UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 3, 2005
Imation Corp.
DELAWARE
(State or other jurisdiction
of incorporation)
1-14310
(Commission File Number)
41-1838504
(IRS Employer
Identification Number)
1 IMATION PLACE
OAKDALE, MINNESOTA
(Address of principal executive offices)
55128
(Zip Code)
Registrants telephone number, including area code: (651) 704-4000
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
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o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
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o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
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o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
(a) On May 4, 2005, the shareholders of Imation Corp. (Imation or the Company) approved the 2005 Stock Incentive Plan. The purpose of the 2005 Incentive Plan is to promote the interests of the Company and its shareholders by aiding the Company in attracting and retaining employees, officers, consultants, independent contractors, advisors and non-employee directors capable of assuring the future success of the Company and motivating such persons to put forth maximum efforts for the success of the Companys business. The 2005 Stock Incentive Plan will allow the Company to compensate such persons through various stock-based arrangements and provide them with opportunities for stock ownership in the Company, thereby aligning the interests of such persons with the Companys shareholders. The flexibility of the 2005 Incentive Plan will allow future awards to be based on then-current objectives for aligning compensation with shareholder value.
Subject to certain adjustments, the aggregate number of shares of Imation common stock that may be issued under all stock-based awards made under the 2005 Stock Incentive Plan is 2,500,000. The 2005 Stock Incentive Plan permits the granting of stock options (including both incentive and non-qualified stock options); stock appreciation rights; restricted stock and restricted stock units; dividend equivalents; performance awards of cash, stock or property; stock awards; and other stock-based awards. Certain awards under the 2005 Stock Incentive Plan are subject to limitations as follows:
no person may be granted in any calendar year awards, the value of which is based solely on an increase in the value of Imation common stock after the date of grant of the award, of more than 500,000 shares in the aggregate;
the maximum number of shares that may be awarded pursuant to grants of restricted stock, restricted stock units and stock awards is 1,500,000;
non-employee directors, as a group, may not be granted awards in the aggregate of more than 500,000 of the shares; and
a maximum of 2,500,000 shares are available for granting incentive stock options.
A copy of the 2005 Stock Incentive Plan is attached as Exhibit 10.1.
(b) On May 3, 2005, the Compensation Committee of the Board of Directors of Imation approved the following:
Form of 2005 Stock Incentive Plan Stock Option Agreement for employees, a copy of which is attached as Exhibit 10.2
Form of 2005 Stock Incentive Plan Stock Option Agreement for executive officers, a copy of which is attached as Exhibit 10.3
Form of 2005 Stock Incentive Plan Stock Option Agreement for directors, a copy of which is attached as Exhibit 10.4
Form of 2005 Stock Incentive Plan Restricted Stock Award Agreement for employees, a copy of which is attached as Exhibit 10.5
Form of 2005 Stock Incentive Plan Restricted Stock Award Agreement for executive officers, a copy of which is attached as Exhibit 10.6
Form of 2005 Stock Incentive Plan Restricted Stock Award Agreement for directors, a copy of which is attached as Exhibit 10.7
An amendment to the form of 2000 Stock Incentive Plan Restricted Stock Award Agreement for executive officers which provides for acceleration of vesting upon termination of employment for any reason other than death, Disability or Termination for Cause within two years following a Change of Control of Imation, all as defined in the amendment to the Restricted Stock Award Agreement, a copy of which is attached as Exhibit 10.8 and the revised 2000 Stock Incentive Plan Restricted Stock Award Agreement for executive officers is attached as Exhibit 10.9
Forms of 2000 Stock Incentive Plan Stock Option Agreements for employees and executive officers, revised to change the term from seven to ten years, copies of which are attached as Exhibits 10.10 and 10.11.
A 2000 Stock Incentive Plan Restricted Stock Award Agreement for Mr. Frank Russomanno, Executive Vice President and Chief Operating Officer of the Company, of 4,000 shares which vest 100% on the third anniversary of the grant date (instead of 25% per year beginning on the first anniversary of the grant date as provided in the form of 2000 Stock Incentive Plan Restricted Stock Award Agreement for executive officers). The form of agreement for Mr. Russomanno is attached as Exhibit 10.12.
(c) On May 4, 2005, the Board of Directors of Imation approved the Director Compensation Program, which summarizes the elements of compensation to Imation non-employee directors and replaces the 1996 Director Stock Compensation Program. Upon shareholder approval of the 2005 Stock Incentive Plan, which includes non-employee directors, no further stock-based awards will be made pursuant to the 1996 Director Stock Compensation Program and, instead, stock-based awards will be made to non-employee directors under the 2005 Stock Incentive Plan as set forth in the Director Compensation Program as in effect from time to time. No changes to non-employee director compensation have been made. A copy of the Director Compensation Program is attached as Exhibit 10.13. No further stock-based awards will be made pursuant to the 2000 Incentive Plan or the 1996 Director Plan upon shareholder approval of the 2005 Incentive Plan .
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
2005 Stock Incentive Plan
Form of 2005 Stock Incentive Plan Stock Option Agreement for employees
Form of 2005 Stock Incentive Plan Stock Option Agreement for executive officers
Form of 2005 Stock Incentive Plan Stock Option Agreement for directors
Form of 2005 Stock Incentive Plan Restricted Stock Award Agreement for employees
Form of 2005 Stock Incentive Plan Restricted Stock Award Agreement for executive officers
Form of 2005 Stock Incentive Plan Restricted Stock Award Agreement for directors
Amendment to 2000 Stock Incentive Plan Restricted Stock Award Agreement for executive officers
Form of 2000 Stock Incentive Plan Restricted Stock Award Agreement for executive officers
Form of 2000 Stock Incentive Plan Stock Option Agreements for employees
Form of 2000 Stock Incentive Plan Stock Option Agreements for executive officers
Form of Restricted Stock Award Agreement between the Company and Frank Russomanno
Director Compensation Program
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Imation Corp.
(REGISTRANT)
By:
/s/ Paul R. Zeller
Paul R. Zeller
Vice President,
Chief Financial Officer
EXHIBIT 10.1
IMATION CORP.
2005 STOCK INCENTIVE PLAN
Section 1. Purpose .
The purpose of the Plan is to promote the interests of the Company and its stockholders by aiding the Company in attracting and retaining employees, officers, consultants, independent contractors, advisors and non-employee Directors capable of assuring the future success of the Company, to offer such persons incentives to put forth maximum efforts for the success of the Companys business and to compensate such persons through various stock-based arrangements and provide them with opportunities for stock ownership in the Company, thereby aligning the interests of such persons with the Companys stockholders.
Section 2. Definitions .
As used in the Plan, the following terms shall have the meanings set forth below:
(a) Affiliate shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in each case as determined by the Committee.
(b) Award shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend Equivalent, Performance Award, Stock Award or Other Stock-Based Award granted under the Plan.
(c) Award Agreement shall mean any written agreement, contract or other instrument or document evidencing an Award granted under the Plan. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.
(d) Board shall mean the Board of Directors of the Company.
(e) Code shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.
(f) Committee shall mean the Compensation Committee of the Board or any successor committee of the Board designated by the Board to administer the Plan. The Committee shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3, and each member of the Committee shall be a Non-Employee Director within the meaning of Rule 16b-3 and an outside director within the meaning of Section 162(m) of the Code. The Company expects to have the Plan administered in accordance with the requirements for the award of qualified performance-based compensation within the meaning of Section 162(m) of the Code.
(g) Company shall mean Imation Corp., a Delaware corporation, or any successor corporation.
(h) Director shall mean a member of the Board.
(i) Dividend Equivalent shall mean any right granted under Section 6(d) of the Plan.
(j) Eligible Person shall mean any employee, officer, consultant, independent contractor, advisor or non-employee Director providing services to the Company or any Affiliate whom the Committee determines to be an Eligible Person. An Eligible Person must be a natural person.
(k) Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
(l) Fair Market Value shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing, unless otherwise determined by the Committee, the Fair Market Value of Shares on a given date for purposes of the Plan shall be the closing sale price of the Shares on the New York Stock Exchange as reported in the consolidated transaction reporting system on such date or, if such Exchange is not open for trading on such date, on the most recent preceding date when such Exchange is open for trading.
(m) Incentive Stock Option shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision.
(n) Non-Qualified Stock Option shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
(o) Option shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
(p) Other Stock-Based Award shall mean any right granted under Section 6(g) of the Plan.
(q) Participant shall mean an Eligible Person designated to be granted an Award under the Plan.
(r) Performance Award shall mean any right granted under Section 6(e) of the Plan.
(s) Performance Goal shall mean one or more of the following performance goals, either individually, alternatively or in any combination, applied on a corporate, subsidiary, division, business unit or line of business basis: sales, revenue, costs, expenses, earnings (including one or more of net profit after tax, gross profit, operating profit, earnings before
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interest and taxes, earnings before interest, taxes, depreciation and amortization and net earnings), earnings per share, earnings per share from continuing operations, operating income, pre-tax income, operating income margin, net income, margins (including one or more of gross, operating and net income margins), returns (including one or more of return on actual or proforma assets, net assets, equity, investment, capital and net capital employed), stockholder return (including total stockholder return relative to an index or peer group), stock price, economic value added, cash generation, cash flow, unit volume, working capital, market share, cost reductions and strategic plan development and implementation. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria. Pursuant to rules and conditions adopted by the Committee on or before the 90 th day of the applicable performance period for which Performance Goals are established, the Committee may appropriately adjust any evaluation of performance under such goals to exclude the effect of certain events, including any of the following events: asset write-downs; litigation or claim judgments or settlements; changes in tax law, accounting principles or other such laws or provisions affecting reported results; severance, contract termination and other costs related to exiting certain business activities; and gains or losses from the disposition of businesses or assets or from the early extinguishment of debt.
(t) Person shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.
(u) Plan shall mean this Imation Corp. 2005 Stock Incentive Plan, as amended from time to time.
(v) Restricted Stock shall mean any Share granted under Section 6(c) of the Plan.
(w) Restricted Stock Unit shall mean any unit granted under Section 6(c) of the Plan evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a Share) at some future date.
(x) Rule 16b-3 shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act or any successor rule or regulation.
(y) Section 162(m) shall mean Section 162(m) of the Code and the applicable Treasury Regulations promulgated thereunder.
(z) Shares shall mean shares of Common Stock, par value of $0.01 per share, of the Company or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan.
(aa) Stock Appreciation Right shall mean any right granted under Section 6(b) of the Plan.
(bb) Stock Award shall mean any Share granted under Section 6(f) of the Plan.
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Section 3. Administration .
(a) Power and Authority of the Committee . The Plan shall be administered by the Committee. Subject to the express provisions of the Plan and to applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or the method by which payments or other rights are to be calculated in connection with) each Award; (iv) determine the terms and conditions of any Award or Award Agreement; (v) amend the terms and conditions of any Award or Award Agreement, provided, however, that, except as otherwise provided in Section 4(c) hereof, the Committee shall not reprice, adjust or amend the exercise price of Options or the grant price of Stock Appreciation Rights previously awarded to any Participant, whether through amendment, cancellation and replacement grant, or any other means; (vi) accelerate the exercisability of any Award or the lapse of restrictions relating to any Award; (vii) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (viii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder of the Award or the Committee; (ix) interpret and administer the Plan and any instrument or agreement, including any Award Agreement, relating to the Plan; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award or Award Agreement, and any employee of the Company or any Affiliate.
(b) Delegation . The Committee may delegate its powers and duties under the Plan to one or more Directors (including a Director who is also an officer of the Company) or a committee of Directors, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion; provided, however, that the Committee shall not delegate its powers and duties under the Plan (i) with regard to officers or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in such a manner as would cause the Plan not to comply with the requirements of Section 162(m) of the Code. In addition, the Committee may authorize one or more officers of the Company to grant Options under the Plan, subject to the limitations of Section 157 of the Delaware General Corporation Law; provided, however, that such officers shall not be authorized to grant Options to officers or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act.
