Board of
Directors of the Agreement shall be final and conclusive. No member of
the Board of Directors shall be liable for any such action or determination
made in good faith.
14. Amendment in Writing. In accordance with its terms (including
Section 17 of the Plan), this Agreement may be amended, but only in
writing which specifically references this Section and is signed by each of
the parties hereto.
15. Integration. The Option is granted pursuant to the Plan, and this
Agreement and the Option are subject to all of the terms and conditions of
the Plan, a copy of which is available upon request and incorporated
herein by reference. As such, this Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the
Option, and supersedes any prior understandings or agreements, whether
written or oral, with respect to the Option.
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 District of Columbia.
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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.
[SIGNATURE PAGE APPEARS ON NEXT PAGE]
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IN WITNESS WHEREOF, this Agreement is executed by the Company
on the day and year first above written.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By _____________________
Name:
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Nonqualified Stock Option Agreement and accepts the
Option subject to the applicable terms and conditions of the Plan and the
terms and conditions hereinabove set forth.
__________________ Date: __________________
Optionee
OPTIONEE: Please complete the following information.
Name: _________________________
Home Address: _________________________
_________________________
_________________________
Social Security Number: _________________________
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EXHIBIT 10.46
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Amendment No. 1 to the
Harman International Industries, Inc.
Deferred Compensation Plan
Pursuant to action by the Board of Directors, the Harman International
Industries, Inc. Deferred Compensation Plan, as amended and restated
effective June 1, 1997 (the "Plan"), is hereby amended in the following
respects. Each such change is effective October 1, 1999, unless another
date is expressly provided.
1. Section 1.9 of the Plan, which defines "Change in Control," shall be
amended to read as follows:
"Change in Control" shall mean 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 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 1.9(i), t he 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 1.9(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 1.9(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
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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 share 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
1.9(iii).
(v) For purposes of this Section 1.9: "Board" shall mean the Board of
Directors of the Company; "Director" shall mean a member of the Board;
"Subsidiary" shall mean an entity in which the Company, directly or
indirectly, beneficially owns 50% or more of the outstanding Voting
Stock; and "Voting Stock" shall mean securities entitled to vote generally
in the election of directors.
2. Section 3.8(d) of the Plan, which could restrict full vesting upon a
Change of Control due to issues under Code Section 280G, shall be
deleted.
2
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3. Section 16.9 of the Plan shall be amended by substituting "Delaware"
for "California" therein.
Executed this 1st day of October, 1999, but effective as provided above.
HARMAN INTERNATIONAL INDUSTRIES, INC.
By: /s/ Frank Meredith
-------------------------
Frank Meredith
Title: Vice President - Finance and
Administration, Chief Financial
Officer and Secretary
3
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EXHIBIT 10.61
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142
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of July 5, 2000, among:
(i) HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED, a Delaware corporation (the
"Company");
(ii) BECKER HOLDING GmbH, a German
corporation (the "Subsidiary Borrower");
(iii) the several banks and other financial
institutions identified on the signature pages
hereto from time to time parties to this
Agreement (each, a "Lender"; and collectively,
the "Lenders");
(iv) COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK
BRANCH, as Lead Arranger (the Arranger"); and
(v) COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK
BRANCH, a German banking corporation
("Commerzbank"), as administrative agent for
the Lenders hereunder (together with its
successors in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Company, the Subsidiary Borrower,
the Lenders, the Arranger and the
Administrative Agent have previously entered
into a Credit Agreement dated as of December
12, 1997 (as amended, supplemented and
otherwise modified through the date hereof,
the "Existing Credit Agreement");
WHEREAS, the Company, the Subsidiary Borrower,
the Lenders, the Arranger and the
Administrative Agent wish to amend and restate
the Existing Credit Agreement upon the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the
premises and the mutual agreements
herein contained, the Existing Credit Agreement
shall be amended and restated in its entirety
as of the Effective Date to read as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement,
the following terms shall have the following
meanings:
"Administrative Agent": as defined in the
introductory paragraph.
"Administrative Schedule": Schedule III to
this Agreement, which contains interest rate
definitions and administrative information.
"Affiliate": as to any Person, any other
Person (other than a Subsidiary) which,
directly or indirectly, is in control of, is
controlled by, or is under common control with,
such
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Person. For purposes of this definition,
"control" of a Person means the power, directly
or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power
for the election of directors of such Person or
(b) direct or cause the direction of the
management and policies of such Person, whether
by contract or otherwise.
"Agreement": this Amended and Restated Credit
Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": with respect to each day
during a fiscal quarter of the Company, the
margin per annum set forth below opposite the
Debt to Capitalization Ratio for the applicable
Test Period as shown on the Debt to
Capitalization Ratio Certificate for the test
period delivered pursuant to subsection 6.2(c):
Debt to Capitalization Ratio Applicable Margin
Less than 60% .60%
Greater than or equalto 60% .75%;
provided, however, that, (i) until the date a
Debt to Capitalization Ratio Certificate for a
test period has been delivered pursuant to
subsection 6.2(c), the Debt to Capitalization
Ratio for an applicable period shall be deemed
to be the Debt to Capitalization Ratio set
forth in the last Debt to Capitalization Ratio
Certificate delivered pursuant to subsection
6.2(c), (ii) in the event that the actual Debt
to Capitalization Ratio for any Test Period is
subsequently determined to be greater than that
determined pursuant to clause (i) or greater
than that set forth in the Debt to
Capitalization Ratio Certificate for such Test
Period the Applicable Margin shall be
recalculated for the applicable fiscal quarter
based upon such actual Debt to Capitalization
Ratio and (iii) if the Company fails to deliver
a Debt to Capitalization Ratio Certificate for
a fiscal quarter by the date set forth in
subsection 6.2(c), the Applicable Margin for
such fiscal quarter shall be .75%.
Changes in the Applicable Margin, if any,
resulting from the operation of clauses (ii)
and (iii) above shall be given effect through
adjustments in subsequent payments of interest
so as to give effect to such Applicable Margin
retroactively to the applicable period.
"Arranger": as defined in the introductory
paragraph.
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": an instrument of
assignment in form and substance satisfactory
to the Administrative Agent and the Company.
"Base Rate": for any day, the greater of (i)
the sum of the Federal Funds Rate and
1/2 of one percent for such day and (ii) the
rate of interest from time to time announced by
Commerzbank at its New York Branch as its
"prime commercial lending rate" and in effect
for such day (which rate is a reference rate
and does not necessarily represent the lowest
or best rate
2
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<PAGE>
actually charged to any customer and
Commerzbank may make commercial loans or other
loans at rates of interest at, above or below
such reference rate).
"Base Rate Loan": any Loan bearing interest
based upon the Base Rate.
"Borrowers": the collective reference to the
Company (as a borrower and as a guarantor) and
the Subsidiary Borrower.
"Borrowing Date": the day on which the Loans
are made under this Agreement.
"Business": as defined in subsection 4.16.
"Business Day": (a) when such term is used in
respect of a day on which a Dollar Equivalent
spot rate or LIBO Rate is to be set, a Loan is
to be made, a payment is to be made in respect
of a Loan or any other dealing in Dollars, such
term shall mean a London Banking Day which is
also a day on which banks are open for general
banking business in New York, New York and (b)
when such term is used in any other context in
this Agreement, such term shall mean a day
other than a Saturday, Sunday or other day on
which commercial banks in New York City are
authorized or required by law to close.
"Capital Stock": any and all shares,
interests, participations or other equivalents
(however designated) of capital stock of a
corporation, any and all equivalent ownership
interests in a Person (other than a
corporation) and any and all warrants or
options to purchase any of the foregoing.
"Change of Control": an event or series of
events by which (i) any "person" or "group" (as
such terms are defined in Sections 13(d) and
14(d) of the Securities Exchange Act of
1934, as amended), other than the Permitted
Investor, is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all
shares that any such Person has the right to
acquire without condition, other than passage
of time, whether such right is exercisable
immediately or only after the passage of time),
directly or indirectly, of more than 50% of the
total voting power of the then outstanding
Voting Stock of the Company, (ii)(A) the
Company consolidates with or merges into
another corporation or conveys, transfers or
leases all or substantially all of its
properties and assets (determined on a
consolidated basis for the Company and its
Subsidiaries taken as a whole) to any Person,
or (B) any corporation consolidates with or
merges into the Company or a Subsidiary of the
Company in a transaction in which the
outstanding Voting Stock of the Company is
changed into or exchanged for cash, securities
or other property, other than a transaction
solely between the Company and a Subsidiary of
the Company or (iii) during any period of two
consecutive years, individuals who at the
beginning of such period constituted the
Board of Directors of the Company (together
with any new directors whose election by such
Board of Directors or whose nomination for
election by the shareholders of the Company was
approved by a vote of 66 2/3% of the directors
then still in office who were either directors
at the beginning of such period or whose
election or nomination for election was
previously so approved) cease for any reason to
constitute a majority of the Board of Directors
of the Company then in office; provided,
however, that notwithstanding anything to the
contrary in this definition,
3
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<PAGE>
transfer of beneficial ownership of shares held
by the Permitted Investor upon the death of the
Permitted Investor to the heirs and devisees of
the Permitted Investor shall not constitute a
Change of Control.
"Code": the Internal Revenue Code of 1986, as
amended from time to time.
"Commerzbank": as defined in the introductory
paragraph.
"Commitment": as to any Lender, the obligation
of such Lender to make Loans hereunder in the
Dollar Equivalent of the amounts set forth
opposite such Lender's name on Schedule I.
"Commitment Percentage": as to any Lender at
any time, the percentage which such Lender's
Commitment then constitutes of the aggregate
Commitments (or, at any time after the
Commitments shall have expired or terminated,
the percentage which the amount of such
Lender's Loans then outstanding constitutes of
the aggregate amount of the Loans of all the
Lenders then outstanding).
"Commonly Controlled Entity": an entity,
whether or not incorporated, which is
under common control with the Company within
the meaning of Section 4001 of ERISA or is
part of a group which includes the Company and
which is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.
"Company": as defined in the introductory
paragraph.
"Company Obligations": the unpaid principal of
and interest on the Loans made to the Company
and all other obligations and liabilities of
the Company to the Administrative Agent or any
Lender (including, without limitation, interest
accruing after the maturity or earlier
acceleration of the Loans and interest accruing
after the filing of any petition in bankruptcy,
or the commencement of any insolvency,
reorganization or like proceeding, relating to
the Company, whether or not a claim for post-
filing or post-petition interest is allowed in
such proceeding), whether direct or indirect,
absolute or contingent, due or to become due,
now existing or hereafter incurred, which may
arise under, out of, or in connection with,
this Agreement, the Loans or any other document
made, delivered or given in connection
therewith, in each case whether on account of
principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements
of counsel to the Administrative Agent or any
Lender) or otherwise.
"Consolidated Capitalization": at any date,
the sum of (i) shareholders' equity of the
Company and (without duplication) its
consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, and
(ii) Consolidated Total Debt.
"Consolidated Total Debt": at any date,
without duplication, the aggregate of all
Indebtedness (including the current portion
thereof) of the Company and its consolidated
Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
4
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<PAGE>
"Contractual Obligation": as to any Person,
any provision of any security issued by such
Person or of any material agreement, instrument
or other undertaking to which such Person is a
party or by which it or any of its property is
bound.
"Debt to Capitalization Ratio": for any Test
Period, the arithmetic average of the ratio of
Consolidated Total Debt to Consolidated
Capitalization, expressed as a percentage, as
of the last day of each fiscal quarter included
in such Test Period.
"Debt to Capitalization Ratio Certificate": as
defined in subsection 6.2(c).
"Default": any event or condition that upon
notice, the lapse of time, or both, would
constitute an Event of Default.
"Designated Lender": a special purpose
corporation that is identified on the
signature pages hereto next to the caption
"Designated Lender" as well as each special
purpose corporation that (i) shall have become
a party to this Agreement pursuant to
subsection 11.6(h) and (ii) is not otherwise a
Lender.
"Designated Lender Note": a promissory note of
a Borrower, substantially in the form of
Exhibit C hereto, evidencing the obligation of
such Borrower to repay Loans made by a
Designated Lender, and "Designated Lender
Notes" means any and all such promissory notes
issued hereunder.
"Designating Lender": each Lender that is
identified as such on the signature pages
hereto next to the caption "Designating Lender"
and immediately below the signature of its
Designated Lender as well as each Lender that
shall designate a Designated Lender pursuant to
subsection 11.6(h).
"Designation Agreement": a designation
agreement in substantially the form of
Exhibit A attached hereto, entered into by a
Lender and a Designated Lender and accepted by
the Company and the Administrative Agent.
"Deutsche Marks" and "DEM": deutsche marks in
lawful currency of the Federal Republic of
Germany.
"Dollar Equivalent": of an amount denominated
in Deutsche Marks, for any day, the amount of
Dollars which could be purchased with the
amount of Deutsche Marks involved in such
computation at the spot rate of exchange
therefor quoted by the Administrative Agent as
of 11:00 a.m. (New York time) on the date three
Business Days prior to such day.
"Dollars" and "$": dollars in lawful currency
of the United Stated of America.
"Effective Date": as defined in Section 5.1.
"Environmental Laws": any and all applicable
material, foreign, Federal, state, local or
municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees,
enforceable requirements of any Governmental
Authority or other Requirements of Law
5
147
<PAGE>
(including common law) regulating, relating to
or imposing liability or standards of conduct
concerning protection of human health or the
environment, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income
Security Act of 1974, as amended from time to
time.
"Event of Default": any of the events
specified in Section 9, provided that any
requirement for the giving of notice, the lapse
of time, or both, or any other condition, has
been satisfied.
"Existing Credit Agreement": as defined in the
recitals.
"Existing Obligations": all amounts, direct or
indirect, contingent or absolute, of every type
or description (including, without limitation,
principal, interest, facility fees and amounts
owing under Section 3.7(c) of the Existing
Credit Agreement as a result of any prepayment
of the Existing Obligations), and at any time
existing, owing to the Administrative Agent or
any Lender pursuant to the terms of the
Existing Credit Agreement.
"Federal Funds Rate": for any day, the rate
per annum (rounded upwards, if necessary, to
the nearest 1/100 of one percent) equal to the
weighted average of the rates on overnight
Federal funds transactions with members of the
Federal Reserve System arranged by Federal
funds brokers on such day, as published by the
Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided
that (a) if the day for which such rate is to
be determined is not a Business Day, the
Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding
Business Day as so published on the next
succeeding Business Day, and (b) if such rate
is not so published for any day which is a
Business Day, the Federal Funds Rate for such
day shall be the average of the quotations for
the day of such transactions received by the
Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter": the letter agreement dated
October 21, 1997, between the Company and
Commerzbank.
"Financing Lease": any lease of property, real
or personal, the obligations of the lessee in
respect of which are required in accordance
with GAAP to be capitalized on a balance sheet
of the lessee.
"Floating Rate Loan": any Loan bearing
interest based upon a LIBO Rate.
"Foreign Subsidiary": each Subsidiary of the
Company which is organized under the laws of a
jurisdiction other than the District of
Columbia or a State of the United States and
listed as a Foreign Subsidiary on Schedule II.
"Funding Office": for each Type of Loan, the
Funding Office set forth in respect thereof in
the Administrative Schedule.
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"Funding Time": for each Type of Loan, the
Funding Time set forth in respect thereof in
the Administrative Schedule.
"GAAP": generally accepted accounting
principles in the United States of America in
effect from time to time.
"German Collateral": the collateral described
in the German Mortgage and the German Security
Agreement.
"German Mortgage": one or more mortgages dated
on or about December 22, 1997 encumbering all
real property of Pledgor in favor of the
Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, as
security for the Subsidiary Obligations.
"German Security Agreement": the Security
Transfer Agreement dated December 22, 1997, as
amended by that certain Security Release and
Amendment Agreement, dated as of September 30,
1999, encumbering certain tangible personal
property of Pledgor in favor of the
Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, as
security for the Subsidiary Obligations.
"Governmental Authority": any nation or
government, any state or other political
subdivision thereof and any entity exercising
applicable executive, legislative, judicial,
regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the
"guaranteeing person"), any obligation of (a)
the guaranteeing person or (b) another Person
(including, without limitation, any bank under
any letter of credit) to induce the creation of
which the guaranteeing person has issued a
reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "primary
obligations") of any other third Person (the
"primary obligor") in any manner, whether
directly or indirectly, including, without
limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to
purchase any such primary obligation or any
property constituting direct or indirect
security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain
working capital or equity capital of the
primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor,
(iii) to purchase property, securities or
services primarily for the purpose of assuring
the owner of any such primary obligation of the
ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such
primary obligation against loss in respect
thereof; provided, however, that the term
Guarantee Obligation shall not include (x)
endorsements of instruments for deposit or
collection in the ordinary course of business
or (y) obligations of the Company or any of its
Subsidiaries under arrangements entered into in
the ordinary course of business whereby the
Company or such Subsidiary sells inventory to
other Persons under agreements obligating the
Company or such Subsidiary to repurchase such
inventory, at a price not exceeding the
original sale price, upon the occurrence of
certain specified events. The amount of any
Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an
amount equal to the stated or determinable
amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b)
the maximum
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amount for which such guaranteeing person may
be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum
amount for which such guaranteeing person may
be liable are not stated or determinable, in
which case the amount of such Guarantee
Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in
respect thereof as determined by the Company in
good faith.
"Guarantor": the Company in its capacity as a
guarantor pursuant to Section 8 of this
Agreement.
"Indebtedness": of any Person at any date, all
indebtedness or obligations of such Person
(other than current trade liabilities incurred
in the ordinary course of business and payable
in accordance with customary practices), as
reflected on the balance sheet of such Person
prepared in accordance with GAAP.
"Insolvency": with respect to any
Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of
Insolvency.
"Interest Payment Date": (a) as to any
Floating Rate Loan having an Interest Period of
three months or less, the last day of such
Interest Period, (b) as to any Floating Rate
Loan having an Interest Period longer than
three months, each day which is three months
after the first day of such Interest Period and
the last day of such Interest Period, (c) as to
any Loan, the Termination Date and any other
date on which the principal amount of any Loan
is repaid (whether by prepayment or
acceleration) and (d) as to any Base Rate Loan,
the last day of each March, June, September and
December.
"Interest Period": with respect to any
Floating Rate Loan:
(i) initially, the period commencing on the
Borrowing Date and ending one, two, three or
six months thereafter, as selected by the
Company in the Notice of Borrowing and
Indemnity Agreement;
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period
applicable to such Floating Rate Loan and
ending one, two, three or six months
thereafter, as selected by the Company in a
Notice of Interest Period with respect thereto;
or
(iii) if no Notice of Interest Period has been
timely delivered by the Company, the Interest
Period shall be the period commencing on the
last day of the preceding Interest Period and
ending one month thereafter; provided, that all
of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period would otherwise end
on a day that is not a Business Day, such
Interest Period shall be extended to the next
succeeding
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Business Day unless the result of such
extension would be to carry such Interest
Period into another calendar month in which
event such Interest Period shall end on the
immediately preceding Business Day;
(2) any Interest Period that would otherwise
extend beyond the Termination Date shall end on
the Termination Date; and
(3) any Interest Period that begins on the
last Business Day of a calendar month (or on a
day for which there is no numerically
corresponding day in the calendar month at the
end of such Interest Period) shall end on the
last Business Day of a calendar month.
"Lender": as defined in the statement of
parties and shall include Designated
Lenders; provided, however, that the term
"Lender" shall exclude each Designated Lender
when used in reference to (a) a Loan, except to
the extent a Designated Lender is the obligee
of a Loan actually funded by it pursuant to
subsection 2.8, (b) the Commitments or (c)
terms relating to the Loans (except to the
extent a Designated Lender is the obligee of a
Loan actually funded by it pursuant to
subsection 2.8) and the Commitments.
"LIBO Rate": for any Interest Period, the rate
for deposits in Dollars for a period
beginning on the first day of such Interest
Period and ending on the last day of such
Interest Period which appears on the Telerate
Page 3750 as of 11:00 a.m. London time on the
second London Banking Day before the first day
of such Interest Period; provided that if such
rate does not appear on the Telerate Screen
Page 3750, the LIBO Rate shall mean the rate
for deposits of an amount comparable to the
aggregate of the outstanding Loans on the
London interbank Dollar market for such
Interest Period determined by Administrative
Agent to be the LIBO Rate offered by the
Administrative Agent to leading banks in the
London Eurodollar interbank market at 11:00
a.m. London time on the Quotation Day for such
Interest Period adjusted for any reserve
requirements in effect on the first day of such
Interest Period.
