Harman Kardon 2009 Annual Report Download - page 101

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Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
year ended June 30, 2009, 28,106 of these restricted stock units were settled at a cost of $0.5 million. During the
year ended June 30, 2008, 2,770 of these restricted stock units were settled at a cost of approximately $0.1
million.
We granted 133,507 restricted stock units with performance conditions in the year ended June 30, 2009
under the 2002 Plan. The restricted stock units vest three years from the date of grant based on attainment of
certain performance targets in fiscal 2011. Compensation expense is recognized ratably over the three-year
vesting period based on grant date fair value and our assessment of the probability that the performance targets
will be met. We have recognized compensation expense based on our estimate of the probability of achieving the
targets.
For the year ended June 30, 2009, we also granted 369,677 restricted stock units under the 2002 Plan that
vest three years from the date of grant.
A summary of equity classified restricted stock unit activity as of and for the year ended June 30, 2009 is
presented below:
Shares
Non-vested at June 30, 2008 .................................. 25,000
Granted ............................................... 503,184
Vested ................................................ —
Forfeited .............................................. (20,820)
Non-vested at June 30, 2009 .................................. 507,364
At June 30, 2009, the aggregate intrinsic value of equity classified restricted stock units was $9.5
million. As of June 30, 2009, there was $10.5 million of total unrecognized compensation cost related to equity
classified restricted stock unit compensation arrangements. The weighted average recognition period was 2.2
years.
Chief Executive Officer Special Enterprise Value Bonus
Our Chief Executive Officer was granted a special bonus award in November 2007. The award will be
settled in cash based on a comparison of our enterprise value at November 2012 to the enterprise value at the
grant date in November 2007. The award is classified as a liability award, and therefore is required to be
measured each quarter. The fair value of this award at June 30, 2009 was $0.3 million, calculated using a Monte
Carlo simulation. Less than $0.1 million of compensation expense was reversed in fiscal year 2009, based on the
value of the award and the proportionate amount of requisite service that has been rendered to date.
Note 12 – Restructuring
We announced a restructuring program in June 2006 designed to increase efficiency in our manufacturing,
engineering and administrative organizations. The implementation of this program has continued through fiscal
year 2009, as we expanded our restructuring actions to improve global footprint, cost structure, technology
portfolio, human resources, and internal processes.
In fiscal year 2008 we announced plant closings in Northridge, California and Martinsville, Indiana and
closed a plant in South Africa and a small facility in Massachusetts. In fiscal year 2009, we completed the
transition of our corporate headquarters from Washington D.C. to Stamford, Connecticut and have initiated
numerous other actions to reduce cost and improve operating efficiency in our businesses. Programs initiated in
80