Exhibit 10.2

SEPARATION AGREEMENT AND GENERAL RELEASE

     This Separation Agreement and General Release (the “Agreement”) is made and
entered into between William T. Monahan, an individual residing at 11930 Isleton
Avenue North, Stillwater, Minnesota 55082 (“Mr. Monahan”) and Imation Corp., a
Delaware corporation, with its principal offices at One Imation Place, Oakdale,
Minnesota 55128 (“Imation”).

     MR. MONAHAN UNDERSTANDS THAT HE MAY CONSIDER THIS AGREEMENT FOR AT LEAST
TWENTY-ONE (21) DAYS AFTER HE HAS RECEIVED THIS AGREEMENT, WHICH WAS ON May 20,
2004, UNLESS HE CHOOSES TO WAIVE THAT RIGHT BY EXECUTING THE AGREEMENT WITHIN
THE TWENTY-ONE (21) DAY PERIOD.

1.   What Imation Agrees To Do

     In return for (i) this Agreement, (ii) Mr. Monahan’s consulting services as
set forth in Section 2.A of this Agreement, (iii) Mr. Monahan’s voluntary
resignation from all positions Mr. Monahan holds with Imation as set forth in
Section 2.B of this Agreement, and in full and final settlement, compromise, and
release of all of Mr. Monahan’s employment-related claims (as described in
Section 2 below), Imation agrees to pay Mr. Monahan the following:

A.   Mr. Monahan’s base salary for the fiscal year 2004 through September 30,
2004, and such amount from June 4, 2004 (the “Separation Date”) to September 30,
2004 is $227,774 (the “Remaining Salary Payment”). The Remaining Salary Payment
shall be paid in equal installments at regular payroll intervals beginning on
June 18, 2004.   B.   If the target financial objectives under Imation’s 2004
Bonus Plan (as previously established by Imation’s Board of Directors) are
satisfied, Imation shall pay Mr. Monahan a bonus by January 31, 2005 equal to
seventy-five percent (75%) of the product of (i) the applicable percentage (from
a minimum of 0% to a maximum of 150%) under Imation’s 2004 Bonus Plan,
multiplied by (ii) $634,500 . Such payment shall be made by check payable to the
order of Mr. Monahan.   2.   What Mr. Monahan Agrees To Do

     As a condition to receiving the payments set forth in Section 1 of this
Agreement, Mr. Monahan agrees as follows:

A.   Until September 30, 2004, Mr. Monahan agrees to provide consulting and
advisory services to Imation as may from time to time be reasonably requested by
Imation concerning any and all matters relating to Imation. Mr. Monahan agrees
that he will provide services under this Agreement using the degree of care,
skill and diligence applied by Mr. Monahan to Imation matters prior to the
Separation Date.

B.   Mr. Monahan hereby voluntarily resigns as a member and Chairman of
Imation’s Board of Directors and as President and Chief Executive Officer of
Imation, and from any other offices Mr. Monahan may hold with Imation, effective
as of June 1, 2004.

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C.   Mr. Monahan agrees to return all Imation property currently in Mr.
Monahan’s possession, including, but not limited to, all notes, memoranda,
correspondence, files, notebooks, technical charts or diagrams, customer lists
or information, sales and marketing information, computer recorded information,
software, equipment, materials, keys and credit cards. Mr. Monahan acknowledges
that this obligation is continuing and agrees to promptly return to Imation any
subsequently discovered property as described above.   D.   Mr. Monahan also
agrees to repay to Imation the amount of any permanent or temporary advances or
other monies due and owing Imation, and to pay off the remaining balance on his
corporate credit cards. If Mr. Monahan fails to make such payments as of the
date he signs this Agreement, Mr. Monahan agrees that Imation may deduct any
monies owed from the payment under this Agreement, if no other written
arrangements are made for repayment by the date this Agreement is signed.

E.   Mr. Monahan hereby irrevocably and unconditionally releases and forever
discharges Imation from any and all federal, state or local charges, claims,
controversies, causes of action, damages, costs, attorneys’ fees, or liabilities
of any nature, both past and present, known and unknown, including but not
limited to claims arising under federal, state, local, and common laws and under
any regulations of any jurisdiction that in any way relate to employment and
termination of employment existing at any time up to and including the date of
this Agreement, that Mr. Monahan now may have or ever have had. This Agreement
specifically includes, but is not limited to, ANY CLAIMS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT of 1967, THE OLDER WORKERS BENEFIT PROTECTION
ACT OF 1990, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, any state or local human rights act, claims for wrongful
termination, breach of contract, and tort claims (for example, defamation,
emotional distress or any tort or negligence-based claim). Mr. Monahan expressly
acknowledges that this Agreement also is intended to include in its scope,
without limitation, all claims that Mr. Monahan does not know of or expect to
exist in Mr. Monahan’s favor at the time Mr. Monahan signs this Agreement and
that this Agreement contemplates the extinguishment of any such claim or claims
except as expressly provided in this Section. MR. MONAHAN IS NOT WAIVING ANY
RIGHTS FOR EVENTS ARISING AFTER THE DATE OF THIS AGREEMENT.

F.   Mr. Monahan agrees that in order to protect Imation’s business interests,
goodwill, confidential business information, trade secrets and customer
relationships, for a period of two years following the Separation Date:

  i.   Mr. Monahan will inform any new employer, prior to accepting employment,
of the existence of this provision of the Agreement and provide such employer
with a copy thereof.     ii.   Mr. Monahan agrees not to directly or indirectly,
render services to any Conflicting Organization in any country in which Imation
conducts business, except that Mr. Monahan may accept employment with a large
Conflicting Organization whose business is diversified (and which has separate
and distinct divisions), and which as to the part of its business in which
Mr. Monahan is to be employed is not a Conflicting Organization, provided
Imation, prior to Mr. Monahan accepting such employment, shall receive separate
written assurances satisfactory to Imation from such Conflicting Organization
and from Mr. Monahan that Mr. Monahan will not render services directly or
indirectly in connection with the development, manufacture, marketing, sale,
merchandising, leasing, servicing or promotion of any Conflicting Product.

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“Conflicting Product” means any product, process, system or service that is the
same as or similar to, or competes with, a product, process, system or service
that was in development by Imation, was sold or leased by Imation or was
utilized by Imation in delivering services to Imation’s customers, in each case
on or prior to the termination of Mr. Monahan’s employment with Imation.

“Conflicting Organization” means any person or organization that develops, sells
or leases Conflicting Products (or utilizes Conflicting Products in delivering
services to such person’s or organization’s customers), whether before or after
Mr. Monahan begins rendering services to such person or organization.

  iii.   Mr. Monahan agrees not to directly or indirectly, (a) participate in
any solicitation or offer to purchase the stock or assets of Imation or other
business combination or similar transaction involving Imation, (b) take any
action to encourage (including by way of furnishing information or access to
information regarding Imation) the making of any offer to purchase the stock or
assets of Imation or other business combination or similar transaction involving
Imation, or (c) participate in any discussions or negotiations regarding the
purchase of the stock or assets of Imation or other business combination or
similar transaction involving Imation.     iv.   Without the prior approval of
Imation’s Board of Directors, Mr. Monahan agrees not to purchase or otherwise
acquire (other than pursuant to a stock split or stock dividend) any additional
shares of common stock of Imation for the purpose of influencing or
participating in the acquisition of a majority of the voting stock of Imation or
the assets of Imation or other business combination or similar transaction
involving Imation; provided, however, the terms of this Agreement shall not be
construed to prohibit Mr. Monahan from voting or tendering any shares of common
stock of Imation held by Mr. Monahan, solely in his capacity as a stockholder.  
  v.   Mr. Monahan further agrees that Mr. Monahan will not solicit Imation
employees, either on behalf of Mr. Monahan or any third party, to resign or
otherwise leave their employment with Imation to work for Mr. Monahan or any
third party.     vi.   Mr. Monahan further agrees that Mr. Monahan will not
solicit business from, attempt to do business with, or do business with any
customer of Imation with whom Imation did business within the two years
preceding the Separation Date. This restriction applies only to business which
is in the scope of a competing business as defined by Paragraph F.ii of this
Agreement.

G.   Mr. Monahan also agrees that following the Separation Date, Mr. Monahan
will not make remarks disparaging the conduct or character of Imation and will
not interfere with Imation’s business relationships with its customers, vendors,
or distributors.

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H.   As further consideration for this Agreement, Mr. Monahan agrees that if
requested by Imation, Mr. Monahan will make himself available at reasonable
times to assist and cooperate with Imation in the litigation of any lawsuits or
claims, and agrees to be available to Imation to testify honestly with regard to
such lawsuits or claims if Mr. Monahan is determined by Imation to be a material
witness. Similarly, Mr. Monahan agrees that he will decline to voluntarily aid,
assist, or cooperate with any parties who are involved in claims or lawsuits by
or against Imation, or with their attorneys or agents; and will notify Imation
when and if the Mr. Monahan is contacted by other parties or their attorneys or
agents involving claims or lawsuits by or against Imation. It is understood and
intended that nothing in this paragraph shall prevent Mr. Monahan from honestly
testifying at a legal proceeding in response to a lawful and properly served
subpoena in a proceeding involving Imation.   I.   Mr. Monahan agrees that
Imation shall be entitled to injunctive and other equitable relief to prevent a
breach or threatened breach of the provisions of this Agreement, without the
necessity of proving actual damages. Such injunctive relief shall be in addition
to any other damages that may be available at law. Mr. Monahan also acknowledges
that if Imation is required to bring an action to enforce its rights under this
Agreement, it shall be entitled to recover its attorney’s fees and costs
associated with such an action, if Imation prevails.

3.   Other Understandings, Agreements, and Representations

A.   Mr. Monahan understands and agrees that Mr. Monahan will not be eligible
for and will not receive consideration, severance pay or benefits under the
Severance Agreement by and between Mr. Monahan and Imation, dated August 7,
2002, and any other group Income Assistance Pay Plan for which Mr. Monahan might
otherwise have been eligible.   B.   Mr. Monahan understands that the term
“Imation”, as used in this Agreement, includes: (i) past, present, and future
divisions, subsidiaries, affiliates, successors and assigns of Imation Corp.,
and the respective officers, directors, employees, agents, insurers and legal
counsel of Imation Corp. and of such past, present and future divisions,
subsidiaries, affiliates, successors and assigns of Imation Corp.; (ii) any
ERISA employee benefit plan sponsored by Imation, acting as plan administrator,
fiduciary or party in interest with respect to such plan. Mr. Monahan agrees
that this Agreement binds Mr. Monahan and also binds Mr. Monahan’s heirs,
executors, administrators, assigns, agents, partners and successors in interest.
  C.   Mr. Monahan agrees that this Agreement and the payment of money to Mr.
Monahan by Imation is not an admission by Imation of any violation of Mr.
Monahan’s rights or of any statutory or other legal obligation.   D.  
Mr. Monahan represents that no right, claim, or cause of action covered by this
Agreement has been assigned or given to someone else.   E.   Mr. Monahan
represents that Mr. Monahan will not apply for or accept employment with Imation
in any capacity, except as approved in writing in advance by Imation’s Board of
Directors.   F.   Nothing in this Agreement shall be deemed to terminate or
reduce in any way any right Mr. Monahan may have to indemnification from Imation
under the provisions of the Delaware General Corporation Law and the Company’s
Restated Certificate of Incorporation and Bylaws, each as in effect on the
Separation Date, for acts, omissions or events that occurred or are alleged to
have occurred prior to the Separation Date.

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G.   This Agreement contains the entire understanding between Mr. Monahan and
Imation and supersedes all prior agreements and understandings relating to the
subject matter of this Agreement. This Agreement shall not be modified, amended,
or terminated except as provided in section 3.J of this Agreement unless such
modification, amendment, or termination is executed in writing by Mr. Monahan
and Imation.   H.   Mr. Monahan agrees that Imation may use this Agreement to
secure withdrawal of any federal, state, or local charge Mr. Monahan might have
filed or will file, that Mr. Monahan will sign any document necessary to obtain
the withdrawal of any such charge, and that Mr. Monahan waives the right to
receive monetary damages or other legal or equitable relief awarded by any
governmental agency related to any such charge.   I.   Mr. Monahan represents
and certifies that Mr. Monahan has twenty-one (2l) days to consider whether to
accept this Agreement and enter into this Agreement; review it before being
asked to sign it; has read this Agreement carefully; has been given a fair
opportunity to discuss and negotiate the terms of this Agreement; understands
its provisions; has been advised to consult an attorney; has determined that it
is in Mr. Monahan’s best interest to enter into this Agreement; has not been
influenced to sign this Agreement by any statement or representation by Imation
not contained in this Agreement; and enters into this Agreement knowingly and
voluntarily. If Mr. Monahan chooses to sign this Agreement before twenty-one
(21) days have passed, Mr. Monahan understands that it is his decision to
execute this Agreement early and that Imation has made the full twenty-one
(21) day period available for Mr. Monahan to consider this Agreement.   J.  
Mr. Monahan understands that pursuant to the provisions of Minnesota Statutes
§363.031, subdivision 2, Mr. Monahan may rescind this Agreement by notifying
Imation of Mr. Monahan’s desire to do so in a writing delivered to Imation
personally or by certified mail, return receipt requested, within fifteen
(15) calendar days of Mr. Monahan’s execution of this Agreement. To be
effective, such notice of rescission, if mailed, must be postmarked within the
fifteen (15) day period and addressed as follows:

Patty Meagher
Imation Corp. Legal Affairs
One Imation Place
Pioneer Building 1S-14
Oakdale, MN 55128

K.   In case any part of this Agreement is held invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining
provisions will not be affected in any way, it being intended that the
provisions of this Agreement are severable, EXCEPT THAT, if paragraph 2 of this
Agreement is held invalid, illegal, or unenforceable, this Agreement is
voidable, and, if Mr. Monahan seeks to void this Agreement, Mr. Monahan
understands and agrees that Mr. Monahan will repay the total amount of
consideration paid to Mr. Monahan under this Agreement.

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L.   Any dispute arising between Mr. Monahan and Imation under this Agreement
will be submitted to final and binding arbitration in accordance with the rules
of the American Arbitration Association before an arbitrator mutually selected
by the parties. In the event that the parties cannot agree on an arbitrator, the
parties agree to submit the dispute before an arbitrator selected by the Chief
Judge of Ramsey County Court. The Arbitration shall be conducted in St. Paul,
Minnesota and shall be final and binding on both parties. The expenses of the
neutral arbitrator(s) and any court reporter shall be equally divided between
Mr. Monahan and Imation.

M.   The parties hereby acknowledge and covenant that for the purposes of this
Agreement, Mr. Monahan is an independent contractor and will act exclusively as
an independent contractor and not as an employee of Imation in performing the
duties assigned hereunder.

N.   This Agreement will be governed by and construed and interpreted according
to the laws of the State of Minnesota.

* * * *

            ACCEPTED AND AGREED:
     
WILLIAM T. MONAHAN
      By:   /s/ William T. Monahan         Date: 5-25-04             

            IMATION CORP.
      By:   /s/ Bruce A. Henderson         Name:   Bruce A. Henderson       
Title:   CEO       Date: 5/26/04     

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WAIVER OF CONSIDERATION PERIOD

I understand that under the law I have 21 days to consider this Agreement. I
knowingly and voluntarily waive this consideration period. The 15 day rescission
period to revoke the acceptance of this Agreement remains in effect.

Print Name:  W.T. Monahan
Signature: /s/ W.T. Monahan
Date:  05-25-04                     

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