Document:

EX-10.25

Exhibit 10.25

Lexmark International, Inc.

Stock Incentive Plan

Performance-Based Restricted Stock Unit Award Notice

This Award Notice evidences the award of performance-based restricted stock units (each, a
“Performance RSU” or collectively, the “Performance RSUs”) that have been granted to you, [NAME],
by Lexmark International, Inc., a Delaware corporation (the “Company”), subject to and conditioned
upon your agreement to the terms of the attached Performance-Based Restricted Stock Unit Award
Agreement (the “Agreement”). The Performance RSUs are granted under the Lexmark International,
Inc. Stock Incentive Plan, as amended and restated, effective January 1, 2009 (the “Plan”), and
represent the Company’s unfunded and unsecured promise to issue shares of the Company’s Common
Stock at a future date, subject to the terms of this Award Notice, the Agreement and the Plan.

The number of Performance RSUs awarded to you, the performance measures to earn Performance RSUs,
and the vesting schedule for earned Performance RSUs are specified below. This Award Notice
constitutes part of, and is subject to the terms and provisions of, the Agreement and the Plan,
which are incorporated by reference herein. Capitalized terms used but not defined in this Award
Notice shall have the meanings set forth in the Agreement or in the Plan.

	 	 	 
	Grant
Date:

	 	[DATE]
	 
	 	 
	Number of
Performance RSUs at
Target:

	 	[      #     ], subject to adjustment as provided under Section 5.4 of the Plan.

	 	 	 	 	 
	Minimum
	 	Target
	 	Maximum
	50%	 	100%	 	150%

	 	 	 
	 
	 	 
	Performance Measure:

	 	Return on Net Assets (excluding cash, with restructuring)

	 	 	 	 	 
	Minimum
	 	Target
	 	Maximum
	 
	[Intentionally Omitted]

	 	 	 
	Performance Period:

	 	January 1, 2009 to December 31, 2009
	 
	 	 
	Service Condition
to Earn Performance
RSUs:

	 	You must be employed on the last day of the Performance Period (December 31,
2009) to earn Performance RSUs. If you have a termination of employment during
the Performance Period for any reason, you shall forfeit the Performance RSUs.
	 
	 	 
	Determination of
Earned Performance
RSUs:

	 	As soon as practicable after the end of the Performance Period, the Committee
intends to review and approve the Company’s business results and certify the
level of achievement of the Performance Measure. Performance RSUs will be
earned if, and to the extent, the Performance Measure has been achieved. The
Committee may use its sole discretion to determine whether the number of earned
Performance RSUs shall be reduced, based on any factors it may deem
appropriate.
	 
	 	 
	Vesting Schedule
for Earned
Performance RSUs:

	 	Subject to the provisions of the Agreement and the Plan and provided that you
remain continuously employed by the Company or one of its Subsidiaries through
the respective vesting dates, set forth below, any earned Performance RSUs
shall become vested as follows:

	 	 	 	 	 
	Vesting Dates	 	% of Earned Performance RSUs
	2nd Anniversary of Grant Date
	 	 	34	%
	3rd Anniversary of Grant Date
	 	 	33	%
	4th Anniversary of Grant Date
	 	 	33	%

 

 

	 	 	 
	Settlement Date:

	 	For each earned Performance RSU, settlement (i.e., one share of the Company’s
Common Stock will be issued for each vested earned Performance RSU) will occur
on (i) the date on which such Performance RSU becomes vested in accordance with
the Vesting Schedule, set forth above, or (ii) on such other date as set forth
in this Award Notice, the Agreement, or the Plan.
	 
	 	 
	Acceleration Events:

	 	If a Change in Control occurs during the Performance Period, a pro-rata portion
of the Performance RSUs will be deemed earned based on the greater of Target or
actual achievement of the Performance Measure as of the date of the Change in
Control, and the earned Performance RSUs shall become 100% vested as of such
date.
	 
	 	 
	 

	 	After the Performance Period has ended, any earned Performance RSUs shall
become 100% vested upon the earliest to occur of: (i) your Retirement, (ii)
your termination of employment with the Company or one of its Subsidiaries as a
result of your death or Disability, or (iii) upon a Change in Control of the
Company prior to your termination of employment with the Company or one of its
Subsidiaries.
	 
