Lexmark International, Inc.
Exhibit
10.1
Lexmark
International, Inc.
2007-2009
Long-Term Incentive Plan
This
2007-2009 Long-Term Incentive Plan (the "2007-2009 LTIP") Agreement
(“Agreement”) by and between Lexmark International, Inc., a Delaware corporation
(the "Company"), and the person specified on the signature page (the
"Participant") is entered into as of February 21, 2007.
This
Agreement is only a summary of the principal terms governing the 2007-2009
LTIP.
The 2007-2009 LTIP is subject in all respects to the terms of the Lexmark
International, Inc. Stock Incentive Plan, as Amended and Restated April 30,
2003
(the "Plan"). In the event of any conflict between the terms of this Agreement
and the terms of the Plan, the terms of the Plan shall control. It is important
that the Participant read and understand the Plan and not rely solely on
the
brief description that follows. All capitalized terms used but not defined
herein shall have the meaning set forth in the Plan.
Overview
The
2007-2009 LTIP is designed to reward the achievement of specific performance
objectives over a three-year period. The Compensation and Pension Committee
of
the Board of Directors of the Company (the "Committee") established the
performance objectives and performance measures set forth below for the
performance period beginning January 1, 2007 and ending December 31, 2009
(the
"Performance Period").
Depending
upon the Company's attainment of the performance objectives and certain
financial performance measures of the Company's peers, the Participant may
be
eligible to receive a payment under the 2007-2009 LTIP, as set forth
below.
Plan
Measurements
For
the
Performance Period, the Committee has established the following performance
measures based on the Company's strategic plan for the Performance
Period:
[Performance
Measures - 2009 Operating Income and Branded Hardware Market Share]
Branded
Hardware Market Share attainment will be calculated by aggregating the points
achieved in each hardware market segment as outlined in the following tables.
The market share of each hardware market segment will be measured at the
end of
the Performance Period based on market research data reported by IDC or such
other market research provider as determined to be appropriate by the Committee
at such time, in its sole discretion.
[Branded
Hardware Market Segments]
Target
Opportunity
The
2007-2009 LTIP awards are denominated in cash, but in the Committee's sole
discretion may be paid in cash, the Company’s Class A Common Stock or a
combination of cash and the Company’s Class A Common Stock. For the Performance
Period, your target award is _____________.
The
chart
below and the examples in Attachment A illustrate how the 2007-2009 LTIP
awards
will be calculated. The level of attainment for Operating Income is not linked
to the level of attainment for Branded Hardware Market Share. As a result,
the
level of attainment on each performance measure may independently generate
a
payment to Participants based on its achievement.
|
Target
Opportunity
|
Minimum
|
Target
|
Maximum
|
|
Operating
Income
|
15%
of Target
|
50%
of Target
|
100%
of Target
|
|
Branded
Hardware Market Share
|
15%
of Target
|
50%
of Target
|
150%
of Target
|
Committee
Discretion
The
Committee may use its sole discretion in determining any payment, or no payment,
to Participants under the 2007-2009 LTIP based on any factors that it deems
appropriate.
The
Committee intends to review and approve the Company's business results and
Branded Hardware Market Share position as compared to the 2007-2009 LTIP
performance measures and, if applicable, the Company's ROIC compared to the
peer
companies included in the index stated above following the end of the three-year
Performance Period. These reviews are expected to occur in a 2010 Committee
meeting. Payments will be made in 2010. Payments will be made only after
the
Committee approval has occurred.
Termination
of Employment
Except
in
the event of the death, long-term disability or retirement of the Participant,
the Participant must be employed at the end of the Performance Period (December
31, 2009) to receive a payout. If the Participant should die, become long-term
disabled or retire during the Performance Period, the payout, if any is achieved
based on actual performance of the Company and its peers over the Performance
Period, will be prorated and paid out after the end of the Performance
Period.
Forfeiture
of the Award
The
Participant acknowledges that this opportunity for a long-term incentive
award
has been granted as an incentive to the Participant to remain employed by
the
Company or one of its Subsidiaries and to exert his or her best efforts to
enhance the value of the Company and its Subsidiaries over the long-term.
