Imation Corp. 2008 Stock Incentive Plan Performance-Based Restricted Stock Award Agreement
Exhibit 10.3
This PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) effective as of
«GrantDt» is between Imation Corp., a Delaware corporation (the “Company”), and ,
«Name» an employee of the Company or one of its Affiliates (the “Participant”), pursuant to
and subject to the terms and conditions of the Imation Corp. 2008 Stock Incentive Plan (the
“Plan”).
The Company desires to award to the Participant a number of shares of the Company’s common
stock, par value $.01 per share (the “Common Stock”), subject to certain restrictions as provided
in this Agreement, in order to carry out the purpose of the Plan. The purpose of this Agreement is
to evidence the terms and conditions of an award of Performance-Based restricted stock granted to
the Participant under the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as follows:
Section 1. Award of Performance-Based Restricted Stock. Effective «▇▇▇▇▇▇»
(the “Effective Date”), the Company granted to the Participant a restricted stock award of
«Shares»(«NbrShares») shares of Common Stock (the “Shares”), subject to the terms and
conditions set forth in this Agreement and in accordance with the terms of the Plan (the
“Restricted Stock Award”).
Section 2. Rights with Respect to the Shares.
(a) Stockholder Rights. With respect to the Shares, the Participant shall be entitled
at all times on and after the date of issuance of the Shares to exercise the rights of a
stockholder of Common Stock of the Company, including the right to vote the Shares and the right to
receive dividends on the Shares as provided in Section 2(b) hereof, unless and until the Shares are
forfeited pursuant to Section 3 hereof. However, the Shares shall be nontransferable and subject to
a risk of forfeiture to the Company at all times prior to the dates on which such Shares become
vested, and the restrictions with respect to the Shares lapse, in accordance with Section 3 of this
Agreement.
(b) Dividends. As a condition to receiving the Shares under the Plan, the Participant
hereby agrees to defer the receipt of dividends paid on the Shares. Cash dividends or other cash
distributions paid with respect to the Shares prior to the date or dates the Shares vest shall be
subject to the same restrictions, terms and conditions as the Shares to which they relate, shall be
promptly deposited with the Secretary of the Company or a custodian designated by the Secretary,
and shall be forfeited in the event that the Shares with respect to which the dividends were paid
are forfeited.
(c) Issuance of Shares. The Company shall cause the Shares to be issued in the
Participant’s name or in a nominee name on the Participant’s behalf, either by book-entry
registration or issuance of a stock certificate or certificates evidencing the Shares, which
certificate or certificates shall be held by the Secretary of the Company or the stock transfer
agent or brokerage service selected by the Secretary of the Company to provide such services for
the Plan.
The Shares shall be restricted from transfer and shall be subject to an appropriate
stop-transfer order. If any certificate is issued, the certificate shall bear an appropriate legend
referring to the restrictions applicable to the Shares. The Participant hereby agrees to the
retention by the Company of the Shares and, if a stock certificate is issued, the Participant
agrees to execute and deliver to the Company a blank stock power with respect to the Shares as a
condition to the receipt of this Restricted Stock Award. After any Shares vest pursuant to Section
3 hereof, and following payment of the applicable withholding taxes pursuant to Section 6 of this
Agreement, the Company shall promptly cause to be issued a certificate or certificates, registered
in the Participant’s name, evidencing such vested whole Shares (less any Shares withheld to pay
withholding taxes) and shall cause such certificate or certificates to be delivered to the
Participant free of the legend and the stop-transfer order referenced above. The Company will not
deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such
fractional Share at the time certificates evidencing the Shares are delivered to the Participant.
Section 3. Vesting; Forfeiture.
(a) Vesting. Subject to the terms and conditions of this Agreement, and except as
otherwise provided in Section 3(c) hereof, the Shares shall vest, and the restrictions with respect
to the Shares shall lapse, in accordance with the performance criteria and vesting schedule set
forth on Exhibit A if the Participant remains continuously employed by the Company or a subsidiary
of the Company until such respective vesting dates.
