Exhibit 10.3
Form for Employees
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Stock Option Agreement
This STOCK OPTION AGREEMENT (the “Agreement”) effective as of
«GrantDt» is between Imation Corp., a Delaware corporation (the “Company”), and
«Name», an employee of the Company or one of its Affiliates (the
“Participant”), pursuant to and subject to the terms and conditions of the
Imation Corp. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the
“Plan”).
The Company desires to provide the Participant with an opportunity to
purchase shares of the Company’s common stock, par value $.01 per share (the
“Common Stock”), as provided in this Agreement in order to carry out the
purpose of the Plan. The purpose of this Agreement is to evidence the terms
and conditions of a Non-Qualified Stock Option granted to the Participant under
the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and the Participant hereby agree
as follows:
1. Grant of Non-qualified Stock Option. Effective «GrantDt» (the
“Effective Date”), the Company granted to the Participant the right and option
to purchase all or any part of an aggregate of «Shares» («NbrShares») shares of
Common Stock on the terms and conditions set forth in this Agreement and in
accordance with the terms of the Plan (the “Option”). The Option is not
intended to be an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended.
2. Purchase Price. The purchase price of the shares of Common Stock
subject to the Option shall be «Price» per share.
3. Term of the Option. The term of the Option (the “Option Period”)
shall be for a period of seven (7) years from the Effective Date, terminating
at the close of business on the seventh anniversary of the Effective Date (the
“Expiration Date”) or such shorter period as provided in Section 6 hereof.
4. Vesting of the Option. Subject to Section 6 hereof, the Option
may be
exercised at any time or from time to time during the Option Period, as to any
part or all of the shares covered thereby in accordance with the following
vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any
time
on or after the first anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time
on or
after the second anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any
time
on or after the third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any
time on or after the fourth anniversary of the Effective Date.
5. Transferability. The Option may not be assigned, transferred (other
than by will or the laws of descent and distribution), pledged,
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hypothecated
(whether by operation of law or otherwise) or otherwise conveyed or encumbered, and
shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions of the Plan or this Agreement, or the
levy of any execution, attachment or similar process upon the Option, shall be
void and unenforceable against the Company and shall constitute an immediate
cancellation of the Option.
6. Effect of Termination of Employment.
(a) In the event the Participant shall cease to be employed by the Company
or an Affiliate for any reason other than Termination for Cause, Retirement,
death or Disability, the Participant may exercise the Option to the extent of
(but only to the extent of) the number of vested shares the Participant was
entitled to purchase under the Option on the date of such termination of
employment, and the exercise of the Option to that limited extent may be
effected at any time within thirty (30) days after the date of such termination
of employment but not thereafter; provided, however, that the Option may not be
exercised after the Expiration Date.
(b) In the event the Participant shall cease to be
employed by the
Company or an Affiliate upon Termination for Cause, the Option shall be
terminated as of the date of such termination.
(c) Except as otherwise provided in Sections 6(b) and
6(d), in the
event the Participant shall cease to be employed by the Company or an Affiliate
because of Retirement, the Option, to the extent not previously exercised or
forfeited, shall be exercisable to the extent of (but only to the extent of)
the number of vested shares the Participant was entitled to purchase under the
Option on the date of the Participant’s Retirement, and the exercise of the
Option to that limited extent may be effected at any time within three (3)
years after the date of the Participant’s Retirement, but not thereafter;
provided, however, that the Option may not be exercised after the Expiration
Date. If a Participant who has thus retired dies within three (3) years after
the date of the Participant’s Retirement and prior to the Expiration Date, the
exercise of the Option to the limited extent provided for in the first sentence
of this Section 6(c) may be effected by the Participant’s estate or by any
Person or Persons to whom the Option has been transferred by will or the
applicable laws of descent and distribution at any time within two (2) years
after the date of the Participant’s death, but not after the Expiration Date.
(d) In the event the Participant dies or is deemed to suffer a Disability
while employed by the Company or an Affiliate, the Option, to the extent not
previously exercised or forfeited, shall be exercisable to the extent of (but
only to the extent of) the number of vested shares the Participant was entitled
to purchase under the Option on the date of the Participant’s death or
Disability. In the event of Participant’s death, the exercise of the Option to
the limited extent provided for in the first sentence of this Section 6(d) may
be effected by the Participant’s estate or by any Person or Persons to whom the
Option has been transferred by will or the applicable laws of descent and
distribution at any time within two (2) years after the date of the
Participant’s death, but not after the Expiration Date. In the event of the
Participant’s Disability, the exercise of the Option to the limited extent
provided for in the first sentence of this Section 6(d) may be effected by the
Participant at any time within two (2) years after the date of the
Participant’s Disability, but not after the Expiration Date.
7. Anti-Dilution Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
shares of Common Stock, other securities or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares or other
securities of the Company, issuance of warrants or other rights to purchase
shares of Common Stock or other securities of the Company or other similar
corporate transaction or event affects the shares of Common Stock covered by
the Option such that an adjustment is determined by the Committee to be
appropriate in order to prevent
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dilution or enlargement of the benefits or potential benefits intended to be made available under this
Agreement, then the Committee shall, in such manner as it may deem equitable,
in its sole discretion, adjust any or all of the number and type of the shares
covered by the Option and the exercise price of the Option.
8. Manner of Exercise. Subject to the terms and conditions of this
Agreement, the Option may be exercised by delivering written notice to the
Stock Plan Administrator pursuant to procedures prescribed by the Company from
time to time. Such notice shall state the election to exercise the Option and
the number of shares in respect of which it is being exercised and shall be
signed by the Participant or such other Person entitled to exercise the Option.
Such notice shall be accompanied by payment of the full purchase price of such
shares and applicable federal, state, local and foreign withholding taxes, if
any. The Participant shall deliver to the Company consideration with a value
equal to such purchase price and applicable withholding taxes, if any, payable
in whole or in part as follows: (a) cash, check, bank draft, money order or
wire transfer payable to the order of the Company, (b) shares of Common Stock
owned by the Participant at the time of exercise and/or (c) in any other form
of valid consideration that is acceptable to the Committee in its sole
discretion. The value of any share of Common Stock delivered in payment of all
or part of the purchase price or applicable withholding taxes upon the exercise
of the Option shall be the last sale price of a share of Common Stock on the
New York Stock Exchange on the date the Option shall be exercised or, if such
date is not a day on which trading occurs generally on the New York Stock
Exchange, on the immediately preceding date on which such trading occurred. In
the event that the Option shall be exercised pursuant to Section 6(c) or 6(d)
hereof by any Person or Persons other than the Participant, such notice shall
be accompanied by appropriate proof of the right of such Person or Persons to
exercise the Option. If the Participant fails to pay the full purchase price
of such shares or applicable withholding taxes, then the Option, and right to
purchase such shares, may be forfeited by the Participant, in the sole
discretion of the Committee. The Option may be exercised in whole or in part
to the extent the Option is exercisable in accordance with the terms of this
Agreement, but only with respect to full shares of Common Stock. No fractional
shares of Common Stock shall be issued upon exercise of the Option, but the
Company will pay, in lieu thereof, the Fair Market Value of such fractional
share.
9. Issuance of Shares. Upon exercise of all or any portion of the
Option, the Company will cause to be issued to the Participant the shares of
Common Stock purchased. Notwithstanding anything to the contrary in this
Agreement, the Company’s obligation to issue shares of Common Stock shall be
subject to (i) all applicable laws, rules and regulations and such approvals by
any governmental agencies as may be required, including, without limitation,
the effectiveness of a registration statement under the Securities Act of 1933,
as amended, and (ii) the condition that such shares shall have been duly listed
on the New York Stock Exchange. The Participant shall not have any of the
rights and privileges of a shareholder of the Company with respect to the
shares of Common Stock subject to this Option unless and until such shares are
issued to the Participant upon due exercise of the Option.
10. Taxes. The Participant acknowledges that the Participant will
consult with the Participant’s personal tax adviser regarding the income tax
consequences of exercising the Option or any other matters related to this
Agreement. In order to comply with all applicable federal, state, local or
foreign income tax laws or regulations, the Company may take such action as it
deems appropriate to ensure that all applicable federal, state, local or
foreign payroll, withholding, income or other taxes, which are the
Participant’s sole and absolute responsibility, are withheld or collected from
the Participant.
11. Definitions. Terms not defined in this Agreement shall have the
meanings given to them in the Plan, and the following terms shall have the
following meanings when used in this Agreement:
(a) “Committee” means the Compensation Committee of the Board of
Directors of the Company or such other committee of Directors designated
by the Board of Directors to administer the Plan.
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(b) “Disability” shall be as defined under the Imation Corp. Long
Term Disability Income Protection Plan.
(c) “Retirement” means retirement as defined under the Imation Corp.
Cash Balance Pension Plan.
(d) “Stock Plan Administrator” means the Committee or any Director,
officer or agent of the Company designated by the Committee from time to
time.
(e) “Termination for Cause” means termination of Participant’s
employment with the Company or an Affiliate for the following acts: (i)
the Participant’s gross incompetence or substantial failure to perform his
or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to
the Company’s reputation, as determined by the Company’s Board of
Directors in its sole and absolute discretion (such misconduct may
include, without limitation, insobriety at the workplace during working
hours or the use of illegal drugs), (iii) failure to follow directions of
the Company’s Board of Directors that are consistent with the
Participant’s duties, (iv) the Participant’s conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral
turpitude, or the entry of an order duly issued by any federal or state
regulatory agency having jurisdiction in the matter permanently
prohibiting the Participant from participating in the conduct of the
affairs of the Company or (v) any breach of this Agreement that is not
remedied within thirty (30) days after receipt of written notice from the
Company specifying such breach in reasonable detail.
12. Governing Law. The internal law, and not the law of conflicts, of
the State of Delaware will govern all questions concerning the validity,
construction and effect of this Agreement.
13. Plan Provisions. This Agreement is made under and subject to the
provisions of the Plan, and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference or conflict between the
provisions of this Agreement and the provisions of the Plan, the provisions of
the Plan will govern. By accepting this Option, the Participant confirms that
the Participant has received a copy of the Plan and represents that the
Participant is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all the terms and provisions of the Plan.
14. No Right to Continue Service or Employment. Nothing herein shall be
construed as giving the Participant the right to continue in the employ or to
provide services to the Company or any Affiliate, whether as an employee or as
a consultant or otherwise, or interfere with or restrict in any way the right
of the Company or any Affiliate to discharge the Participant, whether as an
employee or consultant or otherwise, at any time, with or without cause. In
addition, the Company or any Affiliate may discharge the Participant free from
any liability or claim under this Agreement, unless otherwise expressly provide
herein.
15. Entire Agreement. This Agreement together with the Plan supersede
any and all other prior understandings and agreements, either oral or in
writing, between the parties with respect to the subject matter hereof and
constitute the sole and only agreements between the parties with respect to
said subject matter. All prior negotiations and agreements between the parties
with respect to the subject matter hereof are merged into this Agreement. Each
party to this Agreement acknowledges that no representations, inducements,
promises or agreements, orally or otherwise, have been made by any party or by
anyone acting on behalf of any party, which are not embodied in this Agreement
or the Plan and that any agreement, statement or promise that is not contained
in this Agreement or the Plan shall not be valid or binding or of any force or
effect.
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16. Modification. No change or modification of this Agreement shall be
valid or binding upon the parties unless the change or modification is in
writing and signed by the parties. Notwithstanding the preceding sentence, the
Plan, this Agreement and the Option may be amended, altered, suspended,
discontinued or terminated to the extent permitted by the Plan.
17. Shares Subject to Agreement. The shares covered by the Option shall
be subject to the terms and conditions of this Agreement. Except as otherwise
provided in Section 7, no adjustment shall be made for dividends or other
rights for which the record date is prior to the issuance of such shares. The
Company shall at all times during the Option Term reserve and keep available
such number of shares of Common Stock as will be sufficient to satisfy the
requirements of this Agreement.
18. Severability. In the event that any provision that is contained in
the Plan or this Agreement is or becomes invalid, illegal or unenforceable in
any jurisdiction or would disqualify the Plan or this Agreement for any reason
and under any law as deemed applicable by the Committee, the invalid, illegal
or unenforceable provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without
materially altering the purpose and intent of the Plan or this Agreement in the
discretion of the Committee, such provision shall be stricken as to such
jurisdiction or Option, and the remainder of the Plan or this Agreement shall
remain in full force and effect.
19. Headings. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision hereof.
20. Participant’s Acknowledgments. The Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee or the Board of Directors of the Company, as appropriate, upon any
questions arising under the Plan or this Agreement. Notwithstanding any of the
provisions hereof, the Participant hereby agrees that the Participant will not
exercise the Option granted hereby, and that the Company will not be obligated
to issue any shares to the Participant hereunder, if the exercise thereof or
the issuance of such shares shall constitute a violation by the Participant or
the Company of any provision of any law or regulation of any governmental
authority. Any determination in this connection by the Company, including the
Board of Directors of the Company or the Committee, shall be final, binding and
conclusive. The obligations of the Company and the rights of the Participant
are subject to all applicable laws, rules and regulations.
21. Parties Bound. The terms, provisions, and agreements that are
contained in this Agreement shall apply to, be binding upon, and inure to the
benefit of the parties and their respective heirs, executors, administrators,
legal representatives and permitted successors and assigns, subject to the
limitation on assignment expressly set forth herein. This Agreement shall have
no force or effect unless it is duly executed and delivered by the Company.
The Company has caused this Agreement to be signed and delivered as of the
date set forth above.
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