Document:

lxkexhibit106.htm

    Exhibit 10.6

      CHANGE
IN CONTROL

      AGREEMENT

      

      

      AGREEMENT by and between Lexmark
International, Inc., a Delaware corporation, with its principal place of
business in Fayette County, Kentucky (the "Company"), and «Name»
(the "Executive"), dated as
of «Effective_Date».

      

      The Board of Directors of the Company
(the "Board")
has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
in Control (as defined below) of the Company.  The Board believes it
is imperative to diminish the inevitable distraction of the Executive by virtue
of the personal uncertainties and risks created by a pending or threatened
Change in Control and to encourage the Executive's full attention and dedication
to the Company currently and in the event of any threatened or pending Change in
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change in Control which ensures that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations.  In consideration of the
rights and benefits accruing to each party under this Agreement, the Company and
the Executive hereby agree to terminate the Change in Control Agreement entered
into by the parties on «Date_of_Old_CIC_Agree», each thereby relinquishing all
rights and benefits and terminating the duties and obligations pursuant to such
agreement.  Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this agreement (the "Agreement").

      

      NOW, THEREFORE, IT IS HEREBY AGREED AS
FOLLOWS:

      

      1.           Certain
Definitions.

      

      (a)           "Act" shall mean the
Securities Exchange Act of 1934, as amended.

      

      (b)           "Change in Control
Period" shall mean the period commencing on the date hereof and ending on
October 31, 2010; provided, however, that commencing on the date one year after
the date hereof, and on each annual anniversary (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change in Control Period shall be
automatically extended so as to terminate two years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change in Control Period shall not be so
extended.

      

      (c)           "Effective Date" shall
mean the first date during the Change in Control Period on which a Change in
Control (as defined in Section 2) occurs.  Anything in this Agreement
to the contrary notwithstanding, if a Change in Control occurs and if the
Executive's employment with the Company is terminated within 12 months prior
to

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       the
date on which the Change in Control occurs, and if it is reasonably demonstrated
by the Executive that such termination of employment (i) was at the request of
any potential buyer or potential buyer’s representative in contemplation of a
Change in Control or (ii) otherwise arose in connection with or anticipation of
a Change in Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such termination of
employment.

      

      (d)           "Proposed Change in
Control" means:

      

      (i)           the
commencement of a tender or exchange offer by any third person (other than a
tender or exchange offer which, if consummated, would not result in a Change in
Control) for 30% or more of the combined voting power of the Company's then
outstanding securities;

      

      (ii)           the
execution of an agreement by the Company, the consummation of which would result
in the occurrence of a Change in Control;

      

      (iii)           the
public announcement by any person (including the Company) of an intention to
take or to consider taking actions which if consummated would constitute a
Change in Control; or

      

      (iv)           the
adoption by the Board, as a result of other circumstances, including
circumstances similar or related to the foregoing, of a resolution to the effect
that, for purposes of this Agreement, a Proposed Change in Control has
occurred.

      

      (e)           "Subsidiary" shall
mean 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 Board.

      

      (f)           For
purposes of this Agreement, the terms “terminate,” “terminated” or “termination
of employment,” and variations thereof, as used in this Agreement, are intended
to mean a separation from service or termination of employment that constitutes
a “separation from service” under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).

      

      2.           Change in
Control.  For the purpose of this Agreement, a "Change in Control"
shall mean the occurrence of any of the following events:

      

      (a)           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.

       

       

      
        
          
          

        

        
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      (b)           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

      

      (c)           the
consummation of a transaction (i) for the 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 (x) were not directors of the Company
immediately prior to the merger and (y) 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 (ii) for the direct or indirect sale or
other disposition of all or substantially all of the assets of the
Company.

      

      (d)           Approval
by the shareholders of the Company of a complete liquidation or dissolution 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, a "Change in Control" shall not be deemed to have occurred as a
result of any transaction or series of transactions which the Executive, or any
entity in which the Executive is a partner, officer or more than 50% owner,
initiates, if immediately following the transaction or series of transactions
that would otherwise constitute a Change in Control, the Executive, either alone
or together with other individuals who are executive officers of the Company
immediately prior thereto, beneficially owns, directly or indirectly, more than
10% of the then outstanding shares of common stock of the Company or the
corporation resulting from the transaction or series of transactions, as
applicable, or of the combined voting power of the then outstanding voting
securities of the Company or such resulting corporation.

      

      3.           Employee Benefits During
Employment after the Effective Date.

      

      (a)           Incentive, Savings, and
Retirement Plans.  For a two year period following a Change in
Control, and provided the Executive is then employed by the Company or its
Subsidiaries, the Executive shall be entitled to participate in all

       

      
        
          
          

        

        
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      incentive,
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its Subsidiaries
(including without limitation the Company's Stock Incentive Plan, Retirement
Plan, Savings Plan, Long Term Incentive Plan and Supplemental and/or Excess
Benefits Plans, as and to the extent those plans are in effect from time to
time), but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, less favorable, in the aggregate, than the most favorable of
those provided by the Company and its Subsidiaries for the Executive under such
plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding a Proposed Change in Control or, if more
favorable to the Executive, those provided generally at any time after a
Proposed Change in Control to other peer executives of the Company and its
Subsidiaries.

      

      (b)           Welfare Benefit
Plans.  For a two year period following a Change in Control,
and provided the Executive is then employed by the Company or its Subsidiaries,
the Executive  and the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
Subsidiaries (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its Subsidiaries, but in no event
shall such plans, practices, policies and programs provide the Executive and the
Executive's family with benefits which are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies and programs in
effect for the Executive at any time during the 120-day period immediately
preceding a Proposed Change in Control or, if more favorable to the Executive,
those provided generally at any time after a Proposed Change in Control to other
peer executives of the Company and its Subsidiaries.

      

      (c)           Expenses.  For
a two year period following a Change in Control, and provided the Executive is
then employed by the Company or its Subsidiaries, the Executive shall be
entitled to receive prompt reimbursement for all expenses incurred by the
Executive in accordance with the most favorable policies, practices and
procedures of the Company and its Subsidiaries in effect for the Executive at
any time during the 120-day period immediately preceding a Proposed Change in
Control or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
Subsidiaries.  Reimbursement of expenses in accordance with this
Section 3(c) shall be made promptly as incurred, and in no event later than
December 31 of the year following the year in which such expenses were incurred,
and the amount of such expenses eligible for reimbursement in any year shall not
affect the amount of such expenses eligible for reimbursement in any other
year.

       

       

      
        
          
          

        

        
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      (d)           Fringe
Benefits.  For a two year period following a Change in Control,
and provided the Executive is then employed by the Company or its Subsidiaries,
the Executive shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
Subsidiaries in effect for the Executive at any time during the 120-day period
immediately preceding a Proposed Change in Control or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its Subsidiaries.

