EXHIBIT
3.1
BYLAWS
As Amended, to be effective May 3, 2006
- - -
ARTICLE I
SEAL
Section 1. The corporate seal shall have inscribed thereon the name of the Corporation, the
year of its organization, and shall be in such form as may be approved from time to time by the
Board of Directors. Said seal may be used by causing it or a facsimile thereof to be impressed or
affixed or otherwise reproduced.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders shall be held at such date, time, and place
either within or without the State of Delaware as may be designated by the Board of Directors from
time to time in the notice of the meeting. An annual meeting shall be held for the election of
directors, and any other proper business may be transacted thereat.
Section 2. The holders of a majority of each class of stock issued and outstanding, and
entitled to vote thereat, present in person, or represented by proxy, shall constitute a quorum at
all meetings of the stockholders for the transaction of business except as otherwise provided by
law, by the Restated Certificate of Incorporation, or by these Bylaws. For purposes of the
foregoing, two or more classes or series of stock shall be considered a single class if the holders
thereof are entitled to vote together as a single class at the meeting. In the absence of a quorum
the stockholders so present may, by majority vote, adjourn the meeting from time to time in the
manner provided by Section 3 of Article II of these Bylaws until a quorum shall attend.
Section 3. Any meeting of stockholders, annual or special, may adjourn from time to time and
reconvene at the same or some other place, and notice need not be given of any such adjourned
meeting if the time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 4. At any meeting of the stockholders every stockholder having the right to vote
shall be entitled to vote in person, or by proxy appointed by an instrument in writing subscribed
by such stockholder and bearing a date not more than three (3) years prior to said meeting, unless
said instrument provides for a longer period. Unless otherwise provided in the Restated
Certificate of Incorporation or as otherwise determined by the Board of Directors pursuant to the
powers conferred by the Restated Certificate of Incorporation, each stockholder shall have one vote
for each share of stock having voting power registered in his or her name on the books of the Corporation.
Section 5. Written notice of the annual meeting which shall state the place, date, and hour
of the meeting shall be mailed to each stockholder entitled to vote thereat at such address as
appears on the stock book of the Corporation, at least ten (10) days prior to the meeting and not
more than sixty (60) days prior to the meeting.
Section 6. No business may be transacted at an annual meeting of stockholders, other than
business that is either (a) specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors (or any duly authorized committee thereof), (b)
otherwise properly brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the
annual meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date
of the giving of the notice provided for in this Section and on the record date for the
determination of stockholders entitled to vote at such annual meeting and (ii) who complies with
the notice procedures set forth in this Section.
In addition to any other applicable requirements, for business to be properly brought before
an annual meeting by a stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.
To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and
received at the principal executive offices of the Corporation not less than ninety (90) days prior
to the anniversary date of the immediately preceding annual meeting of stockholders;
provided
,
however
, that in the event that the annual meeting is called for a date
that is not within thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received before the later of the close of business on
the tenth (10th) day following the day on which such notice of the date of the annual meeting was
mailed or the day on which public disclosure of the date of the annual meeting was made, whichever
first occurs and the close of business on the day which is ninety (90) days prior to the date of
the annual meeting.
To be in proper written form, a stockholder’s notice to the Secretary must set forth as to
each matter such stockholder proposes to bring before the annual meeting (i) a brief description of
the business desired to be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the
class or series (if any) and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any material interest of such
stockholder in such business and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the meeting.
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No business shall be conducted at the annual meeting of stockholders except business brought
before the annual meeting in accordance with the procedures set forth in this Section,
provided
,
however
, that, once business has been properly brought before the annual
meeting in accordance with such procedures, nothing in this Section shall be deemed to preclude
discussion by any stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in accordance with the
foregoing procedures, the Chairman shall declare to the meeting that the business was not properly
brought before the meeting and such business shall not be transacted.
Section 7. A complete list of the stockholders entitled to vote at each meeting of
stockholders, arranged in alphabetical order, with the record address of each, and the number of
voting shares held by each, shall be prepared by the Secretary and made available for examination
by any stockholder either (i) on a reasonably accessible electronic network, provided that
information required to gain access is provided with the notice of the meeting or (ii) during
ordinary business hours at the Corporation’s principal place of business, at least ten (10) days
before every meeting, and shall at all times during said meeting continue to be open to the
examination of any stockholder.
Section 8. Special meetings of the stockholders may be called for any purpose or purposes by
the Chairman of the Board, and shall be called by the Secretary at the request in writing of the
Chairman of the Board or of a majority of the Board of Directors. Business transacted at all
special meetings shall be confined to the objects stated in the notice of the meeting.
Section 9. Written notice of a special meeting of stockholders, stating the time and place
and object thereof, shall be mailed postage prepaid, at least ten (10) days before such meeting, to
each stockholder entitled to vote thereat at such address as appears on the books of the
Corporation.
Section 10. The Board of Directors shall appoint two persons as inspectors of election, to
serve for one year or until their successors are chosen. The inspectors shall act at meetings of
stockholders on elections of Directors and on all other matters voted upon by ballot.
If at the time of any meeting inspectors have not been appointed or if none, or only one, of
the inspectors is present and willing to act, the Chairman of the Board shall appoint the required
number of inspectors so that two inspectors shall be present and acting.
ARTICLE III
DIRECTORS
Section 1. The business and affairs of the Corporation shall be managed by or under the
direction of the Board of Directors, except as may be otherwise provided by law or in the Restated
Certificate of Incorporation.
Section 2. Except as otherwise fixed by or pursuant to the provisions of Article FOURTH of
the Restated Certificate of Incorporation (as it may be duly amended from time to time) relating to
the rights of the holders of any class or series of stock having a
preference over the
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common stock as
to dividends or upon liquidation to elect, by
separate class vote, additional directors, the number
of directors of the Corporation shall be the number fixed from time to time by the affirmative vote
of a majority of the total number of directors which the Corporation would have, prior to any
increase or decrease, if there were no vacancies. The persons receiving the votes of a plurality
in amount of holders of the shares of capital stock of the Corporation, considered as a single
class, entitled to vote generally in the election of directors present at the meeting in person or
by proxy shall be directors for the term prescribed by Article TENTH of the Restated Certificate of
Incorporation or until their successors shall be elected and qualified.
Section 3. Newly created directorships resulting from an increase in the number of directors
of the Corporation and vacancies occurring in the Board of Directors resulting from death,
resignation, retirement, removal, or any other reason shall be filled by the affirmative vote of a
majority of the directors, although less than a quorum, then remaining in office and elected by the
holders of the capital stock of the Corporation entitled to vote generally in the election of
directors or, in the event that there is only one such director, by such sole remaining director.
Any director elected in accordance with the preceding sentence shall hold office for the full term
of the class of directors in which the new directorship was created or the vacancy occurred and
until such director’s successor shall have been elected and qualified.
Section 4. Only persons who are nominated in accordance with the following procedures shall
be eligible for election as directors of the Corporation, except as may be otherwise provided in
the Restated Certificate of Incorporation of the Corporation with respect to the right of holders
of preferred stock of the Corporation to nominate and elect a specified number of directors in
certain circumstances. Nominations of persons for election to the Board of Directors may be made
at any annual meeting of stockholders (a) by or at the direction of the Board of Directors (or any
duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a
stockholder of record on the date of the giving of the notice provided for in this Section and on
the record date for the determination of stockholders entitled to vote at such annual meeting and
(ii) who complies with the notice procedures set forth in this Section.
In addition to any other applicable requirements, for a nomination to be made by a
stockholder, such stockholder must have given timely notice thereof in proper written form to the
Secretary of the Corporation.
To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and
received at the principal executive offices of the Corporation not less than ninety (90) days prior
to the anniversary date of the immediately preceding annual meeting of stockholders;
provided
,
however
, that in the event that the annual meeting is called for a date
that is not within thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received before the later of the close of business on
the tenth (10th) day following the day on which such notice of the date of the annual meeting was
mailed or the day on which public disclosure of the date of the annual meeting was made, whichever
first occurs and the close of business on the day which is ninety (90) days prior to the date of
the annual meeting.
To be in proper written form, a stockholder’s notice to the Secretary must set forth (a) as to
each person whom the stockholder proposes to nominate for election as a director (i) the name, age,
business address and residence address of the person, (ii) the
principal occupation
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or employment
of the person, (iii) the class or series (if any) and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person and (iv) any other information
relating to the person that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the
rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i)
the name and record address of such stockholder, (ii) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such stockholder and each
proposed nominee and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder
intends to appear in person or by proxy at the annual meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be required to be
disclosed in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and
the rules and regulations promulgated thereunder. Such notice must be accompanied by a written
consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the Corporation unless nominated in
accordance with the procedures set forth in this Section. If the Chairman of the annual meeting
determines that a nomination was not made in accordance with the foregoing procedures, the Chairman
shall declare to the meeting that the nomination was defective and such defective nomination shall
be disregarded.
Section 5. In addition to the powers and authorities by these Bylaws expressly conferred upon
them, the Board of Directors may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by statute or by the Restated Certificate of Incorporation or by these
Bylaws directed or required to be exercised or done by the stockholders.
ARTICLE IV
COMMITTEES OF DIRECTORS
Section 1. The Board of Directors may by resolution or resolutions passed by a majority of
the whole Board, designate an Executive Committee and one or more committees, each committee to
consist of one (1) or more Directors of the Corporation, which, to the extent provided in said
resolution or resolutions or in these Bylaws, or unless otherwise prescribed by statute, shall have
and may exercise the powers of the Board of Directors in the management of the business and affairs
of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to
all papers which may require it. Such committee or committees shall have such name or names as may
be stated in these Bylaws or as may be determined from time to time by resolution adopted by the
Board.
Section 2. The committees of the Board of Directors shall keep regular minutes of their
proceedings and report the same to the Board when required. In the absence or disqualification of
a member of a committee, the member or members thereof present at any meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in place of any absent or disqualified member.
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ARTICLE V
COMPENSATION OF DIRECTORS
Section 1. The compensation of the Directors of the Corporation shall be fixed by resolution
of the Board of Directors.
ARTICLE VI
MEETINGS OF THE BOARD
Section 1. Regular meetings of the Board of Directors may be held at such places within or
without the State of Delaware and at such times as the Board may from time to time determine, and
if so determined notice thereof need not be given.
Section 2. Special meetings of the Board may be held at any time or place within or without
the State of Delaware whenever called by the Chairman of the Board, if any, or by any two
directors. Reasonable notice thereof shall be given by the persons or persons calling the meeting.