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(c) Power and Authority of the Board of Directors . Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan, unless the exercise of such powers and duties by the Board would cause the Plan not to comply with the requirements of Section 162(m) of the Code.
Section 4. Shares Available for Awards .
(a) Shares Available . Subject to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under all Awards under the Plan shall be 2,500,000. Shares to be issued under the Plan may be authorized but unissued Shares, treasury shares or Shares acquired in the open market or otherwise. If an Award terminates or is forfeited or cancelled without the issuance of any Shares, or if any Shares covered by an Award or to which an Award relates are not issued for any other reason, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such termination, forfeiture, cancellation or other event, shall again be available for granting Awards under the Plan. If Shares of Restricted Stock are forfeited or otherwise reacquired by the Company prior to vesting, whether or not dividends have been paid on such Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award of Restricted Stock, to the extent of any such forfeiture or reacquisition by the Company, shall again be available for granting Awards under the Plan. Shares that are withheld in full or partial payment to the Company of the purchase or exercise price relating to an Award or in connection with the satisfaction of tax obligations relating to an Award shall again be available for granting Awards under the Plan, except that, after May 4, 2015, any Shares withheld in connection with the satisfaction of tax obligations relating to Restricted Stock shall not be available for granting Awards. Prior to May 4, 2015, any previously issued Shares that are used by a Participant as full or partial payment to the Company of the purchase or exercise price relating to an Award or in connection with the satisfaction of tax obligations relating to an Award shall again be available for granting Awards under the Plan.
(b) Accounting for Awards . For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan.
(c) Adjustments . In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), 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 or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or other property) that thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards, (iii) the purchase or exercise price with respect to any Award and (iv) the limitations contained in Section 4(d) of the Plan.
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(d) Award Limitations Under the Plan .
(i) Section 162(m) Limitation for Certain Types of Awards . No Eligible Person may be granted Options, Stock Appreciation Rights or any other Award or Awards under the Plan, the value of which Award or Awards is based solely on an increase in the value of the Shares after the date of grant of such Award or Awards, for more than 500,000 Shares (subject to adjustment as provided in Section 4(c) of the Plan) in the aggregate in any calendar year.
(ii) Section 162(m) Limitation for Performance Awards . The maximum amount payable pursuant to all Performance Awards to any Participant in the aggregate in any calendar year shall be $2,000,000 in value, whether payable in cash, Shares or other property. This limitation does not apply to any Award subject to the limitation contained in Section 4(d)(i) of the Plan.
(iii) Plan Limitation on Restricted Stock, Restricted Stock Units and Stock Awards . No more than 1,500,000 Shares, subject to adjustment as provided in Section 4(c) of the Plan, shall be available under the Plan for issuance pursuant to grants of Restricted Stock, Restricted Stock Units and Stock Awards; provided, however, that if any Awards of Restricted Stock Units terminate or are forfeited or cancelled without the issuance of any Shares or if Shares of Restricted Stock are forfeited or otherwise reacquired by the Company prior to vesting, whether or not dividends have been paid on such Shares, then the Shares subject to such termination, forfeiture, cancellation or reacquisition by the Company shall again be available for grants of Restricted Stock, Restricted Stock Units and Stock Awards for purposes of this limitation on grants of such Awards.
(iv) Limitation on Awards Granted to Non-Employee Directors . Directors who are not also employees of the Company or an Affiliate may not be granted Awards in the aggregate for more than 500,000 Shares available for Awards under the Plan, subject to adjustment as provided in Section 4(c) of the Plan.
(v) Limitation on Incentive Stock Options . The number of Shares available for granting Incentive Stock Options under the Plan shall not exceed 2,500,000, subject to adjustment as provided in Section 4(c) of the Plan and subject to the provisions of Section 422 or 424 of the Code or any successor provision.
Section 5. Eligibility .
Any Eligible Person shall be eligible to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their present and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive Stock Option may only be granted to full-time or part-time employees (which term as used herein includes, without limitation, officers and Directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a subsidiary corporation of the Company within the meaning of Section 424(f) of the Code or any successor provision.
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Section 6. Awards .
(a) Options . The Committee is hereby authorized to grant Options to Eligible Persons with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Exercise Price . The purchase price per Share purchasable under an Option shall be determined by the Committee and shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option; provided, however, that the Committee may designate a per share exercise price below Fair Market Value on the date of grant (A) to the extent necessary or appropriate, as determined by the Committee, to satisfy applicable legal or regulatory requirements of a foreign jurisdiction or (B) if the Option is granted in substitution for a stock option previously granted by an entity that is acquired by or merged with the Company or an Affiliate.
(ii) Option Term . The term of each Option shall be fixed by the Committee but shall not be longer than 10 years from the date of grant.
(iii) Time and Method of Exercise . The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable exercise price) in which, payment of the exercise price with respect thereto may be made or deemed to have been made.
(b) Stock Appreciation Rights . The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Persons subject to the terms of the Plan and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right; provided, however, that the Committee may designate a per share grant price below Fair Market Value on the date of grant (A) to the extent necessary or appropriate, as determined by the Committee, to satisfy applicable legal or regulatory requirements of a foreign jurisdiction or (B) if the Stock Appreciation Right is granted in substitution for a stock appreciation right previously granted by an entity that is acquired by or merged with the Company or an Affiliate. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate.
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(c) Restricted Stock and Restricted Stock Units . The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Eligible Persons with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Restrictions . Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. The minimum vesting period of such Awards shall be three years from the date of grant, unless the Award is conditioned on performance of the Company or an Affiliate or on personal performance (other than continued service with the Company or an Affiliate), in which case the Award may vest over a period of at least one year from the date of grant. Notwithstanding the foregoing, the Committee may permit acceleration of vesting of such Awards in the event of the Participants death, disability or retirement or a change in control of the Company.
(ii) Issuance and Delivery of Shares . Any Restricted Stock granted under the Plan shall be issued at the time such Awards are granted and may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the restrictions applicable to such Restricted Stock. Shares representing Restricted Stock that is no longer subject to restrictions shall be delivered to the Participant promptly after the applicable restrictions lapse or are waived. In the case of Restricted Stock Units, no Shares shall be issued at the time such Awards are granted. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the holder of the Restricted Stock Units.
(iii) Forfeiture . Except as otherwise determined by the Committee, upon a Participants termination of employment (as determined under criteria established by the Committee) during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units held by the Participant at such time shall be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock or Restricted Stock Units.
(d) Dividend Equivalents . The Committee is hereby authorized to grant Dividend Equivalents to Eligible Persons under which the Participant shall be entitled to receive payments (in cash, Shares, other securities, other Awards or other property as determined in the discretion of the Committee) equivalent to the amount of cash dividends paid by the Company to holders of Shares with respect to a number of Shares determined by the Committee. Subject to the terms of the Plan and any applicable Award Agreement, such Dividend Equivalents may have such terms and conditions as the Committee shall determine.
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(e) Performance Awards . The Committee is hereby authorized to grant to Eligible Persons Performance Awards which are intended to be qualified performance-based compensation within the meaning of Section 162(m). A Performance Award granted under the Plan may be payable in cash or in Shares (including, without limitation, Restricted Stock). Performance Awards shall, to the extent required by Section 162(m), be conditioned solely on the achievement of one or more objective Performance Goals, and such Performance Goals shall be established by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m). Subject to the terms of the Plan and any applicable Award Agreement, the Performance Goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted, the amount of any payment or transfer to be made pursuant to any Performance Award and any other terms and conditions of any Performance Award shall be determined by the Committee. The Committee shall also certify in writing that such Performance Goals have been met prior to payment of the Performance Awards to the extent required by Section 162(m).
(f) Stock Awards . The Committee is hereby authorized to grant to Eligible Persons Shares without restrictions thereon, as deemed by the Committee to be consistent with the purpose of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, such Stock Awards may have such terms and conditions as the Committee shall determine.
(g) Other Stock-Based Awards . The Committee is hereby authorized to grant to Eligible Persons such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purpose of the Plan. The Committee shall determine the terms and conditions of such Awards, subject to the terms of the Plan and the Award Agreement. Shares, or other securities delivered pursuant to a purchase right granted under this Section 6(g), shall be purchased for consideration having a value equal to at least 100% of the Fair Market Value of such Shares or other securities on the date the purchase right is granted. The consideration paid by the Participant may be paid by such method or methods and in such form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof), as the Committee shall determine.
(h) General .
(i) Consideration for Awards . Awards may be granted for no cash consideration or for any cash or other consideration as may be determined by the Committee or required by applicable law.
(ii) Awards May Be Granted Separately or Together . Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
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(iii) Forms of Payment under Awards . Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments.
(iv) Term of Awards . The term of each Award shall be for a period not longer than 10 years from the date of grant.
(v) Limits on Transfer of Awards . Except as otherwise provided by the Committee or the terms of this Plan, no Award and no right under any such Award shall be transferable by a Participant other than by will or by the laws of descent and distribution. The Committee may establish procedures as it deems appropriate for a Participant to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of the Participant and receive any property distributable with respect to any Award in the event of the Participants death. The Committee, in its discretion and subject to such additional terms and conditions as it determines, may permit a Participant to transfer a Non-Qualified Stock Option to any family member (as such term is defined in the General Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities Act of 1933, as amended) at any time that such Participant holds such Option, provided that such transfers may not be for value ( i.e. , the transferor may not receive any consideration therefor) and the family member may not make any subsequent transfers other than by will or by the laws of descent and distribution. Each Award under the Plan or right under any such Award shall be exercisable during the Participants lifetime only by the Participant (except as provided herein or in an Award Agreement or amendment thereto relating to a Non-Qualified Stock Option) or, if permissible under applicable law, by the Participants guardian or legal representative. No Award or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.
(vi) Restrictions; Securities Exchange Listing . All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, applicable federal or state securities laws and regulatory requirements, and the Committee may cause appropriate entries to be made or legends to be placed on the certificates for such Shares or other securities to reflect such restrictions. If the Shares or other securities are traded on a securities exchange, the Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been admitted for trading on such securities exchange.
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Section 7. Amendment and Termination; Corrections .
(a) Amendments to the Plan . The Board may amend, alter, suspend, discontinue or terminate the Plan at any time; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, prior approval of the stockholders of the Company shall be required for any amendment to the Plan that:
(i) requires stockholder approval under the rules or regulations of the Securities and Exchange Commission, the New York Stock Exchange, any other securities exchange or the National Association of Securities Dealers, Inc. that are applicable to the Company;
(ii) increases the number of shares authorized under the Plan as specified in Section 4(a) of the Plan;
(iii) increases the number of shares subject to the limitations contained in Section 4(d) of the Plan;
(iv) permits repricing of Options or Stock Appreciation Rights which is prohibited by Section 3(a)(v) of the Plan;
(v) permits the award of Options or Stock Appreciation Rights at a price less than 100% of the Fair Market Value of a Share on the date of grant of such Option or Stock Appreciation Right, contrary to the provisions of Sections 6(a)(i) and 6(b)(ii) of the Plan; and
(vi) would cause Section 162(m) of the Code to become unavailable with respect to the Plan.
(b) Amendments to Awards. Subject to the provisions of the Plan, the Committee may waive any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided in the Plan, the Committee may amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, but no such action may adversely affect the rights of the holder of such Award without the consent of the Participant or holder or beneficiary thereof.
(c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Plan.
Section 8. Income Tax Withholding.
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 sole and absolute responsibility of a Participant, are withheld or collected from such Participant. In order to assist a Participant in paying all or a portion of the applicable taxes to be
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withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (a) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes or (b) delivering to the Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.
Section 9. General Provisions.
(a) No Rights to Awards. No Eligible Person, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.
(b) Award Agreements. No Participant shall have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Participant.