The Committee shall validate whether the performance criteria described Exhibit A were
achieved. Such validation shall be made at a meeting of the Committee as promptly as practicable
after , shall be based on the Company’s audited financial statements and
shall be final and conclusive with respect to the achievement of the performance criteria.
(b) Forfeiture. Except as otherwise provided in Section 3(c) hereof, if the
Participant ceases to be employed by the Company and all subsidiaries of the Company for any reason
prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participant’s rights to all of
the unvested Shares shall be immediately and irrevocably forfeited, including the right to vote
such Shares and the right to receive dividends on such Shares.
(c) Change in Control. Notwithstanding the vesting and forfeiture provisions contained
in Sections 3(a) and 3(b) hereof, but subject to the other terms and conditions set forth in this
Agreement, in the event the Company or a subsidiary terminates the Participant’s employment with
the Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change in Control and, if (and only
if) the required performance criteria described in Exhibit A has been met such that the only
remaining criteria for vesting is the passage of time, the Participant shall become immediately
vested in all of the Shares, and the restrictions with respect to the Shares shall lapse, as of the
date of such termination of employment.
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In the event that the provisions of this Section 3(c) result in “payments” that are finally and
conclusively determined by a court or Internal Revenue Service proceeding to be subject to the
excise tax imposed by Section 4999 of the Code, and the Participant has not received any additional
cash payment from the Company relating thereto under the provisions of Section 6 of the Severance
Agreement between the Company and the Participant (the “Severance Agreement”), the Company shall
pay to the Participant an additional amount such that the net amount retained by the Participant
following realization of all compensation under the Plan that resulted in such “payments,” after
allowing for the amount of such excise tax and any additional federal, state and local income and
employment taxes paid on the additional amount, shall be equal to the net amount that would
otherwise have been retained by the Participant if there were no excise tax imposed by Section 4999
of the Code. If the Participant receives any additional cash payment from the Company under Section
6 of the Severance Agreement, the foregoing sentence shall be of no force or effect and the
provisions of the Severance Agreement shall be deemed to supersede the foregoing sentence in its
entirety.
(d) Early Vesting. Except as provided in Section 3(c) hereof or unless otherwise
determined by the Committee in its sole discretion, and notwithstanding any provisions contained in
the Severance Agreement, in no event will any of the Shares vest prior to their respective vesting
dates set forth in Section 3(a) hereof.
(e) Clawback. In the event that after the grant of the Restricted Stock Award but
prior to a Change in Control (1) the Company issues a material restatement of an initial financial
statement, and (2) the Participant engaged in intentional misconduct that caused or contributed to
the need for such a restatement because of material noncompliance by the Company with applicable
financial reporting requirements (a “Forfeiture Event”), the Participant, at the request of the
Committee made within 90 days after the restatement, shall forfeit those Shares, if any, owned by
the Participant at the time of the initial financial statement that is subsequently restated,
regardless of whether those Shares are subject to restrictions at such time or whether the
restrictions on such Shares shall have lapsed (the “Forfeitable Shares”). In addition, if a
Forfeiture Event occurs, the Participant, at the Committee’s request (which request must be made
within 90 days after the restatement), shall forfeit all dividends deferred pursuant to Section
2(b) with respect to the Forfeitable Shares that then remain subject to restrictions prior to the
Committee’s request and promptly remit to the Company cash equal to the Net Dividends (as
hereinafter defined) received by the Participant at any time on the Forfeitable Shares. If the
Forfeitable Shares are not owned by the Participant at the time of the Committee’s request, the
Participant shall promptly remit to the Company the “Net Proceeds” (as hereinafter defined) from
any sale, after the issuance of an initial financial statement that is subsequently restated, of
Forfeitable Shares in lieu of the Forfeitable Shares. “Net Dividends” or “Net Proceeds” shall mean
dividends or proceeds, as the case may be net of taxes paid or payable by the Participant as a
result of the receipt of such dividends and the sale of such Shares in an amount reasonably
determined by the Committee but including interest on the amount of cash repaid from the date of
the receipt by Participant of such dividends or sale proceeds to the date of payment of such amount
to the Company at a rate reasonably determined by the Committee. The Committee may, but shall not
be required by Participant to, reduce the forfeiture, return and/or payment obligations hereunder
to the extent that the Committee, in its sole and absolute discretion, shall
deem appropriate. Nothing herein shall limit any other rights the Company shall have by law for
misconduct of the Participant that caused or contributed to the need for such restatement.
