Lexmark International, Inc., 2Q Form 10-Q, Exhibit 10.1


    
      Exhibit
        10.1        

      


      NON-QUALIFIED
        STOCK OPTION AGREEMENT

      


      pursuant
        to

      


      LEXMARK
        INTERNATIONAL, INC.

      STOCK
        INCENTIVE PLAN

       

      This
        NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") between Lexmark
        International, Inc., a Delaware corporation (the "Company"), and the person
        specified on the signature page hereof (the "Optionee") is entered into as
        of
        [Grant Date] pursuant to the Lexmark International, Inc. Stock Incentive
        Plan,
        as the same may be amended from time to time (the "Plan").

       

      WHEREAS,
        the Optionee is regarded as a key employee of the Company or one of the
        Subsidiaries and the Committee has determined that it would be to the advantage
        and in the interest of the Company to grant the option provided for herein
        to
        the Optionee as an inducement to the Optionee to remain in the service of
        the
        Company and the Subsidiaries over the long-term and as an incentive to the
        Optionee to devote his or her best efforts and dedication to the performance
        of
        such services and to maximize shareholder value; and

       

      WHEREAS,
        the Optionee desires to accept from the Company the grant of the options
        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.  Grant
        of Option; Exercise Price.

      


      
        	
              	
                (a)     
                  

              	
                Grant
                  of Option; Exercise Price.
                  The Company hereby grants to the Optionee, effective as of [Grant
                  Date]
                  (the "Grant Date") and on the terms and conditions herein, an option
                  (the
                  "Option") to purchase the number of shares (the "Option Shares"),
                  of Class
                  A Common Stock, par value $.01 per share (the “Common Stock”) set forth on
                  the signature page hereof, at an exercise price per Option Share
                  equal to
                  the fair market value on the Grant Date of [Grant Price], which
                  was the
                  closing price of a share of Common Stock on the Grant Date as reported
                  for
                  such day in The Wall Street Journal. The Option is not intended
                  to be an
                  incentive stock option under the United States Internal Revenue
                  Code of
                  1986, as amended.

              


      

      


      	    
              (b)    	
              Stock
                Incentive 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 Optionee hereby acknowledges that a copy 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. Terms used in
                this
                Agreement with initial capital letters, but not defined herein, shall
                have
                the meanings assigned to them under the
                Plan.

            


      


      


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      


      
        	 	
                2.       
                  

              	
                Vesting;
                  Period of Exercise of
                  Option

              


      

      


      
        	                  
                	
                (a)    
                  

              	
                Vesting.
                  Subject to the provisions of Section 4, the Option shall become
                  vested and
                  exercisable in [number of installments] approximately equal installments
                  on each of the first [number of installments] anniversaries of
                  the Grant
                  Date, subject in the case of each such installment to the continuous
                  employment of the Optionee with the Company or a Subsidiary from
                  the date
                  hereof to the applicable anniversary of the Grant Date. Provided,
                  however,
                  if at the time of Optionee's retirement (i) Optionee has 30 years
                  of
                  continuous service, (ii) Optionee is 58 years of age or older and
                  has ten
                  years of continuous service, or (iii) Optionee is 65 years of age
                  or
                  older, and in each case Optionee agrees to the cancellation of
                  any option
                  grant made to him or her within 12 months prior to the date of
                  his or her
                  retirement, then vesting shall continue to occur on this Option
                  for a
                  period of 24 months following the date of his or her retirement
                  (the
                  "Preferential Vesting Period").

              


      

      


      
        	 	
                (b)    
                  

              	
                Termination
                  of Employment.
                  If the Optionee's employment with the Company and its Subsidiaries
                  terminates for any reason, other than a termination by the Company
                  or a
                  Subsidiary for Cause (as defined below), any portion of the Option
                  which
                  is not then exercisable or subject to continued vesting during
                  a
                  Preferential Vesting Period shall immediately terminate and be
                  canceled
                  effective upon such termination of employment and the remaining
                  portion of
                  the Option, if any, shall thereafter remain exercisable for the
                  period
                  provided in Section 4. In the event of the termination of the Optionee's
                  employment by the Company or a Subsidiary for Cause, the Option
                  shall
                  immediately terminate and be canceled in full effective upon the
                  date of
                  such termination of employment.

