AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of March 18, 1997,
among Lexmark International, Inc., a Delaware corporation (the "Employer"),
Lexmark International Group, Inc., a Delaware corporation ("Group"), and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ (the "Employee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Employer, Group and Employee previously entered into an
Employment Agreement dated as of October 1, 1995 (the "Original Employment
Agreement"); and
WHEREAS, Employer, Group and Employee desire to amend and restate the
Original Employment Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the parties hereto hereby agree to amend and restate the Original
Employment Agreement in its entirety as follows:
1. Term; Position and Responsibilities.
-----------------------------------
(a) Term of Employment.
------------------ Unless the Employee's employment shall sooner
terminate pursuant to Section 6, the Employer shall employ the Employee for a
term commencing on April 1, 1997 and ending on March 31, 2001 (the "Initial
Term"), and the Employee's employment shall continue thereafter at will.
(b) Position and Responsibilities.
----------------------------- The Employee will serve as President
and Chief Operating Officer and in such other executive capacity or capacities
as may be determined from time to time by or under the authority of the Board of
Directors of the Employer ("Employer's Board"), and the Employee will devote all
of his skill, knowledge and working time (except for reasonable vacation time
and absence for sickness or similar disability) to the conscientious performance
of his duties. The Employee represents that he is entering into this Agreement
voluntarily and that his employment hereunder and compliance by him with the
terms and conditions of this Agreement will not conflict with or result in the
breach of any agreement to which he is a party or by which he may be bound.
2. Base Salary.
----------- As compensation for the services to be performed by the
Employee hereunder, the Employer will pay the Employee an annual base salary of
$475,000 during the term of his employment hereunder. The Employer will review
the Employee's base salary from time to time during the period of his employment
hereunder and, in the discretion of the Employer, may increase such base salary
from time to time based upon the performance of the Employee, the financial
condition of the Employer, prevailing industry salary scales and such other
factors as the Employer shall consider relevant. (The annual base salary payable
to the Employee under this Section 2, as the same may be increased from time to
time, shall hereinafter be referred to as the "Base Salary".) The Base Salary
payable under this Section 2 shall be reduced to the extent that the Employee
elects to defer such Base Salary under the terms of any deferred compensation or
savings plan maintained or established by the Employer or Group, provided that
any such reduction of the Base Salary shall not be taken into account for
purposes of calculating the Base Amount (as defined in Section 3). The Employer
shall pay the Employee the Base Salary in bi-weekly installments, or in such
other installments as may be mutually agreed upon by the Employer and the
Employee.
3. Short-Term Incentive Compensation.
----------------------------------- The Employee shall receive an
annual incentive bonus award (the "Annual Bonus") for each calendar year ending
during the term of the Employee's employment hereunder equal to:
(a) if the Operating Result (as defined below) for such year
is equal to or greater than the Maximum Operating Target (as defined
below) for such year, 160% of the amount of the Employee's Base Salary
paid to the Employee during the calendar year for which such bonus is
payable (such amount is hereinafter referred to as the "Base Amount");
(b) if the Operating Result for such year is greater than the
Operating Target but less than the Maximum Operating Target for such
year, 75% of the Base Amount plus, for each increase of 1/25 of the
difference between the Operating Target and the Maximum Operating
Target, an additional 3.4% of the Base Amount;
(c) if the Operating Result for such year is equal to 100% of
the Operating Target for such year, 75% of the Base Amount;
(d) if the Operating Result for such year is greater than the
Minimum Operating Target (as defined below) but less than the Operating
Target for such year, 30% of the Base Amount plus, for each increase of
1/20 of the difference between the Minimum Operating Target and the
Operating Target (100%), an additional 2.25% of the Base Amount; and
(e) if the Operating Result for such year is equal to the
Minimum Operating Target for such year, 30% of the Base Amount.
No Annual Bonus shall be paid if the Operating Result is less than the Minimum
Operating Target for such year. The "Operating Target", the "Maximum Operating
Target" and the "Minimum Operating Target" in any year shall be jointly
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established by the Chief Executive Officer of the Employer and Employer's Board.
The "Operating Result" for any year shall be equal to the annual financial
results for the components that make up the Operating Target as of December 31
in such year, using United States generally accepted accounting principles
consistently applied and taking into account such other factors as may be
approved by Employer's Board. The Annual Bonus, if any, shall be paid as soon as
practicable after the close of the year for which the Annual Bonus is payable,
unless the Employee elects to defer such amounts under the terms of any deferred
compensation or savings plan maintained or established by the Employer or Group.
4. Employee Benefits.
------------------ During the term of the Employee's employment
hereunder, employee benefits, including life, medical, dental and disability
insurance, will be provided to the Employee in accordance with programs at the
Employer then available to executive employees. The Employee shall also be
entitled to participate in all of Employer's profit sharing, pension,
retirement, deferred compensation and savings plans, as the same may be amended
and in effect from time to time, at levels and having interests commensurate
with the Employee's then current period of service, compensation and position.
5. Perquisites and Expenses.
------------------------
(a) General.
------- During the term of the Employee's employment
hereunder, the Employee shall be entitled to participate in any special benefit
or perquisite program available from time to time to executive employees of the
Employer on the terms and conditions then prevailing under such program.
(b) Business Travel, Lodging, etc.
----------------------------------- The Employer shall
reimburse the Employee for reasonable travel, lodging and meal expenses incurred
by him in connection with his performance of services hereunder upon submission
of evidence, satisfactory to the Employer, of the incurrence and purpose of each
such expense.
6. Termination of Employment.
-------------------------
(a) Termination Due to Death or Disability.
-------------------------------------- In the event that
the Employee's employment hereunder terminates due to death or is terminated by
the Employer due to the Employee's Disability (as defined below), no termination
benefits shall be payable to or in respect of the Employee except as provided in
Section 6(f)(ii). For purposes of this Agreement, "Disability" shall mean a
physical or mental disability that prevents the performance by the Employee of
his duties hereunder lasting (or likely to last, based on competent medical
evidence presented to Employer's Board) for a continuous period of six months or
longer. The reasoned and good faith judgment of Employer's Board as to the
Employee's Disability shall be final and shall be based on such competent
medical evidence as shall be presented to it by the Employee or by any physician
or group of physicians or other competent medical experts employed by the
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Employee or the Employer to advise Employer's Board.
(b) Termination by the Employer for Cause.
------------------------------------- The Employee may be
terminated for Cause by the Employer. "Cause" shall mean (i) the willful failure
of the Employee substantially to perform his duties hereunder (other than any
such failure due to physical or mental illness) after a demand for substantial
performance is delivered to the Employee by the executive to which the Employee
reports or by Employer's Board, which notice identifies the manner in which such
executive or Employer's Board, as the case may be, believes that the Employee
has not substantially performed his duties, (ii) the Employee's engaging in
willful and serious misconduct that is injurious to Group or Employer or any of
their subsidiaries, (iii) the Employee's conviction of, or entering a plea of
nolo contendere to, a crime that constitutes a felony, or (iv) the willful and
material breach by the Employee of any of his obligations hereunder, or the
willful and material breach by the Employee of any written covenant or agreement
with the Employer or any of its affiliates not to disclose any information
pertaining to the Employer or any of its affiliates or not to compete or
interfere with the Employer or any of its affiliates.
(c) Termination Without Cause.
-------------------------- A termination "Without Cause"
shall mean a termination of employment by the Employer other than due to
Disability as defined in Section 6(a) or Cause as defined in Section 6(b).
(d) Termination by the Employee.
---------------------------- The Employee may terminate
his employment for "Good Reason". "Good Reason" shall mean a termination of
employment by the Employee within 30 days following (i) any assignment to the
Employee of any duties, functions or responsibilities that are significantly
different from, and result in a substantial diminution of, the duties, functions
or responsibilities that the Employee has on the date hereof or (ii) the failure
of the Employer to obtain the assumption of this Agreement by any successor as
contemplated by Section 11.
(e) Notice of Termination.
---------------------- Any termination by the Employer
pursuant to Section 6(a), 6(b) or 6(c), or by the Employee pursuant to Section
6(d), shall be communicated by a written "Notice of Termination" addressed to
the other parties to this Agreement. A "Notice of Termination" shall mean a
notice stating that the Employee's employment hereunder has been or will be
terminated, indicating the specific termination provisions in this Agreement
relied upon and setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination of employment.
(f) Payments Upon Certain Terminations.