Section 3. Unless otherwise restricted by the Restated Certificate of Incorporation or these
Bylaws, members of the Board of Directors, or any committee designated by the Board, may
participate in a meeting of the Board or of such committee, as the case may be, by means of
conference telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 4. Meetings of the Board of Directors shall be presided over by the Chairman of the
Board, if any, or in the absence of the Chairman of the Board, by a chairman chosen at the meeting.
The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary
of the meeting, but in the absence of the Secretary and any Assistant Secretary, the chairman of
the meeting may appoint any person to act as secretary of the meeting.
Section 5. Unless otherwise restricted by the Restated Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the Board or of such
committee, as the case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.
Section 6. At all meetings of the Board of Directors, a majority of the Directors shall
constitute a quorum for the transaction of business, and the vote of a majority of the Directors
present at any meeting at which there is a quorum, shall be the act of the Board, except as may be
otherwise specifically provided by statute or by the Restated Certificate of Incorporation or by
these Bylaws. In case at any meeting of the Board a quorum shall not be present, the members of
the Board present may adjourn the meeting from time to time until a quorum shall attend.
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ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be elected by the Board of Directors at its
annual meeting, or if the case requires, at any other regular or special meeting with such titles
and duties as the Board shall deem desirable. The same person may hold any number of offices at
the same time.
Section 2. The Board of Directors may appoint such other officers and agents as it shall deem
desirable with such further designations and titles as it considers desirable, who shall hold their
offices for such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board.
Section 3. The compensation of the officers of the Corporation shall be fixed by or under the
direction of the Board of Directors.
Section 4. Except as otherwise provided in the resolution of the Board of Directors electing
any officer, each officer shall hold office until the first meeting of the Board after the annual
meeting of stockholders next succeeding his or her election, and until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any officer may resign
at any time upon written notice to the Board or to the Chairman or the Secretary of the
Corporation. Such resignation shall take effect at the time specified therein, and unless
otherwise specified therein, no acceptance of such resignation shall be necessary to make it
effective. The Board may remove any officer with or without cause at any time. Any such removal
shall be without prejudice to the contractual rights of such officer, if any, with the Corporation,
but the election of an officer shall not of itself create contractual rights. Any vacancy
occurring in any office of the Corporation by death, resignation, removal, or otherwise may be
filled for the unexpired portion of the term by the Board at any regular or special meeting.
Section 5. The officers of the Corporation shall have such powers and duties in the
management of the Corporation as shall be stated in these Bylaws or in a resolution of the Board of
Directors which is not inconsistent with these Bylaws, and, to the extent so stated, as generally
pertain to their respective offices, subject to the control of the Board. The Board may require
any officer, agent, or employee to give security for the faithful performance of his or her duties.
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ARTICLE VIII
CERTIFICATES OF STOCK
Section 1. The certificates of stock of the Corporation shall be numbered and shall be
entered in the books of the Corporation as they are issued. They shall exhibit the holder’s name
and number of shares and shall be signed by the Chairman of the Board, or a vice president, and the
Treasurer or an assistant treasurer, or the Secretary or an assistant secretary. The Board of
Directors may adopt the facsimile signature of any such officer as his or her signature and give to
such facsimile the same force and effect as though it were written on the certificates of stock by
such officer, and upon appointment of a Transfer Agent and Registrar any certificate bearing such
facsimile signature when certified and registered by such Transfer Agent and Registrar shall be
deemed duly signed, and unless and until changed by the Board, certificates in the form so adopted
may be issued and delivered whether the said officer so signing and to be taken as so signing the
same continue to be such officers or whether because of death, resignation, or otherwise they, or
either of them, cease to be such officers.
ARTICLE IX
LOST, STOLEN, OR DESTROYED STOCK CERTIFICATE
Section 1. The Corporation may issue a new certificate of stock in the place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or destroyed, and the
Corporation may require the owner of the lost, stolen, or destroyed certificate, or such owner’s
legal representative, to give the Corporation a bond sufficient to indemnify it against any claim
that may be made against it on account of the alleged loss, theft, or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE X
FISCAL YEAR
Section 1. The fiscal year shall begin on the first day of January in each year.
ARTICLE XI
NOTICES
Section 1. Whenever under the provisions of these Bylaws notice is required to be given to
any Director, officer, or stockholder, it shall not be construed to mean personal notice, but such
notice may be given by any means or instrumentality reasonably designed for such purpose and
permitted by law.
Section 2. Whenever notice is required to be given by law or under any provision of the
Restated Certificate of Incorporation or these Bylaws, a written waiver thereof, signed by the
person entitled to notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting,
except when the person
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attends a meeting for the
express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any regular or special
meeting of the stockholders, directors, or members of a committee of directors need be specified in
any written waiver of notice unless so required by the Restated Certificate of Incorporation or
these Bylaws.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. The Corporation shall indemnify, to the full extent authorized or permitted by
law, any person made or threatened to be made a party, witness or participant in or to any action,
suit, or proceeding, whether criminal, civil, administrative, or investigative, by reason of the
fact that such person or such person’s testator or intestate is or was a Director, officer, or
employee of the Corporation or serves or served at the request of the Corporation any other
enterprise as a director, officer, or employee.
Expenses incurred by any such person in defending any such action, suit, or proceeding or as a
witness or participant shall be paid or reimbursed by the Corporation promptly upon receipt by it
of an undertaking of such person to repay such expenses if it shall ultimately be determined that
such person is not entitled to be indemnified by the Corporation. The rights provided to any
person by this Section shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a Director, officer, or
employee. No amendment of this Section shall impair the rights of any person arising at any time
with respect to events occurring prior to such amendment.
For purposes of this Section, the term “Corporation” shall include any predecessor of the
Corporation and any constituent corporation (including any constituent of a constituent) absorbed
by the Corporation in a consolidation or merger; the term “other enterprise” shall include any
corporation, partnership, joint venture, trust, or employee benefit plan; service “at the request
of the Corporation” shall include service as a Director, officer, or employee of the Corporation
which imposes duties on, or involves services by, such Director, officer, or employee with respect
to an employee benefit plan, its participant or beneficiaries; any excise taxes assessed on a
person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and
action by a person with respect to an employee benefit plan which such person reasonably believes
to be in the interest of the participants and beneficiaries of such plan shall be deemed to be
action not opposed to the best interest of the Corporation.
Section 2. The indemnification provided by these Bylaws shall not be deemed exclusive of any
other rights to which those indemnified may be entitled by any Bylaw, agreement, vote of
stockholders or disinterested Directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a Director, officer, or employee and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
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Section 3. The Corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a Director, officer, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a Director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any liability asserted
against him or her and incurred by him or her in any such capacity or arising out of his or her
status as such, whether or not the Corporation would have the power to indemnify him or her against
such liability under the provisions of these Bylaws.
ARTICLE XIII
INTERESTED DIRECTORS
Section 1. No contract or transaction between the Corporation and one or more of its
Directors or officers, or between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its Directors or officers are directors
or officers, or have a financial interest, shall be void or voidable solely for this reason, or
solely because the Director or officer is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or transaction, or solely because his
or her or their votes are counted for such purpose, if: (i) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or are known to the
Board or the committee, and the Board or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested Directors, even though the
disinterested Directors be less than a quorum; or (ii) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved, or ratified by the Board, a committee
thereof, or the stockholders. Common or interested Directors may be counted in determining the
presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or
transaction.
ARTICLE XIV
FORM OF RECORDS
Section 1. Any records maintained by the Corporation in the regular course of its business,
including its stock ledger, books of account, and minute books, may be kept on, or be in the form
of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible form within a
reasonable time. The Corporation shall so convert any records so kept upon the request of any
person entitled to inspect the same.
ARTICLE XV
AMENDMENTS
Section 1. Subject to any limitations imposed by the Restated Certificate of Incorporation,
the Board of Directors shall have power to adopt, amend, or repeal these Bylaws. Any Bylaws made
by the directors under the powers conferred by the Restated Certificate of Incorporation may
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be amended or repealed by the directors or by the stockholders. Notwithstanding the foregoing and any
other provisions of the Restated Certificate of Incorporation or these Bylaws (and notwithstanding
that a lesser percentage may be specified by law), no provisions of these Bylaws shall be adopted,
amended or repealed by the stockholders without an affirmative vote of the holders of not less than
eighty percent (80%) of the voting power of all of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, considered for the purposes of
this Section as a single class.
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EXHIBIT 10.1
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Amendment to Stock Option Agreement
This Amendment to Stock Option Agreement (the “Amendment”), effective as of
,
2006, between Imation Corp., a Delaware corporation (the “Company”) and
, an
employee of the Company or one of its Affiliates (the “Participant”).
WHEREAS, pursuant to a Stock Option Agreement effective as of
(the
“Agreement”), the Company granted the Participant an option of
shares of the Company’s
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 in the manner set forth below.
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:
1.
Section 6
of the Agreement is hereby amended in its entirety to read as follows:
6.
Effect of Termination of Employment
.
(a) In the event the Participant shall cease to be employed by the Company and all
subsidiaries of the Company for any reason other than (i) Termination for Cause, (ii) Retirement,
(iii) death or Disability or (iv) termination by the Company or a subsidiary of the Participant’s
employment with the Company and its subsidiaries 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 and its
subsidiaries 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 and all subsidiaries 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 a subsidiary, 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 Participant’s death or
Disability. In the event of Participant’s 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 Participant’s 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 Participant’s
death, but not after the Expiration Date. In the event of the Participant’s 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
Participant’s Disability, but not after the Expiration Date.
(e) In the event the Company or a subsidiary terminates the Participant’s employment with the
Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change 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 (if the Change of Control would have
constituted a Change of Control under this Agreement prior to the amendment to this Agreement dated
, 2006 (the “2006 Amendment”), which definition prior to the 2006 Amendment is set forth
in Exhibit A to the 2006 Amendment), or thirty (30) days (if the Change of Control would not have
constituted a Change of Control under this Agreement prior to the 2006 Amendment) after the date of
the Participant’s 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,
2
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.
2.
Section 7
of the Agreement is hereby amended in its entirety to read as follows:
7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) 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.