	 	 
	Forfeiture of Award:

	 	By accepting the award of Performance RSUs, you acknowledge that this award has
been granted to you as an incentive to remain employed by the Company or one of
its Subsidiaries, and that if you violate the provisions set forth in Section
1(d) of the Agreement or the Executive Compensation Recovery Policy, you (i)
shall forfeit any unsettled earned or unearned Performance RSUs and (ii) shall
be required to immediately repay to the Company, an amount equal to the value
realized from the settlement of any earned Performance RSUs during the period
set forth in Section 1(d) of the Agreement or the Recovery Period set forth in
the Executive Compensation Recovery Policy, as applicable.

 

 

PERFORMANCE-BASED RESTRICTED STOCK UNIT

AWARD AGREEMENT

pursuant to

LEXMARK INTERNATIONAL, INC.

STOCK INCENTIVE PLAN

     This PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”) between Lexmark
International, Inc., a Delaware corporation (the “Company"), and the person specified on the
signature page hereof (the “Grantee") is entered into as of the Grant Date specified on the
attached Performance-Based Restricted Stock Unit Award Notice (the “Award Notice") pursuant to the
Lexmark International, Inc. Stock Incentive Plan, as the same may be amended from time to time (the
“Plan"). Capitalized terms used and not defined herein shall have the meanings assigned to such
terms in the Plan or in the Award Notice, as applicable.

     WHEREAS, the Committee has determined that it would be to the advantage and in the interest of
the Company to grant performance-based restricted stock units to the Grantee as an inducement to
the Grantee to remain in the service of the Company and the Subsidiaries and as an incentive to the
Grantee to devote his or her best efforts and dedication to the performance of such services and to
maximize shareholder value; and

     WHEREAS, the Grantee desires to accept from the Company the grant of the performance-based
restricted stock units, as set forth in the Award Notice, subject to the terms and conditions of
this Agreement, the Award Notice and the Plan.

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

	 	1.	 	Performance-Based Restricted Stock Unit Award.

	 	(a)	 	Performance-Based Restricted Stock Unit Award. The Company
hereby grants to the Grantee, effective as of the Grant Date, the number of
performance-based restricted stock units, as set forth in the Award Notice, each
representing the Grantee’s right to receive one share of Common Stock, subject to
the achievement of the Performance Measure(s), at the time or times provided for in
the Award Notice, and subject to the terms and conditions set forth in this
Agreement, the Award Notice and the Plan (the “Performance RSUs").
	 
	 	(b)	 	Stock Incentive Plan. This Agreement is subject in all
respects to the terms of the Plan, all of which terms are made a part of and
incorporated in this Agreement by reference. In the event of any conflict between
the terms of this Agreement and the terms of the Plan, the terms of the Plan shall
control. The Grantee hereby acknowledges receipt of a copy of the Plan, either
with this Performance RSU Award Agreement or a prior Incentive Award made under the
Plan, and agrees to comply with and be bound by all of the terms and conditions
thereof. Copies of the Plan may also be obtained from the Vice President of Human
Resources, at any time.
	 
	 	(c)	 	Establishment of Account. No shares of Common Stock will be
issued on the Grant Date of the Performance RSUs and the Company shall not be
required to set aside a fund for the settlement of any such Performance RSUs. The
Company will establish a separate bookkeeping account for the Grantee and will
record in such account the number of Performance RSUs awarded to the Grantee, and,
to the extent applicable, the number of

 

 

	 	 	 	Performance RSUs earned by the Grantee, if any, after the Performance Period has
ended, and the number of Dividend Equivalents provided for in Section 4(b) hereof.
	 