----------------------------------
(i) In the event of a termination of the Employee's employment
Without Cause or a termination by the Employee of his employment for
Good Reason, the Employer shall pay to the Employee (A) (1) the greater
of (x) his Base Salary, if any, for the period from the Date of
Termination through the last day of the Initial Term, provided that
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Employer may, at any time, pay to the Employee in a single lump sum an
amount equal to the Base Salary remaining to be paid to the Employee as
of the date of such lump sum payment and (y) an amount equal to one
year's Base Salary, less (2) any amounts paid or to be paid to the
Employee under the terms of any severance plan or program of Employer,
if any, as in effect on the Date of Termination and (B) a Pro Rata
Share of the Annual Bonus (as defined below). If the Employee's
employment shall terminate and he is entitled to receive salary
continuation payments under this Section 6(f)(i), and if the Employee
obtains new employment, any salary continuation payments to which the
Employee may be entitled pursuant to this Section 6(f)(i) shall be
reduced or canceled to the extent that the Employee receives salary and
other cash compensation from such employment. Any benefits payable to
the Employee under any otherwise applicable plans, policies and
practices of Employer shall not be limited by this provision.
(ii) If the Employee's employment shall terminate upon his
death or Disability or if Employer shall terminate the Employee's
employment for Cause, Employer shall pay the Employee his full Base
Salary through the Date of Termination, plus, in the case of
termination upon the Employee's death or Disability, a Pro Rata Share
of the Annual Bonus. Any benefits payable to or in respect of the
Employee under any otherwise applicable plans, policies and practices
of the Employer shall not be limited by this provision.
(iii) For purposes of this Section 6, the "Pro Rata Share of
the Annual Bonus" shall be calculated and paid as follows. If the
Employee is terminated prior to July 1 of any year, the Pro Rata Share
of the Annual Bonus (A) will be equal to the product of (1) the Annual
Bonus, calculated assuming that 100% of the Operating Target is
achieved in such year, and (2) a fraction equal to the number of full
months in such year prior to the Date of Termination over 12, and (B)
will be paid to the Employee within 30 days after the Date of
Termination. If the Employee is terminated on or after July 1 of any
year, the Pro Rata Share of the Annual Bonus (A) will be equal to the
product of (1) the Annual Bonus, calculated based on the actual
Operating Result for such year, and (2) a fraction equal to the number
of full months in such year prior to the Date of Termination over 12,
and (B) will be paid to the Employee within 90 days after the close of
the year in respect of which the Pro Rata Share of the Annual Bonus is
payable.
(g) Date of Termination.
------------------- As used in this Agreement, the term
"Date of Termination" shall mean (i) if the Employee's employment is terminated
by his death, the date of this death, (ii) if the Employee's employment is
terminated for Cause, the date on which Notice of Termination is given as
contemplated by Section 6(e), and (iii) if the Employee's employment is
terminated Without Cause, due to the Employee's Disability or by the Employee
for Good Reason, 30 days after the date on which Notice of Termination is given
as contemplated by Section 6(d) or, if no such Notice is given, 30 days after
the date of termination of employment.
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(h) Condition to Payments.
--------------------- The Employer's obligation to make
any payments hereunder shall be conditioned upon the Employer's receipt of an
appropriately signed "General Release and Covenant Not to ▇▇▇" in form and
substance satisfactory to the Employer.
7. Unauthorized Disclosure.
----------------------- During and after the term of his employment
hereunder, the Employee shall not, without the written consent of Employer's
Board or a person authorized thereby, or the Chief Executive Officer of the
Employer, disclose to any person (other than an employee or director of the
Employer or its affiliates, or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the Employee of
his duties as an executive of the Employer) any confidential or proprietary
information, knowledge or data that is not theretofore publicly known and in the
public domain obtained by him while in the employ of the Employer with respect
to the Employer or any of its subsidiaries or affiliates or with respect to any
products, improvements, formulas, recipes, designs, processes, customers,
methods of distribution, operation or manufacture, sales, prices, profits,
costs, contracts, suppliers, business prospects, business methods, techniques,
research, trade secrets or know-how of the Employer or any of its subsidiaries
or affiliates (collectively, "Proprietary Information"), except as may be
required by law or in connection with any judicial or administrative proceedings
or inquiry.
8. Non-Competition.
--------------- During the period of the Employee's employment and
thereafter for a period equal to the number of months providing the basis for
calculating any termination payments to the Employee under Section 6, if any
such payments are required, but in any event for at least 12 months, the
Employee shall not engage directly or indirectly in, become employed by, serve
as an agent or consultant to, or become a partner, principal or stockholder of,
any partnership, corporation or other entity which competes with a business that
represents 5% or more of the aggregate gross revenues of the Employer and its
subsidiaries and which is then engaged in such competition in any geographical
area in which the Employer or any of its subsidiaries is then engaged in such
business, provided that the Employee's ownership of less than 1% of the issued
and outstanding stock of any corporation whose stock is traded on an established
securities market shall not constitute competition with the Employer.
9. Non-Interference.
---------------- During the period of the Employee's employment and
thereafter for a period equal to the number of months providing the basis for
calculating any termination payments to the Employee under Section 6, if any
such payments are required, but in any event for at least 12 months, the
Employee will not, directly or indirectly, for his own account or the account of
any other person or entity, (a) employ in a business of the kind in which the
Employer is engaged on the date of such termination, or solicit or endeavor to
entice away from the Employer, or otherwise intentionally interfere with the
Employer's relationship with, any person or entity who or which is at the time
employed by or otherwise engaged to perform services for the Employer or (b)
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intentionally interfere with the Employer's relationship with any person or
entity who or which is, or has been within the previous year, a customer, client
or supplier of the Employer.
10. Return of Documents.
--------------------- In the event of the termination of the
Employee's employment for any reason, the Employee will deliver to the Employer
all non-personal documents and data of any nature pertaining to his work with
the Employer, and he will not take with him any documents or data of any
description or any reproduction thereof, or any documents containing or
pertaining to any Proprietary Information.
11. Assumption of Agreement.
------------------------ The Employer will require any successor
(by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Employer, by agreement in form and substance
reasonably satisfactory to the Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Employer would be required to perform it if no such succession had taken place.
Failure of the Employer to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Employee to compensation from the Employer in the same amount and on the same
terms as the Employee would be entitled hereunder if the Employer terminated his
employment Without Cause as contemplated by Section 6, except that for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
12. Entire Agreement.
---------------- Except as otherwise expressly provided herein,
this Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof, and all promises, representations,
understandings, arrangements and prior agreements relating to such subject
matter (including those made to or with the Employee by any other person or
entity) are merged herein and superseded hereby.
13. Indemnification.
--------------- The Employer agrees that it shall indemnify and
hold harmless the Employee to the fullest extent permitted by Delaware law from
and against any and all liabilities, costs, claims and expenses arising out of
the employment of the Employee hereunder, except to the extent arising out of or
based upon the gross negligence or willful misconduct of the Employee.
14. No Mitigation.
-------------- The Employee shall not be required to mitigate the
amount of any payment that the Employer becomes obligated to make in connection
with this Agreement, by seeking other employment or otherwise.
15. Miscellaneous.
-------------
(a) Binding Effect.
--------------- This Agreement shall be binding on and
inure to the benefit of the Employer and its successors and permitted assigns.
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This Agreement shall also be binding on and inure to the benefit of the Employee
and his heirs, executors, administrators and legal representatives.
(b) Governing Law.
-------------- This Agreement shall be governed by and
constructed in accordance with the laws of the State of Delaware without
reference to principles of conflict of laws.
(c) Taxes.
----- The Employer may withhold from any payments made
under the Agreement all federal, state, city or other applicable taxes or social
security governmental regulation or ruling.
(d) Amendments.
---------- No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
approved by Employer's Board or a person authorized thereby and is agreed to in
writing by the Employee and such officer as may be specifically designated by
Employer's Board. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No waiver of any provision of this Agreement shall be implied
from any course of dealing between or among the parties hereto or from any
failure by any party hereto to assert its rights hereunder on any occasion or
series of occasions.
(e) Severability.
------------ In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
(f) Notices.
------- Any notice or other communication required or
permitted to be delivered under this Agreement shall be (i) in writing, (ii)
delivered personally, by courier service or by certified or registered mail,
first-class postage prepaid and return receipt requested, (iii) deemed to have
been received on the date of delivery or on the third business day after the
mailing thereof, and (iv) addressed as follows (or to such other address as the
party entitled to notice shall hereafter designate in accordance with the terms
hereof):
(A) if to the Employer or Group, to it at:
One Lexmark Centre Drive
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
---------
(B) if to the Employee, to him at the address
listed on the signature page hereof.
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(g) Survival.
-------- Sections 7, 8, 9 and 10 and, if the Employee's
employment terminates in a manner giving rise to a payment under Section 6(f),
Section 6(f) shall survive the termination of the employment of the Employee
hereunder.
(h) Counterparts.
------------ This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(i) Headings.
-------- The section and other headings contained in this
Agreement are for the convenience of the parties only and are not intended to be
a part hereof or to affect the meaning or interpretation hereof.
IN WITNESS WHEREOF, the Employer and Group have duly executed this
Agreement by their authorized representatives and the Employee has hereunto set
his hand, in each case effective as of the date first above written.
LEXMARK INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Chairman of the Board and
Chief Executive Officer
LEXMARK INTERNATIONAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Chairman of the Board and
Chief Executive Officer
THE EMPLOYEE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Address:
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