              


      

       

            
         In accepting this Option, the Optionee acknowledges that the Option has
        been granted as an incentive to the Optionee to remain employed by the Company
        or any Subsidiary and to exert his or her best efforts to enhance the value
        of
        the Company or any Subsidiary over the long-term. Accordingly, the Optionee
        agrees that if he or she (a) within 12 months following termination of
        employment with the Company or any Subsidiary or the end of a Preferential
        Vesting Period, accepts employment with a competitor of the Company or any
        Subsidiary or otherwise engages in competition with the Company or any
        Subsidiary, or (b) within 36 months following termination of employment with
        the
        Company or any Subsidiary or the end of a Preferential Vesting Period, directly
        or indirectly, disrupts, damages, interferes or otherwise acts against the
        interests of the Company or any Subsidiary, including, but not limited to,
        recruiting, soliciting or employing, or encouraging or assisting his or her
        new
        employer or any other person or entity to recruit, solicit or employ, any
        employee of the Company or any Subsidiary without the Company’s prior written
        consent, which may be withheld in its sole discretion, (c) within 36 months
        following termination of employment with the Company, or any Subsidiary,
        disparages, criticizes, or otherwise makes derogatory statements regarding
        the
        Company or any Subsidiary or their directors, officers or employees, or (d)
        discloses or otherwise misuses confidential information or material of the
        Company or any Subsidiary, each of these constituting a harmful action, then
        (i)
        any unexercised portion of this Option shall be canceled immediately (unless
        canceled earlier by operation of another term of this Agreement) and (ii)
        the
        Optionee shall immediately repay to the Company an

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      amount
        equal
        to
        the
        Option gains (represented by the closing market price on the date of exercise
        over the exercise price, multiplied by the number of options

      exercised,
        without
        regard
        to
        any subsequent market price decrease or increase) realized by the Optionee
        from
        the exercise of all or a portion of this Option within

      18
        months
preceding
        the
        earlier of (w) the commitment of any such harmful action and (x) the Optionee's
        termination of employment with the Company and its

      Subsidiaries;
        and
        through the
        later
        of (y) 18 months following the commitment of any such harmful action and
        (z)
        such period as it takes the Company to discover

      such
        harmful action.
        The Optionee
        agrees that the Company or any of its Subsidiaries has the right to deduct
        from
        any amounts the Company or any of its

      Subsidiaries
        may owe
        the
Optionee
        from time to time (including amounts owed to the Optionee as wages or other
        compensation, fringe benefits or vacation pay,

      as
        well
        as any other
        amounts owed
        to
        the Optionee by the Company or any of its Subsidiaries), the amounts the
        Optionee owes the Company or any of its 

      Subsidiaries.
        The Committee
        shall have
        the
        right, in its sole discretion, not to enforce the provisions of this paragraph
        with respect to the Optionee.  

      


      Optionee
        agrees to be fully liable for any breach of this above described covenant,
        promise and agreement. Optionee agrees to reimburse the Company for all costs
        and expenses, including attorneys’ fees, incurred by the Company in enforcing
        the obligations of Optionee. This entire provision shall survive the termination
        of the Agreement and, in no manner, shall the remedies described herein be
        considered as the Company’s exclusive or entire remedy for Optionee’s breach,
        non-compliance or violation of any other agreement that Optionee may have
        entered into with the Company.

      


      
        	 	
                (c)

              	
                Acceleration.
                  The Committee may, in its discretion, accelerate the date or dates
                  as of
                  which all or any portion of the Option shall become vested and
                  exercisable
                  and may establish accelerated times for vesting based upon the
                  attainment
                  of performance goals or such other factors as the Committee may
                  from time
                  to time determine.

              


      

      


      
        	   	
                 (d)    
                  

              	
                Term
                  of Option Exercise Period.
                  Except to the extent that the Option or any portion thereof shall
                  sooner
                  terminate in accordance with Section 2 or 4 hereof, once any portion
                  of
                  the Option has become vested and exercisable, such portion shall
                  remain
                  exercisable until the end of the day preceding the tenth anniversary
                  of
                  the date hereof (the "Option
                  Period").

              


      

      


      
        	 	
                3.
                  

              	
                Method
                  of Exercise and Payment; Certain Restrictions on
                  Resale.

              


      

      


      
        	
              	
                (a)
                             

              	
                Exercise
                  and Payment.
                  Once vested and exercisable, the Option, or any vested portion
                  thereof,
                  may be exercised by the Optionee (or his or her beneficiary or
                  estate) by
                  delivery to the Company on any business day (the "Option Exercise
                  Date")
                  written notice (the "Option Exercise Notice"), in such manner and
                  form as
                  may be required by the Committee, specifying the number of Option
                  Shares
                  the Optionee then desires to purchase and the aggregate exercise
                  price for
                  such Option Shares (the "Option Exercise Price"). The Option Exercise
                  Notice shall be accompanied by payment of the Option Exercise Price
                  and
                  any other amounts required to be paid pursuant to Section
                  5.

              


      

      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
        	 	 	
                The
                  Optionee may pay the Option Exercise Price by delivering to the
                  Company
                  cash, shares of Qualifying Common Stock (as defined below) already
                  owned
                  by the Optionee or a combination of cash and such shares of Qualifying
                  Common Stock provided that the aggregate Fair Market Value on the
                  Option
                  Exercise Date of the shares of Qualifying Common Stock delivered
                  in
                  payment of any portion of the Option Exercise Price shall be equal
                  to the
                  excess of (x)
                  the Option Exercise Price over (y)
                  the amount of any cash delivered by the Optionee in payment of
                  the Option
                  Exercise Price. For purposes of this Agreement, shares of Common
                  Stock
                  shall constitute Qualifying Common Stock that may be delivered
                  in payment
                  of the Option Exercise Price if such shares (i)
                  are not subject to any outstanding loan or other obligation and
                  are not
                  pledged as collateral with respect to any loan or other obligation,
                  other
                  than any such loan or other obligation extended to the Optionee
                  by the
                  Company or any Subsidiary provided the Committee approves the delivery
                  of
                  such shares to pay the Option Exercise Price, and (ii)
                  either (x)
                  have been owned by the Optionee without certain restrictions for
                  a
                  continuous period of at least six months (or such greater or lesser
                  period
                  as the Committee shall determine) or (y)
                  were purchased by the Optionee on a U.S. national securities
                  exchange.

              


      

      


      
        	 	 	
                The
                  Committee may also permit the Optionee to arrange for the payment
                  of all
                  or any portion of the Option Exercise Price and other amounts required
                  to
                  be paid pursuant to Section 5 by directing a securities broker
                  approved
                  for such purpose by the Committee to deliver to the Company, on
                  behalf of
                  the Optionee, the proceeds of the sale on the Option Exercise Date
                  of a
                  number of the Option Shares then being purchased by the Optionee
                  having
                  aggregate sales proceeds on the Exercise Date equal to the sum
                  of all or
                  the applicable portion of the Option Exercise Price and the amounts
                  required to be paid pursuant to Section 5 that the Optionee elects
                  to
                  satisfy by using the proceeds of the sale of the Option Shares
                  (the
                  "Cashless Exercise Procedure").

              


      

      


      
        	 	 	
                Within
                  a reasonable period of time after the Option Exercise Date, subject
                  to
                  payment of the Option Exercise Price and any amounts required to
                  be paid
                  by the Optionee pursuant to Section 5, the Company shall direct
                  its stock
                  transfer agent to make (or to cause to be made) an appropriate
                  book entry
                  reflecting the Optionee's ownership of the Option Shares then being
                  purchased by the Optionee. Upon request, the Company shall deliver
                  to the
                  Optionee a certificate or certificates for the number of Option
                  Shares
                  (reduced, if applicable, by the number of Option Shares sold on
                  the Option
                  Exercise Date pursuant to the Cashless Exercise Procedure) purchased
                  by
                  the Optionee, registered in the name of the Optionee. In the event
                  that
                  the Company or the Committee, in its sole discretion, shall determine
                  that, under applicable U.S. federal or state or non-U.S. securities
                  laws,
                  the transfer of any Option Shares must be subject to restriction,
                  any
                  certificates issued under this Section 3(a) shall bear an appropriate
                  legend restricting the transfer of such Option Shares and appropriate
                  stop
                  transfer instructions shall be delivered to the Company's stock
                  transfer
                  agent.

              


      

       

            (b)    
        Restrictions
        on Sale upon Public Offering.
        The
        Optionee hereby agrees that, during the 20 day period prior to and the 180
        days
        following the effective date of

      any
        registration statement filed by the Company under the Securities Act of 1933,
        as
        amended, with respect to any underwritten public offering of any
        shares

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

        of
          the
          Company's capital stock, the Optionee will not effect any public sale or
          distribution of shares of Common Stock (other than as part of such underwritten
          public offering).

      

      


      
        	 	
                4.        
                  

              	
                Termination. 
                  The Option (or the indicated portion thereof) shall terminate and
                  be
                  canceled immediately upon the first to occur of any of the following
                  events:

              


      

      


      
        	
              	
                 (a)    
                  

              	
                The
                  date of the expiration of the Option Period. 
                  

              


      

       

      (b)  
        The date of the termination of the Optionee's employment with the Company
        and
        its Subsidiaries for Cause.

       

      (c)  
        The date of the termination of the Optionee's employment with the Company
        and
        its Subsidiaries for any reason, other than for Cause, with respect to any
        

      portion of
        the Option which is not subject to a Preferential Vesting Period and has
        not
        become vested and exercisable in accordance with Section 2 on or
        prior  to
        the date of such termination. 

       

      (d)  
        In the case of the Optionee's termination of employment with the Company
        and its
        Subsidiaries for any reason other than for Cause or other than by reason
        if  the

      Optionee's
        Normal Retirement, Early Retirement, Disability or death (as each such term
        is
        defined below), or as a result of a reduction in force, cessation of
        operations,
        merger, consolidation or the sale or other disposition of the Company or
        a
        portion thereof (as set forth below) with respect to any portion of the
Option
        which has become vested and exercisable in accordance with Section 2 on or
        prior
        to the date of such termination of employment, the last day of the 90
day
        period immediately following the date of such termination of
        employment.

      


      	 (e)
                  	
              Subject
                to Section 4(j), in the case of the Optionee's termination of employment
                with the Company and its Subsidiaries by reason of the Optionee's
                Normal
                Retirement,
                with respect to any portion of the Option which has become vested
                and
                exercisable on or prior to the date of such termination of employment
                or
                is subject to a Preferential Vesting Period in accordance with Section
                2,
                the last day of the 36 month period immediately following the date
                of such
                termination of employment.

            


      


      	(f)  
                 	
              Subject
                to Section 4(j), in the case of the Optionee's termination of employment
                with the Company and its Subsidiaries by reason of the Optionee's
                Early
                Retirement, with respect to any portion of the Option which has become
                vested and exercisable in accordance with Section 2 on or prior to
                the
                date of such termination of employment, the last day of the 12 month
                period immediately following the date of such termination of employment,
                and with respect to any portion of the Option which is subject to
                a
                Preferential Vesting Period, the last day of the 12 month period
                immediately following the last day of the Preferential Vesting
                Period.

            


      


      	(g)  
                	
              Subject
                to Section 4(j), in the case of the Optionee's termination of employment
                with the Company and its Subsidiaries as a result of a reduction
                in force,
                cessation of operations, merger, consolidation or the sale or other
                disposition of the stock or all or substantially all of the assets
                of the
                Company, a Subsidiary, or any division, business or other unit or
                function
                of the Company or any 

            


             
        

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      Subsidiary
        (which is designated as such by the Vice President of Human Resources), with
        respect to any portion of the Option which has become vested and

      exercisable
        in accordance with
        Section 2 on or prior to the date of such termination of employment, (i)
        the
        last day of the 24 month period immediately following

      the
        date
        of such termination of employment, provided
        that the Optionee has completed five or more years of continuous service
        with
        the Company or any of its

      Subsidiaries
        or (ii) the last day of the 12 month period immediately following
        the date of such termination of employment, if the Optionee has completed
        less
        than

      five
        years of continuous service with the Company or any of its Subsidiaries,
        and
        with respect
        to any portion of the Option which is subject to a Preferential

      Vesting
        Period, the last day of the 12 month period immediately following the last
        day
        of the Preferential Vesting Period.

       

      	(h) 
                 	
              Subject
                to Section 4(j), in the case of the Optionee's termination of employment
                with the Company and its Subsidiaries by reason of the Optionee's
                Disability, with respect to any portion of the Option which has become
                vested and exercisable in accordance with Section 2 on or prior to
                the
                date of such termination of employment, the last day of the 12 month
                period immediately following the date of such termination of employment,
                and with respect to any portion of the Option which is subject to
                a
                Preferential Vesting Period, the last day of the 12 month period
                immediately following the last day of the Preferential Vesting
                Period.

            


      


      	(i)  
                  	
              In
                the case of the Optionee's termination of employment with the Company
                and
                its Subsidiaries by reason of the Optionee's death, with respect
                to the
                portion of the Option which has become vested and exercisable in
                accordance with Section 2 on or prior to the date of such termination
                of
                employment, the last day of the 12 month period immediately following
                the
                date of such termination of employment, and with respect to any portion
                of
                the Option which is subject to a Preferential Vesting Period, the
                last day
                of the 12 month period immediately following the last day of the
                Preferential Vesting Period.

            


      


      	(j)   
                	
              The
                last day of the 12 month period immediately following the date of
                the
                Optionee's death during any period in which the Optionee was entitled
                to
                exercise any portion of the Option pursuant to Section 4(e), 4(f),
                4(g) or
                4(h), and with respect to any portion of the Option which is subject
                to a
                Preferential Vesting Period, the last day of the 12 month period
                immediately following the last day of the Preferential Vesting
                Period.

            


      


      
        	 	
                (k)  
                    

              	
                For
                  purposes of this Agreement, the following terms shall have the
                  following
                  meanings:

              


      

      


      
        	 	 	
                "Cause"
                  shall mean (A)
                  the willful failure by the Optionee to perform substantially his
                  or her
                  duties as an employee of the Company or any Subsidiary (other than
                  due to
                  physical or mental illness) after reasonable notice to the Optionee
                  of
                  such failure, (B)
                  the Optionee's engaging in serious misconduct that is injurious
                  to the
                  Company or any Subsidiary, (C)
                  the Optionee's having been convicted of, or entered a plea of nolo contendere
                  to, a crime that constitutes a felony or (D)
                  the breach by the Optionee of any written covenant or agreement
                  with the
                  Company or any Subsidiary not to 

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      disclose
        information pertaining to the Company or any Subsidiary or not to compete
        or
        interfere with the Company or any Subsidiary.

       

      
        	 	 	
                "Disability"
                  shall mean a physical or mental disability or infirmity of the
                  Optionee as
                  defined in any disability plan sponsored by the Company or any
                  Subsidiary
                  which employs the Optionee or, if no such plan is sponsored by
                  the
                  Optionee's employer at the relevant time, the Lexmark Long-Term
                  Disability
                  Plan.

              


      

      


      
        	 	 	
                "Early
                  Retirement" shall mean the Optionee's retirement (x)
                  at or after reaching age 55 and the completion of ten years continuous
                  service with the Company or any of its Subsidiaries or (y)
                  at or after the completion of 30 years of continuous service regardless
                  of
                  age.

              


      

      


      
        	 	 	
                "Normal
                  Retirement" shall mean the Optionee's retirement (x)
                  at or after the later of age 65 and the completion of five years
                  of
                  continuous service with the Company or any of its Subsidiaries
                  or
                  (y)
                  at or after any earlier retirement age agreed to, in writing, by
                  the
                  Company after the date hereof and prior to the Optionee's termination
                  of
                  employment with the Company or any Subsidiary (other than any such
                  termination with the Company or any Subsidiary in connection with
                  the
                  contemporaneous reemployment by another Subsidiary or the
                  Company).

              


      

      


      
        	 	
                5.

              	
                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 until the Optionee, or, if applicable, the Optionee'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 Optionee's
                  applicable withholding and other tax requirements, the Company
                  shall be
                  entitled, in its sole discretion, to withhold Option Shares having
                  a Fair
                  Market Value on the Option Exercise Date equal to the applicable
                  amount of
                  such withholding and other tax requirements, subject to any rules
                  adopted
                  by the Committee or required to ensure compliance with applicable
                  law,
                  including, but not limited to, Section 16(b) of the Securities
                  Exchange
                  Act of 1934, as amended. Any cash payment made pursuant to a Change
                  in
                  Control 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.

              


      

      


      
        	 	
                6.

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

              


      

      


      
        	 	
                7.

              	
                Adjustment
                  in Capitalization.

              


      

       

        (a)    
        The aggregate number of shares of Common Stock subject to the Option and
        the
        option exercise price and/or exercisability criteria applicable to the Option
        shall 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      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, the Option shall pertain to the securities
        and other property to which a holder of the number of shares of Common Stock
        then covered by the

      Option
        would have been entitled to receive in connection with such 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 with respect to the Option 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 Committee,
                be
                subject to the same terms and conditions, including restrictions
                on
                exercisability or transfer, as are applicable to the Option with
                respect
                to which such shares, cash or other property is received and stock
                certificate(s) representing or evidencing any shares of stock or
                other
                property so received shall be legended as
                appropriate.

            


      


      
        	 	
                8.

              	
                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 Optionee (or the Optionee's beneficiary
                  or estate) to take any action in connection with the issuance of
                  any
                  shares of Common Stock hereunder, the issuance of such shares shall
                  be
                  deferred until such action shall have been taken to the satisfaction
                  of
                  the Company.

              


      

      


      
        	 	
                9.

              	
                Interpretation;
                  Construction. 
                  All
                  of the powers and authority conferred upon the Committee pursuant
                  to any
                  term of the Plan or the Agreement shall be exercised by the Committee,
                  in
                  its sole discretion. All determinations, interpretations or other
                  actions
                  made or taken by the Committee pursuant to the provisions of the
                  Plan or
                  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 Committee may
                  consult
                  with legal counsel, who may be counsel to the Company or any Subsidiary,
                  and shall not incur any liability for any action taken in good
                  faith in
                  reliance upon the advice of
                  counsel.

              


      

      


      	10.     
                	
              Amendment.
                The Committee 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 Optionee's rights under this
                Agreement without the Optionee's consent. Subject to the preceding
                sentence, any alteration or amendment of this Agreement by the Committee
                shall, upon adoption thereof by the Committee, 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 Optionee of any such alteration or amendment
                of
                this Agreement as promptly as practicable after the adoption thereof.
                

            


       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

        
        This Agreement may also be amended by a writing signed by both the Company
        and
        the Optionee.

       

      	11.     
                	
              No
                Rights as a Stockholder.
                The Optionee shall have no voting or other rights as a stockholder
                of the Company with respect to any Option Shares until the exercise
                of
                the
                Option and the recording of the Optionee's ownership of the Option
                Shares
                on the
                stock transfer records for the Common Stock. No adjustment shall
                be made
                for dividends
                or other rights issued with respect to the Common Stock for which
                the
                record
                date is prior to the recording of such ownership of the Option
                Shares.

            


      


      	12.     
                	
              No
                Guarantee of Employment or Future Incentive
                Awards.
                Nothing in the Plan or this Agreement shall be deemed
                to:

            


      


      	(a)     
              	
              interfere
                with or limit in any way the right of the Company or any Subsidiary
                to
                terminate Optionee’s employment at any time and for any reason with or
                without cause;

            


      


      	(b) 
                 	
              confer
                upon Optionee any right to continue in the employ of the Company
                or any
                Subsidiary; and

            


      


      	(c)   
               	
              provide
                Optionee the right to receive any Incentive Awards under the Plan
                in the
                future or any other benefits the Company may provide to some or all
                of its
                employees.

            


       

                        
        13.       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
        delivered personally or sent by certified or express mail, return receipt
        requested, postage prepaid, or by any recognized international equivalent
        of  

              
           such delivery,
        to the Company or the Optionee, as the case may be, at the following addresses
        or to such other address as the Company or the Optionee, as the 

              
           case may
        be,
        shall specify by notice to the others delivered in accordance with this Section
        13(a):


      
        	 	
                (i)

              	
                if
                  to the Company, to it at:

              


      

       

      One
        Lexmark Centre Drive

      740
        West New Circle Road

      Lexington,
        Kentucky 40550

      Attention:
        Secretary

      


      
        	 	
                (ii)

              	
                if
                  to the Optionee, to the Optionee 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

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

             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
        Optionee without the prior written consent of the other party.

       

        
        (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
        Optionee 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 to the extent required by law,
        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. Optionee further agrees that any action related to, or
        arising

      out
        of,
        this Agreement shall only be brought by Optionee exclusively in the federal
        and
        state courts located in Fayette County, Kentucky. Nothing in this

      Agreement
        shall affect any
        right
        that the Company may 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       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 10
        hereof, the Company intends to amend this Agreement, and hereby reserves
        the
        right to do so without the Optionee’s consent, in the future as required to
        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.


      
        
           

          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      


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

      


          LEXMARK
        INTERNATIONAL, INC.

      


          By:

       

       

          Name:
        Jeri
        Stromquist

          Title:
        Vice
        President of Human Resources

      


      


      


          OPTIONEE:

      


          By: _____________________________________

          (sign
        your
        name and date)

      


      
        	
                 

              	
                Name:

              
	 	
                ID#:

              
	 	 


      

      


          Address
        of
        the Optionee:

      
 

      _______________________________

      Beneficiary
        Name

       

       

      
        	 	
                Number
                  of shares of Common Stock subject to the
                  Option: