Harman Kardon 2009 Annual Report Download - page 98

Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
June 30, 2009, 2008 and 2007, respectively. The total income tax benefit recognized in the Consolidated Income
Statement for share-based compensation arrangements was $1.2 million, $5.6 million and $4.5 million for the
years ended June 30, 2009, 2008 and 2007, respectively.
2002 Plan
The 2002 Plan permits the grant of stock options, stock appreciation rights, restricted stock and restricted
stock units for up to 6,760,000 shares of our common stock. Shares may be issued as original issuances, treasury
shares or a combination of both. We believe that such awards better align the interests of our employees with
those of our stockholders. Option awards are granted with an exercise price equal to the market price of our stock
on the date of the grant. The option awards generally vest over three to five years of continuous service
commencing one year from the date of the grant and expire after ten years. At June 30, 2009, a total of 3,231,699
shares of common stock were available for grant under the 2002 Plan.
Restricted Stock Awards
A grant of restricted stock involves the immediate transfer of ownership of a specified number of shares of
common stock with a “substantial risk of forfeiture” for a period of at least three years. A participant who
receives a restricted stock grant is entitled immediately to voting, dividend and other share ownership rights
associated with the underlying shares of common stock. At June 30, 2009, a total of 86,992 shares of restricted
stock were outstanding, of which 51,000 shares were granted under the 2002 Plan and 35,992 shares were
granted outside of the 2002 Plan.
Restricted Stock Units
A grant of restricted stock units involves an agreement by our Company to deliver a specified number of
shares of common stock or cash to the participant when the award vests. A participant has no ownership or
voting rights associated with the underlying shares of common stock. The Board of Directors may, at its
discretion, authorize the payment of dividend equivalents on the restricted stock units. During the third quarter of
2009, the Board of Directors suspended the dividend on our common stock. At June 30, 2009, a total of 539,440
restricted stock units were outstanding, of which 507,364 share units were granted under the 2002 Plan and
32,076 share units were granted outside of the 2002 Plan.
Stock Appreciation Rights
Stock appreciation rights allow the holders to receive a predetermined percentage of the spread, not to
exceed 100 percent, between the option price and the fair market value of the shares on the date of exercise. A
performance unit is the equivalent of $100 and is awarded for the achievement of specified management
objectives as a condition to the payment of the award. The performance period will not be less than three years.
No stock appreciation right or performance unit grants have been made under the 2002 Plan.
1992 Incentive Plan
We also have options outstanding under our 1992 Incentive Plan. Shares under the 1992 Incentive Plan can
be issued as original issuances or treasury shares or a combination of both. Options to purchase 224,824 shares
with expiration dates ranging from November 10, 2008 to November 8, 2012 are outstanding under our 1992
Incentive Plan. The 1992 Incentive Plan was approved by our stockholders and had no shares available for grant
on June 30, 2009.
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