"Lien": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge or other
security interest or any preference, priority
or other security agreement or preferential
arrangement of any kind or nature whatsoever
(including, without limitation, any conditional
sale or other title retention agreement and any
Financing Lease having substantially the same
economic effect as any of the foregoing).
"Liquidity Bank": for any Designated Lender,
at any date of determination, the collective
reference to the financial institutions which
at such date are providing liquidity or credit
support facilities to or for the account of
such Designated Lender to fund such Designated
Lender's obligations hereunder or to support
the securities, if any, issued by such
Designated Lender to fund such obligations.
"Loan": any Floating Rate Loan or Base Rate
Loan made by any Lender pursuant to this
Agreement.
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"Loan Documents": this Agreement, each Note,
the German Mortgage, the German Security
Agreement, each Notice of Borrowing and
Indemnity Agreement and each Notice of Interest
Period.
"London Banking Day": any day on which banks
in London are open for general banking
business, including dealings in foreign
currency and exchange.
"Majority Lenders": at any time, Lenders the
Commitment Percentages of which aggregate more
than 66-2/3%.
"Material Adverse Effect": a material adverse
effect on (a) the business, operations,
property or condition (financial or otherwise)
of the Company and its Subsidiaries taken as a
whole or (b) the validity or enforceability of
this or any of the other Loan Documents or the
rights or remedies of the Administrative Agent
or the Lenders hereunder or thereunder.
"Material Debt Instrument": those agreements
and other instruments of Indebtedness of the
Borrowers listed on Schedule IV, which list
shall include any such instrument under which
any Borrower is an obligor and under which the
outstanding amount and/or available commitment
to extend credit exceeds $10,000,000.
"Materials of Environmental Concern": any
gasoline or petroleum (including crude oil or
any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or
wastes, defined or regulated as such in or
under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multi-
employer plan as defined in Section 4001(a)(3)
of ERISA.
"Negative Covenants": each and every financial
and negative covenant contained in the
Principal Credit Agreement as such covenants
are in effect from time to time, which, as of
the date hereof, are contained in Section 10 of
the Principal Credit Agreement.
"New Lender": each Person that becomes a
Lender under this Agreement after the date of
this Agreement.
"Non-Excluded Taxes": as defined in subsection
3.6.
"Note": a promissory note executed by a
Borrower, payable to the order of a Lender, in
a maximum principal amount equal to such
Lender's Commitment for such Borrower and
substantially in the form of Exhibit C.
"Notice of Borrowing and Indemnity Agreement":
with respect to the Loans, the notice and
indemnity agreement in the form of Exhibit B
from the Company and the Subsidiary Borrower
delivered to the Administrative Agent, in the
manner and by the time specified in the
Administrative Schedule.
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"Notice of Interest Period": with respect to a
Floating Rate Loan, a notice from the Company
in respect of such Loan, containing the
information in respect of such Loan and
delivered to the Administrative Agent, in the
manner and by the time specified for a Notice
of Interest Period in the Administrative
Schedule.
"Obligations": the collective reference to the
Company Obligations and to the Subsidiary
Obligations.
"Participants": as defined in subsection
11.6(b).
"Payment Office": for each Type of Loan, the
Payment Office set forth in respect thereof in
the Administrative Schedule.
"Payment Time": for each Type of Loan, the
Payment Time set forth in respect thereof in
the Administrative Schedule.
"PBGC": the Pension Benefit Guaranty
Corporation established pursuant to
Subtitle A of Title IV of ERISA.
"Permitted Investor": Sidney Harman, Chairman
of the Board of Directors and Chief Executive
Officer of the Company on the date hereof.
"Person": an individual, partnership,
corporation, business trust, joint stock
company, trust, unincorporated association,
joint venture, Governmental Authority or other
entity of whatever nature.
"Plan": at a particular time, any employee
benefit plan which is covered by ERISA and in
respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were
terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledgor": Harman Audio Electronic Systems
GmbH, an indirect, wholly-owned Subsidiary of
the Subsidiary Borrower.
"Principal Credit Agreement": (i) the Multi-
Currency, Multi-Option Credit Agreement, dated
as of September 30, 1994, among the Company,
certain of its Subsidiaries, Chemical
Securities Inc., as arranger, Nationsbank of
North Carolina, N.A., as co-agent, and
Chemical Bank, as administrative agent,
together with all amendments, modifications,
supplements and waivers thereof (collectively,
the "Revolving Credit Agreement"), and (ii) if
the Revolving Credit Agreement is no longer in
effect, any other credit agreement or loan
agreement which provides the Company and all or
some of its Subsidiaries with their primary
source of working capital borrowings.
"Properties": as defined in subsection 4.16.
"Quotation Day": in respect of the
determination of the LIBO Rate for any
Interest Period, the day on which quotations
would ordinarily be given by prime banks in the
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London interbank market for deposits in Dollars
for delivery on the first day of such Interest
Period and for the term of the Interest Period;
provided, that if quotations would ordinarily
be given on more than one date, the Quotation
Day for such Interest Period shall be the last
of such dates. On the date hereof, the
Quotation Day in respect of any Interest Period
is customarily the last day prior to the
beginning of such Interest Period which is at
least two London Banking Days prior to the
beginning of such Interest Period.
"Register": as defined in subsection 11.6(d).
"Regulation G": Regulation G of the Board of
Governors of the Federal Reserve System as in
effect from time to time.
"Regulation U": Regulation U of the Board of
Governors of the Federal Reserve System as in
effect from time to time.
"Reorganization": with respect to any
Multiemployer Plan, the condition that such
plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set
forth in Section 4043(b) of ERISA, other than
those events as to which the thirty day notice
period is waived under subsections. 13, .14,
.16, .18, .19 or .20 of PBGC Reg. section 2615.
"Requirement of Law": as to any Person, the
Certificate of Incorporation and By-Laws or
other organizational or governing documents of
such Person, and any material law, treaty, rule
or regulation or determination of an arbitrator
or a court or other Governmental Authority, in
each case applicable to or binding upon such
Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer": the chief executive
officer, the president, the chief financial
officer or the vice president for financial or
legal affairs of the Company.
"Schedule Amendment": an instrument of
amendment for purposes of amending certain
Schedules hereto, which instrument shall be in
form and substance satisfactory to the
Administrative Agent and the Company.
"Single Employer Plan": any Plan which is
covered by Title IV of ERISA, but which is not
a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation,
partnership or other entity, of which shares of
stock or other ownership interests having
ordinary voting power (other than stock or such
other ownership interests having such power
only by reason of the happening of a
contingency) to elect a majority of the board
of directors or other managers of such
corporation, partnership or other entity are at
the time owned, or the management of which is
otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to
a Subsidiary or Subsidiaries of the Company.
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"Subsidiary Borrower": as defined in the
statement of parties.
"Subsidiary Obligations": the unpaid principal
of and interest on the Loans made to the
Subsidiary Borrower and all other obligations
and liabilities of the Subsidiary Borrower to
the Administrative Agent or any Lender
(including, without limitation, interest
accruing after the maturity or earlier
acceleration of the Loans and interest accruing
after the filing of any petition in bankruptcy,
or the commencement of any insolvency,
reorganization or like proceeding, relating to
the Subsidiary Borrower, whether or not a claim
for post-filing or post-petition interest is
allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred,
which may arise under, out of, or in connection
with, this Agreement, the Loans, the Notes or
any other document made, delivered or given in
connection therewith, in each case whether on
account of principal, interest, proportional
reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation,
all fees and disbursements of German counsel to
the Administrative Agent or any Lender) or
otherwise.
"Termination Date": August 30, 2002.
"Test Period": for any fiscal quarter of the
Company, the four consecutive fiscal
quarters ended immediately prior thereto.
"Transferee": as defined in subsection
11.6(f).
"Type": in respect of any Loan, its character
as a Floating Rate Loan or a Base Rate Loan, as
the case may be.
"Voting Stock": stock of the class or classes
pursuant to which the holders thereof have the
general voting power under ordinary
circumstances to elect at least a majority of
the Board of Directors of the Company
(irrespective of whether or not at the time
stock of any other class or classes shall have
or might have voting power by reason of the
happening of any contingency).
1.2. Other Definitional Provisions.
(a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the
defined meanings when used in any certificate
or other document made or delivered pursuant
hereto.
(b) As used herein and in any certificate or
other document made or delivered pursuant
hereto, accounting terms relating to the
Company and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not
defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and
"hereunder" and words of similar import when
used in this Agreement shall refer to this
Agreement as a whole and not to any particular
provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
References to Schedules to this Agreement are
references
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to such Schedules as the same may from time to
time be amended or otherwise modified in
accordance with the terms hereof.
(d) The meanings given to terms defined herein
shall be equally applicable to both the
singular and plural forms of such terms.
SECTION 2. THE LOANS
2.1. Loans.
(a) Subject to the terms and conditions
hereof, each Lender severally agrees to make a
term loan in Dollars to the Company and a term
loan in Dollars to the Subsidiary Borrower
(collectively, the "Loans") on the Effective
Date in the Dollar Equivalents of the amounts
set forth for such Lender for such Borrower in
Schedule I. Each Lender's Commitment shall
terminate (i) upon the making by such Lender of
its Loans hereunder or (ii) at 3:00 p.m. New
York City time on the Effective Date.
2.2. Procedure for Borrowing. The Company may
request the Lenders to make the Loans on the
Effective Date by delivering a Notice of
Borrowing and Indemnity Agreement. The Notice
of Borrowing and Indemnity Agreement shall
request Loans to be made on the Effective Date
in Dollars for each of the Company and the
Subsidiary Borrower in an amount equal to the
aggregate of the Commitments for such Borrower
and shall specify the initial Interest Periods.
Upon receipt of the Notice of Borrowing and
Indemnity Agreement from the Company, the
Administrative Agent shall promptly notify each
Lender thereof. Subject to the terms and
conditions hereof, each Lender will make the
amount of its pro rata share of the Loans
available to the Administrative Agent for the
account of the Borrowers at the Funding Office,
and at or prior to the Funding Time, in Dollars
immediately available to the Administrative
Agent. Such borrowing will then be made
available to the Borrowers at the Funding
Office, in like funds as received by the
Administrative Agent.
2.3. Repayment of Loans; Evidence of Debt.
(a) Each Borrower hereby unconditionally
promises to pay to the Administrative Agent for
the account of each Lender on the Termination
Date (or such earlier date on which the Loans
become due and payable pursuant to Section 9),
the then unpaid principal amount of each Loan
made by such Lender. Each Borrower hereby
further agrees to pay interest on the unpaid
principal amount of the Loans made to such
Borrower from time to time outstanding from the
date hereof until payment in full thereof at
the rates per annum, and on the dates, set
forth in subsection 2.6.
(b) Each Lender shall maintain in accordance
with its usual practice an account or accounts
evidencing indebtedness of each Borrower to
such Lender resulting from each Loan of such
Lender from time to time, including the amounts
of principal and interest payable and paid to
such Lender from time to time under this
Agreement.
(c) The Administrative Agent shall maintain
the Register pursuant to subsection 11.6(d),
and a sub-account therein for each Lender, in
which shall be recorded (i) the
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amount of each Loan made hereunder, (ii) the
amount of any principal or interest due and
payable or to become due and payable from each
Borrower to each Lender, (iii) the amount of
any sum received by the Administrative Agent
from each Borrower in respect of Loans, and the
amount of each Lender's share thereof and (iv)
the amount and holder of each Note.
(d) The entries made in the Register and the
accounts of each Lender maintained pursuant to
subsection 2.3(b) shall, to the extent
permitted by applicable law, be prima facie
evidence of the existence and amounts of the
obligations of each Borrower therein recorded;
provided, however, that the failure of any
Lender or the Administrative Agent to maintain
the Register or any such account, or any error
therein, shall not in any manner affect the
obligation of each Borrower to repay (with
applicable interest) the Loan made to such
Borrower by such Lender in accordance with the
terms of this Agreement.
(e) The obligation of the Borrowers to repay
the Loans of each Lender shall be evidenced by
(in addition to this Agreement) the Notes.
2.4. [Reserved].
2.5. Optional Prepayments. Any Borrower may,
at any time and from time to time, prepay the
Loans made to such Borrower, in whole or in
part, without premium or penalty, upon at least
four Business Days' irrevocable notice to the
Administrative Agent, specifying the date and
amount of prepayment. Upon receipt of any such
notice the Administrative Agent shall promptly
notify each Lender thereof. If any such notice
is given, the amount specified in such notice
shall be due and payable on the date specified
therein, together with any amounts payable
pursuant to subsection 3.7. Partial
prepayments shall be in an aggregate principal
amount of $2,500,000 or $500,000 multiples in
excess thereof. Loans prepaid may not be
reborrowed.
2.6. Interest Rates and Payment Dates for
Loans.
(a) Each Floating Rate Loan shall bear
interest for each day during each Interest
Period with respect thereto at a rate per annum
equal to the LIBO Rate for such Interest Period
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at
a rate per annum equal to the Base Rate plus
the Applicable Margin.
(c) If all or a portion of (i) the principal
amount of any Loan or (ii) any interest payable
thereon shall not be paid when due (whether at
the stated maturity, by acceleration or
otherwise), such overdue amount shall bear
interest at a rate per annum which is (x) in
the case of overdue principal, the rate that
would otherwise be applicable thereto pursuant
to the foregoing provisions of this subsection
plus 2% or (y) in the case of overdue interest,
the rate which would be applicable to overdue
principal pursuant to clause (x) of this
subsection, in each case from the date of such
non-payment until such amount is paid in full
(as well after as before judgment).
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(d) Interest on each Loan shall be payable in
arrears on each Interest Payment Date;
provided, that interest accruing pursuant to
paragraph (c) of this subsection shall be
payable from time to time on demand.
2.7. Inability to Determine Interest Rate.
If, on or prior to the Quotation Day for any
Interest Period in respect of any Floating Rate
Loan:
(a) the Administrative Agent shall have
determined (which determination shall be
conclusive absent manifest error) that, by
reason of circumstances affecting the relevant
market generally, adequate and reasonable means
do not exist for ascertaining the LIBO Rate for
such affected Interest Period, or
(b) the Administrative Agent shall have
received notice from Lenders having Loans
comprising at least 33-1/3% of the aggregate
amount of the Loans that the LIBO Rate
determined or to be determined for such
affected Interest Period will not adequately
and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of
making or maintaining their affected Floating
Rate Loans during such affected Interest
Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the
Company and the Lenders as soon as practicable
thereafter. If such notice is given, all Loans
thereafter outstanding on the first day of such
Interest Period shall automatically be
converted to Base Rate Loans and shall remain
as such until such notice has been withdrawn by
the Administrative Agent. Following the
withdrawal of any such notice, all Base Rate
Loans then outstanding shall be converted as
soon as practicable thereafter to bear interest
at the LIBO Rate with such Interest Period as
the Company shall designate in writing to the
Administrative Agent or, if the Company fails
to specify an Interest Period, a one month
Interest Period.
2.8. Loans by Designated Lenders. For any
Lender that is a Designating Lender, any Loan
to be made by such Lender may from time to time
be made by its Designated Lender in such
Designated Lender's sole discretion, but
nothing herein shall constitute a commitment to
make Loans by such Designated Lender; provided
that, if any Designated Lender elects not to,
or fails to, make any such Loan, its
designating Lender hereby agrees that it shall
make such Loan pursuant to the terms hereof.
Any Loan actually funded by a Designated Lender
shall constitute a utilization of the
Commitment of the Designating Lender for all
purposes hereunder.
SECTION 3. CERTAIN PROVISIONS APPLICABLE TO
THE LOANS
3.1. Certain Fees. The Company agrees to pay
to the Administrative Agent, for its own
account, an administrative agent's fee, in the
amounts and on the dates set forth in the
Fee Letter.
3.2. Computation of Interest and Fees.
(a) All interest shall be calculated on the
basis of a 360-day year based on the actual
days elapsed. If the Loans are made as
Floating Rate Loans, the Administrative Agent
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shall as soon as practicable notify the
Borrowers and the Lenders of each determination
of the applicable LIBO Rate.
(b) Each determination of an interest rate by
the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive
and binding on the Borrowers and the Lenders in
the absence of manifest error.
3.3. Pro Rata Treatment and Payments.
(a) The Loans shall be made in Dollars by each
Lender for the full amount of such Lender's
Commitment. Each payment (including each
prepayment) by any Borrower on account of
principal of and interest on any Loans shall be
made pro rata according to the respective
principal amounts of the Loans of such Borrower
then due and owing to the Lenders. All
payments (including prepayments) to be made by
any Borrower hereunder or under any Note,
whether on account of principal, interest, fees
or otherwise, shall be made without set off or
counterclaim. All payments in respect of Loans
shall be made in Dollars and in immediately
available funds at the Payment Office, and at
or prior to the Payment Time, for such Type of
Loans, on the due date thereof. All other
payments under this Agreement or any other Loan
Document shall be made in Dollars in
immediately available funds at the applicable
Payment Office. The Administrative Agent shall
distribute to the Lenders any payments received
by the Administrative Agent promptly upon
receipt in like funds as received. If any
payment hereunder or under any Note becomes due
and payable on a day other than a Business Day,
such payment shall be extended to the next
succeeding Business Day (unless such Business
Day shall be in the next calendar month, in
which case such payment shall be due on the
next preceding Business Day), and, with respect
to payments of principal, interest thereon
shall be payable at the then applicable rate
during such extension.
(b) The Administrative Agent shall assume that
each Lender will make available to the
Administrative Agent an amount equal to the
aggregate of its Commitments, and the
Administrative Agent shall, in reliance upon
such assumption, make available to the relevant
Borrower an amount equal to the aggregate of
the Commitments for such Borrower. If such
amount is not made available to the
Administrative Agent by any Lender by the
required time on the Effective Date, such
Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at
a rate equal to the rate customary in Dollars
for settlement of similar interbank
obligations, as quoted by the Administrative
Agent, in each case for the period until
such Lender makes such amount immediately
available to the Administrative Agent. A
certificate of the Administrative Agent
submitted to any Lender with respect to any
amounts owing under this subsection shall be
conclusive in the absence of manifest error.
3.4. Illegality. Notwithstanding any other
provision herein, if the adoption of or any
change in any Requirement of Law or in the
interpretation thereof by any Governmental
Authority charged with the administration or
interpretation thereof shall make it unlawful
for any Lender to make or maintain Floating
Rate Loans to any Borrower as contemplated by
this Agreement, the commitment of such Lender
hereunder to make or maintain Floating Rate
Loans to such Borrower shall forthwith be
cancelled to the extent necessary to remedy or
prevent such illegality and all Floating Rate
Loans then outstanding shall automatically be
converted to Base
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Rate Loans and shall remain as such until such
time as Floating Rate Loans may once again be
lawfully made and maintained. As soon as
practicable following the date on which it once
again becomes lawful to make and maintain
Floating Rate Loans, all Base Rate Loans then
outstanding shall be converted to bear interest
at the LIBO Rate with such Interest Period as
the Company shall designate in writing to the
Administrative Agent or, if the Company fails
to specify an Interest Period, a one month
Interest Period.
3.5. Requirements of Law.
(a) If after the date hereof the adoption of
or any change in any Requirement of Law or in
the interpretation thereof by any Governmental
Authority charged with the administration or
interpretation thereof or compliance by any
Lender with any request or directive (whether
or not having the force of law) applicable
generally in the jurisdiction of such Lender to
banking institutions of the same type as such
Lender:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement
or any Floating Rate Loan made by it to any
Borrower, or change the basis of taxation of
payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by
subsection 3.6 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable
any reserve, special deposit, compulsory loan
or similar requirement against assets held by,
deposits or other liabilities in or for the
account of, advances, loans or other extensions
of credit by, or any other acquisition of funds
by, any office of such Lender which is not
otherwise included in the determination of the
LIBO Rate; or
(iii) shall impose on such Lender any other
condition affecting Floating Rate Loans made by
such Lender to any Borrower;
and the result of any of the foregoing is to
increase the cost to such Lender by an amount
which such Lender deems to be material, of
making or maintaining Floating Rate Loans, or
to reduce any amount receivable hereunder or
under any Note in respect thereof, and such
Lender has no reasonable means (as it shall
determine in its sole discretion) to avoid such
costs or reductions, then, in any such case,
the Company shall promptly pay such Lender
following receipt of a certificate of such
Lender in accordance with subsection 3.5(d)
such additional amount or amounts as will
compensate such Lender for such increased cost
or reduction suffered.
(b) If any Lender shall have determined that
the adoption of or any change in any
Requirement of Law regarding capital adequacy
or in the interpretation thereof by any
Governmental Authority charged with the
administration or interpretation thereof or
compliance by such Lender or any corporation
controlling such Lender with any request or
directive regarding capital adequacy (whether
or not having the force of law) made subsequent
to the date hereof shall have the effect of
reducing the rate of return on such Lender's or
such corporation's capital as a consequence of
its obligations hereunder to a level below that
which such Lender or such corporation could
have achieved but for such adoption, change or
compliance (taking into
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consideration such Lender's or such
corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender to
be material, then from time to time, the
Company shall promptly pay to such Lender
following receipt of a certificate of such
Lender in accordance with subsection 3.5(d)
such additional amount or amounts as will
compensate such Lender for any such reduction
suffered. Notwithstanding any other provision
in this paragraph (b), none of the
Lenders shall be entitled to demand
compensation pursuant to this paragraph (b) if
it shall not then be the general practice of
such Lender to demand such compensation in
similar circumstances under comparable
provisions of other comparable credit
agreements.
(c) In addition to, and without duplication
of, amounts which may become payable from time
to time pursuant to paragraphs (a) and (b) of
this subsection 3.5, each Borrower agrees to
pay to each Lender which requests compensation
under this paragraph (c) by notice to such
Borrower, on the last day of each Interest
Period with respect to any Floating Rate
Loans made by such Lender to such Borrower, at
any time when such Lender shall be required to
maintain reserves against "Eurocurrency
liabilities" under Regulation D of the Board
(or, at any time when such Lender may be
required by the Board or by any other
Governmental Authority, whether within the
United States or in another relevant
jurisdiction, to maintain reserves against
any other category of liabilities which
includes deposits by reference to which the
LIBO Rate is determined as provided in this
Agreement or against any category of extensions
of credit or other assets of such Lender which
includes any Floating Rate Loans), an
additional amount (determined by such Lender's
calculation or, if an accurate calculation is
impracticable, reasonable estimate using such
reasonable means of allocation as such Lender
shall determine) equal to the actual costs, if
any, incurred by such Lender during such
Interest Period as a result of the
applicability of the foregoing reserves to such
Floating Rate Loans.
(d) A certificate of each Lender setting forth
such amount or amounts as shall be necessary to
compensate such Lender as specified in
paragraph (a), (b) or (c) above, as the case
may be, and setting forth in reasonable detail
an explanation of the basis of requesting such
compensation in accordance with paragraph (a),
(b) or (c) above, including calculations in
detail comparable to the detail set forth in
certificates delivered by such Lender in
similar circumstances under comparable
provisions of other comparable credit
agreements, shall be delivered to the relevant
Borrower and shall be conclusive absent
manifest error. The relevant Borrower shall
pay each Lender the amount shown as due on any
such certificate delivered to it within 10 days
after its receipt of the same.
(e) Failure on the part of any Lender to
demand compensation for any increased costs or
reduction in amounts received or receivable or
reduction in return on capital with respect to
any period shall not constitute a waiver of
such Lender's right to demand compensation with
respect to such period or any other period,
except that no Lender shall be entitled to
compensation under this subsection 3.5 for any
costs incurred or reduction suffered with
respect to any date unless such Lender shall
have notified the relevant Borrower that it
will demand compensation for such costs or
reductions under paragraph (d) above, not more
than six months after the later of (i) such
date and (ii) the date on which such Lender
shall have become aware of such costs or
reductions. The protection of this subsection
3.5 shall be available to each Lender
regardless of any possible contention of the
invalidity or inapplicability of the law, rule,
regulation, guideline or other change or
condition that shall have occurred or been
imposed.
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(f) The agreements in this subsection shall
survive the termination of this Agreement and
the payment of the Loans and all other amounts
payable hereunder and under the Notes.
3.6. Taxes.
(a) All payments made to the Administrative
Agent or any Lender under this Agreement shall
be made free and clear of, and without
deduction or withholding for or on account of,
any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or
assessed by any Governmental Authority,
excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed
on the Administrative Agent or any Lender as a
result of a present or former connection
between the Administrative Agent or such Lender
and the jurisdiction of the Governmental
Authority imposing such tax or any political
subdivision or taxing authority thereof or
therein (other than any such connection arising
solely from the Administrative Agent or such
Lender having executed, delivered or performed
its obligations or received a payment under, or
enforced, this Agreement); provided, however,
that the Lender and the Administrative Agent,
as the case may be, shall have complied with
the relevant provisions of this subsection 3.6.
If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts
payable to the Administrative Agent or any
Lender hereunder or under any Note, the
amounts so payable to the Administrative Agent
or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent
or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other
amounts payable hereunder or under such Note
at the rates or in the amounts specified in
this Agreement. Whenever any Non-Excluded
Taxes are payable by any Borrower, as promptly
as possible thereafter such Borrower shall
timely pay such Non-Excluded Taxes and shall
send to the Administrative Agent for its own
account or for the account of such Lender, as
the case may be, a certified copy of an
original official receipt received by such
Borrower showing payment thereof. If such
Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the
required receipts or other required documentary
evidence, such Borrower shall indemnify the
Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that
may become payable by the Administrative Agent
or any Lender as a result of any such failure.
Notwithstanding the foregoing, no Borrower
shall be required to make any payments in
respect of Non-Excluded Taxes to any Lender
that has changed the Funding Office at which it
maintains the Loans to which such Non-Excluded
Taxes relate (other than any such change in
Funding Office made by such Lender pursuant to
subsection 3.8 to avoid or minimize the
application or effects of subsection 3.5 or
3.6) in an amount greater than such Borrower
would have been required to pay pursuant to
this subsection 3.6 if no such change in
Funding Office had occurred. The agreements in
this subsection shall survive the termination
of this Agreement, and the payment of the Loans
and all other amounts payable hereunder and
under the Notes.
(b) Each Lender shall:
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(i) on or before the Effective Date, deliver
to the Company and the Administrative Agent (A)
in the case of a lender that is not
incorporated or organized under the laws of the
United States or a state thereof (a "Non-U.S.
Lender") two duly completed copies of United
States Internal Revenue Service Form W-8BEN or
Form W-8ECI, and (B) in the case of a lender
that is incorporated or organized under the
laws of the United States or a state thereof (a
"U.S. Lender") an Internal Revenue Service Form
W-9, or successor applicable form, as the case
may be;
(ii) deliver to the Company and the
Administrative Agent two further copies of any
such form or certification on or before the
date that any such form or certification
expires or becomes obsolete and after the
occurrence of any event requiring a change in
the most recent form previously delivered by it
to the Company; and
(iii) obtain such extensions of time for
filing and complete such forms or
certifications as may reasonably be requested
by the Company or the Administrative Agent;
unless in any such case an event (including,
without limitation, any change in treaty, law
or regulation) (a "Tax Event") has occurred
after the date such Lender becomes a Lender
hereunder and prior to the date on which any
such delivery would otherwise be required which
renders all such forms inapplicable or which
would prevent such Lender from duly completing
and delivering any such form with respect to it
and such Lender so advises the Company and the
Administrative Agent. Each Lender delivering a
form pursuant to subsection 3.6(b) shall
certify (i) in the case of a Non-U.S. Lender,
that it is entitled to receive payments under
this Agreement in respect of Loans to the
Company without deduction or withholding of any
United States federal income taxes and (ii) in
the case of a U.S. Lender, that it is entitled
to an exemption from United States backup
withholding tax; provided that, if a Tax Event
occurs with respect to a Non-U.S. Lender and
such Lender can no longer certify that it is
entitled to receive payments under this
Agreement in respect of Loans to the Company
without deduction or withholding of any United
States federal income taxes, then (1) such
Lender shall certify the rate at which
United States Tax should be withheld from
payments made hereunder to such Lender, (2)
notwithstanding subsection 11.6, no Loans may
be assigned to such Lender without the consent
of the Company unless such assignment occurs at
any time when any of the events described in
subsection 9(f) shall have occurred and be
continuing and (3) the Company may prepay all
or part of the Loans made by such Lender to the
Company pursuant to subsections 2.5 and 3.3(a),
provided that such payment need not be made pro
rata. Each Person that shall become a Lender
or a Participant pursuant to subsection 11.6
shall, upon the effectiveness of the related
transfer, be required to provide all of the
forms and statements required pursuant to this
subsection, provided that in the case of a
Participant such Participant shall furnish all
such required forms and statements to the
Lender from which the related participation
shall have been purchased.
(c) Each Lender further agrees to use
reasonable efforts (consistent with legal
and regulatory restrictions) to deliver to the
Subsidiary Borrower, promptly upon any request
therefor from time to time, such forms,
documents and other information as may be
required by
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applicable law from time to time and to file
all appropriate forms to obtain a certificate
or other appropriate documents from the
appropriate governmental authorities to
establish that payments made in respect of
Loans to the Subsidiary Borrower can be made
without (or at a reduced rate of) withholding
of any Non-Excluded Taxes; provided, however,
that if such Lender is or becomes unable, by
virtue of any applicable law, rule or
regulation, to establish such exemption or
reduction the Borrowers shall nonetheless
remain obligated under subsection 3.6(a) above
to pay the amounts described therein and
provided, further, that no Lender shall be
required to take any action hereunder which in
the discretion of such Lender would cause such
Lender and its Funding Office(s) to suffer a
material, economic, legal or regulatory
disadvantage.
3.7. Indemnity. The Company agrees to
indemnify each Lender and to hold each Lender
harmless from any loss or reasonable expense
which such Lender may sustain or incur as a
consequence of (a) default by any Borrower in
making a borrowing of a Loan after the
Company has given the Notice of Borrowing and
Indemnity Agreement requesting the same in
accordance with the provisions of this
Agreement, (b) default by any Borrower in
making any prepayment after such Borrower has
given a notice thereof in accordance with the
provisions of this Agreement, (c) the making by
any Borrower of a prepayment of Floating Rate
Loans on a day which is not the last day of an
Interest Period or the maturity date, as the
case may be, with respect thereto or (d) the
conversion of Loans from one Type to another
Type pursuant to subsections 2.7 and 3.4. Such
other loss or reasonable expense shall be equal
to the sum of (x) such Lender's actual costs
and expenses incurred (other than any lost
profits) in connection with, or by reason of,
any of the foregoing events, including all
costs incurred in connection with the
termination, settlement or modification of any
interest rate swap agreement entered into with
respect to the Loans, and (y) an amount equal
to the excess, if any, as reasonably determined
by the Lender of (i) its cost of obtaining the
funds for the Loan being paid, prepaid or
converted (assumed to be the LIBO Rate
applicable thereto) for the period from and
including the date for such payment, prepayment
or conversion to but excluding the last day of
the Interest Period for such Loan over (ii) the
amount of interest (as reasonably determined by
such Lender) that would be realized by such
Lender in reemploying the funds so paid,
prepaid or converted for such period or
Interest Period, as the case may be. A
certificate of any Lender setting forth any
amount or amounts, including calculations in
reasonable detail, that such Lender is entitled
to receive pursuant to this subsection 3.7
shall be delivered to the Company and shall be
conclusive absent manifest error. This
covenant shall survive the termination of this
Agreement and the payment of the Loans and all
other amounts payable hereunder and under the
Notes.
3.8. Change of Funding Office.
(a) Each Lender agrees that upon the
occurrence of any event giving rise to the
operation of subsection 3.4, 3.5 or 3.6, it
will use reasonable efforts (consistent with
legal and regulatory restrictions) to file any
certificate or document requested by the
Company or designate a different Funding Office
for Loans affected by such event with the
object of avoiding or minimizing the
consequences of such event; provided, that such
filing or designation is made on terms that, in
the sole judgment of such Lender, cause such
Lender and its Funding Office(s) to suffer no
material economic, legal or regulatory
disadvantage; and, provided, further, that
nothing in this subsection 3.8 shall affect or
postpone any of the obligations of any Borrower
or the rights of any Lender pursuant to
subsection 3.4, 3.5 or 3.6.
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(b) In the event that any Lender shall have
delivered a notice or certificate pursuant to
subsections 3.4, 3.5 or 3.6, the Borrowers
shall have the right, but not the obligation,
at their own expense, upon notice to such
Lender and the Administrative Agent, to replace
such Lender with an assignee (in accordance
with and subject to the restrictions contained
in subsection 11.6) approved by the
Administrative Agent (which approval shall not
be unreasonably withheld), and such Lender
hereby agrees to transfer and assign without
recourse (in accordance with and subject to the
restrictions contained in subsection 11.6) all
its interests, rights and obligations under
this Agreement and the other Loan Documents to
such assignee; provided, however, that no
Lender shall be obligated to make any such
assignment unless (i) such assignment shall not
conflict with any Requirement of Law, (ii) such
assignee shall pay to the affected Lender in
immediately available funds on the date of such
assignment the principal of the Loans made by
such Lender hereunder and (iii) the Borrowers
shall pay to the affected Lender in immediately
available funds on the date of such assignment
the interest accrued to the date of payment on
the Loans made by such Lender hereunder and all
other amounts accrued for such Lender's account
or owed to it hereunder or under any Note
(including any amount that would be payable to
such Lender pursuant to subsection 3.7 if such
assignment were, instead, a prepayment).
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the
Lenders to enter into this Agreement and to
make the Loans, the Company hereby represents
and warrants to the Administrative Agent and
each Lender that:
4.1. Financial Condition. The consolidated
balance sheet of the Company and its
consolidated Subsidiaries as at June 30, 1999
and the related consolidated statements of
income and of cash flows for the fiscal year
ended on such date, reported on by KPMG LLP,
copies of which have heretofore been furnished
to each Lender, are complete and correct and
present fairly the consolidated financial
condition of the Company and its consolidated
Subsidiaries as at such date, and the
consolidated results of their operations and
their consolidated cash flows for the fiscal
year then ended. All such financial tatements,
including the related schedules and notes
thereto, have been prepared in accordance with
GAAP applied consistently throughout the
periods involved (except as approved by such
accountants or a Responsible Officer, as the
case may be, and as disclosed therein).
Neither the Company nor any of its consolidated
Subsidiaries had, at the date of the most
recent balance sheet referred to above, any
material Guarantee Obligation, contingent
liability or liability for taxes, or any
long-term lease or unusual forward or long-term
commitment, including, without limitation, any
interest rate or foreign currency swap or
exchange transaction, which is not reflected in
the foregoing statements or in the notes
thereto. During the period from June 30, 1999
to and including the date hereof there has been
no sale, transfer or other disposition by the
Company or any of its consolidated Subsidiaries
of any property and no purchase or other
acquisition of any business or property
(including any capital stock of any other
Person), which in either case would be,
material in relation to the consolidated
financial condition of the Company and its
consolidated Subsidiaries at June 30, 1999.
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4.2. No Change. (a) Since June 30, 1999 there
has been no development or event which has had
or is reasonably expected to have a Material
Adverse Effect, and (b) during the period from
June 30, 1999 to and including the date hereof
no dividends (other than dividends paid in the
ordinary course) or other distributions have
been declared, paid or made upon the Capital
Stock of the Company nor has any of the Capital
Stock of the Company been redeemed, retired,
purchased or otherwise acquired for value by
the Company or any of its Subsidiaries.
4.3. Corporate Existence; Compliance with Law.
Each Borrower (a) is duly organized, validly
existing and in good standing under the laws of
the jurisdiction of its organization, (b) has
the corporate power and authority to own and
operate its property, to lease the property it
operates as lessee and to conduct the business
in which it is currently engaged, (c) is duly
qualified as a foreign corporation under the
laws of each jurisdiction where its ownership,
lease or operation of property or the conduct
of its business requires such qualification
except to the extent that the failure to so
qualify is not reasonably expected to have a
Material Adverse Effect and (d) is in
compliance with all Requirements of Law except
to the extent that the failure to comply
therewith is not reasonably expected to have a
Material Adverse Effect.
4.4. Corporate Power; Authorization;
Enforceable Obligations. Each Borrower
has the corporate power and authority to make,
deliver and perform the Loan Documents to which
it is a party and to borrow hereunder and has
taken all necessary corporate action to
authorize the borrowings on the terms and
conditions of this Agreement and to authorize
the execution, delivery and performance of the
Loan Documents to which it is a party. No
consent or authorization of, filing with,
notice to or other act by or in respect of, any
Governmental Authority or any other Person is
required in connection with the borrowings
hereunder or with the execution, delivery,
performance, validity or enforceability of the
Loan Documents to which the Company or
Subsidiary Borrower is a party. This Agreement
has been, and each other Loan Document to which
it is a party will be, duly executed and
delivered on behalf of the Company and the
Subsidiary Borrower. This Agreement
constitutes, and each other Loan Document to
which it is a party when executed and delivered
will constitute, a valid and binding obligation
of the Company or the Subsidiary Borrower, as
the case may be, enforceable against it in
accordance with its terms, except as
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the
enforcement of creditors' rights generally and
by general equitable principles (whether
enforcement is sought by proceedings in equity
or at law).
4.5. No Legal Bar. The execution, delivery
and performance of the Loan Documents to which
the Company or the Subsidiary Borrower is a
party, the borrowings hereunder and the use of
the proceeds thereof will not (a) violate any
Requirement of Law or Contractual Obligation of
the Company or the Subsidiary Borrower except
where any such violation is not reasonably
expected to result in a Material Adverse Effect
or (b) result in the creation or imposition of
any Lien on any of its or their respective
properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation
except where any such creation or imposition of
any Lien is not reasonably expected to result
in a Material Adverse Effect.
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4.6. No Material Litigation. No litigation,
investigation or proceeding of or before any
arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened
by or against the Company or any of its
Subsidiaries or against any of its or their
respective properties or revenues (a) with
respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby
(b) which is reasonably expected to have a
Material Adverse Effect.
4.7. No Default. Neither the Company nor the
Subsidiary Borrower is in default under or with
respect to any of its Contractual Obligations
in any respect which could reasonably be
expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is
continuing.
4.8. Ownership of Property; Liens. Each of
the Company and the Subsidiary Borrower has
good and marketable title to, or valid
leasehold interests in, all its material real
property, except for minor defects in title
that do not interfere in any material respect
with its ability to conduct its business as
presently conducted. All such material
properties are free and clear of all Liens,
other than Liens permitted by the terms of the
Principal Credit Agreement.
4.9. Intellectual Property. The Company and
each of its Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, copyrights,
technology, know-how and processes necessary
for the conduct of its business as currently
conducted except for those failures to own
or license which are not reasonably expected to
have a Material Adverse Effect (the
"Intellectual Property"). No claim has been
asserted against the Company or any Subsidiary
and is pending by any Person challenging or
questioning the use by the Company or any
Subsidiary of any such Intellectual Property or
the validity or effectiveness of any such
Intellectual Property, nor does the Company
know of any valid basis for any such claim,
except for such claims that, in the aggregate,
are not reasonably expected to have a Material
Adverse Effect. To the best knowledge of the
Company, the use of such Intellectual Property
by the Company and its Subsidiaries does not
infringe on the rights of any Person, except
for such claims and infringements that, in the
aggregate, are not reasonably expected to have
a Material Adverse Effect.
4.10. Taxes. Each of the Company and its
Subsidiaries has filed or caused to be filed
all tax returns which, to the knowledge of the
Company, are required to be filed and has paid
all taxes shown to be due and payable on said
returns or on any assessments made against it
or any of its property and all other taxes,
fees or other charges imposed on it or any of
its property by any Governmental Authority
(other than any amount the validity of which is
currently being contested in good faith by
appropriate proceedings and with respect to
which reserves in conformity with GAAP have
been provided on the books of the Company or
its Subsidiaries, as the case may be) except
where such failure to file or pay is not
reasonably expected to result in a Material
Adverse Effect; no tax Lien has been filed in
respect of any material amount of unpaid taxes,
and, to the knowledge of the Company, no claim
is being asserted, with respect to any such
tax, fee or other charge except where such
claim is not reasonably expected to result in a
Material Adverse Effect.