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or consolidation, make
appropriate provision for the protection of the Option by the substitution of options and
appropriate voting common stock of the corporation surviving any such merger or
consolidation or, if appropriate, the “parent corporation” (as defined in Section 424(e) of
the Code, or any successor provision) of the Company or such surviving corporation, in lieu
of the Option and shares of Common Stock of the Company, or
(ii) with respect to any Fundamental Change, including, without limitation, a merger or
consolidation, declare, prior to the occurrence of the Fundamental Change, and provide
written notice to the holder of the Option of the declaration, that the Option, whether or
not then exercisable, shall be canceled at the time of, or immediately prior to the
occurrence of, the Fundamental Change in exchange for payment to the holder of the Option,
within 20 days after the Fundamental Change, of cash (or, if the Committee so elects in lieu
of solely cash, of such form(s) of consideration, including cash and/or property, singly or
in such combination as the Committee shall determine, that the holder
of the Option would have received as a result of the Fundamental Change if the holder of the
Option had exercised the Option immediately prior to the Fundamental Change) equal to, for
each share of Common Stock covered by the canceled Option, the amount, if any, by which the
Fair Market Value (as defined in this Section 7(b)) per share of Common
Stock exceeds the
exercise price per share
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of Common Stock covered by the Option. At the time of the
declaration provided for in the immediately preceding sentence, the Option shall immediately
become exercisable in full and the holder of the Option shall have the right, during the
period preceding the time of cancellation of the Option, to exercise the Option as to all or
any part of the shares of Common Stock covered thereby in whole or in part, as the case may
be. In the event of a declaration pursuant to this Section 7(b), the Option, to the extent
that it shall not have been exercised prior to the Fundamental Change, shall be canceled at
the time of, or immediately prior to, the Fundamental Change, as provided in the
declaration. Notwithstanding the foregoing, the holder of the Option shall not be entitled
to the payment provided for in this Section 7(b) if such Option shall have expired or been
forfeited. For purposes of this Section 7(b) only, “Fair Market Value” per share of Common
Stock means the fair market value, as determined in good faith by the Committee, of the
consideration to be received per share of Common Stock by the shareholders of the Company
upon the occurrence of the Fundamental Change, notwithstanding anything to the contrary
provided in this Agreement.
3.
Section 11
of the Agreement is hereby amended in its entirety to read as follows:
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 one of the following events:
(i) the consummation of a transaction or series of related transactions in which a
person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than the Company or
a subsidiary of the Company, or any employee benefit plan of the Company or a subsidiary of
the Company, acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 35% or more of the Company’s then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding voting securities
(other than in connection with a Business Combination in which clauses (1), (2) and (3) of
paragraph (a)(iii) apply); or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the Board of Directors of the Company; provided, however, that any individual
becoming a director subsequent to the Effective Date hereof whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than a nomination of an individual
whose initial assumption of office is in connection with a
solicitation with respect to the election or removal of directors of the Company in
opposition to the solicitation by the Board of Directors of the Company) shall be deemed to
be a member of the Incumbent Board; or
4
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other disposition in
a transaction or series of related transactions of all or substantially all of the Company’s
assets or the issuance by the Company of its stock in connection with the acquisition of
assets or stock of another entity (each, a “Business Combination”) in each case unless,
following such Business Combination, (1) all or substantially all of the individuals and
entities that were the beneficial owners of the Company’s outstanding Common Stock and the
Company’s outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or indirectly,
more than 50% of the then outstanding shares of common stock and more than 50% of the
combined voting power of the then outstanding voting securities (or comparable equity
interests) of the entity resulting from such Business Combination (including an entity that,
as a result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one of more subsidiaries) in substantially the
same proportions as their ownership of the Company’s Common Stock and voting securities
immediately prior to such Business Combination, (2) no person, entity or group (other than a
direct or indirect parent entity of the Company that, after giving effect to the Business
Combination, beneficially owns 100% of the outstanding voting securities (or comparable
equity interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable equity
interests) of the entity resulting from such Business Combination and (3) at least a
majority of the members of the board of directors (or similar governing body) of the entity
resulting from such Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement or of the action of the Board of Directors of the
Company providing for such Business Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(c) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(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 Participant’s employment with the Company or
an Affiliate for the following acts: (i) the Participant’s
gross incompetence or
substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to
5
cause harm to the Company or that
causes or is likely to cause harm to the Company’s reputation,
as determined by the Company’s Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Company’s Board of Directors that
are consistent with the Participant’s duties, (iv) the Participant’s conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect. 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 limitation 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 on the
date set forth above.
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IMATION CORP.
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PARTICIPANT
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6
Exhibit A
Definition of Change of Control in Agreement Prior to the 2006 Amendment
(This definition has been replaced by the 2006 Amendment)
Under the Agreement prior to the 2006 Amendment, “Change of Control” meant any one 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 Company’s 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.
EXHIBIT 10.2
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Amendment to Restricted Stock Award Agreement
This Amendment to Restricted Stock Award Agreement (the “Amendment”), effective as of
, 2006, between Imation Corp., a Delaware corporation (the “Company”) and
, an employee of the Company or one of its Affiliates (the “Participant”).
WHEREAS, pursuant to a Restricted Stock Award Agreement effective as of
(as
amended by amendment effective as of
, 2005, the “Agreement”), the Company granted to
Participant a restricted stock award of
shares of the Company’s 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 in the manner set forth below.
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:
1.
Section 3
of the Agreement is hereby amended in its entirety to read as follows:
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 a subsidiary 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 subsidiaries of the Company for any reason
prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participant’s rights to all of
the
unvested Shares shall be immediately and irrevocably forfeited, including the right to vote such
Shares and the right to receive dividends on such Shares.
(c)
Change 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 Company or a subsidiary terminates the Participant’s employment with
the Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change 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.
2.
Section 7(a)
of the Agreement is hereby amended in its entirety to read as follows:
(a) “Change of Control” means any one of the following events:
(i) the consummation of a transaction or series of related transactions in which a
person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than the Company or
a subsidiary of the Company, or any employee benefit plan of the Company or a subsidiary of
the Company, acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 35% or more of the Company’s then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding voting securities
(other than in connection with a Business Combination in which clauses (1), (2) and (3) of
paragraph (a)(iii) apply); or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least
a majority of the Board of Directors of the Company; provided, however, that any individual
becoming a director subsequent to the Effective Date hereof whose
election, or nomination
for election by the Company’s stockholders, was
2
approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than a nomination of an individual
whose initial assumption of office is in connection with a solicitation with respect to the
election or removal of directors of the Company in opposition to the solicitation by the
Board of Directors of the Company) shall be deemed to be a member of the Incumbent Board; or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other disposition in
a transaction or series of related transactions of all or substantially all of the Company’s
assets or the issuance by the Company of its stock in connection with the acquisition of
assets or stock of another entity (each, a “Business Combination”) in each case unless,
following such Business Combination, (1) all or substantially all of the individuals and
entities that were the beneficial owners of the Company’s outstanding Common Stock and the
Company’s outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or indirectly,
more than 50% of the then outstanding shares of common stock and more than 50% of the
combined voting power of the then outstanding voting securities (or comparable equity
interests) of the entity resulting from such Business Combination (including an entity that,
as a result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one of more subsidiaries) in substantially the
same proportions as their ownership of the Company’s Common Stock and voting securities
immediately prior to such Business Combination, (2) no person, entity or group (other than a
direct or indirect parent entity of the Company that, after giving effect to the Business
Combination, beneficially owns 100% of the outstanding voting securities (or comparable
equity interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable equity
interests) of the entity resulting from such Business Combination and (3) at least a
majority of the members of the board of directors (or similar governing body) of the entity
resulting from such Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement or of the action of the Board of Directors of the
Company providing for such Business Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect. 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 limitation 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.
3
The Company and the Participant have caused this Amendment to be signed and delivered on the
date set forth above.
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IMATION CORP.
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PARTICIPANT
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4
EXHIBIT 10.3
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Amendment to Stock Option Agreement
This STOCK OPTION AGREEMENT AMENDMENT effective as of
, 2006, is entered into
between Imation Corp., a Delaware corporation (the “Company”) and Bruce A. Henderson, an employee
of the Company (the “Participant”), pursuant and subject to the terms and conditions of the Imation
Corp. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the “
Plan
”).
WHEREAS, pursuant to a certain Stock Option Agreement effective as of May 13, 2004 (as amended
by an Amendment effective as of February 1, 2005, the “Agreement”), the Company granted the
Participant under the Plan the right and option (the “Option”) to purchase from the Company shares
of the Company’s common stock, par value $.01 per share, on the terms and conditions set forth in
the Agreement.
WHEREAS, the Agreement provides that the Option will become exercisable upon the achievement
of certain performance objectives.
WHEREAS, pursuant to Section 3 of the Plan, the Compensation Committee has authority to amend
the terms and conditions of the Agreement and the Committee has determined to amend the Agreement
in the manner set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Participant hereby agree to amend the Agreement as
follows:
1.
Subsection (a) of Section 5
of the Agreement is hereby amended in its entirety to
read as follows:
(a) In the event (i) the Company or a subsidiary of the Company terminates the Participant’s
employment with the Company and all its subsidiaries without Cause (defined below) during the
Option Period, (ii) the Company or a subsidiary of the Company terminates the Participant’s
employment with the Company and all its subsidiaries during the Option Period
and
within
two years after a Change of Control (defined below) for any reason other than for Cause, the
Participant’s death or disability (as described in the Participant’s employment agreement with the
Company dated May 13, 2004 (the “
Employment Agreement
”)), or (iii) the Participant
terminates his employment with the Company and all its subsidiaries during the Option Period for
Company Breach (defined below) (any of the termination events described in these Sections 5(a)(i),
(ii) and (iii) and any declaration pursuant to Section 8(b)(ii) hereof being referred to herein as
an “
Acceleration Termination Event
”), then a portion of the Option
described in Section 4(a) or Section 4(b) (as applicable, determined based on the date of such
Acceleration Termination Event) shall immediately vest and become exercisable (subject to the time
periods for exercise set forth in other provisions of this Agreement), if (and only if) the
Company had achieved the required level of growth in operating income for the applicable
period ending on
the December 31 immediately prior to the date of such Acceleration Termination Event, in accordance
with Section 4(a) or Section 4(b), as applicable. Such Option shall accelerate (if at all) only in
an amount equal to the number of shares of Common Stock determined by multiplying the maximum
number of shares subject to such Option (either 100,000 shares or 75,000 shares, as applicable,
determined based on the date of such Acceleration Termination Event) by the ratio of (i) the
portion of the applicable measurement period set forth in Section 4(a) or 4(b) (expressed in full
fiscal years) through the December 31 immediately prior to the date of such Acceleration
Termination Event, divided by (ii) the total number of full fiscal years in the applicable
measurement period set forth in Section 4(a) or 4(b).
2.
Subsection (d) of Section 5
of this Agreement is hereby amended in its entirety to
read as follows:
(d) Except as specifically provided in Section 5(a) or Section 8(b)(ii) hereof, there shall
not be any acceleration of vesting of the Option or any portion thereof. Without limiting the
foregoing, a voluntary resignation or retirement by the Participant shall not be an Acceleration
Termination Event.