(c) No Rights of Stockholders. Except with respect to Restricted Stock and Stock Awards, neither a Participant nor the Participants legal representative shall be, or have any of the rights and privileges of, a stockholder of the Company with respect to any Shares issuable upon the exercise or payment of any Award, in whole or in part, unless and until the Shares have been issued.
(d) No Limit on Other Compensation Plans or Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation plans or arrangements, and such plans or arrangements may be either generally applicable or applicable only in specific cases.
(e) No Right to Employment or Directorship. The grant of an Award shall not be construed as giving a Participant the right to be retained as an employee of the Company or any Affiliate, or a Director to be retained as a Director, nor will it affect in any way the right of the Company or an Affiliate to terminate a Participants employment at any time, with or without cause. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan or in any Award Agreement.
(f) Governing Law. The internal law, and not the law of conflicts, of the State of Delaware, shall govern all questions concerning the validity, construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award.
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(g) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such 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 the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
(i) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional Share or whether such fractional Share or any rights thereto shall be canceled, terminated or otherwise eliminated.
(j) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
Section 10. Effective Date of the Plan; Effect on Prior Plans.
The Plan shall be subject to approval by the stockholders of the Company at the annual meeting of stockholders of the Company to be held on May 4, 2005 and the Plan shall be effective as of the date of such stockholder approval. On and after the date of stockholder approval of the Plan, no awards shall be granted under the Companys 2000 Stock Incentive Plan, but all outstanding awards previously granted under the 2000 Stock Incentive Plan shall remain outstanding in accordance with the terms thereof. On and after the date of stockholder approval of the Plan, no stock options, restricted stock, stock or other stock-based awards shall be granted under the 1996 Directors Stock Compensation Program, but all stock options, restricted stock, stock or other stock-based awards previously granted under the 1996 Directors Stock Compensation Program shall remain outstanding in accordance with the terms thereof.
Section 11. Term of the Plan.
The Plan shall terminate at midnight on May 4, 2015, unless terminated before then by the Board. Awards may be granted under the Plan until the Plan terminates or until all Shares available for Awards under the Plan have been purchased or acquired; provided, however, that Incentive Stock Options may not be granted following the 10-year anniversary of the Boards adoption of the Plan. As long as any Awards are outstanding under the Plan, the terms of the Plan shall govern such Awards.
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EXHIBIT 10.2
Imation Corp. 2005 Stock Incentive Plan
Stock Option Agreement
This STOCK OPTION 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. 2005 Stock Incentive Plan (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the Companys common stock, par value $.01 per share (the Common Stock), 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 a Non-Qualified Stock Option 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. Grant of Non-qualified Stock Option. Effective «GrantDt» (the Effective Date), the Company granted to the Participant the right and option to purchase all or any part of an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
Section 2. Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be «Price» per share.
Section 3. Term of the Option. The term of the Option (the Option Period) shall be for a period of ten (10) years from the Effective Date, terminating at the close of business on the tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided in Section 6 hereof.
Section 4. Vesting of the Option. Subject to Section 6 hereof, the Option may be exercised at any time or from time to time during the Option Period, as to any part or all of the shares covered thereby in accordance with the following vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any time on or after the first anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time on or after the second anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any time on or after the third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any time on or after the fourth anniversary of the Effective Date.
Section 5. Transferability. The Option may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged, hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of the Plan or this Agreement, or the levy of any execution, attachment or similar process upon the Option, shall be void and unenforceable against the Company and shall constitute an immediate cancellation of the Option.
Section 6. Effect of Termination of Employment .
(a) In the event the Participant shall cease to be employed by the Company or an Affiliate for any reason other than Termination for Cause, Retirement, death or Disability, the Participant may exercise the Option to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of such termination of employment, and the exercise of the Option to that limited extent may be effected at any time within thirty (30) days after the date of such termination of employment but not thereafter; provided, however, that the Option may not be exercised after the Expiration Date.
(b) In the event the Participant shall cease to be employed by the Company or an Affiliate upon Termination for Cause, the Option shall be terminated as of the date of such termination.
(c) Except as otherwise provided in Sections 6(b) and 6(d), in the event the Participant shall cease to be employed by the Company or an Affiliate because of Retirement, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants Retirement, and the exercise of the Option to that limited extent may be effected at any time within three (3) years after the date of the Participants Retirement, but not thereafter; provided, however, that the Option may not be exercised after the Expiration Date. If a Participant who has thus retired dies within three (3) years after the date of the Participants Retirement and prior to the Expiration Date, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(c) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date.
(d) In the event the Participant dies or is deemed to suffer a Disability while employed by the Company or an Affiliate, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants death or Disability. In the event of Participants death, the exercise of the Option to the limited
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extent provided for in the first sentence of this Section 6(d) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date. In the event of the Participants Disability, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participant at any time within two (2) years after the date of the Participants Disability, but not after the Expiration Date.
Section 7. Anti-Dilution Adjustments . In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), 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 affects the shares of Common Stock covered by the Option such that an adjustment is determined by the Committee to be appropriate 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, in its sole discretion, adjust any or all of the number and type of the shares covered by the Option and the exercise price of the Option.
Section 8. Manner of Exercise . Subject to the terms and conditions of this Agreement, the Option may be exercised by delivering written notice to the Stock Plan Administrator pursuant to procedures prescribed by the Company from time to time. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised and shall be signed by the Participant or such other Person entitled to exercise the Option. Such notice shall be accompanied by payment of the full purchase price of such shares and applicable federal, state, local and foreign withholding taxes, if any. The Participant shall deliver to the Company consideration with a value equal to such purchase price and applicable withholding taxes, if any, payable in whole or in part as follows: (a) cash, check, bank draft, money order or wire transfer payable to the order of the Company, (b) shares of Common Stock owned by the Participant at the time of exercise and/or (c) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. The value of any share of Common Stock delivered in payment of all or part of the purchase price or applicable withholding taxes upon the exercise of the Option shall be the closing sale price of a share of Common Stock on the New York Stock Exchange on the date the Option shall be exercised or, if such Exchange is not open for trading on such date, on the most recent preceding date on which such Exchange is open for trading. In the event that the Option shall be exercised pursuant to Section 6(c) or 6(d) hereof by any Person or Persons other than the Participant, such notice shall be accompanied by appropriate proof of the right of such Person or Persons to exercise the Option. If the Participant fails to pay the full purchase price of such shares or applicable withholding taxes, then the Option, and right to purchase such shares, may be forfeited by the Participant, in the sole discretion of the Committee. The Option may be exercised in whole or in part to the extent the Option is exercisable in accordance with the terms of this Agreement, but only with respect to full shares of Common Stock. No fractional shares of Common Stock shall be issued upon exercise of the Option, but the Company will pay, in lieu thereof, the Fair Market Value of such fractional share.
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Section 9. Issuance of Shares. Upon exercise of all or any portion of the Option, the Company will cause to be issued to the Participant the shares of Common Stock purchased. Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii) the condition that such shares shall have been duly listed on the New York Stock Exchange. The Participant shall not have any of the rights and privileges of a shareholder of the Company with respect to the shares of Common Stock subject to this Option unless and until such shares are issued to the Participant upon due exercise of the Option.
Section 10. Taxes. The Participant acknowledges that the Participant will consult with the Participants personal tax adviser regarding the income tax consequences of exercising the Option or 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
Section 11. 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) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(b) Retirement means retirement as defined under the Imation Corp. Cash Balance Pension Plan.
(c) Stock Plan Administrator means the Committee or any Director, officer or agent of the Company designated by the Committee from time to time.
(d) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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.
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Section 12. 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 13. 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 accepting this Option, 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 Option subject to all the terms and provisions of the Plan.
Section 14. No Right 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 provide herein.
Section 15. Entire Agreement . 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. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. 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 16. 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 Option may be amended, altered, suspended, discontinued or terminated to the extent permitted by the Plan.
Section 17. Shares Subject to Agreement . The shares covered by the Option shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 7, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such shares. The Company shall at all times during the Option Period reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.
Section 18. 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
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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 Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 19. Headings . Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. 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 20. Participants 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. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not exercise the Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. 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 21. 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.
The Company has caused this Agreement to be signed and delivered as of the date set forth above.
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EXHIBIT 10.3
Imation Corp. 2005 Stock Incentive Plan
Stock Option Agreement
This STOCK OPTION 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. 2005 Stock Incentive Plan (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the Companys common stock, par value $.01 per share (the Common Stock), 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 a Non-Qualified Stock Option 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. Grant of Non-qualified Stock Option. Effective «GrantDt» (the Effective Date), the Company granted to the Participant the right and option to purchase all or any part of an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
Section 2. Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be «Price» per share.
Section 3. Term of the Option. The term of the Option (the Option Period) shall be for a period of ten (10) years from the Effective Date, terminating at the close of business on the tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided in Section 6 hereof.
Section 4. Vesting of the Option. Subject to Section 6 hereof, the Option may be exercised at any time or from time to time during the Option Period, as to any part or all of the shares covered thereby in accordance with the following vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any time on or after the first anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time on or after the second anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any time on or after the third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any time on or after the fourth anniversary of the Effective Date.
Section 5. Transferability. The Option may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged, hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of the Plan or this Agreement, or the levy of any execution, attachment or similar process upon the Option, shall be void and unenforceable against the Company and shall constitute an immediate cancellation of the Option.
Section 6. Effect of Termination of Employment .
(a) In the event the Participant shall cease to be employed by the Company or an Affiliate for any reason other than Termination for Cause, Retirement, death or Disability or within two (2) years following a Change of Control, the Participant may exercise the Option to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of such termination of employment, and the exercise of the Option to that limited extent may be effected at any time within thirty (30) days after the date of such termination of employment but not thereafter; provided, however, that the Option may not be exercised after the Expiration Date.
(b) In the event the Participant shall cease to be employed by the Company or an Affiliate upon Termination for Cause, the Option shall be terminated as of the date of such termination.
(c) Except as otherwise provided in Sections 6(b), 6(d) and 6(e), in the event the Participant shall cease to be employed by the Company or an Affiliate because of Retirement, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants Retirement, and the exercise of the Option to that limited extent may be effected at any time within three (3) years after the date of the Participants Retirement but not thereafter; provided, however, that the Option may not be exercised after the Expiration Date. If a Participant who has thus retired dies within three (3) years after the date of the Participants Retirement and prior to the Expiration Date, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(c) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date.
(d) In the event the Participant dies or is deemed to suffer a Disability while employed by the Company or an Affiliate, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants death or Disability. In the event of Participants death, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the
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applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date. In the event of the Participants Disability, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participant at any time within two (2) years after the date of the Participants Disability, but not after the Expiration Date.
(e) In the event the Participant shall cease to be employed by the Company or an Affiliate for any reason other than death, Disability or Termination for Cause within two (2) years following a Change of Control, the Option shall become immediately exercisable in full on the date of such termination of employment, and the exercise of the Option may be effected at any time within six (6) months after the date of the Participants termination of employment, but not after the Expiration Date. In the event that the provisions of this Section 6(e) 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.
Section 7. Anti-Dilution Adjustments . In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), 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 affects the shares of Common Stock covered by the Option such that an adjustment is determined by the Committee to be appropriate 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, in its sole discretion, adjust any or all of the number and type of the shares covered by the Option and the exercise price of the Option.