4.11 Federal Regulations. No part of the
proceeds of any Loans will be used for
"purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the
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quoted terms under Regulation G or Regulation
U. If requested by any Lender, the Company
will furnish to each Lender a statement to the
foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1
referred to in said Regulation G or Regulation
U, as the case may be.
4.12. ERISA. Neither a Reportable Event nor
an "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year
period prior to the date on which this
representation is made or deemed made on the
date of the Notice of Borrowing and Indemnity
Agreement or any Notice of Interest Period with
respect to any Single Employer Plan or
Multiemployer Plan, and each Plan (such
representation in respect of any Multiemployer
Plan being made to the best of the Company's
knowledge) has complied in all material
respects with the applicable provisions of
ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien on
assets of the Company or any Commonly
Controlled Entity in favor of the PBGC or a
Plan has arisen, during such five-year period.
The present value of all accrued benefits under
each Single Employer Plan (based on those
assumptions used to fund such Plans) did not,
as of the last annual valuation date prior to
the date on which this representation is made
or deemed made on the date of the Notice of
Borrowing and Indemnity Agreement or any Notice
of Interest Period, exceed the value of the
assets of such Plan allocable to such accrued
benefits. Neither the Company nor any Commonly
Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and
neither the Company nor any Commonly Controlled
Entity would become subject to any liability
under ERISA if the Company or any such Commonly
Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the
valuation date most closely preceding the date
on which this representation is made or deemed
made. To the best of the Company's knowledge,
no such Multiemployer Plan is in Reorganization
or Insolvent. The present value (determined
using actuarial and other assumptions which are
reasonable in respect of the benefits provided
and the employees participating) of the
liability of the Company and each Commonly
Controlled Entity for post retirement benefits
to be provided to their current and former
employees under Plans which are welfare benefit
plans (as defined in Section 3(1) of ERISA)
does not, in the aggregate, exceed the assets
under all such Plans allocable to such
benefits by an amount in excess of $5,000,000.
4.13. Investment Company Act; Other
Regulations. Neither the Company nor the
Subsidiary Borrower is an "investment company",
or a company "controlled" by an "investment
company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the
Company nor the Subsidiary Borrower is subject
to regulation under any Federal or State
statute or regulation (other than Regulation X
of the Board of Governors of the Federal
Reserve System) which limits its ability to
incur Indebtedness.
4.14. Purpose of Loans. The proceeds of the
Loans shall be used by the Company and the
Subsidiary Borrower to refinance the Existing
Obligations and for general working capital
purposes.
4.15. Accuracy and Completeness of
Information. All information heretofore
furnished by the Company to the Lenders for
purposes of or in connection with this
Agreement, and all such information hereafter
furnished by the Company to any Lender for
purposes of this
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Agreement, will not, at the time delivered,
contain any untrue statement of a material fact
or omit to state a material fact necessary in
order to make the statements made or to be
made, in the light of the circumstances under
which they were or will be made, not
misleading. Prior to the date hereof, the
Company has disclosed to the Lenders in writing
any and all facts which materially and
adversely affect (to the extent the Company can
as of the date hereof reasonably foresee) the
business, operations or financial condition of
the Company and its Subsidiaries taken as a
whole, or the ability of the Borrowers and the
Guarantor to perform their obligations under
this Agreement.
4.16. Environmental Matters. Except to the
extent that all of the following are not
reasonably expected to have a Material Adverse
Effect:
(a) The facilities and properties owned,
leased or operated by the Company or any of its
Subsidiaries (the "Properties") do not contain,
and to the knowledge of the Company during its
period of ownership, lease or operation of the
Properties, have not previously contained, any
Materials of Environmental Concern in amounts
or concentrations which (i) constitute a
violation of, or (ii) are reasonably expected
to give rise to liability under, any
Environmental Law.
(b) The Properties and all operations at the
Properties are in compliance, and have in the
last five years been in compliance, in all
material respects with all applicable
Environmental Laws, and there is no
contamination at, under or about the Properties
or violation of any Environmental Law with
respect to the Properties or the business
operated by the Company or any of its
Subsidiaries (the "Business") which could
materially interfere with the continued
operation of the Properties or materially
impair the fair saleable value thereof.
(c) Neither the Company nor any of its
Subsidiaries has received any written notice of
violation, alleged violation, non-compliance,
liability or potential liability regarding
environmental matters or compliance with
Environmental Laws with regard to any of the
Properties or the Business, nor does the
Company have knowledge or reason to believe
that any such notice will be received or is
being threatened.
(d) Materials of Environmental Concern have
not been transported or disposed of from the
Properties in violation of any Environmental
Law, nor have any Materials of Environmental
Concern been generated, treated, stored or
disposed of at, on or under any of the
Properties in violation of, or in a manner that
could reasonably be expected to give rise to
liability under, any applicable Environmental
Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the
knowledge of the Company, threatened, under any
Environmental Law to which the Company or any
Subsidiary is or will be named as a party with
respect to the Properties or the Business, nor
are there any consent decrees or other decrees,
consent orders, administrative orders or other
orders, or other administrative or judicial
requirements outstanding under any
Environmental Law with respect to the
Properties or the Business.
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(f) There has been no release of Materials of
Environmental Concern at or from the
Properties, or arising from or related to the
operations of the Company or any Subsidiary in
connection with the Properties or otherwise in
connection with the Business, in violation of
or in amounts or in a manner that could
reasonably be expected to give rise to
liability under Environmental Laws.
SECTION 5. CONDITIONS PRECEDENT
5.1. Conditions to Amendment and Restatement
and Making of Loans. This Agreement shall
become effective, and the Existing Credit
Agreement shall be amended and restated in its
entirety as set forth herein and the agreement
of each Lender to make the Loans is subject to
the satisfaction, immediately prior to or
concurrently with the making of such Loans,
on the date (the "Effective Date") which date
shall be a Business Day on which each of the
following conditions shall have been satisfied
or waived:
(a) Execution and Delivery of this Agreement.
The Company, the Subsidiary Borrower and each
of the Lenders shall have executed a copy of
this Agreement (whether the same or different
copies) and shall have delivered the same to
the Administrative Agent.
(b) No Default; Representations and
Warranties. On the Effective Date (before and
after giving effect to the amendment and
restatement), (i) there shall exist no Default
or Event of Default and (ii) all of the
representations and warranties contained herein
or in the other Loan Documents shall be true
and correct in all material respects with the
same effect as though such representations and
warranties had been made on and as of such
date, unless stated to relate to a specific
earlier date, in which case such
representations and warranties shall have been
true and correct in all material respects as of
such earlier date.
(c) Repayment of Existing Obligations. All
Existing Obligations shall have been paid in
full through and including the Effective Date,
whether or not then due and payable.
(d) German Mortgage. No default shall have
occurred and be continuing under the German
Mortgage.
(e) German Security Agreement. The German
Security Agreement shall be in full force and
effect and no default shall have occurred and
be continuing thereunder.
(f) Borrowing Certificate. The Administrative
Agent shall have received, with a counterpart
for each Lender, a certificate of the Company,
dated the Effective Date, in form and substance
satisfactory to the Administrative Agent,
executed by the President or any Vice President
and the Secretary or any Assistant Secretary of
the Company. There shall be attached to such
certificate a copy of the resolutions, in form
and substance satisfactory to the
Administrative Agent, of the Board of Directors
of the Company authorizing the execution,
delivery and performance of this Agreement.
(g) Notes. The Administrative Agent shall
have received the Notes, executed by the
Company or the Subsidiary Borrower, as the case
may be, payable to each Lender.
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(h) Consents, Licenses and Approvals. The
Administrative Agent shall have received, with
a counterpart for each Lender, a certificate of
a Responsible Officer of the Company (i)
attaching copies of all consents,
authorizations and filings referred to in
subsection 4.4, and (ii) stating that such
consents, licenses and filings are in full
force and effect, and each such consent,
authorization and filing shall be in form and
substance satisfactory to the Administrative
Agent.
(i) Notice of Borrowing and Indemnity
Agreement. The Administrative Agent shall have
received three LIBOR Banking Days prior to the
Effective Date the Notice of Borrowing and
Indemnity Agreement, duly completed and
executed and delivered by the Borrowers.
(j) Additional Matters. All corporate and
other proceedings, and all documents,
instruments and other legal matters in
connection with the transactions contemplated
by this Agreement shall be satisfactory in form
and substance to the Administrative Agent.
SECTION 6. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the
Commitments remain in effect or any amount is
owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the
Company shall and (except in the case of
delivery of financial information, reports and
notices) shall cause each of its Subsidiaries
to:
6.1. Financial Statements. Furnish to each
Lender:
(a) as soon as available, but in any event
within 90 days after the end of each
fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and
its consolidated Subsidiaries as at the end of
such year and the related consolidated
statements of income and retained earnings and
of cash flows for such year, setting forth in
each case in comparative form the figures for
the previous year, reported on without a "going
concern" or like qualification or exception, or
qualification arising out of the scope of the
audit, by KPMG LLP or other independent
certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not
later than 45 days after the end of each of the
first three quarterly periods of each fiscal
year of the Company, the unaudited consolidated
balance sheet of the Company and its
consolidated Subsidiaries as at the end of
such quarter and the related unaudited
consolidated statements of income and retained
earnings and of cash flows of the Company and
its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the
end of such quarter, setting forth in each case
in comparative form the figures for the
previous year, certified by a Responsible
Officer as being fairly stated in all material
respects (subject to normal year-end audit
adjustments); all such financial statements
shall be complete and correct in all material
respects and shall be prepared in reasonable
detail and in accordance with GAAP applied
consistently throughout the periods reflected
therein and with prior periods (except as
approved by such accountants or officer, as the
case may be, and disclosed therein).
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6.2. Certificates; Other Information. Furnish
to each Lender:
(a) concurrently with the delivery of the
financial statements referred to in subsection
6.1(a), a certificate of the independent
certified public accountants reporting on such
financial statements stating that in making the
examination necessary therefor no knowledge was
obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the
financial statements referred to in subsections
6.1(a) and (b), a certificate of a Responsible
Officer stating that, to the best of such
officer's knowledge, the Company during such
period has observed or performed all of its
covenants and other agreements, and satisfied
every condition, contained in this Agreement
and the other Loan Documents to be observed,
performed or satisfied by it, and that such
Officer has obtained no knowledge of any
Default or Event of Default except as specified
in such certificate;
(c) within 45 days after the end of each
fiscal quarter of the Company, a certificate of
a senior financial officer of the Company
showing in detail the computations necessary to
calculate the Applicable Margin (the "Debt to
Capitalization Ratio Certificate");
(d) not later than ten Business Days following
approval by the Board of Directors of the
Company (and in any event at least once in each
fiscal year), a copy of the Company's final
business plan as approved by the Directors;
(e) within five days after the same are sent,
copies of all financial statements and reports
which the Company sends to its stockholders,
and within five days after the same are filed,
copies of all financial statements and periodic
reports which the Company may make to, or file
with, the Securities and Exchange Commission or
any successor or analogous Governmental
Authority; and
(f) promptly, such additional financial and
other information as any Lender may from time
to time reasonably request.
6.3. Payment of Obligations. Pay, discharge
or otherwise satisfy at or before maturity or
before they become delinquent, as the case may
be, all its obligations of whatever nature,
except where the amount or validity thereof is
currently being contested in good faith by
appropriate proceedings and reserves in
conformity with GAAP with respect thereto have
been provided on the books of the Company or
its Subsidiaries, as the case may be, or to the
extent that the failure to so pay, discharge or
satisfy would not be reasonably expected to
have a Material Adverse Effect.
6.4. Conduct of Business and Maintenance of
Existence. Continue to engage in business of
the same general type as now conducted by it
and preserve, renew and keep in full force and
effect its corporate existence and take all
reasonable action to maintain all rights,
privileges and franchises necessary or
desirable in the normal conduct of its business
except as otherwise permitted pursuant to the
terms of the Principal Credit Agreement; comply
with all Contractual Obligations and
Requirements of Law except to the extent that
failure to comply therewith could not be
reasonably expected to have a Material Adverse
Effect.
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6.5. Maintenance of Property; Insurance. Keep
all property useful and necessary in its
business in good working order and condition;
maintain with financially sound and reputable
insurance companies insurance on all its
property on an "all risk" basis; and furnish to
each Lender, upon written request, full
information as to the insurance carried.
6.6. Inspection of Property; Books and Records;
Discussions. Keep proper books of records and
account in which full, true and correct entries
in conformity with GAAP and all Requirements of
Law shall be made of all dealings and
transactions in relation to its business and
activities; and permit representatives of the
Lenders to visit and inspect any of its
properties and examine and make abstracts from
any of its books and records at any reasonable
time and as often as may reasonably be desired
and to discuss the business, operations,
properties and financial and other condition of
the Company and its Subsidiaries with officers
and employees of the Company and its
Subsidiaries and with its independent certified
public accountants; provided that all such
visits shall be coordinated by the Lenders with
the Administrative Agent, and by the
Administrative Agent with the Company, in order
to minimize disruption of the Company's
business.
6.7. Notices. Promptly give notice to the
Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of
Default;
(b) any (i) default or event of default under
any Contractual Obligation of the Company or
any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist
at any time between the Company or any of its
Subsidiaries and any Governmental Authority,
which in either case could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the
Company or any of its Subsidiaries in which the
amount involved is $5,000,000 or more and not
covered by insurance or in which injunctive or
similar relief is sought unless the Company has
determined in good faith, after consultation
with and based upon advice of counsel acting
for the Company or such Subsidiary in such
litigation or proceeding, that it could not be
reasonably expected that such litigation or
proceeding would result in a final judgment
against the Company or such Subsidiary in an
amount greater than $5,000,000;
(d) the following events, as soon as possible
and in any event within 30 days after the
Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of
any Reportable Event with respect to any Single
Employer Plan or Multiemployer Plan; a failure
of the Company or a Commonly Controlled Entity
to make any required contribution to a Plan;
the creation of any Lien on the assets of the
Company or any Commonly Controlled Entity in
favor of the PBGC or a Plan; or any withdrawal
of the Company or a Commonly Controlled Entity
from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii)
the institution of proceedings or the taking of
any other action by the PBGC or the Company or
any Commonly Controlled Entity or any
Multiemployer Plan with respect to the
withdrawal from, or the terminating,
Reorganization or Insolvency of, any Single
Employer Plan or Multiemployer Plan; and
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(e) any development or event which could
reasonably be expected to have a Material
Adverse Effect. Each notice pursuant to this
subsection shall be accompanied by a statement
of a Responsible Officer setting forth details
of the occurrence referred to therein and
stating what action the Company proposes to
take with respect thereto.
6.8. Environmental Laws.
(a) Comply with, and ensure compliance by all
tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and
comply in all material respects with and
maintain, and ensure that all tenants and
subtenants obtain and comply in all material
respects with and maintain, any and all
licenses, approvals, notifications,
registrations or permits required by applicable
Environmental Laws except to the extent that
failure to do so could not be reasonably
expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations,
studies, sampling and testing,
and all remedial, removal and other actions
required under Environmental Laws and promptly
comply in all material respects with all lawful
orders and directives of all Governmental
Authorities regarding Environmental Laws except
to the extent that the same (i) are being
contested in good faith by appropriate
proceedings and could not be reasonably
expected to have a Material Adverse Effect or
(ii) could not be reasonably expected to have a
Material Adverse Effect.
SECTION 7. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the
Commitments remain in effect or any amount is
owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the
Company shall comply with the Negative
Covenants, and such Negative Covenants
(together with all of the terms utilized
therein) are hereby incorporated by reference
as if set forth herein in their entirety.
SECTION 8. GUARANTEE
8.1. Guarantee.
(a) In order to induce the Administrative
Agent and the Lenders to execute and deliver
this Agreement and to make the Loans hereunder,
and in consideration thereof, the Company
hereby unconditionally and irrevocably
guarantees to the Administrative Agent and
each Lender and their respective successors and
assigns, the prompt and complete payment when
due (whether at the stated maturity, by
acceleration or otherwise) of the Subsidiary
Obligations, and the Company further agrees to
pay any and all reasonable expenses which may
be paid or incurred by the Administrative Agent
or any Lender in collecting any or all of the
Subsidiary Obligation and/or enforcing any
rights under this Section 8 or under Subsidiary
Obligations or with respect to any German
Collateral.
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(b) No payment or payments made by the
Subsidiary Borrower, the Guarantor, any other
guarantor or any other Person or received or
collected by the Administrative Agent or any
Lender from the Subsidiary Borrower, the
Guarantor, any other guarantor or any other
Person by virtue of any action or proceeding or
any set-off or appropriation or application
at any time or from time to time in reduction
of or in payment of the Subsidiary Obligations
shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor
hereunder which shall, notwithstanding any such
payment or payments other than payments made by
the Guarantor in respect of the Subsidiary
Obligations or payments received or collected
from the Guarantor in respect of the Subsidiary
Obligations, remain liable for the Subsidiary
Obligations guaranteed by it hereunder until
the Subsidiary Obligations are paid in full and
the Commitments are terminated.
8.2. No Subrogation. Notwithstanding any
payment or payments made by the Company
hereunder or under any Note, or any set-off or
application of funds of the Company by the
Administrative Agent or any Lender, the Company
shall not be entitled to be subrogated to any
of the rights of the Administrative Agent or
any Lender against the Subsidiary Borrower or
against any collateral security or guarantee or
right of offset held by the Administrative
Agent or any Lender for the payment of the
Subsidiary Obligations, nor shall the Company
seek or be entitled to seek any contribution or
reimbursement from the Subsidiary Borrower in
respect of payments made by the Company
hereunder or under any Note, until all amounts
owing to the Administrative Agent and the
Lenders by the Subsidiary Borrower on account
of the Subsidiary Obligations are paid in full
and the Commitments are terminated. If any
amount shall be paid to the Company on account
of such subrogation rights at any time when all
of the Subsidiary Obligations shall not have
been paid in full, such amount shall be held by
the Company in trust for the Administrative
Agent and the Lenders, segregated from other
funds of the Company, and shall, forthwith upon
receipt by the Company, be turned over to the
Administrative Agent in the exact form received
by the Company (duly indorsed by the Company to
the Administrative Agent, if required), to be
applied against the Subsidiary Obligations,
whether matured or unmatured, in such order as
the Administrative Agent may determine. The
provisions of this paragraph shall continue to
be effective after the termination of this
Agreement, the payment in full of the
Subsidiary Obligations and the termination of
the Commitments.
8.3. Modification of Obligations. The
Guarantor hereby consents that, without the
necessity of any reservation of rights against
it and without notice to or further assent by
it, any demand made by the Administrative Agent
or any Lender for payment of any of the
Subsidiary Obligations may be rescinded by the
Administrative Agent or such Lender and any of
such Subsidiary Obligations continued, and the
Subsidiary Obligations, or the liability of any
other party upon or for any part thereof, or
any collateral security or guarantee therefor
or right of offset with respect thereto, may,
from time to time, in whole or in part, be
renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered
or released by the Administrative Agent or such
Lender and this Agreement (other than the
obligations specifically incurred by the
Guarantor as a Borrower or as the Guarantor
under this Section 8), any collateral security
document or other guarantee or document in
connection therewith may be amended, modified,
supplemented or terminated, in whole or in
part, as the Administrative Agent or such
Lender may deem advisable from time to time,
and any collateral security or guarantee or
right of offset at any time held by the
Administrative Agent or any Lender for the
payment of such
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Subsidiary Obligations may be sold, exchanged,
waived, surrendered or released, all without
the necessity of any reservations of rights
against the Guarantor and without notice to or
further assent by the Guarantor (in respect of
its guarantee hereunder) which will remain
bound hereunder notwithstanding any such
renewal, extension, supplement, termination,
sale, exchange, waiver, surrender or release.
Neither the Administrative Agent nor any Lender
shall have any obligation to protect, secure,
perfect or insure any collateral security
document or property subject thereto at any
time held as security for the Subsidiary
Obligations and the Guarantor specifically
acknowledges that the Administrative Agent has
not recorded or registered and has no
obligation to record or register the German
Mortgage or the German Security Agreement.
