Document:

Lexmark International, Inc., 3Q Form 10Q, Exhibit 10.2

     

     

    Exhibit
      10.2

    

    

    
 

    

    

    

    

    

    

    LEXMARK
      SUPPLEMENTAL SAVINGS AND 

    DEFERRED
      COMPENSATION PLAN

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    TABLE
      OF CONTENTS

    

      
        	
                PREAMBLE

              	
                1

              

      

      

      
        	
                ARTICLE
                  1 - DEFINITIONS

              	
                2

              

      

      

      
        	
                1.1

              	 Account	
                2

              
	
                1.2

              	
                 Beneficiary

              	
                2

              
	
                1.3

              	 Board
                or Board of Directors	
                2

              
	
                1.4

              	 Change
                in Control	
                2

              
	
                1.5

              	 Code	
                2

              
	
                1.6

              	 Committee	
                2

              
	
                1.7

              	 Compensation	
                2

              
	
                1.8

              	 Continuous
                Service	
                3

              
	
                1.9

              	 Disabled
                or Disability	
                3

              
	
                1.10

              	 Effective
                Date	
                3

              
	
                1.11

              	 Eligible
                Employee	
                3

              
	
                1.12

              	 Employer	
                3

              
	
                1.13

              	 ERISA	
                3

              
	
                1.14

              	 Excess
                Compensation	
                3

              
	
                1.15

              	 Identification
                Date	
                3

              
	
                1.16

              	 Key
                Employee	
                3

              
	
                1.17

              	 Participant	
                3

              
	
                1.18

              	 Plan	
                4

              
	
                1.19

              	 Plan
                Year    	
                4

              
	1.20	 Related
                Employer	
                4

              
	
                1.21

              	 Separation
                from Service	
                4

              
	
                1.22

              	 Unforeseeable
                Emergency	
                4

              
	
                1.23

              	 Valuation
                Date	
                4

              

      

      

      
        	
                ARTICLE
                  2 - PARTICIPATION

              	
                5

              

      

      

      
        	
                2.1

              	
                Participation

              	
                5

              
	
                2.2

              	
                Termination
                  of Participation

              	
                5

              

      

      

      
        	
                ARTICLE
                  3 - PARTICIPANT CONTRIBUTIONS

              	
                6

              

      

      

      
        	
                3.1

              	
                Deferral
                  Agreement

              	
                6

              
	
                3.2

              	
                Amount
                  of Deferral

              	
                6

              
	
                3.3

              	
                Timing
                  of Election to Defer

              	
                7

              
	
                3.4

              	
                Election
                  of Payment Schedule and Form of Payment

              	
                7

              

      

      

      

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      

      
        	
                ARTICLE
                  4 - EMPLOYER CONTRIBUTIONS

              	
                9

              

      

      

      
        	
                4.1

              	
                Matching
                  Contributions

              	
                9

              
	
                4.2

              	
                Other
                  Employer Contributions

              	
                9

              

      

      

      
        	
                ARTICLE
                  5 - ACCOUNTS AND CREDITS/OTHER ADJUSTMENTS

              	
                10

              

      

      

      
        	
                5.1

              	
                Establishment
                  of Account

              	
                10

              
	
                5.2

              	
                Contribution
                  Credits to Account

              	
                10

              
	
                5.3

              	
                Interest
                  Credits to Account

              	
                10

              
	
                5.4

              	
                Adjustment
                  of Accounts

              	
                10

              

      

      

      
        	
                ARTICLE
                  6 - RIGHT TO BENEFITS

              	
                11

              

      

      

      
        	
                6.1

              	
                Vesting

              	
                11

              
	
                6.2

              	
                Death

              	
                11

              
	
                6.3

              	
                Disability

              	
                11

              
	
                6.4

              	
                Change
                  in Control

              	
                11

              

      

      

      
        	
                ARTICLE
                  7 - DISTRIBUTION OF BENEFITS

              	
                15

              

      

      

      
        	
                7.1

              	
                Amount
                  of Benefits

              	
                15

              
	
                7.2

              	
                Method
                  and Timing of Distributions

              	
                15

              
	
                7.3

              	
                Unforeseeable
                  Emergency

              	
                15

              
	
                7.4

              	
                Cashouts
                  of Amounts Not Exceeding Stated Limit

              	
                16

              
	
                7.5

              	
                Key
                  Employees

              	
                16

              
	
                7.6

              	
                Permissible
                  Delays in Payment

              	
                17

              

      

      

      
        	
                ARTICLE
                  8 - AMENDMENT AND TERMINATION

              	
                19

              

      

      

      
        	
                8.1

              	
                Amendment
                  by Employer

              	
                19

              
	
                8.2

              	
                Retroactive
                  Amendments

              	
                19

              
	
                8.3

              	
                Plan
                  Termination

              	
                19

              
	
                8.4

              	
                Distribution
                  Upon Termination of the Plan

              	
                20

              

      

      

      
        	
                ARTICLE
                  9 - THE TRUST

              	
                21

              

      

      

      
        	
                9.1

              	
                Establishment
                  of Trust

              	
                21

              
	
                9.2

              	
                Grantor
                  Trust

              	
                21

              
	
                9.3

              	
                Investment
                  of Trust Funds

              	
                21

              

      

      

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      

      
        	
                ARTICLE
                  10 - PLAN ADMINISTRATION

              	
                22

              

      

      

      
        	
                10.1

              	
                Powers
                  and Responsibilities of the Employer

              	
                22

              
	
                10.2

              	
                Powers
                  and Responsibilities of the Committee

              	
                22

              
	
                10.3

              	
                Claims
                  and Review Procedures

              	
                23

              
	
                10.4

              	
                Plan
                  Administrative Costs

              	
                23

              

      

      

      
        	
                ARTICLE
                  11 - MISCELLANEOUS

              	
                24

              

      

      

      
        	
                11.1

              	
                Unsecured
                  General Creditor of the Employer

              	
                24

              
	
                11.2

              	
                Employer’s

              	
                24

              
	
                11.3

              	
                Limitation
                  of Rights

              	
                24

              
	
                11.4

              	
                Anti-Assignment

              	
                24

              
	
                11.5

              	
                Facility
                  of Payment

              	
                24

              
	
                11.6

              	
                Notices

              	
                24

              
	
                11.7

              	
                Tax
                  Withholding

              	
                25

              
	
                11.8

              	
                Indemnification

              	
                25

              
	
                11.9

              	
                Permitted
                  Acceleration of Payment

              	
                25

              
	
                11.10

              	
                No
                  Guarantee of Employment or Participation

              	
                26

              
	
                11.11

              	
                Unclaimed
                  Benefit

              	
                26

              
	
                11.12

              	
                Governing
                  Law

              	
                26

              

      

    

    

    
      
        
          
             

            

            

          

          
          

        

        
          iii

          
            

          

        

        
          
          

          
          

        

      

    

    

    PREAMBLE

    

    

    Lexmark
      International, Inc. ("Employer") hereby establishes the Lexmark Supplemental
      Savings and Deferred Compensation Plan ("Plan"). The Plan is intended to be
      a
“plan which is unfunded and is maintained by an employer primarily for the
      purpose of providing deferred compensation for a select group of management
      or
      highly compensated employees” within the meaning of Sections 201(2), 301(a)(3)
      and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as
      amended, and is further intended to comply with the requirements of Internal
      Revenue Code Section 409A and the guidance issued thereunder and shall be
      implemented and administered in a manner consistent therewith. 

    

    

    

    
      
        
          
             

            

            

          

          
          

        

        
          1

          
            

          

        

        
          
          

          
          

        

      

    

    

    ARTICLE
      1 

    DEFINITIONS

    

    Pronouns
      used in the Plan are in the masculine gender but include the feminine gender
      unless the context clearly indicates otherwise. Wherever used herein, the
      following terms have the meanings set forth below, unless a different meaning
      is
      clearly required by the context:

    

    1.1 “Account”
      means an account established for the purpose of recording amounts credited
      on
      behalf of a Participant and any income, expenses, gains, losses or distributions
      included thereon. The Account shall be a bookkeeping entry only and shall be
      utilized solely as a device for the measurement and determination of the amounts
      to be paid to a Participant pursuant to the Plan. Separate Accounts shall be
      established for a Participant by Plan Year and by type of contribution credited
      to the Participant.

    

    1.2 “Beneficiary”
      means the persons, trusts, estates or other entities designated in writing
      by a
      Participant, or otherwise entitled under Section 6.2 to receive benefits under
      the Plan upon the death of a Participant.

    

    1.3 “Board”
      or “Board of Directors” means the Board of Directors of the
      Employer.

    

    1.4 “Change
      in Control” means the occurrence of an event involving the Employer
      that is described in Section 6.4.

    

    1.5 “Code”
      means the Internal Revenue Code of 1986, as amended.

    

    1.6 "Committee"
      means the Compensation and Pension Committee of the Board of
      Directors.

    

    1.7 “Compensation”
      with respect to a Plan Year means salary, commission payments, and recurring
      payments under any form of variable compensation plan, plus short-term incentive
      compensation (but only to the extent the short-term incentive compensation
      qualifies as performance-based compensation under Code Section 409A) and
      additional compensation paid during such Plan Year, including but not limited
      to
      payments for nonscheduled work days, overtime and shift premium, but excluding
      compensation deferred under any nonqualified deferred compensation plan other
      than this Plan, and also excluding long-term incentive compensation, special
      awards, amounts deferred under the Lexmark Stock Incentive Plan, deferred and
      accrued vacation payments to terminating employees, and any amount reported
      on
      Form W-2 in respect of a stock option exercise. Commissions and any short-term
      incentive compensation earned but not paid at the time of a Participant's
      termination of employment with the Employer or any Related Employer shall be
      treated as having been paid immediately prior to such termination. Compensation
      also shall include elective amounts that are not otherwise includable in the
      gross income of the Participant under Code Sections 125, 132(f)(4), 402(e)(3)
      and 402(h).

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    1.8 "Continuous
      Service" means the Participant's Continuous Service credited under the
      Lexmark Savings Plan.

    

    1.9 “Disabled”
      or "Disability" means a determination by the Employer that the
      Participant is, by reason of any medically determinable physical or mental
      impairment which can be expected to result in death or last for a continuous
      period of not less than twelve months, receiving income replacement benefits
      for
      a period of not less than three months under an accident and health plan
      covering employees of the Employer or any Related Employer. A Participant also
      will be considered disabled if he is determined to be totally disabled by the
      Social Security Administration.

    

    1.10 "Effective
      Date" means April 3, 2006.

    

    1.11 “Eligible
      Employee” means an employee of the Employer who is determined by the
      Employer to be a member of a select group of management or highly compensated
      employees within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of
      ERISA, whose annual Compensation is expected to exceed the limitation on
      compensation under Section 401(a)(17) of the Code as adjusted for cost-of-living
      increases in accordance with Code Section 401(a)(17)(B), and who is selected
      by
      the Employer for participation in the Plan. 

    

    1.12 “Employer”
      means Lexmark International, Inc., a Delaware corporation, and any successor
      corporation or other successor entity that agrees to continue the
      Plan.

    

    1.13 “ERISA”
      means the Employee Retirement Income Security Act of 1974, as
      amended.

    

    1.14 "Excess
      Compensation" means the amount of an Eligible Employee's Compensation
      for a Plan Year that is in excess of the Code Section 401(a)(17) compensation
      limit for such Plan Year. The Code Section 401(a)(17) limitation shall be
      applied to the Eligible Employee's Compensation in the order of time as
      Compensation is actually paid to the Eligible Employee, including elective
      amounts that are not otherwise includable in the gross income of the Participant
      under Code Sections 125, 132(f)(4), 402(e)(3) and 402(h).

    

    1.15 “Identification
      Date” means the date as of which Key Employees are determined, which
      shall be December 31 of each calendar year.

    

    1.16 “Key
      Employee” means a ‘specified employee’ within the meaning of Section
      409A(a)(2)(B)(i) of the Code who satisfies the conditions set forth in Section
      7.5.

    

    1.17 “Participant”
      means an Eligible Employee who commences participation in the Plan in accordance
      with Article 2.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.18 “Plan”
      means the Lexmark Supplemental Savings and Deferred Compensation
      Plan.

    

    1.19 “Plan
      Year” means the 12-month period commencing January 1 and ending on
      December 31. The first Plan Year of the Plan is a short Plan Year, beginning
      April 3, 2006 and ending December 31, 2006. 

    

    1.20 “Related
      Employer” means the Employer and (a) any corporation that is a member
      of a controlled group of corporations as defined in Section 414(b) of the Code
      that includes the Employer, and (b) any trade or business that is under common
      control as defined in Section 414(c) of the Code that includes the
      Employer.

    

    1.21 “Separation
      from Service” means the date that the Participant dies, retires or
      otherwise has a termination of employment with respect to all entities
      comprising the Related Employer. A Separation from Service does not occur if
      the
      Participant is on military leave, sick leave or other bona fide leave of absence
      if the period of leave does not exceed six months or such longer period during
      which the Participant’s right to re-employment is provided by statute or
      contract. If the period of leave exceeds six months and the Participant’s right
      to re-employment is not provided either by statute or contract, a Separation
      from Service will be deemed to have occurred on the first day following the
      six-month period.

    

    1.22 “Unforeseeable
      Emergency” means a severe financial hardship of the Participant
      resulting from an illness or accident of the Participant, the Participant’s
      spouse, or the Participant’s dependent (as defined in Code Section 152(a)); loss
      of the Participant’s property due to casualty; or other similar extraordinary
      and unforeseeable circumstances arising as a result of events beyond the control
      of the Participant. 

    

    1.23 “Valuation
      Date” means each business day of the Plan Year.

    

    

    
      
        
           

          

          

          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    ARTICLE
      2 

    PARTICIPATION

    

    2.1 Participation.
      The Participants in the Plan shall be those “management” or “highly compensated”
employees of the Employer within the meaning of Sections 201(2), 301(a)(3)
      and
      401(a)(1) of ERISA who satisfy the requirements to be considered an Eligible
      Employee pursuant to Section 1.11 of the Plan.

    

    2.2 Termination
      of Participation. The Employer may terminate a Participant’s
      participation in the Plan but any such termination at the direction of the
      Employer shall not take effect until the first day of the next Plan
      Year.

    

     

    

    
      
        
           

          

          

          
          

        

        
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    ARTICLE
      3

    PARTICIPANT
      CONTRIBUTIONS

    

     
           3.1 Deferral Agreement. 
Each Eligible Employee may elect prior to the beginning of
      a Plan Year
      to defer his Excess Compensation for such upcoming Plan Year by executing
      writing or electronically, a deferral agreement in accordance with rules and
      procedures established by the Employer and the provisions of this Article 3.
      The
      period during which an Eligible Employee must complete a deferral agreement
      for
      an upcoming Plan Year is hereafter referred to as an "Election Period." The
      Election Period to defer Excess Compensation for the 2007 Plan Year shall be
      the
      period commencing on June 1, 2006 and ending on the date determined by the
      Employer, but not later than June 30, 2006 ("2006 Election Period"). The
      Election Period for each succeeding Plan Year shall be established by the
      Employer. A new deferral agreement must be timely executed for each Plan Year
      during which the Eligible Employee desires to defer Excess Compensation. An
      Eligible Employee who does not timely execute a deferral agreement shall be
      deemed to have elected zero deferrals of Excess Compensation for such Plan
      Year.

    

    A
      deferral agreement completed during an Election Period may be changed or revoked
      through the last day of the Election Period. In addition, a deferral agreement
      completed during the 2006 Election Period may be revoked at any time during
      2006
      with respect to deferrals of Excess Compensation earned and paid in 2007 and/or
      with respect to Employer contributions credited to the Eligible Employee in
      2007; provided, however, this extended revocation period shall only be available
      in the event that the Internal Revenue Service ("IRS") issues guidance under
      Code Section 409A that differs in substance from the regulations and other
      guidance issued by the IRS with respect to Code Section 409A as of the Plan's
      Effective Date, and such extended period shall not be available for any deferral
      elected by the Eligible Employee during the 2006 Election Period with respect
      to
      performance-based compensation, as described in Code Section 409A(a)(4)(B)(iii),
      earned by the Eligible Employee in 2006 but payable in 2007. Except with respect
      to the 2006 Election Period and as provided in Section 7.3, a deferral agreement
      may not be changed or revoked after the last day of the Election Period;
      provided, however, in the event that the Employer determines subsequent to
      the
      end of an Election Period but prior to the beginning of the upcoming Plan Year
      that a Participant will not be eligible to defer Excess Compensation into the
      Plan during the upcoming Plan Year, then such a Participant's deferral agreement
      is automatically revoked to the extent permitted by Code Section
      409A.

    

    3.2 Amount
      of Deferral. An Eligible Employee may elect to defer up to 100% of his
      Excess Compensation (net of applicable tax withholding and payroll deductions)
      for a Plan Year. An Eligible Employee's deferrals for a Plan Year shall not
      commence until the Eligible Employee's Compensation paid to him for such Plan
      Year has reached the Code Section 401(a)(17) limit, including elective amounts
      that are not otherwise includable in the gross income of the Participant under
      Code Sections 125, 132(f)(4), 402(e)(13) and 402(h).

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    3.3 Timing
      of Election to Defer. Each Eligible Employee who desires to defer
      Excess Compensation otherwise payable during a Plan Year must execute a deferral
      agreement within the Election Period preceding the Plan Year specified by the
      Employer. 

    

    Except
      as
      otherwise provided below, an Employee who is designated as an Eligible Employee
      during a Plan Year may elect to defer Excess Compensation otherwise paid for
      services to be performed during the remainder of such Plan Year subsequent
      to
      such election in accordance with the rules of this Section 3.3 by executing
      a
      deferral agreement within the thirty (30) day period beginning on the date
      the
      employee is designated as an Eligible Employee. If Excess Compensation is based
      on a specified performance period that begins before the Eligible Employee
      executes his deferral agreement, the election will apply to the portion of
      such
      Excess Compensation equal to the total amount of Excess Compensation for the
      service period multiplied by the ratio of the number of days remaining in the
      performance period after the election over the total number of days in the
      performance period. The rules of this paragraph shall not apply if the Eligible
      Employee has ever participated or is participating in a "Plan" as defined by
      Prop. Reg. Sec. 1.409A-1(c) sponsored by the Employer or any Related
      Employer.