Section 8. Manner of Exercise . Subject to the terms and conditions of this Agreement, the Option may be exercised by delivering written notice to the Stock Plan Administrator pursuant to procedures prescribed by the Company from time to time. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised and shall be signed by the Participant or such other Person entitled to exercise the Option. Such notice shall be accompanied by payment of the full purchase price of such shares and applicable federal, state, local and foreign withholding taxes, if any. The Participant shall deliver to the Company consideration with a value equal to such purchase price and applicable withholding taxes, if any, payable in whole or in part as follows: (a) cash, check, bank draft, money order or
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wire transfer payable to the order of the Company, (b) shares of Common Stock owned by the Participant at the time of exercise and/or (c) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. The value of any share of Common Stock delivered in payment of all or part of the purchase price or applicable withholding taxes upon the exercise of the Option shall be the closing sale price of a share of Common Stock on the New York Stock Exchange as reported on the consolidated transaction reporting system on the date the Option shall be exercised or, if such Exchange is not open for trading on such date, on the most recent preceding date on which such Exchange is open for trading. In the event that the Option shall be exercised pursuant to Section 6(c) or 6(d) hereof by any Person or Persons other than the Participant, such notice shall be accompanied by appropriate proof of the right of such Person or Persons to exercise the Option. If the Participant fails to pay the full purchase price of such shares or applicable withholding taxes, then the Option, and right to purchase such shares, may be forfeited by the Participant, in the sole discretion of the Committee. The Option may be exercised in whole or in part to the extent the Option is exercisable in accordance with the terms of this Agreement, but only with respect to full shares of Common Stock. No fractional shares of Common Stock shall be issued upon exercise of the Option, but the Company will pay, in lieu thereof, the Fair Market Value of such fractional share.
Section 9. Issuance of Shares. Upon exercise of all or any portion of the Option, the Company will cause to be issued to the Participant the shares of Common Stock purchased. Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii) the condition that such shares shall have been duly listed on the New York Stock Exchange. The Participant shall not have any of the rights and privileges of a shareholder of the Company with respect to the shares of Common Stock subject to this Option unless and until such shares are issued to the Participant upon due exercise of the Option.
Section 10. Taxes. The Participant acknowledges that the Participant will consult with the Participants personal tax adviser regarding the income tax consequences of exercising the Option or 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
Section 11. 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 of Control means any of the following events:
(i) the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3
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promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or
(ii) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or
(iii) the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or
(iv) the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased.
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(c) Retirement means retirement as defined under the Imation Corp. Cash Balance Pension Plan.
(d) Stock Plan Administrator means the Committee or any Director, officer or agent of the Company designated by the Committee from time to time.
(e) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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.
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Section 12. 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 13. 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 accepting this Option, 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 Option subject to all the terms and provisions of the Plan.
Section 14. No Right 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 provide herein.
Section 15. 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 16. 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 Option may be amended, altered, suspended, discontinued or terminated to the extent permitted by the Plan.
Section 17. Shares Subject to Agreement . The shares covered by the Option shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 7, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such shares. The Company shall at all times during the Option Period reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.
Section 18. 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
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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 Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 19. Headings . Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. 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 20. Participants 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. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not exercise the Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. 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 21. 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.
The Company has caused this Agreement to be signed and delivered as of the date set forth above.
IMATION CORP. | ||||
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7
EXHIBIT 10.4
Imation Corp. 2005 Stock Incentive Plan
Stock Option Agreement
This STOCK OPTION AGREEMENT (the Agreement) effective as of «GrantDt» is between Imation Corp., a Delaware corporation (the Company), and , «Name» a non-employee Director of the Company (the Participant), pursuant to and subject to the terms and conditions of the Imation Corp. 2005 Stock Incentive Plan (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the Companys common stock, par value $.01 per share (the Common Stock), 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 a Non-Qualified Stock Option 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. Grant of Non-qualified Stock Option . Effective «GrantDt» (the Effective Date), the Company granted to the Participant the right and option to purchase all or any part of an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
Section 2. Purchase Price . The purchase price of the shares of Common Stock subject to the Option shall be «Price» per share.
Section 3. Term of the Option . The term of the Option (the Option Period) shall be for a period of ten (10) years from the Effective Date, terminating at the close of business on the tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided in Section 6 hereof.
Section 4. Vesting of the Option . Subject to Section 6 hereof, the Option may be exercised at any time or from time to time during the Option Period, as to any part or all of the shares covered thereby in accordance with the following vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any time on or after the first anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time on or after the second anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any time on or after the third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any time on or after the fourth anniversary of the Effective Date.
Section 5. Transferability. The Option may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged, hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of the Plan or this Agreement, or the levy of any execution, attachment or similar process upon the Option, shall be void and unenforceable against the Company and shall constitute an immediate cancellation of the Option.
Section 6. Effect of Termination of Board Service; Change of Control .
(a) Except as otherwise provided in Section 6(e) hereof, in the event the Participant shall cease to serve on the Board of Directors of the Company for any reason other than removal for cause, Retirement, death or Disability, the Participant may exercise the Option to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the last day of Board service, and the exercise of the Option to that limited extent may be effected at any time within thirty (30) days after the last day of Board service but not thereafter; provided, however, that the Option may not be exercised after the Expiration Date.
(b) In the event the Participant shall cease to serve on the Board of Directors of the Company upon removal for cause by the Companys shareholders, the Option shall be terminated as of the date of such removal.
(c) Except as otherwise provided in Sections 6(b), 6(d) and 6(e), in the event the Participant shall cease to serve on the Board of Directors of the Company because of Retirement, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants Retirement, and the exercise of the Option to that limited extent may be effected at any time within three (3) years after the date of the Participants Retirement but not thereafter; provided, however, that the Option may not be exercised after the Expiration Date. If a Participant who has thus retired dies within three (3) years after the date of the Participants Retirement and prior to the Expiration Date, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(c) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date.
(d) In the event the Participant dies or is deemed to suffer a Disability while serving on the Board of Directors of the Company, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the
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Participants death or Disability. In the event of Participants death, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date. In the event of the Participants Disability, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participant at any time within two (2) years after the date of the Participants Disability, but not after the Expiration Date.
(e) Notwithstanding the provisions of Sections 4, 6(a), 6(c) and 6(d) hereof, in the event of a Change of Control, the Option shall become immediately exercisable in full as of the date of the Change of Control, and the exercise of the Option may be effected at any time within six (6) months after the date of the Change of Control, but not after the Expiration Date. In the event that the provisions of this Section 6(e) 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, 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.
Section 7. Anti-Dilution Adjustments . In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), 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 affects the shares of Common Stock covered by the Option such that an adjustment is determined by the Committee to be appropriate 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, in its sole discretion, adjust any or all of the number and type of the shares covered by the Option and the exercise price of the Option.
Section 8. Manner of Exercise . Subject to the terms and conditions of this Agreement, the Option may be exercised by delivering written notice to the Stock Plan Administrator pursuant to procedures prescribed by the Company from time to time. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised and shall be signed by the Participant or such other Person entitled to exercise the Option. Such notice shall be accompanied by payment of the full purchase price of such shares and applicable federal, state, local and foreign withholding taxes, if any. The Participant shall deliver to the Company consideration with a value equal to such purchase price and applicable withholding taxes, if any, payable in whole or in part as follows: (a) cash, check, bank draft, money order or wire transfer payable to the order of the Company, (b) shares of Common Stock owned by the Participant at the time of exercise and/or (c) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. The value of any share of Common Stock delivered in payment of all or part of the purchase price or applicable withholding taxes upon the
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exercise of the Option shall be the closing sale price of a share of Common Stock on the New York Stock Exchange as reported on the consolidated transaction reporting system on the date the Option shall be exercised or, if such Exchange is not open for trading on such date, on the most recent preceding date on which such Exchange is open for trading. In the event that the Option shall be exercised pursuant to Section 6(c) or 6(d) hereof by any Person or Persons other than the Participant, such notice shall be accompanied by appropriate proof of the right of such Person or Persons to exercise the Option. If the Participant fails to pay the full purchase price of such shares or applicable withholding taxes, then the Option, and right to purchase such shares, may be forfeited by the Participant, in the sole discretion of the Committee. The Option may be exercised in whole or in part to the extent the Option is exercisable in accordance with the terms of this Agreement, but only with respect to full shares of Common Stock. No fractional shares of Common Stock shall be issued upon exercise of the Option, but the Company will pay, in lieu thereof, the Fair Market Value of such fractional share.
Section 9. Issuance of Shares . Upon exercise of all or any portion of the Option, the Company will cause to be issued to the Participant the shares of Common Stock purchased. Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii) the condition that such shares shall have been duly listed on the New York Stock Exchange. The Participant shall not have any of the rights and privileges of a shareholder of the Company with respect to the shares of Common Stock subject to this Option unless and until such shares are issued to the Participant upon due exercise of the Option.
Section 10. Taxe s. The Participant acknowledges that the Participant will consult with the Participants personal tax adviser regarding the income tax consequences of exercising the Option or 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
Section 11. 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 of Control means any of the following events:
(i) the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or
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(ii) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or
(iii) the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or
(iv) the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased.
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan as if covered by such plan.
(c) Retirement means retirement under the Imation Corp. Board Retirement Policy.
(d) Stock Plan Administrator means the Committee or any Director, officer or agent of the Company designated by the Committee from time to time.
Section 12. 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 13. 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 accepting this Option, 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 Option subject to all the terms and provisions of the Plan.
Section 14. No Right to Continue Board Service . Nothing herein shall be construed as giving the Participant the right to continue to serve on the Board of Directors of the Company.
Section 15. Entire Agreement . 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. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this
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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 16. 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 Option may be amended, altered, suspended, discontinued or terminated to the extent permitted by the Plan.
Section 17. Shares Subject to Agreement . The shares covered by the Option shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 7, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such shares. The Company shall at all times during the Option Period reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.
Section 18. 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 Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 19. Headings . Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. 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 20. Participants 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. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not exercise the Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. 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.
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Section 21. 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.
The Company has caused this Agreement to be signed and delivered as of the date set forth above.
IMATION CORP. | ||||
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EXHIBIT 10.5
Imation Corp. 2005 Stock Incentive Plan
Restricted Stock Award Agreement
This 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. 2005 Stock Incentive Plan (the Plan).
The Company desires to award to the Participant a number of shares of the Companys 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 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 Restricted Stock.
Effective «GrantDt» (the Effective Date), the Company granted to the Participant a restricted stock award of «GrantDt»(«GrantDt») 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 Participants name or in a nominee name on the Participants 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 Participants 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, twenty five percent (25%) of the Shares shall vest, and the restrictions with respect to the Shares shall lapse, on each of the first, second, third and fourth anniversaries of the Effective Date if the Participant remains continuously employed by the Company or an Affiliate of the Company until such respective vesting dates.
(b) Forfeiture. If the Participant ceases to be employed by the Company and all Affiliates of the Company for any reason prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participants 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) No Early Vesting . Unless otherwise determined by the Committee in its sole discretion, in no event will any of the Shares vest prior to their respective vesting dates set forth in Section 3(a) hereof.
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.
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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 determined by the Committee to be appropriate 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, in its sole discretion, 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 Participants 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 Participants 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 Participants election must be made on or before the date that the amount of tax to be withheld is determined. 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.
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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 accepting this Restricted Stock Award, 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.
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.
Section 11. Entire Agreement.
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. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. 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
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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. 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. Participants 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.
The Company has caused this Agreement to be signed and delivered as of the date set forth above.
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IMATION P. COR | |||
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5
EXHIBIT 10.6
Imation Corp. 2005 Stock Incentive Plan
Restricted Stock Award Agreement
This 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. 2005 Stock Incentive Plan (the Plan).
The Company desires to award to the Participant a number of shares of the Companys 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 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 Restricted Stock.
Effective «GranDt» (the Effective Date), the Company granted to the Participant a restricted stock award of «GranDt»(«GranDt») 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 Participants name or in a nominee name on the Participants 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 Participants 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, twenty five percent (25%) of the Shares shall vest, and the restrictions with respect to the Shares shall lapse, on each of the first, second, third and fourth anniversaries of the Effective Date if the Participant remains continuously employed by the Company or an Affiliate of the Company until such respective vesting dates.