	 	(d)	 	Forfeiture. In accepting this grant of Performance RSUs, the
Grantee acknowledges that the Performance RSUs have been granted as an incentive to
the Grantee to remain employed by the Company or any Subsidiary and to exert his or
her best efforts to enhance the value of the Company or any Subsidiary over the
long-term. Accordingly, the Grantee agrees that if he or she (i) within 12 months
following termination of employment with the Company or any Subsidiary, accepts
employment with a competitor of the Company or any Subsidiary or otherwise engages
in competition with the Company or any Subsidiary, (ii) within 36 months following
termination of employment with the Company or any Subsidiary, directly or
indirectly, disrupts, damages, interferes or otherwise acts against the interests
of the Company or any Subsidiary, including, but not limited to, recruiting,
soliciting or employing, or encouraging or assisting his or her new employer or any
other person or entity to recruit, solicit or employ, any employee of the Company
or any Subsidiary without the Company’s prior written consent, which may be
withheld in its sole discretion, (iii) within 36 months following termination of
employment with the Company, or any Subsidiary, disparages, criticizes, or
otherwise makes any derogatory statements regarding the Company or any Subsidiary
or their directors, officers or employees, or (iv) discloses or otherwise misuses
confidential information or material of the Company or any Subsidiary, each of
these constituting a harmful action, then any unsettled earned or unearned
Performance RSUs shall be canceled immediately (unless canceled earlier by
operation of another term of this Agreement) and the Grantee shall immediately
repay to the Company an amount equal to the value of the earned and settled
Performance RSUs (represented by the closing market price on the applicable Vesting
Dates (as set forth in the Award Notice) multiplied by the number of earned
Performance RSUs vested on such Vesting Dates, without regard to any subsequent
market price decrease or increase) realized by the Grantee from the vesting of any
earned Performance RSUs within 18 months preceding the earlier of (w) the
commitment of any such harmful action and (x) the Grantee’s termination of
employment with the Company and its Subsidiaries; and through the later of (y) 18
months following the commitment of any such harmful action and (z) such period as
it takes the Company to discover such harmful action. In addition, the Grantee
acknowledges that, if he or she is a “Covered Employee” subject to the Company’s
Executive Compensation Recovery Policy (the “Recovery Policy") and engages in
“Prohibited Activity,” that the unsettled earned or unearned Performance RSUs shall
be canceled immediately and the Grantee shall immediately repay the “Equity Gains”
realized by the Grantee during the “Recovery Period,” as such terms are defined in
the Recovery Policy. The Grantee agrees that the Company or any of its
Subsidiaries has the right to deduct from any amounts the Company or any of its
Subsidiaries may owe the Grantee from time to time (including amounts owed to the
Grantee as wages or other compensation, fringe benefits or vacation pay, as well as
any other amounts owed to the Grantee by the Company or any of its Subsidiaries),
the amounts the Grantee owes the Company or any of its Subsidiaries. The Committee
shall have the right, in its sole discretion, not to enforce the provisions of this
paragraph with respect to the Grantee.
	 
	 	 	 	Grantee agrees to be fully liable for any breach of this above described covenant,
promise and agreement. Grantee agrees to reimburse the Company for all costs and
expenses, including attorneys’ fees, incurred by the Company in enforcing the
obligations of Grantee. This entire provision shall survive the termination of the
Agreement and, in no manner, shall the remedies described herein be considered as
the Company’s exclusive or entire remedy for Grantee’s breach, non-compliance or
violation of any other agreement that Grantee may have entered into with the
Company.

 

 

2. Earning Performance RSUs. As soon as practicable after the end of the Performance
Period, as set forth in the Award Notice, the Committee shall review and approve the
Company’s business results and certify the level of achievement of the Performance
Measure(s), as set forth in the Award Notice. Provided you are employed on the last day of
the Performance Period, and to the extent that the Performance Measure(s) have been
achieved, a number of Performance RSUs will be deemed earned based on the level of
attainment of each Performance Measure. Settlement of the earned Performance RSUs is
subject to your continued employment through the Vesting Dates, as set forth in Section
3(a). The Committee may use its sole discretion to determine whether the number of earned
Performance RSUs shall be reduced, based on any factors it may deem appropriate. If a
Change in Control occurs during the Performance Period, a pro-rata portion of the
Performance RSUs will be deemed earned based on the greater of Target, as set forth in the
Award Notice, or the actual achievement of the Performance Measure(s) as of the effective
date of the Change in Control.

3. Vesting of Earned Performance RSUs.

	 	(a)	 	Vesting. The earned Performance RSUs shall become vested in
such amounts and on such Vesting Dates as set forth in the Award Notice, subject to
the Grantee’s continuous employment with the Company or a Subsidiary from the Grant
Date to the applicable Vesting Date. To the extent vesting would result in the
settlement of a fractional number of earned Performance RSUs, the number shall be
rounded to a whole number, but shall not exceed the total number of earned
Performance RSUs, as determined by the Committee.
	 
