Harman International Travel Policy

Approval — CEO & President
Approval: — Chief Financial Officer

TABLE OF CONTENTS

This policy applies to all Harman International Business Units and is intended to facilitate business-required travel and entertainment, in a comfortable fashion, while managing costs and maintaining efficient business processes. It is not intended to be onerous or unduly restrictive. Please direct any concerns regarding this policy to the Director of Corporate Travel. It is a governing guideline that supersedes all previous directives relating to travel, entertainment and other employee expense reimbursement from any other source. In no circumstances may any Harman employee modify these policies to be less stringent in their application.

Each Harman operating unit shall establish policies and procedures with respect to reimbursing employees for legitimate travel and entertainment expense incurred in connection with the conduct of company business, provided that proper reporting procedures have been observed.

Employees will be reimbursed only for expenses incurred which are necessary to the transaction of Company business and which are incurred in connection with the employee's regular duties or special assignments.

All employees must incur and report their own travel expenses and must report all expenses promptly and accurately with the required documentation, including receipts for all expenses. Employees must always review all bills and documents for accuracy before accepting or paying them. The employee's immediate supervisor is responsible for ensuring that all employees who travel or incur business-related expenses are aware of this policy.

Company employees who incur travel, entertainment, and other related business expenses are responsible for complying with the provisions of the policy. Any exceptions must be documented with adequate and reasonable explanations by the employee and reviewed by the designated approver.
Employees are encouraged to examine lower-cost alternatives, such as audio/video conferencing or web casting. Contact your local IT Department to review your options.

The company may not reimburse for expenses that do not comply with this policy.

Reimbursement of business-related charges paid for by the employee is made on the basis of a timely submission of a properly completed and approved expense report. Original reports will be kept in active history in the system for two years, and will be stored thereafter according to records retention policies along with the supporting physical receipts.

Company employees who incur travel and entertainment expenses are required to comply with this policy. Employees submitting expenses that are not incompliance with this policy risk delayed, partial or denial of reimbursements. When submitted expenses that do not comply with policy guidelines, the out-of-policy spending will become the spending employee's responsibility and the employee will not be reimbursed for it unless specifically approved as a one-time exception to policy.

Cases of significant abuse may result in disciplinary action up to and including termination of employment.

Company-Sponsored Corporate Card Overview
The company sponsors employees in obtaining an American Express corporate card. These cards are to be used for all company business travel expenses, and should be used only for this purpose.

See also:
Card Use
Liability

3.1 Card Use
It is required that all possible business travel expenses be charged to the corporate card. Use of these cards provides the company with data for critical trend information on travel expenses, which is used to negotiate lower cost preferred provider contracts.

Because of this, the employee is expected to minimize the use of cash for reimbursable expenses and asked to refrain from using the company issued card for personal expenses.

3.2 Liability
The individual cardholder is personally responsible for full payment of all expenses and charges detailed on the monthly statement, which will be billed directly to their home or business address. When using electronic expense reporting software, the company will make payments to the corporate card provider on behalf of the employee for all approved business expenses.

The employee is responsible for any corporate card fees and delinquency charges. FINANCE AND DELINQUENCY CHARGES ARE NOT REIMBURSABLE FOR ANY REASON.

The company is not responsible in any way to the issuer of the corporate card for any non-payment or misuse by the employee.

The expense of obtaining personal credit cards, annual charges related to that card, monthly interest and finance charges are not reimbursable.

Employees should consult the corporate card agreement for important information concerning the reporting and replacement of lost or stolen corporate cards, the handling of billing inquiries and payment issues and procurement of cash advances using the corporate card.

4.1 Cash Advances
Harman finance offices should avoid issuing cash advances; employees who travel very infrequently should be encouraged to use their own personal credit card, or the Harman finance department may issue a temporary corporate card. For employees traveling on business more than three times per year a corporate card must be issued.

4.2 Corporate Card ATM Withdrawal
A cash advance obtained with the corporate card through an automatic teller (ATM) is the personal responsibility of the employee and must be repaid directly to the corporate card provider. Reimbursements for ATM fees must be accompanied by the ATM receipt and the corporate card statement must be attached to the expense report.

4.3 Hotel Cash Advances
Employees using the corporate card to obtain a cash advance and adding the amount of the advance to the hotel folio (bill) must itemize how the cash advance was spent. Any funds not spent should be marked as non-reimbursable. The employee is responsible for paying non-reimbursable amounts to the corporate card provider directly.

5.1 Reservation Procedures
It is required that all air, lodging and car rental reservations, including enroute changes, be booked through the Company's designated offline or interactive corporate travel program. Offline: US: American Express Travel; Europe: Carlson Wagonlit Travel; Asia: TBD; Interactive: Sound Travels Online Reservation Tool. These corporate travel programs are familiar with company policy and will assist employees in making travel arrangements in compliance with the travel policy and using the company's preferred providers. The use of other agencies is not permitted and will not be reimbursed. The approved agency is required to guarantee the lowest fares possible. If employees have specific information that would indicate otherwise, they are asked to contact the Harman Director of Corporate Travel.

Air travel, car rental and hotel reservations, or changes in itinerary must be directed to the approved Harman travel service provider. Changes in itinerary which arise during the course of business travel should be handled through the approved travel service provider.

Contact your local travel coordinator/planner for agency contact and/or information regarding the interactive reservation tool.

All reservations for domestic trips or easy "point to point" international (Point to Point Examples: Frankfurt to London roundtrip; Los Angeles to Paris roundtrip; Frankfurt to Cardiff roundtrip) air travel must be made through the Harman Interactive Booking Tool (Sound Travels). This will help to simplify travel arrangements and ensure consistent and complete management information. All travelers will be issued a username and password for the Harman Interactive Booking Tool by the local Travel Coordinator. Each traveler or designated travel arranger will be responsible for coordinating his/her travel arrangements, obtaining confirmation numbers and ensuring proper payment is made.

5.2 Spouse/Child Travel
Travel expenses for a spouse are not reimbursable as a business expense unless it is shown that the spouse's presence was both essential and directly related to the effective accomplishment of Company business. In the limited instances of such cases, the employee must obtain written approval in advance from their departmental supervisor. In this case, spouse travel expenses are to be included in the employee's expense report.

Baby-sitting fees incurred as the result of approved spouse travel must be approved in advance as part of the travel expense and will be reimbursed up to $50.00 per day, provided a receipt is attached to the expense report. Travel expenses incurred on behalf of a child traveling with an employee are not reimbursable.

5.3 Weekend Travel
Employees needing air travel departing on Friday or returning on Sunday may include a Saturday night stay in their travel plans in order to take advantage of advance purchase fares.

The company will reimburse a reasonable cost for food and lodging based upon demonstrated savings to the Company.

Entertainment expenses incurred during the additional days' stay are personal and non-reimbursable.

5.4 Group, Tradeshow and Meeting Travel
Any meeting requiring 15 participants or more must have Executive Committee member and Chief Human Resources Officer approval. Corporate Travel is also the authorized source for arrangements for group or meeting travel. Any department planning to sponsor group or meeting travel involving ten or more participants should identify the event to Corporate Travel to assist in site selection and contract negotiations.

5.5 Traveler Profiles
Employees expecting to travel two (2) or more times per year should submit a Corporate Profile Form to Corporate Travel to ensure that pertinent details and preferences are adhered to in the reservation process. Contact the Office Manager to obtain a copy of the Corporate Profile Form.

5.6 Use of Preferred Suppliers
Use of preferred air, hotel, and car rental vendors should take priority. Non-preferred suppliers should be used only in markets not served by the preferred supplier, or when a lower fare/rate is offered and available.

5.7 Enforcement
Reservations for trips requiring air travel made through sources other than the company preferred agencies or interactive site do not comply with policy and will not be reimbursed.

6.1 Air Travel Arrangements
Travel arrangements require a Pre Trip approval and should be made through the approved Harman travel service provider in accordance with this policy. All air travel with flight segments greater than 8 hours (Intercontinental) requires Executive Committee member approval prior to booking; all other travel requires approval by traveler's immediate supervisor.

6.2 Payment and Documentation
Airline tickets should be charged to employee held corporate cards. An explanation and specific approval is required for any other payment method. For tickets purchased with a payment method other than the corporate card, the original passenger coupon must be submitted with the expense report.

6.3 Lowest Fare Routing
Employees are expected to use the lowest fare routing when arranging air travel. When making travel reservations online the employee will be prompted of the lowest fare; when working with our designated travel counselor, provide your travel dates, destination and preferred arrival or departure time (depending on the traveler's scheduling priorities); the agent(s) will identify the lowest airfare available at the time of your inquiry.

LFR Exceptions –
For the traveler's benefit and convenience, the following exceptions are allowed to LFR:

A non-stop flight may be selected over a connecting flight if the fare difference is not greater than $100 USD equivalent; if greater the traveler should acquire appropriate departmental pre-approval. Employees are encouraged, however, to select connecting flights if savings can be achieved and their schedule permits.

6.4 Travel Limitations on Some Flights
To the extent that it is practical to do so by advanced planning, commercial airline travel should be scheduled so that
1) no more than two executives travel together on any one flight,
2) no more than two Directors in the same department travel on the same flight,
3) no more than 4 employees from any division to fly to the same event without Executive Committee or Chief Human Resources Officer approval,
4) a concentration on one flight of too many employees within the same city, department or function is avoided. These officers or key employees are responsible for ensuring compliance with this policy.

6.5 Advanced Bookings/Restricted Fares
To minimize airfare costs, travelers are required to book flights at least seven days in advance and use restricted fares when practical. If booking less than 7 days in advance a pre-trip approval must be obtained from your immediate supervisor and an Executive Committee member prior to booking the reservation. Corporate Travel will advise you of change restrictions and fees as well as non-refundable costs associated with advanced bookings and restricted fares. Each traveler should assess the risk of change to travel plans when booking his/her flight.

6.6 Changes Enroute
Changes to air travel enroute are to be arranged through Corporate Travel or Emergency Services Hotline. The telephone numbers needed to make changes are on the travel itinerary provided with the airline ticket.

6.7 Unused REFUNDABLE Air Tickets
All unused airline tickets should be forwarded to Corporate Travel immediately. Corporate Travel will process the unused tickets and post credit to the card on which charges were originally made.

6.8 Unused NON-REFUNDABLE Air Tickets
While the airline rules change periodically, generally, unused non-refundable tickets may be turned in for credit toward the purchase of another ticket if the following three criteria are met: 1) must be done within 12 months, 2) must be the same airline, 3) must be the same individual traveler (and often the same origination and destination).

If you have a non-refundable ticket, this must be documented in the expense report, and the entire ticket should be returned to the travel agency. It is the employee's responsibility to try to utilize this ticket during any future business travel. Any subsequent credits received must be fully documented on the expense report.

6.9 Classes of Air Travel

Domestic/Continental Travel: (within your own country/continent e.g. less than 8 hour flight segment)
All employees are expected to travel in economy (coach). Requires a Pre Trip approval by your immediate supervisor.

Intercontinental: (Segment greater than 8 hours in duration or from one continent to another - over water)
For a flight segments greater than 8 hours in duration, or from one continent to another, employee grade 16 and above, business class is allowed. All Intercontinental travel with a flight segment greater than 8 hours or from one continent* to another requires a Pre Trip approval by your immediate supervisor and an Executive Committee member.

These rules apply with the following exceptions:

• Division Presidents and heads of Group functions may further restrict business class travel at their discretion.
• Employee is disabled and requires special accommodations. Documentation of this approval is required to be submitted along with receipt of airline ticket.

Note: First class airfare will not be reimbursed.

6.10 Transcontinental Travel
Employees may not book a transcontinental flight unless they are staying for a minimum of three full working days at their destination. Any exceptions to this policy must have advance approval of the business unit's group President.

6.11 Frequent Flyer Programs
Traveling employees may retain frequent flyer benefits, such as using frequent flyer miles earned from traveling on business for personal travel.  However, participation in these programs will not result in any incremental cost to the Company.