(b) Forfeiture. Except as otherwise provided in Section 3(c) hereof, if the Participant ceases to be employed by the Company and all Affiliates of the Company for any reason prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participants 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 of 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 Participant shall cease to be employed by the Company or an Affiliate for any reason other than death, Disability or Termination for Cause within two (2) years following a Change of Control, 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. 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
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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. Without limiting the generality of the foregoing, the Company and the Participant hereby expressly acknowledge and agree that the provisions of Section 5(i)(d) of the Severance Agreement shall not apply to the Shares or to this Restricted Stock Award.
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 determined by the Committee to be appropriate 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, in its sole discretion, 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 Participants 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
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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 Participants 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 Participants election must be made on or before the date that the amount of tax to be withheld is determined. 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 of Control means any of the following events:
i. | the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or | |||
ii. | individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or |
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iii. | the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or | |||
iv. | the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased. |
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(c) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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.
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Section 15. Headings .
Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. 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. Participants 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.
The Company and the Participant have caused this Agreement to be signed and delivered as of the date set forth above.
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IMATION CORP. | |||
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7
EXHIBIT 10.7
Imation Corp. 2005 Stock Incentive Plan
Restricted Stock Award Agreement
This RESTRICTED STOCK AWARD AGREEMENT (the Agreement) effective as of «GrantDt» is between Imation Corp., a Delaware corporation (the Company), and «Name», a non-employee Director of the Company (the Participant), pursuant to and subject to the terms and conditions of the Imation Corp. 2005 Stock Incentive Plan (the Plan).
The Company desires to award to the Participant a number of shares of the Companys 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 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 Restricted Stock.
Effective «GrantDt» (the Effective Date), the Company granted to the Participant a restricted stock award of «GrantDt»(«GrantDt») 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 Participants name or in a nominee name on the Participants 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 Participants 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, twenty five percent (25%) of the Shares shall vest, and the restrictions with respect to the Shares shall lapse, on each of the first, second, third and fourth anniversaries of the Effective Date if the Participant serves continuously on the Board of Directors of the Company until such respective vesting dates.
(b) Forfeiture. Except as otherwise provided in Section 3(c) hereof, if the Participant ceases to serve on the Board of Directors of the Company for any reason prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participants 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 of 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 of a Change of Control, 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 the Change of Control. 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, 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.
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(d) Early Vesting . Except as provided in Section 3(c) hereof or unless otherwise determined by the Committee in its sole discretion, in no event will any of the Shares vest prior to their respective vesting dates set forth in Section 3(a) hereof.
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 determined by the Committee to be appropriate 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, in its sole discretion, 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 Participants 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 Participants 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, if any, 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
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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 Participants election must be made on or before the date that the amount of tax to be withheld is determined. 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 of Control means any of the following events:
i. | the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or | |||
ii. | individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or | |||
iii. | the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or |
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iv. | the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased. |
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.
Section 10. No Rights to Continue Board Service.
Nothing herein shall be construed as giving the Participant the right to continue to serve on the Board of Directors of the Company.
Section 11. Entire Agreement.
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. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. 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
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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. 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. Participants 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.
The Company has caused this Agreement to be signed and delivered as of the date set forth above.
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IMATION CORP. | |
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EXHIBIT 10.8
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Amendment to Restricted Stock Award Agreement
This RESTRICTED STOCK AWARD AGREEMENT AMENDMENT (the Amendment) effective as of May ___, 2005 between Imation Corp., a Delaware corporation (the Company), and «Name» , an employee of the Company or one of its Affiliates (the Participant).
WHEREAS, pursuant to a Restricted Stock Award Agreement effective as of «Name» (the Agreement), the Company granted to Participant a restricted stock award (the Restricted Stock Award) of «Name» ( «Name») shares (the Shares) of the Companys common stock, par value $.01 per share, subject to the terms and conditions set forth in the Agreement and in accordance with the terms and conditions of the Imation Corp. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the Plan).
WHEREAS, Section 3 of the Plan provides that the committee administering the Plan (the Committee) has full power and authority, subject to the express provisions of the Plan and applicable law, to amend the terms and conditions of any award granted under the Plan.
WHEREAS, pursuant to Section 3 of the Plan, the Committee has determined to amend the Agreement to provide that the Shares will vest upon certain events following a change of control of the Company.
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Participant hereby agree to amend the Agreement as follows:
Section 1. Section 3 of the Agreement is hereby amended in its entirety to read as follows:
3. Vesting; Forfeiture .
(a) Vesting . Subject to the terms and conditions of this Agreement, and except as otherwise provided in Section 3(c) hereof, twenty five percent (25%) of the Shares shall vest, and the restrictions with respect to the Shares shall lapse, on each of the first, second, third and fourth anniversaries of the Effective Date if the Participant remains continuously employed by the Company or an Affiliate of the Company until such respective vesting dates.
(b) Forfeiture . Except as otherwise provided in Section 3(c) hereof, if the Participant ceases to be employed by the Company and all Affiliates of the Company for any reason prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participants 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 of 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 Participant shall cease to be employed by the Company or an Affiliate for any reason other than death, Disability or Termination for Cause within two (2) years following a Change of Control, 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. 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. Without limiting the generality of the foregoing, the Company and the Participant hereby expressly acknowledge and agree that the provisions of Section 5(i)(d) of the Severance Agreement shall not apply to the Shares or to this Restricted Stock Award.
Section 2. Section 7 of the Agreement is hereby amended in its entirety to read as follows:
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:
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(a) Change of Control means any of the following events:
(i) the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or
(ii) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or
(iii) the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or
(iv) the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased.
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(c) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys Board of Directors in its sole and
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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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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 3. Section 10 of the Agreement is hereby amended in its entirety to read as follows:
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 4. Section 11 of the Agreement is hereby amended in its entirety to read as follows :
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 5. No other terms or conditions of the Agreement are amended hereby, and all such terms and conditions of the Agreement shall remain on full force and effect.
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Section 6. The terms, provisions and agreements that are contained in this Amendment 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 limitations on assignment expressly set forth in the Agreement. This Amendment shall have no force or effect unless it is duly executed and delivered by the Company and the Participant.
The Company and the Participant have caused this Amendment to be signed and delivered as of the date set forth above.
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IMATION CORP. | |
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EXHIBIT 10.9
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Restricted Stock Award Agreement
This 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. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the Plan).
The Company desires to award to the Participant a number of shares of the Companys 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 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 Restricted Stock.
Effective «GrantDt» (the Effective Date), the Company granted to the Participant a restricted stock award of «Share»(«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 Participants name or in a nominee name on the Participants 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 Participants 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, twenty five percent (25%) of the Shares shall vest, and the restrictions with respect to the Shares shall lapse, on each of the first, second, third and fourth anniversaries of the Effective Date if the Participant remains continuously employed by the Company or an Affiliate of the Company until such respective vesting dates.
(b) Forfeiture . Except as otherwise provided in Section 3(c) hereof, if the Participant ceases to be employed by the Company and all Affiliates of the Company for any reason prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participants 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 of 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 Participant shall cease to be employed by the Company or an Affiliate for any reason other than death, Disability or Termination for Cause within two (2) years following a Change of Control, 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. 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
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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. Without limiting the generality of the foregoing, the Company and the Participant hereby expressly acknowledge and agree that the provisions of Section 5(i)(d) of the Severance Agreement shall not apply to the Shares or to this Restricted Stock Award.
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 determined by the Committee to be appropriate 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, in its sole discretion, 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.
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Section 6. Taxes .
(a) The Participant acknowledges that the Participant will consult with the Participants 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
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 Participants election must be made on or before the date that the amount of tax to be withheld is determined. 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 of Control means any of the following events:
(i) the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or
(ii) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or
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(iii) the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or
(iv) the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased.
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(c) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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 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 materially altering the purpose and intent of the Plan or this Agreement in the discretion of the Committee, 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.
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Section 15. Headings .
Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. 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. Participants 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.
The Company and the Participant have caused this Agreement to be signed and delivered as of the date set forth above.
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IMATION CORP. | |
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7
EXHIBIT 10.10
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Stock Option Agreement
This STOCK OPTION 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. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the Companys common stock, par value $.01 per share (the Common Stock), 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 a Non-Qualified Stock Option 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:
1. Grant of Non-qualified Stock Option. Effective «GrantDt» (the Effective Date), the Company granted to the Participant the right and option to purchase all or any part of an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be «Price» per share.
3. Term of the Option. The term of the Option (the Option Period) shall be for a period of ten (10) years from the Effective Date, terminating at the close of business on the tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided in Section 6 hereof.
4. Vesting of the Option. Subject to Section 6 hereof, the Option may be exercised at any time or from time to time during the Option Period, as to any part or all of the shares covered thereby in accordance with the following vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any time on or after the first anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time on or after the second anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any time on or after the third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any time on or after the fourth anniversary of the Effective Date.
5. Transferability. The Option may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged, hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of the Plan or this Agreement, or the levy of any execution, attachment or similar process upon the Option, shall be void and unenforceable against the Company and shall constitute an immediate cancellation of the Option.
6 . Effect of Termination of Employment.
(a) In the event the Participant shall cease to be employed by the Company or an Affiliate for any reason other than Termination for Cause, Retirement, death or Disability, the Participant may exercise the Option to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of such termination of employment, and the exercise of the Option to that limited extent may be effected at any time within thirty (30) days after the date of such termination of employment but not thereafter; provided, however , that the Option may not be exercised after the Expiration Date.
(b) In the event the Participant shall cease to be employed by the Company or an Affiliate upon Termination for Cause, the Option shall be terminated as of the date of such termination.
(c) Except as otherwise provided in Sections 6(b) and 6(d), in the event the Participant shall cease to be employed by the Company or an Affiliate because of Retirement, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants Retirement, and the exercise of the Option to that limited extent may be effected at any time within three (3) years after the date of the Participants Retirement, but not thereafter; provided , however , that the Option may not be exercised after the Expiration Date. If a Participant who has thus retired dies within three (3) years after the date of the Participants Retirement and prior to the Expiration Date, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(c) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date.
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(d) In the event the Participant dies or is deemed to suffer a Disability while employed by the Company or an Affiliate, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants death or Disability. In the event of Participants death, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date. In the event of the Participants Disability, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participant at any time within two (2) years after the date of the Participants Disability, but not after the Expiration Date.
7. Anti-Dilution Adjustments . In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), 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 affects the shares of Common Stock covered by the Option such that an adjustment is determined by the Committee to be appropriate 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, in its sole discretion, adjust any or all of the number and type of the shares covered by the Option and the exercise price of the Option.
8. Manner of Exercise . Subject to the terms and conditions of this Agreement, the Option may be exercised by delivering written notice to the Stock Plan Administrator pursuant to procedures prescribed by the Company from time to time. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised and shall be signed by the Participant or such other Person entitled to exercise the Option. Such notice shall be accompanied by payment of the full purchase price of such shares and applicable federal, state, local and foreign withholding taxes, if any. The Participant shall deliver to the Company consideration with a value equal to such purchase price and applicable withholding taxes, if any, payable in whole or in part as follows: (a) cash, check, bank draft, money order or wire transfer payable to the order of the Company, (b) shares of Common Stock owned by the Participant at the time of exercise and/or (c) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. The value of any share of Common Stock delivered in payment of all or part of the purchase price or applicable withholding taxes upon the exercise of the Option shall be the last sale price of a share of Common Stock on the New York Stock Exchange on the date the Option shall be exercised or, if such date is not a day on which trading occurs generally on the New York Stock Exchange, on the immediately preceding date on which such trading occurred. In the event that the Option shall be exercised pursuant to Section 6(c) or 6(d) hereof by any Person or Persons other than the Participant, such notice shall be accompanied by appropriate proof of the right of such Person or Persons to exercise the Option. If the Participant fails to pay the full purchase price of such shares or applicable
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withholding taxes, then the Option, and right to purchase such shares, may be forfeited by the Participant, in the sole discretion of the Committee. The Option may be exercised in whole or in part to the extent the Option is exercisable in accordance with the terms of this Agreement, but only with respect to full shares of Common Stock. No fractional shares of Common Stock shall be issued upon exercise of the Option, but the Company will pay, in lieu thereof, the Fair Market Value of such fractional share.