      

      (e)           Office and Support
Staff.  For a two year period following a Change in Control,
and provided the Executive is then employed by the Company or its Subsidiaries,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to personal secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and its Subsidiaries at any time during the 120-day
period immediately preceding a Proposed Change in Control or, if more favorable
to the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and its Subsidiaries.

      

      (f)           Vacation.  For
a two year period following a Change in Control, and provided the Executive is
then employed by the Company or its Subsidiaries, the Executive shall be
entitled to paid vacation, management directed time off with pay and sick leave
in accordance with the most favorable plans, policies, programs and practices of
the Company and its Subsidiaries as in effect for the Executive at any time
during the 120-day period immediately preceding a Proposed Change in Control or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
Subsidiaries.

      

      4.           Termination of Employment
after the Effective Date.

      

      (a)           Termination Due to Death or
Disability.  The Executive's employment shall terminate
automatically upon the Executive's death after the Effective Date.  If
the Company determines in good faith that the Disability of the Executive has
occurred after the Effective Date (pursuant to the definition of Disability set
forth below), the Company may give to the Executive written notice in accordance
with Section 13(d) of this Agreement of its intention to terminate the
Executive's employment.  In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties.  For purposes of this
Agreement, "Disability" shall
mean a physical or mental disability that prevents the performance by the
Executive of his duties with the Company lasting (or likely to last, based on
competent medical evidence presented to the Board) for a continuous period of
six months or longer.  The reasoned and good faith judgment of the
Board as to the Executive's Disability shall be final and shall be based on such
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      evidence
as shall be presented to it by the Executive or by any physician or group of
physicians or other competent medical experts employed by the Executive or the
Company to advise the Board.

      

      (b)           Cause.  The
Company may terminate the Executive's employment after the Effective Date for
Cause.  For purposes of this Agreement, "Cause" shall mean:
(i) the willful failure by the Executive to perform substantially the
Executive's duties with the Company or any Subsidiary (other than any such
failure due to physical or mental illness) after a demand for substantial
performance is delivered to the Executive by the executive to which the
Executive reports or by the Board, which notice identifies the manner in which
such executive or the Board, as the case may be, believes that the Executive has
not substantially performed his duties, (ii) the Executive's engaging in willful
and serious misconduct that is injurious to the Company or any of its
Subsidiaries, (iii) the Executive's making a substantial, abusive use of
alcohol, drugs, or similar substances, and such abuse in the Company's judgment
has affected his ability to conduct the business of the Company in a proper and
prudent manner, (iv) the Executive's conviction of, or entering a plea of nolo contendere to, a
crime that constitutes a felony, or (v) the willful and material breach by the
Executive of any of his obligations hereunder, or the willful and material
breach by the Executive of any written covenant or agreement with the Company or
any of its affiliates not to disclose any information pertaining to the Company
or any of its affiliates or not to compete or interfere with the Company or any
of its affiliates.

      

      For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the
Company.  Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer or a senior officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company.  The cessation of employment of the Executive shall not
be deemed to be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purposes (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, the Executive is guilty of the conduct described in any of
subparagraphs (i) through (v) above, and specifying the particulars thereof in
detail.

      

      (c)           Good
Reason.  The Executive's employment may be terminated by the
Executive after the Effective Date for Good Reason.  "Good Reason"
shall mean a termination of employment by the Executive within 90 days following
(i) any assignment to the Executive of any duties, functions or responsibilities
that are significantly different from, and result in a substantial and material
diminution of, the duties, functions or responsibilities that the Executive has
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      Company
that the Executive be based more than 100 miles from the Executive’s then
current location or the Company headquarters, (iii) any reduction in base
salary, (iv) any reduction of in incentive compensation opportunity, using
consistent performance goals, (v) a material reduction in the Executive’s total
employee benefits,  or (vi) the failure of the Company to obtain the
assumption of the Employment Agreement by and between the Company and the
Executive dated as of «Date_of_Employment_Agreement»,  or any
subsequent employment agreement in effect immediately prior to the Effective
Date (“Employment Agreement”) by any successor as contemplated by the Employment
Agreement.

      

      (d)           Notice of
Termination.  Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 13(d) of this
Agreement.  For  purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 90 days after the giving of such
notice).  The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.  Notwithstanding the
foregoing, a Notice of Termination by the Executive must be provided to the
Company within 90 days of the date the Executive has actual knowledge of the
occurrence of the event or circumstances described in the definition of Good
Reason.

      

      (e)           Date of
Termination.  "Date of Termination"
means (i) if the Executive's employment is terminated by the Company for Cause,
the date of receipt of the Notice of Termination, (ii) if the Executive's
employment is terminated by the Company other than for Cause, death or
Disability, the date on which the Company notifies the Executive of such
termination, (iii) if the Executive's employment is terminated by reason of
death or Disability, the date of death of the Executive or the Disability
Effective Date, as the case may be, and (iv) if the Executive’s employment is
terminated by the Executive for Good Reason, 31 days following the date of
receipt of the Notice of Termination, or any later date specified therein, as
the case may be, provided that the Executive does not terminate his employment
for Good Reason until the Executive has given the Company or its successor at
least 30 days in which to cure the event or circumstance set forth in the Notice
of Termination and such event or circumstance is not cured by the 30th
day.

       

       

      
        
          
          

        

        
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      5.           Obligations of the Company
upon Termination.

      

      (a)  Good Reason; Other Than for
Cause, Death or Disability.  If, within 24 months after the
Effective Date, the Company terminates the Executive's employment other than for
Cause, death or Disability or the Executive terminates employment for Good
Reason:

      

      (i)           the
Company shall pay the Executive the following amounts in a lump sum in cash as
soon as reasonably practicable after the Date of Termination, provided that, the
payment at such time can be characterized as a “short-term deferral” for
purposes of  Code Section 409A, or if any portion of the payment
cannot be so characterized, and the Executive is a “specified employee” under
Code Section 409A, such portion of the payment shall be delayed until the
earlier to occur of the Executive’s death or the date that is six months and one
day following the Executive’s Date of Termination:

      

      (A)           (1)
the Executive's annual base salary on the Effective Date (the "Annual Base Salary")
through the Date of Termination, to the extent not theretofore paid to the
Executive, (2) the Annual Bonus Amount (as defined in the Executive’s Employment
Agreement) with respect to a completed fiscal year to the extent not theretofore
paid to the Executive, and (3) the Pro Rata Share of the Annual Bonus (as
defined below) for the fiscal year in which the Date of Termination
occurs.  "Pro Rata Share of the Annual
Bonus" will be equal to the product of (1) the Annual Bonus, calculated
assuming the greater of (x) 100% of the Company's incentive compensation
financial targets (as defined in such incentive compensation plan) are achieved
in such year and (y) the actual attainment of the Company's incentive
compensation financial targets as of the Date of Termination are achieved in
such year, in each case without regard to personal attainment, and (2) a
fraction equal to the number of full and partial months in such year prior to
the Date of Termination over 12 (the sum of the amounts described in this clause
(A) shall be hereinafter referred to as the "Accrued
Obligations"); and

      

      (B) two times the sum of (1) the Annual
Base Salary and (2) an amount equal to 100% of the Executive's incentive
compensation target (as defined in such incentive compensation plan), calculated
as though the Company attains its financial targets (without regard to personal
attainment) (the sum of clauses (B) (1) and (B) (2) shall be hereinafter
referred to as the "Annual
Compensation").