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Section 4. Restrictions on Transfer. Until the Shares vest pursuant to Section 3
hereof, neither the Shares, nor any right with respect to the Shares under this Agreement, may be
sold, assigned, transferred, pledged, hypothecated (by operation of law or otherwise) or otherwise
conveyed or encumbered and shall not be subject to execution, attachment or similar process. Any
attempted sale, assignment, transfer, pledge, hypothecation or other conveyance or encumbrance
shall be void and unenforceable against the Company or any Affiliate of the Company.
Section 5. Distributions and Adjustments.
(a) If any Shares vest subsequent to any change in the number or character of the Common Stock
of the Company through any stock dividend or other distribution, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of shares or other securities of the Company, issuance of warrants or other
rights to purchase shares of Common Stock or other securities of the Company or other similar
corporate transaction or event such that an adjustment is necessary in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under this
Agreement, then the Committee shall, in such manner as it may deem equitable, adjust any or all of
the number and type of such Shares.
(b) Any additional shares of Common Stock of the Company, any other securities of the Company
and any other property distributed with respect to the Shares prior to the date or dates the Shares
vest shall be subject to the same restrictions, terms and conditions as the Shares to which they
relate and shall be promptly deposited with the Secretary of the Company or a custodian designated
by the Secretary.
Section 6. Taxes.
(a) The Participant acknowledges that the Participant will consult with the Participant’s
personal tax adviser regarding the income tax consequences of the grant of the Shares, payment of
dividends on the Shares, the vesting of the Shares and any other matters related to this Agreement.
In order to comply with all applicable federal, state, local or foreign income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all applicable
federal, state, local or foreign payroll, withholding, income or other taxes, which are the
Participant’s sole and absolute responsibility, are withheld or collected from the Participant.
(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee administering the Plan, the Participant may elect to satisfy tax withholding obligations
arising from the receipt of, or the lapse of restrictions relating to, the Shares by (i) delivering
cash, check, bank draft, money order or wire transfer payable to the order of the Company, (ii)
having the Company withhold a portion of the Shares otherwise to be delivered having a Fair Market
Value equal to the amount of such taxes, or (iii) delivering to the Company shares of Common Stock
having a Fair Market Value equal to the amount of such
taxes. The Company will not deliver any fractional Share but will pay, in lieu thereof, the Fair
Market Value of such fractional Share. The Participant’s election must be made on or before the
date that the amount of tax to be withheld is determined.
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If the Participant does not make an election, the Company will withhold a portion of the
Shares otherwise to be delivered having a Fair Market Value equal to the amount of such taxes.
Section 7. Definitions. Terms not defined in this Agreement shall have the meanings
given to them in the Plan, and the following terms shall have the following meanings when used in
this Agreement:
(a) “Change in Control” means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction,
owns the Company or all or substantially all of the Company’s assets either
directly or through one of more subsidiaries) in substantially the same proportions
as their ownership of the Company’s Common Stock and voting securities immediately
prior to such Business Combination, (2) no person, entity or group (other than a
direct or indirect parent entity of the Company that, after giving effect to the
Business Combination, beneficially owns 100% of the outstanding voting securities
(or comparable equity interests) of the entity resulting from the Business
Combination) beneficially owns, directly or indirectly, 35% or more of the
outstanding shares of common stock or the combined voting power of the then
outstanding voting securities (or comparable equity interests) of the entity
resulting from such Business Combination and (3) at least a majority of the members
of the board of directors (or similar governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board of Directors of the
Company providing for such Business Combination; or
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(iv) approval by the stockholders of the dissolution of the Company.