	 	(b)	 	Acceleration. The Committee may, in its discretion,
accelerate the vesting of all or any portion of the Performance RSUs or waive any
conditions to the vesting of such Performance RSUs.
	 
	 	(c)	 	Termination of Employment during the Performance Period. In
the event of the Grantee’s termination of employment with the Company and its
Subsidiaries for any reason during the Performance Period, the Grantee shall
immediately forfeit all rights with respect to the Performance RSUs.
	 
	 	(d)	 	Termination of Employment after the end of the Performance
Period. In the event of the Grantee’s termination of employment with the
Company and its Subsidiaries for any reason, other than death, Disability, or
Retirement, after the end of the Performance Period, the Grantee shall immediately
forfeit all rights with respect to any earned Performance RSUs (and Dividend
Equivalents) which have not yet vested in accordance with the terms of the Award
Notice, this Agreement or the Plan. After the Performance Period has ended, any
earned Performance RSUs shall become 100% vested upon the earliest to occur of: (i)
the Grantee’s Retirement or (ii) the Grantee’s termination of employment with the
Company and its Subsidiaries as a result of the Grantee’s death or Disability.
	 
	 	(e)	 	Change in Control. In the event of a Change in Control prior to
the Grantee’s termination of employment, any earned Performance RSUs (including any
Performance RSUs deemed earned on the effective date of the Change in Control
pursuant to Section 2) shall become 100% vested as of the effective date of the
Change in Control.

	 	4.	 	Settlement of Restricted Stock Unit Award.

	 	(a)	 	Settlement. On, or as soon as reasonably practicable after, a
Vesting Date, subject to Section 5 hereof, the Company shall direct its stock
transfer agent to make (or to cause to be made) an appropriate book entry in the
Company’s stock transfer books and records reflecting the transfer to the Grantee,
and the Grantee’s ownership, of one share of Common Stock for each earned
Performance RSU that shall have become vested on

 

 

	 	 	 	such Vesting Date. Upon the Grantee’s request, subject to Section 5 hereof, the
Company shall deliver to the Grantee a stock certificate registered in the Grantee’s
name and representing such number of shares of Common Stock free and clear of all
restrictions except any that may be imposed by law. No payment will be required to
be made by the Grantee upon the delivery of such shares of Common Stock, except as
otherwise provided in Section 5 of the Agreement.
	 
	 	(b)	 	Dividend Equivalents. Unless otherwise determined by the
Committee, during the period following the Performance Period and prior to a
Vesting Date, the Company will credit to the bookkeeping account of the Grantee an
amount equal to any dividends paid by the Company with respect to the number of
shares of Common Stock corresponding to the number of Performance RSUs (“Dividend
Equivalents”). Dividend Equivalents in respect of earned Performance RSUs that
shall have become vested on the applicable Vesting Date shall be payable to the
Grantee on such Vesting Date in accordance with Section 4(a).
	 
	 	(c)	 	Restrictions on Sale upon Public Offering. The Grantee hereby
agrees that, notwithstanding the vesting of the earned Performance RSUs pursuant to
Section 3(a) of this Agreement or the transfer of the shares of Common Stock
covered thereby to the Grantee pursuant to Section 4(a) hereof, the Grantee will
not effect any public sale or distribution of any of such shares of Common Stock
during the 20-day period prior to and the 180 days following the effective date of
any registration statement hereinafter filed by the Company under the Securities
Act of 1933, as amended, with respect to any underwritten public offering of any
shares of the Company’s capital stock (other than as part of such underwritten
public offering).