    

    3.4 Election
      of Payment Schedule and Form of Payment. At the time an Eligible
      Employee completes a deferral agreement for Excess Compensation for the upcoming
      Plan Year, the Eligible Employee must elect a distribution event (which includes
      a specified time) and a form of payment for the Excess Compensation subject
      to
      the deferral agreement and for any Employer contributions made during such
      Plan
      Year from among the options the Employer has made available for this purpose
      and
      which are specified in the deferral agreement. The availability of any
      particular distribution event or form of payment with respect to a deferral
      or
      Employer contribution for a Plan Year is no guarantee that such distribution
      event or form of payment will continue to be available for future deferrals
      or
      Employer contributions. If an Eligible Employee fails to have an executed
      deferral agreement in effect for a Plan Year during which an Employer
      contribution pursuant to Article 4 is made on his behalf, the Eligible Employee
      will be deemed to have elected to receive a lump sum distribution upon
      Separation from Service. The Transitional Contribution (and interest credited
      thereon) credited to a Participant's Account as described in Section 4.2 below
      shall be paid to the Participant in a lump sum distribution on the first day
      of
      the seventh month following the Participant's Separation from Service; provided,
      the Participant may elect a different distribution event or a different form
      of
      payment for the Transitional Contribution (and interest credited thereon) during
      the 2006 Election Period in reliance on the transitional relief provided under
      IRS Notice 2005-1, Q&A-19(c) as extended pursuant to the preamble to the
      proposed Treasury Regulations under Code Section 409A; provided, further, if
      the
      Participant incurs a Separation from Service on or before June 30, 2007, any
      election of a different distribution event or a different form of payment shall
      be disregarded, and the Participant's Transitional Contribution (and interest
      credited thereon) shall be paid to the Participant in a lump sum distribution
      on
      the first day of the seventh month following the Participant's Separation from
      Service. An Eligible 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Employee
      may elect to receive in-service distributions of elective deferrals (including
      interest credited thereon), subject to a three-year minimum deferral period,
      or
      elect to defer distribution (or commencement of distribution) of such amounts
      until at least the first day of the seventh month following Separation from
      Service. An Eligible Employee may not elect to receive or commence distribution
      of Employer contributions (including interest credited thereon) credited to
      his
      Accounts prior to the first day of the seventh month following his Separation
      from Service. An Eligible Employee may elect to have the amounts payable to
      him
      following his Separation from Service paid in the form of a single lump sum
      distribution or in annual installments; provided, however, that (a) any election
      made by an Eligible Employee is subject to the provisions contained in Article
      7, and (b) the balance or remaining balance credited to a Participant's
      Account(s) shall be paid to the Participant (or his Beneficiary(ies)) in the
      form of a single lump sum cash payment as soon as administratively feasible
      in
      the event of the Participant's death or Disability or, in the event a Change
      in
      Control occurs, on the date of the occurrence of the Change in Control as
      determined in accordance with Section 6.4, or as soon thereafter as
      administratively feasible.

     

     

    
      
        
        

      

      
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    ARTICLE
      4

    EMPLOYER
      CONTRIBUTIONS

    

    4.1 Matching
      Contributions. Beginning with the 2007 Plan Year, the Employer for each
      Plan Year will credit the Participant’s Account with a matching contribution in
      an amount equal to 100% of the Participant's elective deferrals not exceeding
      6%
      of the Participant's Excess Compensation for such Plan Year, but only if the
      Participant is employed by the Employer or a Related Employer on the date the
      matching contribution would otherwise be credited to the Participant's Account.
      Matching contributions shall be credited as of the date the deferred Excess
      Compensation on which the matching contribution is based is credited and would
      otherwise have been paid to the Participant. 

    

    4.2 Other
      Employer Contributions. For the 2006 Plan Year, the Employer will
      credit the Participant's Account with a contribution ("Transitional
      Contribution") in the amount of 6% of the Participant's Excess Compensation
      for
      the Plan Year, less the amount of any deemed contribution credit for the
      Participant to the Lexmark Nonqualified Supplemental Retirement Plan for the
      2006 Plan Year. The Transitional Contribution will be credited to the
      Participant's Account as soon as administratively feasible following the last
      day of the 2006 Plan Year. For Plan Years beginning on and after January 1,
      2007, the Employer will credit the Participant's Account with a contribution,
      if
      any, in an amount determined by the Employer in its sole discretion. Any
      Employer contribution other than a matching contribution credited to a
      Participant's Account for a Plan Year subsequent to the 2006 Plan Year will
      be
      credited to the Participant's Account as soon as administratively feasible
      following the last day of such Plan Year or such other time as reasonably
      determined by the Employer based on the existing circumstances. Provided,
      however, that any Employer contribution credit to a Participant's Account
      contemplated under this Section 4.2 shall be made only if the Participant is
      employed by the Employer or a Related Employer at the time the Employer
      contribution would otherwise be credited to the Participant's
      Account.

    

    

    

    
      
        
          
             

            

            

          

          
          

        

        
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    ARTICLE
      5

    ACCOUNTS
      AND CREDITS/OTHER ADJUSTMENTS

    

    5.1 Establishment
      of Account. For accounting and computational purposes only, the
      Employer will establish and maintain separate Accounts for each Participant
      which will reflect the credits made pursuant to Section 5.2 along with the
      deemed interest credits and any expenses allocated thereto as provided in
      Sections 5.3 and 5.4. The Employer will establish and maintain such other
      records and accounts, as it decides in its discretion to be reasonably required
      or appropriate to discharge its duties under the Plan.

    

    5.2 Contribution
      Credits to Account. A Participant’s Account will be credited for each
      Plan Year with (a) the amount of his elective deferrals under Section 3.1 at
      the
      time the amount subject to the deferral election would otherwise have been
      paid
      to the Participant and (b) the amount of Employer contributions credited on
      his
      behalf under Article 4. Employer contributions will be credited to the
      Participant’s Accounts at the times specified, respectively, in Sections 4.1 and
      4.2 above. Separate Accounts shall be maintained for each Participant for each
      Plan Year for which contributions are credited to the Participant and for each
      type of contribution credit: deferral contribution, matching contribution and
      Employer discretionary contribution (including any Transitional Contribution).
      

    

    5.3 Interest
      Credits to Account. Each Account maintained for a Participant shall be
      credited with interest. Interest is credited during a Plan Year at a rate equal
      to the Merrill Lynch U.S. Corporate 7-10 year index rate, determined as of
      the
      last business day of the month of November of the prior year, or if such index
      rate is not available, such other comparable rate as is determined to be
      appropriate by the Committee. Interest accrues from the date of credits
      specified in Section 5.2.

    

    5.4 Adjustment
      of Accounts. Each Account maintained for a Participant shall be
      adjusted for interest credits and any expenses allocable under the terms of
      the
      Plan to the Account. The Account shall be adjusted as of each Valuation Date
      to
      reflect: (a) the interest credits and expenses described above; (b) amounts
      credited pursuant to Section 5.2; and (c) distributions or
      withdrawals.

    

    

    
      
        
          
             

            

            

          

          
          

        

        
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    ARTICLE
      6

    RIGHT
      TO BENEFITS

    

    6.1 Vesting.
      A Participant, at all times, has a 100% nonforfeitable interest in the amounts
      credited to his Accounts attributable to his elective deferrals made in
      accordance with Section 3.1, Employer matching contributions made in accordance
      with Section 4.1, and the additional Employer Transitional Contribution for
      the
      2006 Plan Year described in Section 4.2. A Participant’s interest in any amounts
      credited to his Accounts attributable to any other Employer discretionary
      contributions made in accordance with Section 4.2 shall become nonforfeitable
      upon his completion of three years of Continuous Service or upon his death
      or
      Disability, or upon a Change in Control, whichever occurs first.

    

    6.2 Death.
      The balance or remaining balance credited to a Participant’s vested Accounts
      shall be paid to his Beneficiary(ies) in a single lump sum cash payment thirty
      days following the date of death, or as soon as administratively feasible
      thereafter. A Participant may designate a Beneficiary or Beneficiaries, or
      change any prior designation of Beneficiary or Beneficiaries in accordance
      with
      rules and procedures established by the Employer, provided, however, that a
      married Participant may not designate anyone other than the Participant's spouse
      without the written, notarized consent of the Participant's spouse.

    

    A
      copy of
      the death notice or other sufficient documentation must be filed with and
      approved by the Employer. In the absence of an effective Beneficiary
      designation, upon the death of an unmarried Participant the deemed Beneficiary
      shall be the Participant's estate, and upon the death of a married Participant
      the deemed Beneficiary shall be the Participant's surviving spouse or, if there
      is no surviving spouse, the Participant's estate.

     

    6.3 Disability.
      The
      balance or remaining balance credited to a Participant’s vested Accounts shall
      be paid to the Participant in a single lump sum cash payment as soon as
      administratively feasible following the date the Participant is determined
      to be
      Disabled as defined in Section 1.9, but no earlier than otherwise permissible
      under Code Section 409A. The Employer, in its sole discretion, shall determine
      whether a Participant has experienced a Disability for purposes of this Section
      6.3. 

    

    6.4 Change
      in Control.
      The
      balance or remaining balance credited to a Participant's vested Accounts shall
      be paid to the Participant in a single lump sum cash payment on the date of
      the
      occurrence of the Change in Control or as soon thereafter as administratively
      feasible. A Change in Control will occur upon a change in the ownership of
      the
      Employer, a change in the effective control of the Employer or a change in
      the
      ownership of a substantial portion of the assets of the Employer. The Employer,
      for this purpose, includes any corporation identified in this Section 6.4.
      Whether a Change in Control has occurred will be determined by the Employer
      in
      accordance with the rules and definitions set forth in this Section 6.4.

    

    
      
        
        

      

      
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              (a)

            	
              Relevant
                Corporations.
                To
                constitute a Change in Control for purposes of the Plan, the event
                must
                relate to (i) the corporation for whom the Participant is performing
                services at the time of the Change in Control, (ii) the corporation
                that
                is liable for the payment of the Participant’s benefits under the Plan (or
                all corporations liable if more than one corporation is liable),
                or (iii)
                a corporation that is a majority shareholder of a corporation identified
                in (i) or (ii), or any corporation in a chain of corporations in
                which
                each corporation is a majority corporation of another corporation
                in the
                chain, ending in a corporation identified in (i) or (ii). A majority
                shareholder is defined as a shareholder owning more than 50% of the
                total
                fair market value and voting power of such
                corporation.