Booking a more expensive, full-price coach seat in order to use an upgrade certificate or sticker when less expensive coach fares are available is not permitted.

Employees will not be reimbursed for any free tickets received from air mileage programs and used for business purposes. It is the company's preference that points or mileage earned through business travel be used toward upgrades or future business travel tickets.

Cost and business requirements, not membership in a particular frequent flyer program, must be the determinant when booking a flight.

6.12 Airline Clubs
The Company will not reimburse travelers the cost of membership to an Airline Club.

6.13 Privately Owned Planes
Air travel is permissible only on commercial airlines. Use of privately owned or rented aircraft on Company business is prohibited without the express advance approval of the President of Harman International. No employee may operate any aircraft on Company business.

6.14 Lost or Stolen Tickets
Tickets must be treated with the same care as cash. If a ticket is lost or stolen, immediately report the loss to the airline or the approved travel agency.

Harman International carries travel accident insurance for accidental death or dismemberment for all employees traveling on company business. Please consult your Human Resources Department for more information.

Through the corporate billing program, all employees traveling on company business who have charged their airline tickets to the corporate card are covered for accidental death or injury. Employees should consult the corporate card agreement for details concerning the business travel accident insurance coverage. There is no reimbursement for additional insurance purchased by the employee.

Airlines frequently offer special reduced fares which require a traveler to stay over a weekend night. Employees who elect to extend a business trip over a weekend to take advantage of the discounted fares will be reimbursed for reasonable lodging and meals for the employees only under the following conditions:

1. The extended stay must be approved by the employee's supervisor.
2. Reimbursement for additional lodging and meal costs cannot exceed the savings on the airfare (the savings on airfare is generally printed on the itinerary included with the airline tickets).
3. Travel is limited to the area where business was or will be conducted.

Transportation at Destination Overview
Employees are expected to use the most economical facilities appropriate under the circumstances, and are therefore encouraged to use, in order of desirability, 1) courtesy cars , 2) airport limousines or buses , 3) taxis , 4) rental cars .

See also:
Rail
Personal car

9.1 Courtesy Cars
Many hotels have courtesy cars, which will pick up and return a traveler to an airport at no charge. Employees are urged to take advantage of this free service whenever possible.

9.2 Airport Limousine or Bus
This is the second least expensive mode of transportation from the airport to a hotel and should be used whenever possible. At major airports (New York, Chicago, St. Louis, Dallas, etc.) such services are as quick as a taxi and dramatically less expensive. Chauffeured limousines are much more expensive and are not included in this category. As a general rule, chauffeured limousines are not reimbursable and require supervisory approval.

9.3 Taxis
Where airport limousines or buses are not available, a taxi is often the most economical and convenient mode of transportation. The use of taxis is preferred over rental cars, but judgment must be used by the employee.

9.4 Rental Cars

9.5 Rail
All rail transportation must be in economy class in the United States. Sleeping accommodations, when necessary, are limited to a roomette or equivalent.

9.6 Personal Car
Employees may utilize personal cars for business travel when other transportation is unavailable or uneconomical. The use of personal cars for business will be reimbursed at the current mileage allowance. This mileage allowance covers all auto cost (e.g. gasoline, repairs, insurance, etc.) other than parking and tolls. The total cost for use of a personal car on a business trip is limited to the economy airfare for the same destination(s).

Company employees are required to provide their own transportation to/from and during work. Employees will not be reimbursed for rental of vehicles in their home cities.

Mileage must be calculated from the employee's base (office) location of where the trip originates.

10.1 Hotel Selection
Hotel reservations should be made through Corporate Travel. The Company may have negotiated preferred rates with certain hotels. Employees are to utilize these hotels whenever feasible. In destinations where Harman negotiated rates are not available, traveler is required to select a moderately priced hotel.

10.2 Room Type
A single room with a private bath in a moderately priced business class hotel or motel is the corporate standard. "Business class" rooms, either on a separate floor or with business office equipment, will not be reimbursed.