3.
Subsection (a) of Section 7
of the Agreement is hereby amended in its entirety to
read as follows:
(a) In the event the Participant shall cease to be employed by the Company or a Subsidiary for
any reason other than termination for Cause or death, or elects to accept Pre-Retirement Leave
(“
PRL
”) in conjunction with a Company sponsored severance plan, 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 or
commencement of PRL, and such exercise may be effected at any time within 90 days after such
termination of employment or commencement of PRL (or within six months after such termination of
employment or commencement of PRL if such termination or PRL is for any reason following a Change
of Control that would also have constituted a Change of Control prior to the amendment dated
, 2006 to this Agreement (the “2006 Amendment”), which definition prior to the 2006
Amendment is set forth in Exhibit A to the 2006 Amendment) but not thereafter;
provided,
however
, that the Option may not be exercised after the Option Period.
4.
Section 8
of the Agreement is hereby amended in its entirety to read as follows:
8.
Adjustments for Stock Dividends, Stock Splits, Recapitalization, Merger or
Consolidation or other Fundamental Changes
.
(a) If all or any portion of the Option shall be exercised subsequent to any stock dividend,
stock split, recapitalization, merger or consolidation involving the Company or
its Common Stock, the Committee shall make appropriate adjustment to the Option to give effect
thereto on an equitable basis.
2
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or
consolidation, make appropriate provision for the protection of the Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the “parent
corporation” (as defined in Section 424(e) of the Code, or any successor provision)
of the Company or such surviving corporation, in lieu of the Option and shares of
Common Stock of the Company, provided that nothing stated herein shall limit the
obligations of the Committee under Section 8(a), or
(ii) with respect to any Fundamental Change, including, without limitation, a
merger or consolidation, declare, prior to the occurrence of the Fundamental Change,
and provide written notice to the holder of the Option of the declaration, that the
Option, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of, the Fundamental Change in exchange for
payment to the holder of the Option, within 20 days after the Fundamental Change, of
cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such combination as the
Committee shall determine, that the holder of the Option would have received as a
result of the Fundamental Change if the holder of the Option had exercised the
Option immediately prior to the Fundamental Change) equal to, for each share of
Common Stock covered by the canceled Option with respect to which the Option is
exercisable at the time of such cancellation (including shares with respect to which
the Option becomes exercisable pursuant to the following provisions of this Section
8(b)(ii)), the amount, if any, by which the Fair Market Value (as defined in this
Section 8(b)(ii)) per share of Common Stock with respect to which the Option is then
exercisable exceeds the exercise price per share of Common Stock covered by the
Option with respect to which the Option is then exercisable. At the time of the
declaration provided for in the immediately preceding sentence, an Acceleration
Termination Event shall be deemed to have occurred and the Option, to the extent it
has not previously become exercisable in full or expired, shall immediately become
exercisable, to the extent set forth in the next sentence, if (and only if) the
Company had achieved the required level of growth in operating income for the
applicable period ending on the December 31 immediately prior to the date of such
declaration. In such event, the Option shall accelerate only to the extent provided
in the last sentence of Section 5(a), for which purpose the Acceleration Termination
Event shall be deemed to have occurred on the date of the declaration. Following the
declaration, the holder of the Option shall have the right, during the period
preceding the time of cancellation of the Option, to exercise the Option as to all
or any part of the shares of Common Stock covered
thereby for which the Option is exercisable (including as a result of the
Acceleration Termination Event resulting from the declaration pursuant to this
Section 8(a)(ii) but not with respect to the Common Shares for which the Option has
not become exercisable). In the event of a declaration pursuant to this Section
8(b), the
3
Option, to the extent that it shall not have been exercised prior to the
Fundamental Change, shall be canceled at the time of, or immediately prior to, the
Fundamental Change, as provided in the declaration, notwithstanding anything to the
contrary provided in this Agreement. Notwithstanding the foregoing, the holder of
the Option shall not be entitled to the payment provided for in this Section 8(b) if
such Option shall have expired or been forfeited. For purposes of this Section 8(b)
only, “Fair Market Value” per share of Common Stock means the fair market value, as
determined in good faith by the Committee, of the consideration to be received per
share of Common Stock by the shareholders of the Company upon the occurrence of the
Fundamental Change, notwithstanding anything to the contrary provided in this
Agreement.
5.
Section 11
of the Agreement is hereby amended in its entirety to read as follows:
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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s
4
assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(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) “
Common Stock
” means the common stock of the Company, par value $.01 per share.
(d) “
Company Breach
” means: (i) a change in the Participant’s duties or
responsibilities with the Company (A) that represents a substantial reduction of the duties or
responsibilities as in effect immediately prior thereto and (B) that is reasonably likely to
subject the Participant to professional embarrassment or ridicule; (2) a change by the Board of
Directors of the Company in the duties or responsibilities of other senior executive officers of
the Company that has the effect of precluding the Participant from effectively performing his
duties
and responsibilities; (3) a material reduction in the Participant’s base compensation that is
not substantially proportionate to any reduction in the base compensation of other senior
executives of the Company; or (4) any material breach by the Company of any provision of the
Employment
5
Agreement that is not remedied within 30 days after receipt of written notice from the
Participant specifying such breach in reasonable detail.
(e) “
Fundamental Change
” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(f) “
Subsidiary
” means a corporation more than 50% of the voting stock of which shall
at the time be owned directly or indirectly by the Company.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Company and the Participant have executed this Stock Option Agreement
Amendment as of the date and year first written above.
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IMATION CORP.
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By:
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Name:
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Title:
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PARTICIPANT
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Bruce A. Henderson
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6
Exhibit A
Definition of Change of Control in Agreement Prior to the 2006 Amendment
(This definition has been replaced by the 2006 Amendment)
Under the Agreement prior to the 2006 Amendment, “Change of Control” meant any one 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 a subsidiary of the Company, or any employee benefit
plan of the Company or a subsidiary of the Company, of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either the then
outstanding Common Stock or the combined voting power of the Company’s 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 date of this Agreement, 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 Rule 14a-11 of 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 a subsidiary of the Company) pursuant to which Common Stock is purchased.
EXHIBIT 10.4
Imation Corp. 2000 Stock Incentive Plan,
as Amended February 6, 2003
Amendment to Stock Option Agreement
This STOCK OPTION AGREEMENT AMENDMENT effective as of
, 2006, is entered into
between Imation Corp., a Delaware corporation (the “Company”) and Frank P. Russomanno, an employee
of the Company (the “Participant”), pursuant and subject to the terms and conditions of the Imation
Corp. 2000 Stock Incentive Plan, as Amended February 6, 2003 (the “
Plan
”).
WHEREAS, pursuant to a certain Stock Option Agreement effective as of May 13, 2004 (the
“Agreement”), the Company granted the Participant under the Plan the right and option (the
“Option”) to purchase from the Company shares of the Company’s common stock, par value $.01 per
share, on the terms and conditions set forth in the Agreement.
WHEREAS, the Agreement provides that the Option will become exercisable upon the achievement
of certain performance objectives.
WHEREAS, pursuant to Section 3 of the Plan, the Compensation Committee has authority to amend
the terms and conditions of the Agreement and the Committee has determined to amend the Agreement
in the manner set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Participant hereby agree to amend the Agreement as
follows:
1.
Subsection (a) of Section 5
of the Agreement is hereby amended in its entirety to
read as follows:
(a) If prior to December 31, 2007 (i) the Company or a subsidiary of the Company terminates
the Participant’s employment with the Company and all its subsidiaries without Cause, (ii) the
Company or a subsidiary of the Company terminates the Participant’s employment with the Company and
all its subsidiaries
and
such termination is within two years after a Change of Control for
any reason other than Cause or the Participant’s death or Disability, or (iii) the Participant
terminates his employment with the Company and all its subsidiaries for Company Breach (any of the
termination events described in these Sections 5(a)(i), (ii) and (iii) and any declaration pursuant
to Section 8(b)(ii) hereof being referred to herein as an “Acceleration Termination Event”), then a
portion of the Option shall immediately vest and become exercisable (subject to the time periods
for exercise set forth in other provisions of this Agreement), if (and only if) the Company had
achieved the required level of growth in operating income for the applicable period ending on the
December 31 immediately prior to the date of
such Acceleration Termination Event, in accordance with Section 4. Such Option shall
accelerate (if at all) only in an amount equal to the number of shares of Common Stock determined
by multiplying fifty thousand (50,000) shares by the ratio of (i) the portion of the applicable
measurement period set forth in Section 4 (expressed in full fiscal years) through the December 31
immediately prior to the date of such Acceleration Termination Event, divided by (ii) four (4).
2.
Subsection (c) of Section 5
of the Agreement is hereby amended in its entirety to
read as follows:
(c) Except as specifically provided in Section 5(a) or Section 8(b)(ii) hereof, there shall
not be any acceleration of vesting of the Option or any portion thereof. Without limiting the
foregoing, a voluntary resignation or retirement by the Participant shall not be an Acceleration
Termination Event.
3.
Subsection (a) of Section 7
of the Agreement is hereby amended in its entirety to
read as follows:
(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
(including the shares, if any, that vested pursuant to Section 5 hereof if an Acceleration
Termination Event has occurred), and the exercise of the Option to that limited extent may be
effected at any time within ninety (90) days after the date of such termination of employment (or
within six (6) months after such termination of employment if such termination is for any reason
following a Change of Control that would also have constituted a Change of Control prior to the
amendment dated
, 2006 to this Agreement (the “2006 Amendment”), which definition prior
to the 2006 Amendment is set forth in Exhibit A to the 2006 Amendment) but not thereafter;
provided,
however
, that the Option may not be exercised after the Expiration Date.
4.
Section 8
of the Agreement is hereby amended in its entirety to read as follows:
8.
Anti-Dilution and Fundamental Change Adjustments.
(a) 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.
