Lexmark International, Inc.
Exhibit
10.8
Lexmark
International, Inc.
2007-2009
Long-Term Incentive Plan
Agreement
(As
Amended and Restated Effective as of December 17, 2007)
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"), as entered into as of February 21, 2007, is hereby amended and
restated, effective as of December 17, 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:
[Intentionally
Omitted]
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.
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1
[Intentionally
Omitted]
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
|
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2
Committee
Discretion
The
Committee may use its sole discretion in determining the amount of 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 only after the Committee approval has
occurred, and any such payments will be made in 2010 and no later than two and
one-half months after the end of the three-year Performance Period.
Termination of
Employment
Except in
the event of the death, Disability or Retirement of the Participant during the
third year of the Performance Period, the Participant must be employed at the
end of the Performance Period (December 31, 2009) to receive a
payout. If the Participant terminates employment for any reason
(including death, Disability or Retirement) during the first two years of the
Performance Period, the Participant shall forfeit all rights to any payments
under this Agreement. If the Participant should terminate employment
due to death, Disability or Retirement during the third year of 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 subject to the approval of the Committee
and in accordance with the payout timing described above. For
purposes of this Agreement, (a) “Disability” means a physical or mental
disability or infirmity of the Participant, as defined in any disability plan
sponsored by the Company or any Subsidiary which employs the Participant, or, if
no such plan is sponsored by the Participant’s employer, the Lexmark
International, Inc. Long-term Disability Plan; and (b) “Retirement” means a
Participant’s retirement at or after normal retirement age under the terms of
the retirement plan sponsored by the Company or any Subsidiary which employs
such Participant.
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.
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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.
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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; or
|
|
|
(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.
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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)
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Attachment A - Long-Term
Incentive Plan Examples
|
Bonus
Opportunity
|
Minimum
|
Target
|
Maximum
|
|
2009
Operating Income
|
15%
of Target
|
50%
of Target
|
100%
of Target
|
|
Branded
Hardware Market Share
|
15%
of Target
|
50%
of Target
|
150%
of Target
|
|
Example
1
|
Example
2
|
Example
3
|
Example
4
|
Example
5
|
|
|
Level of
Attainment
|
|||||
|
2009
Operating Income
|
Target
|
Minimum
|
Maximum
|
Minimum
|
Below
Minimum
|
|
Branded
Hardware Market Share
|
Target
|
Minimum
|
Maximum
|
Target
|
Below
Minimum
|
|
Level
of Attainment (% of
Target)
|
|||||
|
2009
Operating Income
|
50%
|
15%
|
100%
|
15%
|
0%
|
|
Branded
Hardware Market Share
|
50%
|
15%
|
150%
|
50%
|
0%
|
|
Aggregate
Attainment
|
100%
|
30%
|
250%
|
65%
|
0%
|
|
Target
Award ($)
|
$100,000
|
$100,000
|
$100,000
|
$100,000
|
$100,000
|
|
Aggregate
Attainment (% of Target)
|
100%
|
30%
|
250%
|
65%
|
0%
|
|
Payout
(Target
times Aggregate Attainment)
|
$100,000
|
$30,000
|
$250,000
|
$65,000
|
1
$0
|
(1) Since
the aggregate attainment based upon the two performance measures results in no
funding, there would be an additional calculation comparing the three-year
average Return on Invested Capital for the Company with that of its peer
companies over the same three-year Performance Period (2007 through 2009) and
the potential for funding the payout at the Minimum level (30%).
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