	 	5.	 	Tax Withholding. The delivery of any directions to the Company’s stock
transfer agent or any certificates for shares of Common Stock pursuant to Section 4
shall not be made unless and until the Grantee, or, if applicable, the Grantee’s
beneficiary or estate, has made appropriate arrangements for the payment to the Company
of an amount sufficient to satisfy any applicable U.S. federal, state and local and
non-U.S. tax withholding or other tax requirements, as determined by the Company. To
satisfy the Grantee’s applicable withholding and other tax requirements, the Company
may, in its sole discretion, (i) withhold a number of shares of Common Stock having an
aggregate Fair Market Value on the Vesting Date equal to the applicable amount of such
withholding and other tax requirements or (ii) require the Grantee to sell a number of
shares of Common Stock having at least a value sufficient to meet the applicable amount
of such withholding and other tax requirements to account for rounding and market
fluctuations, subject to any rules adopted by the Committee or required to ensure
compliance with applicable law, including, but not limited to, Section 16 of the
Securities Exchange Act of 1934, as amended. Shares required to be sold to satisfy the
Grantee’s applicable withholding and other tax requirements may be sold as part of a
block trade with the Grantee receiving an average price. Any cash payment made
pursuant to Section 4 shall be made net of any amounts required to be withheld or paid
with respect thereto (and with respect to any shares of Common Stock delivered
contemporaneously therewith) under any applicable U.S. federal, state and local and
non-U.S. tax withholding and other tax requirements.
	 
	 	6.	 	Transferability. Unless otherwise provided in accordance with the
provisions of the Plan, the Performance RSUs may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated by the Grantee, other than by will or
the laws of descent and distribution. The term “Grantee” as used in this Agreement
shall include any permitted transferee of the Performance RSUs.

 

 

	 	7.	 	Adjustment in Capitalization.

	 	(a)	 	The aggregate number of shares of Common Stock covered by the
Performance RSUs granted hereunder shall be proportionately adjusted to reflect, as
deemed equitable and appropriate by the Committee, an Adjustment Event.
	 
	 	(b)	 	Any shares of stock (whether Common Stock, shares of stock into which
shares of Common Stock are converted or for which shares of Common Stock are
exchanged or shares of stock distributed with respect to Common Stock) or cash or
other property received or credited to the account of the Grantee with respect to
the Performance RSUs as a result of any Adjustment Event, any distribution of
property or any merger, consolidation, reorganization, liquidation, dissolution or
other similar transaction shall, except as otherwise provided by the Committee, be
subject to the same terms and conditions, including restrictions on transfer, as
are applicable to the Performance RSUs with respect to which such shares, cash or
other property is received or so credited and stock certificate(s), if any,
representing or evidencing any shares of stock or other property so received shall
be legended as appropriate.

	 	8.	 	Preemption by Applicable Laws and Regulations. Notwithstanding
anything in the Plan or this Agreement to the contrary, the issuance of shares of
Common Stock hereunder shall be subject to compliance with all applicable U.S. federal,
state and non-U.S. securities laws. Without limiting the foregoing, if any law,
regulation or requirement of any governmental authority having jurisdiction shall
require either the Company or the Grantee (or the Grantee’s beneficiary or estate) to
take any action in connection with the issuance of any shares of Common Stock
hereunder, the issuance of such shares shall be deferred until such action shall have
been taken to the satisfaction of the Company.
	 
	 	9.	 	Interpretation; Construction. All of the powers and authority
conferred upon the Committee pursuant to any term of the Plan or the Agreement shall be
exercised by the Committee, in its sole discretion. All determinations,
interpretations or other actions made or taken by the Committee pursuant to the
provisions of the Plan or the Agreement shall be final, binding and conclusive for all
purposes and upon all persons and, in the event of any judicial review thereof, shall
be overturned only if arbitrary and capricious. The Committee may consult with legal
counsel, who may be counsel to the Company or any Subsidiary, and shall not incur any
liability for any action taken in good faith in reliance upon the advice of counsel.
	 
	 	10.	 	Amendment. The Committee shall have the right, in its sole discretion,
to alter or amend this Agreement, from time to time, as provided in the Plan in any
manner for the purpose of promoting the objectives of the Plan, provided that no such
amendment shall impair the Grantee’s rights under this Agreement without the Grantee’s
consent. Subject to the preceding sentence, any alteration or amendment of this
Agreement by the Committee shall, upon adoption thereof by the Committee, become and be
binding and conclusive on all persons affected thereby without requirement for consent
or other action with respect thereto by any such person. Notwithstanding any other
provision of this Agreement or the Plan to the contrary, the Committee may, in its sole
and absolute discretion and without the consent of the Grantee, amend this Agreement,
to take effect retroactively or otherwise, as it may deem necessary or advisable for
the purpose of conforming the Agreement to any present or future law, regulation or
rule applicable to this Agreement or the Plan. The Company shall give written notice
to the Grantee of any such alteration or amendment of this Agreement as promptly as
practicable after the adoption thereof. This Agreement may also be amended by a
writing signed by both the Company and the Grantee.
	 
	 	11.	 	No Rights as a Stockholder. The Grantee shall have no rights as a
stockholder with respect to the Performance RSUs prior to the date as of which the
shares of Common Stock covered thereby are transferred to the Grantee in accordance
with Section 4(a) hereof.

 

 

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

	 	(a)	 	interfere with or limit in any way the right of the Company or any
Subsidiary to terminate Grantee’s employment at any time and for any reason, with
or without cause;
	 
	 	(b)	 	confer upon Grantee any right to continue in the employ of the Company
or any Subsidiary; and
	 
	 	(c)	 	provide Grantee the right to receive any Incentive Awards under the
Plan in the future or any other benefits the Company may provide to some or all of
its employees.

	 	13.	 	Miscellaneous.

	 	(a)	 	Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be deemed
to have been given if delivered personally or sent by certified or express mail,
return receipt requested, postage prepaid, or by any recognized international
equivalent of such delivery, to the Company or the Grantee, as the case may be, at
the following addresses or to such other address as the Company or the Grantee, as
the case may be, shall specify by notice to the others delivered in accordance with
this Section 13(a):

	 	(i)	 	if to the Company, to it at:

One Lexmark Centre Drive

740 West New Circle Road

Lexington, KY 40550

Attention: Secretary

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

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

	 
	 	(b)	 	Binding Effect; Benefits. This Agreement shall be binding
upon and inure to the benefit of the parties to this Agreement and their respective
successors and assigns. Nothing in this Agreement, express or implied, is intended
or shall be construed to give any person other than the parties to this Agreement
or their respective successors or assigns any legal or equitable right, remedy or
claim under or in respect of any agreement or any provision contained herein.
	 
	 	(c)	 	Waiver. Any party hereto may by written notice to the other
party (i) extend the time for the performance of any of the obligations or
other actions of the other party under this Agreement, (ii) waive
compliance with any of the conditions or covenants of the other party contained in
this Agreement and (iii) waive or modify performance of any of the
obligations of the other party under this Agreement. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any preceding or succeeding breach and no
failure by a party to exercise any right or privilege hereunder shall be deemed a
waiver of such party’s rights or privileges hereunder or shall be deemed a waiver
of such party’s rights to exercise the same at any subsequent time or times
hereunder.

 

 

	 	(d)	 	Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be assignable
by the Company or the Grantee without the prior written consent of the other party.
	 
	 	(e)	 	Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of the
law that might be applied under principles of conflict of laws and excluding any
conflict or choice of law rule or principle that may otherwise refer construction
or interpretation of the Plan or this Agreement to the substantive law of another
jurisdiction.
	 
	 	(f)	 	Jurisdiction. The Grantee hereby irrevocably and
unconditionally submits to the jurisdiction and venue of the state courts of the
Commonwealth of Kentucky and of the United States District Court of the Eastern
District of Kentucky located in Fayette County, Kentucky, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereby irrevocably agree that all claims in respect of any such action or
proceeding may be heard and determined in such Kentucky state or United States
federal courts located in such jurisdiction. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum. Grantee further agrees that any action related to, or arising
out of, this Agreement shall only be brought by Grantee exclusively in the federal
and state courts located in Fayette County, Kentucky. Nothing in this Agreement
shall affect any right that the Company may otherwise have to bring any action or
proceeding relating to this Agreement in the courts of any jurisdiction.
	 
	 	(g)	 	Severability. If any provision of this Agreement or the Plan
shall be held invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provisions of this Agreement or the Plan, and the Agreement
and the Plan shall be construed and enforced as if such provision had not been
included.
	 
	 	(h)	 	Survival. Any provision of this Agreement which contemplates
performance or observance subsequent to any termination or expiration of this
Agreement shall survive any termination or expiration of this Agreement and
continue in full force and effect.
	 