When making any demand hereunder against the
Guarantor or the Subsidiary Borrower, the
Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar
demand on the other, and any failure by the
Administrative Agent or such Lender to make any
such demand or to collect any payments from the
Subsidiary Borrower or the Guarantor or any
other guarantor or any release of the
Guarantor, the Subsidiary Borrower or any other
guarantor shall not relieve the Guarantor or
the Subsidiary Borrower of its obligations and
liabilities hereunder, and shall not impair or
affect the rights and remedies, express or
implied, or as a matter of law, of the
Administrative Agent or any Lender against the
Guarantor or the Subsidiary Borrower. For
purposes of this subsection 8.3, the term
"demand" shall include the commencement and
continuance of any legal proceedings.
8.4. Waiver. The Guarantor hereby waives any
and all notice of the creation, renewal,
extension or accrual of any of the Subsidiary
Obligations and notice of or proof of reliance
by the Administrative Agent or any Lender upon
the guarantee contained in this Section 8 or
acceptance of the guarantee contained in this
Section 8, and such Subsidiary Obligations, and
any of them, shall conclusively be deemed to
have been created, contracted or incurred in
reliance upon the guarantee contained in this
Section 8, and all dealings between the
Borrowers and the Guarantor and the Lenders
shall likewise be conclusively presumed to have
been had or consummated in reliance upon the
guarantee contained in this Section 8. The
Guarantor hereby waives diligence, presentment,
protest, demand for payment and notice of
default or nonpayment and all other notices to
or upon the Guarantor with respect to the
Subsidiary Obligations. This Section 8 shall
be construed as a continuing, absolute and
unconditional guarantee of payment without
regard to the validity, regularity or
enforceability of this Agreement, any of the
Subsidiary Obligations, or any collateral
security or guarantee therefor or right of
offset with respect thereto at any time or from
time to time held by the Administrative Agent
or any Lender and without regard to any
defense, set-off or counterclaim which may at
any time be available to or be asserted by the
Guarantor or the Subsidiary Borrower against
the Administrative Agent or any Lender, or by
any other circumstance whatsoever (with or
without notice to or knowledge of the Guarantor
or the Subsidiary Borrower) (other than payment
in full of the Subsidiary Obligations) which
constitutes, or might be construed to
constitute, an equitable or legal discharge of
the Subsidiary Borrower for the Subsidiary
Obligations, or of the Guarantor under the
guarantee contained in this Section 8 in
bankruptcy or in any other instance, and the
obligations and liabilities of the Guarantor
and the Borrowers hereunder shall not be
conditioned or contingent upon the pursuit by
the Administrative Agent or any Lender at any
time of any right or remedy against any
Borrower, the Guarantor or any other Person
which may be or become liable in respect of all
or any part of the Subsidiary Obligations or
against any collateral security
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or guarantee therefor or right of offset with
respect thereto. The guarantee contained in
this Section 8 shall remain in full force and
effect and be binding in accordance with and to
the extent of its terms upon the Guarantor (and
any successor and assign thereof) and shall
inure to the benefit of the Administrative
Agent and the Lenders and their respective
successors and assigns, until (subject to
subsection 8.5) all the Subsidiary Obligations
and the obligations of the Guarantor under this
Section 8 shall have been satisfied by payment
in full.
8.5. Reinstatement. The guarantee contained
in this Section 8 shall continue to be
effective, or be reinstated, as the case may
be, if at any time payment, or any part
thereof, of any of the Subsidiary Obligations
is rescinded or must otherwise be restored or
returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of
the Subsidiary Borrower, or upon or as a result
of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer
for, any Borrower or any substantial part of
its property, all as though such payments had
not been made.
8.6. Payment of Subsidiary Obligations. The
Guarantor hereby guarantees that the Subsidiary
Obligations guaranteed by it hereunder will be
paid to the Person entitled thereto pursuant to
the terms of this Agreement at the applicable
Payment Office without set-off or counterclaim.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and
be continuing:
(a) Any Borrower shall fail to pay any
principal of any Loan when due in accordance
with the terms thereof or hereof; or any
Borrower shall fail to pay any interest on any
Loan, or any other amount payable hereunder or
under any Note, within five days after any such
interest or other amount becomes due in
accordance with the terms hereof; or
(b) Any representation or warranty made or
deemed made by the Company or the Subsidiary
Borrower herein or in any other Loan Document
or which is contained in any certificate,
document or financial or other statement
furnished by it at any time under or in
connection with this Agreement shall prove to
have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) The Company shall default in the
observance or performance of any Negative
Covenant, except those Negative Covenants for
which the Principal Credit Agreement provides a
cure period; or
(d) Any Borrower shall default in the
observance or performance of other agreement
contained (or incorporated by reference) in
this Agreement or any other Loan Document
(other than as provided in paragraphs (a)
through (c) of this Section), and such default
shall continue unremedied for a period of 30
days (in the case of any such default by the
Company) or 30 days after written notice
thereof to the Subsidiary Borrower (in the case
of any such default by the Subsidiary
Borrower); or
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(e) The Company or any of its Restricted
Subsidiaries shall (i) default in the payment
of principal of or interest on any Indebtedness
(other than the Loans) or in the payment of any
Guarantee Obligation, beyond the period of
grace (not to exceed 30 days), if any, provided
in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was
created, if the aggregate amount of the
Indebtedness and/or Guarantee Obligations in
respect of which such default or defaults shall
have occurred is at least $25,000,000; or (ii)
default in the observance or performance of any
other agreement or condition relating to any
such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement
evidencing, securing or relating thereto, or
any other event shall occur or condition exist,
the effect of which default or other event or
condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary
or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required,
such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to
become payable; or
(f) (i) The Company or any of its Restricted
Subsidiaries shall commence any case,
proceeding or other action (A) under any
existing or future law of any jurisdiction,
domestic or foreign, relating, to bankruptcy,
insolvency, reorganization or relief of
debtors, seeking to have an order for relief
entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement,
adjustment, winding-up, liquidation,
dissolution, composition or other relief with
respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian,
conservator or other similar official for it or
for all or any substantial part of its assets,
or the Company or any of its Restricted
Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there
shall be commenced against the Company or any
of its Restricted Subsidiaries any case,
proceeding or other action of a nature referred
to in clause (i) above which (A) results in the
entry of an order for relief or any such
adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be
commenced against the Company or any of its
Restricted Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of
attachment, execution, distraint or similar
process against all or any substantial part of
its assets which results in the entry of an
order for any such relief which shall not have
been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry
thereof, or (iv) the Company shall take any
action in furtherance of, or indicating its
consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Company shall
generally not, or shall be unable to, or shall
admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any
"prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets
of the Company or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable
Event or commencement of proceedings or
appointment of a trustee is, in the reasonable
opinion of the Majority Lenders, likely to
result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the
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Company or any Commonly Controlled Entity
shall, or in the reasonable opinion of the
Majority Lenders is likely to, incur any
liability in connection with a withdrawal from,
or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together
with all other such events or conditions, if
any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more final judgments or decrees of
a court shall be entered against the Company or
any of its Restricted Subsidiaries for the
payment of money in an aggregate amount (to the
extent not adequately covered by insurance) of
$25,000,000 or more, and all such judgments or
decrees shall not have been vacated,
discharged, stayed or bonded pending appeal
within 60 days from the entry thereof; or
(i) Any Change of Control shall occur;
then, and in any such event, (A) if such event
is an Event of Default specified in clause (i)
or (ii) of paragraph (f) of this Section with
respect to the Company, automatically the
Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon)
and all other amounts owing under this
Agreement or any Note shall immediately become
due and payable; (B) if such event is any other
Event of Default, either or both of the
following actions may be taken: (i) with the
consent of the Majority Lenders, the
Administrative Agent may, or upon the request
of the Majority Lenders, the Administrative
Agent shall, by notice to the Company declare
the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the
Majority Lenders, the Administrative Agent may,
or upon the request of the Majority Lenders,
the Administrative Agent shall, by notice to
the Company, declare the Loans hereunder (with
accrued interest thereon) and all other amounts
owing under this Agreement and the Notes to be
due and payable forthwith, whereupon the same
shall immediately become due and payable and
(C) with the consent of the Majority Lenders,
the Administrative Agent may, or upon the
request of the Majority Lenders, the
Administrative Agent shall, exercise its
remedies under the German Mortgage and/or the
German Security Agreement.
Except as expressly provided above in this
Section, presentment, demand, protest and all
other notices of any kind are hereby expressly
waived.
SECTION 10. THE ADMINISTRATIVE AGENT; THE
ARRANGER
10.1. Appointment. Each Lender hereby
irrevocably designates and appoints the
Administrative Agent as the agent of such
Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably
authorizes, and each holder of a Note by the
acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative
Agent, in such capacity, to take such action on
its behalf under the provisions of this
Agreement and the other Loan Documents and to
exercise such powers and perform such duties as
are expressly delegated to the Administrative
Agent by the terms of this Agreement and the
other Loan Documents, together with such other
powers as are reasonably incidental thereto.
The Administrative Agent is hereby expressly
authorized by the Lenders to accept on their
behalf any security interests or
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guarantees granted by any Borrower or the
Pledgor. Notwithstanding any provision to the
contrary elsewhere contained in this Agreement,
the Administrative Agent shall not have any
duties or responsibilities, except those
expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied
covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into
this Agreement or any other Loan Document or
otherwise exist against the Administrative
Agent.
10.2. Delegation of Duties. The
Administrative Agent may execute any of its
duties under this Agreement and the other Loan
Documents by or through agents or
attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters
pertaining to such duties. The Administrative
Agent shall not be responsible for the
negligence or misconduct of any agents or
attorneys in-fact selected by it with
reasonable care.
10.3. Exculpatory Provisions. Neither the
Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by
it or such Person under or in connection with
this Agreement or any other Loan Document
(except for its or such Person's own gross
negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders
or any holder of a Note for any recitals,
statements, representations or warranties made
by any Borrower or any officer thereof
contained in this Agreement or any other Loan
Document or in any certificate, report,
statement or other document referred to or
provided for in, or received by the
Administrative Agent under or in connection
with, this Agreement or any other Loan Document
or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or
for any failure of any Borrower to perform its
obligations hereunder or thereunder. The
Administrative Agent shall not be under any
obligation to any Lender or any holder of a
Note to ascertain or to inquire as to the
observance or performance of any of the
agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to
inspect the properties, books or records of any
Borrower.
10.4. Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex
or teletype message, statement, order or other
document or conversation believed by it to be
genuine and correct and to have been signed,
sent or made by the proper Person or Persons
and upon advice and statements of legal counsel
(including, without limitation, counsel to the
Company), independent accountants and other
experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the
payee of any note as the owner thereof for all
purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been
filed with the Administrative Agent. The
Administrative Agent shall be fully justified
in failing or refusing to take any action under
this Agreement or any other Loan Document
unless it shall first receive such advice or
concurrence of the Majority Lenders as it deems
appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and
all liability and expense which may be incurred
by it by reason of taking or continuing to take
any such action. The Administrative Agent
shall in all cases be fully protected in
acting, or in refraining from acting, under
this Agreement and the other Loan Documents in
accordance with a request of the Majority
Lenders, and such request and any
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action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and
holders of the Notes and all future holders of
the Loans and the Notes.
10.5. Notice of Default. The Administrative
Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or
Event of Default hereunder unless the
Administrative Agent has received notice from a
Lender or the Company referring to this
Agreement, describing such Default or Event of
Default and stating that such notice is a
"notice of default". In the event that the
Administrative Agent receives such a notice,
the Administrative Agent shall give notice
thereof to the Lenders. The Administrative
Agent shall take such action with respect to
such Default or Event of Default as shall be
reasonably directed by the Majority Lenders;
provided that unless and until the
Administrative Agent shall have received such
directions, the Administrative Agent may (but
shall not be obligated to) take such action, or
refrain from taking such action, with respect
to such Default or Event of Default as it shall
deem advisable in the best interests of the
Lenders and the holders of the Notes.
10.6. Non-Reliance on Administrative Agent and
Other Lenders. Each Lender expressly
acknowledges, and each holder of a Note by the
acceptance of such Note shall be deemed to
acknowledge, that neither the Administrative
Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or
Affiliates has made any representations or
warranties to it and that no act by the
Administrative Agent hereinafter taken,
including any review of the affairs of any
Borrower, shall be deemed to constitute any
representation or warranty by the
Administrative Agent to any Lender or holder of
a Note. Each Lender represents, and each
holder of a Note by the acceptance of such Note
shall be deemed to represent, to the
Administrative Agent that it has, independently
and without reliance upon the Administrative
Agent or any other Lender or holder of a Note,
and based on such documents and information as
it has deemed appropriate, made its own
appraisal of and investigation into the
business, operations, property, financial and
other condition and creditworthiness of the
Borrowers and made its own decision to make its
Loans hereunder, enter into this Agreement
and/or accept such Note, as the case may be.
Each Lender also represents, and each holder of
a Note by the acceptance of such Note shall be
deemed to represent, that it will,
independently and without reliance upon the
Administrative Agent or any other Lender or
holder of a Note, and based on such documents
and information as it shall deem appropriate at
the time, continue to make its own credit
analysis, appraisals and decisions in taking or
not taking action under this Agreement and the
other Loan Documents, and to make such
investigation as it deems necessary to inform
itself as to the business, operations,
property, financial and other condition and
creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly
required to be furnished to the Lenders by the
Administrative Agent hereunder, the
Administrative Agent shall not have any duty or
responsibility to provide any Lender or holder
of a Note with any credit or other information
concerning the business, operations, property,
condition (financial or otherwise), prospects
or creditworthiness of any Borrower which may
come into the possession of the Administrative
Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or
Affiliates.
10.7. Indemnification. The Lenders agree to
indemnify the Administrative Agent in its
capacity as such (to the extent not reimbursed
by the Borrowers and without limiting
the obligation of the Borrowers to do so),
ratably according to their respective
Commitment
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Percentages in effect on the date on which
indemnification is sought (or, if
indemnification is sought after the date upon
which the Commitments shall have terminated and
the Loans shall have been paid in full, ratably
in accordance with their Commitment Percentages
immediately prior to such date), from and
against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any
kind whatsoever which may at any time
(including, without limitation, at any time
following the payment of the Loans) be imposed
on, incurred by or asserted against the
Administrative Agent in any way relating to or
arising out of, the Commitments, this
Agreement, any of the other Loan Documents
or any documents contemplated by or referred to
herein or therein or the transactions
contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent
under or in connection with any of the
foregoing; provided that no Lender shall be
liable for the payment of any portion of such
liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from
the Administrative Agent's gross negligence or
willful misconduct; provided further that no
Designated Lender shall be liable for any
payment under this subsection 10.7 so long as,
and to the extent that, its Designating Lender
makes such payments. The agreements in this
subsection shall survive the payment of the
Loans and all other amounts payable hereunder
and under the Notes.
10.8. Administrative Agent in Its Individual
Capacity. The Administrative Agent and its
Affiliates may make loans to, accept deposits
from and generally engage in any kind of
business with the Borrowers as though the
Administrative Agent were not the
Administrative Agent hereunder and under the
other Loan Documents. With respect to the
Loans made by it or one of its branches, the
Administrative Agent shall have the same rights
and powers under this Agreement and the other
Loan Documents as any Lender and may exercise
the same as though it were not the
Administrative Agent, and the terms "Lender",
"Lenders" or "holders of Notes" shall include
the Administrative Agent in its individual
capacity.
10.9. Successor Administrative Agent. The
Administrative Agent may resign as
Administrative Agent upon 10 days' notice to
the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this
Agreement and the other Loan Documents, then
the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders,
which successor agent shall, unless an Event of
Default shall be outstanding, be approved by
the Company (such approval not to be
unreasonably withheld), whereupon such
successor agent shall succeed to the rights,
powers and duties of the Administrative Agent,
and the term "Administrative Agent" shall mean
such successor agent effective upon such
appointment and approval, and the former
Administrative Agent's rights, powers and
duties as Administrative Agent shall be
terminated, without any other or further act or
deed on the part of such former
Administrative Agent or any of the parties to
this Agreement or any holders of the Loans.
After any retiring Administrative Agent's
resignation as Administrative Agent, the
provisions of this Section 10 shall inure to
its benefit as to any actions taken or omitted
to be taken by it while it was Administrative
Agent under this Agreement and the other Loan
Documents.
10.10. Arranger. The Arranger, in such
capacity, shall have no duties or
responsibilities, and shall incur no
obligations or liabilities, under this
Agreement or the other Loan Documents but shall
nevertheless be entitled to all of the
indemnities and other protections afforded to
the Administrative Agent under this Section 10.
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SECTION 11. MISCELLANEOUS
11.1. Amendments and Waivers Generally;
Amendments to Schedules I, II and III.
(a) Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may
be amended, supplemented or modified except in
accordance with the provisions of this
subsection. The Majority Lenders may, or, with
the written consent of the Majority Lenders,
the Administrative Agent may, from time to
time, (i) enter into with the Company written
amendments, supplements or modifications hereto
and to the other Loan Documents for the purpose
of adding any provisions to this Agreement or
the other Loan Documents or changing in any
manner the rights of the Lenders or of the
Borrowers hereunder or thereunder or (ii)
waive, on such terms and conditions as the
Majority Lenders or the Administrative Agent,
as the case may be, may specify in such
instrument, any of the requirements of this
Agreement or the other Loan Documents or any
Default or Event of Default and its
consequences; provided, however, that no such
waiver and no such amendment, supplement or
modification shall (A) reduce the amount or
extend the scheduled date of maturity of any
Loan or of any installment thereof, or reduce
the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any
payment thereof or increase the amount or
extend the expiration date of any Lender's
Commitments, in each case without the consent
of each Lender affected thereby, or (B) amend,
modify or waive any provision of this
subsection or reduce the percentage specified
in the definition of Majority Lenders, or
consent to the assignment or transfer by any
Borrower of any of its rights and obligations
under this Agreement and the other Loan
Documents, or release the Guarantor from its
obligations under Section 8, in each case
without the written consent of all the Lenders,
or (C) release all or substantially all of
the German Collateral from the Lien of the
German Mortgage and the German Security
Agreement, or (D) amend, modify or waive any
provision of Section 10 without the written
consent of the then Administrative Agent. Any
such waiver and any such amendment, supplement
or modification shall apply equally to each of
the Lenders and shall be binding upon the
Borrowers, the Lenders, the Administrative
Agent and all future holders of the Loans. In
the case of any waiver, the Borrowers, the
Lenders and the Administrative Agent shall be
restored to their former positions and rights
hereunder and under the other Loan Documents,
and any Default or Event of Default waived
shall be deemed to be cured and not continuing;
no such waiver shall extend to any subsequent
or other Default or Event of Default or impair
any right consequent thereon.
(b) Schedules I, II, and III may be amended as
follows:
(i) Schedule I may be amended to change the
notice information contained therein upon
delivery of written notice of such change to
the Administrative Agent by the Lender making
such change.
(ii) Schedule II will be amended to remove
Subsidiaries of the Company as Restricted
Subsidiaries, upon execution and delivery by
the Company and the Administrative Agent of a
Schedule Amendment providing for such
amendment. Schedule II shall be deemed amended
to add Subsidiaries of the
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Company as Restricted Subsidiaries, upon
delivery of written notice thereof by the
Company to the Administrative Agent.
(iii) Schedule III will be amended to change
administrative information contained therein
(other than any Funding Time, Payment Time or
notice time contained therein), upon execution
and delivery by the Company and the
Administrative Agent of a Schedule Amendment
providing for such amendment.
(iv) Schedule III will be amended to conform
any Funding Time, Payment Time or notice time
contained therein to then-prevailing market
practices, upon execution and delivery by the
Company, the Majority Lenders and the
Administrative Agent of a Schedule Amendment
providing for such amendment.
(c) Each Designating Lender may act on behalf
of its Designated Lender with respect to any
rights of its Designated Lender to grant or
withhold any consent hereunder to the fullest
extent it has been so delegated to act by its
Designated Lender pursuant to its Designation
Agreement.