9. Issuance of Shares. Upon exercise of all or any portion of the Option, the Company will cause to be issued to the Participant the shares of Common Stock purchased. Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii) the condition that such shares shall have been duly listed on the New York Stock Exchange. The Participant shall not have any of the rights and privileges of a shareholder of the Company with respect to the shares of Common Stock subject to this Option unless and until such shares are issued to the Participant upon due exercise of the Option.
10 . Taxes. The Participant acknowledges that the Participant will consult with the Participants personal tax adviser regarding the income tax consequences of exercising the Option or 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
11 . 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) Committee means the Compensation Committee of the Board of Directors of the Company or such other committee of Directors designated by the Board of Directors to administer the Plan.
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(c) Retirement means retirement as defined under the Imation Corp. Cash Balance Pension Plan.
(d) Stock Plan Administrator means the Committee or any Director, officer or agent of the Company designated by the Committee from time to time.
(e) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants gross incompetence or substantial failure to perform his or her duties, (ii) misconduct by the
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Participant that causes or is likely to cause harm to the Company or that causes or is likely to cause harm to the Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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.
12. 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.
13. 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 accepting this Option, 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 Option subject to all the terms and provisions of the Plan.
14. No Right 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 provide herein.
15. Entire Agreement . 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. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. 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.
16. 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.
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Notwithstanding the preceding sentence, the Plan, this Agreement and the Option may be amended, altered, suspended, discontinued or terminated to the extent permitted by the Plan.
17. Shares Subject to Agreement . The shares covered by the Option shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 7, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such shares. The Company shall at all times during the Option Term reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.
18. Severability . In the event that any provision that is contained in the Plan or this Agreement is or becomes 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 materially altering the purpose and intent of the Plan or this Agreement in the discretion of the Committee, such provision shall be stricken as to such jurisdiction or Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
19. Headings . Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.
20. Participants 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. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not exercise the Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. 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.
21. 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.
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The Company has caused this Agreement to be signed and delivered as of the date set forth above.
IMATION CORP. | ||||
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7
EXHIBIT 10.11
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Stock Option Agreement
This STOCK OPTION 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. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the Companys common stock, par value $.01 per share (the Common Stock), 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 a Non-Qualified Stock Option 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:
1. Gr ant of Non-qualified Stock Option. Effective «GrantDt» (the Effective Date), the Company granted to the Participant the right and option to purchase all or any part of an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
2. Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be «Price» per share.
3. Term of the Option. The term of the Option (the Option Period) shall be for a period of ten (10) years from the Effective Date, terminating at the close of business on the tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided in Section 6 hereof.
4. Vesting of the Option. Subject to Section 6 hereof, the Option may be exercised at any time or from time to time during the Option Period, as to any part or all of the shares covered thereby in accordance with the following vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any time on or after the first anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time on or after the second anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any time on or after the third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any time on or after the fourth anniversary of the Effective Date.
5. Transferability. The Option may not be assigned, transferred (other than by will or the laws of descent and distribution), pledged, hypothecated (whether by operation of law or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of the Plan or this Agreement, or the levy of any execution, attachment or similar process upon the Option, shall be void and unenforceable against the Company and shall constitute an immediate cancellation of the Option.
6 . Effect of Termination of Employment.
(a) In the event the Participant shall cease to be employed by the Company or an Affiliate for any reason other than Termination for Cause, Retirement, death or Disability or within two (2) years following a Change of Control, the Participant may exercise the Option to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of such termination of employment, and the exercise of the Option to that limited extent may be effected at any time within thirty (30) days after the date of such termination of employment but not thereafter; provided, however , that the Option may not be exercised after the Expiration Date.
(d) In the event the Participant shall cease to be employed by the Company or an Affiliate upon Termination for Cause, the Option shall be terminated as of the date of such termination.
(e) Except as otherwise provided in Sections 6(b), 6(d) and 6(e), in the event the Participant shall cease to be employed by the Company or an Affiliate because of Retirement, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants Retirement, and the exercise of the Option to that limited extent may be effected at any time within three (3) years after the date of the Participants Retirement but not thereafter; provided , however , that the Option may not be exercised after the Expiration Date. If a Participant who has thus retired dies within three (3) years after the date of the Participants Retirement and prior to the Expiration Date, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(c) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date.
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(d) In the event the Participant dies or is deemed to suffer a Disability while employed by the Company or an Affiliate, the Option, to the extent not previously exercised or forfeited, shall be exercisable to the extent of (but only to the extent of) the number of vested shares the Participant was entitled to purchase under the Option on the date of the Participants death or Disability. In the event of Participants death, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participants estate or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution at any time within two (2) years after the date of the Participants death, but not after the Expiration Date. In the event of the Participants Disability, the exercise of the Option to the limited extent provided for in the first sentence of this Section 6(d) may be effected by the Participant at any time within two (2) years after the date of the Participants Disability, but not after the Expiration Date.
(e) In the event the Participant shall cease to be employed by the Company or an Affiliate for any reason other than death, Disability or Termination for Cause within two (2) years following a Change of Control, the Option shall become immediately exercisable in full on the date of such termination of employment, and the exercise of the Option may be effected at any time within six (6) months after the date of the Participants termination of employment, but not after the Expiration Date. In the event that the provisions of this Section 6(e) 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.
7. Anti-Dilution Adjustments . In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities or other property), 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 affects the shares of Common Stock covered by the Option such that an adjustment is determined by the Committee to be appropriate 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, in its sole discretion, adjust any or all of the number and type of the shares covered by the Option and the exercise price of the Option.
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8. Manner of Exercise . Subject to the terms and conditions of this Agreement, the Option may be exercised by delivering written notice to the Stock Plan Administrator pursuant to procedures prescribed by the Company from time to time. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised and shall be signed by the Participant or such other Person entitled to exercise the Option. Such notice shall be accompanied by payment of the full purchase price of such shares and applicable federal, state, local and foreign withholding taxes, if any. The Participant shall deliver to the Company consideration with a value equal to such purchase price and applicable withholding taxes, if any, payable in whole or in part as follows: (a) cash, check, bank draft, money order or wire transfer payable to the order of the Company, (b) shares of Common Stock owned by the Participant at the time of exercise and/or (c) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. The value of any share of Common Stock delivered in payment of all or part of the purchase price or applicable withholding taxes upon the exercise of the Option shall be the last sale price of a share of Common Stock on the New York Stock Exchange on the date the Option shall be exercised or, if such date is not a day on which trading occurs generally on the New York Stock Exchange, on the immediately preceding date on which such trading occurred. In the event that the Option shall be exercised pursuant to Section 6(c) or 6(d) hereof by any Person or Persons other than the Participant, such notice shall be accompanied by appropriate proof of the right of such Person or Persons to exercise the Option. If the Participant fails to pay the full purchase price of such shares or applicable withholding taxes, then the Option, and right to purchase such shares, may be forfeited by the Participant, in the sole discretion of the Committee. The Option may be exercised in whole or in part to the extent the Option is exercisable in accordance with the terms of this Agreement, but only with respect to full shares of Common Stock. No fractional shares of Common Stock shall be issued upon exercise of the Option, but the Company will pay, in lieu thereof, the Fair Market Value of such fractional share.
9. Issuance of Shares. Upon exercise of all or any portion of the Option, the Company will cause to be issued to the Participant the shares of Common Stock purchased. Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii) the condition that such shares shall have been duly listed on the New York Stock Exchange. The Participant shall not have any of the rights and privileges of a shareholder of the Company with respect to the shares of Common Stock subject to this Option unless and until such shares are issued to the Participant upon due exercise of the Option.
10 . Taxes. The Participant acknowledges that the Participant will consult with the Participants personal tax adviser regarding the income tax consequences of exercising the Option or 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
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11 . 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 of Control means any of the following events:
(i) the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or
(ii) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or
(iii) the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or
(iv) the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased.
(b) Committee means the Compensation Committee of the Board of Directors of the Company or such other committee of Directors designated by the Board of Directors to administer the Plan.
(c) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
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(d) Retirement means retirement as defined under the Imation Corp. Cash Balance Pension Plan.
(e) Stock Plan Administrator means the Committee or any Director, officer or agent of the Company designated by the Committee from time to time.
(f) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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.
12. 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.
13. 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 accepting this Option, 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 Option subject to all the terms and provisions of the Plan.
14. No Right 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 provide herein.
15. 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
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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.
16. 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 Option may be amended, altered, suspended, discontinued or terminated to the extent permitted by the Plan.
17. Shares Subject to Agreement . The shares covered by the Option shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 7, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such shares. The Company shall at all times during the Option Term reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.
18. Severability . In the event that any provision that is contained in the Plan or this Agreement is or becomes 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 materially altering the purpose and intent of the Plan or this Agreement in the discretion of the Committee, such provision shall be stricken as to such jurisdiction or Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
19. Headings . Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.
20. Participants 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. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the Participant will not exercise the Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. 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.
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21. 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.
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IMATION CORP. | ||||
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EXHIBIT 10.12
Imation Corp. 2000 Stock Incentive Plan,
Restricted Stock Award Agreement
This RESTRICTED STOCK AWARD AGREEMENT (the Agreement) effective as of May 3, 2005 is between Imation Corp., a Delaware corporation (the Company), and Frank R. Russomanno , 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. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the Plan).
The Company desires to award to the Participant a number of shares of the Companys 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 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 Restricted Stock.
Effective May 3, 2005 the Effective Date), the Company granted to the Participant a restricted stock award of Four Thousand (4,000) 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 Participants name or in a nominee name on the Participants 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 Participants 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, one hundred percent (100%) of the Shares shall vest, and the restrictions with respect to the Shares shall lapse, on the third anniversary of the Effective Date if the Participant remains continuously employed by the Company or an Affiliate of the Company until such respective vesting dates.
(b) Forfeiture . Except as otherwise provided in Section 3(c) hereof, if the Participant ceases to be employed by the Company and all Affiliates of the Company for any reason prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participants 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 of 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 Participant shall cease to be employed by the Company or an Affiliate for any reason other than death, Disability or Termination for Cause within two (2) years following a Change of Control, 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. 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
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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. Without limiting the generality of the foregoing, the Company and the Participant hereby expressly acknowledge and agree that the provisions of Section 5(i)(d) of the Severance Agreement shall not apply to the Shares or to this Restricted Stock Award.
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 determined by the Committee to be appropriate 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, in its sole discretion, 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.
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Section 6. Taxes.
(a) The Participant acknowledges that the Participant will consult with the Participants 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 Participants sole and absolute responsibility, are withheld or collected from the Participant.
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 Participants election must be made on or before the date that the amount of tax to be withheld is determined. 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 of Control means any of the following events:
(i) the acquisition by any 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 an Affiliate, or any employee benefit plan of the Company or an Affiliate, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either the then outstanding Common Stock or the combined voting power of the Companys then outstanding voting securities in a transaction or series of transactions not approved in advance by a vote of a majority of the Continuing Directors (as hereinafter defined); or
(ii) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (generally the Directors and as of the Effective Date the Continuing Directors) cease for any reason to constitute at least a majority thereof, provided that any person becoming a Director subsequent to the Effective Date whose nomination for
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election was approved in advance by a vote of a majority of the Continuing Directors (other than a nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of the Directors of the Company, as such terms are used in Regulation 14A under the Exchange Act) shall be deemed to be a Continuing Director; or
(iii) the approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation or dissolution of the Company or of the sale (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company other than a reorganization, merger, consolidation, liquidation, dissolution or sale approved in advance by a vote of a majority of the Continuing Directors; or
(iv) the first purchase under any tender offer or exchange offer (other than an offer by the Company or an Affiliate) pursuant to which Common Stock is purchased.