Accordingly, the Participant agrees that if he or she (a) within 12 months
of
termination of employment with the Company, or its Subsidiaries, accepts
employment with a competitor of the Company or one of its Subsidiaries or
otherwise engages in competition with the Company or one of its Subsidiaries,
or
(b) within 36 months of termination of employment with the Company, or its
Subsidiaries, directly or indirectly, disrupts, damages, interferes or otherwise
acts against the interests of the Company or one of its Subsidiaries, including,
but not limited to, recruiting, soliciting or employing, or encouraging or
assisting the Participant's new employer or any other person or entity to
recruit, solicit or employ, any employee of the Company or one of its
Subsidiaries without the Company's prior written consent, which may withheld
in
its sole discretion, or (c) within 36 months of termination of employment
with
the Company, or its Subsidiaries, disparages, criticizes, or otherwise makes
any
derogatory statements regarding the Company or its Subsidiaries or their
directors, officers or employees, or (d) discloses or otherwise uses
confidential information or material of the Company or one of its Subsidiaries,
each of these constituting a harmful action, then the Participant shall
immediately repay to the Company the full amount of the award received under
the
terms and conditions of the 2007-2009 LTIP. The Committee shall have the
right
not to enforce the provisions of this paragraph with respect to the
Participant.
Participant
agrees to be fully liable for any remedies available at law or in equity,
including, but not limited to, injunctive relief, for any breach of this
above
described covenant, promise and agreement. Participant agrees to reimburse
the
Company for all costs and expenses, including attorneys’ fees, incurred by the
Company in enforcing the obligations of Participant. This entire provision
shall
survive the termination of the Agreement and, in no manner, shall the remedies
described herein be considered as the Company’s exclusive or entire remedy for
Participant’s breach, non-compliance or violation of this Agreement or any other
agreement that Participant may have entered into with the Company.
Tax
Withholding
In
the
event that the payout of the award is made in Class A Common Stock of the
Company, delivery of such stock shall not be made unless and until the
Participant, or, if applicable, the Participant’s beneficiary or estate, has
made appropriate arrangements for the payment to the Company of an amount
sufficient to satisfy any applicable U.S. federal, state and local and non-U.S.
tax withholding or other tax requirements, as determined by the Company.
To
satisfy the Participant’s applicable withholding and other tax requirements, the
Company may, in its sole discretion, withhold a number of shares of Class
A
Common Stock having an aggregate Fair Market Value on the payout date equal
to
the applicable amount of such withholding and other tax requirements, subject
to
any rules adopted by the Committee or required to ensure compliance with
applicable law, including, but not limited to, Section 16 of the Securities
Exchange Act of 1934, as amended. Any cash payment made under this Agreement
shall be made net of any amounts required to be withheld or paid with respect
thereto (and with respect to any shares of Class A Common Stock delivered
therewith) under any applicable U.S. federal, state and local and non-U.S.
tax
withholding and other tax requirements.
Transferability
Unless
otherwise provided in accordance with the provisions of the Plan, the award
granted pursuant to this Agreement may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated by the Participant, other
than
by will or the laws of descent and distribution. The term “Participant” as used
in this Agreement shall include any permitted transferee.
Interpretation;
Construction
All
powers and authority conferred upon the Committee pursuant to any term of
the
Plan or this Agreement shall be exercised by the Committee, in its sole
discretion. All determinations, interpretations or other actions made or
taken
by the Committee pursuant to the provisions of the Plan or this Agreement
shall
be final, binding and conclusive for all purposes and upon all persons and,
in
the event of any judicial review thereof, shall be overturned only if arbitrary
and capricious. The Committee may consult with legal counsel, who may be
counsel
to the Company or any of its subsidiaries, and shall not incur any liability
for
any action taken in good faith in reliance upon the advice of counsel.
Amendment
The
Committee shall have the right to alter or amend the 2007-2009 LTIP and this
Agreement in its sole discretion, from time to time, as provided in the Plan
in
any manner for the purpose of promoting the objectives of the Plan, provided
that no such amendment shall impair the Participant's rights under the 2007-2009
LTIP without the Participant's consent. Subject to the preceding sentence,
any
alteration or amendment to the 2007-2009 LTIP by the Committee shall, upon
adoption by the Committee, become and be binding and conclusive. The Company
shall give written notice to the Participant of any such alteration or amendment
of the 2007-2009 LTIP as promptly as practical after the adoption. This
Agreement may also be amended in writing signed by both an authorized
representative of the Company and the Participant.
No
Guarantee of Employment or Future Incentive Awards
Nothing
in the Plan or the 2007-2009 LTIP shall be deemed to:
(a)
interfere with or limit in any way the right of the Company or any Subsidiary
to
terminate the Participant's employment at any time for any reason, with or
without cause;
(b)
confer upon the Participant any right to continue in the employ of the Company
or any Subsidiary; and
(c)
provide Participant the right to receive any Incentive Awards under the Plan
in
the future or any other benefits the Company may provide to some or all of
its
employees.
Internal
Revenue Code Section 409A
Assignability
Neither
this Agreement or any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by the Company or the Participant
without the prior consent of the other party.
Applicable
Law
The
2007-2009 LTIP and this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the law
that
might be applied under principles of conflict of laws and excluding any conflict
or choice of law rule or principle that may otherwise refer construction
or
interpretation of the 2007-2009 LTIP or this Agreement to the substantive
law of
another jurisdiction.
Jurisdiction
The
Participant hereby irrevocably and unconditionally submits to the jurisdiction
and venue of the state courts of the Commonwealth of Kentucky and of the
United
States District Court of the Eastern District of Kentucky located in Fayette
County, Kentucky, and any appellate court from any thereof, in any action
or
proceeding arising out of or relating to this Agreement, or for recognition
or
enforcement of any judgment, and each of the parties hereby irrevocably agree
that all claims in respect of any such action or proceeding may be heard
and
determined in such Kentucky state or United States federal courts located
in
such jurisdiction. Each of the parties hereto agrees that a final judgment
in
any such action or proceeding shall be conclusive and may be enforced in
other
jurisdictions by suit on the judgment or in any other manner provided by
law.
The parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying
of venue of any such proceeding brought in such a court and any claim that
any
such proceeding brought in such a court has been brought in an inconvenient
forum. Participant further agrees that any action related to, or arising
out of,
this Agreement shall only be brought by Participant exclusively in the federal
and state courts located in Fayette County, Kentucky. Nothing in this Agreement
shall affect any right that the Company may otherwise have to bring any action
or proceeding relating to this Agreement in the courts of any jurisdiction.
Section
and Other Headings, Etc.
The
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement. In this Agreement all references to “dollars” or “$” are to United
States dollars.
Severability
If
any
provision of this Agreement, the 2007-2009 LTIP or the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions of this Agreement, the 2007-2009 LTIP or the Plan, and
the
Agreement, the 2007-2009 LTIP and the Plan shall be construed and enforced
as if
such provision had not been included.
Survival
Any
provision of this Agreement which contemplates performance or observance
subsequent to any termination or expiration of this Agreement shall survive
any
termination or expiration of this Agreement and continue in full force and
effect.
Counterparts
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original and all of which together shall constitute one and
the
same instrument.
Please
sign and date this Agreement to acknowledge that you have read the terms
of this
Agreement and understand that this 2007-2009 LTIP award is subject to the
provisions of the Plan and that you agree to the terms and conditions contained
herein and therein.
LEXMARK
INTERNATIONAL, INC.
By:
_________________________________
Vice
President of Human Resources
EXECUTIVE:
By:
(Name)
_________________________________
(sign
your name)
Date:_________________________________
_________________________________
(Beneficiary
Name)
Attachment
A - Long-Term Incentive Plan Examples
[2007-2009
LTIP Examples]