       

       

      
        
          
          

        

        
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      (ii)           for
a period of two years following the Executive's Date of Termination or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and the
Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 3(b) of this Agreement if the Executive's employment had not been
terminated or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
Subsidiaries, and their families, provided, however, that if the Executive
becomes re-employed with another employer and is eligible to receive medical or
other welfare benefits under another employer-provided plan, the medical and
other welfare benefits described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility.  Reimbursement of expenses incurred by Executive pursuant
to this Section 5(a)(ii) shall be made promptly as incurred, and in no event
later than December 31 of the year following the year in which such expenses
were incurred, and the amount of expenses eligible for reimbursement, or in-kind
benefits provided, in any year shall not affect the amount of expenses eligible
for reimbursement, or in-kind benefits to be provided, in any other year, except
for any limit on the amount of expenses that may be reimbursed under an
arrangement described in Code Section 105(b).  If Executive is a
“specified employee” under Code Section 409A, the full cost of the continuation
or provision of employee benefit plans, programs or arrangements (other than
medical or dental benefit plans) under this Section 5(a)(ii) shall be paid by
Executive until the earlier to occur of Executive’s death or the date that is
six months and one day following Executive’s termination of employment, and such
cost shall be reimbursed by the Company to, or on behalf of, Executive in a lump
sum cash payment on the earlier to occur of Executive’s death or the date that
is six months and one day following Executive’s termination of
employment;

      

      (iii)           to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under, and in accordance
with the terms of, any plan, program, policy or practice or contract or
agreement of the Company and its Subsidiaries (the amounts and types of benefits
described in Sections 5(a)(ii) and (iii) of this Agreement, without regard to
duration, shall be hereinafter referred to as the "Other Benefits");
and

      

      (iv)           to
the extent the Executive has unvested benefits under the Lexmark Retirement
Plan, any Supplemental and/or Excess Benefits Plans and/or the Lexmark Savings
Plan, or other unvested benefits under the plans, practices, policies and
programs described in Section 3(a) of this Agreement, the Company shall
accelerate the vesting of benefits under any such plan, practice, policy or
program or, if such accelerated vesting is prohibited under applicable laws, the
Company shall provide and/or pay the Executive outside any such plan, practice,
policy or program the benefits that would have become vested if such
acceleration of vesting were not prohibited.

       

      
        
          
          

        

        
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      (b)           Death.  If
the Executive's employment is terminated by reason of the Executive's death
within 24 months after the Effective Date, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits.  Accrued Obligations shall be paid to
the Executive’s estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination.  With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section
5(b) shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and its Subsidiaries to the estates
and beneficiaries of peer executives of the Company and its Subsidiaries under
such plans, programs, practices and policies relating to death benefits, if any,
as in effect with respect to other peer executives and their beneficiaries at
any time during the 120-day period immediately preceding a Proposed Change in
Control or, if more favorable to the Executive's estate and/or the Executive's
beneficiaries, as in effect on the date of the Executive's death with respect to
other peer executives of the Company and its Subsidiaries and their
beneficiaries.

      

      (c)           Disability.  If
the Executive's employment is terminated by reason of the Executive's Disability
within 24 months after the Effective Date, this Agreement shall terminate
without further obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other
Benefits.  Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days after six months have passed from the Date of
Termination.  With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 5(c) shall include, and the
Executive shall be entitled after the Disability Effective Date to receive,
disability and other benefits at least equal to the most favorable of those
generally provided by the Company and its Subsidiaries to disabled executives
and/or their families in accordance with such plans, programs, practices and
policies relating to disability, if any, as in effect generally with respect to
other peer executives and their families at any time during the 120-day period
immediately preceding a Proposed Change in Control or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
generally with respect to other peer executives of the Company and its
Subsidiaries and their families.

      

      (d)           Cause; Other than for Good
Reason.  If the Executive's employment shall be terminated for
Cause after the Effective Date, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive
(x) the Annual Base Salary through the Date of Termination and (y) Other
Benefits accrued through the Date of Termination, in each case to the extent
theretofore unpaid.  If the Executive voluntarily terminates
employment at any time following the effective date of this Agreement, excluding
a termination for Good Reason, this Agreement shall terminate without further
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      Obligations
and the timely payment or provision of Other Benefits accrued through the Date
of Termination.  In such case, all Accrued Obligations shall be paid
to the Executive in a lump sum in cash within 30 days after six months have
passed from the Date of Termination.

      

      6.           Effect of Change in Control
on Incentive Awards.  The effect of a Change in Control on
Incentive Awards granted to the Executive under the Company's Amended and
Restated Stock Incentive Plan, dated as of April 30, 2003, or any successor plan
(the "SIP") and any Award Agreement (as defined in the SIP) shall be as provided
in the SIP.  Pursuant to authority granted to the Board under the SIP
to amend or modify the SIP and the Board's approval of this Agreement, the
Company shall not be permitted to substitute Alternative Awards (as defined in
the SIP) pursuant to the SIP without the written agreement of the
Executive.  Notwithstanding the foregoing, if the Company shall
terminate the Executive’s employment other than for Cause, death or Disability
or the Executive shall terminate his employment for Good Reason, the Company
shall accelerate the vesting of Incentive Awards.  In addition, the
number of Performance Awards (as defined in the SIP) that shall be paid to the
Executive upon a Change in Control shall be calculated assuming the greater of
(x) 100% of the Company's target performance objectives (as defined in such
Performance Awards) are achieved over the measurement period or periods and (y)
the actual attainment of the Company's performance objectives from the beginning
of the measurement period or periods through the Change in Control are achieved
over the measurement period or periods.

      

      7.           Non-exclusivity of Rights;
Vested and Severance Benefits.  Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its Subsidiaries
and for which the Executive may qualify, nor, subject to the last sentence of
this Section 7, shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or any
of its Subsidiaries.  Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
Subsidiaries at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.  Notwithstanding the
foregoing, if the Executive becomes entitled to receive severance pay under
Section 5(a) hereof, such severance pay shall be in lieu of any severance pay
under other contract or agreement, any severance or separation plan, program or
policy of the Company or any of its Subsidiaries to which the Executive would
otherwise have been entitled.