(b) Disability shall be as defined under the Imation Corp. Long Term Disability Income Protection Plan.
(c) Termination for Cause means termination of Participants employment with the Company or an Affiliate for the following acts: (i) the Participants 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 Companys reputation, as determined by the Companys 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 Companys Board of Directors that are consistent with the Participants duties, (iv) the Participants 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 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 materially altering the purpose and intent of the Plan or this Agreement in the discretion of the Committee, 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.
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Section 15. Headings.
Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. 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. Participants 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.
The Company and the Participant have caused this Agreement to be signed and delivered as of the date set forth above.
IMATION CORP. | ||||
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EXHIBIT 10.13
IMATION CORP.
DIRECTORS COMPENSATION PROGRAM
EFFECTIVE MAY 4, 2005
SECTION 1. PURPOSE
(a) The purpose of the Program is to attract and retain well-qualified persons for service as nonemployee directors of the Company and to promote identity of interest between directors and stockholders of the Company. The Program is designed and intended to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, as such Rule may be amended from time to time, and shall be interpreted in a manner consistent with the requirements thereof, as now or hereafter construed, interpreted and applied by regulations, rulings and cases.
(b) The Program is also intended to comply in form and operation with Section 409A of the Internal Revenue Code.
SECTION 2. DEFINITIONS
The following words and phrases have the meaning indicated below, unless the context clearly indicates otherwise.
(a) Accounting Date means the first business day following the annual meeting of stockholders of the Company.
(b) Basic Fee means the annual retainer payable to an Eligible Director at the annual rate in effect on the Accounting Date for such Eligible Directors services on the Board (exclusive of any Chairperson Fee, Lead Director Fee or Meeting Fees.)
(c) Board means the Board of Directors of the Company.
(d) Chairperson Fee means the annual retainer payable to an Eligible Director at the annual rate in effect on the Accounting Date for such Eligible Directors services as the chairperson of any committee of the Board.
(e) Change in Control has the meaning given it in Section 8(b) to the extent it is consistent with and satisfies the definition of Change of Control under Code section 409A.
(f) Change in Control Price of the Common Stock shall equal the higher of (i) if applicable, the price paid for the Common Stock in the transaction constituting a Change in Control and (ii) the Fair Market Value of the Common Stock as of the last trading day preceding the date of the Change in Control.
(g) Code means the Internal Revenue Code of 1986, as amended, and any applicable regulations or binding rules promulgated thereunder.
(h) Committee means the Compensation Committee of the Board.
(i) Common Stock means the common stock, par value $.01 per share, of the Company.
(j) Company means Imation Corp.
(k) Dividend Equivalent Credit has the meaning given it in Section 7(b).
(l) Election Form means the Election Form attached as Exhibit B hereto or such other form as may be deemed acceptable by the Secretary of the Company from time to time.
(m) Eligible Director means each member of the Board who is not at the time of reference an employee of the Company or any of its subsidiaries.
(n) Exchange Act means the Securities Exchange Act of 1934, as amended.
(o) Fair Market Value as of any date means, the fair market value as defined under the Stock Plan.
(p) Lead Director Fee means the annual retainer payable to the Eligible Director who is selected to be the lead director at the annual rate in effect on the Accounting Date for such Eligible Directors services as the lead director.
(q) Meeting Fees means the amounts payable to an Eligible Director in arrears on any Quarterly Payment Date for attendance at meetings or participation in teleconferences of the Board or any committee of the Board (exclusive of any Basic Fee, Chairperson Fee or Lead Director Fee).
(r) Program means the Companys Directors Compensation Program, as amended from time to time.
(s) Proration Fraction means a fraction, the numerator of which is the number of days from the date an Eligible Director first becomes an Eligible Director to the date of the next succeeding annual meeting of stockholders and the denominator of which is 365.
(t) Quarterly Payment Date means the date established by the Company from time to time for payment, in arrears, of all Meeting Fees earned by Eligible Directors during the preceding calendar quarter, provided such date shall not be later than two and one-half (2 1 / 2 ) months from the end of such calendar quarter.
(u) Restricted Stock Unit means a right to receive payment of one share of Common Stock in accordance with the conditions set forth in Section 7 hereof or conditions established by the Committee.
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(v) Rule 16b-3 means Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.
(w) Stock Plan means the then current stock incentive plan of the Company used to grant stock based awards to Eligible Directors.
SECTION 3. ADMINISTRATION
(a) The Program shall be administered by the Committee.
(b) In administering the Program, it will be necessary to follow various laws and regulations. It may be necessary from time to time to change or waive requirements of the Program to conform with the law, to meet special circumstances not anticipated or covered in the Program, or to carry on successful operation of the Program, and in connection therewith, the Committee shall have the full power and authority to:
(i) Prescribe, amend, and rescind rules and regulations relating to the Program, establish procedures deemed appropriate for its administration, interpret the provisions of the Program, remedy ambiguities, and make any and all other determinations not herein specifically authorized which may be necessary or advisable for its effective administration;
(ii) Make any amendments to or modifications of the Program which may be required or necessary to make the Program set forth herein comply with the provisions of any laws, federal or state, or any regulations issued thereunder, and to cause the Company at its expense to take any action related to the Program which may be required under such laws or regulations;
(iii) Contest on behalf of the Eligible Directors or the Company, at the sole discretion of the Committee and at the expense of the Company, any ruling or decision on any issue related to the Program, and conduct any such contest and any resulting litigation to a final determination, ruling, or decision; and
(iv) Grant stock-based awards under the Program, as provided in Section 5 hereof.
(c) Unless otherwise expressly provided in the Program, all designations, determinations, interpretations and other decisions under or with respect to the Program or any award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Eligible Director or beneficiary, and any employee of the Company.
SECTION 4. FEES/EXPENSES
(a) Each Eligible Director who is first elected to the Board at, or who continues to serve on the Board immediately following an annual meeting of stockholders, is entitled to receive a Basic Fee and a Chairperson Fee for serving as chairperson of a committee of the Board (as applicable).
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(b) Any Eligible Director who is designated as the lead director is entitled to receive a Lead Director Fee for services as the lead director.
(c) Each Eligible Director who joins the Board or becomes a chairperson of a committee of the Board or Lead Director after the annual meeting of stockholders is entitled to receive a Basic Fee, Chairperson Fee or Lead Director Fee (as applicable) multiplied by the Proration Fraction, as of the date such Eligible Director first becomes an Eligible Director, chairperson of a committee of the Board or Lead Director.
(d) Each Eligible Director is entitled to receive a Meeting Fee for attendance at a meeting of the Board or a Committee of the Board or participation in a teleconference in lieu of such meeting. The Meeting Fees are payable in arrears on the Quarterly Payment Date. Any member of the Board who interviews a Board candidate shall be entitled to receive compensation in an amount equal to the Meeting Fee for an in person Board meeting for each such interview.
(e) The current rate of the Basic Fee, Chairperson Fee, Lead Director Fee and Meeting Fees are set forth on the attached Exhibit A, and may be amended from time to time by the Board or any committee given responsibility for determining Board of Director compensation.
(f) Each Eligible Director is entitled to reimbursement for reasonable travel costs of attending Board and committee meetings and interviews of Board candidates. Such reimbursement shall be payable in cash after receipt of documentation by the Company from such Eligible Director.
SECTION 5. ANNUAL GRANT OF STOCK BASED AWARD
(a) Each Eligible Director who is first elected to the Board at, or continues to serve on the Board immediately following an annual meeting of stockholders shall be granted a stock based award ( i.e., options, restricted stock, etc.) as of the date of such meeting in type, proportion and amount to be determined by the Committee and under, and in accordance with, the terms of the Stock Plan.
(b) Each Eligible Director who joins the Board after an annual meeting of stockholders, shall be granted a stock based award pursuant to this Section 5 as of the date such Eligible Director first becomes an Eligible Director based on the number of whole shares of Common Stock equal to the number granted other Eligible Directors at the time of the immediately preceding annual meeting of stockholders, multiplied by the Proration Fraction.
(c) Terms and conditions of stock based awards (such as grant price, vesting schedule, etc.) shall be as determined by the Committee and under, and in accordance with, the terms of the Stock Plan.
(d) The amount and composition of the current annual stock based award are set forth on the attached Exhibit A, which may be amended from time to time by the Board or any committee given responsibility for determining Board of Director compensation.
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SECTION 6. MATCHING GIFT PROGRAM
Each Eligible Director is entitled to a matching gift from the Company of up to $15,000 per calendar year to qualifying charitable institutions, prorated for any calendar year that Eligible Director joins the Board. Each Eligible Director must submit evidence of such gift to the Company and the Company will send the matching contribution directly to the qualifying charitable institution on behalf of the Eligible Director.
SECTION 7. ELECTIONS TO RECEIVE COMMON STOCK OR RESTRICTED STOCK UNITS
(a) Elections .
(i) Common Stock . Each Eligible Director who is not covered by clause (iii) below, may elect to receive, in lieu of a cash payment for his or her Basic Fee, Chairperson Fee, Lead Director Fee and/or Meeting Fees (or a portion thereof, as elected by the Eligible Director), a number of shares of Common Stock (excluding fractional shares, which shall be paid in cash (or carried over to the next payment if an Eligible Director elects to be paid all in Common Stock)), which is calculated by dividing his or her Basic Fee, Chairperson Fee, Lead Director Fee and/or Meeting Fees (or a portion thereof), by the Fair Market Value of one share of Common Stock on the Accounting Date or Quarterly Payment Date, as applicable. To be effective, any such election shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the relevant Accounting Date or Quarterly Payment Date, as applicable.
(ii) Restricted Stock Units .
(A) Each Eligible Director who is not covered by clause (iii) below, may elect to receive, in lieu of cash payment for his or her Basic Fee, Chairperson Fee, Lead Director Fee and/or Meeting Fees, Restricted Stock Units (including fractional Restricted Stock Units) calculated by dividing his or her Basic Fee, Chairperson Fee, Lead Director Fee and/or Meeting Fees (or a portion thereof, as elected by the Eligible Director) for services to be performed in the following the calendar year by the Fair Market Value of one share of Common Stock on the Accounting Date or Quarterly Payment Date, as applicable. To be effective, any such election relating to the Basic Fee, Chairperson Fee, Lead Director Fee or Meeting Fees shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the calendar year in which the Eligible Director wishes the election to be in effect and such election shall be irrevocable for such calendar year.
(B) Each Eligible Director who is not covered by clause (iii) below may elect to receive, in lieu of cash payment for his or her Meeting Fees (or a portion thereof, as elected by the Eligible Director), Restricted Stock Units (including fractional Restricted Stock Units) calculated by dividing his or her Meeting Fees (or portion thereof) by the Fair Market Value of one share of
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Common Stock on the Quarterly Payment Date. To be effective, any such election relating to the Meeting Fees shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the calendar year in which the Eligible Director wishes the election to be in effect and such election shall be irrevocable for such calendar year.
(iii) New Directors . Each Eligible Director who joins the Board between annual meetings of stockholders may elect prior to first becoming an Eligible Director to receive, in lieu of cash payment for his or her Basic Fee, Chairperson Fee and/or Lead Director Fee, a number of shares of Common Stock (excluding fractional shares, which shall be paid in cash (or carried over to the next payment if an Eligible Director elects to be paid all in Common Stock)) and/or Restricted Stock Units (including fractional Restricted Stock Units) up to the number which is calculated by (A) multiplying the sum of his or her Basic Fee, Chairperson Fee, Lead Director Fee (or a portion thereof, as elected by the Eligible Director) payable with respect to the time prior to the next annual meeting of stockholders which the Eligible Director is first elected to the Board by the Proration Fraction and (B) dividing the product resulting from clause (A) by the Fair Market Value of one share of Common Stock on the date that the Eligible Director becomes an Eligible Director. Each Eligible Director may also elect to receive, in lieu of cash payment for his or her Meeting Fees (or a portion thereof, as elected by the Eligible Director), Common Stock (excluding fractional shares, which shall be paid in cash (or carried over to the next payment if an Eligible Director elects to be paid all in Common Stock)) Restricted Stock Units (including fractional Restricted Stock Units) calculated by dividing his or her Meeting Fees (or portion thereof) by the Fair Market Value of one share of Common Stock on the Quarterly Payment Date. To be effective, any such election shall be made by submitting a completed and executed Election Form to the Secretary of the Company prior to the date that the Eligible Director becomes an Director, and such Election Form shall be irrevocable for that calendar year with respect to any election (or lack of election) to receive Restricted Stock Units.