            

    

    

    
      	 	
              (b)

            	
              Stock
                Ownership.
                Code Section 318(a) applies for purposes of determining stock ownership.
                Stock underlying a vested option is considered owned by the individual
                who
                owns the vested option (and the stock underlying an unvested option
                is not
                considered owned by the individual who holds the unvested option).
                If,
                however, a vested option is exercisable for stock that is not
                substantially vested (as defined by Treasury Regulation Section 1.83-3(b)
                and (j)) the stock underlying the option is not treated as owned
                by the
                individual who holds the option. 

            

    

    

    
      	 	
              (c)

            	
              Change
                in the Ownership of a Corporation.
                A
                change in the ownership of a corporation occurs on the date that
                any one
                person or more than one person acting as a group, acquires ownership
                of
                stock of the corporation that, together with stock held by such person
                or
                group, constitutes more than 50% of the total fair market value or
                total
                voting power of the stock of such corporation. If any one person
                or more
                than one person acting as a group is considered to own more than
                50% of
                the total fair market value or total voting power of the stock of
                a
                corporation, the acquisition of additional stock by the same person
                or
                persons is not considered to cause a change in the ownership of the
                corporation (or to cause a change in the effective control of the
                corporation as discussed below in Section 6.4(d)). An increase in
                the
                percentage of stock owned by any one person, or persons acting as
                a group,
                as a result of a transaction in which the corporation acquires its
                stock
                in exchange for property will be treated as an acquisition of stock.
                This
                Section 6.4(c) applies only when there is a transfer of stock of
                a
                corporation (or issuance of stock of a corporation) and stock in
                such
                corporation remains outstanding after the transaction. For purposes
                of
                this Section 6.4(c), persons will not be considered to be acting
                as a
                group solely because they purchase or own stock of the same corporation
                at
                the same time or as a result of the same public offering. Persons
                will,
                however, be considered to be acting as a group if they are owners
                of a
                corporation that enters into a merger, consolidation, purchase or
                acquisition of stock, or similar business transaction with the
                corporation. If a person, including an entity, owns stock in both
                corporations that enter into a merger, consolidation, purchase or
                acquisition of stock, or similar 

            

    

     

    
      
        
        

      

      
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              transaction,
                such shareholder is considered to be acting as a group with other
                shareholders in a corporation only with respect to the ownership
                in that
                corporation prior to the transaction giving rise to the change and
                not
                with respect to the ownership interest in the other
                corporation.

            

    

     

    
      	 	
              (d)

            	
              Change
                in the effective control of a corporation.
                A
                change in the effective control of a corporation occurs on the date
                that
                either (i) any one person, or more than one person acting as a group,
                acquires (or has acquired during the twelve month period ending on
                the
                date of the most recent acquisition by such person or persons) ownership
                of stock of the corporation possessing 35% or more of the total voting
                power of the stock of such corporation, or (ii) a majority of members
                of
                the corporation’s board of directors is replaced during any twelve month
                period by directors whose appointment or election is not endorsed
                by a
                majority of the members of the corporation’s board of directors prior to
                the date of the appointment or election, provided that for purposes
                of
                this clause (ii), the term corporation refers solely to the relevant
                corporation identified in Section 6.4(a) for which no other corporation
                is
                a majority shareholder for purposes of Section 6.4(a). A change in
                effective control also may occur in any transaction in which either
                of the
                two corporations involved in the transaction has a change in the
                ownership
                of such corporation as described in Section 6.4(c) or a change in
                the
                ownership of a substantial portion of the assets of such corporation
                as
                described in Section 6.4(e). If any one person, or more than one
                person
                acting as a group, is considered to effectively control a corporation
                within the meaning of this Section 6.4(d), the acquisition of additional
                control of the corporation by the same person or persons is not considered
                to cause a change in the effective control of the corporation or
                to cause
                a change in the ownership of the corporation within the meaning of
                Section
                6.4(c). For purposes of this Section 6.4(d), persons will not be
                considered to be acting as a group solely because they purchase or
                own
                stock of the same corporation at the same time, or as a result of
                the same
                public offering. Persons will be considered to be acting as a group,
                though, if they are owners of a corporation that enters into a merger,
                consolidation, purchase or acquisition of stock, or similar business
                transaction with the corporation. If a person, including an entity,
                owns
                stock in both corporations that enter into a merger, consolidation,
                purchase or acquisition of stock, or similar transaction, such shareholder
                is considered to be acting as a group with other shareholders in
                a
                corporation only with respect to the ownership in that corporation
                prior
                to the transaction giving rise to the change and not with respect
                to the
                ownership interest in the other
                corporation.

            

    

    

    
      	 	
              (e)

            	
              Change
                in the ownership of a substantial portion of a corporation’s
                assets.
                A
                change in the ownership of a substantial portion of a corporation’s assets
                occurs on the date that any one person, or more than one person acting
                as
                a group (as determined in accordance with rules similar to those
                set forth
                in Section 6.4(c)), 

            

    

     

    
      
        
        

      

      
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              acquires
                (or has acquired during the twelve month period ending on the date
                of the
                most recent acquisition by such person or persons) assets from the
                corporation that have a total gross fair market value equal to or
                more
                than 40% of the total gross fair market value of all of the assets
                of the
                corporation immediately prior to such acquisition or acquisitions.
                For
                this purpose, gross fair market value means the value of the assets
                of the
                corporation, or the value of the assets being disposed of, determined
                without regard to any liabilities associated with such assets. There
                is no
                Change in Control event under this Section 6.4(e) when there is a
                transfer
                to an entity that is controlled by the shareholders of the transferring
                corporation immediately after the transfer. A transfer of assets
                by a
                corporation is not treated as a change in ownership of such assets
                if the
                assets are transferred to (i) a shareholder of the corporation
                (immediately before the asset transfer) in exchange for or with respect
                to
                its stock, (ii) an entity, 50% or more of the total value or voting
                power
                of which is owned, directly or indirectly, by the corporation, (iii)
                a
                person, or more than one person acting as a group, that owns, directly
                or
                indirectly, 50% or more of the total value or voting power of all
                the
                outstanding stock of the corporation, or (iv) an entity, at least
                50% of
                the total value or voting power of which is owned, directly or indirectly,
                by a person described in clause (iii). For purposes of the foregoing,
                and
                except as otherwise provided, a person’s status is determined immediately
                after the transfer of assets. Persons will not be considered to be
                acting
                as a group solely because they purchase assets of the same corporation
                at
                the same time. However, persons will be considered to be acting as
                a group
                if they are owners of a corporation that enters into a merger,
                consolidation, purchase or acquisition of assets, or similar business
                transaction with the corporation. If a person, including an entity
                shareholder, owns stock in both corporations that enter into a merger,
                consolidation, purchase or acquisition of assets, or similar transaction,
                such shareholder is considered to be acting as a group with other
                shareholders in a corporation only to the extent of the ownership
                in that
                corporation prior to the transaction giving rise to the change and
                not
                with respect to the ownership interest in the other corporation.
                

            

    

     

    

    
      
        
           

          

          

          
          

        

        
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    ARTICLE
      7

    DISTRIBUTION
      OF BENEFITS

    

    7.1 Amount
      of Benefits. The vested amounts credited to a Participant’s Accounts as
      determined under Articles 5 and 6 shall determine and constitute the basis
      for
      the value of benefits payable to the Participant under the Plan.

    

    7.2 Method
      and Timing of Distributions. Except as otherwise provided under the
      Plan, distributions under the Plan shall be made in accordance with the
      elections made by the Participant under Article 3. Distributions upon the
      occurrence of a distribution event shall be made (or commence) as of the date
      of
      the distribution event or as soon thereafter as is administratively feasible.
      A
      Participant may elect, at least twelve months before a scheduled distribution
      event, to delay the payment date for a minimum period of sixty months from
      the
      originally scheduled date of payment. The further deferral election must be
      made
      in accordance with procedures and rules established by the Employer. The
      Participant may, at the same time the date of payment is deferred, change the
      form of payment but such change in the form of payment may not effect an
      acceleration of payment in violation of Section 409A of the Code. A subsequent
      election to delay a payment or to change the form of payment may not take effect
      until at least twelve months after the date on which the election is made.
      Installment payments shall be treated as the entitlement to a single payment,
      rather than the entitlement to a series of separate payments, for purposes
      of
      making election changes.

    

    7.3 Unforeseeable
      Emergency. A Participant may request a distribution due to an
      Unforeseeable Emergency. The request must be in writing and must be submitted
      to
      the Employer along with evidence that the circumstances constitute an
      Unforeseeable Emergency. The Employer has the discretion to require whatever
      evidence it deems necessary to determine whether a distribution is warranted.
      Whether a Participant has incurred an Unforeseeable Emergency will be determined
      by the Employer on the basis of the relevant facts and circumstances in its
      sole
      discretion, but, in no event, will an Unforeseeable Emergency be deemed to
      exist
      if the hardship can be relieved: (a) through reimbursement or compensation
      by
      insurance or otherwise, (b) by liquidation of the Participant’s assets to the
      extent such liquidation would not itself cause severe financial hardship, or
      (c)
      by cessation of deferrals under the Plan. A distribution due to an Unforeseeable
      Emergency must be limited to the amount reasonably necessary to satisfy the
      emergency need and may include any amounts necessary to pay any federal, state
      or local income taxes or tax penalties reasonably anticipated to result from
      the
      distribution. The distribution will be made in the form of a single lump sum
      cash payment. Any such distribution to the Participant shall be made from the
      Account scheduled to be distributed at the earliest date to the Participant
      under the terms of the Plan, and then from such other Account(s) in order of
      the
      earliest scheduled distribution date(s) as necessary to meet the need caused
      by
      the Unforeseeable Emergency. A Participant’s deferral elections for the
      remainder of the Plan Year will be cancelled upon either of the following
      events: (i) a distribution under 

    
      
        
        

      

      
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    the
      Plan
      to the Participant due to Unforeseeable Emergency, or (ii) a hardship
      distribution pursuant to Treasury Regulation Section 1.40(k)-1(d)(3), or any
      successor provision of the Treasury Regulations, under the Lexmark Savings
      Plan,
      or any successor thereto, to the Participant.

    

    7.4 Cashouts
      Of Amounts Not Exceeding Stated Limit. If the total vested amounts
      credited to a Participant’s Accounts do not exceed $10,000 at the time of a
      Separation from Service, the Employer shall distribute such amount to the
      Participant in a single lump sum cash payment as of the first day of the seventh
      month following Separation from Service or, if earlier, upon his death,
      regardless of whether the Participant had made different elections of time
      or
      form of payment as to the vested amounts credited to his Accounts or whether
      the
      Participant was receiving installments at the time of such Separation from
      Service. This Section 7.4 shall not apply if distribution is made in accordance
      with Section 6.3.

    

    7.5 Key
      Employees. In no event shall a distribution made to a Key Employee from
      his Accounts due to his Separation from Service occur before the date which
      is
      six months after his Separation from Service, or, if earlier, his date of death
      For purposes of this Section 7.5, a Key Employee means an employee of an
      employer, including any corporation that is a member of a controlled group
      of
      corporations as defined in Section 414(b) of the Code that includes the employer
      and any trade or business that is under common control as defined in Section
      414(c) of the Code with the employer, any of whose stock is publicly traded
      on
      an established securities market or otherwise who satisfies the requirements
      of
      Section 416(i)(1)(A)(i), (ii) or (iii), of the Code, determined without regard
      to Section 416(i)(5) of the Code, at any time during the twelve-month period
      ending on the Identification Date. An employee who is determined to be a Key
      Employee on an Identification Date shall be treated as a Key Employee for
      purposes of the six-month delay in distributions set forth in this Section
      7.5
      for the twelve-month period beginning on the first day of the fourth month
      following the Identification Date. Whether any stock of the Employer or any
      Related Employer is traded on an established securities market or otherwise
      is
      determined on the date a Participant experiences a Separation from Service.
      Installment distributions to a Key Employee that are delayed due to the
      application of the requirements of this Section 7.5 shall commence as of the
      earliest date permitted by Code Section 409A. This Section 7.5 shall not apply
      to any of the following distributions: (i) a distribution upon the Participant's
      Disability in accordance with section 6.3 or upon a Change in Control in
      accordance with Section 6.4, provided that the Participant's Separation from
      Service did not precede such Disability or Change in Control; (ii) a
      distribution to an individual other than the Participant as may be necessary
      to
      fulfill a domestic relations order within the meaning of Section 414(p)(1)(B)
      of
      the Code; (iii) a distribution to comply with a certificate of divestiture
      as
      defined in Section 1043(b)(2) of the Code; (iv) a distribution to pay the
      Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101,
      3121(a) and 3121(v)(2) of the Code on compensation deferred under the Plan;
      and
      (v) a distribution to pay the income tax under Section 3401 of the Code or
      the
      corresponding withholding provisions of the applicable state, local or foreign
      tax laws as a result of the payment of any FICA tax described in clause (iv)
      and
      to pay the 

     

    
      
        
        

      

      
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    additional
      income tax at source on wages attributable to the pyramiding Code Section 3401
      wages and taxes; provided, the total payment under clauses (iv) and (v) shall,
      in no event, exceed the aggregate of the FICA tax and the income tax withholding
      related to such FICA tax.

    

    7.6 Permissible
      Delays in Payment. Distributions may be delayed beyond the date payment
      would otherwise occur in accordance with the provisions of Articles 6 and 7
      in
      any of the following circumstances. The Employer may delay payment if it
      reasonably anticipates that its deduction with respect to such payment would
      be
      limited or eliminated by the application of Section 162(m) of the Code. Payment
      must be made at the earliest date at which the Employer reasonably anticipates
      that the deduction of the payment amount will not be eliminated or limited
      by
      Section 162(m) of the Code or the calendar year in which the Participant incurs
      a Separation from Service. The Employer may also delay payment if it reasonably
      anticipates that the payment will violate a term of a loan agreement or other
      similar contract to which the Employer is a party and such violation will cause
      material harm to the Employer, unless waived or otherwise addressed by the
      lender in a manner reasonably satisfactory to the Employer. Payment must be
      made
      at the earliest date on which the Employer reasonably anticipates that the
      making of the payment will not cause a violation or the violation will no longer
      cause material harm to the Employer. Payment cannot be delayed if the facts
      and
      circumstances indicate that the Employer entered into the loan agreement or
      similar contract not for legitimate business reasons but to avoid the
      restrictions on deferral elections and subsequent deferral elections under
      Section 409A of the Code. The Employer may also delay payment if it reasonably
      anticipates that the making of the payment will violate Federal securities
      laws
      or other applicable laws provided payment is made at the earliest date on which
      the Employer reasonably anticipates that the making of the payment will not
      cause such violation. The Employer also reserves the right to delay payment
      upon
      such other events and conditions as the Secretary of the Treasury may prescribe
      in generally applicable guidance published in the Internal Revenue
      Bulletin.        

     

    Except
      as
      may be otherwise required under Code Section 409A, a payment is treated as
      made
      upon the date contemplated under the provisions of the Plan if the payment
      is
      made at such date or a later date within the same calendar year or, if later,
      by
      the 15th day of the third calendar month following the date contemplated by
      the
      Plan.  If calculation of the amount as the payment is not administratively
      practicle due to events beyond the control of the Participant (or Participant's
      estate), the payment will be treated as made upon the date contemplated by
      the
      Plan if the payment is made during the first calendar year in which the payment
      is administratively practicable.  Similarly, if the funds of the Employer
      are not sufficient to make the payment at the date specified under the Plan
      without jeopardizing the solvency of the Employer, the payment will be treated
      as made upon the date contemplated by the Plan if the payment is made
      during the first calendar year in which the funds of the Employer are
      sufficient to make the payment without jeopardizing the solvency of the
      Employer.

     

     

    

     

    
      
        
        

      

      
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    If
      a payment is not made, in whole or
      in part, as of the date contemplated by the Plan because the Employer refuses
      to
      make such payment, the payment will be treated as made upon the date
      contemplated by the Plan if the Participant accepts the portion (if any) of
      the
      payment that the Employer is willing to make (unless such acceptance will result
      in forfeiture of the claim to the remaining amount), makes prompt and
      reasonable, good faith efforts to collect the payment and the payment is made
      during the first calendar year in which the Employer and the Participant enter
      into a legally binding settlement of such dispute, the Employer concedes that
      the amount is payable, or the Employer is required to make such payment pursuant
      to a final and nonappealable judgment or other binding decision. For purposes
      of
      this paragraph, the Employer is not treated as having refused to make a payment
      where pursuant to the terms of the Plan the Participant is required to request
      payment, or otherwise provide information or take any other action, and the
      Participant has failed to take such action. In addition, for purposes of this
      paragraph, the Participant is deemed to have requested that a payment not be
      made, rather than the Employer having refused to make such payment, where the
      Employer's decision to refuse to make the payment is made by the Participant
      or
      a member of the Participant's family (as defined in Code Section 267(c)(4)
      applied as if the family of an individual includes the spouse of any member
      of
      the family), or any person or group of persons over whom the Participant's
      family member has effective control, or any person any portion of whose
      compensation is controlled by the Participant or the Participant's family
      member. 

    

    

    

    
      
        
          
             

            

            

          

          
          

        

        
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    ARTICLE
      8

    AMENDMENT
      AND TERMINATION

    

    8.1 Amendment
      by Employer. The Employer reserves the sole right to amend the Plan
      pursuant to a resolution of its Board of Directors. An amendment must be in
      writing and executed by a representative of the Employer authorized to take
      such
      action. The Employer intends to amend this Plan, and hereby reserves the right
      to do so without the consent of the Participants in the future, as required
      to
      comply with Section 409A of the Code with respect to amounts subject to Section
      409A of the Code and to prevent any Participant from becoming subject to any
      additional tax or penalty under Code Section 409A. No amendment can directly
      or
      indirectly deprive any current or former Participant or Beneficiary of all
      or
      any portion of his vested Account which had accrued prior to the amendment,
      except to the extent required by the Code or other applicable law.

    

    8.2 Retroactive
      Amendments. An amendment made by the Employer in accordance with
      Section 8.1 may be made effective on a date prior to the first day of the Plan
      Year in which it is adopted. Any retroactive amendment by the Employer shall
      be
      subject to the provisions of Section 8.1.

    

    8.3 Plan
      Termination. The Plan will terminate automatically as of the date that
      no amounts remain to be distributed under the Plan. 

    

    The
      Employer reserves the right to terminate the Plan and accelerate the time and
      form of payment of all amounts to be distributed under the Plan in accordance
      with the following provisions of this Section 8.3. The Employer may terminate
      the Plan and distribute all amounts credited to all Participant Accounts within
      the 30 days preceding or the twelve months following a Change in Control as
      determined in accordance with the rules set forth in Section 6.4. For this
      purpose, the Plan will be treated as terminated only if all substantially
      similar arrangements sponsored by the Employer or any Related Employer are
      terminated so that all Participants under the Plan and all substantially similar
      arrangements are required to receive all amounts deferred under the terminated
      arrangements within twelve months of the date of termination of the
      arrangements. In addition, the Employer reserves the right to terminate the
      Plan
      within twelve months of a corporate dissolution taxed under Section 331 of
      the
      Code or with the approval of a bankruptcy court pursuant to Section 503(b)(1)(A)
      of Title 11 of the United States Code, provided that amounts deferred under
      the
      Plan are included in the gross incomes of Participants in the latest of (1)
      the
      calendar year in which the termination occurs, (2) the calendar year in which
      the amount is no longer subject to a substantial risk of forfeiture, or (3)
      the
      first calendar year in which payment is administratively practicable. The
      Employer retains the discretion to terminate the Plan if (1) all arrangements
      sponsored by the Employer or any related Employer that would be aggregated
      with
      any terminated arrangement under Prop. Treas. Reg. Section 1.409A-1(c) if the
      same service provider participated in all of the arrangements are terminated,
      (2) no payments other than payments that would be payable under the terms of
      the
      arrangements if the termination had not occurred are made within twelve months
      of the 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    termination
      of the arrangements, (3) all payments are made within twenty-four months of
      the
      termination of the arrangements, and (4) neither the Employer nor any Related
      Employer adopts a new arrangement that would be aggregated with any terminated
      arrangement under Prop. Treas. Reg. Section 1.409A-1(c), if the same service
      provider participated in both arrangements, at any time within the five year
      period following the date of termination of the arrangement. The Employer also
      reserves the right to terminate the Plan and accelerate the time and form of
      payment of all amounts to be distributed under the Plan under such conditions
      and events as may be prescribed by the Commissioner in generally applicable
      guidance published in the Internal Revenue Bulletin.

    

    8.4 Distribution
      Upon Termination of the Plan. Except as provided in Section 8.3, the
      Plan may not be terminated before the date on which all amounts credited to
      all
      Participant Accounts have been distributed in accordance with Articles 6 and
      7.

     

    

    

    
      
        
          
             

            

            

          

          
          

        

        
          20

          
            

          

        

        
          
          

          
          

        

      

    

    

    ARTICLE
      9

    THE
      TRUST

    

    9.1 Establishment
      of Trust. The Employer may but is not required to establish a trust to
      hold amounts which the Employer may contribute from time to time to correspond
      to some or all amounts credited to Participants under Article 5. If the Employer
      establishes a trust, the provisions of Sections 9.2 and 9.3 shall become
      operative.

    

    9.2 Grantor
      Trust. Any trust established by the Employer shall be between the
      Employer and a trustee pursuant to a separate written agreement under which
      assets are held, administered and managed, subject to the claims of the
      Employer's creditors in the event of the Employer's insolvency, until paid
      to
      the Participant and/or his Beneficiaries. The trust is intended to be treated
      as
      a grantor trust under the Code, and it is intended that the establishment of
      the
      trust shall not cause the Participant to realize current income on amounts
      contributed thereto. The Employer must notify the trustee in the event of a
      lawsuit regarding the Plan or regarding its bankruptcy or
      insolvency.

    

    9.3 Investment
      of Trust Funds. Any amounts contributed to the trust by the Employer
      shall be invested by the trustee in accordance with the provisions of the trust
      and the instructions of the Committee.

    

    

    

    

    

     

    

    

    
      
        
          
             

            

            

          

          
          

        

        
          21

          
            

          

        

        
          
          

          
          

        

      

    

    

    ARTICLE
      10

    PLAN
      ADMINISTRATION

    

    10.1 Powers
      and Responsibilities of the Employer. The Employer shall be responsible
      for the general operation and administration of the Plan and for carrying out
      the provisions thereof. The Employer's powers and responsibilities include,
      but
      are not limited to, the following, which powers and responsibilities shall
      be
      exercised in its sole discretion:

    

    
      	 	
              (a)

            	
              To
                make and enforce such rules and regulations as it deems, in its sole
                discretion, necessary or proper for the efficient administration
                of the
                Plan;

            

    

    

    
      	 	
              (b)

            	
              To
                decide all questions concerning the Plan and the eligibility of any
                person
                to participate in the Plan, in its sole discretion, subject to review
                by
                the Committee;

            

    

    

    
      	 	
              (c)

            	
              To
                administer the claims and review procedures specified in Section
                10.3;

            

    

    

    
      	 	
              (d)

            	
              To
                compute the amount of benefits which will be payable to any Participant,
                former Participant or Beneficiary in accordance with the provisions
                of the
                Plan in its discretion;

            

    

    

    
      	 	
              (e)

            	
              To
                determine the person or persons to whom such benefits will be paid
                in its
                discretion;

            

    

     

    
      
        	 	
                (f)

              	
                To
                  authorize the payment of benefits;

              

      

       

    

    
      	 	
              (g)

            	
              To
                comply with any applicable reporting and disclosure requirements
                of Part 1
                of Subtitle B of Title I of ERISA;

            

    

    

    
      	 	
              (h)

            	
              To
                appoint such agents, counsel, accountants, and consultants as may
                be
                required to assist in administering the
                Plan;

            

    

    

    
      	 	
              (i)

            	
              To
                allocate and delegate its responsibilities in its discretion, including
                the formation of any administrative sub-committee to administer the
                Plan.

            

    

    

    10.2 Powers
      and
      Responsibilities of the Committee. The Committee shall be responsible
      (a) for determining the interest rate to credit to Participants' Accounts
      pursuant to Section 5.3, and (b) for the review of denied claims pursuant to
      Section 10.3(b) in its sole discretion. In the course of reviewing a denied
      claim, the Committee shall have the power to interpret the Plan in its sole
      discretion, and its interpretation thereof shall be final, conclusive and
      binding on all persons claiming benefits under the Plan.

    

    

    
      
        
           

          

          

          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    10.3 Claims
      and Review Procedures.

    

    
      	 	
              (a)

            	
              Claims
                Procedure.
                If
                any person believes he is being denied any rights or benefits under
                the
                Plan, such person may file a claim in writing with the Employer.
                If any
                such claim is wholly or partially denied, the Employer will notify
                such
                person of its decision in writing. Such notification will contain
                (i)
                specific reasons for the denial, (ii) specific reference to pertinent
                Plan
                provisions, (iii) a description of any additional material or information
                necessary for such person to perfect such claim and an explanation
                of why
                such material or information is necessary, and (iv) information as
                to the
                steps to be taken if the person wishes to submit a request for review.
                Such notification will be given within 90 days after the claim is
                received
                by the Employer (or within 180 days, if special circumstances require
                an
                extension of time for processing the claim, and if written notice
                of such
                extension and circumstances is given to such person within the initial
                90-day period). If such notification is not given within such period,
                the
                claim will be considered denied as of the last day of such period
                and such
                person may request a review of his
                claim.

            

    

    

    
      	 	
              (b)

            	
              Review
                Procedure.
                Within 60 days after the date on which a person receives a written
                notification of denial of claim (or, if written notification is not
                provided, within 60 days of the date denial is considered to have
                occurred), such person (or his duly authorized representative) may
                (i)
                file a written request with the Committee for a review of his denied
                claim
                and of pertinent documents and (ii) submit written issues and comments
                to
                the Committee. The Committee will notify such person of its decision
                in
                writing. Such notification will be written in a manner calculated
                to be
                understood by such person and will contain specific reasons for the
                decision as well as specific references to pertinent Plan provisions.
                The
                decision on review will be made within 60 days after the request
                for
                review is received by the Committee (or within 120 days, if special
                circumstances require an extension of time for processing the request,
                such as an election by the Committee to hold a hearing, and if written
                notice of such extension and circumstances is given to such person
                within
                the initial 60-day period). If the decision on review is not made
                within
                such period, the claim will be considered
                denied.

            

    

     

    10.4 Plan
      Administrative Costs.
      All
      reasonable costs and expenses (including legal, accounting, and employee
      communication fees) incurred by the Employer or Committee in administering
      the
      Plan shall be paid by the Plan, to the extent not paid by the
      Employer.

    

    

    
      
        
           

          

          

          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    ARTICLE
      11

    MISCELLANEOUS

    

    11.1 Unsecured
      General Creditor of the Employer. The Plan at all times shall be
      entirely unfunded. Participants and their Beneficiaries, heirs, successors
      and
      assigns shall have no legal or equitable rights, interests or claims in any
      property or assets of the Employer or any Related Employer. For purposes of
      the
      payment of benefits under the Plan, the assets of the Employer or of any Related
      Employer shall be, and shall remain, the general, unpledged, unrestricted assets
      of the Employer or of such Related Employer, respectively. The Employer's
      obligation under the Plan shall be merely that of an unfunded and unsecured
      promise to pay money in the future. 

    

    11.2 Employer’s
      Liability. The Employer’s liability for the payment of benefits under
      the Plan shall be defined only by the Plan and by the deferral agreements
      entered into between a Participant and the Employer. The Employer shall have
      no
      obligation or liability to a Participant under the Plan except as provided
      by
      the Plan and a deferral agreement or agreements. 

    

    11.3 Limitation
      of Rights. Neither the establishment of the Plan, nor any amendment
      thereof, nor the creation of any fund or account, nor the payment of any
      benefits, will be construed as giving to the Participant or any other person
      any
      legal or equitable right against the Employer, the Committee or any Related
      Employer except as provided herein; and in no event will the terms of employment
      or service of the Participant be modified or in any way affected
      hereby.

    

    11.4 Anti-Assignment.
      None of the benefits or rights of a Participant or any Beneficiary of a
      Participant shall be subject to the claim of any creditor. In particular, to
      the
      fullest extent permitted by law and except as otherwise provided in Sections
      11.7 and 11.9, all such benefits and rights shall be free from attachment,
      garnishment, or any other legal or equitable process available to any creditor
      of the Participant and his or her Beneficiary. Neither the Participant nor
      his
      or her Beneficiary shall have the right to alienate, anticipate, commute,
      pledge, encumber, or assign any of the payments which he or she may expect
      to
      receive, contingently or otherwise, under the Plan, except the right to
      designate a Beneficiary to receive death benefits provided
      hereunder.

    

    11.5 Facility
      of Payment. If the Employer determines, on the basis of medical reports
      or other evidence satisfactory to the Employer, that the recipient of any
      benefit payments under the Plan is incapable of handling his affairs by reason
      of minority, illness, infirmity or other incapacity, the Employer may disburse
      such payments to a person or institution designated by a court which has
      jurisdiction over such recipient or a person or institution otherwise having
      the
      legal authority under State law for the care and control of such recipient.
      The
      receipt by such person or institution of any such payments, and any such payment
      to the extent thereof, shall discharge the liability of the Employer for the
      payment of benefits hereunder to such recipient.

    

    11.6 Notices.
      Any notice or other communication required or permitted to be given in
      connection with the Plan shall be in writing and shall be deemed to have
      been

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    duly
      given (i) upon receipt, if delivered personally or via courier, (ii) upon
      confirmation of receipt, if given by facsimile or electronic transmission,
      and
      (iii) on the third business day following mailing, if mailed first-class,
      postage prepaid, registered or certified mail as follows:

    

    
      	 	
              (a)

            	
              If
                it is sent to the Employer or Committee, it will be at the address
                specified by the Employer; or

            

    

    

    
      	 	
              (b)

            	
              If
                it is sent to a Participant or Beneficiary, it will be at the last
                address
                filed with the Employer by the Participant (or
                Beneficiary).

            

    

    

    11.7 Tax
      Withholding. The Employer shall have the right to deduct from all
      payments or deferrals made under the Plan any tax required by law to be
      withheld. If the Employer concludes that tax is owing with respect to any
      deferral or payment hereunder, the Employer shall withhold such amounts from
      any
      payments due the Participant, as permitted by law, or otherwise make appropriate
      arrangements with the Participant or his Beneficiary for satisfaction of such
      obligation. Tax, for purposes of this Section 11.7, means any federal, state,
      local, foreign or any other governmental income tax, employment or payroll
      tax,
      excise tax, or any other tax or assessment owing with respect to amounts
      deferred, any earnings thereon, and any payments made to Participants or
      Beneficiaries under the Plan.

    

    11.8 Indemnification.
      To the fullest extent allowed by law, the Employer shall indemnify and hold
      harmless each member of the Committee and each employee, officer, or director
      of
      the Employer or any Related Employer to whom is delegated duties,
      responsibilities, and authority with respect to the Plan against all claims,
      liabilities, fines and penalties, and all expenses reasonably incurred by or
      imposed upon him (including but not limited to reasonable attorney fees) which
      arise as a result of his actions or failure to act in connection with the
      operation and administration of the Plan to the extent lawfully allowable and
      to
      the extent that such claim, liability, fine, penalty, or expense is not paid
      for
      by liability insurance purchased or paid for by the Employer or any Related
      Employer. Notwithstanding the foregoing, the Employer shall not indemnify any
      person for any such amount incurred through any settlement or compromise of
      any
      action unless the Employer consents in writing to such settlement or
      compromise.

    

    11.9 Permitted
      Acceleration of Payment. The Plan may permit acceleration of payment
      (a) to an individual other than the Participant as may be necessary to fulfill
      a
      domestic relations order within the meaning of Section 414(p)(1)(B) of the
      Code,
      (b) to comply with a certificate of divestiture as defined in Section 1043(b)(2)
      of the Code, (c) to pay the Federal Insurance Contributions Act (FICA) tax
      imposed under Sections 3101, 3121(a) and 3121(v)(2) of the Code on compensation
      deferred under the Plan, (d) to pay the income tax under Section 3401 of the
      Code or the corresponding withholding provisions of the applicable state, local
      or foreign tax laws as a result of the payment of any FICA tax described in
      clause (c) and to pay the additional income tax at source on wages attributable
      to the pyramiding Code Section 3401, wages and taxes, and (e) to pay the amount
      required to be included in gross income as a result of the failure of the Plan
      to comply with the requirements of Section 409A of the Code. The total
      payment

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    under
      clause (c) and (d) shall, in no event, exceed the aggregate of the FICA tax
      and
      the income tax withholding related to such FICA tax. The total payment under
      clause (e) shall, in no event, exceed the amount required to be included in
      income as a result of the failure to comply with requirements of Section 409A
      of
      the Code.

    

    11.10 No
      Guarantee of Employment or Participation. Nothing in the Plan shall
      interfere with or limit in any way the right of the Employer or any Related
      Employer to terminate any Participant's employment at any time and for any
      reason, nor confer upon any Participant any right to continue in the employ
      of
      the Employer or any Related Employer. No employee of the Employer or any Related
      Employer shall have a right to be selected as a Participant under the Plan
      or,
      if selected, to continue to participate for any Plan Year.

    

    11.11 Unclaimed
      Benefit. Each Participant shall keep the Employer informed of his
      current address and the current address of his Beneficiary. The Employer shall
      not be obligated to search for the whereabouts of any person. If the location
      of
      a Participant is not made known to the Employer within three years after the
      date on which payment of the Participant's vested Account is scheduled to be
      made (or to commence), payment may be made as though the Participant had died
      at
      the end of the three-year period. If within one additional year after such
      three-year period has elapsed, or, within three years after the actual death
      of
      a Participant, the Employer is unable to locate the Beneficiary of the
      Participant, then the Employer shall have no further obligation to pay any
      benefit hereunder to such Participant or Beneficiary or any other person and
      such benefit shall be irrevocably forfeited.

    

    11.12 Governing
      Law. The Plan will be construed, administered and enforced according to
      the laws of the State of Delaware without regard to principles of conflicts
      of
      law to the extent not otherwise preempted by the Code or by ERISA.

    

    IN
      WITNESS WHEREOF, Lexmark International, Inc. has caused its duly authorized
      representative to execute this Plan document as of the 6th day of 
November, 2006.

    

     

    
      
        	 	 	 
	 	LEXMARK
                INTERNATIONAL, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Jeri
                I. Stromquist    
	
                                      
                  Title: VP Human Resources

              

      

    

     

     

     

     

     

     

    26Lexmark International, Inc., 3Q 2006 Form 10-Q , Exhibit 10.3

    

      Exhibit
        10.3

       

       

      NON-QUALIFIED
        STOCK OPTION AGREEMENT

      

      pursuant
        to

      

      LEXMARK
        INTERNATIONAL, INC.

      2005
        NONEMPLOYEE DIRECTOR STOCK PLAN

      

      

      This
        NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") between Lexmark
        International, Inc., a Delaware corporation (the "Company"), and the person
        specified on the signature page hereof (the "Optionee") is entered into as
        of
        the ___ day of ____, ____ pursuant to the Lexmark International, Inc.
        2005 Nonemployee Director Stock Plan, as the same may be amended from time
        to
        time (the "Plan").

      

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

      

      WHEREAS,
        the Optionee desires to accept from the Company the grant of the options
        evidenced hereby on the terms and subject to the conditions herein;

      

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

      

      1.
        Grant
        of Option; Exercise Price.

      

      (a)
        Grant
        of Option; Exercise Price.
        The
        Company hereby grants to the Optionee, effective as of the date hereof and
        on
        the terms and conditions herein, an option (the "Option") to purchase ____
        shares (the "Option Shares") of the Company's Class A Common Stock, par value
        $.01 per share (the "Common Stock"), at an exercise price per Option Share
        equal
        to _____, which was the closing price per share of Common Stock on
        ________, ______. The Option is not intended to be an incentive stock
        option under the Internal Revenue Code of 1986, as amended.

      

      (b)
        2005
        Nonemployee Director Stock Plan.
        This
        Agreement is subject in all respects to the terms of the Plan, all of which
        terms are made a part of and incorporated in this Agreement by reference.
        In the
        event of any conflict between the terms of this Agreement and the terms of
        the
        Plan, the terms of the Plan shall control. The Optionee hereby acknowledges
        that
        a copy of the Plan may be obtained from the 

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      Vice
        President of Human Resources and agrees to comply with and be bound by all
        of
        the terms and conditions thereof. Terms used in this Agreement with initial
        capital letters, but not defined herein, shall have the meanings assigned
        to
        them under the Plan.

      

      2.
        Vesting;
        Period of Exercise of Option.

      

      (a)
        Vesting.
        The
        Option shall become vested and exercisable in three approximately equal
        installments on each of the first three anniversaries (34% on the first
        anniversary and 33% on each of the second and third anniversaries, in each
        case
        resulting in a fractional Option Share, rounded up to the next whole Option
        Share, but not exceeding the total set forth in Section 1(a) above) of the
        date
        hereof, subject in the case of each such installment to the provisions of
        Section 2(b) below.