      

      8.           Settlement; Mitigation;
Legal Fees and Expenses.

      

      (a)           Full
Settlement.  The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.

       

       

      
        
          
          

        

        
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      (b)           No Mitigation
Required.  In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and,
except as specifically provided in Section 5(a)(ii), such amounts shall not be
reduced whether or not the Executive obtains other employment.

      

      (c)           Advancement of Legal Fees
and Expenses.  The Company agrees to pay (without duplication)
as incurred, to the fullest extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of  any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement, the Employment Agreement or any guarantee of performance thereof
(whether such contest is between the Company and the Executive or between either
of them and any third party, and including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").  Reimbursement
of expenses in accordance this Section 8(c) shall be made promptly as incurred,
and in no event later than December 31 of the year following the year in which
such expenses were incurred, and the amount of such expenses eligible for
reimbursement in any year, shall not affect the amount of such expenses eligible
for reimbursement in any other year.

      

      9.           Tax Equalization for
Compensation.

      

      (a)           Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but excluding any
additional payments required under this Section 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code, or any
corresponding provision of any subsequent Internal Revenue Code, as the same may
be amended from time to time, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Executive of all Federal, state, local
and foreign taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and the Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.

      

      (b)           Subject
to the provisions of Section 9(c), all determinations required to be made under
this Section 9, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      PricewaterhouseCoopers
L.L.P. or such other certified public accounting firm, law firm or consulting
firm as may be designated by the Executive (the "Accounting Firm"),
which shall provide detailed supporting calculations to the Company and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is reasonably requested
by the Company.  In the event that the Accounting Firm is serving as
accountant, auditor or advisor for the individual, entity or group effecting the
Change in Control, the Executive shall appoint another nationally recognized
accounting firm, law firm or consulting firm to make the determinations required
thereunder (which accounting firm, law firm or consulting firm shall then be
referred to as the Accounting Firm hereunder).  All fees and expenses
of the Accounting Firm shall be borne solely by the Company.  Any
Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the
Company to the Executive within ten days of the receipt of the Accounting Firm's
determination.  Any determination by the Accounting Firm shall be
binding upon the Company and the Executive.  As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder.  In the event that the Company exhausts its remedies
pursuant to Section 9(c) and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Executive.

      

      (c)           The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment or an Underpayment.  Such notification shall be
given as soon as practicable but not later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due).  If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

      

      (i)           give
the Company any information reasonably requested by the Company relating to such
claim,

      

      (ii)           take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

      

      (iii)           cooperate
with the Company in good faith in order effectively to contest such claim,
and

       

       

      
        
          
          

        

        
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      (iv)           permit
the Company to participate in any proceedings relating to such
claim;

      

      provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses.  Without limitation on the foregoing provisions of this
Section 9(c), the Company shall control all proceedings taken in connection such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest  the claim in
any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder, and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

      

      (d)           If,
after the receipt by the Executive of an amount advanced by the Company pursuant
to Section 9(c), the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the Company's complying
with the requirements of Section 9(c)) promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 9(c), a determination is made
that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of their intent
to contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

      

      (e)           The
Company reserves the right to amend or terminate the provisions of this Section
9 at any time, provided, that no such amendment or termination shall adversely
affect the right of any Executive to receive any amount 

       

      
        
          
          

        

        
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      under
this Section who becomes subject to the tax imposed by Section 4999 of the Code,
in whole or in part, by reason of any change in the ownership or effective
control of the Company occurring prior to the date of such amendment or
termination.

      

      (f)           Notwithstanding
anything to the contrary in the foregoing provisions of this Section 9, (i)
payment of any Gross-Up Payment shall be made in accordance with Section 9(b)
above and in no event later than December 31 of the year next following the year
in which the Excise Tax is remitted to the taxing authority, and (ii)
reimbursement of expenses incurred due to a tax audit or litigation addressing
the existence or amount of a tax liability, whether federal, state, local or
foreign, shall be made as incurred and in no event later than the end of the
year following the year in which the taxes that are the subject of the audit or
litigation are remitted to the taxing authority, or where as a result of such
audit or litigation no taxes are remitted, the end of the year following the
year in which the audit is completed or there is a final nonapplicable
settlement or other resolution of the litigation.

      

      10.           Unauthorized Disclosure;
Non-Competition; Non-Interference and Return of Documents.

      

      (a)           Unauthorized
Disclosure.  During and after the term of the Executive's
employment with the Company and its Subsidiaries, the Executive shall not,
without the written consent of the Board or the General Counsel or the Chief
Executive Officer of the Company, disclose to any person (other than an employee
or director of the Company or its affiliates, or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Company) any confidential or
proprietary information, knowledge or data that is not theretofore publicly
known and in the public domain obtained by the Executive while in the employ of
the Company and its Subsidiaries with respect to the Company or any of its
Subsidiaries or affiliates or with respect to any products, improvements,
formulas, recipes, designs, processes, customers, methods of distribution,
operation or manufacture, sales, prices, profits, costs, contracts, suppliers,
business prospects, business methods, techniques, research, plans, strategies,
personnel, organization, trade secrets or know-how of the Company or any of its
Subsidiaries or affiliates (collectively, "Proprietary Information"), except as
may be required by law or in connection with any judicial or administrative
proceedings or inquiry.

      

      (b)           Non-Competition.  During
the period of the Executive's employment with the Company and its Subsidiaries
and thereafter for a period of two years from the Date of Termination, the
Executive, regardless of whether such termination is at the insistence of the
Company or the Executive, shall not engage directly or indirectly in, become
employed by, serve as an agent or consultant to, or become a partner, principal
or stockholder of, any partnership, corporation or other entity which competes
with a business (including any product or service offering of such business)
that represents 5% or more of the aggregate gross revenues of the Company and
its Subsidiaries, or competes with the Company’s solution services business, and
which is 

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      then
engaged in such competition in any geographical area in which the Company or any
of its Subsidiaries is then engaged in such business without first obtaining
written approval from the Company, provided that the Executive's ownership of
less than 1% of the issued and outstanding stock of any corporation whose stock
is traded on an established securities market shall not constitute competition
with the Company or any of its Subsidiaries.  The Company may grant or
deny such approval in its sole discretion.

