Exhibit 10.1
Amendment to Employment Agreement
     This Amendment to Employment Agreement, effective as of
                    , 2006, between Imation Corp., a Delaware corporation (the
“Company”) and Bruce A. Henderson (the “Executive”).
     WHEREAS, the Company and the Executive entered into an Employment Agreement
as of the 13th day of May, 2004 (the “Agreement”); and
     WHEREAS, the Company and the Executive desire to amend the Agreement in the
manner set forth below.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy are hereby acknowledged, the Company and the Executive hereby agree to
amend the Agreement as follows:
     1. Section 5(a) of the Agreement is hereby amended in its entirety to read
as follows:
          (a) Definitions. For the purposes of this Agreement:
     “Affiliate” shall have the meaning given in Rule 405 promulgated under the
Securities Act of 1933, as amended.
     “Change of Control” means any one of the following events:
          (i) the consummation of a transaction or series of related
transactions in which a person, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), other than the Company or a subsidiary of the Company, or
any employee benefit plan of the Company or a subsidiary of the Company,
acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 35% or more of the Company’s then outstanding shares
of common stock or the combined voting power of the Company’s then outstanding
voting securities (other than in connection with a Business Combination in which
clauses (1), (2) and (3) of paragraph (a)(iii) apply); or
          (ii) individuals who, as of the Effective Date hereof, constitute the
Board of Directors of the Company (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board of Directors of the Company;
provided, however, that any individual becoming a director subsequent to the
Effective Date hereof whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than a nomination of an
individual whose initial assumption of office is in connection with a
solicitation with respect to the election or removal of directors of the Company
in opposition to the solicitation by the Board of Directors of the Company)
shall be deemed to be a member of the Incumbent Board; or

 

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          (iii) the consummation of a reorganization, merger, statutory share
exchange, consolidation or similar transaction involving the Company, a sale or
other disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity
(each, a “Business Combination”) in each case unless, following such Business
Combination, (1) all or substantially all of the individuals and entities that
were the beneficial owners of the Company’s outstanding common stock and the
Company’s outstanding voting securities immediately prior to such Business
Combination beneficially own immediately after the transaction or transactions,
directly or indirectly, more than 50% of the then outstanding shares of common
stock and more than 50% of the combined voting power of the then outstanding
voting securities (or comparable equity interests) of the entity resulting from
such Business Combination (including an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one of more subsidiaries) in substantially the
same proportions as their ownership of the Company’s common stock and voting
securities immediately prior to such Business Combination, (2) no person, entity
or group (other than a direct or indirect parent entity of the Company that,
after giving effect to the Business Combination, beneficially owns 100% of the
outstanding voting securities (or comparable equity interests) of the entity
resulting from the Business Combination) beneficially owns, directly or
indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and
(3) at least a majority of the members of the board of directors (or similar
governing body) of the entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board of Directors of the Company providing
for such Business Combination; or
          (iv) approval by the stockholders of the dissolution of the Company.
     “Change of Control Amount” shall mean, except as set forth in the next
sentence, an amount equal to the sum of (i) two times the total annual Base
Compensation of the Executive that is in effect immediately prior to a Change of
Control plus (ii) two times the average of the Executive’s Cash Incentive
Compensation payment (if any) for the two years prior to a Change of Control,
or, if the Executive has been employed by the Company for less than two years,
two times the amount of the Executive’s last Cash Incentive Compensation payment
(if any) by the Company. Notwithstanding the foregoing sentence, if (x) a Change
of Control has occurred during the Employment Term, (y) the Executive’s
employment with the Company terminates more than one year after the Change of

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Control but within two years after the Change of Control (whether or not the
Employment Term or this Agreement is otherwise deemed to have terminated
pursuant to Section 2), and (z) the Executive is otherwise entitled to a Change
of Control Benefit pursuant to Section 5(b), the Change of Control Amount shall
mean (i) one times the total annual Base Compensation of the Executive that is
in effect immediately prior to the Change of Control plus (ii) one times the
average of the Executive’s Cash Incentive Compensation payment (if any) for the
two years prior to the Change of Control, or, if the Executive has been employed
by the Company for less than two years, one times the amount of the Executive’s
last Cash Incentive Compensation payment (if any) by the Company.
     2. Section 5(b) of the Agreement is hereby amended in its entirety to read
as follows:
               (b) Change of Control Benefit. If (i) a Change of Control has
occurred during the Employment Term and (ii) within two years thereafter
(whether or not the Employment Term or this Agreement is otherwise deemed to
have terminated pursuant to Section 2), the Executive’s employment with the
Company terminates for any reason other than (1) termination by the Company for
Cause or (2) termination by the Executive for other than Company Breach, then
the Company shall pay to the Executive within thirty (30) days of such
termination a lump sum equal to the Change of Control Amount. The receipt of
such Change of Control Amount shall be in lieu of any right of payment that the
Executive may have in connection with such termination of employment, whether
pursuant to this Agreement or otherwise. If any payment made to the Executive
pursuant to this Section 5(b) with respect to a Change of Control that occurs
prior to the one-year anniversary of the Effective Date, either alone or
together with other payments or benefits, either cash or non-cash, that the
Executive has the right to receive from the Company, including without
limitation accelerated vesting or payment of any deferred compensation, options,
stock appreciation rights or any benefits payable to (or for the benefit of) the
Executive under any plan for the benefit of employees, would constitute an
“excess parachute payment” (as defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”)), then such payment or other benefit shall
be reduced so that the aggregate present value of all payments and benefits,
either cash or non-cash, to (or for the benefit of) the Executive which are
contingent on the Change of Control (as defined in Code Section 280G(b)(2)(A))
is One Dollar ($1.00) less than the amount which the Executive could receive
without being considered to have received any parachute payment (the amount of
this reduction is referred to herein as the “Excess Amount”). The determination
of the amount of any reduction required by this Section 5(b) shall be made by an
accountant selected by the Company, and such determination shall be conclusive
and binding on the parties hereto. Notwithstanding the foregoing provisions, if
it is established, pursuant to a final determination of a court or an Internal
Revenue Service proceeding which has been finally and conclusively resolved,
that an Excess Amount was received by the Executive from the Company, then the
Executive shall repay the Excess Amount to the Company promptly after written
demand from the Company is received by the Executive.

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     3. A new Section 5(e) is hereby added to the Agreement to read as follows:
          (e) Conformance with Section 409A of the Code. This Agreement is
intended to satisfy the requirements of Section 409A(a)(2), (3) and (4) of the
Code (including current and future guidance issued by the Department of Treasury
or Internal Revenue Service). To the extent that any provision of this Agreement
fails to satisfy those requirements, the provision shall automatically be
modified in a manner that, in the good-faith opinion of the Company, brings the
provisions into compliance with those requirements while preserving as closely
as possible the original intent of the provision and this Agreement. Such
modifications may include, but are not necessarily limited to, providing that if
the Executive is a “specified employee” under Section 409A(a)(2)(B) of the Code,
then any payment under this Agreement that is treated as deferred compensation
under Section 409A of the Code shall be deferred for six months following
termination of the Executive’s employment with the Company (without interest or
earnings).
     The Company and the Executive have caused this Amendment to be signed and
delivered on the date set forth above.

      IMATION CORP.
 
   
By:
   
 
   
Name:
   
 
   
Title:
   
 
   
 
    EXECUTIVE
 
     

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