2
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or
consolidation, make appropriate provision for the protection of the Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the “parent
corporation” (as defined in Section 424(e) of the Code, or any successor provision)
of the Company or such surviving corporation, in lieu of the Option and shares of
Common Stock of the Company, provided that nothing stated herein shall limit the
obligations of the Committee under Section 8(a), or
(ii) with respect to any Fundamental Change, including, without limitation, a
merger or consolidation, declare, prior to the occurrence of the Fundamental Change,
and provide written notice to the holder of the Option of the declaration, that the
Option, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of, the Fundamental Change in exchange for
payment to the holder of the Option, within 20 days after the Fundamental Change, of
cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such combination as the
Committee shall determine, that the holder of the Option would have received as a
result of the Fundamental Change if the holder of the Option had exercised the
Option immediately prior to the Fundamental Change) equal to, for each share of
Common Stock covered by the canceled Option with respect to which the Option is
exercisable at the time of such cancellation (including shares with respect to which
the Option becomes exercisable pursuant to the following provisions of this Section
8(b)(ii)), the amount, if any, by which the Fair Market Value (as defined in this
Section 8(b)(ii)) per share of Common Stock with respect to which the Option is then
exercisable exceeds the exercise price per share of Common Stock covered by the
Option with respect to which the Option is then exercisable. At the time of the
declaration provided for in the immediately preceding sentence, an Acceleration
Termination Event shall be deemed to have occurred and the Option, to the extent it
has not previously become exercisable in full or expired, shall immediately become
exercisable, to the extent set forth in the next sentence, if (and only if) the
Company had achieved the required level of growth in operating income for the
applicable period ending on the December 31 immediately prior to the date of such
declaration. In such event, the Option shall accelerate only to the extent provided
in the last sentence of Section 5(a), for which purpose the Acceleration Termination
Event shall be deemed to have occurred on the date of the declaration. Following the
declaration, the holder of the Option shall have the right, during the period
preceding the time of cancellation of the Option, to exercise the Option as to all
or any part of the shares of Common Stock covered
thereby for which the Option is exercisable (including as a result of the
Acceleration Termination Event resulting from the declaration pursuant to this
Section 8(a)(ii) but not with respect to the Common Shares for which the Option
has
not become exercisable). In the event of a declaration pursuant to this Section
8(b), the
3
Option, to the extent that it shall not have
been exercised prior to the
Fundamental Change, shall be canceled at the time of, or immediately prior to, the
Fundamental Change, as provided in the declaration, notwithstanding anything to the
contrary provided in this Agreement. Notwithstanding the foregoing, the holder of
the Option shall not be entitled to the payment provided for in this Section 8(b) if
such Option shall have expired or been forfeited. For purposes of this Section 8(b)
only, “Fair Market Value” per share of Common Stock means the fair market value, as
determined in good faith by the Committee, of the consideration to be received per
share of Common Stock by the shareholders of the Company upon the occurrence of the
Fundamental Change, notwithstanding anything to the contrary provided in this
Agreement.
5.
Section 12
of the Agreement is hereby amended in its entirety to read as follows:
12.
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) “Cause” means termination of Participant’s employment with the Company or an Affiliate for
the following acts: (i) the Participant’s gross incompetence or substantial failure to perform his
duties, (ii) misconduct by the Participant that causes or is likely to cause harm to the Company or
that causes or is likely to cause harm to the Company’s reputation, as determined by the Company’s
Board of Directors in its sole and absolute discretion (such misconduct may include, without
limitation, insobriety at the workplace during working hours or the use of illegal drugs), (iii)
failure to follow directions of the Company’s Board of Directors that are consistent with the
Participant’s duties, (iv) the Participant’s conviction of, or entry of a pleading of guilty or
nolo contendre to, any crime involving moral turpitude, or the entry of an order duly issued by any
federal or state regulatory agency having jurisdiction in the matter permanently prohibiting the
Participant from participating in the conduct of the affairs of the Company or (v) any breach of
this Agreement that is not remedied within thirty (30) days after receipt of written notice from
the Company specifying such breach in reasonable detail.
(b) “Change of Control” means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock
or the combined voting power of the Company’s then outstanding voting securities
(other than in connection with a Business Combination in which clauses (1), (2) and
(3) of paragraph (b)(iii) apply); or
4
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
5
(c) “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.
(d) “Company Breach” means: (i) a change in the Participant’s duties or responsibilities with
the Company (A) that represents a substantial reduction of the duties or responsibilities as in
effect immediately prior thereto and (B) that is reasonably likely to subject the Participant to
professional embarrassment or ridicule; (ii) a change by the Board of Directors of the Company in
the duties or responsibilities of other senior executive officers of the Company that has the
effect of precluding the Participant from effectively performing his duties and responsibilities;
(iii) a material reduction in the Participant’s base compensation that is not substantially
proportionate to any reduction in the base compensation of other senior executives of the Company;
or (iv) any material breach by the Company of any provision of the Severance Agreement between the
Participant and the Company that is not remedied within thirty (30) days after receipt of written
notice from the Participant specifying such breach in reasonable detail.
(e) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(f) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(g) “Retirement” means retirement as defined under the Imation Corp. Cash Balance Pension
Plan.
(h) “Stock Plan Administrator” means the Committee or any Director, officer or agent of the
Company designated by the Committee from time to time.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect.
6
IN WITNESS WHEREOF, the Company and the Participant have executed this Stock Option Agreement
Amendment as of the date and year first written above.
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IMATION CORP.
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By:
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Name:
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Title:
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PARTICIPANT
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Frank P. Russomanno
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7
Exhibit A
Definition of Change of Control in Agreement Prior to the 2006 Amendment
(This definition has been replaced by the 2006 Amendment)
Under the Agreement prior to the 2006 Amendment, “Change of Control” meant any one 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 Company’s 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.
EXHIBIT 10.5
Imation Corp. 2005 Stock Incentive Plan
Amendment to Stock Option Agreement
This Amendment to Stock Option Agreement (the “Amendment”), effective as of
,
2006, between Imation Corp., a Delaware corporation (the “Company”) and
, an
employee of the Company or one of its Affiliates (the “Participant”).
WHEREAS, pursuant to a Stock Option Agreement effective as of
(the
“Agreement”), the Company granted the Participant an option for
shares of the Company’s
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. 2005 Stock Incentive
Plan (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 in the manner set forth below.
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:
1.
Section 6
of the Agreement is hereby amended in its entirety to read as follows:
Section 6.
Effect of Termination of Employment
.
(a) In the event the Participant shall cease to be employed by the Company and all
subsidiaries of the Company for any reason other than (i) Termination for Cause, (ii) Retirement,
(iii) death or Disability or (iv) termination by the Company or a subsidiary of the Participant’s
employment with the Company and its subsidiaries 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 and its
subsidiaries 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 and all subsidiaries 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 a subsidiary, 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 Participant’s death or
Disability. In the event of Participant’s 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 Participant’s 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 Participant’s
death, but not after the Expiration Date. In the event of the Participant’s 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
Participant’s Disability, but not after the Expiration Date.
(e) In the event the Company or a subsidiary terminates the Participant’s employment with the
Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change 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 (if the Change of Control would have
constituted a Change of Control under this Agreement prior to the amendment to this Agreement dated
, 2006 (the “2006 Amendment”), which definition prior to the 2006 Amendment is set forth
in Exhibit A to the 2006 Amendment), or thirty (30) days (if the Change of Control would not have
constituted a Change of Control under this Agreement prior to the 2006 Amendment) after the date of
the Participant’s 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
2
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.
2.
Section 7
of the Agreement is hereby amended in its entirety to read as follows:
Section 7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) 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.
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or
consolidation, make appropriate provision for the protection of the Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the “parent
corporation” (as defined in Section 424(e) of the Code, or any successor provision)
of the Company or such surviving corporation, in lieu of the Option and shares of
Common Stock of the Company, or
(ii) with respect to any Fundamental Change, including, without limitation, a
merger or consolidation, declare, prior to the occurrence of the Fundamental Change,
and provide written notice to the holder of the Option of the declaration, that the
Option, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of, the Fundamental Change in exchange for
payment to the holder of the Option, within 20 days after the Fundamental Change, of
cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such
combination as the Committee shall determine, that the holder of the Option would
have received as a result of the Fundamental Change if the holder of the Option had
exercised the Option immediately prior to the Fundamental Change) equal to, for each
share of Common Stock covered by the canceled Option, the amount, if any, by which
the Fair Market Value (as defined in this Section 7(b)) per share of Common
3
Stock
exceeds the exercise
price per share of Common Stock covered by the Option. At the
time of the declaration provided for in the immediately preceding sentence, the
Option shall immediately become exercisable in full and the holder of the Option
shall have the right, during the period preceding the time of cancellation of the
Option, to exercise the Option as to all or any part of the shares of Common Stock
covered thereby in whole or in part, as the case may be. In the event of a
declaration pursuant to this Section 7(b), the Option, to the extent that it shall
not have been exercised prior to the Fundamental Change, shall be canceled at the
time of, or immediately prior to, the Fundamental Change, as provided in the
declaration. Notwithstanding the foregoing, the holder of the Option shall not be
entitled to the payment provided for in this Section 7(b) if such Option shall have
expired or been forfeited. For purposes of this Section 7(b) only, “Fair Market
Value” per share of Common Stock means the fair market value, as determined in good
faith by the Committee, of the consideration to be received per share of Common
Stock by the shareholders of the Company upon the occurrence of the Fundamental
Change, notwithstanding anything to the contrary provided in this Agreement.
3.
Section 11
of the Agreement is hereby amended in its entirety to read as follows:
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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the
Effective Date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than a nomination of an individual whose
initial assumption of office is in connection with a solicitation
with respect to
the election or
4
removal of directors of the Company in opposition to the
solicitation by the Board of Directors of the Company) shall be deemed to be a
member of the Incumbent Board; or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(c) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(d) “Retirement” means retirement as defined under the Imation Corp. Cash Balance Pension
Plan.
5
(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 Participant’s employment with the Company or
an Affiliate for the following acts: (i) the Participant’s gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to the Company’s reputation,
as determined by the Company’s Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Company’s Board of Directors that
are consistent with the Participant’s duties, (iv) the Participant’s conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect. 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 limitation 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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Title:
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PARTICIPANT
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6
Exhibit A
Definition of Change of Control in Agreement Prior to the 2006 Amendment
(This definition has been replaced by the 2006 Amendment)
Under the Agreement prior to the 2006 Amendment, “Change of Control” meant any one 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
Company’s 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.
EXHIBIT 10.6
Imation Corp. 2005 Stock Incentive Plan
Amendment to Restricted Stock Award Agreement
This Amendment to Restricted Stock Award Agreement (the “Amendment”), effective as of
, 2006, between Imation Corp., a Delaware corporation (the “Company”) and
, an employee of the Company or one of its Affiliates (the “Participant”).
WHEREAS, pursuant to a Restricted Stock Award Agreement effective as of
(the
“Agreement”), the Company granted to Participant a restricted stock award of
shares of
the Company’s 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. 2005 Stock
Incentive Plan (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 in the manner set forth below.
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:
1.
Section 3
of the Agreement is hereby amended in its entirety to read as follows:
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 a subsidiary 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 subsidiaries of the Company for any reason
prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participant’s rights to all of
the unvested Shares shall be immediately and irrevocably forfeited, including the right to vote
such Shares and the right to receive dividends on such Shares.