(b) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(c) “Termination for Cause” means termination of Participant’s employment with the Company or
an Affiliate for the following acts: (i) the Participant’s gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to the Company’s reputation,
as determined by the Company’s Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Company’s Board of Directors that
are consistent with the Participant’s duties, (iv) the Participant’s conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
Section 8. Governing Law. The internal law, and not the law of conflicts, of the
State of Delaware will govern all questions concerning the validity, construction and effect of
this Agreement.
Section 9. Plan Provisions. This Agreement is made under and subject to the
provisions of the Plan, and all of the provisions of the Plan are also provisions of this
Agreement. If there is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. By signing this Agreement, the
Participant confirms that the Participant has received a copy of the Plan and represents that the
Participant is familiar with the terms and provisions thereof, and hereby accepts this Restricted
Stock Award subject to all the terms and provisions of the Plan.
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Section 10. No Rights to Continue Service or Employment. Nothing herein shall be
construed as giving the Participant the right to continue in the employ or to provide services to
the Company or any Affiliate, whether as an employee or as a consultant or otherwise, or interfere
with or restrict in any way the right of the Company or any Affiliate to discharge the Participant,
whether as an employee or consultant or otherwise, at any time, with or without cause. In addition,
the Company or any Affiliate may discharge the Participant free from any liability or claim under
this Agreement, unless otherwise expressly provided herein.
Section 11. Entire Agreement. Except as specifically provided herein with regard to
the Severance Agreement, (i) this Agreement together with the Plan supersede any and all other
prior understandings and agreements, either oral or in writing, between the parties with respect to
the subject matter hereof and constitute the sole and only agreements between the parties with
respect to said subject matter; (ii) all prior negotiations and agreements between the parties with
respect to the subject matter hereof are merged into this Agreement; and (iii) each party to this
Agreement acknowledges that no representations, inducements, promises or agreements, orally or
otherwise, have been made by any party or by anyone acting on behalf of any party, which are not
embodied in this Agreement or the Plan and that any agreement, statement or promise that is not
contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.
Section 12. Modification. No change or modification of this Agreement shall be valid
or binding upon the parties unless the change or modification is in writing and signed by the
parties. Notwithstanding the preceding sentence, the Plan, this Agreement and the Restricted Stock
Award may be amended, altered, suspended, discontinued or terminated to the extent permitted by the
Plan.
Section 13. Shares Subject to Agreement. The Shares shall be subject to the terms and
conditions of this Agreement. Except as otherwise provided in Section 5, no adjustment shall be
made for dividends or other rights for which the record date is prior to the issuance of the
Shares. The Company shall not be required to deliver any Shares until the requirements of any
federal or state securities or other laws, rules or regulations (including the rules of any
securities exchange) as may be determined by the Committee to be applicable are satisfied.
Section 14. Severability. In the event that any provision that is contained in the
Plan or this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or this Agreement for any reason and under any law as
deemed applicable by the Committee, the invalid, illegal or unenforceable provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be so construed or
deemed amended without, in the determination of the Committee, materially altering the purpose or
intent of the Plan or this Agreement, such provision shall be stricken as to such jurisdiction or
Shares, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 15. Headings. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference.
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Such headings shall not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision hereof.
Section 16. Participant’s Acknowledgments. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. Any determination in this connection by the Company, including the Board of Directors of
the Company or the Committee, shall be final, binding and conclusive. The obligations of the
Company and the rights of the Participant are subject to all applicable laws, rules and
regulations.
Section 17. Parties Bound. The terms, provisions and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representatives and permitted successors and
assigns, subject to the limitation on assignment expressly set forth herein. This Agreement shall
have no force or effect unless it is duly executed and delivered by the Company and the Participant
or until such Agreement is delivered and accepted through any electronic medium in accordance with
procedures established by the Company.
The Company has caused this Agreement to be signed (which may be by electronic signature) and
delivered and the Participant has caused this Agreement to be accepted (which may be by electronic
acceptance) as of the date set forth above.
| IMATION CORP. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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Exhibit A
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