Document:

Exhibit 10.1

    

      Exhibit
        10.1

      

      Lexmark
        International, Inc.

      

      2007-2009
        Long-Term Incentive Plan

      

      Agreement

      

      

      

      

      

      

      This
        2007-2009 Long-Term Incentive Plan (the "2007-2009 LTIP") Agreement
        (“Agreement”) by and between Lexmark International, Inc., a Delaware corporation
        (the "Company"), and the person specified on the signature page (the
        "Participant") is entered into as of February 21, 2007.

      

      This
        Agreement is only a summary of the principal terms governing the 2007-2009
        LTIP.
        The 2007-2009 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
        2007-2009 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, 2007 and ending December 31, 2009
        (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 2007-2009 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:

      

      

      [Performance
        Measures - 2009 Operating Income and Branded Hardware Market Share]

      

      

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

      

      

      

      

      [Branded
        Hardware Market Segments]

      

      

      

      At
        the
        end of the three-year Performance Period, if the attainment of Operating
        Income
        and Branded Hardware Market Share results in no funding for the 2007-2009
        LTIP,
        there is an additional calculation comparing the three-year average Return
        on
        Invested Capital ("ROIC") for the Company with that of its peer companies
        over
        the same three-year period (2007 through 2009). The calculation of the Company's
        three-year average ROIC will be based upon the average of Net Income before
        Extraordinary Items for fiscal years 2007 through 2009. If the Company's
        three-year average ROIC is at or above the median of the three-year 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
        2007-2009 LTIP will be funded at 15% of Target for each of the two performance
        measures (30% of Target, as specified below) regardless of any below-Minimum
        attainment for the two performance measures.

      

      

      Target
        Opportunity

      

      The
        2007-2009 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 _____________.

      

      The
        chart
        below and the examples in Attachment A illustrate how the 2007-2009 LTIP
        awards
        will be calculated. The level of attainment for Operating Income is not linked
        to the level of attainment for Branded Hardware Market Share. As a result,
        the
        level of attainment on each performance measure may independently generate
        a
        payment to Participants based on its achievement.

      

      

      
        	
                Target
                  Opportunity

              	
                Minimum

              	
                Target

              	
                Maximum

              
	 	 	 	 
	
                Operating
                  Income

              	
                15%
                  of Target

              	
                50%
                  of Target

              	
                100%
                  of Target

              
	 	 	 	 
	
                Branded
                  Hardware Market Share

              	
                15%
                  of Target

              	
                50%
                  of Target

              	
                150%
                  of Target

              

      

      

      

      Committee
        Discretion

      

      The
        Committee may use its sole discretion in determining any payment, or no payment,
        to Participants under the 2007-2009 LTIP based on any factors that it deems
        appropriate.

      

      

      Payout
        Timing

      

      The
        Committee intends to review and approve the Company's business results and
        Branded Hardware Market Share position as compared to the 2007-2009 LTIP
        performance measures and, if applicable, the Company's ROIC 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 2010 Committee
        meeting. Payments will be made in 2010. Payments will be made only after
        the
        Committee approval has occurred. 

      

      

      Termination
        of Employment

      

      Except
        in
        the event of the death, long-term disability or retirement of the Participant,
        the Participant must be employed at the end of the Performance Period (December
        31, 2009) to receive a payout. If the Participant should die, become long-term
        disabled or retire during 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.

      

      

      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, 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 2007-2009 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 remedies available at law or in equity,
        including, but not limited to, injunctive relief, for any breach of this
        above
        described covenant, promise and agreement. Participant agrees to reimburse
        the
        Company for all costs and expenses, including attorneys’ fees, incurred by the
        Company 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 the Company’s exclusive or entire remedy for
        Participant’s breach, non-compliance or violation of this Agreement or any other
        agreement that Participant may have entered into with the Company.

      

      

      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 2007-2009 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 2007-2009
        LTIP without the Participant's consent. Subject to the preceding sentence,
        any
        alteration or amendment to the 2007-2009 LTIP by the Committee shall, upon
        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 2007-2009 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 2007-2009 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; and

      

      (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
        Company intends for this Agreement to comply with the provisions of Section
        409A
        of the Code and the guidance issued thereunder. The Company intends to amend
        this Agreement, and hereby reserves the right to do so, in the future as
        required to conform to the provisions of Section 409A of the Code with respect
        to amounts subject to Section 409A of the Code.

      

      

      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
        2007-2009 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 2007-2009 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 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 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 2007-2009 LTIP or the Plan shall be held
        invalid or unenforceable, such invalidity or unenforceability shall not affect
        any other provisions of this Agreement, the 2007-2009 LTIP or the Plan, and
        the
        Agreement, the 2007-2009 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 2007-2009 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)

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Attachment
        A - Long-Term Incentive Plan Examples

      

      

      

      

      

      

      

      

      

      

      

      [2007-2009
        LTIP Examples]Exhibit 10.2

    Exhibit
      10.2

    

    

    

    DESCRIPTION
      OF COMPENSATION PAYABLE TO NONEMPLOYEE DIRECTORS

    

    

    Upon
      the
      recommendation of the Corporate Governance and Public Policy Committee of the
      Board of Directors of Lexmark International, Inc., on February 22, 2007, the
      Board approved the compensation to each nonemployee director of the Board with
      respect to his/her service on the Board. The following table sets forth the
      compensation for nonemployee directors for 2007 and 2006:

    

    

    
      	 	 	
                          2007

            	
                          2006

            
	 	 	 	 
	
              ·  

            	
              Presiding
                Director Retainer Fee

            	
              $
                10,000

            	
              $
                10,000

            
	
              ·  

            	
              Committee
                Chair Retainer Fees:

            	 	 
	 	
              o  Finance
                and Audit Committee

            	
              15,000

            	
              10,000

            
	 	
              o  Other
                Committees

            	
              10,000

            	
              6,500

            
	
              ·  

            	
              Annual
                Retainer Fee

            	
              50,000

            	
              40,000

            
	
              ·  

            	
              Board
                Meeting Attendance Fee

            	
              2,500

            	
              2,500

            
	
              ·  

            	
              Committee
                Meeting Attendance Fees:

            	 	 
	 	
              o  Finance
                and Audit Committee

            	
              2,500

            	
              2,500

            
	 	
              o  Other
                Committees

            	
              2,000

            	
              2,000

            
	
              ·  

            	
              Telephonic
                Meeting Attendance Fee

            	
              750

            	
              750

            
	
              ·  

            	
              Initial
                Equity Award - Restricted Stock Units

            	 	 
	 	
              (Face
                Value)

            	
              150,000

            	
              150,000

            
	
              ·  

            	
              Annual
                Equity Award - Stock Options

            	 	 
	 	
              (Face
                Value)

            	
              350,000

            	
              250,000

            
	 	
              (Black-Scholes
                Value)

            	
              185,000

            	
              145,500

            

    

    

    

    Pursuant
      to the terms of the Lexmark International, Inc. 2005 Nonemployee Director Stock
      Plan, each nonemployee director may defer his or her retainer and/or meeting
      fees into Deferred Stock Units based on the fair market value of Lexmark Class
      A
      Common Stock on the date of deferral. The Deferred Stock Units are eligible
      for
      settlement initially on June 30th
      in the
      fifth year following the date of grant.

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