EX-10.22






Exhibit 10.22




LEXMARK INTERNATIONAL, INC.

STOCK INCENTIVE PLAN

AS AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 2009




SECTION 1.




PURPOSE




     The purpose of the Plan is to foster and promote the long-term financial success of the
Company and materially increase shareholder value by (a) motivating superior performance by means
of performance-related incentives, (b) encouraging and providing for the acquisition of an
ownership interest in the Company by Employees and (c) enabling the Company to attract and retain
the services of an outstanding management team upon whose judgment, interest and special effort the
successful conduct of its operations is largely dependent.



SECTION 2.




DEFINITIONS




     2.1. Definitions. Whenever used herein, the following terms shall have the respective
meanings set forth below:




     (a) “Act” means the Securities Exchange Act of 1934, as amended.




     (b) “Adjustment Event” shall mean any stock dividend, stock split or share combination of,
or extraordinary cash dividend on, the Common Stock or recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering
to purchase Common Stock at a price substantially below Fair Market Value, or other similar event
affecting the Common Stock of the Company.




     (c) “Award Agreement” means the agreement, certificate or other instrument evidencing the
grant of any Incentive Award under the Plan.




     (d) “Board” means the Board of Directors of the Company.




     (e) “Cause”, with respect to any Incentive Award, shall have the meaning assigned thereto in
the Award Agreement evidencing such Incentive Award or, if there is no such meaning assigned,
shall mean (i) the willful failure by the Participant to perform substantially his duties as an
employee of the Company or any Subsidiary (other than due to physical or mental illness) after
reasonable notice to the Participant of such failure, (ii) the Participant’s engaging in serious
misconduct that is injurious to the Company or any Subsidiary, (iii) the Participant’s having
been convicted of, or entered a plea of nolo contendere to, a crime that constitutes a felony or
(iv) the breach by the Participant of any written covenant or agreement with the Company or any
Subsidiary not to disclose information pertaining to the Company or any Subsidiary or not to
compete or interfere with the Company or any Subsidiary.




     (f) “Change in Control” shall mean the occurrence of any of the following events:




     (i) a majority of the members of the Board at any time cease for any reason other than
due to death or disability to be persons who were members of the Board twenty-four months
prior to such time (the “Incumbent Directors”); provided that any director whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least a
majority of the members of the Board then still in office who are Incumbent Directors shall be
treated as an Incumbent Director;




     (ii) any “person,” including a “group” (as such terms are used in Sections 13(d) and
14(d)(2) of the Act, but excluding the Company, its Subsidiaries, any employee benefit plan of
the Company or any Subsidiary, employees of the Company or any Subsidiary or any group of
which any of the foregoing is a member) is or becomes the “beneficial owner” (as defined in
Rule 13(d)(3) under the Act), directly or indirectly, including without limitation, by means
of a tender or exchange offer, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities; or



 









 






     (iii) the stockholders of the Company shall approve a definitive agreement (x) that
results in the consummation of a merger or other business combination of the Company with or
into another corporation immediately following which merger or combination (A) the stock of
the surviving entity is not readily tradable on an established securities market, (B) a
majority of the directors of the surviving entity are persons who (1) were not directors of
the Company immediately prior to the merger and (2) are not nominees or representatives of the
Company or (C) any “person,” including a “group” (as such terms are used in Sections 13(d) and
14(d)(2) of the Act, but excluding the Company, its Subsidiaries, any employee benefit plan of
the Company or any Subsidiary, employees of the Company or any Subsidiary or any group of
which any of the foregoing is a member) is or becomes the “beneficial owner” (as defined in
Rule 13(d)(3) under the Act), directly or indirectly, of 30% or more of the securities of the
surviving entity or (y) for the direct or indirect sale or other disposition of all or
substantially all of the assets of the Company.




     Notwithstanding the foregoing, a “Change in Control” shall not be deemed to occur in the
event the Company files for bankruptcy, liquidation or reorganization under the United States
Bankruptcy Code.




     Notwithstanding the foregoing, to the extent that any Section 409A Incentive Award would
become payable under this Plan by reason of a Change in Control, such amount shall become payable
only if the event constituting a Change in Control would also constitute a “change in the
ownership” of the Company, a “change in the effective control” of the Company, or a “change in
the ownership of a substantial portion of the assets” of the Company within the meaning of
Section 1.409A-3(i)(5) of the Treasury Regulations.




     (g) “Change in Control Price” shall mean the highest price per share of Common Stock paid in
conjunction with any transaction resulting in a Change in Control (as determined in good faith by
the Committee if any part of the offered price is payable other than in cash) or, in the case of
a Change in Control occurring solely by reason of a change in the composition of the Board, the
average selling price of the Common Stock for the 30-day period immediately preceding the date on
which such Change in Control occurs, calculated in accordance with Section 1.409A-1(b)(5)(iv).




     (h) “Code” means the Internal Revenue Code of 1986, as amended.




     (i) “Committee” means the Compensation and Pension Committee of the Board or such other
committee as may be designated by the Board that is composed solely of two or more Non-Employee
Directors (as defined in Rule 16b-3(b)(3) as promulgated under the Act) and “outside directors”
within the meaning of Section 162(m) of the Code.




     (j) “Common Stock” means the Class A Common Stock of the Company, par value $0.01 per share,
or such other shares or kind of securities as determined by the Board.




     (k) “Company” means Lexmark International, Inc., a Delaware corporation, and any successor
thereto.




     (l) “Deferred Stock Unit” means a Participant’s right to receive pursuant to the Plan one
share of Common Stock, or, if provided by the Committee, cash equal to the Fair Market Value of a
share of Common Stock, at the end of a specified period of time.




     (m) “Deferred Stock Unit Election” means an election by a Participant to defer the receipt
of all or any portion of his annual compensation, annual incentive compensation, and/or his
compensation realized pursuant to a Performance Award in accordance with the rules set forth in
Section 9 of the Plan.




     (n) “Disability” means:




     (i) with respect to an Incentive Stock Option, a Disability within the meaning of Section
22(e)(3) of the Code;




     (ii) with respect to a Section 409A Incentive Award, a determination by the Committee
that the Participant is, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of
not less than 12 months receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the Company or any
Subsidiary. A Participant shall also be considered disabled if he is determined to be totally
disabled by the Social Security Administration; or



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     (iii) with respect to any other Incentive Award, “Disability” shall have the meaning
assigned thereto in the Award Agreement evidencing such Incentive Award, or, if there is no
such meaning assigned, shall mean a physical or mental disability or infirmity of a
Participant, as defined in any disability plan sponsored by the Company or any Subsidiary
which employs such Participant, or, if no such plan is sponsored by such Participant’s
employer, the Lexmark International, Inc. Long-term Disability Program.




     (o) “Employee” means any employee of the Company or any of its Subsidiaries.




     (p) “Fair Market Value” means, as of any date of determination, the closing price of a share
of Common Stock on a national securities exchange on that day, as reported for such day in the
Wall Street Journal, or the mean of the last bid and asked prices for a share of Common Stock on
such immediately preceding day, as reported on a nationally recognized system of price quotation.
In the event that there are no Common Stock transactions reported on such exchange or system on
such day, Fair Market Value shall mean the closing price or the mean of the last bid and asked
prices, whichever is applicable, on the immediately preceding day on which Common Stock
transactions were so reported.




     (q) “Incentive Award” means any award under the Plan of an Option, Stock Appreciation Right,
Restricted Stock, Performance Award or Deferred Stock Unit.




     (r) “Option” means the right to purchase a stated number of shares of Common Stock at a
stated price (as specified in Section 6.2 hereof) for a specified period of time. For purposes of
the Plan, an Option may be either (i) an “Incentive Stock Option” within the meaning of Section
422 of the Code or (ii) an Option which is not an Incentive Stock Option (a “Non-Qualified Stock
Option”).




     (s) “Participant” means any Employee designated by the Committee to receive an Incentive
Award under the Plan.




     (t) “Performance Award” means any grant of stock-based or cash-based Incentive Awards
subject to the achievement of performance objectives during the Performance Period pursuant to
Section 8.




     (u) “Performance Period” means that period established by the Committee at the time a
Performance Award is granted during which any performance objectives specified by the Committee
with respect to such Performance Award are to be measured, provided that such period shall not be
less than 12 months or more than five years.




     (v) “Plan” means the Lexmark International, Inc. Stock Incentive Plan, as set forth herein
and as the same may be amended from time to time.




     (w) “Predecessor Plans” means the Lexmark Holding, Inc. Stock Option Plan for Executives and
Senior Officers, the Lexmark Holding, Inc. Stock Option Plan for Senior Managers, the Lexmark
Holding, Inc. Employee Stock Option Plan and the 1995-1997 Long Term Incentive Plan.




     (x) “Qualifying Common Stock” means shares of Common Stock which (i) are not subject to any
loan or other obligation or pledged as collateral with respect to any loan or other obligation of
the Participant (subject to the consent of the Committee, other than any loan extended to the
Participant by the Company or a Subsidiary) and (ii) either (A) have been owned by the
Participant for at least six months (or such greater or lesser period as the Committee shall
determine) or (B) were purchased by the Participant on a national securities exchange or
nationally recognized over-the-counter market.




     (y) “Restriction Period” means the period during which shares of Restricted Stock are
subject to forfeiture or restrictions on transfer (if applicable) as described in Section 7 of
the Plan and any applicable Award Agreement.




     (z) “Restricted Stock” means Common Stock or units with respect to Common Stock awarded to a
Participant pursuant to the Plan which is subject to forfeiture and restrictions on
transferability in accordance with Section 7 of the Plan.




     (aa) “Retirement,” with respect to any Incentive Award, shall have the meaning assigned
thereto in the Award Agreement evidencing such Incentive Award, or, if there is no such meaning
assigned, shall mean 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.



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     (bb) “Section 409A Incentive Award” means any Incentive Award, which provides for the
“deferral of compensation” within the meaning of Section 1.409A-1(b) of the Treasury Regulations,
which is not otherwise exempt from the requirements of Section 409A of the Code.




     (cc) “Stock Appreciation Right” means the right to receive a payment from the Company, in
cash, Common Stock or a combination thereof, equal to the excess of the Fair Market Value of a
share of Common Stock at the date of exercise over a specified price fixed by the Committee (as
specified in Section 6.7(c) hereof).




     (dd) “Subsidiary” means any entity that is directly or indirectly controlled by the Company
or any other entity in which the Company has a significant equity interest, as determined by the
Committee.




     (ee) For purposes of any Section 409A Incentive Award, the terms “terminate,” “terminated,”
or “termination of employment,” and variations thereof, as used in the Plan or any Award
Agreement for a Section 409A Incentive Award, are intended to mean a Participant’s “separation
from service” from the Company or a Subsidiary of the Company, as applicable, for purposes of
Section 409A of the Code, using the default provisions set forth in Section 1.409A-1(h) of the
Treasury Regulations.



     2.2. Gender and Number. Except when otherwise indicated by the context, words in the
masculine gender used in the Plan shall include the feminine gender, the singular shall include the
plural, and the plural shall include the singular.



SECTION 3.




ELIGIBILITY AND PARTICIPATION




     Participants in the Plan shall be those Employees selected by the Committee to participate in
the Plan.



SECTION 4.




ADMINISTRATION




     4.1. Power to Grant and Establish Terms of Awards. The Committee shall have the discretionary
authority, subject to the terms of the Plan, to determine the Employees to whom Incentive Awards
shall be granted and the terms and conditions of such Incentive Awards, including but not limited
to the number of shares of Common Stock to be covered by each Incentive Award; the time or times at
which Incentive Awards may be exercised, paid or transferred, as the case may be; whether Options
shall be designated as Incentive Stock Options or Non-Qualified Stock Options; the form and manner
of payment of any amount due from a Participant in connection with any Incentive Award; whether any
Reload Option (as defined in Section 6.6) will be granted to any Participant pursuant to Section
6.6; whether any restriction (including any provision as to vesting, exercisability, payment or
transferability) shall be modified or waived, in whole or in part, after the date of grant of the
Incentive Award, provided, however, the Committee shall not modify or waive any restriction of any
Section 409A Incentive Award that would result in an impermissible acceleration of payment in
violation of Section 1.409A-3(j) of the Treasury Regulations, or otherwise violate Section 409A of
the Code or any provision of the Treasury Regulations promulgated thereunder; the rights of a
Participant with respect to any Incentive Award following the Participant’s termination of
employment; whether amounts payable by the Company in respect of any Incentive Award shall be paid
in Common Stock, cash or any combination thereof; whether and to what extent any Incentive Award
may be transferred by the Participant; and the terms, provisions and conditions to be included in
any Incentive Award Agreement. The Committee shall not have the power to reduce, whether through
amendment or otherwise, the exercise price of any outstanding Option or Stock Appreciation Right
nor to grant a new Option, Stock Appreciation Right or other Incentive Award in substitution for or
upon the cancellation of any previously granted Option or Stock Appreciation Right, which has the
effect of reducing the exercise price, unless approved by stockholders.



     The officers of the Company may suggest to the Committee the Participants who should receive
Incentive Awards under the Plan. In accordance with the terms of the Plan, the terms and conditions
of each Incentive Award shall be determined by the Committee at the time of grant, and such terms
and conditions may be subsequently changed by the Committee, in its discretion, provided that no
such change may be effected which would adversely affect a Participant’s rights with respect to an
Incentive Award then outstanding, without the consent of such Participant, or result in an
impermissible acceleration of payment of any Section 409A Incentive Award in violation of Section
1.409A-3(j) of the Treasury Regulations, or otherwise violate Section 409A of the Code or any
provision of the Treasury Regulations. The Committee may establish different terms and conditions
for different Participants receiving Incentive Awards and for the same Participant for each
Incentive Award such Participant may receive, whether or not granted at different times. The grant
of any Incentive Award to any Employee shall not entitle such Employee to the grant of any other
Incentive Awards.



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Notwithstanding anything else contained in the Plan to the contrary, the Committee may
delegate, subject to such terms and conditions as it shall determine, to any officer of the Company
or to a committee of officers of the Company, the authority to grant Incentive Awards (and to make
any and all determinations related thereto) to Participants who are not, and are not expected to
become, subject to the reporting requirements of Section 16(a) of the Act and whose compensation
will not be subject to the limitations on the deductibility thereof by the Company or its
Subsidiaries pursuant to Section 162(m) of the Code.




     4.2. Administration. The Committee shall be responsible for the administration of the Plan.
Any Incentive Award granted by the Committee may be subject to such conditions, not inconsistent
with the terms of the Plan, as the Committee shall determine, in its discretion. The Committee, by
majority action thereof, has discretionary authority to prescribe, amend and rescind rules and
regulations relating to the Plan, to interpret and apply the provisions of the Plan, to provide for
conditions deemed necessary or advisable to protect the interests of the Company or to interpret
the Plan and to make all other determinations necessary or advisable for the administration and
interpretation of the Plan and to carry out its provisions and purposes.



     4.3. Discretionary Authority of Committee. All of the powers and authority conferred upon the
Committee pursuant to any term of the Plan shall be exercised by the Committee, in its discretion.
All determinations, interpretations or other actions made or taken by the Committee pursuant to the
provisions of the Plan 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, and
shall not incur any liability for any action taken in good faith in reliance upon the advice of
counsel.



SECTION 5.




STOCK SUBJECT TO PLAN




     5.1. Number. Subject to the provisions of Section 5.4, the number of shares of Common Stock
that may be delivered under the Plan may not exceed 25,560,000, plus any shares that become
available for grant pursuant to Section 5.2, provided that no more than 4,000,000 shares may be
delivered pursuant to Incentive Awards other than Options and Stock Appreciation Rights. The shares
to be delivered under the Plan may consist, in whole or in part, of Common Stock held in treasury
or authorized but unissued Common Stock, not reserved for any other purpose, or from Common Stock
reacquired by the Company.



     5.2. Canceled, Terminated, or Forfeited Awards. Any shares of Common Stock subject to any
portion of an Incentive Award and any shares of Common Stock subject to any award granted under a
Predecessor Plan which, in any such case and for any reason, expires, or is canceled, terminated or
otherwise settled, without the issuance of such shares of Common Stock, including shares covered by
an Incentive Award used to satisfy tax withholding requirements on behalf of a Participant as
provided for in Section 12.4, shall again be available for award under the Plan. Shares of Common
Stock that are delivered to the Company, either actually or by attestation, in payment of the
exercise price for any Option granted under the Plan or under a Predecessor Plan will also be
available for future grants under the Plan. Shares reacquired by the Company on the open market
using the cash proceeds (the exercise price paid in cash and the value of the tax deduction
realized by the Company determined under generally accepted accounting principles) received by the
Company from the exercise of Options granted under the Plan or under a Predecessor Plan that are
exercised after the effective date will also be available for future grants under the Plan.



     5.3. Substitute Awards. Incentive Awards assumed or granted in substitution or exchange for
awards previously granted by a company acquired by the Company or with which the Company combines
will not reduce the shares that may be delivered under the Plan or authorized for grant to a
Participant pursuant to Sections 6.1, 6.7 and 8.1.



     5.4. Adjustment in Capitalization. The aggregate number of shares of Common Stock available
for Incentive Awards, under Section 5.1, or subject to outstanding Incentive Awards, and the
respective prices and/or vesting criteria applicable to outstanding Incentive Awards shall be
proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, an
Adjustment Event. To the extent deemed equitable and appropriate by the Committee, subject to any
required action by stockholders, in any merger, consolidation, reorganization, liquidation,
dissolution or other similar transaction, any Incentive Award granted under the Plan shall pertain
to the securities and other property to which a holder of the number of shares of Common Stock
covered by the Incentive Award would have been entitled to receive in connection with such event.



     Any shares of stock (whether Common Stock, shares of stock into which shares of Common Stock
are converted or for which shares of Common Stock are exchanged or shares of stock distributed with
respect to Common Stock) or cash or other property received with respect to any Incentive Award
granted under the Plan as a result of any Adjustment Event, any distribution of property



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or any merger, consolidation, reorganization, liquidation, dissolution or other similar
transaction shall, except as provided in Section 7.4, Section 9.3 or as otherwise provided by the
Committee at or after the date any such award is made, be subject to the same terms and conditions,
including vesting and restrictions on exercisability or transfer, as are applicable to the
Incentive Award with respect to which such shares, cash or other property is received, and any
Award Agreement and stock certificate(s) representing or evidencing any shares of stock or other
property so received shall so provide and be legended as appropriate.




SECTION 6.




STOCK OPTIONS AND STOCK APPRECIATION RIGHTS




     6.1. Grant of Options. Options may be granted to Participants at such time or times as shall
be determined by the Committee. Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non- Qualified Stock Options, except that no Incentive Stock Option may be
granted to any Employee of a Subsidiary which is not a corporation. The date of grant of an Option
under the Plan will be the date on which the Option is awarded by the Committee or, if so
determined by the Committee, the date on which occurs any event the occurrence of which is an
express condition precedent to the grant of the Option. The Committee shall determine the number of
Options, if any, to be granted to a Participant, provided that, in no event shall the number of
shares of Common Stock subject to all Options (or Stock Appreciation Rights) granted to any
Participant under the Plan during any consecutive five-year period exceed 3,000,000 shares
(adjusted pursuant to Section 5.4 if an Adjustment Event shall occur). Each Option shall be
evidenced by an Award Agreement that shall specify the type of Option granted, the exercise price,
the duration of the Option, the number of shares of Common Stock to which the Option pertains and
such other terms and conditions not inconsistent with the Plan as the Committee shall determine.



     6.2. Option Price. Options granted pursuant to the Plan shall have an exercise price which is
not less than the Fair Market Value on the date the Option is granted, except that if a
Non-Qualified Stock Option is granted retroactively in tandem with or in substitution for a Stock
Appreciation Rights grant, the designated Fair Market Value for purposes of establishing the
exercise price for such option may be the Fair Market Value on the date the Stock Appreciation
Rights were granted.



     6.3. Exercise of Options. Options awarded to a Participant under the Plan shall be
exercisable at such time or times and subject to such restrictions or other conditions, including
the performance of a minimum period of service or the satisfaction of performance goals, as the
Committee shall determine. To the extent not specified otherwise by the Committee, Options will
become exercisable in three installments as follows, subject to the Participant’s continued
employment until the applicable date:



	 	 	 
	Percentage of	 	Anniversary of
	Grant Exercisable	 	Date of Grant
	60%

	 	Third anniversary
	80%

	 	Fourth anniversary
	100%

	 	Fifth anniversary






     Once exercisable, an Option may be exercised from time to time, in whole or in part, up to the
total number of shares of Common Stock with respect to which it is then exercisable.
Notwithstanding the foregoing, except as provided in Section 6.8, no Option shall be exercisable
for more than 10 years after the date on which it is granted.



     6.4. Payment. The Committee shall establish procedures governing the exercise of Options,
which shall require that notice of exercise be given and that the Option price be paid in full at
the time of exercise (i) in cash or cash equivalents, (ii) in the discretion of the Committee, in
shares of Qualifying Common Stock having a Fair Market Value on the date of exercise equal to such
Option price or in a combination of cash and Qualifying Common Stock or (iii) in accordance with
such other procedures or in such other form as the Committee shall from time to time determine. As
soon as practicable after receipt of an exercise notice and payment of the exercise price in
accordance with this Section 6.4, the Company shall direct its stock transfer agent to make (or to
cause to be made) an appropriate book entry reflecting the Participant’s ownership of the shares of
Common Stock so acquired.



     6.5. Incentive Stock Options. Notwithstanding anything in the Plan to the contrary, no term
of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall
any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan
under Section 422 of the Code, or, without the consent of any Participant affected thereby, to
cause any Incentive Stock Option previously granted to fail to qualify for the Federal income tax
treatment afforded Incentive Stock Options under Section 421 of the Code. No more than 4,000,000
shares of Common Stock may be issued pursuant to Incentive Stock Options.



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     6.6. Reload Options. If provided by the Committee at or after the date of grant, a
Participant who delivers shares of Common Stock that have been owned by such Participant for any
minimum period of time specified by the Committee to exercise an Option or an option granted under
a Predecessor Plan, will automatically be granted new Options (“Reload Options”) for a number of
shares of Common Stock equal to the number of shares so delivered. Unless the Committee determines
otherwise, such Reload Options will be subject to the same terms and conditions (including the same
expiration date) as the related Option except (i) that the exercise price shall be equal to the
Fair Market Value of a share of Common Stock on the date such Reload Option is granted and (ii)
such Reload Option shall not be exercisable prior to the six-month anniversary of the date of grant
and, thereafter, shall be exercisable in full.



     6.7. Stock Appreciation Rights.




     (a) Stock Appreciation Rights may be granted to Participants at such time or times and with
respect to such number of shares of Common Stock as shall be determined by the Committee and
shall be subject to such terms and conditions as the Committee may impose, provided that no
Participant may receive Stock Appreciation Rights (or Options) under the Plan covering shares of
Common Stock in excess of 3,000,000 (adjusted pursuant to Section 5.4 if an Adjustment Event
shall occur) during any consecutive five-year period. Each grant of an Incentive Award of Stock
Appreciation Rights shall be evidenced by an Award Agreement.




     (b) Stock Appreciation Rights may be exercised at such time or times and subject to such
conditions, including the performance of a minimum period of service, the satisfaction of
performance goals or the occurrence of any event or events, including a Change in Control, as the
Committee shall determine, either at or after the date of grant. Stock Appreciation Rights which
are granted in tandem with an Option may only be exercised upon the surrender of the right to
exercise such Option for an equivalent number of shares and may be exercised only with respect to
the shares of Common Stock for which the related Option is then exercisable. Notwithstanding any
other provision of the Plan, the Committee may impose such conditions on the exercise of a Stock
Appreciation Right (including, without limitation, the right of the Committee to limit the time
of exercise to specified periods) as may be required to satisfy the applicable provisions of Rule
16b-3 as promulgated under the Act or any successor rule.




     (c) Subject to the provisions of Section 12.4 of the Plan, upon exercise of a Stock
Appreciation Right, the Participant shall be entitled to receive payment in cash, Common Stock or
in a combination of cash and Common Stock, as determined by the Committee, of an amount
determined by multiplying:




     (i) any increase in the Fair Market Value of a share of Common Stock at the date of
exercise over the price fixed by the Committee at the date of grant of such Stock Appreciation
Right, provided such amount shall not be less than the Fair Market Value of a share of Common
Stock at the date of grant, by




     (ii) the number of shares of Common Stock with respect to which the Stock Appreciation
Right is exercised.



     6.8. Exercisability Following Termination of Employment. Unless otherwise determined by the
Committee at or after the date of grant, in the event a Participant’s employment with the Company
and Subsidiaries terminates by reason of Retirement, Disability, death or special termination with
the consent of the Company, all Options and Stock Appreciation Rights then held by such Participant
that are exercisable at the date of such termination of employment shall thereafter remain
exercisable by the Participant or, if applicable, the Participant’s beneficiary, for a period of
one year from the date of termination, but in no event later than the expiration of the stated term
of the Option or Stock Appreciation Right. Notwithstanding the foregoing, to the extent provided by
the Committee at or after the date of grant, in the event of a Participant’s termination of
employment due to death or Disability, all such Non-Qualified Stock Options and Stock Appreciation
Rights shall remain exercisable for a minimum period of one year, without regard to the stated term
of the Non-Qualified Stock Option or Stock Appreciation Right. Unless otherwise determined by the
Committee at or after the date of grant, in the event a Participant’s employment with the Company
and Subsidiaries terminates for any reason other than Retirement, Disability, death, or special
termination with the consent of the Company or by the Company for Cause, all Options and Stock
Appreciation Rights then held by such Participant that are then exercisable shall remain
exercisable for the 90-day period immediately following such termination of employment or until the
expiration of the term of such Option or Stock Appreciation Right, whichever period is shorter.
Unless otherwise determined by the Committee at or after the date of grant, in the event of a
Participant’s termination of employment with the Company and Subsidiaries by the Company for Cause,
all Options and Stock Appreciation Rights then held by such Participant shall immediately terminate
and be canceled, in full, on the date of such termination of employment. All Options that are not
vested as of the date of a Participant’s termination of employment shall immediately terminate and
be canceled on such date and all other Options shall terminate and be canceled on the date the
period for exercise has expired to the extent not exercised prior to such date.



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SECTION 7.




RESTRICTED STOCK




     7.1. Grant of Restricted Stock. The Committee may grant Incentive Awards of Restricted Stock
to Participants at such times and in such amounts, and subject to such other terms and conditions
not inconsistent with the Plan, as it shall determine. Unless the Committee provides otherwise at
or after the date of grant, stock certificates evidencing any shares of Restricted Stock so granted
shall be held in the custody of the Secretary of the Company until the Restriction Period lapses,
and, as a condition to the grant of any Incentive Award of shares of Restricted Stock, the
Participant shall have delivered to the Company a stock power, endorsed in blank, relating to the
shares of Common Stock covered by such Incentive Award. Each grant of Restricted Stock shall be
evidenced by an Incentive Award Agreement.



     7.2. Payment. Upon the expiration or termination of the Restriction Period and the
satisfaction (as determined by the Committee) of any other conditions determined by the Committee,
the restrictions applicable to the Restricted Stock shall lapse and the Company shall cancel and
direct its stock transfer agent to make (or to cause to be made) an appropriate book entry
reflecting the Participant’s ownership of such number of shares of Common Stock with respect to
which the restrictions have lapsed, free of all such restrictions, other than any imposed by
applicable law. Upon request, the Company shall deliver to the Participant a stock certificate
registered in such Participant’s name and representing the number of shares of Common Stock with
respect to which the restrictions have lapsed, free of all such restrictions except any that may be
imposed by law. To the extent provided by the Committee, in its discretion, in lieu of delivering
shares of Common Stock, the Company may make a cash payment in full or partial satisfaction of any
Incentive Award of Restricted Stock equal to the Fair Market Value, on the date the applicable
restrictions lapse, of the number of shares or units of Restricted Stock with respect to which such
restrictions have lapsed. No payment will be required to be made by the Participant upon the
delivery of such shares of Common Stock and/or cash, except as otherwise provided in Section 12.4
of the Plan.



     7.3. Restriction Period; Restrictions on Transferability during Restriction Period. Unless
otherwise determined by the Committee at or after the date of grant, the Restriction Period
applicable to any award of Restricted Stock shall lapse, and such shares of Restricted Stock shall
become freely transferable the date of the Participant’s termination of employment with the Company
and the Subsidiaries due to death or Disability, subject in any such case to the Participant’s
continuous employment with the Company or a Subsidiary through such date. Except as provided in
Section 12.1, shares of Restricted Stock may not be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated until such time as the Restriction Period applicable thereto
shall have lapsed upon the satisfaction of such conditions, including without limitation, the
completion of a minimum period of service or the occurrence of such event or events, as shall be
determined by the Committee either at or after the time of grant.



     7.4. Rights as a Stockholder. Unless otherwise determined by the Committee at or after the
date of grant, Participants granted shares of restricted stock shall be entitled to vote on any
matter submitted to the Company’s stockholders. In addition, unless otherwise determined by the
Committee, Participants granted Restricted Stock shall be entitled to receive, either currently or
at a future date, as specified by the Committee, all dividends and other distributions paid with
respect to those shares, provided that if any such dividends or distributions are paid in shares of
Common Stock or other property (other than cash), such shares and other property shall be subject
to the same forfeiture restrictions and restrictions on transferability as apply to the shares of
Restricted Stock with respect to which they were paid.



     7.5. Legend. To the extent any stock certificate is issued to a Participant in respect of
shares of Restricted Stock awarded under the Plan prior to the expiration of the applicable
Restriction Period, such certificate shall be registered in the name of the Participant and shall
bear the following (or similar) legend:




     “The shares of stock represented by this certificate are subject to the terms and conditions
contained in the Lexmark International, Inc. Stock Incentive Plan, as amended and restated, and
the Incentive Award Agreement, dated as of                      between the Company and the
Participant, and may not be sold, pledged, transferred, assigned, hypothecated or otherwise
encumbered in any manner (except as provided in Section 12.1 of the Plan or in such Incentive
Award Agreement) until                     .”



     Upon the lapse of the Restriction Period with respect to any such shares of Restricted Stock,
the Company shall, upon the Participant’s request, issue or have issued new share certificates
without the legend described herein in exchange for those previously issued.



     7.6. Deferred Settlement of Restricted Stock Units. The Committee may permit a Participant who
has received an Incentive Award



8









 




consisting of Restricted Stock units to elect to defer the settlement to a specified date
after the settlement date, as set forth in Section 7.2 or as otherwise provided in the Award
Agreement, subject to such terms and conditions as determined by the Committee. If a Participant
is allowed to defer settlement of Restricted Stock units, the initial election to defer such
Restricted Stock units must be made within 30 days after the date of grant, provided that the
vesting of such Incentive Award is contingent on the Participant providing services for at least 12
months following the date of such initial deferral election. Absent an initial election to defer
settlement of the Restricted Stock units, the Participant may also make a subsequent election to
defer the settlement of the Restricted Stock units to a specified date after the settlement date,
as set forth in Section 7.2 or as otherwise provided in the Award Agreement, provided the
Participant’s election to defer the settlement date is made in accordance with the rules set forth
in Section 9.6, substituting Restricted Stock units for Deferred Stock Units.




SECTION 8.




PERFORMANCE AWARDS




     8.1. Grant of Performance Awards. The Committee may grant Performance Awards which may be in
the form of shares of Common Stock or valued by reference to a designated amount of property other
than shares of Common Stock, including cash, to Participants at such times and in such amounts and
subject to such terms and conditions not inconsistent with the Plan, as it shall determine. The
performance objectives to be achieved during any Performance Period will be determined by the
Committee upon the grant of each Performance Award; provided that in no event shall (i) the number
of shares of Common Stock delivered pursuant to stock-based Performance Awards to any Participant
exceed 200,000 (adjusted pursuant to Section 5.4 if an Adjustment Event shall occur) for any
Performance Period of three years or (ii) the value of any property other than shares of Common
Stock, including cash, paid with respect to Performance Awards, regardless of whether such payment
is in cash or shares of Common Stock, exceed $10,000,000 for any Performance Period of three years,
with proportionate adjustments for shorter or longer Performance Periods. Each grant of Performance
Awards shall be evidenced by an Award Agreement.



     8.2. Code Section 162(m) Provisions. Notwithstanding any other provision in the Plan, if the
Committee determines that at the time a Performance Award is granted to a Participant who is, or is
likely to be, a “covered employee” under Section 162(m) of the Code during any Performance Period,
then the Committee may provide that this Section 8.2 is applicable to such Performance Award.




     (a) In addition to any other restrictions imposed on such Performance Awards, Performance
Awards shall become vested, if at all, upon the determination by the Committee that performance
objectives established by the Committee have been attained, in whole or in part. Such performance
objectives shall relate to one or more of the following criteria: revenue; unit growth; operating
cash flow; earnings before interest and taxes; earnings before interest, taxes, depreciation and
amortization; net working funds; cash conversion cycle; days sales outstanding; days payables
outstanding; accounts receivable delinquency; operating earnings; net income; earnings per share;
working capital; inventory turnover rates; days of inventory; market share; return on investment;
return on capital; return on equity; return on assets; profit margin; stock price appreciation;
total shareholder return; shareholder value add; customer satisfaction; customer service; product
quality; and product awards. Performance objectives may relate to the performance of the Company,
a Subsidiary, an affiliate or a division or business unit, or a combination thereof, and may be
established in either absolute terms or relative to the performance of one or more comparable
companies or an index covering multiple companies.




     (b) The measurement of the Company’s performance against its performance objectives may
include or exclude, as determined in the sole discretion of the Committee at the time of
establishing the performance objectives, the impact of charges for restructurings, discontinued
operations, extraordinary items, and any other unusual or nonrecurring items, and the cumulative
effects of accounting changes, each as defined by generally accepted accounting principles and as
identified in the Company’s financial statements, notes to the financial statements or
management’s discussion and analysis.




     (c) The Committee may adjust downwards, but not upwards, the number of shares of Common
Stock to be granted to a Participant and/or the amount payable pursuant to a Performance Award.



     8.3. Payment. Performance Awards may be paid in cash, shares of Common Stock, other property,
or any combination thereof, in the sole discretion of the Committee at the time of payment.
Performance Awards may be paid in a lump sum or in installments following the close of the
Performance Period, or at such later time, in accordance with procedures established by the
Committee. Notwithstanding the foregoing, if the Performance Award is a Section 409A Incentive
Award, the Committee shall establish the time and form of payment for such Performance Award no
later than the latest date permitted in accordance with Section 1.409A-2(a)(2) of the Treasury
Regulations.



9









 





SECTION 9.




DEFERRED STOCK UNITS




     9.1. Deferred Stock Unit Awards. Subject to such terms and conditions as the Committee shall
determine, a Participant may be permitted to make a Deferred Stock Unit Election. With respect to
any compensation that is not “performance-based compensation” within the meaning of Section
1.409A-1(e) of the Treasury Regulations, the Participant’s Deferred Stock Unit Election must be
made no later than the fixed date established by the Committee for such deferral, and in no event
later than December 31 of the calendar year immediately preceding the calendar year in which any
services are performed for which such compensation is payable. With respect to any compensation
that is “performance-based compensation,” the Participant’s Deferred Stock Unit Election must be
made no later than the fixed date established by the Committee for such deferral, and in no event
later than the date that is on or before the date that is six months before the end of the
performance period, provided the Participant performs services continuously from the later of the
beginning of the performance period or the date the performance criteria are established through
the date a Participant makes his Deferred Stock Unit Election, and provided further that in no
event may the Participant’s election to defer performance-based compensation be made after such
compensation has become readily ascertainable, as determined in accordance with Section 1.409A-1(e)
of the Treasury Regulations. A Participant who makes a Deferred Stock Unit Election shall receive
a number of Deferred Stock Units (the “Elective Units”) in lieu of the compensation deferred
pursuant to the Deferred Stock Unit Election (the “Deferred Amount”) equal to the greatest whole
number which may be obtained by dividing (x) the amount of the Deferred Amount, by (y) the Fair
Market Value of a share of Common Stock on the date of grant. No shares of Common Stock will be
issued at the time an award of Deferred Stock Units is made and the Company shall not be required
to set aside a fund for the payment of any such award. The Company will establish a separate
account for the Participant and will record in such account the number of Deferred Stock Units
awarded to the Participant. Unless the Committee determines otherwise, each Participant who
receives an award of Elective Units shall receive an additional award of Deferred Stock Units (the
“Supplemental Units”) equal to the greatest whole number which may be obtained by dividing (x) 20%
(or such other percentage as may be determined by the Committee at the date of grant) of the
Deferred Amount, by (y) the Fair Market Value of a share of Common Stock on the date of grant. The
Committee may also grant a Participant an Incentive Award of Deferred Stock Units (“Freestanding
Deferred Stock Units”) without regard to any election by the Participant to defer receipt of any
compensation payable to him.



     9.2. Dividends with respect to Deferred Stock Units. The Committee will determine whether and
to what extent to credit to the account of, or to pay currently to, each recipient of a Deferred
Stock Unit award, an amount equal to any dividends paid by the Company during the period of
deferral with respect to the corresponding number of shares of Common Stock (“Dividend
Equivalents”). To the extent provided by the Committee at the date of grant, any Dividend
Equivalents with respect to cash dividends on the Common Stock credited to a Participant’s account
shall be deemed to have been invested in shares of Common Stock on the record date established for
the related dividend and, accordingly, a number of Deferred Stock Units shall be credited to such
Participant’s account equal to the greatest whole number which may be obtained by dividing (x) the
value of such Dividend Equivalent on the record date, by (y) the Fair Market Value of a share of
Common Stock on such date.



     9.3. Vesting of Deferred Stock Unit Awards. The portion of each Deferred Stock Unit award
that consists of Elective Units, together with any Dividend Equivalents credited with respect
thereto shall be fully vested at all times. Unless the Committee provides otherwise at the date of
grant, the portion of each Deferred Stock Unit award that consists of Supplemental Units or
Freestanding Deferred Stock Units, together with any Dividend Equivalents credited with respect
thereto, will become vested in full on the fifth anniversary of (x) in the case of Supplemental
Units, the date the corresponding Deferred Amount would have been paid absent the Participant’s
Deferred Stock Unit Election and (y) in the case of Freestanding Deferred Stock Units, the date of
grant of such units, provided the Participant remains in the continuous employ of the Company or a
Subsidiary through such applicable vesting date. Notwithstanding the foregoing, unless the
Committee provides otherwise at the date of grant, the portion of each Deferred Stock Unit award
that consists of Supplemental Units or Freestanding Deferred Stock Units, together with any
Dividend Equivalents credited with respect thereto, will become vested in full on the date of the
Participant’s termination of employment with the Company or a Subsidiary, as applicable, due to
death or Disability, subject in any such case to the Participant’s continuous employment with the
Company or a Subsidiary through such date. Any Deferred Stock Units that are not vested as of the
date of the Participant’s termination of employment shall be forfeited.



     9.4. Rights as a Stockholder. A Participant or his beneficiary shall not have any right in
respect of Deferred Stock Units awarded pursuant to the Plan to vote on any matter submitted to the
Company’s stockholders until such time as the shares of Common Stock attributable to such Deferred
Stock Units have been issued to such Participant or his beneficiary, as applicable.



10









 





     9.5. Settlement of Deferred Stock Units. Unless the Committee determines otherwise at the
date of grant, a Participant shall receive one share of Common Stock for each vested Deferred Stock
Unit (and related Dividend Equivalents) as of the earlier of (x) the fifth anniversary of the date
of grant and (y) the date of such Participant’s termination of employment due to Retirement (or six
months and 1 day after termination of employment due to Retirement, if the Participant is a
“specified employee” within the meaning of Section 1.409A-1(i) of the Treasury Regulations), death,
or Disability (or such later date as may be elected by the Participant on his Deferred Stock Unit
Election in accordance with the rules and procedures of the Committee).



     9.6 Deferred Settlement of Deferred Stock Units.




	 	(a)	 	If permitted by the Committee, a Participant may elect to defer settlement of the
Deferred Stock Units beyond the date specified in Section 9.5 or in the Award Agreement,
as applicable, provided the following requirements are satisfied:






	 	(i)	 	A Participant’s election to defer settlement of the Deferred Stock
Units may not take effect until at least 12 months after the date on which the
election is made by the Participant;
	 
	 	(ii)	 	A Participant’s election to defer settlement of the Deferred Stock
Units must delay settlement for a period of not less than five (5) years from the
original settlement date set forth in Section 9.5, or as otherwise provided in
the Award Agreement; and
	 
	 	(iii)	 	A Participant’s election to defer settlement of the Deferred Stock
Units must be made at least 12 months prior to the settlement date set forth in
Section 9.5, or as otherwise provided in the Award Agreement.






	 	(b)	 	The Company may delay settlement of the Deferred Stock Units if it reasonably
anticipates that the making of the payment will violate Federal securities laws or other
applicable laws provided payment is made at the earliest date on which the Company
reasonably anticipates that the making of the payment will not cause such violation.
	 
	 	(c)	 	The Company also reserves the right to delay payment upon such other events and
conditions as the Secretary of the Treasury may prescribe in generally applicable
guidance published in the Internal Revenue Bulletin.





SECTION 10.




CHANGE IN CONTROL




     10.1. Accelerated Vesting and Payment. Subject to the provisions of Section 10.2 below, in
the event of a Change in Control, (i) each Option and Stock Appreciation Right shall promptly be
canceled in exchange for a payment in cash of an amount equal to the excess of the Change in
Control Price over the exercise price for such Option or the base price for such Stock Appreciation
Right, whichever is applicable (except that the Change in Control Price shall not apply to Stock
Appreciation Rights granted in tandem with Incentive Stock Options), (ii) the Restriction Period
applicable to all Restricted Stock shall expire and all shares shall become nonforfeitable and
immediately transferable, (iii) all Performance Awards shall be promptly cancelled in exchange for
a payment in cash of an amount equal to the pro rata share earned based on the greater of target
achievement or actual achievement as of the date of Change in Control and (iv) all Deferred Stock
Units and Restricted Stock units shall become fully vested and the shares of Common Stock with
respect thereto shall be immediately payable.



     10.2. Alternative Awards. Notwithstanding Section 10.1, no cancellation, acceleration of
exercisability, vesting, cash settlement or other payment shall occur with respect to any Incentive
Award, other than a Performance Award or a Section 409A Incentive Award, if the Committee
reasonably determines in good faith prior to the occurrence of a Change in Control that such
Incentive Award or class of Incentive Awards shall be honored or assumed, or new rights substituted
therefor (such honored, assumed or substituted award hereinafter called an “Alternative Award”) by
a Participant’s employer (or the parent or a subsidiary of such employer) immediately following the
Change in Control, provided that any such Alternative Award must:




     (a) be based on stock which is traded on an established securities market, or which will be
so traded within 60 days following the Change in Control;




     (b) provide such Participant (or each Participant in a class of Participants) with rights
and entitlements substantially equivalent



11









 







to or better than the rights and entitlements applicable under such Incentive Award,
including, but not limited to, an identical or better exercise or vesting schedule and identical
or better timing and methods of payment;




     (c) have substantially equivalent economic value to such Incentive Award (determined by the
Committee as constituted immediately prior to the Change in Control, in it’s sole discretion,
promptly after the Change in Control);




     (d) have terms and conditions which provide that in the event that the Participant’s
employment is involuntarily terminated or constructively terminated (other than for Cause) upon
or following such Change in Control, any conditions on a Participant’s rights under, or any
restrictions on transfer or exercisability applicable to, each such Alternative Award shall be
waived or shall lapse, as the case may be; and




     (e) satisfy the requirements of Section 1.409A-1(b)(v)(D) of the Treasury Regulations.



     For this purpose, a constructive termination shall mean a termination by a Participant
following a material reduction in the Participant’s compensation, a material reduction in the
Participant’s responsibilities or the relocation of the Participant’s principal place of employment
to another location a material distance farther away from the Participant’s home, in each case,
without the Participant’s prior written consent.



SECTION 11.




AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN




     The Board may at any time terminate or suspend the Plan, and from time to time may amend or
modify the Plan, provided, however, that any amendment which would (i) increase the number of
shares available for issuance under Sections 5.1, 6.1, 6.7 and 8.1, (ii) lower the minimum exercise
price for Options and Stock Appreciation Rights or (iii) materially modify the requirements for
eligibility to participate in the Plan, shall be subject to the approval of the Company’s
stockholders. No action of the Board may, without the consent of a Participant, alter or impair
such Participant’s rights under any previously granted Incentive Award. Notwithstanding any other
provision of the Plan or any Award Agreement to the contrary, the Board may, in its sole and
absolute discretion and without the consent of any Participant or approval of the Company’s
stockholders, amend the Plan or any outstanding Award Agreements, to take effect retroactively or
otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award
Agreement to any present or future law, regulation or rule applicable to the Plan, including, but
not limited to, Section 409A of the Code and all applicable guidance promulgated thereunder.



SECTION 12.




MISCELLANEOUS PROVISIONS




     12.1. Nontransferability of Awards. Unless the Board, the Committee or the Company’s Vice
President, Human Resources and Vice President and General Counsel shall permit an Incentive Award
to be transferred by a Participant to a Participant’s family member for estate planning purposes or
to a trust, partnership, corporation or other entity established by the Participant for estate
planning purposes, on such terms and conditions as the Board, the Committee or such officers may
specify, no Incentive Award granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.
All rights with respect to any Incentive Award granted to a Participant under the Plan shall be
exercisable by the tranferee only for as long as they could have been exercisable by such
Participant. If any Incentive Award is transferred to a family member, trust, partnership,
corporation or other entity as contemplated by the first sentence hereof, all references herein and
in the applicable Award Agreement to the Participant shall be deemed to refer to such permitted
transferee, other than any such references with respect to the personal status of the Participant.



     12.2. Beneficiary Designation. Each Participant under the Plan may from time to time name any
beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit
under the Plan is to be paid or by whom any right under the Plan is to be exercised in case of his
death. Each designation will revoke all prior designations by the same Participant, shall be in a
form prescribed by the Committee and will be effective only when filed by the Participant in
writing with the Committee during his lifetime. In the absence of any such designation, benefits
remaining unpaid or Incentive Awards outstanding at the Participant’s death shall be paid to or
exercised by the Participant’s surviving spouse, if any, or otherwise to or by his estate.



     12.3. No Guarantee of Employment or Participation. Nothing in the Plan shall interfere with
or limit in any way the right of the



12









 




Company or any Subsidiary to terminate any Participant’s employment at any time and for any
reason, nor confer upon any Participant any right to continue in the employ of the Company or any
Subsidiary. No Employee shall have a right to be selected as a Participant, or, having been so
selected, to receive any Incentive Awards under the Plan.




     12.4. Tax Withholding. The Company shall have the power to withhold, or require a Participant
to remit to the Company promptly upon notification of the amount due, an amount determined by the
Company, in its discretion, to be sufficient to satisfy all Federal, state and local withholding
tax requirements in respect of any Incentive Award, and the Company may defer payment of cash or
issuance or delivery of Common Stock until such requirements are satisfied. The Committee may
permit or require a Participant to satisfy his tax withholding obligation hereunder in such other
manner, subject to such conditions, as the Committee shall determine, including, without
limitation, (i) to have Common Stock otherwise issuable or deliverable under the Plan withheld by
the Company or (ii) to deliver, either actually or by attestation, to the Company, Qualifying
Common Stock, in each case, having a Fair Market Value sufficient to satisfy all or part of the
Participant’s Federal, state and local withholding tax obligation.



     12.5. Indemnification. Each person who is or shall have been a member of the Committee or the
Board shall be indemnified and held harmless by the Company against and from any loss, cost,
liability or expense that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit or proceeding to which he may be made a party or in which he
may be involved by reason of any action taken or failure to act under the Plan and against and from
any and all amounts paid by him in settlement thereof, with the Company’s approval, or paid by him
in satisfaction of any judgment in any such action, suit or proceeding against him, provided that
he shall give the Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification
shall not be exclusive and shall be independent of any other rights of indemnification to which
such persons may be entitled under the Company’s articles of incorporation or by-laws, by contract,
as a matter of law or otherwise.



     12.6. No Limitation on Compensation. Nothing in the Plan shall be construed to limit the
right of the Company to establish other plans or to pay compensation to its employees in cash or
property, in a manner which is not expressly authorized under the Plan.



     12.7. Requirements of Law. The granting of Incentive Awards and the issuance of shares of
Common Stock shall be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be appropriate or required, as
determined by the Committee.



     12.8. Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of Delaware, without regard to principles of conflicts
of laws.



     12.9. No Impact on Benefits. Incentive Awards granted under the Plan are not compensation for
purposes of calculating an Employee’s rights under any employee benefit plan, except to the extent
provided in any such plan.



     12.10. Securities Law Compliance. Instruments evidencing Incentive Awards may contain such
other provisions, not inconsistent with the Plan, as the Committee deems advisable, including a
requirement that the Participant represent to the Company in writing, when an Incentive Award is
granted or when he receives shares with respect to such Award (or at such other times as the
Committee deems appropriate) that he is accepting such Incentive Award, or receiving or acquiring
such shares (unless they are then covered by a Securities Act of 1933 registration statement), for
his own account for investment only and with no present intention to transfer, sell or otherwise
dispose of such shares except such disposition by a legal representative as shall be required by
will or the laws of any jurisdiction in winding up the estate of the Participant or pursuant to a
transfer permitted by Section 12.1. Such shares shall be transferable only if the proposed transfer
shall be permissible pursuant to the Plan and if, in the opinion of counsel satisfactory to the
Company, such transfer at such time will be in compliance with applicable securities laws.



     12.11. No Right to Particular Assets. Nothing contained in this Plan and no action taken
pursuant to this Plan shall create or be construed to create a trust of any kind or any fiduciary
relationship between the Company and any Participant, the executor, administrator or other personal
representative or designated beneficiary of such Participant, or any other persons. Any reserves
that may be established by the Company in connection with this Plan shall continue to be held as
part of the general funds of the Company, and no individual or entity other than the Company shall
have any interest in such funds until paid to a Participant. To the extent that any Participant or
his executor, administrator or other personal representative, as the case may be, acquires a right
to receive any payment from the Company pursuant to this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company.



     12.12. Notices. Each Participant shall be responsible for furnishing the Committee with the
current and proper address for the



13









 




mailing of notices and delivery of agreements and shares of Common Stock. Any notices required
or permitted to be given shall be deemed given if directed to the person to whom addressed at such
address and mailed by regular United States mail, first-class and prepaid. If any item mailed to
such address is returned as undeliverable to the addressee, mailing will be suspended until the
Participant furnishes the proper address.




     12.13. Severability of Provisions. If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof,
and this Plan shall be construed and enforced as if such provision had not been included.



     12.14. Incapacity. Any benefit payable to or for the benefit of a minor, an incompetent
person or other person incapable of receiving such benefit shall be deemed paid when paid to such
person’s guardian or to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Committee, the Company and other parties with
respect thereto.



     12.15. Headings and Captions. The headings and captions herein are provided for reference and
convenience only, shall not be considered part of this Plan and shall not be employed in the
construction of this Plan.



     12.16. Compliance with Section 162(m) of the Code. Notwithstanding anything else contained in
the Plan to the contrary, unless the Committee otherwise determines at the time of grant, any
Incentive Award made hereunder to an officer who is subject to the reporting requirements of
Section 16(a) of the Act is intended to qualify as other performance based compensation within the
meaning of Section 162(m)(4)(C) of the Code, and the Committee shall not be entitled to exercise
any discretion otherwise authorized under the Plan with respect to such award if, and to the extent
that, the ability to exercise such discretion (as opposed to the exercise of such discretion) would
cause such award to fail to qualify as other performance based compensation.



     12.17. Compliance with Section 409A of the Code. The Company intends the Plan and any Section
409A Incentive Award to comply with Section 409A of the Code and the Treasury Regulations
promulgated thereunder, and the Plan and any Award Agreement consisting of a Section 409A Incentive
Award shall be administered in accordance with such intent. If a Participant, who is a “specified
employee” within the meaning of Section 1.409A-1(i) of the Treasury Regulations, becomes entitled
to payment of any Section 409A Incentive Award on account of his termination of employment, such
payment shall be made at the time specified in his Award Agreement, provided, however, no payments
under such Award Agreement shall be made until six months and one day after such termination of
employment.



     12.17. Foreign Employees. Incentive Awards may be granted to Participants who are foreign
nationals or employed outside the United States, or both, on such terms and conditions different
from those applicable to Incentive Awards to Participants in the United States as may be necessary
or desirable, in the judgment of the Committee, to recognize differences in currency, local law or
tax policy.



     12.18. Effective Date and Term. The amended and restated Plan became effective upon the
approval of the Plan by stockholders at the 2003 Annual Meeting on April 30, 2003 (the “Original
Effective Date”). The Plan was subsequently amended by the Company and approved by stockholders on
April 28, 2008. The Plan, as amended and restated for purposes of Section 409A, shall be effective
as of January 1, 2009. The Plan will terminate on the tenth anniversary of the Original Effective
Date, unless sooner terminated by the Board pursuant to Section 11.




14