11.2. Notices. All notices, requests and
demands to or upon the respective parties
hereto to be effective shall be in writing
(including by facsimile transmission), and,
unless otherwise expressly provided herein,
shall be deemed to have been duly given or made
when delivered, or 5 days after being deposited
in the mail, postage prepaid, or, in the case
of telecopy notice, when received, addressed as
follows in the case of the Borrowers and the
Administrative Agent, and as set forth in
Schedule I in the case of the other parties
hereto, or to such other address as may be
hereafter notified by the respective parties
hereto:
Any Borrower: Harman International Industries,
Incorporated
1101 Pennsylvania Avenue, N.W., Suite 1010
Washington, D.C. 20004
Attention: Mr. Greg Henry,
Assistant Treasurer
Fax: (202) 393-3064
The Administrative Agent: Commerzbank AG
New York Branch
2 World Financial Center
New York, NY 10281-1050
Attention: Credit Administration
Sunita Sajnani
Fax: 212-266-7593
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with a copy to: Commerzbank AG
Los Angeles Branch
633 West Fifth Street, 5th Floor
Los Angeles, CA 90071
Attention: Corporate Banking
Werner Schmidbauer
Fax: 213-623-0039
Any Lender: To the address for such Lender on
Schedule I
provided that the Notice of Borrowing and
Indemnity Agreement, any Notice of Interest
Period, or any notice pursuant to subsection
2.5 shall not be effective until received.
11.3. No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising,
on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall
any single or partial exercise of any right,
remedy, power or privilege hereunder preclude
any other or further exercise thereof or the
exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and
privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers
and privileges provided by law.
11.4. Survival of Representations and
Warranties. All representations and
warranties made hereunder, in the other Loan
Documents and in any document, certificate or
statement delivered pursuant hereto or in
connection herewith shall survive the execution
and delivery of this Agreement and the making
of the Loans hereunder.
11.5 Payment of Expenses and Taxes. The
Company agrees (a) to pay or reimburse the
Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in
connection with the development, preparation
and execution of, and any amendment, supplement
or modification to, this Agreement and the
other Loan Documents and any other documents
prepared in connection herewith or therewith,
and the consummation and administration of the
transactions contemplated hereby and thereby,
including, without limitation, the reasonable
fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for
all its costs and expenses incurred in
connection with the enforcement or preservation
of any rights under this Agreement, the other
Loan Documents and any such other documents,
including, without limitation, the fees
and disbursements of counsel to each Lender and
of counsel to the Administrative Agent, (c) to
pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all
recording and filing fees and any and all
liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other
taxes, if any, which may be payable or
determined to be payable in connection with the
execution and delivery of, or consummation or
administration of any of the transactions
contemplated by, or any amendment, supplement
or modification of, or any waiver or consent
under or in respect of, this Agreement, the
other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold
the Administrative Agent and each Lender (each,
an "indemnified person") harmless from and
against any and all liabilities, obligations,
losses, damages, judgments, penalties, costs,
expenses or disbursements of any kind
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or nature whatsoever arising out of claims,
actions, suits or proceedings brought by third
parties with respect to the execution,
delivery, enforcement, performance and
administration of this Agreement or the use of
the proceeds of the Loans (all the foregoing,
collectively, the "indemnified liabilities"),
provided, that the Company shall have no
obligation hereunder to any indemnified person
with respect to indemnified liabilities arising
from (i) the gross negligence or willful
misconduct of such indemnified person or (ii)
legal proceedings commenced against such
indemnified person by any security holder or
creditor thereof arising out of and based upon
rights afforded any such security holder or
creditor solely in its capacity as such. The
agreements in this subsection shall survive
repayment of the Loans and all other amounts
payable hereunder and under the Notes.
11.6. Successors and Assigns; Participations
and Assignments.
(a) This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the
Guarantor, the Lenders, the Administrative
Agent and their respective successors and
assigns, except that no Borrower may assign or
transfer any of its rights or obligations under
this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of
its commercial banking business and in
accordance with applicable law, at any time
sell to one or more banks or other entities
("Participants") participating interests in any
Loan owing to such Lender, any Commitment of
such Lender or any other interest of such
Lender hereunder and under the other Loan
Documents. In the event of any such sale by a
Lender of a participating interest to a
Participant, such Lender's obligations under
this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender
shall remain solely responsible for the
performance thereof, such Lender shall remain
the holder of any Loan for all purposes under
this Agreement and the other Loan Documents,
and the Borrowers and the Administrative Agent
shall continue to deal solely and directly with
such Lender in connection with such Lender's
rights and obligations under this Agreement and
the other Loan Documents. The Borrowers agree
that if amounts outstanding under this
Agreement or any Note are due or unpaid, or
shall have been declared or shall have become
due and payable upon the occurrence of an Event
of Default, each Participant shall, to the
maximum extent permitted by applicable law, be
deemed to have the right of setoff in respect
of its participating interest in amounts owing
under this Agreement or any Note to the same
extent as if the amount of its participating
interest were owing directly to it as a Lender
under this Agreement, provided that, in
purchasing such participating interest, such
Participant shall be deemed to have agreed to,
share with the Lenders the proceeds thereof as
provided in subsection 11.7(a) as fully as if
it were a Lender hereunder. The Borrowers also
agree that each Participant shall be entitled
to the benefits of subsections 3.5, 3.6 and 3.7
with respect to its participation in the
Commitments and the Loans outstanding as if
it were a Lender; and provided, further, that
no Participant shall be entitled to receive any
greater amount pursuant to any such subsection
than the transferor Lender would have been
entitled to receive in respect of the amount of
the participation transferred by such
transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of
its commercial banking business and in
accordance with applicable law, at any time and
from time to time assign to any
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Lender or any affiliate thereof or, with the
consent of the Company and the Administrative
Agent (which in each case shall not be
unreasonably withheld), to an additional bank
or financial institution (an "Assignee") all or
any part of its rights and obligations under
this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance
executed by such Assignee, such assigning
Lender (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by
the Company and the Administrative Agent) and
delivered to the Administrative Agent for its
acceptance and recording in the Register,
provided that, in the case of any such
assignment to an additional bank or financial
institution, the aggregate amount of the
Commitment being assigned and, if such
assignment is of less than all of the rights
and obligations of the assigning Lender, the
aggregate amount of the Commitment remaining
with the assigning Lender are each not less
than $5,000,000 (or such lesser amount as may
be agreed to by the Company and the
Administrative Agent). Upon such execution,
delivery, acceptance and recording, from and
after the effective date determined pursuant to
such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations
of a Lender hereunder with a Commitment and
Loans outstanding as set forth therein, and (y)
the assigning Lender thereunder shall, to the
extent provided in such Assignment and
Acceptance, be released from its obligations
under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's
rights and obligations under this Agreement,
such assigning Lender shall cease to be a party
hereto). Notwithstanding any provision of this
paragraph (c) and paragraph (e) of this
subsection, the consent of the Company shall
not be required for any assignment which occurs
at any time when any of the events described in
Section 9(f) shall have occurred and be
continuing.
(d) The Administrative Agent shall maintain at
the address of the Administrative Agent
referred to in subsection 11.2 a copy of each
Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation
of the names and addresses and Commitments of
the Lenders and the principal amounts of the
Loans, and the principal amounts and holders of
the Notes, owing by each Borrower to each
Lender from time to time. The entries
in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers,
the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the
Register as the owner of a Loan or holder of a
Note or other obligation hereunder as the owner
or holder thereof for all purposes of this
Agreement and the other Loan Documents,
notwithstanding any notice to the contrary.
Any assignment of any Loan or other obligation
hereunder shall be effective only upon
appropriate entries with respect thereto being
made in the Register. The Register shall be
available for inspection by the Borrower or any
Lender and any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt from an assigning Lender
and an Assignee of an Assignment and Acceptance
executed by an assigning Lender and an Assignee
(and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the
Company and the Administrative Agent) together
with payment to the Administrative Agent of a
registration and processing fee of $2,500, (i)
the Administrative Agent shall (A) promptly
accept such Assignment and Acceptance and (B)
on the effective date determined pursuant
thereto record the information contained
therein in the Register and give notice of such
acceptance and recordation to the Lenders and
the Company and (ii) the assigning Lender, the
Administrative Agent and the
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Borrowers shall make appropriate arrangements
(at such assigning Lender's cost and expense)
so that the Notes evidencing such assigned Loan
are surrendered and new Notes are issued to the
Assignee and the assigning Lender, as
appropriate.
(f) Each Borrower authorizes each Lender to
disclose to any Participant, Assignee or
Designated Lender (each, a "Transferee") and
any prospective Transferee, subject to the
provisions of subsection 11.17, any and all
financial information in such Lender's
possession concerning the Borrower and its
Affiliates which has been delivered to such
Lender by or on behalf of the Borrower pursuant
to this Agreement or, which has been delivered
to such Lender by or on behalf of the Borrower
in connection with such Lender's credit
evaluation of the Borrower and its Affiliates
prior to becoming a party to this Agreement,
provided, that the Lenders shall take such
steps as reasonably necessary to ensure that
confidential information will be treated in a
confidential manner as required by subsection
11.17.
(g) For avoidance of doubt, the parties to
this Agreement acknowledge that the provisions
of this subsection concerning assignments of
Loans relate only to absolute assignments and
that such provisions do not prohibit
assignments creating security interests,
including, without limitation, any pledge or
assignment by a Lender of any Loan to any
Federal Reserve Bank in accordance with
applicable law.
(h) Any Lender may at any time designate not
more than one Designated Lender to fund Loans
on behalf of such Designating Lender subject to
the terms of this subsection 11.6(h), and the
provisions of subsections 11.6(b), (c), (d) and
(e) shall not apply to such designation. No
Lender may have more than one Designated Lender
at any time. Such designation may occur either
by the execution of the signature pages hereof
by such Lender and Designated Lender next to
the appropriate "Designating Lender" and
"Designated Lender" captions, or by execution
by such parties of a Designation Agreement
subsequent to the date hereof; provided, that
any Lender and its Designated Lender executing
the signatures pages hereof as "Designating
Lender" and "Designated Lender", respectively,
on the date hereof shall be deemed to have
executed a Designation Agreement, and shall be
bound by the respective representations,
warranties and covenants contained therein, and
such designation shall be conclusively deemed
to be accepted by the Company, the Subsidiary
Borrower and the Administrative Agent. The
parties to each such designation occurring
subsequent to the execution date hereof shall
execute and deliver to the Company and the
Administrative Agent for their acceptance a
Designation Agreement. Upon such receipt of an
appropriately completed Designation Agreement
executed by a Designating Lender and a designee
representing that it is a Designated Lender and
consented to by the Company, the Administrative
Agent will accept such Designation Agreement
and will give prompt notice thereof to the
Company and the other Lenders, whereupon, (i)
the Company and/or the Subsidiary Borrower, as
the case may be, shall execute and deliver to
the Designating Lender (at such Designated
Lender's cost and expense) a Designated Lender
Note payable to the order of the Designated
Lender, (ii) from and after the effective date
specified in the Designation Agreement, the
Designated Lender shall become a party to this
Agreement with a right to make Loans on behalf
of its Designating Lender pursuant to
subsection 2.8 and (iii) the Designated Lender
shall not be required to make payments with
respect to any obligations in this Agreement
except to the extent of excess cash flow of
such Designated Lender which is not otherwise
required to repay obligations of such
Designated
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Lender which are then due and payable;
provided, however, that regardless of such
designation and assumption by the Designated
Lender, the Designating Lender shall be and
remain obligated to the Company, the Subsidiary
Borrower, the Administrative Agent and the
Lenders for each and every of the obligations
of the Designating Lender and its related
Designated Lender with respect to this
Agreement, including, without limitation, any
indemnification obligations under subsection
10.7 and any sums otherwise payable to the
Company or the Subsidiary Borrower by the
Designated Lender. Each Designating Lender, or
a specified branch or affiliate thereof, shall
serve as the administrative agent of its
Designated Lender and shall on behalf of its
Designated Lender: (a) receive any and all
payments made for the benefit of such
Designated Lender and (b) give and receive all
communications and notices and take all actions
hereunder, including, without limitation,
votes, approvals, waivers, consents and
amendments under or relating to this
Agreement and the other Loan Documents. Any
such notice, communication, vote, approval,
waiver, consent or amendment shall be signed by
a Designating Lender, or specified branch or
affiliate thereof, as administrative agent for
its Designated Lender and need not be signed by
such Designated Lender on its own behalf. The
Company, the Subsidiary Borrower, the
Administrative Agent and the Lenders may rely
thereon without any requirement that the
Designated Lender sign or acknowledge the same.
No Designated Lender may assign or transfer
all or any portion of its interest hereunder or
under any other Loan Document, other than via
an assignment to its Designating Lender or
Liquidity Bank, if any, or otherwise in
accordance with the provisions of this
subsection 11.6.
11.7. Adjustments; Set-off.
(a) If any Lender (a "benefitted Lender")
shall at any time receive any payment of all or
part of its Loans or other Obligations or
Subsidiary Obligations then due and owing, or
interest thereon, or receive any collateral in
respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events
or proceedings of the nature referred to in
Section 9(f), or otherwise), in a greater
proportion than any such payment to or
collateral received by any other Lender, if
any, in respect of such other Lender's Loans or
other Obligations or Subsidiary Obligations
then due and owing, or interest thereon, such
benefitted Lender shall purchase for cash from
the other Lenders a participating interest in
such portion of each such other Lender's
Loans or other Obligations or Subsidiary
Obligations, or shall provide such other
Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall
be necessary to cause such benefitted Lender to
share the excess payment or benefits of such
collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any
portion of such excess payment or benefits is
thereafter recovered from such benefitted
Lender, such purchase shall be rescinded,
and the purchase price and benefits returned,
to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of
the Lenders provided by law, each Lender shall
have the right, without prior notice to any
Borrower, any such notice being expressly
waived by the Borrowers to the extent permitted
by applicable law, upon any amount becoming due
and payable by any Borrower hereunder or under
any Note (whether at the stated maturity, by
acceleration or otherwise) to set-off and
appropriate and apply against such amount any
and all deposits (general or special, time or
demand, provisional or final), in any currency,
and any other credits, indebtedness or claims,
in any currency, in each case whether direct or
indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such
Lender
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or any branch or agency thereof to or for the
credit or the account of such Borrower. Each
Lender agrees promptly to notify such Borrower
and the Administrative Agent after any such
set-off and application made by such Lender,
provided that the failure to give such notice
shall not affect the validity of such set-off
and application.
11.8. Power of Attorney. The Subsidiary
Borrower hereby grants to the Company an
irrevocable power of attorney to act as its
attorney-in-fact with regard to matters
relating to this Agreement and each other Loan
Document, including, without limitation,
execution and delivery of any amendments,
supplements, waivers or other modifications
hereto or thereto, receipt of any notices
hereunder or thereunder and receipt of service
of process in connection herewith or therewith.
The Subsidiary Borrower hereby explicitly
acknowledges that the Administrative Agent and
each Lender has executed and delivered this
Agreement and each other Loan Document to which
it is a party, and has performed its
obligations under this Agreement and each other
Loan Document to which it is a party, in
reliance upon the irrevocable grant of such
power of attorney pursuant to this subsection
11.8.
11.9. Judgment.
(a) If for the purpose of obtaining judgment
in any court it is necessary to convert a sum
due hereunder or under any Note in one currency
into another currency, the parties hereto
agree, to the fullest extent that they may
effectively do so, that the rate of exchange
used shall be that rate, inclusive of any costs
of exchange, at which in accordance with normal
banking procedures the Administrative Agent
could purchase the first currency with such
other currency on the Business Day preceding
the day on which final judgment is given.
(b) The obligation of any Borrower or the
Guarantor in respect of any sum due to any
Lender or the Administrative Agent hereunder or
under any Note shall, notwithstanding any
judgment in a currency (the "Judgment
Currency") other than that in which such sum is
denominated in accordance with the applicable
provisions of this Agreement (the "Agreement
Currency"), be discharged only to the extent
that on the Business Day following receipt by
such Lender or the Administrative Agent (as the
case may be) of any sum adjudged to be so due
in the Judgment Currency such Lender or the
Administrative Agent (as the case may be) may
in accordance with normal banking procedures
purchase the Agreement Currency with the
Judgment Currency; if the amount of the
Agreement Currency so purchased is less than
the sum originally due to such Lender or the
Administrative Agent (as the case may be) in
the Agreement Currency, such Borrower or the
Guarantor (as the case may be) agrees, as a
separate obligation and notwithstanding any
such judgment, to indemnify such Lender or the
Administrative Agent (as the case may be)
against such loss, and if the amount of the
Agreement Currency so purchased exceeds the sum
originally due to any Lender or the
Administrative Agent (as the case may be), such
Lender or the Administrative Agent (as the case
may be) agrees to remit to such Borrower or the
Guarantor (as the case may be) such excess.
11.10 Counterparts. This Agreement may be
executed by one or more of the parties to this
Agreement on any number of separate
counterparts (including by facsimile
transmission), and all of said counterparts
taken together shall be deemed to constitute
one and
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190
<PAGE>
the same instrument. A set of the copies of
this Agreement signed by all the parties shall
be lodged with the Company and the
Administrative Agent.
11.11. Severability. Any provision of this
Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without
invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render
unenforceable such provision in any other
jurisdiction.
11.12. Integration. This Agreement and the
other Loan Documents represent the agreement of
the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter
hereof, and there are no promises,
undertakings, representations or warranties by
the Administrative Agent or any Lender relative
to the subject matter hereof not expressly set
forth or referred to herein or in the other
Loan Documents.
11.13. GOVERNING LAW. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OF CONFLICT OF LAWS.
11.14. Submission To Jurisdiction; Waivers.
Each Borrower hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any
legal action or proceeding relating to this
Agreement and the other Loan Documents to which
it is a party, or for recognition and
enforcement of any judgement in respect
thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New
York, the courts of the United States of
America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or
proceeding may be brought in such courts
and waives any objection that it may now or
hereafter have to the venue of any such action
or proceeding in any such court or that such
action or proceeding was brought in an
inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such
action or proceeding may be effected by mailing
a copy thereof by registered or certified mail
(or any substantially similar form of mail),
postage prepaid, to the Company at its address
set forth in subsection 11.2 or at such other
address of which the Administrative Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect
the right to effect service of process in any
other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not
prohibited by law, any right it may have to
claim or recover in any legal action or
proceeding referred to in this subsection any
special, exemplary, punitive or consequential
damages.
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11.15. Acknowledgments. Each Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this
Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any
Lender has any fiduciary relationship with or
duty to such Borrower arising out of or in
connection with this Agreement or any of the
other Loan Documents, and the relationship
between Administrative Agent and Lenders, on
one hand, and the Borrowers, on the other hand,
in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by
the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby
among the Lenders or among the Borrowers and
the Lenders.
11.16. WAIVERS OF JURY TRIAL. THE BORROWERS,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
11.17. Confidentiality. Each Lender and the
Administrative Agent agrees to keep
confidential all non-public information
provided to it by the Company pursuant to this
Agreement that is designated by the Company in
writing as confidential; provided that nothing
herein shall prevent any Lender or the
Administrative Agent, as the case may be, from
disclosing any such information (i) to the
Administrative Agent or any other Lender, (ii)
to any Designated Lender or Transferee which
receives such information having been made
aware of the confidential nature thereof, (iii)
to its employees, directors, agents, attorneys,
accountants and other professional advisors, as
necessary, (iv) upon the request or demand of
any Governmental Authority having jurisdiction
over such Lender, (v) in response to any order
of any court or other Governmental Authority or
as may otherwise be required pursuant to any
Requirement of Law, (vi) which has been
publicly disclosed other than in breach of this
Agreement, (vii) in connection with the
exercise of any remedy hereunder or (viii) to
any rating agency, commercial paper dealer or
provider of a surety, guaranty or credit or
liquidity enhancement to any Designated
Lender.
11.18. No Bankruptcy Proceedings. Each of the
Company, the Subsidiary Borrower, the Lenders
and the Administrative Agent agrees that it
will not institute against any Designated
Lender or join any other Person in instituting
against any Designated Lender any bankruptcy,
reorganization, arrangement, insolvency or
liquidation proceeding under any federal
or state bankruptcy or similar law, for one
year and one day after the payment in full of
the latest maturing commercial paper note
issued by such Designated Lender.
11.19. No Double Counting. For the avoidance
of doubt and for purposes of construction,
there shall be no double counting of amounts
owing or payments made under this Agreement and
under the Notes.
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IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed
and delivered by their proper and duly
authorized officers as of the day and year
first above written.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By:
Name:
Title:
BECKER HOLDING GMBH
By:
Name:
Title:
COMMERZBANK AG, NEW YORK
BRANCH,
as Administrative Agent
By:
Name:
Title:
By:
Name:
Title:
Effective Date: , 2000
193
<PAGE>
Designating Lender:
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as a Lender
By:
Name:
Title:
By:
Name:
Title:
Designated Lender:
FOUR WINDS FUNDING CORPORATION
by Commerzbank AG, New York Branch,
attorney-in-fact
By:
Name:
Title:
By:
Name:
Title:
Designating Lender: Commerzbank AG,
New York - Grand
Cayman Branches
194
<PAGE>
COMMERZBANK AG,
LOS ANGELES BRANCH
By:
Name:
Title:
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
HSBC Bank USA
By:
Name:
Title:
BANK OF AMERICA N.A.
