Lexmark International, Inc., 3q 2006 Form 10-Q Exhibit 10.4


    Exhibit
      10.4

     

    

      RESTRICTED
        STOCK UNIT AWARD AGREEMENT

      


      pursuant
        to

      


      LEXMARK
        INTERNATIONAL, INC.

      2005
        NONEMPLOYEE DIRECTOR STOCK PLAN

      


      


      This
        RESTRICTED STOCK UNIT AWARD  AGREEMENT (the "Agreement") between Lexmark
        International, Inc., a Delaware  corporation (the "Company"), and the


      person
        specified on the signature page hereof (the "Grantee") is entered into as
        of
        the ____ day of _____, _____ (the "Grant Date") pursuant to the
        Lexmark International, Inc. 2005 Nonemployee Director Stock Plan, as the
        same
        may be amended from time to time (the "Plan"). Capitalized terms used and
        not
        defined herein shall have the meanings assigned to such terms in the
        Plan.

      


      WHEREAS,
        the Grantee is a member of the Board of Directors of the Company, who is
        not
        also an officer or employee of the Company or one of its Subsidiaries or
        affiliated with any stockholder of the Company holding 5% or more of the
        Company’s equity securities, and the Board has determined that it would be to
        the advantage and in the interest of the Company to grant the restricted
        stock
        unit award provided for herein to the Grantee as an inducement to the Grantee
        to
        remain in the service of the Company and the Subsidiaries and as an incentive
        to
        the Grantee to devote his or her best efforts and dedication to the performance
        of such services and to maximize shareholder value; and

      


      WHEREAS,
        the Grantee desires to accept from the Company the grant of the restricted
        stock
        units evidenced hereby on the terms and subject to the conditions
        herein;

      


      NOW,
        THEREFORE, in consideration of the premises and subject to the terms and
        conditions set forth herein and in the Plan, the parties hereto hereby covenant
        and agree as follows:

      


      
        	 	
                1.

              	
                Restricted
                  Stock Unit Award.

              


      

      


      
        	 	
                (a)

              	
                Restricted
                  Stock Unit Award.
                  The Company hereby grants to the Grantee, effective as of the date
                  hereof
                  and on the terms and conditions herein, the number of restricted
                  stock
                  units set forth on the signature page hereof, each representing
                  the
                  Grantee's right to receive one share of Common Stock at the time
                  or times
                  provided for in Section 3 hereof, subject to the terms and conditions
                  described herein (the "Restricted Stock Units" or "Units").
                  

              


      


      
        
           

          
          

        

        
          1

          
            

          

        

        
          
          

        

      


      
        	 	
                (b)

              	
                2005
                  Nonemployee Director Stock Plan.
                  This Agreement is subject in all respects to the terms of the Plan,
                  all of
                  which terms are made a part of and incorporated in this Agreement
                  by
                  reference. In the event of any conflict between the terms of this
                  Agreement and the terms of the Plan, the terms of the Plan shall
                  control.
                  The Grantee hereby acknowledges that copies of the Plan may be
                  obtained
                  from the Vice President of Human Resources and agrees to comply
                  with and
                  be bound by all of the terms and conditions thereof.
                  

              


      

      


      
        	 	
                (c)

              	
                Establishment
                  of Account.
                  No shares of Common Stock will be issued on the date of grant of
                  the
                  Restricted Stock Units and the Company shall not be required to
                  set aside
                  a fund for the payment of any such Units. The Company will establish
                  a
                  separate account for the Grantee and will record in such account
                  the
                  number of Restricted Stock Units awarded to the Grantee and, to
                  the extent
                  applicable, the Dividend Equivalents provided for in Section 3(b)
                  hereof.

              


      

      

        


        	2.   
                 	
                Vesting
                  and Settlement of Restricted Stock Units.

              


         

      

      
        	 	
                (a)

              	
                Vesting
                  and Settlement.
                  The Restricted Stock Units will become vested in whole on the sixth
                  anniversary of the date of grant, _____, ____, or such other date
                  as
                  determined by the Board (the "Vesting Date"), subject to the Grantee's
                  continuous service as a member of the Board of Directors of the
                  Company
                  from the date hereof to the Vesting Date. After the Restricted
                  Stock Units
                  have become vested on the Vesting Date, they shall settle upon
                  the
                  termination of Grantee’s status as a member of the Board of Directors of
                  the Company, or such other date as determined by the Board (“the
                  Settlement Date”).

              


      

      


      
        	 	
                (b)

              	
                Acceleration.
                  The Board may, in its discretion, accelerate the vesting and/or
                  settlement
                  of all or any portion of the Restricted Stock Units or waive any
                  conditions to the vesting and/or settlement of such Restricted
                  Stock
                  Units.

              


      

      


      
        	 	
                (c)

              	
                Termination
                  of Status as a Board Member.
                  In the event of the Grantee's termination of service as a member
                  of the
                  Board of Directors of the Company prior to the Vesting Date, the
                  Grantee
                  shall immediately forfeit all rights with respect to any Restricted
                  Stock
                  Units (and Dividend Equivalents) which have not yet vested in accordance
                  with the provisions of Section 2(a) of this
                  Agreement.

              


      

      


      
        	 	
                3.

              	
                Payment
                  of Restricted Stock Unit Award.

              


      

      


      
        	 	
                (a)

              	
                Payment.
                  On, or as soon as reasonably practicable after, the Settlement
                  Date,
                  subject to Section 4 hereof, the Company shall direct its stock
                  transfer
                  agent to make (or to cause to be made) an appropriate book entry
                  

              


      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      
        	 	 	
                in
                  the Company's stock transfer books and records reflecting the transfer
                  to
                  the Grantee, and the Grantee's ownership, of one share of Common
                  Stock for
                  each Restricted Stock Unit that shall have become vested and settled
                  on
                  such Settlement Date. Upon the Grantee's request, subject to Section
                  4
                  hereof, the Company shall deliver to the Grantee a stock certificate
                  registered in the Grantee's name and representing such number of
                  shares of
                  Common Stock free and clear of all restrictions except any that
                  may be
                  imposed by law. No payment will be required to be made by the Grantee
                  upon
                  the delivery of such shares of Common Stock, except as otherwise
                  provided
                  in Section 4 of this Agreement.

              


      

      


      
        	 	
                (b)

              	
                Dividend
                  Equivalents.
                  Unless otherwise determined by the Board, the Company will credit
                  to the
                  account of the Grantee an amount equal to any dividends or dividend
                  equivalents and other distributions paid by the Company with respect
                  to
                  the number of shares of Common Stock corresponding to the number
                  of
                  Restricted Stock Units ("Dividend Equivalents"). Dividend Equivalents
                  in
                  respect of Restricted Stock Units that shall have become vested
                  on the
                  Vesting Date shall be payable to the Grantee on the Settlement
                  Date.

              


      

      


      
        	 	
                (c)

              	
                Restrictions
                  on Sale upon Public Offering. The Grantee hereby agrees that,
                  notwithstanding the vesting of the Restricted Stock Units pursuant
                  to
                  Section 2(a) of this Agreement or the transfer of the shares of
                  Common
                  Stock covered thereby to the Grantee pursuant to Section 3(a) hereof,
                  the
                  Grantee will not effect any public sale or distribution of any
                  of such
                  shares of Common Stock during the 20 day period prior to and the
                  180 days
                  following the effective date of any registration statement hereinafter
                  filed by the Company under the Securities Act of 1933, as amended,
                  with
                  respect to any underwritten public offering of any shares of the
                  Company's
                  capital stock (other than as part of such underwritten public
                  offering).

              


      

      


      
        	 	
                4.

              	
                Tax
                  Withholding.
                  The delivery of any directions to the Company's stock transfer
                  agent or
                  any certificates for shares of Common Stock pursuant to Section
                  3 shall
                  not be made unless and until the Grantee, or, if applicable, the
                  Grantee's
                  beneficiary or estate, has made appropriate arrangements for the
                  payment
                  to the Company of an amount sufficient to satisfy any applicable
                  U.S.
                  federal, state and local and non-U.S. tax withholding or other
                  tax
                  requirements, as determined by the Company. To satisfy the Grantee's
                  applicable withholding and other tax requirements, the Company
                  may, in its
                  sole discretion, (i) withhold a number of shares of Common Stock
                  having an
                  aggregate Fair Market Value on the Settlement Date equal to the
                  applicable
                  amount of such withholding and other tax requirements or (ii) require
                  the
                  Grantee to sell a number of shares of Common Stock having at least
                  a value
                  sufficient to meet the applicable amount of such withholding and
                  other tax
                  requirements to account for rounding and market fluctuations, subject
                  to
                  any rules adopted by the Board or required to ensure compliance
                  with
                  applicable

              


      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      
        	 	 	
                law,
                  including, but not limited to, Section 16 of the Securities Exchange
                  Act
                  of 1934, as amended. Shares required to be sold to satisfy the
                  Grantee’s
                  applicable withholding and other tax requirements may be sold as
                  part of a
                  block trade with the Grantee receiving an average price. Any cash
                  payment
                  made pursuant to Section 3 shall be made net of any amounts required
                  to be
                  withheld or paid with respect thereto (and with respect to any
                  shares of
                  Common Stock delivered contemporaneously therewith) under any applicable
                  U.S. federal, state and local and non-U.S. tax withholding and
                  other tax
                  requirements.

              


      

      


      
        	 	
                5.

              	
                Transferability.
                  Unless otherwise provided in accordance with the provisions of
                  the Plan,
                  the Restricted Stock Units may not be sold, transferred, pledged,
                  assigned
                  or otherwise alienated or hypothecated by the Grantee, other than
                  by will
                  or the laws of descent and distribution. The term "Grantee" as
                  used in
                  this Agreement shall include any permitted transferee of the Restricted
                  Stock Units.

              


      

      


      
        	 	
                6.

              	
                Adjustment
                  in Capitalization.

              


      

      


      
        	 	
                (a)

              	
                The
                  aggregate number of shares of Common Stock covered by the Restricted
                  Stock
                  Units granted hereunder shall be proportionately adjusted to reflect,
                  as
                  deemed equitable and appropriate by the Board, an Adjustment
                  Event.

              


      

      


      
        	 	
                (b)

              	
                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 or credited to the account of the
                  Grantee
                  with respect to the Restricted Stock Units as a result of any Adjustment
                  Event, any distribution of property or any merger, consolidation,
                  reorganization, liquidation, dissolution or other similar transaction
                  shall, except as otherwise provided by the Board, be subject to
                  the same
                  terms and conditions, including restrictions on transfer, as are
                  applicable to the Restricted Stock Units with respect to which
                  such
                  shares, cash or other property is received or so credited and stock
                  certificate(s), if any, representing or evidencing any shares of
                  stock or
                  other property so received shall be legended as
                  appropriate.

              


      

      


      
        	 	
                7.

              	
                Preemption
                  by Applicable Laws and Regulations.
                  Notwithstanding anything in the Plan or this Agreement to the contrary,
                  the issuance of shares of Common Stock hereunder shall be subject
                  to
                  compliance with all applicable U.S. federal, state and non-U.S.
                  securities
                  laws. Without limiting the foregoing, if any law, regulation or
                  requirement of any governmental authority having jurisdiction shall
                  require either the Company or the Grantee (or the Grantee's beneficiary
                  or
                  estate) to take any action in connection with the issuance of any
                  shares
                  of Common Stock hereunder, the issuance of such


              


      


      
        
           

          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      
        	 	 	
                shares
                  shall be deferred until such action shall have been taken to the
                  satisfaction of the Company.

              


      

      


      
        	 	
                8.

              	
                Interpretation;
                  Construction.
                  All of the powers and authority conferred upon the Board pursuant
                  to any
                  term of the Plan or the Agreement shall be exercised by the Board,
                  in its
                  sole discretion. All determinations, interpretations or other actions
                  made
                  or taken by the Board pursuant to the provisions of the Plan or
                  the
                  Agreement shall be final, binding and conclusive for all purposes
                  and upon
                  all persons and, in the event of any judicial review thereof, shall
                  be
                  overturned only if arbitrary and capricious. The Board 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.

              


      

      


      
        	 	
                9.

              	
                Amendment.
                  The Board shall have the right, in its sole discretion, to alter
                  or amend
                  this Agreement, from time to time, as provided in the Plan in any
                  manner
                  for the purpose of promoting the objectives of the Plan, provided
                  that no
                  such amendment shall impair the Grantee's rights under this Agreement
                  without the Grantee's consent. Subject to the preceding sentence,
                  any
                  alteration or amendment of this Agreement by the Board shall, upon
                  adoption thereof by the Board, become and be binding and conclusive
                  on all
                  persons affected thereby without requirement for consent or other
                  action
                  with respect thereto by any such person. The Company shall give
                  written
                  notice to the Grantee of any such alteration or amendment of this
                  Agreement as promptly as practicable after the adoption thereof.
                  This
                  Agreement may also be amended by a writing signed by both the Company
                  and
                  the Grantee.

              


      

      


      
        	 	
                10.

              	
                No
                  Rights as a Stockholder.
                  Except as provided by the Plan, the Grantee shall have no rights
                  as a
                  stockholder with respect to the Restricted Stock Units prior to
                  the date
                  as of which the shares of Common Stock covered thereby are transferred
                  to
                  the Grantee in accordance with Section 3(a) hereof.
                  

              


      

      


      
        	 	
                11.

              	
                Miscellaneous.

              


      

      


      
        	 	
                (a)

              	
                Notices.
                  All notices and other communications required or permitted to be
                  given
                  under this Agreement shall be in writing and shall be deemed to
                  have been
                  given if mailed by regular United States mail, first-class and
                  prepaid, or
                  by any recognized international equivalent of such delivery, to
                  the
                  Company or the Grantee, as the case may be, at the following addresses
                  or
                  to such other address as the Company or the Grantee, as the case
                  may be,
                  shall specify by notice to the others delivered in accordance with
                  this
                  Section 11(a):

              


      

      



      
        
           

          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      
        	 	
                (i)

              	
                if
                  to the Company, to it at:

              


      

      


      
        	 	 	
                One
                  Lexmark Centre Drive

              


      

      
        	 	 	
                740
                  West New Circle Road

              


      

      
        	 	 	
                Lexington,
                  KY 40550

              


      

      
        	 	 	
                Attention:
                  Secretary

              


      

      


      
        	 	
                (ii)

              	
                if
                  to the Grantee, to the Grantee at the address set forth on the
                  signature
                  page hereof.

              


      

      


      All
        such
        notices and communications shall be deemed to have been received on the date
        of
        delivery or on the third business day after the mailing thereof. 

      


      
        	 	
                (b)

              	
                Binding
                  Effect; Benefits.
                  This Agreement shall be binding upon and inure to the benefit of
                  the
                  parties to this Agreement and their respective successors and assigns.
                  Nothing in this Agreement, express or implied, is intended or shall
                  be
                  construed to give any person other than the parties to this Agreement
                  or
                  their respective successors or assigns any legal or equitable right,
                  remedy or claim under or in respect of any agreement or any provision
                  contained herein.

              


      

      


      
        	 	
                (c)

              	
                Waiver.
                  Any party hereto may by written notice to the other party (i)
                  extend the time for the performance of any of the obligations or
                  other
                  actions of the other party under this Agreement, (ii)
                  waive compliance with any of the conditions or covenants of the
                  other
                  party contained in this Agreement and (iii)
                  waive or modify performance of any of the obligations of the other
                  party
                  under this Agreement. Except as provided in the preceding sentence,
                  no
                  action taken pursuant to this Agreement, including, without limitation,
                  any investigation by or on behalf of any party, shall be deemed
                  to
                  constitute a waiver by the party taking such action of compliance
                  with any
                  representations, warranties, covenants or agreements contained
                  herein. The
                  waiver by any party hereto of a breach of any provision of this
                  Agreement
                  shall not operate or be construed as a waiver of any preceding
                  or
                  succeeding breach and no failure by a party to exercise any right
                  or
                  privilege hereunder shall be deemed a waiver of such party's rights
                  or
                  privileges hereunder or shall be deemed a waiver of such party's
                  rights to
                  exercise the same at any subsequent time or times
                  hereunder.

              


      

      


      
        	 	
                (d)

              	
                Assignability.
                  Neither this Agreement nor any right, remedy, obligation or liability
                  arising hereunder or by reason hereof shall be assignable by the
                  Company
                  or the Grantee without the prior written consent of the other
                  party.

              


      


      
        
           

          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      
        	 	
                (e)

              	
                Applicable
                  Law.
                  This Agreement shall be governed by and construed in accordance
                  with the
                  laws of the State of Delaware, regardless of the law that might
                  be applied
                  under principles of conflict of laws and excluding any conflict
                  or choice
                  of law rule or principle that may otherwise refer construction
                  or
                  interpretation of the Plan or this Agreement to the substantive
                  law of
                  another jurisdiction.

              


      

      


      
        	 	
                (f)

              	
                Jurisdiction.
                  The Grantee hereby irrevocably and unconditionally submits to the
                  jurisdiction and venue of the state courts of the Commonwealth
                  of Kentucky
                  and of the United States District Court of the Eastern District
                  of
                  Kentucky located in Fayette County, Kentucky, and any appellate
                  court from
                  any thereof, in any action or proceeding arising out of or relating
                  to
                  this Agreement, or for recognition or enforcement of any judgment,
                  and
                  each of the parties hereby irrevocably agree that all claims in
                  respect of
                  any such action or proceeding may be heard and determined in such
                  Kentucky
                  state or United States federal courts located in such jurisdiction.
                  Each
                  of the parties hereto agrees that a final judgment in any such
                  action or
                  proceeding shall be conclusive and may be enforced in other jurisdictions
                  by suit on the judgment or in any other manner provided by law.
                  The
                  parties hereby irrevocably waive, to the fullest extent permitted
                  by
                  applicable law, any objection which they may now or hereafter have
                  to the
                  laying of venue of any such proceeding brought in such a court
                  and any
                  claim that any such proceeding brought in such a court has been
                  brought in
                  an inconvenient forum. Grantee further agrees that any action related
                  to,
                  or arising out of, this Agreement shall only be brought by Grantee
                  exclusively in the federal and state courts located in Fayette
                  County,
                  Kentucky. Nothing in this Agreement shall affect any right that
                  the
                  Company may otherwise have to bring any action or proceeding relating
                  to
                  this Agreement in the courts of any
                  jurisdiction.

              


      

      


      
        	 	
                (g)

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

              


      

      


      
        	 	
                (h)

              	
                Survival.
                  Any provision of this Agreement which contemplates performance
                  or
                  observance subsequent to any termination or expiration of this
                  Agreement
                  shall survive any termination or expiration of this Agreement and
                  continue
                  in full force and effect.

              


      

      


      
        	 	
                (i)

              	
                Internal
                  Revenue Code Section 409A.
                  The Company intends for this Agreement to comply with the provisions
                  of
                  Section 409A of the Code and the guidance issued thereunder.
                  Notwithstanding Section 9 hereof, the Company intends to amend
                  this
                  Agreement, and hereby reserves the right to do so without the Grantee’s
                  consent, in the future as required to


              


      


      
        
           

          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      
        	 	 	
                conform
                  to the provisions of Section 409A of the Code with respect to amounts
                  subject to Section 409A of the
                  Code.

              


      

      


      
        	 	
                (j)

              	
                Section
                  and Other Headings, Etc.
                  The section and other headings contained in this Agreement are
                  for
                  reference purposes only and shall not affect the meaning or interpretation
                  of this Agreement. In this Agreement all references to "dollars"
                  or "$"
                  are to United States dollars.

              


      

      


      
        	 	
                (k)

              	
                Counterparts.
                  This Agreement may be executed in any number of counterparts, each
                  of
                  which shall be deemed to be an original and all of which together
                  shall
                  constitute one and the same
                  instrument.

              


      


      
        
           

          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the Company and the Grantee have executed this Agreement
        as of
        the date first above written.

      


      LEXMARK
        INTERNATIONAL, INC.

      


      


      


      Name: Jeri.
        I
        Stromquist

      Title: Vice
        President of Human Resources

      


      


      


      GRANTEE:

      


      


      By:
        ______________________________

      (Sign
        Here)

      


      Name:

      


      


      Address
        of the Grantee:

      


      


      


      Number
        of
        Restricted Stock Units

      Granted
        on: