Exhibit 10.1
IMATION CORP.
2008 STOCK INCENTIVE PLAN
Section 1.
Purpose
.
The purpose of the Plan is to promote the interests of the
Company and its stockholders by aiding the Company in attracting
and retaining employees, officers, consultants, independent
contractors, advisors and non-employee Directors capable of
assuring the future success of the Company, to offer such
persons incentives to put forth maximum efforts for the success
of the Companys business and to compensate such persons
through various stock-based arrangements and provide them with
opportunities for stock ownership in the Company, thereby
aligning the interests of such persons with the Companys
stockholders.
Section 2.
Definitions
.
As used in the Plan, the following terms shall have the meanings
set forth below:
(a)
Affiliate
shall mean (i) any
entity that, directly or indirectly through one or more
intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest,
in each case as determined by the Committee.
(b)
Award
shall mean any Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit,
Dividend Equivalent, Performance Award, Stock Award or Other
Stock-Based Award granted under the Plan.
(c)
Award Agreement
shall mean any
written agreement, contract or other instrument or document
evidencing an Award granted under the Plan. An Award Agreement
may be in an electronic medium and need not be signed by a
representative of the Company or the Participant. Each Award
Agreement shall be subject to the applicable terms and
conditions of the Plan and any other terms and conditions (not
inconsistent with the Plan) determined by the Committee.
(d)
Board
shall mean the Board of
Directors of the Company.
(e)
Change in Control
shall have the
meaning ascribed to such term in an Award Agreement, or any
other applicable employment, severance or change in control
agreement between the Participant and the Company.
(f)
Code
shall mean the Internal Revenue
Code of 1986, as amended from time to time, and any regulations
promulgated thereunder.
(g)
Committee
shall mean the
Compensation Committee of the Board or any successor committee
of the Board designated by the Board to administer the Plan. The
Committee shall be comprised of not less than such number of
Directors as shall be required to permit Awards granted under
the Plan to qualify under
Rule 16b-3,
and each member of the Committee shall be a Non-Employee
Director within the meaning of
Rule 16b-3
and an outside director within the meaning of
Section 162(m). The Company expects to have the Plan
administered in accordance with the requirements for the award
of qualified performance-based compensation within
the meaning of Section 162(m).
(h)
Company
shall mean Imation Corp., a
Delaware corporation, or any successor corporation.
(i)
Director
shall mean a member of the
Board.
(j)
Dividend Equivalent
shall mean any
right granted under Section 6(d) of the Plan.
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(k)
Eligible Person
shall mean any
employee, officer, consultant, independent contractor, advisor
or non-employee Director providing services to the Company or
any Affiliate whom the Committee determines to be an Eligible
Person. An Eligible Person must be a natural person.
(l)
Exchange Act
shall mean the
Securities Exchange Act of 1934, as amended.
(m)
Fair Market Value
shall mean, with
respect to any property (including, without limitation, any
Shares or other securities), the fair market value of such
property determined by such methods or procedures as shall be
established from time to time by the Committee. Notwithstanding
the foregoing, unless otherwise determined by the Committee, the
Fair Market Value of Shares on a given date for purposes of the
Plan shall be the closing sale price of the Shares on the New
York Stock Exchange as reported in the consolidated transaction
reporting system on such date or, if such Exchange is not open
for trading on such date, on the most recent preceding date when
such Exchange is open for trading.
(n)
Incentive Stock Option
shall mean an
option granted under Section 6(a) of the Plan that is
intended to meet the requirements of Section 422 of the
Code or any successor provision.
(o)
Non-Qualified Stock Option
shall
mean an option granted under Section 6(a) of the Plan that
is not intended to be an Incentive Stock Option.
(p)
Option
shall mean an Incentive Stock
Option or a Non-Qualified Stock Option.
(q)
Other Stock-Based Award
shall mean
any right granted under Section 6(g) of the Plan.
(r)
Participant
shall mean an Eligible
Person designated to be granted an Award under the Plan.
(s)
Performance Award
shall mean any
right granted under Section 6(e) of the Plan.
(t)
Performance Goal
shall mean one or
more of the following performance goals, either individually,
alternatively or in any combination, applied on a corporate,
subsidiary, division, business unit or line of business basis:
sales, revenue, costs, expenses, earnings (including one or more
of net profit after tax, gross profit, operating profit,
earnings before interest and taxes, earnings before interest,
taxes, depreciation and amortization and net earnings), earnings
per share, earnings per share from continuing operations,
operating income, pre-tax income, operating income margin, net
income, margins (including one or more of gross, operating and
net income margins), returns (including one or more of return on
actual or proforma assets, net assets, equity, investment,
capital and net capital employed), stockholder return (including
total stockholder return relative to an index or peer group),
stock price, economic value added, cash generation, cash flow,
unit volume, working capital, market share, cost reductions and
strategic plan development and implementation. Such goals may
reflect absolute entity or business unit performance or a
relative comparison to the performance of a peer group of
entities or other external measure of the selected performance
criteria. Pursuant to rules and conditions adopted by the
Committee on or before the 90th day of the applicable
performance period for which Performance Goals are established,
the Committee may appropriately adjust any evaluation of
performance under such goals to exclude the effect of certain
events, including any of the following events: asset
write-downs; litigation or claim judgments or settlements;
changes in tax law, accounting principles or other such laws or
provisions affecting reported results; severance, contract
termination and other costs related to exiting certain business
activities; acquisitions and gains or losses from the
disposition of businesses or assets or from the early
extinguishment of debt.
(u)
Person
shall mean any individual or
entity, including a corporation, partnership, limited liability
company, association, joint venture or trust.
(v)
Plan
shall mean this Imation Corp.
2008 Stock Incentive Plan, as amended from time to time.
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(w)
Qualifying Termination
shall have
the meaning ascribed to it in any applicable Award Agreement,
and, if not defined in any applicable Award Agreement, shall
mean termination of employment under circumstances that, in the
judgment of the Committee, warrant acceleration of the
exercisability of Options or Stock Appreciation Rights or the
lapse of restrictions relating to Restricted Stock, Restricted
Stock Units or other Awards under the Plan. Without limiting the
generality of the foregoing, a Qualifying Termination may apply
to large scale terminations of employment relating to the
disposition or divestiture of business or legal entities or
similar circumstances.
(x)
Restricted Stock
shall mean any
Share granted under Section 6(c) of the Plan.
(y)
Restricted Stock Unit
shall mean any
unit granted under Section 6(c) of the Plan evidencing the
right to receive a Share (or a cash payment equal to the Fair
Market Value of a Share) at some future date.
(z)
Rule 16b-3
shall mean
Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Exchange Act or any successor rule or regulation.
(aa)
Section 162(m)
shall mean
Section 162(m) of the Code, or any successor provision, and
the applicable Treasury Regulations promulgated thereunder.
(bb)
Section 409A
shall mean
Section 409A of the Code, or any successor provision, and
applicable Treasury Regulations and other applicable guidance
thereunder.
(cc)
Shares
shall mean shares of Common
Stock, par value of $0.01 per share, of the Company or such
other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(c) of the
Plan.
(dd)
Specified Employee
shall mean a
specified employee as defined in Code Section 409A(a)(2)(B)
or applicable proposed or final regulations under Code
Section 409A.
(ee)
Stock Appreciation Right
shall mean
any right granted under Section 6(b) of the Plan.
(ff)
Stock Award
shall mean any Share
granted under Section 6(f) of the Plan.
Section 3.
Administration
.
(a)
Power and Authority of the
Committee
.
The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan and
to applicable law, the Committee shall have full power and
authority to: (i) designate Participants;
(ii) determine the type or types of Awards to be granted to
each Participant under the Plan; (iii) determine the number
of Shares to be covered by (or the method by which payments or
other rights are to be calculated in connection with) each
Award; (iv) determine the terms and conditions of any Award
or Award Agreement, including any terms relating to the
forfeiture of any Award and the forfeiture, recapture or
disgorgement of any cash, Shares, other securities, other
Awards, other property and other amounts payable with respect to
any Award; (v) amend the terms and conditions of any Award
or Award Agreement, provided, however, that, except as otherwise
provided in Section 4(c) hereof, the Committee shall not
reprice, adjust or amend the exercise price of Options or the
grant price of Stock Appreciation Rights previously awarded to
any Participant, whether through amendment, cancellation and
replacement grant, or any other means; (vi) accelerate the
exercisability of any Award or the lapse of restrictions
relating to any Award; (vii) determine whether, to what
extent and under what circumstances Awards may be exercised in
cash, Shares, other securities, other Awards or other property,
or canceled, forfeited or suspended; (viii) determine
whether, to what extent and under what circumstances cash,
Shares, other securities, other Awards, other property and other
amounts payable with respect to an Award under the Plan shall be
deferred either automatically or at the election of the holder
of the Award or the Committee; (ix) interpret and
administer the Plan and any instrument or agreement, including
any Award Agreement, relating to the Plan; (x) establish,
amend, suspend or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper
administration of the
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Plan; (xi) make any other determination and take any other
action that the Committee deems necessary or desirable for the
administration of the Plan; and (xii) adopt such
modifications, rules, procedures and subplans as may be
necessary or desirable to comply with provisions of the laws of
non-U.S. jurisdictions
in which the Company or an Affiliate may operate, including,
without limitation, establishing any special rules for
Affiliates, Eligible Persons or Participants located in any
particular country, in order to meet the objectives of the Plan
and to ensure the viability of the intended benefits of Awards
granted to Participants located in such
non-United
States jurisdictions. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Award
or Award Agreement shall be within the sole discretion of the
Committee, may be made at any time and shall be final,
conclusive and binding upon any Participant, any holder or
beneficiary of any Award or Award Agreement, and any employee of
the Company or any Affiliate.
(b)
Delegation
.
The Committee may
delegate its powers and duties under the Plan to one or more
Directors (including a Director who is also an officer of the
Company) or a committee of Directors, subject to such terms,
conditions and limitations as the Committee may establish in its
sole discretion; provided, however, that the Committee shall not
delegate its powers and duties under the Plan (i) with
regard to officers or directors of the Company or any Affiliate
who are subject to Section 16 of the Exchange Act or
(ii) in such a manner as would cause the Plan not to comply
with the requirements of Section 162(m). In addition, the
Committee may authorize one or more officers of the Company to
grant Options under the Plan, subject to the limitations of
Section 157 of the Delaware General Corporation Law;
provided, however, that such officers shall not be authorized to
grant Options to officers or directors of the Company or any
Affiliate who are subject to Section 16 of the Exchange Act.
(c)
Power and Authority of the Board of
Directors
.
Notwithstanding anything to the
contrary contained herein, the Board may, at any time and from
time to time, without any further action of the Committee,
exercise the powers and duties of the Committee under the Plan,
unless the exercise of such powers and duties by the Board would
cause the Plan not to comply with the requirements of
Section 162(m).
Section 4.
Shares Available
for Awards
.
(a)
Shares Available
.
Subject
to adjustment as provided in Section 4(c) of the Plan, the
aggregate number of Shares that may be issued under all Awards
under the Plan shall be 4,000,000. Shares to be issued under the
Plan may be authorized but unissued Shares, treasury shares or
Shares acquired in the open market or otherwise. If an Award
terminates or is forfeited or cancelled without the issuance of
any Shares, or if any Shares covered by an Award or to which an
Award relates are not issued for any other reason, then the
number of Shares counted against the aggregate number of Shares
available under the Plan with respect to such Award, to the
extent of any such termination, forfeiture, cancellation or
other event, shall again be available for granting Awards under
the Plan. If Shares of Restricted Stock are forfeited or
otherwise reacquired by the Company prior to vesting, whether or
not dividends have been paid on such Shares, then the number of
Shares counted against the aggregate number of Shares available
under the Plan with respect to such Award of Restricted Stock,
to the extent of any such forfeiture or reacquisition by the
Company, shall again be available for granting Awards under the
Plan. Shares that are withheld in full or partial payment to the
Company of the purchase or exercise price relating to an Award
or in connection with the satisfaction of tax obligations
relating to an Award shall not be available for granting Awards
under the Plan.
(b)
Accounting for Awards
.
For
purposes of this Section 4, if an Award entitles the holder
thereof to receive or purchase Shares, the number of Shares
covered by such Award or to which such Award relates shall be
counted on the date of grant of such Award against the aggregate
number of Shares available for granting Awards under the Plan.
For Stock Appreciation Rights settled in Shares upon exercise,
the aggregate number of Shares with respect to which the Stock
Appreciation Right is exercised, rather than the number of
Shares actually issued upon exercise, shall be counted against
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the number of Shares available for Awards under the Plan. Awards
that do not entitle the holder thereof to receive or purchase
Shares and Awards that are settled in cash shall not be counted
against the aggregate number of Shares available for Awards
under the Plan.
(c)
Adjustments
.
In the event that
any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization,
stock split, reverse stock split, reorganization, merger,
consolidation,
split-up,
spin-off, combination, repurchase or exchange of Shares or other
securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company or other
similar corporate transaction or event affects the Shares such
that an adjustment is necessary in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or
other property) that thereafter may be made the subject of
Awards, (ii) the number and type of Shares (or other
securities or other property) subject to outstanding Awards,
(iii) the purchase or exercise price with respect to any
Award and (iv) the limitations contained in
Section 4(d) of the Plan.
(d)
Award Limitations Under the Plan
.
(i)
Section 162(m) Limitation for Certain Types
of Awards
.
No Eligible Person may be granted
Options, Stock Appreciation Rights or any other Award or Awards
under the Plan, the value of which Award or Awards is based
solely on an increase in the value of the Shares after the date
of grant of such Award or Awards, for more than
500,000 Shares (subject to adjustment as provided in
Section 4(c) of the Plan) in the aggregate in any calendar
year.
(ii)
Section 162(m) Limitation for Performance
Awards
.
The maximum amount payable pursuant
to all Performance Awards to any Participant in the aggregate in
any calendar year shall be $2,000,000 in value, whether payable
in cash, Shares or other property. This limitation does not
apply to any Award subject to the limitation contained in
Section 4(d)(i) of the Plan.
(iii)
Plan Limitation on Awards Other Than Options
and Stock Appreciation Rights
.
No more than
2,000,000 Shares, subject to adjustment as provided in
Section 4(c) of the Plan, shall be available under the Plan
for issuance pursuant to grants of Awards other than Options and
Stock Appreciation Rights; provided, however, that if any Awards
other than Options and Stock Appreciation Rights terminate or
are forfeited or cancelled without the issuance of any Shares or
if Shares subject to any Awards other than Options and Stock
Appreciation Rights are forfeited or otherwise reacquired by the
Company prior to vesting, whether or not dividends have been
paid on such Shares, then the Shares subject to such
termination, forfeiture, cancellation or reacquisition by the
Company shall again be available for grants of Awards other than
Options and Stock Appreciation Rights for purposes of this
limitation on grants of such Awards. Awards other than Options
and Stock Appreciation Rights that do not entitle the holder
thereof to receive or purchase Shares, and Awards other than
Options and Stock Appreciation Rights that are settled in cash,
shall not be counted against the aggregate number of Shares
available for Awards other than Options and Stock Appreciation
Rights pursuant to this Section 4(d)(iii).
(iv)
Limitation on Awards Granted to Non-Employee
Directors
.
Directors who are not also
employees of the Company or an Affiliate may not be granted
Awards in the aggregate for more than 1,000,000 Shares
available for Awards under the Plan, subject to adjustment as
provided in Section 4(c) of the Plan.
Section 5.
Eligibility
.
Any Eligible Person shall be eligible to be designated a
Participant. In determining which Eligible Persons shall receive
an Award and the terms of any Award, the Committee may take into
account the nature of the services rendered by the respective
Eligible Persons, their present and potential contributions to
the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant.
Notwithstanding the foregoing, an Incentive Stock Option may
only be granted to
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full-time or part-time employees (which term as used herein
includes, without limitation, officers and Directors who are
also employees), and an Incentive Stock Option shall not be
granted to an employee of an Affiliate unless such Affiliate is
also a subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code or any successor
provision. Further, notwithstanding the foregoing, Options and
Stock Appreciation Rights shall not be granted to an Eligible
Person providing direct services to an Affiliate unless the
Company has a controlling interest in such Affiliate
within the meaning of Treas. Reg. Sec. 1.409A-1(b)(5)(iii)(E)(1).
Section 6.
Awards
.
(a)
Options
.
The Committee is
hereby authorized to grant Options to Eligible Persons with the
following terms and conditions and with such additional terms
and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:
(i)
Exercise Price
.
The purchase
price per Share purchasable under an Option shall be determined
by the Committee and shall not be less than 100% of the Fair
Market Value of a Share on the date of grant of such Option;
provided, however, that the Committee may designate a per share
exercise price below Fair Market Value on the date of grant
(A) to the extent necessary or appropriate, as determined
by the Committee, to satisfy applicable legal or regulatory
requirements of a foreign jurisdiction or (B) if the Option
is granted in substitution for a stock option previously granted
by an entity that is acquired by or merged with the Company or
an Affiliate.
(ii)
Option Term
.
The term of each
Option shall be fixed by the Committee but shall not be longer
than 10 years from the date of grant.
(iii)
Time and Method of
Exercise
.
The Committee shall determine the
time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms
(including, without limitation, cash, Shares, other securities,
other Awards or other property, or any combination thereof,
having a Fair Market Value on the exercise date equal to the
applicable exercise price) in which, payment of the exercise
price with respect thereto may be made or deemed to have been
made.
(b)
Stock Appreciation Rights
.
The
Committee is hereby authorized to grant Stock Appreciation
Rights to Eligible Persons subject to the terms of the Plan and
any applicable Award Agreement. A Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a
right to receive upon exercise thereof the excess of
(i) the Fair Market Value of one Share on the date of
exercise (or, if the Committee shall so determine, at any time
during a specified period before or after the date of exercise)
over (ii) the grant price of the Stock Appreciation Right
as specified by the Committee, which price shall not be less
than 100% of the Fair Market Value of one Share on the date of
grant of the Stock Appreciation Right. Subject to the terms of
the Plan and any applicable Award Agreement, the grant price,
term, methods of exercise, dates of exercise, methods of
settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The
Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem
appropriate.
(c)
Restricted Stock and Restricted Stock
Units
.
The Committee is hereby authorized to
grant Awards of Restricted Stock and Restricted Stock Units to
Eligible Persons with the following terms and conditions and
with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i)
Restrictions
.
Shares of
Restricted Stock and Restricted Stock Units shall be subject to
such restrictions as the Committee may impose (including,
without limitation, any limitation on the right to vote a Share
of Restricted Stock or the right to receive any dividend or
other right or property with respect thereto), which
restrictions may lapse separately or in combination at such time
or times, in such installments or otherwise, as the Committee
may deem appropriate. The minimum vesting period of such Awards
shall be one year from the date of grant. Notwithstanding
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the foregoing, the Committee may permit acceleration of vesting
of such Awards in the event of the Participants death,
disability or retirement or a Change in Control of the Company.
(ii)
Issuance and Delivery of
Shares
.
Any Restricted Stock granted under
the Plan shall be issued at the time such Awards are granted and
may be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a
stock certificate or certificates, which certificate or
certificates shall be held by the Company. Such certificate or
certificates shall be registered in the name of the Participant
and shall bear an appropriate legend referring to the
restrictions applicable to such Restricted Stock. Shares
representing Restricted Stock that is no longer subject to
restrictions shall be delivered to the Participant promptly
after the applicable restrictions lapse or are waived. In the
case of Restricted Stock Units, no Shares shall be issued at the
time such Awards are granted. Upon the lapse or waiver of
restrictions and the restricted period relating to Restricted
Stock Units evidencing the right to receive Shares, such Shares
shall be issued and delivered to the holder of the Restricted
Stock Units.
(iii)
Forfeiture
.
Except as
otherwise determined by the Committee, upon a Participants
termination of employment or resignation or removal as a
Director (in either case, as determined under criteria
established by the Committee) during the applicable restriction
period, all Shares of Restricted Stock and all Restricted Stock
Units held by the Participant at such time shall be forfeited
and reacquired by the Company; provided, however, that the
Committee may, when it finds that a waiver would be in the best
interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted
Stock or Restricted Stock Units.
(d)
Dividend Equivalents
.
The
Committee is hereby authorized to grant Dividend Equivalents to
Eligible Persons under which the Participant shall be entitled
to receive payments (in cash, Shares, other securities, other
Awards or other property as determined in the discretion of the
Committee) equivalent to the amount of cash dividends paid by
the Company to holders of Shares with respect to a number of
Shares determined by the Committee. Subject to the terms of the
Plan and any applicable Award Agreement, such Dividend
Equivalents may have such terms and conditions as the Committee
shall determine. Notwithstanding the foregoing, the Committee
may not grant Dividend Equivalents to Eligible Persons in
connection with grants of Options or Stock Appreciation Rights
to such Eligible Persons.
(e)
Performance Awards
.
The
Committee is hereby authorized to grant to Eligible Persons
Performance Awards which are intended to be qualified
performance-based compensation within the meaning of
Section 162(m). A Performance Award granted under the Plan
may be payable in cash or in Shares (including, without
limitation, Restricted Stock). Performance Awards shall, to the
extent required by Section 162(m), be conditioned solely on
the achievement of one or more objective Performance Goals, and
such Performance Goals shall be established by the Committee
within the time period prescribed by, and shall otherwise comply
with the requirements of, Section 162(m). Subject to the
terms of the Plan and any applicable Award Agreement, the
Performance Goals to be achieved during any performance period,
the length of any performance period, the amount of any
Performance Award granted, the amount of any payment or transfer
to be made pursuant to any Performance Award and any other terms
and conditions of any Performance Award shall be determined by
the Committee. The Committee shall also certify in writing that
such Performance Goals have been met prior to payment of the
Performance Awards to the extent required by Section 162(m).
(f)
Stock Awards
.
The Committee is
hereby authorized to grant to Eligible Persons Shares without
restrictions thereon, as deemed by the Committee to be
consistent with the purpose of the Plan. Subject to the terms of
the Plan and any applicable Award Agreement, such Stock Awards
may have such terms and conditions as the Committee shall
determine.
(g)
Other Stock-Based Awards
.
The
Committee is hereby authorized to grant to Eligible Persons such
other Awards that are denominated or payable in, valued in whole
or in part by reference to, or
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otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares), as are deemed
by the Committee to be consistent with the purpose of the Plan.
The Committee shall determine the terms and conditions of such
Awards, subject to the terms of the Plan and the Award
Agreement. Shares, or other securities delivered pursuant to a
purchase right granted under this Section 6(g), shall be
purchased for consideration having a value equal to at least
100% of the Fair Market Value of such Shares or other securities
on the date the purchase right is granted. The consideration
paid by the Participant may be paid by such method or methods
and in such form or forms (including, without limitation, cash,
Shares, other securities, other Awards or other property, or any
combination thereof), as the Committee shall determine.
(h)
General
.
(i)
Consideration for
Awards
.
Awards may be granted for no cash
consideration or for any cash or other consideration as may be
determined by the Committee or required by applicable law.
(ii)
Awards May Be Granted Separately or
Together
.
Awards may, in the discretion of
the Committee, be granted either alone or in addition to, in
tandem with or in substitution for any other Award or any award
granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or
in addition to or in tandem with awards granted under any other
plan of the Company or any Affiliate may be granted either at
the same time as or at a different time from the grant of such
other Awards or awards.
(iii)
Forms of Payment under
Awards
.
Subject to the terms of the Plan and
of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or
payment of an Award may be made in such form or forms as the
Committee shall determine (including, without limitation, cash,
Shares, other securities, other Awards or other property, or any
combination thereof), and may be made in a single payment or
transfer, in installments or on a deferred basis, in each case
in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without
limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents with respect to
installment or deferred payments.
(iv)
Term of Awards
.
The term of
each Award shall be for a period not longer than 10 years
from the date of grant.
(v)
Limits on Transfer of
Awards
.
Except as otherwise provided in this
Section 6(h)(v), no Award (other than a Stock Award) and no
right under any such Award shall be transferable by a
Participant other than by will or by the laws of descent and
distribution. The Committee may establish procedures as it deems
appropriate for a Participant to designate a Person or Persons,
as beneficiary or beneficiaries, to exercise the rights of the
Participant and receive any property distributable with respect
to any Award in the event of the Participants death. The
Committee, in its discretion and subject to such additional
terms and conditions as it determines, may permit a Participant
to transfer a Non-Qualified Stock Option to any family
member (as such term is defined in the General
Instructions to
Form S-8
(or any successor to such Instructions or such Form) under the
Securities Act of 1933, as amended) at any time that such
Participant holds such Option, provided that such transfers may
not be for value (i.e., the transferor may not receive any
consideration therefor) and the family member may not make any
subsequent transfers other than by will or by the laws of
descent and distribution. Each Award under the Plan or right
under any such Award shall be exercisable during the
Participants lifetime only by the Participant (except as
provided herein or in an Award Agreement or amendment thereto
relating to a Non-Qualified Stock Option) or, if permissible
under applicable law, by the Participants guardian or
legal representative. No Award (other than a Stock Award) or
right under any such Award may be pledged, alienated, attached
or otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.
8
(vi)
Restrictions; Securities Exchange
Listing
.
All Shares or other securities
delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such restrictions as the Committee
may deem advisable under the Plan, applicable federal or state
securities laws and regulatory requirements, and the Committee
may cause appropriate entries to be made or legends to be placed
on the certificates for such Shares or other securities to
reflect such restrictions. If the Shares or other securities are
traded on a securities exchange, the Company shall not be
required to deliver any Shares or other securities covered by an
Award unless and until such Shares or other securities have been
admitted for trading on such securities exchange.
(vii)
Section 409A
Provisions
.
Notwithstanding anything in the
Plan or any Award Agreement to the contrary, to the extent that
any amount or benefit that constitutes deferred
compensation to a Participant under Section 409A of
the Code and applicable guidance thereunder is otherwise payable
or distributable to a Participant under the Plan or any Award
Agreement solely by reason of the occurrence of a Change in
Control or due to the Participants disability or
separation from service (as such term is defined
under Section 409A), such amount or benefit will not be
payable or distributable to the Participant by reason of such
circumstance unless the Committee determines in good faith that
(i) the circumstances giving rise to such Change in
Control, disability or separation from service meet the
definition of a change in ownership or control, disability, or
separation from service, as the case may be, in
Section 409A(a)(2)(A) of the Code and applicable proposed
or final regulations, or (ii) the payment or distribution
of such amount or benefit would be exempt from the application
of Section 409A by reason of the short-term deferral
exemption or otherwise. Any payment or distribution that
otherwise would be made to a Participant who is a Specified
Employee (as determined by the Committee in good faith) on
account of separation from service may not be made before the
date which is 6 months after the date of the Specified
Employees separation from service (or if earlier, upon the
Specified Employees death) unless the payment or
distribution is exempt from the application of Section 409A
by reason of the short-term deferral exemption or otherwise.
Section 7.
Amendment
and Termination; Corrections
.
(a)
Amendments to the Plan
.
The
Board may amend, alter, suspend, discontinue or terminate the
Plan at any time; provided, however, that, notwithstanding any
other provision of the Plan or any Award Agreement, prior
approval of the stockholders of the Company shall be required
for any amendment to the Plan that:
(i) requires stockholder approval under the rules or
regulations of the Securities and Exchange Commission, the New
York Stock Exchange, the National Association of Securities
Dealers, Inc. or any other securities exchange that are
applicable to the Company;
(ii) increases the number of shares authorized under the
Plan as specified in Section 4(a) of the Plan;
(iii) increases the number of shares subject to the
limitations contained in Sections 4(d)(i), (iii) and
(iv) of the Plan or the dollar amount subject to the
limitation contained in Section 4(d)(ii) of the Plan;
(iv) permits repricing of Options or Stock Appreciation
Rights which is prohibited by Section 3(a)(v) of the Plan;
(v) permits the award of Options or Stock Appreciation
Rights at a price less than 100% of the Fair Market Value of a
Share on the date of grant of such Option or Stock Appreciation
Right, contrary to the provisions of Sections 6(a)(i) and
6(b)(ii) of the Plan; and
(vi) would cause Section 162(m) to become unavailable
with respect to the Plan.
(b)
Amendments to Awards
.
Subject
to the provisions of the Plan, the Committee may waive any
conditions of or rights of the Company under any outstanding
Award, prospectively or retroactively. Except as otherwise
provided in the Plan, the Committee may amend, alter, suspend,
discontinue or
9
terminate any outstanding Award, prospectively or retroactively,
but no such action may adversely affect the rights of the holder
of such Award without the consent of the Participant or holder
or beneficiary thereof. The Company intends that Awards under
the Plan shall satisfy the requirements of Section 409A to
avoid any adverse tax results thereunder, and the Committee
shall administer and interpret the Plan and all Award Agreements
in a manner consistent with that intent. If any provision of the
Plan or an Award Agreement would result in adverse tax
consequences under Section 409A, the Committee may amend
that provision (or take any other action reasonably necessary)
to avoid any adverse tax results and no action taken to comply
with Section 409A shall be deemed to impair or otherwise
adversely affect the rights of any holder of an Award or
beneficiary thereof.
(c)
Correction of Defects, Omissions and
Inconsistencies
.
The Committee may correct
any defect, supply any omission or reconcile any inconsistency
in the Plan or in any Award or Award Agreement in the manner and
to the extent it shall deem desirable to implement or maintain
the effectiveness of the Plan.
Section 8.
Income
Tax Withholding
.
In order to comply with all applicable federal, state, local or
foreign income tax laws or regulations, the Company may take
such action as it deems appropriate to ensure that all
applicable federal, state, local or foreign payroll,
withholding, income or other taxes, which are the sole and
absolute responsibility of a Participant, are withheld or
collected from such Participant. In order to assist a
Participant in paying all or a portion of the applicable taxes
to be withheld or collected upon exercise or receipt of (or the
lapse of restrictions relating to) an Award, the Committee, in
its discretion and subject to such additional terms and
conditions as it may adopt, may permit the Participant to
satisfy such tax obligation by (a) electing to have the
Company withhold a portion of the Shares otherwise to be
delivered upon exercise or receipt of (or the lapse of
restrictions relating to) such Award with a Fair Market Value
equal to the amount of such taxes or (b) delivering to the
Company Shares other than Shares issuable upon exercise or
receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes. The
election, if any, must be made on or before the date that the
amount of tax to be withheld is determined.
Section 9.
General
Provisions
.
(a)
No Rights to Awards
.
No
Eligible Person, Participant or other Person shall have any
claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons,
Participants or holders or beneficiaries of Awards under the
Plan. The terms and conditions of Awards need not be the same
with respect to any Participant or with respect to different
Participants.
(b)
Award Agreements
.
No
Participant shall have rights under an Award granted to such
Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company and, if requested by the
Company, signed by the Participant, or until such Award
Agreement is delivered and accepted through any electronic
medium in accordance with procedures established by the Company.
(c)
No Rights of
Stockholders
.
Except with respect to
Restricted Stock and Stock Awards, neither a Participant nor the
Participants legal representative shall be, or have any of
the rights and privileges of, a stockholder of the Company with
respect to any Shares issuable upon the exercise or payment of
any Award, in whole or in part, unless and until the Shares have
been issued.
(d)
No Limit on Other Compensation Plans or
Arrangements
.
Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation plans or
arrangements, and such plans or arrangements may be either
generally applicable or applicable only in specific cases.
(e)
No Right to Employment or
Directorship
.
The grant of an Award shall not
be construed as giving a Participant the right to be retained as
an employee of the Company or any Affiliate, or a
10
Director to be retained as a Director, nor will it affect in any
way the right of the Company or an Affiliate to terminate a
Participants employment at any time, with or without
cause. In addition, the Company or an Affiliate may at any time
dismiss a Participant from employment free from any liability or
any claim under the Plan or any Award, unless otherwise
expressly provided in the Plan or in any Award Agreement.
(f)
Governing Law
.
The internal
law, and not the law of conflicts, of the State of Delaware,
shall govern all questions concerning the validity, construction
and effect of the Plan or any Award, and any rules and
regulations relating to the Plan or any Award.
(g)
Severability
.
If any provision
of the Plan or any Award is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or would
disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the
Committee, materially altering the purpose or intent of the Plan
or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such
Award shall remain in full force and effect.
(h)
No Trust or
Fund Created
.
Neither the Plan nor any
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
or any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.
(i)
No Fractional Shares
.
No
fractional Shares shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine whether
cash shall be paid in lieu of any fractional Share or whether
such fractional Share or any rights thereto shall be canceled,
terminated or otherwise eliminated.
(j)
Headings
.
Headings are given
to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 10.
Effective
Date of the Plan; Effect on Prior Plan
.
The Plan shall be subject to approval by the stockholders of the
Company at the annual meeting of stockholders of the Company to
be held on May 7, 2008 and the Plan shall be effective as
of the date of such stockholder approval. On and after the date
of stockholder approval of the Plan, no awards shall be granted
under the Companys 2005 Stock Incentive Plan, but all
outstanding awards previously granted under the 2005 Stock
Incentive Plan shall remain outstanding in accordance with the
terms thereof.
Section 11.
Term
of the Plan
.
The Plan shall terminate at midnight on May 6, 2018, unless
terminated before then by the Board. Awards may be granted under
the Plan until the Plan terminates or until all Shares available
for Awards under the Plan have been purchased or acquired;
provided, however, that Incentive Stock Options may not be
granted following the
10-year
anniversary of the Boards adoption of the Plan. As long as
any Awards are outstanding under the Plan, the terms of the Plan
shall govern such Awards.
11
Exhibit 10.2
Imation Corp. 2005 Stock Incentive Plan
Stock Option Agreement
This STOCK OPTION AGREEMENT (the Agreement) effective as of «GrantDt» is between Imation
Corp., a Delaware corporation (the Company), and «Name», an employee of the Company or one of its
Affiliates (the Participant), pursuant to and subject to the terms and conditions of the Imation
Corp. 2005 Stock Incentive Plan (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the
Companys common stock, par value $.01 per share (the Common Stock), as provided in this
Agreement in order to carry out the purpose of the Plan. The purpose of this Agreement is to
evidence the terms and conditions of a Non-Qualified Stock Option granted to the Participant under
the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as follows:
Section 1.
Grant of Non-qualified Stock Option
. Effective «GrantDt» (the Effective
Date), the Company granted to the Participant the right and option to purchase all or any part of
an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth
in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not
intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (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 Participants
employment with the Company and its subsidiaries within two (2) years following a Change in
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 Participants Retirement, and the exercise
of the Option to that limited extent may be effected at any time within three (3) years after the
date of the Participants Retirement but not thereafter; provided, however, that the Option may not
be exercised after the Expiration Date. If a Participant who has thus retired dies within three (3)
years after the date of the Participants Retirement and prior to the Expiration Date, the exercise
of the Option to the limited extent provided for in the first sentence of this Section 6(c) may be
effected by the Participants estate or by any Person or Persons to whom the Option has been
transferred by will or the applicable laws of descent and distribution at any time within two (2)
years after the date of the Participants death, but not after the Expiration Date.
(d) In the event the Participant dies or is deemed to suffer a Disability while employed by
the Company or 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 Participants
death or Disability. In the event of Participants death, the exercise of the Option to the limited
extent provided for in the first sentence of this Section 6(d) may be effected by the Participants
estate or by any Person or Persons to whom the Option has been transferred by will or the
applicable laws of descent and distribution at any time within two (2) years after the date of the
Participants death, but not after the Expiration Date. In the event of the Participants
Disability, the exercise of the Option to the limited extent provided for in the first sentence of
this Section 6(d) may be effected by the Participant at any time within two (2) years after the
date of the Participants Disability, but not after the Expiration Date.
(e) In the event the Company or a subsidiary terminates the Participants employment with the
Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change in Control, the Option
shall become immediately exercisable in full on the date of such termination of employment, and the
exercise of the Option may be effected at any time within six (6) months after the date of the
Participants termination of employment, but not after the Expiration Date. In the event that the
provisions of this Section 6(e) result in payments that are finally and conclusively determined
by a court or Internal Revenue Service proceeding to be subject to the excise tax imposed by
Section 4999 of the Code, and the Participant has not received any additional cash payment from the
Company relating thereto under the provisions of Section 6 of the Severance Agreement between the
Company and the Participant (the Severance Agreement), the Company shall pay to the Participant
an additional amount such that the net amount retained by the Participant following realization of
all compensation under the Plan that resulted in such payments, after allowing for the amount of
such excise tax and any additional federal, state and local income and employment taxes paid on the
additional amount, shall be equal to the net amount that would otherwise have been retained by the
Participant if there were no excise tax imposed by Section 4999 of the Code. If the Participant
receives any additional cash payment from the Company under Section 6 of the Severance Agreement,
the foregoing sentence shall be of no force or effect and the provisions of the Severance Agreement
shall be deemed to supersede the foregoing sentence in its entirety.
Section 7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) In the event 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 necessary in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Agreement, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of the number and type of 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 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. Forfeiture. In the event that after the grant of the Option but prior to a Change
in Control (1) the Company issues a material restatement of an initial financial statement, and (2)
the Participant engaged in intentional misconduct that caused or contributed to the need for such a
restatement because of material noncompliance by the Company with
applicable financial reporting requirements (a Forfeiture Event), the Participant, at the
request of the Committee made within 90 days after the restatement, shall forfeit (and shall not be
entitled to exercise) the portion of the Option, if any, which has not been exercised prior to the
Committees request. If all or any portion of the Option shall have been exercised prior to the
Committees request, the Participant, at the request of the Committee made within 90 days after the
restatement, shall forfeit those Shares, if any, purchased by the Participant upon the exercise of
the Options that are owned by the Participant at the time of the initial financial statement that
is subsequently restated (the Forfeitable Shares) and promptly remit to the Company cash equal
to the Net Dividends (as hereinafter defined) received by the Participant at any time on the
Forfeitable Shares. If the Forfeitable Shares are not owned by the Participant at the time of the
Committees request, the Participant shall promptly remit to the Company the Net Proceeds (as
hereinafter defined) from any sale, after the issuance of an initial financial statement that is
subsequently restated, of Forfeitable Shares in lieu of the Forfeitable Shares. Net Dividends or
Net Proceeds shall mean dividends or proceeds, as the case may be net of taxes paid or payable by
the Participant as a result of the receipt of such dividends and the sale of such Shares in an
amount reasonably determined by the Committee but including interest on the amount of cash repaid
from the date of the receipt by Participant of such dividends or sale proceeds to the date of
payment of such amount to the Company at a rate reasonably determined by the Committee. The
Committee may, but shall not be required by Participant to, reduce the forfeiture, return and/or
payment obligations hereunder to the extent that the Committee, in its sole and absolute
discretion, shall deem appropriate. Nothing herein shall limit any other rights the Company shall
have by law for misconduct of the Participant that caused or contributed to the need for such
restatement.
Section 9.
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 10.
Issuance of Shares
. Upon exercise of all or any portion of the Option, the
Company will cause to be issued to the Participant the shares of Common Stock purchased.
Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue
shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such
approvals by any governmental agencies as may be required, including, without limitation, the
effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii)
the condition that such shares shall have been duly listed on the New York Stock Exchange. The
Participant shall not have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to this Option unless and until such shares are
issued to the Participant upon due exercise of the Option.
Section 11.
Taxes
. The Participant acknowledges that the Participant will consult with
the Participants personal tax adviser regarding the income tax consequences of exercising the
Option or any other matters related to this Agreement. In order to comply with all applicable
federal, state, local or foreign income tax laws or regulations, the Company may take such action
as it deems appropriate to ensure that all applicable federal, state, local or foreign payroll,
withholding, income or other taxes, which are the Participants sole and absolute responsibility,
are withheld or collected from the Participant.
Section 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) Change in Control means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the Exchange Act)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Companys then outstanding shares of Common Stock or the combined voting power of
the Companys 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 Companys
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 Companys 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 Companys outstanding Common Stock and the Companys
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 Companys assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Companys 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 Participants employment with the Company or
an Affiliate for the following acts: (i) the Participants gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to the Companys reputation,
as determined by the Companys Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Companys Board of Directors that
are consistent with the Participants duties, (iv) the Participants conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
Section 13.
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 14.
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 15.
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 16.
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 17.
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 18.
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 19.
Severability
. In the event that any provision that is contained in the
Plan or this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or this Agreement for any reason and under any law as
deemed applicable by the Committee, the invalid, illegal or unenforceable provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be so construed or
deemed amended without, in the determination of the Committee, materially altering the purpose or
intent of the Plan or this Agreement, such provision shall be stricken as to such jurisdiction or
Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 20.
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 21.
Participants Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the
Participant will not exercise the Option granted hereby, and that the Company will not be obligated
to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such
shares shall constitute a violation by the Participant or the Company of any provision of any law
or regulation of any governmental authority. Any determination in this connection by the Company,
including the Board of Directors of the Company or the Committee, shall be final, binding and
conclusive. The obligations of the Company and the rights of the Participant are subject to all
applicable laws, rules and regulations.
Section 22.
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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Exhibit 10.3
Imation Corp. 2008 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. 2008 Stock Incentive Plan (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the
Companys common stock, par value $.01 per share (the Common Stock), as provided in this
Agreement in order to carry out the purpose of the Plan. The purpose of this Agreement is to
evidence the terms and conditions of a Non-Qualified Stock Option granted to the Participant under
the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as follows:
Section 1.
Grant of Non-qualified Stock Option
. Effective «GrantDt» (the Effective
Date), the Company granted to the Participant the right and option to purchase all or any part of
an aggregate of «Shares» («NbrShares») shares of Common Stock on the terms and conditions set forth
in this Agreement and in accordance with the terms of the Plan (the Option). The Option is not
intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the Code).
Section 2.
Purchase Price
. The purchase price of the shares of Common Stock subject to
the Option shall be «Price» per share.
Section 3.
Term of the Option
. The term of the Option (the Option Period) shall be
for a period of ten (10) years from the Effective Date, terminating at the close of business on the
tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided
in Section 6 hereof.
Section 4.
Vesting of the Option
. Subject to Section 6 hereof, the Option may be
exercised at any time or from time to time during the Option Period, as to any part or all of the
shares covered thereby in accordance with the following vesting schedule:
(a) twenty five percent (25%) of the Option may be exercised at any time on or after the first
anniversary of the Effective Date;
(b) fifty percent (50%) of the Option may be exercised at any time on or after the second
anniversary of the Effective Date;
(c) seventy five percent (75%) of the Option may be exercised at any time on or after the
third anniversary of the Effective Date; and
(d) one hundred percent (100%) of the Option may be exercised at any time on or after the
fourth anniversary of the Effective Date.
Section 5.
Transferability
. The Option may not be assigned, transferred (other than by
will or the laws of descent and distribution), pledged, hypothecated (whether by operation of law
or otherwise) or otherwise conveyed or encumbered, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions of the Plan or this Agreement, or the levy of
any execution, attachment or similar process upon the Option, shall be void and unenforceable
against the Company and shall constitute an immediate cancellation of the Option.
Section 6.
Effect of Termination of Employment
.
(a) In the event the Participant shall cease to be employed by the Company 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 Participants
employment with the Company and its subsidiaries within two (2) years following a Change in
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 Participants Retirement, and the exercise
of the Option to that limited extent may be effected at any time within three (3) years after the
date of the Participants Retirement but not thereafter; provided, however, that the Option may not
be exercised after the Expiration Date. If a Participant who has thus retired dies within three
(3) years after the date of the Participants Retirement and prior to the Expiration Date, the
exercise of the Option to the limited extent provided for in the first sentence of this Section
6(c) may be effected by the Participants estate or by any Person or Persons to whom the Option has
been transferred by will or the applicable laws of descent and distribution at any time within two
(2) years after the date of the Participants death, but not after the Expiration Date.
(d) In the event the Participant dies or is deemed to suffer a Disability while employed by
the Company or 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 Participants
2
death or Disability. In the event of Participants death, the exercise of the Option to the limited
extent provided for in the first sentence of this Section 6(d) may be effected by the Participants
estate or by any Person or Persons to whom the Option has been transferred by will or the
applicable laws of descent and distribution at any time within two (2) years after the date of the
Participants death, but not after the Expiration Date. In the event of the Participants
Disability, the exercise of the Option to the limited extent provided for in the first sentence of
this Section 6(d) may be effected by the Participant at any time within two (2) years after the
date of the Participants Disability, but not after the Expiration Date.
(e) In the event the Company or a subsidiary terminates the Participants employment with the
Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change in Control, the Option shall become
immediately exercisable in full on the date of such termination of employment, and the exercise of
the Option may be effected at any time within six (6) months after the date of the Participants
termination of employment, but not after the Expiration Date. In the event that the provisions of
this Section 6(e) result in payments that are finally and conclusively determined by a court or
Internal Revenue Service proceeding to be subject to the excise tax imposed by Section 4999 of the
Code, and the Participant has not received any additional cash payment from the Company relating
thereto under the provisions of Section 6 of the Severance Agreement between the Company and the
Participant (the Severance Agreement), the Company shall pay to the Participant an additional
amount such that the net amount retained by the Participant following realization of all
compensation under the Plan that resulted in such payments, after allowing for the amount of such
excise tax and any additional federal, state and local income and employment taxes paid on the
additional amount, shall be equal to the net amount that would otherwise have been retained by the
Participant if there were no excise tax imposed by Section 4999 of the Code. If the Participant
receives any additional cash payment from the Company under Section 6 of the Severance Agreement,
the foregoing sentence shall be of no force or effect and the provisions of the Severance Agreement
shall be deemed to supersede the foregoing sentence in its entirety.
Section 7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) In the event 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 necessary in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Agreement, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of the number and type of 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.
Forfeiture
. In the event that after the grant of the Option but prior to a
Change in Control (1) the Company issues a material restatement of an initial financial statement,
and (2) the Participant engaged in intentional misconduct that caused or contributed to the need
for such a restatement because of material noncompliance by the Company with
4
applicable financial reporting requirements (a Forfeiture Event), the Participant, at the
request of the Committee made within 90 days after the restatement, shall forfeit (and shall not be
entitled to exercise) the portion of the Option, if any, which has not been exercised prior to the
Committees request. If all or any portion of the Option shall have been exercised prior to the
Committees request, the Participant, at the request of the Committee made within 90 days after the
restatement, shall forfeit those Shares, if any, purchased by the Participant upon the exercise of
the Options that are owned by the Participant at the time of the initial financial statement that
is subsequently restated (the Forfeitable Shares) and promptly remit to the Company cash equal
to the Net Dividends (as hereinafter defined) received by the Participant at any time on the
Forfeitable Shares. If the Forfeitable Shares are not owned by the Participant at the time of the
Committees request, the Participant shall promptly remit to the Company the Net Proceeds (as
hereinafter defined) from any sale, after the issuance of an initial financial statement that is
subsequently restated, of Forfeitable Shares in lieu of the Forfeitable Shares. Net Dividends or
Net Proceeds shall mean dividends or proceeds, as the case may be net of taxes paid or payable by
the Participant as a result of the receipt of such dividends and the sale of such Shares in an
amount reasonably determined by the Committee but including interest on the amount of cash repaid
from the date of the receipt by Participant of such dividends or sale proceeds to the date of
payment of such amount to the Company at a rate reasonably determined by the Committee. The
Committee may, but shall not be required by Participant to, reduce the forfeiture, return and/or
payment obligations hereunder to the extent that the Committee, in its sole and absolute
discretion, shall deem appropriate. Nothing herein shall limit any other rights the Company shall
have by law for misconduct of the Participant that caused or contributed to the need for such
restatement.
Section 9.
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
5
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 10.
Issuance of Shares
. Upon exercise of all or any portion of the Option, the
Company will cause to be issued to the Participant the shares of Common Stock purchased.
Notwithstanding anything to the contrary in this Agreement, the Companys obligation to issue
shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such
approvals by any governmental agencies as may be required, including, without limitation, the
effectiveness of a registration statement under the Securities Act of 1933, as amended, and
(ii) the condition that such shares shall have been duly listed on the New York Stock Exchange. The
Participant shall not have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to this Option unless and until such shares are
issued to the Participant upon due exercise of the Option.
Section 11.
Taxes
. The Participant acknowledges that the Participant will consult with
the Participants personal tax adviser regarding the income tax consequences of exercising the
Option or any other matters related to this Agreement. In order to comply with all applicable
federal, state, local or foreign income tax laws or regulations, the Company may take such action
as it deems appropriate to ensure that all applicable federal, state, local or foreign payroll,
withholding, income or other taxes, which are the Participants sole and absolute responsibility,
are withheld or collected from the Participant.
Section 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) Change in Control means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the Exchange Act)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Companys then outstanding shares of Common Stock or the combined voting power of
the Companys 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
6
Effective Date hereof whose election, or nomination for election by the Companys
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 Companys 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 Companys outstanding Common Stock and the Companys
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 Companys assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Companys 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.
7
(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 Participants employment with the Company or
an Affiliate for the following acts: (i) the Participants gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to the Companys reputation,
as determined by the Companys Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Companys Board of Directors that
are consistent with the Participants duties, (iv) the Participants conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
Section 13.
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 14.
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 15.
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 16.
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
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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 17.
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 18.
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 19.
Severability
. In the event that any provision that is contained in the
Plan or this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or this Agreement for any reason and under any law as
deemed applicable by the Committee, the invalid, illegal or unenforceable provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be so construed or
deemed amended without, in the determination of the Committee, materially altering the purpose or
intent of the Plan or this Agreement, such provision shall be stricken as to such jurisdiction or
Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 20.
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 21.
Participants Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the
Participant will not exercise the Option granted hereby, and that the Company will not be obligated
to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such
shares shall constitute a violation by the Participant or the Company of any provision of any law
or regulation of any governmental authority. Any determination in this connection by the Company,
including the Board of Directors of the Company or the Committee, shall be final, binding and
conclusive. The obligations of the Company and the rights of the Participant are subject to all
applicable laws, rules and regulations.
9
Section 22.
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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10
Exhibit 10.4
Imation Corp. 2008 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. 2008 Stock Incentive Plan (the Plan).
The Company desires to provide the Participant with an opportunity to purchase shares of the
Companys common stock, par value $.01 per share (the Common Stock), as provided in this
Agreement in order to carry out the purpose of the Plan. The purpose of this Agreement is to
evidence the terms and conditions of a Non-Qualified Stock Option granted to the Participant under
the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as follows:
Section 1.
Grant of Non-qualified Stock Option
. Effective «
GrantDt
» (the
Effective Date), the Company granted to the Participant the right and option to purchase all or
any part of an aggregate of «
Shares
» («
NbrShares
») shares of Common Stock on the
terms and conditions set forth in this Agreement and in accordance with the terms of the Plan (the
Option). The Option is not intended to be an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the Code).
Section 2.
Purchase Price
. The purchase price of the shares of Common Stock subject to
the Option shall be «Price» per share.
Section 3.
Term of the Option
. The term of the Option (the Option Period) shall be
for a period of ten (10) years from the Effective Date, terminating at the close of business on the
tenth anniversary of the Effective Date (the Expiration Date) or such shorter period as provided
in Section 6 hereof.
Section 4.
Vesting of the Option
. Subject to Section 6 hereof, the Option may be
exercised at any time or from time to time 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 in 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 Companys 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 Participants Retirement, and the
exercise of the Option may be effected at any time within three (3) years after the date of the
Participants Retirement but not thereafter;
provided
,
however
, that the Option may
not be exercised after the Expiration Date. If a Participant who has thus retired dies within three
(3) years after the date of the Participants Retirement and prior to the Expiration Date, the
exercise of the Option may be effected by the Participants estate or by any Person or Persons to
whom the Option has been transferred by will or the applicable laws of descent and distribution at
any time within two (2) years after the date of the Participants death, but not after the
Expiration Date.
(d) 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 Participants death or
Disability. In the event of Participants death, the exercise of the Option may be effected by the
Participants estate or by any Person or Persons to whom the Option has been transferred by will or
the applicable laws of descent and distribution at any time within two (2) years after the date of
the Participants death, but not after the Expiration Date. In the event of the Participants
Disability, the exercise of the Option may be effected by the Participant at any time within two
(2) years after the date of the Participants Disability, but not after the Expiration Date.
(e) Notwithstanding the provisions of Sections 4, 6(a), 6(c) and 6(d) hereof, in the event of
a Change in Control, the Option shall become immediately exercisable in full as of the date of the
Change in 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 in
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
2
that the net amount retained by the Participant following realization of all compensation
under the Plan that resulted in such payments, after allowing for the amount of such excise tax
and any additional federal, state and local income and employment taxes paid on the additional
amount, shall be equal to the net amount that would otherwise have been retained by the Participant
if there were no excise tax imposed by Section 4999 of the Code.
Section 7.
Anti-Dilution and Fundamental Change Adjustments
.
(a) In the event 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 necessary in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Agreement, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of the number and type of 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
3
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 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 Companys obligation to issue
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shares of Common Stock shall be subject to (i) all applicable laws, rules and regulations and such
approvals by any governmental agencies as may be required, including, without limitation, the
effectiveness of a registration statement under the Securities Act of 1933, as amended, and (ii)
the condition that such shares shall have been duly listed on the New York Stock Exchange. The
Participant shall not have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to this Option unless and until such shares are
issued to the Participant upon due exercise of the Option.
Section 10.
Taxes
. The Participant acknowledges that the Participant will consult with
the Participants personal tax adviser regarding the income tax consequences of exercising the
Option or any other matters related to this Agreement. In order to comply with all applicable
federal, state, local or foreign income tax laws or regulations, the Company may take such action
as it deems appropriate to ensure that all applicable federal, state, local or foreign payroll,
withholding, income or other taxes, which are the Participants sole and absolute responsibility,
are withheld or collected from the Participant.
Section 11.
Definitions
.
Terms not defined in this Agreement shall have the meanings
given to them in the Plan, and the following terms shall have the following meanings when used in
this Agreement:
(a) Change in Control means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the Exchange Act)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Companys then outstanding shares of Common Stock or the combined voting power of
the Companys 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 Companys 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
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(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 Companys 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 Companys outstanding Common Stock and the Companys
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 Companys assets either directly or through one of more
subsidiaries) in substantially the same proportions as their ownership of the
Companys 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
7
or intent of the Plan or this Agreement, such provision shall be stricken as to such jurisdiction
or Option, and the remainder of the Plan or this Agreement shall remain in full force and effect.
Section 19.
Headings
. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of this Agreement or any provision
hereof.
Section 20.
Participants Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. Notwithstanding any of the provisions hereof, the Participant hereby agrees that the
Participant will not exercise the Option granted hereby, and that the Company will not be obligated
to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such
shares shall constitute a violation by the Participant or the Company of any provision of any law
or regulation of any governmental authority. Any determination in this connection by the Company,
including the Board of Directors of the Company or the Committee, shall be final, binding and
conclusive. The obligations of the Company and the rights of the Participant are subject to all
applicable laws, rules and regulations.
Section 21.
Parties Bound
. The terms, provisions, and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representatives and permitted successors and
assigns, subject to the limitation on assignment expressly set forth herein. This Agreement shall
have no force or effect unless it is duly executed and delivered by the Company.
The Company has caused this Agreement to be signed and delivered as of the date set forth
above.
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IMATION CORP.
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8
Exhibit 10.5
Imation Corp. 2008 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. 2008 Stock Incentive Plan (the Plan).
The Company desires to award to the Participant a number of shares of the Companys common
stock, par value $.01 per share (the Common Stock), subject to certain restrictions as provided
in this Agreement, in order to carry out the purpose of the Plan. The purpose of this Agreement is
to evidence the terms and conditions of an award of restricted stock granted to the Participant
under the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as follows:
Section 1.
Award of Restricted Stock
. Effective
«GranDt»
(the Effective
Date), the Company granted to the Participant a restricted stock award of
«GranDt»(«GranDt»)
shares of Common Stock (the Shares), subject to the terms and conditions set forth in this
Agreement and in accordance with the terms of the Plan (the Restricted Stock Award).
Section 2.
Rights with Respect to the Shares
.
(a)
Stockholder Rights
. With respect to the Shares, the Participant shall be entitled
at all times on and after the date of issuance of the Shares to exercise the rights of a
stockholder of Common Stock of the Company, including the right to vote the Shares and the right to
receive dividends on the Shares as provided in Section 2(b) hereof, unless and until the Shares are
forfeited pursuant to Section 3 hereof. However, the Shares shall be nontransferable and subject to
a risk of forfeiture to the Company at all times prior to the dates on which such Shares become
vested, and the restrictions with respect to the Shares lapse, in accordance with Section 3 of this
Agreement.
(b)
Dividends
. As a condition to receiving the Shares under the Plan, the Participant
hereby agrees to defer the receipt of dividends paid on the Shares. Cash dividends or other cash
distributions paid with respect to the Shares prior to the date or dates the Shares vest shall be
subject to the same restrictions, terms and conditions as the Shares to which they relate, shall be
promptly deposited with the Secretary of the Company or a custodian designated by the Secretary,
and shall be forfeited in the event that the Shares with respect to which the dividends were paid
are forfeited.
(c)
Issuance of Shares
. The Company shall cause the Shares to be issued in the
Participants name or in a nominee name on the Participants behalf, either by book-entry
registration or issuance of a stock certificate or certificates evidencing the Shares, which
certificate or certificates shall be held by the Secretary of the Company or the stock transfer
agent or brokerage service selected by the Secretary of the Company to provide such services for
the Plan. The Shares shall be restricted from transfer and shall be subject to an appropriate
stop-transfer order. If any certificate is issued, the certificate shall bear an appropriate legend
referring to the restrictions applicable to the Shares. The Participant hereby agrees to the
retention by the Company of the Shares and, if a stock certificate is issued, the Participant
agrees to execute and deliver to the Company a blank stock power with respect to the Shares as a
condition to the receipt of this Restricted Stock Award. After any Shares vest pursuant to Section
3 hereof, and following payment of the applicable withholding taxes pursuant to Section 6 of this
Agreement, the Company shall promptly cause to be issued a certificate or certificates, registered
in the Participants name, evidencing such vested whole Shares (less any Shares withheld to pay
withholding taxes) and shall cause such certificate or certificates to be delivered to the
Participant free of the legend and the stop-transfer order referenced above. The Company will not
deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such
fractional Share at the time certificates evidencing the Shares are delivered to the Participant.
Section 3.
Vesting; Forfeiture
.
(a)
Vesting
. Subject to the terms and conditions of this Agreement, and except as
otherwise provided in Section 3(c) hereof, twenty five percent (25%) of the Shares shall vest, and
the restrictions with respect to the Shares shall lapse, on each of the first, second, third and
fourth anniversaries of the Effective Date if the Participant remains continuously employed by the
Company or 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, Participants rights to all of
the unvested Shares shall be immediately and irrevocably forfeited, including the right to vote
such Shares and the right to receive dividends on such Shares.
(c)
Change in Control
. Notwithstanding the vesting and forfeiture provisions contained
in Sections 3(a) and 3(b) hereof, but subject to the other terms and conditions set forth in this
Agreement, in the event the Company or a subsidiary terminates the Participants employment with
the Company and all subsidiaries of the Company for any reason other than death, Disability or
Termination for Cause within two (2) years following a Change in Control, 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
2
imposed by Section 4999 of the Code. If the Participant receives any additional cash payment from
the Company under Section 6 of the Severance Agreement, the foregoing sentence shall be of no force
or effect and the provisions of the Severance Agreement shall be deemed to supersede the foregoing
sentence in its entirety.
(d)
Early Vesting
. Except as provided in Section 3(c) hereof or unless otherwise
determined by the Committee in its sole discretion, and notwithstanding any provisions contained in
the Severance Agreement, in no event will any of the Shares vest prior to their respective vesting
dates set forth in Section 3(a) hereof.
(e)
Clawback
. In the event that after the grant of the Restricted Stock Award but
prior to a Change in Control (1) the Company issues a material restatement of an initial financial
statement, and (2) the Participant engaged in intentional misconduct that caused or contributed to
the need for such a restatement because of material noncompliance by the Company with applicable
financial reporting requirements (a Forfeiture Event), the Participant, at the request of the
Committee made within 90 days after the restatement, shall forfeit those Shares, if any, owned by
the Participant at the time of the initial financial statement that is subsequently restated,
regardless of whether those Shares are subject to restrictions at such time or whether the
restrictions on such Shares shall have lapsed (the Forfeitable Shares). In addition, if a
Forfeiture Event occurs, the Participant, at the Committees request (which request must be made
within 90 days after the restatement), shall forfeit all dividends deferred pursuant to Section
2(b) with respect to the Forfeitable Shares that then remain subject to restrictions prior to the
Committees request and promptly remit to the Company cash equal to the Net Dividends (as
hereinafter defined) received by the Participant at any time on the Forfeitable Shares. If the
Forfeitable Shares are not owned by the Participant at the time of the Committees request, the
Participant shall promptly remit to the Company the Net Proceeds (as hereinafter defined) from
any sale, after the issuance of an initial financial statement that is subsequently restated, of
Forfeitable Shares in lieu of the Forfeitable Shares. Net Dividends or Net Proceeds shall mean
dividends or proceeds, as the case may be net of taxes paid or payable by the Participant as a
result of the receipt of such dividends and the sale of such Shares in an amount reasonably
determined by the Committee but including interest on the amount of cash repaid from the date of
the receipt by Participant of such dividends or sale proceeds to the date of payment of such amount
to the Company at a rate reasonably determined by the Committee. The Committee may, but shall not
be required by Participant to, reduce the forfeiture, return and/or payment obligations hereunder
to the extent that the Committee, in its sole and absolute discretion, shall deem appropriate.
Nothing herein shall limit any other rights the Company shall have by law for misconduct of the
Participant that caused or contributed to the need for such restatement.
3
Section 4.
Restrictions on Transfer
. Until the Shares vest pursuant to Section 3
hereof, neither the Shares, nor any right with respect to the Shares under this Agreement, may be
sold, assigned, transferred, pledged, hypothecated (by operation of law or otherwise) or otherwise
conveyed or encumbered and shall not be subject to execution, attachment or similar process. Any
attempted sale, assignment, transfer, pledge, hypothecation or other conveyance or encumbrance
shall be void and unenforceable against the Company or any Affiliate of the Company.
Section 5.
Distributions and Adjustments
.
(a) If any Shares vest subsequent to any change in the number or character of the Common Stock
of the Company through any stock dividend or other distribution, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of shares or other securities of the Company, issuance of warrants or other
rights to purchase shares of Common Stock or other securities of the Company or other similar
corporate transaction or event such that an adjustment is necessary in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under this
Agreement, then the Committee shall, in such manner as it may deem equitable, adjust any or all of
the number and type of such Shares.
(b) Any additional shares of Common Stock of the Company, any other securities of the Company
and any other property distributed with respect to the Shares prior to the date or dates the Shares
vest shall be subject to the same restrictions, terms and conditions as the Shares to which they
relate and shall be promptly deposited with the Secretary of the Company or a custodian designated
by the Secretary.
Section 6.
Taxes
.
(a) The Participant acknowledges that the Participant will consult with the Participants
personal tax adviser regarding the income tax consequences of the grant of the Shares, payment of
dividends on the Shares, the vesting of the Shares and any other matters related to this Agreement.
In order to comply with all applicable federal, state, local or foreign income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all applicable
federal, state, local or foreign payroll, withholding, income or other taxes, which are the
Participants sole and absolute responsibility, are withheld or collected from the Participant.
(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee administering the Plan, the Participant may elect to satisfy tax withholding obligations
arising from the receipt of, or the lapse of restrictions relating to, the Shares by (i) delivering
cash, check, bank draft, money order or wire transfer payable to the order of the Company, (ii)
having the Company withhold a portion of the Shares otherwise to be delivered having a Fair Market
Value equal to the amount of such taxes, or (iii) delivering to the Company shares of Common Stock
having a Fair Market Value equal to the amount of such taxes. The Company will not deliver any
fractional Share but will pay, in lieu thereof, the Fair Market Value of such fractional Share. The
Participants election must be made on or before the
4
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 in Control means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the Exchange Act)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Companys then outstanding shares of Common Stock or the combined voting power of
the Companys 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 Companys 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 Companys 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 Companys outstanding Common Stock and the Companys
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
5
Business Combination (including an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Companys assets
either directly or through one of more subsidiaries) in substantially the same
proportions as their ownership of the Companys 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 Participants employment with the Company or
an Affiliate for the following acts: (i) the Participants gross incompetence or substantial
failure to perform his or her duties, (ii) misconduct by the Participant that causes or is likely
to cause harm to the Company or that causes or is likely to cause harm to the Companys reputation,
as determined by the Companys Board of Directors in its sole and absolute discretion (such
misconduct may include, without limitation, insobriety at the workplace during working hours or the
use of illegal drugs), (iii) failure to follow directions of the Companys Board of Directors that
are consistent with the Participants duties, (iv) the Participants conviction of, or entry of a
pleading of guilty or nolo contendre to, any crime involving moral turpitude, or the entry of an
order duly issued by any federal or state regulatory agency having jurisdiction in the matter
permanently prohibiting the Participant from participating in the conduct of the affairs of the
Company or (v) any breach of this Agreement that is not remedied within thirty (30) days after
receipt of written notice from the Company specifying such breach in reasonable detail.
Section 8.
Governing Law
. The internal law, and not the law of conflicts, of the
State of Delaware will govern all questions concerning the validity, construction and effect of
this Agreement.
Section 9.
Plan Provisions
. This Agreement is made under and subject to the
provisions of the Plan, and all of the provisions of the Plan are also provisions of this
Agreement. If there is a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern. By signing this Agreement, the
Participant confirms that the Participant has received a copy of the Plan and represents that the
Participant is
6
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 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
7
any way material or relevant to the construction or interpretation of this Agreement or any
provision hereof.
Section 16.
Participants Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. Any determination in this connection by the Company, including the Board of Directors of
the Company or the Committee, shall be final, binding and conclusive. The obligations of the
Company and the rights of the Participant are subject to all applicable laws, rules and
regulations.
Section 17.
Parties Bound
. The terms, provisions and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representatives and permitted successors and
assigns, subject to the limitation on assignment expressly set forth herein. This Agreement shall
have no force or effect unless it is duly executed and delivered by the Company and the Participant
or until such Agreement is delivered and accepted through any electronic medium in accordance with
procedures established by the Company.
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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By:
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Title:
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Participant
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8
Exhibit 10.6
Imation Corp. 2008 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. 2008 Stock Incentive Plan (the Plan).
The Company desires to award to the Participant a number of shares of the Companys common
stock, par value $.01 per share (the Common Stock), subject to certain restrictions as provided
in this Agreement, in order to carry out the purpose of the Plan. The purpose of this Agreement is
to evidence the terms and conditions of an award of restricted stock granted to the Participant
under the Plan.
Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as follows:
Section 1.
Award of Restricted Stock
.
Effective «
GrantDt
» (the Effective Date), the Company granted to the Participant a
restricted stock award of «
GrantDt
»(«
GrantDt
») shares of Common Stock (the
Shares), subject to the terms and conditions set forth in this Agreement and in accordance with
the terms of the Plan (the Restricted Stock Award).
Section 2.
Rights with Respect to the Shares
.
(a)
Stockholder Rights
. With respect to the Shares, the Participant shall be entitled
at all times on and after the date of issuance of the Shares to exercise the rights of a
stockholder of Common Stock of the Company, including the right to vote the Shares and the right to
receive dividends on the Shares as provided in Section 2(b) hereof, unless and until the Shares are
forfeited pursuant to Section 3 hereof. However, the Shares shall be nontransferable and subject to
a risk of forfeiture to the Company at all times prior to the dates on which such Shares become
vested, and the restrictions with respect to the Shares lapse, in accordance with Section 3 of this
Agreement.
(b)
Dividends
. As a condition to receiving the Shares under the Plan, the Participant
hereby agrees to defer the receipt of dividends paid on the Shares. Cash dividends or other cash
distributions paid with respect to the Shares prior to the date or dates the Shares vest shall be
subject to the same restrictions, terms and conditions as the Shares to which they relate, shall be
promptly deposited with the Secretary of the Company or a custodian designated by the Secretary,
and shall be forfeited in the event that the Shares with respect to which the dividends were paid
are forfeited.
(c)
Issuance of Shares
. The Company shall cause the Shares to be issued in the
Participants name or in a nominee name on the Participants behalf, either by book-entry
registration or issuance of a stock certificate or certificates evidencing the Shares, which
certificate or certificates shall be held by the Secretary of the Company or the stock transfer
agent or brokerage service selected by the Secretary of the Company to provide such services for
the Plan. The Shares shall be restricted from transfer and shall be subject to an appropriate
stop-transfer order. If any certificate is issued, the certificate shall bear an appropriate legend
referring to the restrictions applicable to the Shares. The Participant hereby agrees to the
retention by the Company of the Shares and, if a stock certificate is issued, the Participant
agrees to execute and deliver to the Company a blank stock power with respect to the Shares as a
condition to the receipt of this Restricted Stock Award. After any Shares vest pursuant to Section
3 hereof, and following payment of the applicable withholding taxes pursuant to Section 6 of this
Agreement, the Company shall promptly cause to be issued a certificate or certificates, registered
in the Participants name, evidencing such vested whole Shares (less any Shares withheld to pay
withholding taxes) and shall cause such certificate or certificates to be delivered to the
Participant free of the legend and the stop-transfer order referenced above. The Company will not
deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value of such
fractional Share at the time certificates evidencing the Shares are delivered to the Participant.
Section 3.
Vesting; Forfeiture
.
(a)
Vesting
. Subject to the terms and conditions of this Agreement, and except as
otherwise provided in 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, Participants rights to all of the unvested
Shares shall be immediately and irrevocably forfeited, including the right to vote such Shares and
the right to receive dividends on such Shares.
(c)
Change in Control
. Notwithstanding the vesting and forfeiture provisions contained
in Sections 3(a) and 3(b) hereof, but subject to the other terms and conditions set forth in this
Agreement, in the event of a Change in 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 in 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 Participants 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 necessary in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under this
Agreement, then the Committee shall, in such manner as it may deem equitable, adjust any or all of
the number and type of such Shares.
(b) Any additional shares of Common Stock of the Company, any other securities of the Company
and any other property distributed with respect to the Shares prior to the date or dates the Shares
vest shall be subject to the same restrictions, terms and conditions as the Shares to which they
relate and shall be promptly deposited with the Secretary of the Company or a custodian designated
by the Secretary.
Section 6.
Taxes
.
(a) The Participant acknowledges that the Participant will consult with the Participants
personal tax adviser regarding the income tax consequences of the grant of the Shares, payment of
dividends on the Shares, the vesting of the Shares and any other matters related to this Agreement.
In order to comply with all applicable federal, state, local or foreign income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure that all applicable
federal, state, local or foreign payroll, withholding, income or other taxes, which are the
Participants sole and absolute responsibility, are withheld or collected from the Participant.
(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee administering the Plan, the Participant may elect to satisfy tax withholding obligations,
if any, arising from the receipt of, or the lapse of restrictions relating to, the Shares by (i)
delivering cash, check, bank draft, money order or wire transfer payable to the
3
order of the Company, (ii) having the Company withhold a portion of the Shares otherwise to be
delivered having a Fair Market Value equal to the amount of such taxes, or (iii) delivering to the
Company shares of Common Stock having a Fair Market Value equal to the amount of such taxes. The
Company will not deliver any fractional Share but will pay, in lieu thereof, the Fair Market Value
of such fractional Share. The Participants election must be made on or before the date that the
amount of tax to be withheld is determined. If the Participant does not make an election, the
Company will withhold a portion of the Shares otherwise to be delivered having a Fair Market Value
equal to the amount of such taxes.
Section 7.
Definitions
. Terms not defined in this Agreement shall have the meanings
given to them in the Plan, and the following terms shall have the following meanings when used in
this Agreement:
(a) Change in Control means any one of the following events:
(i) the consummation of a transaction or series of related transactions in
which a person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the Exchange Act)), other than
the Company or a subsidiary of the Company, or any employee benefit plan of the
Company or a subsidiary of the Company, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
Companys then outstanding shares of Common Stock or the combined voting power of
the Companys 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 Companys 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 Companys 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 Companys outstanding Common Stock and the
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Companys 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 Companys assets either directly
or through one of more subsidiaries) in substantially the same proportions as their
ownership of the Companys 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.
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.
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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.
Section 15.
Headings
. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of this Agreement or any provision
hereof.
Section 16.
Participants Acknowledgments
. The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee or the Board of
Directors of the Company, as appropriate, upon any questions arising under the Plan or this
Agreement. Any determination in this connection by the Company, including the Board of Directors of
the Company or the Committee, shall be final, binding and conclusive. The obligations of the
Company and the rights of the Participant are subject to all applicable laws, rules and
regulations.
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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
or until such Agreement is delivered and accepted through any electronic medium in accordance with
procedures established by the Company.
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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By:
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Name:
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Title:
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Participant
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