(formerly known as NationsBank N.A.)
By:
Name:
Title:
SOCIETE GENERALE
By:
Name:
Title:
DEN DANSKE BANK AKTIESELSKAB,
CAYMAN ISLANDS BRANCH
By:
Name:
Title:
195
<PAGE>
SCHEDULE I
Commitments and Notice Information
Total Amount of Loan to Amount of Loan to
Lender Commitment Company Subsidiary Borrower
- -------- ---------- ----------------- -------------------
Commerzbank AG,
Los Angeles
Branch DEM 0.00 DEM 0.00 DEM 0.00
Commerzbank AG, DEM 30,000,000 DEM 24,000,000 DEM 6,000,000
New York - Grand
Cayman Branches
Citibank, N.A. DEM 25,000,000 DEM 20,000,000 DEM 5,000,000
HSBC Bank USA DEM 25,000,000 DEM 20,000,000 DEM 5,000,000
Bank of
America N.A. DEM 25,000,000 DEM 20,000,000 DEM 5,000,000
Societe Generale DEM 25,000,000 DEM 20,000,000 DEM 5,000,000
Den Danske Bank DEM 20,000,000 DEM 16,000,000 DEM 4,000,000
Aktieselskab,
Cayman Islands
Branch
----------- ----------- ----------
Total 150,000,000 120,000,000 30,000,000
Notice Information:
Commerzbank AG, New York - Grand Cayman
Branches
2 World Financial Center
New York, New York 10281-1050
Attn: Credit Administration
Sunita Sajnani
Tel: (212) 266-7608
Fax: (212) 266-7593
Schedule I Page 1
196
<PAGE>
With a copy to: Commerzbank AG, Los Angeles
Branch
633 West Fifth Street
Los Angeles, CA 90071
Attn: Corporate Banking
Werner Schmidbauer
Tel: (213) 623-8223
Fax: (213) 623-0039
Citibank N.A.
2 Penn's Way, Suite 200
New Castle, DE 19720
Attention: Sally Schoenleber
Assistant Manger
Tel: (302) 894-6061
Fax: (302) 894-6020
HSBC Bank USA
1 HSBC Center, 26th Floor
Buffalo, NY 14203
Attention: Tanysia Hunter
Tel: (716) 841-1930
Fax: (716) 841-7152
Bank of America N.A.
335 Madison Avenue
5th Floor
New York, New York 10017
Attention: Lisa B. Choi
Vice President
Tel: (212) 503-8101
Fax: (212) 503-7066
Societe Generale
1221 Avenue of the Americas
New York, NY 10020
Attention: Kateline Martinez
Corporate Banking Officer
Tel: (212) 278-6855
Fax: (212) 278-7490
Schedule I Page 2
197
<PAGE>
Den Danske Bank Aktieselskab
Cayman Islands Branch
280 Park Avenue
New York, NY 10017
Attention: Loan Administration
Tel: (212) 984-8462
Fax: (212) 490-0252
Schedule I Page 3
198
<PAGE>
SCHEDULE III
Administrative Schedule
FUNDING OFFICE, FUNDING TIME, PAYMENT OFFICE
AND PAYMENT TIME
Floating Rate Loans
1. Funding Office: Commerzbank AG, New York -
Grand Cayman Islands
2. Funding Time: 11:00 a.m., New York time on
the Effective Date
3. Payment Office: Commerzbank AG, New York
Branch
ABA No.: 026 008 044
Account No.: 150/1036565/05USD
Ref.: Harman Industries Inc.
4. Payment Time: 11:00 a.m., New York time
Base Rate Loans
1. Funding Office: Commerzbank AG, New York
Branch
2. Funding Time: N/A
3. Payment Office: Commerzbank AG, New York
Branch
ABA No.: 026 008 044
Account No.: 150/1036565/05USD
Ref.: Harman Industries Inc.
4. Payment Time: 11:00 a.m., New York time
Notice of Borrowings/Notice of Interest Periods
1. Deliver to: Commerzbank AG, New York
Branch
2 World Financial Center
New York, New York 10281-1050
Attn: Credit Administration
Sunita Sajnani
Tel: (212) 266-7608
Fax: (212) 266-7593
Schedule III Page 1
199
<PAGE>
Commerzbank AG, Los Angeles Branch
633 West Fifth Street
Los Angeles, CA 90071
Attn: Corporate Banking
Werner Schmidbauer
Tel: (213) 623-8223
Fax: (213) 623-0039
2. Time: Floating Rate Loans - Not later than
10:00 a.m., New York time, on the last Business
Day preceding the Quotation Day in respect of
such borrowing.
Schedule III Page 2
200
<PAGE>
EXHIBIT A
Form of Designation Agreement
Dated _________________, 20__
Reference is made to that certain Amended and
Restated Credit Agreement dated as of July 5,
2000 (as amended, supplemented or otherwise
modified from time to time, the "Credit
Agreement") by and among Harman International
Industries, Incorporated (the "Company"),
Becker Holding GmbH (the "Subsidiary
Borrower"), the Lenders parties thereto,
and Commerzbank AG, New York Branch, as
Administrative Agent (the "Administrative
Agent"). Terms defined in the Credit Agreement
are used herein with the same meaning.
[NAME OF DESIGNATING LENDER] (the "Designating
Lender"), [NAME OF DESIGNEE] (the "Designee"),
the Administrative Agent, the Company and the
Subsidiary Borrower agree as follows:
1. Pursuant to subsection 11.6(h) of the
Credit Agreement, the Designating Lender hereby
designates the Designee, and the Designee
hereby accepts such designation, to have a
right to make Loans pursuant to Section 2 of
the Credit Agreement. Any delegation by
Designating Lender to Designee of its rights to
make a Loan pursuant to such Section 2 shall be
effective at the time of the funding of such
Loan and not before such time.
2. Except as set forth in Section 7 below, the
Designating Lender makes no representation or
warranty and assumes no responsibility pursuant
to this Designation Agreement with respect to
(a) any statements, warranties or
representations made in or in connection with
any Loan Document or the execution, legality,
validity, enforceability, genuineness,
sufficiency or value of any Loan Document or
any other instrument and document furnished
pursuant thereto and (b) the financial
condition of the Company or the Subsidiary
Borrower or the performance or observance by
either of any of its obligations under any Loan
Document or any other instrument or document
furnished pursuant thereto.
3. The Designee (a) confirms that it has
received a copy of each Loan Document, together
with copies of the financial statements
referred to in subsection 6.1 of the Credit
Agreement and such other documents and
information as it has deemed appropriate to
make its own credit analysis and decision to
enter into this Designation Agreement; (b)
agrees that it will independently and without
reliance upon the Administrative Agent, the
Designating Lender or any other Lender and
based on such documents and information as it
shall deem appropriate at the time, continue to
make its own credit decisions in taking or not
taking action under any Loan Document; (c)
confirms that it is a Designated Lender; (d)
appoints and authorizes the Administrative
Agent to take such action as the Administrative
Agent on its behalf and to exercise such powers
and discretion under any Loan Document as are
delegated to the Administrative Agent by the
terms thereof, together with such powers and
discretion as are reasonably incidental
thereto; and (e) agrees that it will perform in
accordance with their terms all of the
obligations which by the terms of any Loan
Document are required to be performed by
it as a Lender.
Exhibit A Page 1
201
<PAGE>
4. The Designee hereby appoints [Designating
Lender or a specified branch or affiliate of
Designating Lender] as Designee's agent and
attorney in fact and grants to [Designating
Lender or a specified branch or affiliate of
Designating Lender] an irrevocable power of
attorney to receive payments made for the
benefit of Designee under the Credit
Agreement, to deliver and receive all
communications and notices under the Credit
Agreement and other Loan Documents and to
exercise on Designee's behalf all rights to
vote and to grant and make approvals, waivers,
consents of amendments to or under the Credit
Agreement or other Loan Documents. Any
document executed by such agent on the
Designee's behalf in connection with the Credit
Agreement or other Loan Documents shall be
binding on the Designee. The Company, the
Subsidiary Borrower, the Administrative Agent
and each of the Lenders may rely on and are
beneficiaries of the preceding provisions.
5. Following the execution of this Designation
Agreement by the Designating Lender, its
Designee, the Company and the Subsidiary
Borrower, it will be delivered to the
Administrative Agent for acceptance and
recording by the Administrative Agent. The
effective date for this Designation Agreement
(the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent,
unless otherwise specified on the signature
page thereto.
6. Each of the Company, the Subsidiary
Borrower, the Designating Lender and the
Administrative Agent hereby (i) acknowledges
that the Designee is relying on the non-
petition provisions of subsection 11.18 of the
Credit Agreement as agreed to by all
signatories thereto and (ii) reaffirms that it
will not institute against the Designee or join
any other Person in instituting against the
Designee any bankruptcy, reorganization,
arrangement, insolvency or liquidation
proceedings under any federal or state
bankruptcy or similar law for one year and one
day after the payment in full of the latest
maturing commercial paper note issued by the
Designee.
7. The Designating Lender unconditionally
agrees to pay or reimburse the Designee and
save the Designee harmless against all
liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature
whatsoever which may be imposed or asserted by
any of the parties to the Loan Documents
against the Designee, in its capacity as such,
in any way relating to or arising out of this
Agreement or any other Loan Documents or any
action taken or omitted by the Designee
hereunder or thereunder, provided that the
Designating Lender shall not be liable for any
portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements if the
same results from the Designee's gross
negligence or willful misconduct.
8. Upon such acceptance and recording by the
Administrative Agent, as of the Effective Date,
the Designee shall be a party to the Credit
Agreement with a right to make Loans as a
Designated Lender pursuant to subsection 2.8 of
the Credit Agreement and the rights and
obligations of a Designated Lender related
thereto; provided, however, that the Designee
shall not be required to make payments with
respect to such obligations except to the
extent of excess cash flow of the Designee
which is not otherwise required to repay
obligations of the Designee Lender which are
then due and payable. Notwithstanding the
foregoing, the [Designating Lender or a
specified branch or affiliate of Designating
Lender], as administrative
Exhibit A Page 2
202
<PAGE>
agent for the Designee, shall be and remain
obligated to the Company, the Subsidiary
Borrower, the Administrative Agent and the
Lenders for each and every of the obligations
of the Designee and the Designating Lender with
respect to the Credit Agreement, including,
without limitation, any indemnification
obligations under subsection 10.7 of the Credit
Agreement and any sums otherwise payable to the
Company or the Subsidiary Borrower by the
Designee.
9. This Designation Agreement shall be
governed by and construed in accordance with
the laws of the State of New York.
10. This Designation Agreement may be executed
in any number of counterparts and by different
parties hereto in separate counterparts, each
of which when so executed shall be deemed to be
an original and all of which taken together
shall constitute one and the same agreement.
Delivery of an executed counterpart of a
signature page to this Designation Agreement by
facsimile transmission shall be effective as
delivery of a manually executed counterpart of
this Designation Agreement.
IN WITNESS WHEREOF, the Designating Lender and
the Designee intending to be legally bound,
have caused this Designation Agreement to be
executed by their officers thereunto duly
authorized as of the date first above written.
[NAME OF DESIGNATING LENDER],
as Designating Lender
By:
Name:
Title:
[NAME OF DESIGNEE],
as Designee
By:
Name:
Title:
Exhibit A Page 3
203
<PAGE>
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED,
as the Company
By:
Name:
Title:
BECKER HOLDING GMBH,
as the Subsidiary Borrower
By:
Name:
Title:
Accepted this ___ day of _________, 20__:
COMMERZBANK AG, NEW YORK BRANCH,
as Administrative Agent
By:
Name:
Title:
Exhibit A Page 4
204
<PAGE>
EXHIBIT B
NOTICE OF BORROWING AND INDEMNITY AGREEMENT
This NOTICE OF BORROWING AND INDEMNITY
AGREEMENT dated as of _______ __, 2000 (this
"Notice and Agreement") is made among HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED (the
"Company"), BECKER HOLDING GMBH (the
"Subsidiary Borrower") and COMMERZBANK AG, NEW
YORK BRANCH ("Administrative Agent")
W I T N E S S E T H:
WHEREAS, the Company, Subsidiary Borrower,
Administrative Agent and lenders party thereto
("Lenders") have entered into that certain
Amended and Restated Credit Agreement dated as
of July 5, 2000 (the "Credit Agreement")
(capitalized terms not otherwise defined herein
shall have the meanings assigned to them in the
Credit Agreement);
WHEREAS, pursuant to the Credit Agreement,
the execution and delivery of this Notice and
Agreement is a condition precedent to the
effectiveness of the Credit Agreement and the
making of the Loans under the Credit Agreement;
and
NOW, THEREFORE, in order to induce the
Lenders to make the Loans under the Credit
Agreement, the Company and the Subsidiary
Borrower provide the following notices and
agree with the Administrative Agent for the
benefit of each Lender as follows:
1. The Company hereby irrevocably notifies the
Lenders and the Administrative Agent that it
will borrow on the Effective Date (________ __,
2000), $[______] (the "Company Loan Amount").
The initial Interest Period for such Loan will
be [__] months.
2. The Subsidiary Borrower hereby irrevocably
notifies the Lenders and the Administrative
Agent that it will borrow on the Effective Date
(________ __, 2000), $[______] (the "Subsidiary
Borrower Loan Amount"). The initial Interest
Period for such Loan will be [__] months.
3. The Company hereby instructs the
Administrative Agent upon satisfaction or
waiver of the conditions precedent in Section
5.1 of the Credit Agreement to wire transfer on
the Effective Date the Company Loan Amount in
immediately available funds in United States
Dollars to the account of [_____________] as
follows (or such other account which the
Company shall designate):
Bank: [_____________]
Account No.: [_________]
Exhibit B Page 1
205
<PAGE>
ABA No.: [_________]
Reference: [_________]
4. The Subsidiary Borrower hereby instructs
the Administrative Agent upon satisfaction or
waiver of the conditions precedent in Section
5.1 of the Credit Agreement to wire transfer on
the Effective Date the Subsidiary Borrower Loan
Amount in immediately available funds in United
States Dollars to the account of _____________]
as follows (or such other account which the
Subsidiary Borrower shall designate):
Bank: [________________]
Account No.: [_________]
ABA No.: [_________]
Reference: [_________]
5. In the event that for any reason the making
of the Loans under the Credit Agreement (the
"Closing") does not occur by 3:00 p.m. (New
York City time) on the Effective Date, the
Borrowers, jointly and severally, shall
indemnify each Lender and hold it harmless
from any loss, cost or expense which such
Lender may sustain or incur as a result of such
Lender having made arrangements in the London
interbank market or otherwise to fund its
Commitment on the Effective Date and the
Closing failing to occur by 3:00 p.m. (New York
City time) on that date.
6. The provisions of Sections 11 of the Credit
Agreement are, by this reference, incorporated
herein as if set forth in full herein together
with all necessary defined terms, except that
references to the term "Agreement" shall mean
this Notice and Agreement.
Exhibit B Page 2
206
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the
date first above written.
HARMAN INTERNATIONAL INDUSTRIES,
INC.,
The Company
By:
Name:
Title:
BECKER HOLDING GMBH,
the Subsidiary Borrower
By:
Name:
Title:
Accepted this ___ day of _________, 20__:
COMMERZBANK AG, NEW YORK BRANCH,
as Administrative Agent
By:
Name:
Title:
By:
Name:
Title:
Exhibit B Page 3
207
<PAGE>
EXHIBIT C
FORM OF
PROMISSORY NOTE
U.S. $____________ New York, New York
_________, 200_
FOR VALUE RECEIVED, the undersigned, [HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED, a
Delaware corporation] [BECKER HOLDING GmbH, a
German corporation] (the "Borrower"), hereby
unconditionally promises to pay to the order of
________________________ (the "Lender"), in
care of Commerzbank AG, New York Branch, as
Administrative Agent (the "Agent"), to
Commerzbank AG, New York Branch, 2 World
Financial Center, New York, New York 10281-
1050, or at such other address as may be
specified by the Agent to the Borrower, the
principal sum of ___________________ AND __/100
U.S. DOLLARS $___________ on the Termination
Date, or such lesser amount as may be the then
outstanding and unpaid balance of all Loans
made by the Lender to the Borrower pursuant to,
and in accordance with the terms of, the
Amended and Restated Credit Agreement dated as
of July 5, 2000 (as amended, restated,
supplemented or otherwise modified from time to
time, the "Credit Agreement") among the
Borrower, [Harman International Industries,
Incorporated] [Becker Holding GmbH], the Agent,
Commerzbank AG, New York Branch, as Arranger,
and the other financial institutions party
thereto. Capitalized terms used herein and not
defined herein shall have the respective
meanings given to such terms in the Credit
Agreement.
The Borrower further agrees to pay interest at
said office, in like money, on the unpaid
principal amount owing hereunder from time to
time on the dates and at the rates and at the
times specified in the Credit Agreement.
This Note is one of the "Notes" referred to in
the Credit Agreement and is subject to, and
entitled to, all provisions and benefits
thereof. The Credit Agreement, among other
things, (a) provides for the making of Loans by
the Lender to the Borrower in an aggregate
amount not to exceed the Dollar amount first
above mentioned, (b) permits and, in certain
circumstances, requires the prepayment of the
Loans by the Borrower subject to certain terms
and conditions and (c) provides for the
acceleration of the Loans upon the occurrence
of certain specified events.
The Borrower hereby waives presentment, demand,
protest and notice of any kind. No failure to
exercise, and no delay in exercising any rights
hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
Exhibit C Page 1
208
<PAGE>
IN WITNESS WHEREOF, the undersigned has
executed and delivered this Note as of the date
written above.
[HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED]
[BECKER HOLDING GmbH]
By:
Name:
Title:
Exhibit C Page 2
209
<PAGE>
[Execution Copy]
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July 5, 2000
among
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED,
BECKER HOLDING GMBH,
THE SEVERAL LENDERS FROM TIME TO TIME PARTY
HERETO
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK
BRANCH,
as Administrative Agent
and
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH
Lead Arranger
210
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1. Defined Terms 1
1.2. Other Definitional Provisions 13
SECTION 2. THE LOANS 14
2.1. Loans 14
2.2. Procedure for Borrowing 14
2.3 Repayment of Loans;
Evidence of Debt 14
2.4. [Reserved] 15
2.5. Optional Prepayments 15
2.6 Interest Rates and Payment Dates
for Loans 15
2.7. Inability to Determine Interest
Rate 16
2.8. Loans by Designated Lenders 16
SECTION 3. CERTAIN PROVISIONS APPLICABLE
TO THE LOANS 16
3.1. Certain Fees 16
3.2. Computation of Interest and Fees16
3.3. Pro Rata Treatment and Payments 17
3.4. Illegality 17
3.5. Requirements of Law 18
3.6. Taxes 20
3.7. Indemnity 22
3.8. Change of Funding Office 22
SECTION 4. REPRESENTATIONS AND
WARRANTIES 23
4.1. Financial Condition 23
4.2. No Change 24
4.3. Corporate Existence; Compliance
with Law 24
4.4. Corporate Power; Authorization;
Enforceable Obligations 24
4.5. No Legal Bar 24
4.6. No Material Litigation 24
4.7. No Default 25
4.8. Ownership of Property; Liens 25
4.9. Intellectual Property 25
4.10. Taxes 25
4.11. Federal Regulations 25
4.12. ERISA 26
4.13. Investment Company Act;
Other Regulations 26
(i)
211
<PAGE>
4.14. Purpose of Loans 26
4.15. Accuracy and Completeness
of Information 26
4.16. Environmental Matters 27
SECTION 5. CONDITIONS PRECEDENT 28
5.1. Conditions to Amendment
and Restatement and
Making of Loans 28
SECTION 6. AFFIRMATIVE COVENANTS 29
6.1. Financial Statements 29
6.2. Certificates; Other Information 29
6.3. Payment of Obligations 30
6.4. Conduct of Business
and Maintenance of
Existence 30
6.5. Maintenance of Property;
Insurance 31
6.6. Inspection of Property;
Books and Records;
Discussions 31
6.7. Notices 31
6.8. Environmental Laws 32
SECTION 7. NEGATIVE COVENANTS 32
SECTION 8. GUARANTEE 32
8.1. Guarantee 32
8.2. No Subrogation 33
8.3. Modification of Obligations 33
8.4. Waiver 34
8.5. Reinstatement 35
8.6. Payment of Subsidiary
Obligations 35
SECTION 9. EVENTS OF DEFAULT 35
SECTION 10. THE ADMINISTRATIVE AGENT;
THE ARRANGER 37
10.1. Appointment 37
10.2. Delegation of Duties 38
10.3. Exculpatory Provisions 38
10.4. Reliance by
Administrative Agent 38
10.5. Notice of Default 38
10.6. Non-Reliance on
Administrative Agent
and Other Lenders 39
10.7. Indemnification 39
10.8. Administrative Agent
in Its Individual
Capacity 40
10.9. Successor Administrative Agent 40
10.10. Arranger 40
SECTION 11. MISCELLANEOUS 41
11.1. Amendments and Waivers
Generally; Amendments to
Schedules I, II and III 41
(ii)
212
<PAGE>
11.2. Notices 42
11.3. No Waiver; Cumulative Remedies 43
11.4. Survival of Representations
and Warranties 43
11.5. Payment of Expenses and Taxes 43
11.6. Successors and Assigns;
Participations and Assignments 44
11.7. Adjustments; Set-off 47
11.8. Power of Attorney 48
11.9. Judgment 48
11.10. Counterparts 48
11.11. Severability 48
11.12. Integration 49
11.13. GOVERNING LAW 49
11.14. Submission To Jurisdiction;
Waivers 49
11.15. Acknowledgments 49
11.16. WAIVERS OF JURY TRIAL 50
11.17. Confidentiality 50
11.18. No Bankruptcy Proceedings 50
11.19. No Double Counting 50
SCHEDULES AND EXHIBITS
SCHEDULE I Commitments and Notice Information
SCHEDULE II Subsidiaries
SCHEDULE III Administrative Schedule
SCHEDULE IV Material Debt Instruments
EXHIBIT A Form of Designation Agreement
EXHIBIT B Form of Notice of Borrowing and
Indemnity Agreement
EXHIBIT C Form of Promissory Note
(iii)
213
<PAGE>
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214
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>11
<FILENAME>0011.txt
<TEXT>
<PAGE>
EXHIBIT 10.70
215
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
216
<PAGE>
EXECUTION COPY
FIFTH AMENDMENT
FIFTH AMENDMENT, dated as of July 17, 2000 (the "Amendment"),
to the MULTI-CURRENCY, MULTI-OPTION CREDIT AGREEMENT,
dated as of September 30, 1994 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; terms defined herein
being used herein as therein defined), among HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED (the "Company"),
the Subsidiary Borrowers and Subsidiary Guarantors parties thereto, the
Lenders parties thereto, BANK OF AMERICA, N.A. (formerly originally
known as Nationsbank of North Carolina, N.A., and subsequently as
Nationsbank, N.A.), as Co-Agent, CHASE SECURITIES INC. (as
successor to Chemical Securities, Inc.) as arranger and THE CHASE
MANHATTAN BANK (as successor to Chemical Bank) as administrative
agent (the "Administrative Agent").
WITNESSETH:
WHEREAS, the parties to this Amendment wish to amend the Credit
Agreement in the manner hereinafter set forth; and
WHEREAS, this Amendment is entered into in accordance with the
provisions of subsection 14.1 to the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
1. Amendment of Subsection 1.1. Subsection 1.1 is hereby amended by:
(A) adding the words "Swedish Krona" immediately prior to the
words "and any other" in the definition of "Available Foreign Currencies";
(B) deleting the phrase "and a Subsidiary Guarantor" from subsection
(iii) of the definition of "Permitted Business Acquisition";
(C) deleting in its entirety the definition of "Restricted Subsidiary"
and replacing it with the following:
"`Restricted Subsidiary': any Subsidiary listed on Schedule II."; and
(D) deleting in its entirely the definition of "Subsidiary Guarantor".
2. Amendment to Section 6. Section 6 of the Credit Agreement is hereby
amended by adding thereto the following new subsection 6.10:
"6.10 European Economic and Monetary Union. (a) Definitions. In
this subsection 6.10 and in each other provision of this Agreement to
which reference is made in this
2
217
<PAGE>
subsection 6.10, expressly or impliedly, the following terms have the
meanings given to them in this subsection 6.10:
"commencement of the third stage of EMU" means January 1, 1999.
"EMU" means economic and monetary union as contemplated in the
Treaty on European Union.
"EMU legislation" means legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in
part the implementation of the third stage of EMU.
"euro" means the single currency of participating member states of the
European Union.
"euro unit" means the currency unit of the euro.
"national currency unit" means the unit of currency (other than a euro
unit) of a participating member state.
"participating member state" means each state so described in any
EMU legislation.
"Target Operating Day" means any day that is not (i) a Saturday or
Sunday, (ii) Christmas Day or New Year's Day or (iii) any other day on
which the Trans-European Real-time Gross Settlement Operating System
(or any successor settlement system) is not operating (as determined by
the Administrative Agent).
"Treaty on European Union" means the Treaty of Rome of March 25,
1957, as amended by the Single European Act 1986 and the Maastricht
Treaty (which was signed at Maastricht on February 7, 1992, and came
into force on November 1, 1993), as amended from time to time.
"(b) Effectiveness of Provisions. The provisions of paragraphs (c) to
(j) below (inclusive) shall be effective at and from the commencement of
the third stage of EMU, provided, that if and to the extent that any such
provision relates to any state (or the currency of such state) that is not a
participating member state on the commencement of the third stage of
EMU, such provision shall become effective in relation to such state (and
the currency of such state) at and from the date on which such state
becomes a participating member state.
"(c) Redenomination and Alternative Currencies. Each obligation
under this Agreement of a party to this Agreement which has been
denominated in the national currency unit of a participating member state
shall be redenominated into the euro unit in accordance with EMU
legislation, provided, that if and to the extent that any EMU legislation
provides that following the commencement of the third stage of EMU an
amount denominated either in the
3
218
<PAGE>
euro or in the national currency unit of a participating member state and
payable within that participating member state by crediting an account of
the creditor can be paid by the debtor either in the euro unit or in that
national currency unit, each party to this Agreement shall be entitled to
pay or repay any such amount either in the euro unit or in such national
currency unit.
"(d) Loans. Any Loan in the currency of a participating member state
shall be made in the euro unit, provided that any Loan may, if so requested
by any Borrower(s), be made in the national currency unit of any
participating member state following commencement of the third stage of
EMU so long as such national currency unit continues to be available.
"(e) Business Days. With respect to any amount denominated or to be
denominated in the euro or a national currency unit, any reference to
"Business Days" shall be construed as a reference to Target Operating
Days.
"(f) Payments to the Administrative Agent. Subsection 6.3 shall be
construed so that, in relation to the payment of any amount of euro units or
national currency units, such amount shall be made available to the
Administrative Agent in immediately available, freely transferable,
cleared funds to such account with such bank (in such principal financial
center) as the Administrative Agent may from time to time nominate for
this purpose.
"(g) Payments by the Administrative Agent to the Lenders. Any
amount payable by the Administrative Agent to the Lenders under this
Agreement in the currency of a participating member state shall be paid in
the euro unit.
"(h) Payments by the Administrative Agent Generally. With respect to
the payment of any amount denominated in the euro or in a national
currency unit, the Administrative Agent shall not be liable to the
Borrowers or any of the Lenders in any way whatsoever (unless due to the
Administrative Agent's gross negligence or wilful misconduct) for any
delay, or the consequences of any delay, in the crediting to any account of
any amount required by this Agreement to be paid by the Administrative
Agent if the Administrative Agent shall have taken all relevant steps to
achieve, on the date required by the Agreement, the payment of such
amount in immediately available, freely transferable, cleared funds (in the
euro unit or, as the case may be, in a national currency unit) to the account
with the bank in the principal financial center in the participating member
state which the Borrowers or, as the case may be, any Lender shall have
specified for such purpose. In this paragraph (h), "all relevant steps"
means all such steps as may be prescribed from time to time by the
regulations or operating procedures of such clearing or settlement system
as the Administrative Agent may from time to time determine for the
purpose of clearing or settling payment of the euro.
"(i) Basis of Accrual. If the basis of accrual of interest or fees
expressed in this Agreement with respect to the national currency unit of
any state that becomes a participating member state shall be inconsistent
with any convention or practice in the London Interbank Market for the
basis of accrual of interest or fees in respect of the euro, such convention
or practice shall replace such expressed basis effective as of and from the
date on which such state becomes a participating member state; provided,
that if any Loan in the
4
219
<PAGE>
currency of such state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Loan, at the end of the
then current Interest Period.
"(j) Rounding and Other Consequential Changes. Without prejudice
and in addition to any method of conversion or rounding prescribed by any
EMU legislation and without prejudice to the respective liabilities for
indebtedness of the Borrowers to the Lenders and the Lenders to the
Borrowers under or pursuant to this Agreement:
(i) each reference in this Agreement to a minimum amount (or an
integral multiple thereof) in a national currency unit to be paid to or by the
Administrative Agent shall be replaced by a reference to such reasonably
comparable and convenient amount (or an integral multiple thereof) in the
euro unit as the Administrative Agent may from time to time specify; and
(ii) except as expressly provided in this subsection, each provision of
this Agreement shall be subject to such reasonable changes of construction
as the Administrative Agent may from time to time specify to be necessary
or appropriate to reflect the introduction of or changeover to the euro in
participating member states.
"(k) Increased Costs. The Borrowers shall, within 30 days after
receipt of notice from the Administrative Agent, pay to the Administrative
Agent for the account of each Lender the amount of any cost or increased
cost incurred by, or of any reduction in any amount payable to or in the
effective return on its capital to, or of interest or other return foregone by,
such Lender as a result of the introduction of, changeover to or operation
of the euro in any participating member state. Such notice shall specify
the event giving rise to such claim and shall set forth in reasonable detail
the basis and computation of such claim."
3. Amendment to Subsection 10.1(a). Subsection 10.1(a) is hereby
amended by deleting 68% and replacing it with 55%.
4. Amendment of Subsection 10.1(b). Subsection 10.1(b) is hereby
amended by deleting the figures and word "2.25 to 1.0" and replacing
them with the figures and word "3.5 to 1.0".
5. Amendment of Subsection 10.6(i). Subsection 10.6(i) is hereby
amended by deleting the amount of "$2,500,000" and replacing it with the
amount of "$150,000,000".
6. Amendment of Subsection 14.8. Subsection 14.8 is hereby
amended by deleting the phrase "and Subsidiary Guarantor" from the first
and second sentences thereon.
7. Amendment of Subsection 14.14. Subsection 14.14 is hereby
amended by deleting the phrase "and each Subsidiary Guarantor"
appearing after the word "Borrower" and before the word "hereby".
5
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<PAGE>
8. Amendment of Subsection 14.15. Subsection 14.15 is hereby
amended by deleting the phrase "and each Subsidiary Guarantor"
appearing after the word "Borrower" and before the word "hereby".
9. Amendment to Subsection 14.15(b). Subsection 14.15(b) is hereby
amended by deleting the phrase "or Subsidiary Guarantor" appearing after
the word "Borrower" and before the word "arising".
10. Addition of New Foreign Subsidiary Borrower; Amendment of
Schedule II.
(A) Harman Europe EEIG ("Harman Europe"), an indirect Subsidiary
of the Company, by its signature below, hereby acknowledges that it has
received and reviewed a copy (in execution form) of the Credit
Agreement, and agrees, from and after the effective date of this
Amendment (the "Effective Date"), to (a) join the Credit Agreement as a
Foreign Subsidiary Borrower, (b) be bound by all covenants, agreements
and acknowledgments attributable to a Foreign Subsidiary Borrower in the
Credit Agreement and (c) perform all obligations required of it by the
Credit Agreement.
(B) Harman Europe hereby represents and warrants that the
representations and warranties with respect to it contained in, or made or
deemed made by it in, Section 7 of the Credit Agreement are true and
correct on the date hereof and on the Effective Date.
(C) The address and jurisdiction of incorporation of Harman Europe is
set forth in Annex I to this Amendment.
(D) Each of the parties hereto agrees that this Amendment shall be
deemed to be a Joinder Agreement, in form and substance satisfactory for
all purposes of the Credit Agreement.
(E) Schedule II to the Credit Agreement is hereby amended by
deleting such Schedule in its entirety and inserting in lieu thereof Annex I
hereto.
11. Amendment of Schedule IV; Administrative Schedule.
Schedule IV to the Credit Agreement is hereby amended by deleting such
Schedule in its entirety and inserting in lieu thereof Annex II hereto.
12. Amendment of Schedule 7.14; Subsidiaries. Schedule 7.14 to the
Credit Agreement is hereby amended by deleting such Schedule in its
entirety and inserting in lieu thereof Annex III hereto.
13. Amendment Fee. As consideration for each Lenders' approval and
consent to this Amendment, the Company agrees to pay to the
Administrative Agent, for the Account of each Lender that has approved
and consented to this Amendment, on the Effective Date, a one-time fee of
0.075% of such Lender's Commitment.
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14. Representations and Warranties. The Company hereby represents
and warrants that, after giving effect to the amendments effected hereby,
the representations and warranties made by it contained in Section 7 of the
Credit Agreement are true and correct on the date hereof provided that
references to the Credit Agreement therein shall be deemed to be
references to this Amendment and to the Credit Agreement as affected by
this Amendment.
15. Conditions to Effectiveness. (A) This Amendment shall become
effective upon the receipt by the Administrative Agent (which
effectiveness shall be confirmed to the other parties hereto by the
Administrative Agent's delivery to such parties of notice of such
effectiveness) of counterparts of this Amendment, duly executed and
delivered by the Company and the Majority Lenders; provided, however,
that Subsection 1(A) and Section 11 of this Amendment shall become
effective upon the receipt by the Administrative Agent of counterparts of
this Amendment, duly executed and delivered by the Company and all of
the Lenders.
(B) Subsection 10 of this Amendment shall become effective upon
receipt by the Administrative Agent (which effectiveness shall be
confirmed to the other parties hereto by the Administrative Agent's
delivery to such parties of a fully executed copy of this Amendment) of
the following: (i) counterparts of this Amendment, duly executed by the
Company, Harman Europe, the Administrative Agent and the Majority
Lenders and (ii) copies of corporate resolutions, other corporate
documents and legal opinions in respect of Harman Europe, which
resolutions, documents and opinions are substantially equivalent to
comparable materials delivered on the Closing Date in respect of the other
Subsidiary Borrowers.
16. Miscellaneous. Except as expressly amended herein, the Credit
Agreement shall continue to be, and shall remain, in full force and effect
in accordance with its terms. This Amendment may be executed by the
parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
17. GOVERNING LAW. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be duly executed and delivered by its proper and duly
authorized officer(s) as of the day and year first above written.
HARMAN INTERNATIONAL INDUSTRIES,
INCORPORATED
By:
Name:
Title:
HARMAN EUROPE EEIG
By:
Name:
Title:
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ACKNOWLEDGED AND AGREED TO:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By:
Name:
Title:
DEN DANSKE BANK
By:
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
COMMERZBANK AG, LOS ANGELES BRANCH
By:
Name:
Title:
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<PAGE>
ERSTE BANK
By:
Name:
Title:
By:
Name:
Title:
HSBC BANK USA
By:
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
Name:
Title:
BANK OF AMERICA, N.A.
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
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<PAGE>
SOCIETE GENERALE
By:
Name:
Title:
BANK OF SCOTLAND
By:
Name:
Title:
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<PAGE>
ANNEX II
SCHEDULE IV
ADMINISTRATIVE SCHEDULE
I. COMMITTED RATE LOANS
A. Interest Rates for Each Currency
Dollars:
1. Committed Rate ABR Loans: ABR
2. Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Dollars for a period beginning on the first day of such Interest Period and
ending on the last day of such Interest Period which appears on the
Telerate Page 3750 (or, if no such quotation appears on such Telerate
Page, on the appropriate Reuters Screen) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
Austrian Schillings:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Austrian Schillings for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Reuters Screen VIBO (or, if no such quotation appears on such
Reuters Screen, on the appropriate Telerate Page) as of 11:00 a.m.,
London time, on the Quotation Day for such Interest Period.
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Danish Kroner:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Danish Kroner for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Reuters Screen DKNH (or, if no such quotation appears on such
Reuters Screen, on the appropriate Telerate Page) as of 11:00 a.m.,
London time, on the Quotation Day for such Interest Period.
Deutsche Marks:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Deutsche Marks for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Telerate Page 3750 (or, if no such quotation appears on such Telerate
Page, on the appropriate Reuters Screen) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
Dutch Guilders
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Dutch Guilders for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Reuters Screen FWEB (or, if no such quotation appears on such
Reuters Screen, on the appropriate Telerate Page) as of 11:00 a.m.,
London time, on the Quotation Day for such Interest Period.
French Francs:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
French Francs for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Telerate Page 3740 (or, if no such quotation appears on such Telerate
Page, on the appropriate Reuters Screen) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
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Sterling:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate per annum equal
to the average (rounded upward to the nearest 1/16th of 1%) of the
respective rates notified to the Administrative Agent by each of the
Reference Lenders as the rate at which such Reference Lender is offered
deposits in Sterling in the Paris interbank market at or about 11:00 A.M.,
Paris time, on the Quotation Day for such Interest Period for delivery on
the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to such Reference Lender's
Commitment Percentage of such Tranche.
Swedish Krona:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Swedish Krona for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Reuters Screen SIOR (or, if no such quotation appears on such Reuters
Screen, on the appropriate Telerate Page) as of 11:00 A.M., London time,
on the Quotation Day for such Interest Period.
Swiss Francs:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Swiss Francs for a period beginning on the first day of such Interest Period
and ending on the last day of such Interest Period which appears on the
Telerate Page 3750 (or, if no such quotation appears on such Telerate
Page, on the appropriate Reuters Screen) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
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<PAGE>
Yen:
Committed Rate Eurocurrency Loans:
for any Interest Period, in respect of any Tranche, the rate for deposits in
Yen for a period beginning on the first day of such Interest Period and
ending on the last day of such Interest Period which appears on the
Telerate Page 3750 (or, if no such quotation appears on such Telerate
Page, on the appropriate Reuters Screen) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
Hong Kong Dollars:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Hong Kong Dollars for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Reuters Screen HIBO (or, if no such quotation appears on such
Reuters Screen, on the appropriate Telerate Page) as of 11:00 a.m.,
London time, on the Quotation Day for such Interest Period.
Singapore Dollars:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the average (determined
by the Administrate Agent) of the rates for deposits in Singapore Dollars
for a period beginning on the first day of such Interest Period and ending
on the last day of such Interest Period which appears on the Reuters
Screen SIBO (or, if no such quotations appears on such Reuters Screen, on
the appropriate Telerate Page) as of 11:00 a.m., London time, on the
Quotation Day for such Interest Period.
Belgian Francs:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
Belgian Francs for a period beginning on the first day of such Interest
Period and ending on the last day of such Interest Period which appears on
the Reuters Screen BIBO (or, if no such quotation appears on such Reuters
Screen, on the appropriate Telerate Page) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
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<PAGE>
Euro Units:
Committed Rate Eurocurrency Loans:
for any Interest Period in respect of any Tranche, the rate for deposits in
euro units for a period beginning on the first day of such Interest Period
and ending on the last day of such Interest Period which appears on the
Telerate 3750 Screen (or if no such quotation appears on such Telerate
Screen, on the appropriate Reuters Screen) as of 11:00 a.m., London time,
on the Quotation Day for such Interest Period.
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>12
<FILENAME>0012.txt
<TEXT>
<PAGE>
EXHIBIT 10.71
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SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement"), dated as of
June 20, 2000, is made and entered by and between Harman International
Industries, Incorporated ("Harman" or, including any successor thereto,
the "Company"), a Delaware corporation, and [Name of Executive] (the
"Executive").
WHEREAS, the Executive is a senior executive of Harman, and has
made, and is expected to continue 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;
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(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:
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236
<PAGE>
(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
( 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
3
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<PAGE>
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 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 or a
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
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<PAGE>
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 compen