	 	(i)	 	Internal Revenue Code Section 409A. It is intended that the
settlement of the Performance RSUs shall constitute a “short-term deferral” for
purposes of Section 409A of the Code and the Treasury Department regulations and
other interpretive guidance issued thereunder, or as otherwise exempt from the
provisions of Section 409A of the Code. To the extent any portion of the settlement
of the Performance RSUs cannot be so characterized, this Agreement shall be
interpreted and construed in compliance with Section 409A of the Code and Treasury
Department regulations and other interpretive guidance issued thereunder, including
the restriction that payments made to a “specified employee” (within the meaning of
Section 409A of the Code) on account of a termination of employment shall be
delayed for six months and one day from the date of termination.
	 
	 	(j)	 	Section and Other Headings, Etc. The section and other
headings contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.

 

 

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

* * * * *

 

 

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement, effective as of
the Grant Date.

	 	 	 	 	 	 	 
	 	 	LEXMARK INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

          Jeri L. Isbell
	 	 
	 

	 	 	 	          Vice President of Human Resources	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

          (Sign Here)
	 	 
	 
	 	 	 	 	 	 
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Designation of Beneficiary

In the event of my death, I hereby designate the following person(s), as my beneficiary, to receive
any unsettled earned Performance RSUs that become vested upon my death pursuant to this Agreement.
I acknowledge that if I fail to designate a beneficiary, below, that any unsettled earned
Performance RSUs that become vested upon my death shall be paid to my estate.

	 	 	 	 	 
	 

	 	 

Beneficiary NameEX-10.31

Exhibit 10.31

AMENDMENT NO. 5

TO THE

LEXMARK INTERNATIONAL, INC.

NONEMPLOYEE DIRECTOR STOCK PLAN

(Amended and Restated Effective April 30, 1998)

     This is Amendment No. 5 to the Lexmark International, Inc. Nonemployee Director Stock Plan, as
amended and restated, Effective April 30, 1998, and as subsequently amended February 11, 1999,
April 29, 1999, July 23, 1999, and April 22, 2004 (the “Plan”).

     WHEREAS, pursuant to Section 13 of the Plan, the Board of Directors of Lexmark International,
Inc. (the “Board”) is authorized to amend the Plan from time to time to effect any amendment deemed
appropriate; and

     WHEREAS, at its meeting on October 25, 2007, the Board delegated its authority to amend the
Plan to each of the Corporation’s Vice President of Human Resources and the Corporation Vice
President, General Counsel and Secretary, for purposes of bringing the Plans into compliance with
Section 409A of the Internal Revenue Code, as amended (the “Code”);

     WHEREAS, the Corporation’s Vice President of Human Resources believes that it is in the best
interests of the Corporation to amend the Plan to comply with Code Section 409A and the Treasury
Regulations promulgated thereunder;

     NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended, effective as of January 1,
2005, unless another effective date is set forth herein, as follows:

     1. Section 2(f) of the Plan is amended to add a paragraph to the end thereof as follows:

Notwithstanding the foregoing, to the extent that any Section 409A Incentive Award
would become payable under this Plan by reason of a Change in Control, such amount
shall become payable only if the event constituting a Change in Control would also
constitute a “change in the ownership” of the Company, a “change in the effective
control” of the Company, or a “change in the ownership of a substantial portion of
the assets” of the Company within the meaning of Section 1.409A-3(i)(5) of the
Treasury Regulations.

2. Section 2(m) of the Plan is amended in its entirety as follows:

(m) “Fair Market Value” means, as of any date of determination, the closing price of
a share of Common Stock on a national securities exchange on that day, as reported
for such day in the Wall Street Journal, or the mean of the last bid and asked
prices for a share of Common Stock on such immediately preceding date, as reported
on a nationally recognized system of price quotation. In the event that there are no
Common Stock transactions reported on such exchange or system on

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such day, Fair Market Value shall mean the closing price or the mean of the last bid
and asked prices, whichever is applicable, on the immediately preceding day on which
Common Stock transactions were so reported.

3. Section 2 of the Plan is amended to the following new subsections:

(u) “Grandfathered Award” means any Award that was both granted and vested before
January 1, 2005, which would otherwise provide for a “deferral of compensation”
within the meaning of Section 1.409A-1(b) of the Treasury Regulations. No amendment
or change to the Plan or other change (including an exercise of discretion) with
respect to such a Grandfathered Award after October 3, 2004, shall be effective if
such change would constitute a “material modification” within the meaning of Code
Section 409A and the Treasury Regulations promulgated thereunder.

(v) “Section 409A Incentive Award” means any Award, other than a Grandfathered
Award, which provides for the “deferral of compensation” within the meaning of
Section 1.409A-1(b) of the Treasury Regulations, which is not otherwise exempt from
the requirements of Section 409A of the Code.

(w) For purposes of any Section 409A Incentive Award, the terms “ceases to serve,”
“terminate,” or “termination of service,” and variations thereof, as used in the
Plan or any Award Agreement for a Section 409A Incentive Award, are intended to mean
an Eligible Director’s “separation from service” from the Company for purposes of
Section 409A of the Code, using the default provisions set forth in Section
1.409A-1(h) of the Treasury Regulations.

4. Section 7(e) of the Plan is amended in its entirety as follows:

(e) Settlement of Deferred Stock Units. On June 30th in the
fifth calendar year following the year in which the Award of Deferred Stock Units is
made, or at such other time or times as shall be determined by the Board and
specified in the Award Agreement, an Eligible Director will be entitled to receive
one Share for each Deferred Stock Unit (and related Dividend Equivalents) subject to
such Award.

5. Section 7 of the Plan is amended to add a new subsection (f) and (g) as follows:

(f) Deferred Settlement of Deferred Stock Units. With respect to
Grandfathered Awards, an Eligible Director may elect to further defer receipt of the
Shares issuable with respect to such Deferred Stock Units pursuant to such election
procedures as may be specified by the Board.

With respect to any Deferred Stock Units that constitute Section 409A Incentive
Awards, an Eligible Director may elect to defer settlement of such Deferred Stock
Units beyond the date specified in the paragraph above, or as otherwise specified

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in the Award Agreement, as applicable, provided the following requirements are
satisfied:

     (i) An Eligible Director’s election to defer settlement of the Deferred
Stock Units may not take effect until at least 12 months after the date on
which the election is made by the Eligible Director;

     (ii) An Eligible Director’s election to defer settlement of the
Deferred Stock Units must delay settlement for a period of not less than
five (5) years from the original settlement date set forth in Section 10.6,
or as otherwise provided in the Award Agreement; and

     (iii) An Eligible Director’s election to defer settlement of the
Deferred Stock Units must be made at least 12 months prior to the settlement
date set forth in Section 10.6, or as otherwise provided in the Award
Agreement.

     The Company may delay settlement of the Deferred Stock Units 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
Company reasonably anticipates that the making of the payment will not cause such
violation.

     The Company also reserves the right to delay settlement of the Deferred Stock
Units upon such other events and conditions as the Secretary of the Treasury may
prescribe in generally applicable guidance published in the Internal Revenue
Bulletin.

(g) 2008 Transition Rules. Notwithstanding the provisions of Section 7(f),
an Eligible Director may elect a new settlement date with respect to his Deferred
Stock Units constituting a Section 409A Incentive Awards in accordance with the
transition relief set forth in IRS Notice 2006-79, as extended by IRS Notice
2007-86. To elect a new settlement date, the Eligible Director must complete a new
Equity Fee Election to specify the new settlement date on or before December 31,
2008. The new settlement date may not defer a payment that would otherwise be made
in 2008 and may not cause a Deferred Stock Unit constituting a Section 409A
Incentive Award to be paid in 2008 that would not otherwise be paid in 2008. In
addition, the new election may not accelerate the settlement to a date prior to the
original settlement date specified in Sections 7(e), or such date as otherwise
provided in the Award Agreement.

6. Section 15 of the Plan is amended to add a new subsection (j) as follows:

(j) Code Section 409A Compliance. The Company intends the Plan, as
it relates to any Section 409A Incentive Award, and any Section 409A
Incentive Award Agreement to comply with Section 409A of the Code

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and the Treasury Regulations promulgated thereunder, and the Plan and any
Award Agreement shall be administered in accordance with such intent.

In all other respects, the Plan is hereby ratified and confirmed.

     IN WITNESS WHEREOF, the Corporation has caused this 5th Amendment of the
Plan to be executed by its duly authorized representative, this 19th day of December, 2008.

	 	 	 	 	 
	 	LEXMARK INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Jeri L. Isbell
 	 
	 	 	Jeri L. Isbell 	 
	 	 	Vice President of Human Resources 	 
	 

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