      

      (b)
        Termination
        of Director Status.
        In the
        event the Optionee ceases to serve as a member of the Board for any
        reason,

       

      (i)
        if
        such Optionee has completed three (3) Years of Board Service or less as of
        the
        date of such termination, any portion of the Option (x)
        which
        is then outstanding, vested and exercisable on the date of termination may
        be
        exercised by the Optionee or, if applicable, his or her beneficiary for a
        period
        of 90 days following the date of the Optionee's termination of service, but
        in
        no event later than the expiration date of the term of the Option Period
        (as
        defined in Section 2(c)), and (y)
        which
        is not vested and exercisable on the date of termination, shall be canceled,
        in
        full, on the date of such termination; or

      

      (ii)
        if
        such Optionee has completed more than three (3) Years of Board Service as
        of the
        date of such termination, any portion of the Option (x)
        which
        is then outstanding, vested and exercisable on the date of termination may
        be
        exercised by the Optionee or, if applicable, his or her beneficiary until
        the
        third anniversary of the date of the Optionee's termination of service, but
        in
        no event later than the expiration date of the term of the Option, and
        (y)
        which
        is then outstanding but not vested and exercisable on the date of termination,
        shall thereafter vest and become exercisable by the Optionee or, if applicable,
        his or her beneficiary at the time or times indicated in Section 2(a) for
        a
        period of three (3) years following the Optionee’s termination of service and,
        once exercisable, will remain exercisable for a period of three (3) years
        following the date of the Optionee's termination of service, but in no event
        later than the expiration date of the term of the Option Period.

      

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

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      3.
        Method
        of Exercise and Payment; Certain Restrictions on Resale.

      

      (a)
        Exercise
        and Payment.
        Once
        vested and exercisable, the Option, or any such portion thereof, may be
        exercised by the Optionee (or his or her beneficiary or estate) by delivering
        to
        the Company on any business day (the "Option Exercise Date") written notice
        (the
        "Option Exercise Notice"), in such manner and form as may be required by
        the
        Board, specifying the number of Option Shares the Optionee then desires to
        purchase and the aggregate exercise price for such Option Shares (the "Option
        Exercise Price"). The Option Exercise Notice shall be accompanied by payment
        of
        the Option Exercise Price and any other amounts required to be paid pursuant
        to
        Section 4.

      

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

      

      Within
        a
        reasonable period of time after the Option Exercise Date, subject to payment
        of
        the Option Exercise Price and any amounts required to be paid by the Optionee
        pursuant to Section 4, the Company shall direct its stock transfer agent
        to make
        (or to cause to be made) an appropriate book entry reflecting the Optionee's
        ownership of the Option Shares then being purchased by the Optionee. Upon
        request, the Company shall deliver to the Optionee a certificate or certificates
        for the number of Option Shares purchased by the Optionee, registered in
        the
        name of the Optionee. In the event that the Company or the Board, in its
        sole
        discretion, shall determine that, under applicable U.S. federal or state
        or
        non-U.S. securities laws, the transfer of any Option Shares must be subject
        to
        restriction, any certificates issued under this Section 3(a) shall bear an
        appropriate legend restricting the transfer of such Option Shares, and
        appropriate stop transfer instructions shall be delivered to the Company's
        stock
        transfer agent.

      

      (b)
        Restrictions
        on Sale upon Public Offering.
        The
        Optionee hereby agrees that, during the 20 day period prior to and the 180
        days
        following the effective date of any registration statement filed by the Company
        under the Securities Act of 1933, as amended, with respect to any underwritten
        public offering of any shares of the Company's capital stock, the Optionee
        will
        not effect any public sale or distribution of shares of Common Stock (other
        than
        as part of such underwritten public offering).

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      4.
        Tax
        Withholding.
        The
        delivery of any directions to the Company's stock transfer agent or any
        certificates for shares of Common Stock pursuant to Section 3 shall not be
        made
        until the Optionee, or, if applicable, the Optionee's beneficiary or estate,
        has
        made appropriate arrangements for the payment to the Company of an amount
        sufficient to satisfy any applicable U.S. federal, state and local and non-U.S.
        tax withholding or other tax requirements, as determined by the
        Company.

      

      5.
        Assignability.
        Except
        as set forth in the Plan, the Option may not be sold, transferred, pledged,
        assigned or otherwise alienated or hypothecated by the Optionee otherwise
        than
        by will or the laws of descent and distribution and is exercisable during
        Optionee's lifetime only by the Optionee.

      

      6.
        Adjustment
        in Capitalization.

      

      (a)
        The
        aggregate number of shares of Common Stock subject to the Option and the
        option
        exercise price and/or vesting and exercisability criteria applicable to the
        Option shall be proportionately adjusted to reflect, as deemed equitable
        and
        appropriate by the Board, an Adjustment Event. To the extent deemed equitable
        and appropriate by the Board, subject to any required action by stockholders,
        in
        any merger, consolidation, reorganization, liquidation, dissolution or other
        similar transaction, other than any such transaction that constitutes a Change
        in Control, the Option shall pertain to the securities and other property
        to
        which a holder of the number of shares of Common Stock then covered by the
        Option would have been entitled to receive in connection with such
        event.

      

      (b)
        Any
        shares of stock (whether Common Stock, shares of stock into which shares
        of
        Common Stock are converted or for which shares of Common Stock are exchanged
        or
        shares of stock are distributed with respect to Common Stock) or cash or
        other
        property received with respect to the Option as a result of any Adjustment
        Event, any distribution of property or any merger, consolidation,
        reorganization, liquidation, dissolution or other similar transaction shall,
        except as provided in the Plan, be subject to the same terms and conditions,
        including vesting and restrictions on exercisability or transfer, as are
        applicable to the Option with respect to which such shares, cash or other
        property is received, and stock certificate(s) representing or evidencing
        any
        shares of stock or other property so received shall be legended as
        appropriate.

      

      7.
        Preemption
        by Applicable Laws and Regulations.
        Notwithstanding anything in the Plan or this Agreement to the contrary, the
        issuance of shares of Common Stock hereunder shall be subject to compliance
        with
        all applicable U.S. federal, state and non-U.S. securities laws. Without
        limiting the foregoing, if any law, regulation or requirement of any
        governmental authority having jurisdiction shall require either the Company
        or
        the Optionee (or the Optionee's beneficiary or estate) to take any action
        in
        connection with the issuance of any shares of Common Stock hereunder, the
        issuance of such shares shall be deferred until such action shall have been
        taken to the satisfaction of the Company.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      8.
        Interpretation;
        Construction.
        All of
        the powers and authority conferred upon the Board pursuant to any term of
        the
        Plan or the Agreement shall be exercised by the Board, in its sole discretion.
        All determinations, interpretations or other actions made or taken by the
        Board
        pursuant to the provisions of the Plan or the Agreement shall be final, binding
        and conclusive for all purposes and upon all persons and, in the event of
        any
        judicial review thereof, shall be overturned only if arbitrary and capricious.
        The Board may consult with legal counsel, who may be counsel to the Company,
        and
        shall not incur any liability for any action taken in good faith in reliance
        upon the advice of counsel.

      

      9.
        Amendment.
        The
        Board shall have the right to alter or amend this Agreement from time to
        time,
        subject to the restrictions set forth in the Plan, for the purpose of promoting
        the objectives of the Plan, provided that no such amendment shall impair
        the
        Optionee's rights under this Agreement without the Optionee's consent. Subject
        to the preceding sentence, any alteration or amendment of this Agreement
        by the
        Board shall, upon adoption thereof by the Board, become and be binding and
        conclusive on all persons affected thereby without requirement for consent
        or
        other action with respect thereto by any such person. The Company shall give
        written notice to the Optionee of any such alteration or amendment of this
        Agreement as promptly as practicable after the adoption thereof. This Agreement
        may also be amended by a writing signed by both the Company and the
        Optionee.

      

      10.
        No
        Right to Serve as a Director.
        Neither
        the Plan nor this Agreement imposes any obligation on the Company to retain
        any
        Optionee as a director or any obligation on any Optionee to remain as a director
        of the Company.

      

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

      

      12.
        Miscellaneous.

      

      (a)
        Notices. All notices and other communications required or permitted to
        be
        given under this Agreement shall be in writing and shall be deemed to have
        been
        given if delivered personally or sent by certified or express mail, return
        receipt requested, postage prepaid, or by any recognized international
        equivalent of such delivery, to the Company or the Optionee, as the case
        may be,
        at the following addresses or to such other address as the Company or the
        Optionee, as the case may be, shall specify by notice to the others delivered
        in
        accordance with this Section 12(a): 

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
        	 	
                (i)

              	
                if
                  to the Company, to it at:

              

      

      

      One
        Lexmark Centre Drive

      740
        West
        New Circle Road 

      Lexington,
        Kentucky 40550

      Attention:
        Secretary

      

      
        	 	
                (ii)

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

              

      

      

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

      

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

       

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

      
        

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

        

        (e)
          Jurisdiction.
          The
          Optionee hereby irrevocably and unconditionally submits to the jurisdiction
          and
          venue of the state courts of the Commonwealth of Kentucky and of the United
          States District Court of the Eastern District of Kentucky located in Fayette
          County, Kentucky, and any appellate court from any thereof, in any 

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        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. Optionee further agrees that any action related to, or arising out
          of,
          this Agreement shall only be brought by Optionee exclusively in the federal
          and
          state courts located in Fayette County, Kentucky. Nothing in this Agreement
          shall affect any right that the Company may otherwise have to bring any
          action
          or proceeding relating to this Agreement in the courts of any
          jurisdiction.

        

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

        

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

        

        (h)
          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.

        

        (i)
          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.

        

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

      

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

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

      

      

      LEXMARK
        INTERNATIONAL, INC.

      

      

      By:         
        _______________________________

      Name: Jeri
        I. Stromquist

      Title: Vice
        President of Human Resources

      

      

      OPTIONEE:

      

      

      

      By:         
        _______________________________

      Name: __________________________

      Title: Director

      

      

      Address
        of Optionee:

      

      _____________________________________

      _____________________________________

      _____________________________________

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