      

      (c)           Non-Interference.  During
the period of the Executive's employment with the Company and its Subsidiaries
and thereafter for a period of two years from the Date of Termination, the
Executive, regardless of whether such termination is at the insistence of the
Company or the Executive, shall not, directly or indirectly, for his own account
or the account of any other person or entity: (a) disparage, criticize, or
otherwise make any derogatory statements regarding the products and services of
the Company or its Subsidiaries or the Board, officers or employees; (b)
solicit, recruit, induce, employ or hire, or attempt to solicit, recruit,
induce, employ or hire, directly or by assisting others (including but not
limited to, any new employer, any employee of the Company or its Subsidiaries
who within six months of that time has been employed by the Company or its
Subsidiaries) any person or entity who or which is at the time, or within six
months of that time has been, employed by or otherwise engaged to perform
services for the Company or its Subsidiaries; or (c) solicit, interfere with, or
otherwise entice or attempt to entice away any person or entity who or which is
a customer or prospective customer of the Company or its Subsidiaries (including
a person or entity who or which is a customer or prospective customer either by
direct contract or relationship with the Company or its Subsidiaries, or who or
which has purchased, leased, or otherwise acquired the Company’s or its
Subsidiaries’ products or services from the Company’s or its Subsidiaries’
distributors, parties for whom the Company is an original equipment
manufacturer, dealers or resellers), a supplier to the Company or its
Subsidiaries, or has, within the previous 36 months, been a customer of or
supplier to the Company or its Subsidiaries.

      

      (d)           Return of
Documents.  In the event of the termination of the Executive's
employment with the Company and its Subsidiaries for any reason, the Executive
will deliver to the Company all memoranda, notes, records, drawings, manuals, or
other documents, and all copies thereof including any electronic information
(e.g., e-mails and spreadsheets) or copies, that are in the possession of the
Executive, whether made or compiled by the Executive or furnished to the
Executive by the Company.

      

      (e)           Waiver of Defenses;
Enforceability of Covenants.  The Executive acknowledges and
agrees that the covenants contained in this Section 10 (as well as each
sub-section) shall be construed as agreements independent of each other and of
any provision of this or any other contract between the parties hereto, and that
the existence of any claim or cause of action by the Executive against the
Company, whether predicated upon this or any other contract, shall not
constitute a defense to the enforcement by the Company of said
covenants.  The Executive further agrees that the 

       

      
        
          
          

        

        
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      term of
the covenants contained in this Section 10 (as well as each sub-section) and the
geographic limitations are reasonable limits within the context of the
Executive’s current or former activities for the Company.  The
Executive therefore waives any defense to enforcement of these covenants on the
grounds that these covenants are not valid or that the terms of these covenants
are not reasonable, but the Executive expressly does not waive the right to seek
a construction of the covenants themselves.  In the event that any
provisions relating to this covenant shall be declared by a court of competent
jurisdiction to exceed the maximum time periods and/or areas of restriction
deemed reasonable and enforceable, the time period and/or areas of restriction
deemed reasonable and enforceable by such court shall become and thereafter be
the maximum time period and/or areas.

      

      (f)           Company’s Right to Obtain an
Injunction.  The Executive acknowledges that the Proprietary
Information and the covenants contained in this Section 10 are extremely
valuable to the Company and Executive recognizes and agrees that the injury the
Company will suffer in the event of the Executive's breach of this Agreement
cannot be compensated by monetary damages alone, and the Executive therefore
agrees that the Company, in addition to and without limiting any other remedies
or rights that it may have, either under this Agreement or otherwise, shall have
the right to obtain an injunction against the Executive (including but not
limited to, a temporary restraining order, or a preliminary or permanent
injunction), without the posting of any bond and without proof of actual
damages, to prevent breaches or threatened breaches of this Agreement and/or to
compel specific performance of this Agreement from a court of competent
jurisdiction, enjoining any such breach.

      

      11.           Successors.

      

      (a)           This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution.  This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal
representatives.

      

      (b)           This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

      

      (c)           The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.  As used
in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

       

       

      
        
          
          

        

        
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      12.           Trust
Deposit.  Upon the occurrence of a Proposed Change in Control
during the Change in Control Period, the Company shall deposit in trust or
escrow with a third party cash in an amount sufficient to provide all of the
benefits and other payments to which the Executive would be entitled hereunder
if a Change in Control occurred on the date of the Proposed Change in Control
and the Executive's employment were terminated by the Company without Cause
immediately thereafter.  Upon such deposit, references hereunder to
any payment by the Company shall be deemed to refer to a payment from such trust
or escrow; provided, however, that nothing contained herein shall relieve the
Company of its obligations to make the payments required of them hereunder in
the event any such payment is not made from the trust or escrow.  If
the Proposed Change in Control does not occur within 24 months following such
deposit, the Company may recover any funds deposited.

      

      13.           Miscellaneous.

      

      (a)          
Governing Law and
Venue.  If a dispute arises between the parties including
disputes that may arise out of or relates to this Agreement or the breach,
termination, or validity thereof (hereinafter “Dispute”), and if a Dispute
cannot be settled through direct discussions, the parties agree that a federal
or state court located in Fayette County, in the Commonwealth Kentucky, is an
appropriate forum and the parties hereby consent to the jurisdiction of such
courts.  AS SUCH, ANY AND ALL ACTIONS, SUITS, OR OTHER LEGAL
PROCEEDINGS ARISING FROM OR REGARDING THIS AGREEMENT AND ANY DISPUTE BETWEEN THE
PARTIES (INCLUDING ANY ACTION BY EXECUTIVE AGAINST ANOTHER COMPANY EMPLOYEE(S)
OR AGENT(S)) SHALL BE BROUGHT EXCLUSIVELY IN A STATE OR FEDERAL COURT SITUATED
WITHIN FAYETTE COUNTY IN THE COMMONWEALTH OF KENTUCKY.  THE PARTIES
WAIVE ANY OBJECTION A PARTY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
PROCEEDING IN FAYETTE COUNTY THE LOCATION OF THE PRINCIPAL OFFICE OF THE
COMPANY; provided, however, that an action or ancillary proceeding to enforce
injunctive relief or a judgment obtained by a party in said Fayette County court
may be in any appropriate forum.  This Agreement shall be deemed to
have been entered into in the Commonwealth of Kentucky; this Agreement is a
contract performable wholly or partly within the Commonwealth of Kentucky; and
this Agreement as well as any Dispute shall be governed by, enforced and
interpreted in accordance with the laws of the Commonwealth of Kentucky
notwithstanding its conflict of law provisions.  In any action by
Company against Executive in any forum, Executive waives personal service of any
summons, complaint or other process and agrees that the service thereof may be
made personally or by registered or certified mail directed to the Executive at
his/her home address. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR OTHER LEGAL PROCEEDING.

      

      (b)             Condition to
Payments.  The Company's obligation to make any payments
hereunder shall be conditioned upon Executive’s continued compliance with the
terms of this Agreement and the Company's receipt of an appropriately signed

       

      
        
          
          

        

        
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      "General
Release and Covenant Not to Sue" in form and substance satisfactory to the
Company.  Payments made under this Agreement shall immediately cease
and the Employee shall repay within 60 days of the violation all amounts
previously paid under this Agreement in the event that the Employee violates the
terms of the “General Release and Covenant Not to Sue” or the Employee violates
any of the covenants contained in Section 10 of this Agreement prior to the Date
of Termination or thereafter.