(b) Restricted Stock Units .
(i) Account . Upon the grant of Restricted Stock Units to an Eligible Director, such units shall be credited to an account established for such Eligible Director. Each Eligible Director shall receive an annual statement showing the number of Restricted Stock Units that have been credited to the Eligible Directors account under the Program.
(ii) Dividend Equivalent Credits . An Eligible Directors account shall be credited with Dividend Equivalent Credits equivalent to the amount of dividends paid by the Company to holders of outstanding shares of Common Stock based on the number of Restricted Stock Units credited to the Eligible Directors account on the dividend record date for shares of Common Stock. Such Dividend Equivalent Credit shall be converted into an equivalent number of Restricted Stock Units (including fractional Restricted Stock Units) based on the fair market value of one share of Common Stock on the related dividend payment date and such Restricted Stock Units shall be subject to the same distribution timing as the underlying Restricted Stock Units to which the Dividend Equivalent Credits related. If a dividend is paid in cash, each Eligible Director shall be credited, as of each applicable dividend payment date, in accordance with the following formula:
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(A X B) / C
in which A equals the number of Restricted Stock Units held by the Eligible Director on the dividend record date, B equals the cash dividend per share and C equals the Fair Market Value per share of Common Stock on the dividend payment date. If a dividend is paid in property other than cash, Dividend Equivalent Credits shall be credited, as of the applicable dividend payment date, in accordance with the formula set forth above, except that B shall equal the fair market value per share of the property that the Eligible Director would have received in respect of the number of shares of Common Stock equal to the number of Restricted Stock Units held by the Eligible Director as of the dividend record date, had such shares been owned by the Eligible Director as of the record date for such dividend.
(iii) Time of Payment . All payments in respect of an Eligible Directors Restricted Stock Units shall be made as soon as practicable following the earlier of (A) the Eligible Directors death (B) the occurrence of a Change in Control, and (C) the specific date the Eligible Director has elected to receive payment pursuant to the applicable Election Form pursuant to which such Eligible Director elected to receive such Restricted Stock Units in lieu of cash.
(iv) Form of Payment . Payment in respect of Restricted Stock Units shall be made in one lump sum payment in the form of shares of Common Stock. For purposes of the preceding sentence, any payment made upon the occurrence of a Change in Control in full or partial payment of Restricted Stock Units shall be made in cash in an amount equal the Change in Control Price multiplied by the number of Restricted Stock Units (including fractional units).
(c) Stock Plan.
All shares of Common Stock and all Restricted Stock Units awarded pursuant to this Section 7 shall be awarded under, and in accordance with, the terms of the Stock Plan. Restricted Stock Units awarded hereunder shall be considered Other Stock-Based Awards under the Plan.
SECTION 8. CHANGE IN CONTROL
(a) For purposes of this Section 8, the following words and phrases have the meanings indicated below, unless the context clearly indicates otherwise:
(i) Person shall have the meaning associated with that term as it is used in Sections 13(d) and 14(d) of the Act.
(ii) Affiliates and Associates shall have the meanings assigned to such terms in Rule 12b-2 promulgated under Section 12 of the Act.
(iii) Act shall mean the Securities Exchange Act of 1934.
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(iv) Continuing Directors means directors whose appointment or election is endorsed by a majority of the members of the Companys Board prior to the date of the appointment or election of such member.
(b) For purposes of the Program, a Change in Control of the Company shall be deemed to have occurred if:
(i) any Person (together with its Affiliates and Associates), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person (together with its Affiliates and Associates) or becomes the beneficial owner (as that term is defined in Rule 13d-3 promulgated under the Act), directly or indirectly, of securities of the Company representing thirty-five percent (35%) or more of the combined voting power of the Companys then outstanding securities; or
(ii) the Continuing Directors of the Companys Board shall at any time fail to constitute a majority of the members of such Board.
SECTION 9. AMENDMENT; TERMINATION
The Board may at any time and from time to time alter, amend, suspend, or terminate the Program in whole or in part; provided, however, that no amendment which requires stockholder approval in order for the exemptions available under Rule 16b-3 to be applicable to the Program and the Eligible Directors shall be effective unless the same shall be approved by the stockholders of the Company entitled to vote thereon.
SECTION 10. RIGHTS OF ELIGIBLE DIRECTORS
Nothing contained in the Program or with respect to any grant shall interfere with or limit in any way the right of the stockholders of the Company to remove any Eligible Director from the Board pursuant to the bylaws of the Company, nor confer upon any Eligible Director any right to continue in the service of the Company as a director.
SECTION 11. GENERAL RESTRICTIONS
(a) Investment Representations . The Company may require any Eligible Director to whom Common Stock is issued, as a condition of receiving such Common Stock, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the Common Stock for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws.
(b) Compliance with Securities Laws . Each issuance shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, is necessary as a condition of, or in
8
connection with, the issuance of shares thereunder, such issuance may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification.
(c) Nontransferability . Except as otherwise provided by the Committee, Restricted Stock Units under this Program shall not be transferable by an Eligible Director other than by the laws of descent and distribution.
(d) No Acceleration of Distribution of Restricted Stock Units . The distribution of Restricted Stock Units may not be accelerated, including upon termination of the Program, if such acceleration would cause the distribution to become subject to tax under Code Section 409A.
SECTION 12. WITHHOLDING
The Company may defer making payments or delivering shares of Common Stock under the Program until satisfactory arrangements have been made for the payment of any federal, state or local income or employment taxes required which the Company reasonably determines in its sole discretion are to be withheld with respect to such payment or delivery.
SECTION 13. GOVERNING LAW
The Program and all rights hereunder shall be construed in accordance with and governed by the internal law, and not the law of conflicts, of the State of Delaware.
SECTION 14. UNFUNDED PROGRAM
The Program shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Program shall not establish any fiduciary relationship between the Company and any Eligible Director or other person. To the extent any person holds any rights by virtue of a grant under the Program, such right shall be no greater than the right of an unsecured general creditor of the Company.
SECTION 15. HEADINGS
The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Program.
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EXHIBIT A
FEES
(as of May 2005)
$
34,000
$
15,000
Audit & Finance: $10,000
Compensation/Nominating
&Governance: $5,000
$
1,500/$1,000
Meetings/Teleconferences
$
1,500/$1,000
Meetings/Teleconferences
$
1,000/$1,000
Meetings/Teleconferences
$
1,000/$1,000
Dollar value $175,000 in options
and restricted stock, with 75% as
options and 25% as restricted
stock (calculated using
Black-Scholes model)
EXHIBIT B
IMATION CORP.
DIRECTORS COMPENSATION PROGRAM
ELECTION FORM
THIS ELECTION is made by _________ (the Eligible Director), effective as of the ___ day of ___, 200_.
WHEREAS, Imation Corp., a Delaware corporation (the Company) has a director compensation program (the Program);
WHEREAS, the Eligible Director has the option under the Program to receive Common Stock and/or Restricted Stock Units in lieu of payment of certain cash compensation for service as a director of the Company;
NOW, THEREFORE, in accordance with the terms and conditions of the Program, the Eligible Director hereby agrees as follows:
The Program
This Election is entered into pursuant to the Program, which is incorporated herein by reference and made a part hereof. The Eligible Director hereby acknowledges receipt of a copy of the Program. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Program.
Basic Fee, Chairperson Fee and Lead Director Fee (Annual Grant)
The Basic Fee, Chairperson Fee and Lee Director Fee is payable (and prorated) on the date first elected to the Board of Directors (if other than at an annual meeting of stockholders). Thereafter, the Basic Fee, Chairperson Fee and Lead Director Fee is payable on each Accounting Date following the Annual Meeting of Stockholders.
** Special Tax Rules Relating to Election to Receive Restricted Stock Units
Due to new Internal Revenue Code Section 409A relating to the taxation of deferred compensation, an election to receive Restricted Stock Units under the Program can only be made for services performed and payments to be received following the calendar year in which the election is made ( e.g., an election made in 2005 is not effective until January 1, 2006). Also, the election must remain in effect for the ENTIRE calendar year. Any change in or termination of the election can only be made the year before it is to go in effect ( e.g., a change for 2007 must be made before the end of 2006.)
DUE TO THE SPECIAL TAX RULE NOTED ABOVE, AN ELECTION MUST BE MADE FOR 2005 (WHICH CANNOT INCLUDE PAYMENT IN RESTRICTED STOCK UNITS) AND FOR 2006 (WHICH CAN , AT THE ELIBLE DIRECTORS ELECTION, INCLUDE RESTRICTED STOCK UNITS.)
Subject to the terms and conditions of the Program, the Eligible Director hereby elects to
receive the Basic Fee, the Chairperson and Lead Director Fee, if applicable, in the following
manner:
BASIC FEE
For 2005 calendar year
:
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Cash
100
%
For 2006 Calendar year (and thereafter)**:
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Restricted Stock Units in lieu of Cash
___
%
Election to receive Cash
100
%
CHAIRPERSON FEE
: (if applicable)
For 2005 calendar year
:
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Cash
100
%
For 2006 Calendar year (and thereafter)**:
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Restricted Stock Units in lieu of Cash
___
%
Election to receive Cash
100
%
2
MEETING FEES :
Subject to the terms and conditions of the Program, the Eligible Director elects to receive Meeting Fees compensation in the following manner, with such fees payable on each Quarterly Payment Date:
|
___ | % | Election to receive Common Stock in lieu of Cash | |||
|
||||||
|
___ | % | Election to receive Cash | |||
Total:
|
100 | % |
For 2006 Calendar year (and thereafter)**:
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Restricted Stock Units in lieu of Cash
___
%
Election to receive Cash
100
%
LEAD DIRECTOR FEE
: (if applicable-
please complete this section even if you are not
currently lead director
)
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Cash
100
%
For 2006 Calendar year (and thereafter)**:
___
%
Election to receive Common Stock in lieu of Cash
___
%
Election to receive Restricted Stock Units in lieu of Cash
___
%
Election to receive Cash
100
%
3
DISTRIBUTION ELECTION FOR RESTRICTED STOCK UNITS : ( Must be completed if Eligible Director has made an Election to Receive Restricted Stock Units.)
The Eligible Director hereby elects to receive payment of his or her Restricted Stock Units on the earlier to occur of a Change in Control, his or her death or the following date:
___
|
___-year anniversary of the grant date (please specify) | |
|
||
___
|
The date the Eligible Director incurs a separation from service with Company (within the meaning of Section 409A of the Internal Revenue Code). | |
|
||
___
|
Other (please specify date only): ___________________________ |
Term of Election
This Election will remain in effect until terminated or changed by the Eligible Director pursuant to written notice to the Secretary of the Company or filing of a new Election Form. Note: A change or termination of an Election to receive Restricted Stock Units will not become effective until January 1 of the calendar year following the calendar year the change or termination is filed with the Secretary of the Company.
IN WITNESS WHEREOF, the Eligible Director has entered into this Election on the day and year first above written, and the Company has accepted this Election as of such day and year.
ELIGIBLE DIRECTOR | ||||||
|
||||||
Signature | ||||||
|
||||||
Accepted and Agreed to by IMATION CORP. | ||||||
|
||||||
|
By: | |||||
Title: | ||||||
|
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