(c)
Change 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 Company or a subsidiary terminates the Participant’s employment
with the Company and all subsidiaries of the Company for any reason
other than
death, Disability or
Termination for Cause within two (2) years following a Change 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.
2.
Section 7(a)
of the Agreement is hereby amended in its entirety to read as follows:
(a) “Change of Control” means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company;
provided, however, that any individual becoming a director subsequent to the
Effective Date hereof whose election, or nomination for election by the
Company’s
stockholders,
2
was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than a nomination of an individual whose
initial assumption of office is in connection with a solicitation with respect to
the election or removal of directors of the Company in opposition to the
solicitation by the Board of Directors of the Company) shall be deemed to be a
member of the Incumbent Board; or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect. 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 limitation 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.
3
The Company and the Participant have caused this Amendment to be signed and delivered on the
date set forth above.
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IMATION CORP.
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PARTICIPANT
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4
EXHIBIT 10.7
Imation Corp. 2005 Stock Incentive Plan
Amendment to Stock Option Agreement
This Amendment to Stock Option Agreement (the “Amendment”), effective as of
,
2006, between Imation Corp., a Delaware corporation (the “Company”) and
, a
non-employee Director of the Company or one of its Affiliates (the “Participant”).
WHEREAS, pursuant to a Stock Option Agreement effective as of
(the
“Agreement”), the Company granted the Participant an option
for
shares of the Company’s
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. 2005 Stock Incentive
Plan (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 in the manner set forth below.
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:
1.
Section 6
(e) of the Agreement is hereby amended in its entirety to read as follows:
(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 (if the Change of Control would also have constituted a
Change of Control under this Agreement prior to the amendment of this Agreement dated
,
2006 (the “2006 Amendment”), which definition prior to the 2006 Amendment is set forth in Exhibit A
to the 2006 Amendment), or thirty (30) days after the date of the Change of Control (if the Change
of Control would not have constituted a Change of Control under this Agreement prior to the 2006
Amendment), 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.
2.
Section 7
of the Agreement is hereby amended in its entirety to read as follows:
Section 7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) 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.
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or
consolidation, make appropriate provision for the protection of the Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the “parent
corporation” (as defined in Section 424(e) of the Code, or any successor provision)
of the Company or such surviving corporation, in lieu of the Option and shares of
Common Stock of the Company, or
(ii) with respect to any Fundamental Change, including, without limitation, a
merger or consolidation, declare, prior to the occurrence of the Fundamental Change,
and provide written notice to the holder of the Option of the declaration, that the
Option, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of, the Fundamental Change in exchange for
payment to the holder of the Option, within 20 days after the Fundamental Change, of
cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such combination as the
Committee shall determine, that the holder of the Option would have received as a
result of the Fundamental Change if the holder of the Option had exercised the
Option immediately prior to the Fundamental Change) equal to, for each share of
Common Stock covered by the canceled Option, the amount, if any, by which the Fair
Market Value (as defined in this Section 7(b)) per share of Common Stock exceeds the
exercise price per share of Common Stock covered by the Option. At the time of the
declaration provided for in the immediately preceding sentence, the Option shall
immediately become
exercisable in full and the holder of the Option shall have the right, during the
period preceding the time of cancellation of the Option, to exercise the Option as
to all or any part of the shares of Common Stock covered thereby in
whole or in part, as the case may be. In the event of a declaration pursuant to this Section
7(b), the Option, to the
2
extent that it
shall not have been exercised prior to the
Fundamental Change, shall be canceled at the time of, or immediately prior to, the
Fundamental Change, as provided in the declaration. Notwithstanding the foregoing,
the holder of the Option shall not be entitled to the payment provided for in this
Section 7(b) if such Option shall have expired or been forfeited. For purposes of
this Section 7(b) only, “Fair Market Value” per share of Common Stock means the fair
market value, as determined in good faith by the Committee, of the consideration to
be received per share of Common Stock by the shareholders of the Company upon the
occurrence of the Fundamental Change, notwithstanding anything to the contrary
provided in this Agreement.
3.
Section 11
of the Agreement is hereby amended in its entirety to read as follows:
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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all
or
substantially all of
the Company’s assets
3
or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(c) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(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.
No other terms or conditions of the Agreement are amended hereby, and all such terms and
conditions of the Agreement shall remain in full force and effect. The terms, provisions and
agreements that are contained in this Amendment shall apply to, be binding upon and inure to the
4
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
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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By:
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Name:
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Title:
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PARTICIPANT
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5
Exhibit A
Definition of Change of Control in Agreement Prior to the 2006 Amendment
(This definition has been replaced by the 2006 Amendment)
Under the Agreement prior to the 2006 Amendment, “Change of Control” meant any one 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 Company’s 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.
EXHIBIT 10.9
IMATION CORP.
DIRECTORS COMPENSATION PROGRAM
EFFECTIVE MAY 4, 2005
(As amended February 8, 2006)
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 Director’s 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 Director’s 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 Director’s 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 Company’s 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 (21/2) months from the end of
such calendar quarter.
2
(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.
(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.
3
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).
(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.
4
(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.
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.
5
(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 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 Director’s account under the Program.
6
(ii)
Dividend Equivalent Credits
. An Eligible Director’s 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 Director’s 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:
(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 Director’s
Restricted Stock Units shall be made as soon as practicable following the earlier of (A) the
Eligible Director’s 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.
7
SECTION 8. CHANGE IN CONTROL
(a) For purposes of this Section 8, “Act” shall mean the Securities Exchange Act of 1934.
(b) For purposes of the Program, a “Change in Control” of the Company shall be deemed to have
occurred if any one of the following events shall occur:
(i) the consummation of a transaction or series of related transactions during a
12-month period in which a person, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Act) that owns (after application of the attribution rules of Section 318
of the Code) less than 35% of the combined voting power of the Company’s outstanding voting
stock prior to such transaction or the first of such series of related transactions), other
than the Company or a subsidiary of the Company, or any employee benefit plan of the Company
or a subsidiary of the Company, acquires ownership (after application of the attribution
rules of Section 318 of the Code) of 35% or more of the combined voting power of the
Company’s then outstanding voting stock (other than in connection with a Business
Combination in which clauses (1) and (2) of Section 8(b) (iii) apply); or
(ii) a majority of the members of the Company’s Board of Directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board of Directors prior to the date of the election or
appointment; or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other disposition in
a transaction or series of related transactions within a 12-month period of all or
substantially all of the Company’s assets or the issuance by the Company of its stock in
connection with the acquisition of assets or stock of another entity (each, a “Business
Combination”) in each case unless, following such Business Combination, (1) all or
substantially all of the individuals and entities that were the owners of the Company’s
outstanding voting stock immediately prior to such Business Combination own (after
application of the attribution rules of Section 318 of the Code) immediately after the
transaction or transactions more than 50% of the combined voting power of the then
outstanding voting stock (or comparable equity interests) of the entity resulting from such
Business Combination (including an entity that, as a result of such transaction, owns the
Company or all or substantially all of the Company’s assets either directly or through one
of more subsidiaries), and (2) no person, entity or group (other than a direct or indirect
parent entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity interests)
of the entity resulting from the Business Combination) has acquired, during a 12-month
period, ownership (after application of the attribution rules of Section 318 of the Code) of
35% or more of the combined voting power of the then outstanding voting stock (or comparable
equity interests) of the entity resulting from such Business Combination.
8
Notwithstanding anything herein stated, no Change in Control shall be deemed to occur unless
it would be deemed to constitute a change in ownership or effective control, or a change in the
ownership of a substantial portion of the assets, of a business under Section 409A of the Code.
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
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.
9
(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.
10
EXHIBIT A
FEES
(as of May 2005)
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|
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|
Basic Fee
|
$34,000
|
|
|
|
|
Lead Director
|
$15,000
|
|
|
|
|
Committee Chair
|
Audit
& Finance: $10,000
Compensation/Nominating
&Governance: $5,000
|
|
|
|
|
Board Meetings/Teleconferences
|
$1,500/$1,000
|
|
|
|
|
Audit & Finance
Meetings/Teleconferences
|
$1,500/$1,000
|
|
|
|
|
Compensation Committee
Meetings/Teleconferences
|
$1,000/$1,000
|
|
|
|
|
Nomination & Governance
Meetings/Teleconferences
|
$1,000/$1,000
|
|
|
|
|
Annual Stock Based Grants
|
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 ELIGIBLE DIRECTOR’S 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:
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___%
|
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Election to receive Common Stock in lieu of Cash
|
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|
|
|
|
|
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|
|
|
|
|
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___%
|
|
Election to receive Cash
|
|
|
|
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|
Total:
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100
%
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|
For 2006 Calendar year (and thereafter)**:
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|
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|
|
|
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___%
|
|
Election to receive Common Stock in lieu of Cash
|
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|
|
|
|
|
|
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|
___%
|
|
Election to receive Restricted Stock Units in lieu of Cash
|
|
|
|
|
|
|
|
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___%
|
|
Election to receive Cash
|
|
|
|
|
|
|
|
Total:
|
|
100
%
|
|
|
CHAIRPERSON FEE:
(if applicable)
For 2005 calendar year:
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|
|
|
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___%
|
|
Election to receive Common Stock in lieu of Cash
|
|
|
|
|
|
|
|
|
|
___%
|
|
Election to receive Cash
|
|
|
|
Total:
|
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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
|
|
|
|
|
|
|
|
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|
___%
|
|
Election to receive Cash
|
|
|
|
Total:
|
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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:
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|
|
|
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___%
|
|
Election to receive Common Stock in lieu of Cash
|
|
|
|
|
|
|
|
|
|
___%
|
|
Election to receive Cash
|
|
|
|
Total:
|
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100
%
|
|
|
For 2006 Calendar year (and thereafter)**:
|
|
|
|
|
|
|
|
|
___%
|
|
Election to receive Common Stock in lieu of Cash
|
|
|
|
|
|
|
|
|
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___%
|
|
Election to receive Restricted Stock Units in lieu of Cash
|
|
|
|
|
|
|
|
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___%
|
|
Election to receive Cash
|
|
|
|
Total:
|
|
100
%
|
|
|
LEAD DIRECTOR FEE:
(if applicable
-please complete this section even if you are not currently lead
director)
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|
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___%
|
|
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
|
|
|
|
|
|
|
|
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|
___%
|
|
Election to receive Cash
|
|
|
|
Total:
|
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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:
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___
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___-year anniversary of the grant date (please specify)
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___
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The date the Eligible Director incurs a “separation from service” with
Company (within the meaning of Section 409A of the Internal Revenue
Code).
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___
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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.
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ELIGIBLE DIRECTOR
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Signature
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Accepted and Agreed to by IMATION CORP.
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By:
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Title:
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4
EXHIBIT 10.10
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
Company’s 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 and all
subsidiaries of the Company for any reason other than (i) Termination for Cause, (ii) Retirement,
(iii) death or Disability or (iv) termination by the Company or a subsidiary of the Participant’s
employment with the Company and its subsidiaries 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 and its
subsidiaries 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 and all subsidiaries 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 Participant’s 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 a subsidiary, 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 Participant’s
death or Disability. In the event of Participant’s death,
2
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’s
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
Participant’s death, but not after the Expiration Date. In the event of the Participant’s
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 Participant’s Disability, but not after the Expiration Date.
(e) In the event the Company or a subsidiary terminates the Participant’s employment with the
Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change 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 Participant’s
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 and Fundamental Change Adjustments
.
(a) 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.
3
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or
consolidation, make appropriate provision for the protection of the Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the “parent
corporation” (as defined in Section 424(e) of the Code, or any successor provision)
of the Company or such surviving corporation, in lieu of the Option and shares of
Common Stock of the Company, or
(ii) with respect to any Fundamental Change, including, without limitation, a
merger or consolidation, declare, prior to the occurrence of the Fundamental Change,
and provide written notice to the holder of the Option of the declaration, that the
Option, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of, the Fundamental Change in exchange for
payment to the holder of the Option, within 20 days after the Fundamental Change, of
cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such combination as the
Committee shall determine, that the holder of the Option would have received as a
result of the Fundamental Change if the holder of the Option had exercised the
Option immediately prior to the Fundamental Change) equal to, for each share of
Common Stock covered by the canceled Option, the amount, if any, by which the Fair
Market Value (as defined in this Section 7(b)) per share of Common Stock exceeds the
exercise price per share of Common Stock covered by the Option. At the time of the
declaration provided for in the immediately preceding sentence, the Option shall
immediately become exercisable in full and the holder of the Option shall have the
right, during the period preceding the time of cancellation of the Option, to
exercise the Option as to all or any part of the shares of Common Stock covered
thereby in whole or in part, as the case may be. In the event of a declaration
pursuant to this Section 7(b), the Option, to the extent that it shall not have been
exercised prior to the Fundamental Change, shall be canceled at the time of, or
immediately prior to, the Fundamental Change, as provided in the declaration.
Notwithstanding the foregoing, the holder of the Option shall not be entitled to the
payment provided for in this Section 7(b) if such Option shall have expired or been
forfeited. For purposes of this Section 7(b) only, “Fair Market Value” per share of
Common Stock means the fair market value, as determined in good faith by the
Committee, of the consideration to be received per share of Common Stock by the
shareholders of the Company upon the occurrence of the Fundamental Change,
notwithstanding anything to the contrary provided in this Agreement.
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
4
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 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 Company’s 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 Participant’s 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 Participant’s sole and absolute responsibility,
are withheld or collected from the Participant.
5
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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities
6
immediately prior to such Business Combination, (2) no person, entity or group
(other than a direct or indirect parent entity of the Company that, after giving
effect to the Business Combination, beneficially owns 100% of the outstanding voting
securities (or comparable equity interests) of the entity resulting from the
Business Combination) beneficially owns, directly or indirectly, 35% or more of the
outstanding shares of common stock or the combined voting power of the then
outstanding voting securities (or comparable equity interests) of the entity
resulting from such Business Combination and (3) at least a majority of the members
of the board of directors (or similar governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board of Directors of the
Company providing for such Business Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(c) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(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 Participant’s employment with the Company or
an Affiliate for the following acts: (i) the Participant’s gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to the Company’s reputation,
as determined by the Company’s Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Company’s Board of Directors that
are consistent with the Participant’s duties, (iv) the Participant’s conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
7
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
8
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.
Participant’s Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. 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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IMATION CORP.
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By:
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Name:
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Title:
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9
EXHIBIT 10.11
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 Company’s common
stock, par value $.01 per share (the “Common Stock”), subject to certain restrictions as provided
in this Agreement, in order to carry out the purpose of the Plan. The purpose of this Agreement is
to evidence the terms and conditions of an award of 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
Participant’s name or in a nominee name on the
Participant’s behalf, either by book-entry registration or issuance of a stock
certificate or certificates evidencing the Shares, which
certificate
or certificates shall be held by the Secretary
of the Company or the stock transfer
agent or brokerage service selected by the Secretary of the Company to provide such services for
the Plan. The Shares shall be restricted from transfer and shall be subject to an appropriate
stop-transfer order. If any certificate is issued, the certificate shall bear an appropriate legend
referring to the restrictions applicable to the Shares. The Participant hereby agrees to the
retention by the Company of the Shares and, if a stock certificate is issued, the Participant
agrees to execute and deliver to the Company a blank stock power with respect to the Shares as a
condition to the receipt of this Restricted Stock Award. After any Shares vest pursuant to Section
3 hereof, and following payment of the applicable withholding taxes pursuant to Section 6 of this
Agreement, the Company shall promptly cause to be issued a certificate or certificates, registered
in the Participant’s name, evidencing such vested whole Shares (less any Shares withheld to pay
withholding taxes) and shall cause such certificate or certificates to be delivered to the
Participant free of the legend and the stop-transfer order referenced above. The Company will not
deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such
fractional Share at the time certificates evidencing the Shares are delivered to the Participant.
Section 3.
Vesting; Forfeiture
.
(a)
Vesting
.
Subject to the terms and conditions of this Agreement, and except as
otherwise provided in Section 3(c) hereof, 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 a subsidiary 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 subsidiaries of the Company for any reason
prior to the vesting of the Shares pursuant to Section 3(a) hereof, Participant’s rights to all of
the unvested Shares shall be immediately and irrevocably forfeited, including the right to vote
such Shares and the right to receive dividends on such Shares.
(c)
Change 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 Company or a subsidiary terminates the Participant’s employment with
the Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change 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
2
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.
3
Section 6.
Taxes
.
(a) The Participant acknowledges that the Participant will consult with the Participant’s
personal tax adviser regarding the income tax consequences of the grant of the Shares, payment of
dividends on the Shares, the vesting of the Shares and any other matters related to this Agreement.
In order to comply with all applicable federal, state, local or foreign income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all applicable
federal, state, local or foreign payroll, withholding, income or other taxes, which are the
Participant’s sole and absolute responsibility, are withheld or collected from the Participant.
(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee administering the Plan, the Participant may elect to satisfy tax withholding obligations
arising from the receipt of, or the lapse of restrictions relating to, the Shares by (i) delivering
cash, check, bank draft, money order or wire transfer payable to the order of the Company, (ii)
having the Company withhold a portion of the Shares otherwise to be delivered having a Fair Market
Value equal to the amount of such taxes, or (iii) delivering to the Company shares of Common Stock
having a Fair Market Value equal to the amount of such taxes. The Company will not deliver any
fractional Share but will pay, in lieu thereof, the Fair Market Value of such fractional Share. The
Participant’s election must be made on or before the date that the amount of tax to be withheld is
determined. 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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof whose election, or nomination for election by the
Company’s stockholders,
4
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than a nomination of an
individual whose initial assumption of office is in connection with a solicitation
with respect to the election or removal of directors of the Company in opposition to
the solicitation by the Board of Directors of the Company) shall be deemed to be a
member of the Incumbent Board; or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(c) “Termination for Cause” means termination of Participant’s employment with the Company or
an Affiliate for the following acts: (i) the Participant’s gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or
5
is likely to cause harm to the Company or that causes or is likely to cause harm to the Company’s
reputation, as determined by the Company’s Board of Directors in its sole and absolute discretion
(such misconduct may include, without limitation, insobriety at the workplace during working hours
or the use of illegal drugs), (iii) failure to follow directions of the Company’s Board of
Directors that are consistent with the Participant’s duties, (iv) the Participant’s conviction of,
or entry of a pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the
entry of an order duly issued by any federal or state regulatory agency having jurisdiction in the
matter permanently prohibiting the Participant from participating in the conduct of the affairs of
the Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
Section 8.
Governing Law
.
The internal law, and not the law of conflicts, of the State of Delaware will govern all
questions concerning the validity, construction and effect of this Agreement.
Section 9.
Plan Provisions
.
This Agreement is made under and subject to the provisions of the Plan, and all of the
provisions of the Plan are also provisions of this Agreement. If there is a difference or conflict
between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan
will govern. By signing this Agreement, the Participant confirms that the Participant has received
a copy of the Plan and represents that the Participant is familiar with the terms and provisions
thereof, and hereby accepts this Restricted Stock Award subject to all the terms and provisions of
the Plan.
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
6
acting on behalf of any party, which are not embodied in
this Agreement or the Plan and that any agreement, statement or promise that is not contained in
this Agreement or the Plan shall not be valid or binding or of any force or effect.
Section 12.
Modification
.
No change or modification of this Agreement shall be valid or binding upon the parties unless
the change or modification is in writing and signed by the parties. Notwithstanding the preceding
sentence, the Plan, this Agreement and the Restricted Stock Award may be amended, altered,
suspended, discontinued or terminated to the extent permitted by the Plan.
Section 13.
Shares Subject to Agreement
.
The Shares shall be subject to the terms and conditions of this Agreement. Except as otherwise
provided in Section 5, no adjustment shall be made for dividends or other rights for which the
record date is prior to the issuance of the Shares. The Company shall not be required to deliver
any Shares until the requirements of any federal or state securities or other laws, rules or
regulations (including the rules of any securities exchange) as may be determined by the Committee
to be applicable are satisfied.
Section 14.
Severability
.
In the event that any provision that is contained in the Plan or this Agreement is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the
Plan or this Agreement for any reason and under any law as deemed applicable by the Committee, the
invalid, illegal or unenforceable provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in the determination of
the Committee, materially altering the purpose or intent of the Plan or this Agreement, such
provision shall be stricken as to such jurisdiction or Shares, and the remainder of the Plan or
this Agreement shall remain in full force and effect.
Section 15.
Headings
.
Headings are given to the sections and subsections of this Agreement solely as a convenience
to facilitate reference. Such headings shall not be deemed in any way material or relevant to the
construction or interpretation of this Agreement or any provision hereof.
Section 16.
Participant’s Acknowledgments
.
The Participant hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee or the Board of Directors of the Company, as appropriate, upon any
questions arising under the Plan or this Agreement. Any determination in this connection by the
Company, including the Board of Directors of the Company or the Committee, shall be final, binding
and conclusive. The obligations of the Company and the rights of the Participant are subject to all
applicable laws, rules and regulations.
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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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Title:
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«GrantDt»
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8
EXHIBIT 10.12
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
Company’s 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 beginning on the first anniversary of the Effective Date and
continuing throughout the remainder of the Option Period, as to any part or all of the shares
covered thereby.
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 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 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 Company’s shareholders, the Option shall be terminated as of the date
of such removal.
(c) Except as otherwise provided in Sections 6(b) 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, shall
become immediately exercisable in full as of the date of the Participant’s Retirement, and the
exercise of the Option may be effected at any time within three (3) years after the date of the
Participant’s 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 Participant’s Retirement and prior to the Expiration Date, the
exercise of the Option may be effected by the Participant’s 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 Participant’s death, but not after the
Expiration Date.
(d) Except as otherwise provided in Section 6(b) and 6(e), 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 shall become immediately exercisable in full as of the date of the Participant’s death or
Disability. In the event of Participant’s death, the exercise of the Option may be effected by the
Participant’s 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 Participant’s death, but not after the Expiration Date. In the event of the Participant’s
Disability, the exercise of the Option may be effected by the Participant at any time within two
(2) years after the date of the Participant’s 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 thereafter and within
six (6) months after the director ceases to serve on the Board of Directors following 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
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Participant if
there were no excise tax imposed by Section 4999 of the Code.
Section 7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) 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.
(b) In the event of a proposed Fundamental Change, the Committee may, but shall not be
obligated to:
(i) with respect to a Fundamental Change that involves a merger or
consolidation, make appropriate provision for the protection of the Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any such merger or consolidation or, if appropriate, the “parent
corporation” (as defined in Section 424(e) of the Code, or any successor provision)
of the Company or such surviving corporation, in lieu of the Option and shares of
Common Stock of the Company, or
(ii) with respect to any Fundamental Change, including, without limitation, a
merger or consolidation, declare, prior to the occurrence of the Fundamental Change,
and provide written notice to the holder of the Option of the declaration, that the
Option, whether or not then exercisable, shall be canceled at the time of, or
immediately prior to the occurrence of, the Fundamental Change in exchange for
payment to the holder of the Option, within 20 days after the Fundamental Change, of
cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such combination as the
Committee shall determine, that the holder of the Option would have received as a
result of the Fundamental Change if the holder of the Option had exercised the
Option immediately prior to the Fundamental Change) equal to, for each share of
Common Stock covered by the canceled Option, the amount, if any, by which the Fair
Market Value (as defined in this Section 7(b)) per share of Common Stock exceeds the
exercise price per share of Common Stock covered by the Option. At the time of the
declaration provided for in the immediately preceding sentence, the Option shall
immediately become exercisable in full and the holder of the Option shall have the
right, during the period preceding the time of cancellation of the Option, to exercise the Option as
to all or any part of the shares of
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Common Stock
covered thereby in whole or in
part, as the case may be. In the event of a declaration pursuant to this Section
7(b), the Option, to the extent that it shall not have been exercised prior to the
Fundamental Change, shall be canceled at the time of, or immediately prior to, the
Fundamental Change, as provided in the declaration. Notwithstanding the foregoing,
the holder of the Option shall not be entitled to the payment provided for in this
Section 7(b) if such Option shall have expired or been forfeited. For purposes of
this Section 7(b) only, “Fair Market Value” per share of Common Stock means the fair
market value, as determined in good faith by the Committee, of the consideration to
be received per share of Common Stock by the shareholders of the Company upon the
occurrence of the Fundamental Change, notwithstanding anything to the contrary
provided in this Agreement.
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 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 Company’s 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
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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
Participant’s 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 Participant’s 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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all
or
substantially all of the Company’s
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assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of another entity (each,
a “Business Combination”) in each case unless, following such Business Combination,
(1) all or substantially all of the individuals and entities that were the
beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Fundamental Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, or a merger or consolidation of the Company with or
into any other corporation, regardless of whether the Company is the surviving corporation.
(c) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan as if covered by such plan.
(d) “Retirement” means retirement under the Imation Corp. Board Retirement Policy or under
such other circumstances determined to be retirement by the Committee in its sole discretion.
(e) “Stock Plan Administrator” means the Committee or any Director, officer or agent of the
Company designated by the Committee from time to time.
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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 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 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.
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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.
Participant’s Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. 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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IMATION CORP.
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8
EXHIBIT 10.13
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 Company’s common
stock, par value $.01 per share (the “Common Stock”), subject to certain restrictions as provided
in this Agreement, in order to carry out the purpose of the Plan. The purpose of this Agreement is
to evidence the terms and conditions of an award of 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
Participant’s name or in a nominee name on the
Participant’s behalf, either by book-entry
registration or issuance of a stock certificate or certificates
evidencing the Shares, which
certificate or certificates
shall be held by the Secretary of the Company or the stock transfer
agent or brokerage service selected by the Secretary
of the Company to provide such services for
the Plan. The Shares shall be restricted from transfer and shall be subject to an appropriate
stop-transfer order. If any certificate is issued, the certificate shall bear an appropriate legend
referring to the restrictions applicable to the Shares. The Participant hereby agrees to the
retention by the Company of the Shares and, if a stock certificate is issued, the Participant
agrees to execute and deliver to the Company a blank stock power with respect to the Shares as a
condition to the receipt of this Restricted Stock Award. After any Shares vest pursuant to Section
3 hereof, and following payment of the applicable withholding taxes pursuant to Section 6 of this
Agreement, the Company shall promptly cause to be issued a certificate or certificates, registered
in the Participant’s name, evidencing such vested whole Shares (less any Shares withheld to pay
withholding taxes) and shall cause such certificate or certificates to be delivered to the
Participant free of the legend and the stop-transfer order referenced above. The Company will not
deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such
fractional Share at the time certificates evidencing the Shares are delivered to the Participant.
Section 3.
Vesting; Forfeiture
.
(a)
Vesting
. Subject to the terms and conditions of this Agreement, and except as
otherwise provided in Sections 3(c) and 3(d) hereof, the Shares shall vest, and the restrictions
with respect to the Shares shall lapse, on the first anniversary of the Effective Date if the
Participant serves continuously on the Board of Directors of the Company until such vesting date.
(b)
Forfeiture
. Except as otherwise provided in Sections 3(c) and 3(d) 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, Participant’s rights to all of the unvested
Shares shall be immediately and irrevocably forfeited, including the right to vote such Shares and
the right to receive dividends on such Shares.
(c)
Change 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.
2
(d)
Early Vesting
. Notwithstanding the vesting and forfeiture provisions contained in
Sections 3(a) and 3(b) hereof, the participant shall become immediately vested in all of the
Shares, and the restrictions with respect to the Shares shall lapse, upon the Participant’s death,
Disability or Retirement.
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 Participant’s
personal tax adviser regarding the income tax consequences of the grant of the Shares, payment of
dividends on the Shares, the vesting of the Shares and any other matters related to this Agreement.
In order to comply with all applicable federal, state, local or foreign income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all applicable
federal, state, local or foreign payroll, withholding, income or other taxes, which are the
Participant’s sole and absolute responsibility, are withheld or collected from the Participant.
(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee administering the Plan, the Participant may elect to
satisfy tax withholding obligations, if any, arising from the receipt of, or the lapse of restrictions relating to, the
Shares by
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(i) delivering cash, check, bank draft, money
order or wire transfer payable to the order
of the Company, (ii) having the Company withhold a portion of the Shares otherwise to be delivered
having a Fair Market Value equal to the amount of such taxes, or (iii) delivering to the Company
shares of Common Stock having a Fair Market Value equal to the amount of such taxes. The Company
will not deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such
fractional Share. The Participant’s election must be made on or before the date that the amount of
tax to be withheld is determined. 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 one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Company’s then outstanding shares of Common Stock or the combined voting power of
the Company’s then outstanding voting securities (other than in connection with a
Business Combination in which clauses (1), (2) and (3) of paragraph (a)(iii) apply);
or
(ii) individuals who, as of the Effective Date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the Effective Date hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than a nomination of an individual whose initial assumption
of office is in connection with a solicitation with respect to the election or
removal of directors of the Company in opposition to the solicitation by the Board
of Directors of the Company) shall be deemed to be a member of the Incumbent Board;
or
(iii) the consummation of a reorganization, merger, statutory share exchange,
consolidation or similar transaction involving the Company, a sale or other
disposition in a transaction or series of related transactions of all or
substantially all of the Company’s assets or the issuance by the Company of its
stock in connection with the acquisition of assets or stock of
another entity (each, a
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“Business Combination”) in each case unless, following such Business
Combination, (1) all or substantially all of the individuals and entities that were
the beneficial owners of the Company’s outstanding Common Stock and the Company’s
outstanding voting securities immediately prior to such Business Combination
beneficially own immediately after the transaction or transactions, directly or
indirectly, more than 50% of the then outstanding shares of common stock and more
than 50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the entity resulting from such Business Combination
(including an entity that, as a result of such transaction, owns the Company or all
or substantially all of the Company’s assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Company’s Common Stock and voting securities immediately prior to such Business
Combination, (2) no person, entity or group (other than a direct or indirect parent
entity of the Company that, after giving effect to the Business Combination,
beneficially owns 100% of the outstanding voting securities (or comparable equity
interests) of the entity resulting from the Business Combination) beneficially owns,
directly or indirectly, 35% or more of the outstanding shares of common stock or the
combined voting power of the then outstanding voting securities (or comparable
equity interests) of the entity resulting from such Business Combination and (3) at
least a majority of the members of the board of directors (or similar governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board of Directors of the Company providing for such Business
Combination; or
(iv) approval by the stockholders of the dissolution of the Company.
(b) “Disability” shall be as defined under the Imation Corp. Long Term Disability Income
Protection Plan.
(c) “Retirement” means retirement under the Imation Corp. Board Retirement Policy or under
such other circumstances determined to be retirement by the Committee in its sole discretion.
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 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 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.
Participant’s Acknowledgments
.
The Participant hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee or the Board of Directors of the Company, as appropriate, upon any
questions arising under the Plan or this Agreement. Any determination in this connection by the
Company, including the Board of Directors of the Company or the Committee, shall be final, binding
and conclusive. The obligations of the Company and the rights of the Participant are subject to all
applicable laws, rules and regulations.
Section 17.
Parties Bound
.
The terms, provisions and agreements that are contained in this Agreement shall apply to, be
binding upon, and inure to the benefit of the parties and their respective heirs, executors,
administrators, legal representatives and permitted successors and assigns, subject to the
limitation on assignment expressly set forth herein. This Agreement shall have no force or effect
unless it is duly executed and delivered by the Company.
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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By:
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Name:
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Title:
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