      

      (c)           Internal Revenue Code
Section 409A.  The time or schedule of any payment or amount
scheduled to be paid pursuant to the terms of this Agreement that is subject to
Code Section 409A may not be accelerated except as otherwise permitted under
Code Section 409A and the guidance and Treasury Department regulations issued
thereunder.  The parties intend that this Agreement be interpreted and
construed in compliance with Section 409A of the Code and Treasury Department
regulations and other interpretive guidance issued thereunder to the extent
applicable.  Notwithstanding the foregoing, the Company shall not be
required to assume any increased economic burden in connection
therewith.

      

      (d)           Notices.  Any
notice or other communication required or permitted to be delivered under this
Agreement shall be (i) in writing, (ii) delivered personally, by courier service
or by certified or registered mail, first-class postage prepaid and return
receipt requested, (iii) deemed to have been received on the date of delivery or
on the third business day after the mailing thereof, and (iv) addressed as
follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):

      

      If to the
Executive:

      

      to the Executive at the address listed
on the signature page hereof

      

      If to the
Company:

      

      Lexmark International,
Inc.

      One Lexmark Centre Drive

      740 West New Circle Road

      Lexington,
KY  40550

      Attn:  General
Counsel

      

      (e)           Amendment.  This
Agreement may not be amended or modified, except as provided in Section 9(e),
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.  Notwithstanding the
foregoing, any modification, waiver or amendment required by law may be made, or
be deemed to be made, by a duly authorized officer of the Company without the
express approval of the Board and without the Executive’s consent.

      

      (f)           Headings.  The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect.

       

       

      
        
          
          

        

        
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      (g)           Taxes.  The
Company may withhold from any amounts payable under this Agreement such Federal,
state, local and foreign taxes as shall be required to be withheld pursuant to
any applicable law, regulation or ruling.

      

      (h)           Waiver.  The
Executive's or the Company's failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 4(c) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

      

      (i)           Employment "At Will"; Entire
Agreement.  The Executive and the Company acknowledge that,
except as may otherwise be provided in the Employment Agreement or under any
other written agreement between the Executive or the Company, the employment of
the Executive by the Company is "at will" and the Executive's employment may be
terminated by either the Executive or the Company at any time.  Except
as otherwise expressly provided herein, this Agreement, the Employment Agreement
and the Indemnification Agreement made and entered into as of
«Date_of_Indemnification_Agreement», by and among the Company and the Executive
(the "Indemnification Agreement") constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, and all promises,
representations, understandings, arrangements and prior agreements relating to
such subject matter (including those made to or with the Executive by any other
person or entity) are merged herein, in the Employment Agreement and in the
Indemnification Agreement and superseded hereby and thereby.  To the
extent that the amount and timing of payments required to be made under this
Agreement are inconsistent with or different from the amount and timing of
payments required to be made pursuant to the Employment Agreement and/or the
Indemnification Agreement, the Executive shall be entitled to the most favorable
benefits provided to the Executive under the provisions of any such
agreements.  In the avoidance of any doubt, this Agreement does not
alter, modify or otherwise amend or supersede any agreement or understandings
between the Company and Executive as to the Lexmark Agreement Regarding
Confidential Information and Intellectual Property, any stock option
plan/agreements, sales commission plans/agreements, bonus plans/agreements,
incentive compensation plans/agreements or restricted stock unit
plans/agreements that may be offered to Executive by the Company, from time to
time.

      

      (j)           Reformation;
Severability.  If any provision of this Agreement is held by a
court to be unreasonable in scope or duration or otherwise, the court shall, to
the extent permitted by law, reform such provision so that it is enforceable,
and enforce the applicable provision as so reformed.  Reformation of
any provision of this Agreement pursuant to this subsection shall not affect any
other provision of this Agreement or render this Agreement unenforceable or
void.

       

       

      
        
          
          

        

        
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      (k)           Payments
Unconditional.  In no event shall an asserted violation of the
provisions of this Agreement or any other obligation, covenant or agreement
constitute a basis for deferring or withholding any amounts otherwise payable to
the Executive under this Agreement, the Employment Agreement or the
Indemnification Agreement.

      

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

      

      (m)             Pronouns.  Use
of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate.

      

      (n)             Termination of Existing
Agreement.  Upon the execution of this Agreement by a
representative of the Company and the Executive, the Change in Control Agreement
entered into by the parties on «Date_of_Old_CIC_Agree», is hereby terminated,
and each party to this Agreement hereby relinquishes all rights and benefits and
terminates all duties and obligations pursuant to such agreement.

      

      (o)             Employee
Acknowledgement.  Executive represents and confirms that
Executive has been, and is hereby, advised by the Company to consult (at
Executive’s expense) with an attorney and otherwise seek financial and legal
advice prior to executing this Agreement, has thoroughly discussed all aspects
of this Agreement with such advisors as Executive has determined appropriate,
has carefully read and fully understands all of the provisions of this
Agreement, is not relying on any statements made by any representative,
attorney, employee, officer or member of the Board of Directors of the Company,
is voluntarily entering into this Agreement, and has had a reasonable period of
time to consider this Agreement.

      

      {Signature
Page Follows}

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Executive has hereunto set the Executive's hand, and,
pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.

      

      

      LEXMARK INTERNATIONAL,
INC.

      

      

      

      By:  __________________________________

      Paul J. Curlander

      Chairman and Chief Executive
Officer

      

      

      EXECUTIVE: «Name»

      

      

      ___________________________________

      

      Address:

      

      ___________________________________

      

      

      ___________________________________

      
        
           

        

        
          22lxkexhibit107.htm

    

      Exhibit
10.7

      

      

      Lexmark
International, Inc.

      

      2006-2008
Long-Term Incentive Plan

      

      Agreement

      

      (As
Amended and Restated Effective as of December 17, 2007)

      

      

      

      This
2006-2008 Long-Term Incentive Plan (the "2006-2008 LTIP") Agreement
(“Agreement”) between Lexmark International, Inc., a Delaware corporation (the
"Company"), and the person specified on the signature page (the "Participant"),
as entered into as of March 13, 2006, is hereby amended and restated, effective
as of December 17, 2007.

      

      This
Agreement is only a summary of the principal terms governing the 2006-2008 LTIP.
The 2006-2008 LTIP is subject in all respects to the terms of the Lexmark
International, Inc. Stock Incentive Plan, as amended and restated April 30, 2003
(the "Plan").  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.  It is important that the Participant read and understand the
Plan and not rely solely on the brief description that follows.  All
capitalized terms used but not defined herein shall have the meaning set forth
in the Plan.

      

      

      Overview

      

      The
2006-2008 LTIP is designed to reward the achievement of specific performance
objectives over a three-year period.  The Compensation and Pension
Committee of the Board of Directors of the Company (the "Committee") established
the performance objectives and performance measures set forth below for the
performance period beginning January 1, 2006 and ending December 31, 2008 (the
"Performance Period").

      

      Depending
upon the Company's attainment of the performance objectives and certain
financial performance measures of the Company's peers, the Participant may be
eligible to receive a payment under the 2006-2008 LTIP, as set forth
below.

      

      

      Plan
Measurements

      

      For the
Performance Period, the Committee has established the following performance
measures based on the Company's strategic plan for the Performance
Period:

      

      

      [Intentionally
Omitted]

      

      

      
        
          
            Page
1

          

           

        

        
           

          
            

          

        

        
           

        

      

      Market
share attainment will be calculated by aggregating the points achieved in each
market segment as outlined in the following tables.  Segment market
share will be measured at the end of the Performance Period based on market
research reported by IDC or such other market research provider as determined to
be appropriate by the Committee at the time, in its sole
discretion.

      

      

      

      

      

      

      

      [Intentionally
Omitted]

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      At the end of the three-year Performance Period, if the
aggregate attainment based upon the two performance measures is below the
Minimum level, there is an additional calculation comparing the Return on
Invested Capital ("ROIC") for the Company with that of its peer companies over
the same three-year period.  The calculation of the Company's ROIC
will be based upon Net Income before Extraordinary Items.  If the
Company's ROIC is at or above the median average of the ROIC of the peer
companies included in the S&P Technology Index or, in the event that such
index is no longer available, such other index as determined to be appropriate
by the Committee at the time in its sole discretion, the 2006-2008 LTIP will be
funded at 15% of Target for each of the two performance measures (as specified
below) regardless of any below-Minimum attainment for the two performance
measures.

      

      

      Target
Opportunity

      

      The
2006-2008 LTIP awards are denominated in cash, but in the Committee's sole
discretion may be paid in cash, the Company’s Class A Common Stock or a
combination of cash and the Company’s Class A Common Stock.  For the
Performance Period, your target award is [TARGET AMOUNT].

      

      The chart
below and the examples in Attachment A illustrate how the 2006-2008 LTIP awards
will be calculated. The level of attainment for Operating Income is not linked
to the level of attainment for Market Share.  As a result, the level
of attainment on each performance measure may independently generate a payment
to Participants based on its achievement.

      

      
        
          
            Page
2

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      ------------------------------------------
------------------------- ----------------------
------------------------

      Target
Opportunity                            Minimum                  Target               Maximum

      ------------------------------------------
------------------------- ----------------------
------------------------

      ------------------------------------------
------------------------- ----------------------
------------------------

      

      Operating
Income                          15%
of Target       50% of
Target     100% of Target

      

      ------------------------------------------
------------------------- ----------------------
------------------------

      

      Market
Share                                 15%
of Target       50% of
Target     150% of Target

      

      ------------------------------------------
------------------------- ----------------------
------------------------

      

      

      Committee
Discretion

      

      The
Committee may use its sole discretion in determining the amount of any payment,
or no payment, to Participants under the 2006-2008 LTIP based on any factors
that it deems appropriate.

      

      

      Payout
Timing

      

      The
Committee intends to review and approve the Company's business results and
Market Share position as compared to the 2006-2008 LTIP performance measures and
the Company's business results compared to the peer companies included in the
index stated above following the end of the three-year Performance Period. These
reviews are expected to occur in a 2009 Committee meeting.  Payments
will be made only after the Committee approval has occurred, and any such
payments will be made in 2009 and no later than two and one-half months after
the end of the three-year Performance
Period.    

      

      Termination of
Employment

      

      Except in
the event of the death, Disability or Retirement of the Participant during the
third year of the Performance Period, the Participant must be employed at the
end of the Performance Period (December 31, 2008) to receive a
payout.  If the Participant terminates employment for any reason
(including death, Disability or Retirement) during the first two years of the
Performance Period, the Participant shall forfeit all rights to any payments
under this Agreement.  If the Participant should terminate employment
due to death, Disability or Retirement during the third year of the Performance
Period, the payout, if any is achieved based on actual performance of the
Company and its peers over the Performance Period, will be prorated and paid out
after the end of the Performance Period subject to the approval of the Committee
and in accordance with the payout timing described above.  For
purposes of this Agreement, (a) “Disability” means a physical or mental
disability or infirmity of the Participant, as defined in any disability plan
sponsored by the Company or any Subsidiary which employs the Participant, or, if
no such plan is sponsored by the Participant’s employer, the Lexmark
International, Inc. Long-term Disability Plan; and (b) “Retirement” means 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.

      

      

      Forfeiture of the
Award

      

      The
Participant acknowledges that this opportunity for a long-term incentive award
has been granted as an incentive to the Participant to remain employed by the
Company or one of its Subsidiaries and to exert his or her best efforts to
enhance the value of the Company and its Subsidiaries over the long-term.
Accordingly, the Participant agrees that if he or she (a) within 12 months of
termination of employment with the Company, or its Subsidiaries, accepts
employment with a competitor of the Company or one of its Subsidiaries or
otherwise engages in competition with the Company or one of its Subsidiaries, or
(b) within 36 months of termination of employment with the Company, or its
Subsidiaries, directly or indirectly, disrupts, damages, interferes or otherwise
acts against the interests of the Company or one of its Subsidiaries,

       

      
        
          Page
3

        

        
          
          

          
            

          

        

        
          
          

        

      

      including,
but not limited to, recruiting, soliciting or employing, or encouraging or
assisting the Participant's new employer or any other person or entity to
recruit, solicit or employ, any employee of the Company or one of its
Subsidiaries without the Company's prior written consent, which may withheld in
its sole discretion, or (c) within 36 months of termination of employment with
the Company, or its Subsidiaries, disparages, criticizes, or otherwise makes any
derogatory statements regarding the Company or its Subsidiaries or their
directors, officers or employees, or (d) discloses or otherwise uses
confidential information or material of the Company or one of its Subsidiaries,
each of these constituting a harmful action, then the Participant shall
immediately repay to the Company the full amount of the award received under the
terms and conditions of the 2006-2008 LTIP.  The Committee shall have
the right not to enforce the provisions of this paragraph with respect to the
Participant.

      

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

      

      

      Tax
Withholding

      

      In the
event that the payout of the award is made in Class A Common Stock of the
Company, delivery of such stock shall not be made unless and until the
Participant, or, if applicable, the Participant’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 Participant’s applicable withholding and
other tax requirements, the Company may, in its sole discretion, withhold a
number of shares of Class A Common Stock having an aggregate Fair Market Value
on the payout 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
of the Securities Exchange Act of 1934, as amended.  Any cash payment
made under this Agreement shall be made net of any amounts required to be
withheld or paid with respect thereto (and with respect to any shares of Class A
Common Stock delivered therewith) under any applicable U.S. federal, state and
local and non-U.S. tax withholding and other tax requirements.

      

      

      Transferability

      

      Unless
otherwise provided in accordance with the provisions of the Plan, the award
granted pursuant to this Agreement may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated by the Participant, other than
by will or the laws of descent and distribution.  The term
“Participant” as used in this Agreement shall include any permitted
transferee.

      

      

      Interpretation;
Construction

      

      All
powers and authority conferred upon the Committee pursuant to any term of the
Plan or this 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 this
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 of its subsidiaries, and
shall not incur any liability for any action taken in good faith in reliance
upon the advice of counsel.

      

      

      Amendment

      

      The
Committee shall have the right to alter or amend the 2006-2008 LTIP and this
Agreement in its sole discretion, 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 Participant's rights under the 2006-2008
LTIP without the Participant's consent. Subject to the preceding sentence, any
alteration or amendment to the 2006-2008 LTIP by the Committee shall, upon

       

      
        
          Page
4

        

        
          
          

          
            

          

        

        
          
          

        

      

      adoption
by the Committee, become and be binding and conclusive. The Company shall give
written notice to the Participant of any such alteration or amendment of the
2006-2008 LTIP as promptly as practical after the adoption.  This
Agreement may also be amended in writing signed by both an authorized
representative of the Company and the Participant.

      

      

      No Guarantee of Employment
or Future Incentive Awards

      

      Nothing
in the Plan or the 2006-2008 LTIP shall be deemed to:

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                (c)  provide
      Participant 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.

              

      

      

        

         

        Internal
Revenue Code Section 409A

      

      The parties intend for the awards under this Agreement to meet
the “short-term deferral” exception from the provisions of Code Section 409A and
the Treasury regulations issued thereunder or to otherwise comply with Code
Section 409A and the guidance and Treasury regulations issued
thereunder.  Notwithstanding any provision of the Agreement to the
contrary, the Agreement shall be interpreted and construed consistent with this
intent, provided that the Company shall not be required to assume any increased
economic burden.

      

      Assignability

      

      Neither
this Agreement or any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by the Company or the Participant
without the prior consent of the other party.

      

      

      Applicable
Law

      

      The
2006-2008 LTIP and 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 2006-2008 LTIP or this Agreement to the substantive law of
another jurisdiction.

      

      

      Jurisdiction

      

      The
Participant 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.  Participant further
agrees that any action related to, or arising out of, this Agreement shall only
be brought by Participant 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 

       

      
        
          Page
5

        

        
          
          

          
            

          

        

        
          
          

        

      

      the
courts of any jurisdiction.

      

      

      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.

      

      Severability

      

      If any
provision of this Agreement, the 2006-2008 LTIP or the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions of this Agreement, the 2006-2008 LTIP or the Plan, and the
Agreement, the 2006-2008 LTIP and the Plan shall be construed and enforced as if
such provision had not been included.

      

      

      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.

      

      

      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.

      

      

      Please
sign and date this Agreement to acknowledge that you have read the terms of this
Agreement and understand that this 2006-2008 LTIP award is subject to the
provisions of the Plan and that you agree to the terms and conditions contained
herein and therein.

      

      

                                                      
LEXMARK INTERNATIONAL, INC.

      

      

                                                By:  _________________________________

      

                                                     Vice
President of Human Resources

      

      

                                                     EXECUTIVE:

      

                                                By:  (Name)

      

                                                     _________________________________

                                                     
(sign your name)

      

                                                Date:_________________________________

      

      

                                                     _________________________________

                                                     
(Beneficiary Name)

      

       

      
 

      
        
          Page
6

        

        
          
          

          
            

          

        

        
          
          

        

      

      Attachment A - Long-Term
Incentive Plan Examples

      

      

      

      
        	
                Bonus
      Opportunity

              	
                Minimum

              	
                Target

              	
                Maximum

              
	
                2008
      Operating Income

              	
                15%
      of Target

              	
                50%
      of Target

              	
                100%
      of Target

              
	
                Market
      Share

              	
                15%
      of Target

              	
                50%
      of Target

              	
                150%
      of Target

              

      

      

      

      

      
        

          
            	 
      	
                    Example
      1

                  	
                    Example
      2

                  	
                    Example
      3

                  	
                    Example
      4

                  	
                    Example
      5

                  
	
                    Level of
      Attainment

                  	 
      	 
      	 
      	 
      	 
      
	
                    2008
      Operating Income

                  	
                    Target

                  	
                    Minimum

                  	
                    Maximum

                  	
                    Minimum

                  	
                    Minimum

                  
	
                    Market
      Share

                  	
                    Target

                  	
                    Minimum

                  	
                    Maximum

                  	
                    Target

                  	
                    Below
      Minimum

                  
	 
      	 
      	 
      	 
      	 
      	 
      
	
                    Level of Attainment (% of
      Target)

                  	 
      	 
      	 
      	 
      	 
      
	
                    2008
      Operating Income

                  	
                    50%

                  	
                    15%

                  	
                    100%

                  	
                    15%

                  	
                    15%

                  
	
                    Market
      Share

                  	
                    50%

                  	
                    15%

                  	
                    150%

                  	
                    50%

                  	
                    0%

                  
	
                    Aggregate
      Attainment

                  	
                    100%

                  	
                    30%

                  	
                    250%

                  	
                    65%

                  	
                    15%

                  
	 
      	 
      	 
      	 
      	 
      	 
      
	
                    Target
      Award ($)

                  	
                    $100,000

                  	
                    $100,000

                  	
                    $100,000

                  	
                    $100,000

                  	
                    $100,000

                  
	
                    Aggregate
      Attainment (% of Target)

                  	
                    100%

                  	
                    30%

                  	
                    250%

                  	
                    65%

                  	
                    15%

                  
	
                     

                    Payout

                    (Target
      times Aggregate Attainment)

                  	
                     

                    $100,000

                  	
                     

                    $30,000

                  	
                     

                    $250,000

                  	
                     

                    $65,000

                  	
                    1

                    $15,000

                     

                  

          

 

        
          
 

          
 

        

      

      (1)  Since
the aggregate attainment based upon the two performance measures is below the
Minimum level (30%), there would be an additional calculation comparing the
Return on Invested Capital for the Company with that of its peer companies over
the same three-year Performance Period and the potential for funding the payout
at the Minimum level (30%).

       

      

Page
7

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