Harman Kardon 2007 Annual Report Download - page 16

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3
following the merger based on the expected equity financing for the merger. If the total elections for
Parent shares exceed that maximum number, then the shares of Parent common stock will be allocated to
electing Harman stockholders and option holders on a pro rata basis and the remaining Harman shares
and options will be converted into cash.
Our Board of Directors, upon the recommendation of a committee of independent directors, has
unanimously approved and declared advisable the merger agreement and the transactions contemplated by
the merger agreement, determined that the terms of the merger agreement are fair to, and in the best
interests of, our company and our stockholders and resolved to recommend that our stockholders vote in
favor of the adoption of the merger agreement.
Completion of the merger is subject to the approval of our stockholders and other customary closing
conditions, including regulatory approvals and antitrust clearances. We presently anticipate that the
merger will be completed in the fourth quarter of calendar year 2007.
Products
Automotive
We believe that we are a leader in developing and manufacturing high-quality, high fidelity digitally-
integrated infotainment systems and premium branded audio systems for automobiles.
The automotive market is currently experiencing unprecedented consumer demand for information and
entertainment in the car. We have developed leading technical competencies to address this demand. Our
infotainment systems are a combination of information and entertainment components that may include or
control GPS navigation, traffic information, voice-activated telephone and climate control, rear seat
entertainment, wireless Internet access, hard disk recording, MP3 playback and a high-end branded audio
system. These systems include scaleable software to allow us to better serve a full range of vehicles from
luxury through entry-level. In fiscal 2007, we supplied infotainment systems for vehicles manufactured
by Mercedes-Benz, BMW, Porsche, Audi, Hyundai, Chrysler, Renault, PSA Peugeot Citroën and Land
Rover. Our business objective is to maintain our leadership position in the infotainment business.
We continue to leverage our expertise in the design and manufacture of premium branded audio systems,
as well as the reputation for quality associated with our JBL, Infinity, Harman/Kardon, Mark Levinson,
Becker and Lexicon brand names. As a result of our well-established relationships with automobile
manufacturers, our engineers are engaged early in the vehicle design process to develop systems that
optimize acoustic performance and minimize weight and space requirements. Our Infinity branded car
audio systems are offered by DaimlerChrysler and Mitsubishi, in North America. DaimlerChrysler’s
Mercedes-Benz Division, the BMW Group, Land Rover, Porsche, GM and Saab provide Harman/Kardon
branded audio systems in their vehicles. Our premium Mark Levinson digital audio system is offered by
Lexus and Rolls Royce. Rolls Royce vehicles come standard with a Lexicon branded audio system.
Toyota, PSA Peugeot Citroën and Hyundai/Kia offer our JBL branded audio systems.
In the future, we expect our infotainment systems will also provide driver assist capabilities such as pre-
crash emergency braking, full speed adaptive cruise control, sleep guarding, lane departure warnings and
night vision.