10.3 Cancellation
Hotel reservations may be "guaranteed for late arrival" when necessary, using the employee's corporate card. It is the employee's responsibility to cancel hotel reservations if there is a change in travel plans. This should be done by 4 PM. The employee should personally cancel the reservation directly with the hotel. He/she should then obtain the name of the person taking the cancellation and the cancellation number. "No show" bills will not be reimbursable except in an unusual circumstance when job scheduling requirements result in a cancellation penalty.

10.4 Payment and Documentation
Lodging charges are to be billed to the employee's corporate card. The original, itemized hotel bill is required documentation for reimbursement of lodging charges. Detailed hotel billings must be submitted to Accounting. Charges for non-lodging services such as telephone, meals, etc. should be identified and listed separately on the expense report. Charges that are personal in nature (movies, health club fees etc.) should be identified and deducted. Employees will not be reimbursed for excessive "Mini-Bar" charges (not to exceed $10.00 per day) or for gifts, sundries or clothing purchased from hotel shops or concessions and charged to the room. All telephone calls must be charged to the corporate telephone calling card. Long distance telephone calls that are charged to the hotel room are costly to the company.

10.5 Hotel Rooms Charged to Company
No hotel room charges should be billed directly to the Company.

10.6 Questionable Hotel Charges
The hotel rate should be indicated on the employee's itinerary from the travel agency. It is the responsibility of the employee to verify that the rate shown on the itinerary is the rate charged by the hotel. Employees should reconfirm upon check-in that Harman is receiving the lowest rate available. Any unusual items should be explained when completing the expense report.

10.7 Third-Party Lodging
While traveling on business, an employee may be provided lodging without charge by a fellow employee, business acquaintance, friend or relative. In such situations, it may be appropriate to offer the host or hostess a token of appreciation. A maximum of $75 per host for flowers, a meal or a gift certificate is reimbursable, provided a receipt is obtained and attached to the expense report.

11.1 Personal Meals/Breakfast, Lunch, Dinner
Employees will be reimbursed for the actual cost of meals incurred, including reasonable tips, in the course of approved company business. Meal costs must be appropriate to the nature of the business. Current per diem cost guidelines by individual U.S. cities are available from the Director of Corporate Travel. Every request for meal reimbursement must be accompanied by the original charge card or cash receipt. The "tear tab" from the restaurant receipt is not acceptable.

Meal expense is reimbursable, provided that the restaurant is reasonable priced for the locale and that the expense is incurred while conducting company business under one of the following conditions:

• The business travel requires overnight lodging;
• The business entertainment is reasonable and necessary to the conduct of business.
• The group event requires the employee's attendance.

When having a meal with other Harman employees, for the purpose of internal controls the highest ranking employee present should pay the bill.

The original cash register receipt must support expenses for business meals. Tear tab receipts should be avoided.

Tax Requirements. To be in compliance with current tax regulations, the following information must be included on employee expense reports as support for all business meal and entertainment expenses: 1) Name, title and company of all attendees 2) Name and location of the establishment where the event took place 3) Amount and date of expense 4) Specific business topic discussed 5) In the case of Entertainment expenses, the specific time the business discussion took place (i.e., before, during or after the event).

11.3 Alcohol
As a general rule, alcoholic beverages purchased by an employee are not reimbursable. Further, it is against company policy to reimburse employees for drinks in lieu of meals. However, the Company recognizes that alcoholic beverages during a business meal or when entertaining may be appropriate. It is expected that alcohol consumption be kept at or below a moderate level and in no event be excessive. Consumption of alcohol during normal business hours or on company premises is prohibited.

11.4 Entertainment Expenses
Entertainment expenses include events such as theater and sporting events when a business discussion takes place immediately before, during or immediately after the event. Entertainment tickets must be used by the employee and customer together. The number of Harman employees attending must be kept to a minimum and the venue/event must take place in an environment that is conducive to the business objective. Employees should use their best judgment when incurring entertainment and gift expenses when determining if amounts are lavish or extravagant. Note: Entertainment expenses relating to Gentlemen's clubs and like establishments will not be reimbursed.
 

11.5 Non-Entertainment Expenses
The Company will not reimburse entertainment that is not directly related to business activities. Generally, entertainment which does not occur on the same day as the business activity will not be considered related to the business activity.

11.6 Receipt Requirements
To be in compliance with tax requirements, the following information must be included on employee expense reports as support for all business meals and entertainment expenses:

• A receipt for entertainment expenses regardless of cost or form of payment;
• Name, title and company of all attendees;
• Name and location of establishment where event took place;
• Amount and date of expense;
• Specific business topic discussed;
• In case of entertainment expenses, the specific time the business discussion took place. (i.e., before, during or after the event);
• A handwritten restaurant "tear-tab" receipt is not acceptable;
• Failure to comply with tax reporting requirements may result in a loss of expense deductibility to the Company, and in unforeseen tax liability to the employee.

Tax accounting requirements may differ outside the U.S. Expense report submitters should follow guidance from their local accounting office regarding what receipts are required to support business expenses.

12.1 Business Calls
The Company will pay for local and long distance business calls made outside a Company office provided the calls are substantiated by a listing, hotel bill, telephone bill, or downloaded telephone corporate card charge. When possible, office phones should be used to avoid hotel surcharges.

12.2 Personal Calls
The Company will pay charges for personal long distance calls not exceeding $10/day while traveling on business. These calls must be substantiated in the same manner as business calls. When possible, office phones should be used to avoid hotel surcharges.

12.3 Calling Cards
Phone calls should be made using the employee's company-issued calling card. Direct dialing from a hotel room adds 75-100% to a typical long distance call and should be avoided.

If an employee has not yet obtained a corporate card and calls are made using the employee's own provider, a copy of the phone bill must be submitted and the expense report should include an explanation identifying:

• The business purpose or topic discussed
• Name, title and company of all participants in the call

12.5 Air Phone
As a general rule, this expense is not reimbursable and requires supervisory approval.

12.6 Rental Cell Phone
As a general rule, this expense is not reimbursable and requires supervisory approval.

12.7 Rail Phone
As a general rule, this expense is not reimbursable and requires supervisory approval.

In-Town Expenses Overview
In-town expenses are expenditures incurred by the employee in his/her home city for business meals, entertainment, in-town transportation, telephone expenses and other items necessary for conducting business. See the following guidelines, applicable for in-town expenses:

See also:
In-town transportation
After-hours transportation - major metropolitan areas
In-town meals

13.1 In-Town Transportation
When traveling within the home city, employees will be reimbursed for authorized local transportation expenses, including taxis and use of personal cars, if required for business purposes. The use of personal cars for local business transportation will be reimbursed at the current mileage allowance.

To determine reimbursable mileage (allowable under tax authority guidelines), employees are to use the following criteria:

• Mileage from an employee's home to his/her primary office location is not reimbursable. This is considered commuting by the tax authorities and is not a company business expense.
• For travel to business, training or airport locations that are not the employee's primary office location; the number of miles traveled greater than those to the primary office location will be reimbursed.

13.3 In-Town Meals or Meals With Others
"In-town" meals are meals purchased in the immediate vicinity of the employee's location and which qualify for reimbursement. These include meals taken during authorized extended overtime work, or while attending professional association or business meetings. These meals should be taken at reasonable and moderately priced restaurants.

When having a meal with other Harman employees, for the purpose of internal controls the highest ranking employee present should pay the bill.

Business Gifts Overview
The Company recognizes that in certain circumstances it may be appropriate to give or accept business courtesies on occasion as a means of fostering good will.  Harman employees should exercise caution when exchanging gifts to avoid any implication that unfair or preferential treatment will be granted or received in their course of dealing on behalf of the company.  A basic consideration before accepting gifts should be that public disclosure would not be embarrassing to the company or the recipient. With the foregoing in mind, employees should exercise good judgment before accepting any business courtesies from those with whom the company does business and must comply with the approval and disclosure requirements set forth below. Harman employees should never solicit business courtesies of any kind from any business contact.  When gift expenditures are submitted for reimbursement, the cost and description of the item and the business relationship of the recipient must be furnished with the report.

See also:
Customer gifts
Contributions or donations
Employee gifts

Gift Policy Points to Consider: