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
Company’s common stock, par value $.01 per share (the
“Common Stock”), as provided in this Agreement in order
to carry out the purpose of the Plan. The purpose of this Agreement
is to evidence the terms and conditions of a Non-Qualified Stock
Option granted to the Participant under the Plan.
Accordingly, for good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Participant hereby agree as
follows:
Section 1. Grant of
Non-qualified Stock Option . Effective «GrantDt»
(the “Effective Date”), the Company granted to the
Participant the right and option to purchase all or any part of an
aggregate of «Shares» («NbrShares») shares
of Common Stock on the terms and conditions set forth in this
Agreement and in accordance with the terms of the Plan (the
“Option”). The Option is not intended to be an
incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the
“Code”).
Section 2. Purchase Price
. The purchase price of the shares of Common Stock subject to the
Option shall be «Price» per share.
Section 3. Term of the
Option . The term of the Option (the “Option
Period”) shall be for a period of ten (10) years from
the Effective Date, terminating at the close of business on the
tenth anniversary of the Effective Date (the “Expiration
Date”) or such shorter period as provided in Section 6
hereof.
Section 4. Vesting of the
Option . Subject to Section 6 hereof, the Option may be
exercised at any time or from time to time during the Option
Period, as to any part or all of the shares covered thereby in
accordance with the following vesting schedule:
(a) twenty
five percent (25%) of the Option may be exercised at any time on or
after the first anniversary of the Effective Date;
(b) fifty
percent (50%) of the Option may be exercised at any time on or
after the second anniversary of the Effective Date;
(c) seventy
five percent (75%) of the Option may be exercised at any time on or
after the third anniversary of the Effective Date; and
(d) one
hundred percent (100%) of the Option may be exercised at any time
on or after the fourth anniversary of the Effective Date.
Section 5.
Transferability . The Option may not be assigned,
transferred (other than by will or the laws of descent and
distribution), pledged, hypothecated (whether by operation of law
or otherwise) or otherwise conveyed or encumbered, and shall not be
subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions of the Plan or this
Agreement, or the levy of any execution, attachment or similar
process upon the Option, shall be void and unenforceable against
the Company and shall constitute an immediate cancellation of the
Option.
Section 6. Effect of
Termination of Employment .
(a) In
the event the Participant shall cease to be employed by the Company
and all subsidiaries of the Company for any reason other than
(i) Termination for Cause, (ii) Retirement,
(iii) death or Disability or (iv) termination by the
Company or a subsidiary of the Participant’s employment with
the Company and its subsidiaries within two (2) years
following a Change 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 Participant’s Retirement, and the
exercise of the Option to that limited extent may be effected at
any time within three (3) years after the date of the
Participant’s Retirement but not thereafter; provided,
however, that the Option may not be exercised after the Expiration
Date. If a Participant who has thus retired dies within three
(3) years after the date of the Participant’s Retirement
and prior to the Expiration Date, the exercise of the Option to the
limited extent provided for in the first sentence of this Section
6(c) may be effected by the Participant’s estate or by any
Person or Persons to whom the Option has been transferred by will
or the applicable laws of descent and distribution at any time
within two (2) years after the date of the Participant’s
death, but not after the Expiration Date.
(d) In
the event the Participant dies or is deemed to suffer a Disability
while employed by the Company or a subsidiary, the Option, to the
extent not previously exercised or forfeited, shall be exercisable
to the extent of (but only to the extent of) the number of vested
shares the Participant was entitled to purchase under the Option on
the date of the Participant’s
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death or
Disability. In the event of Participant’s death, the exercise
of the Option to the limited extent provided for in the first
sentence of this Section 6(d) may be effected by the
Participant’s estate or by any Person or Persons to whom the
Option has been transferred by will or the applicable laws of
descent and distribution at any time within two (2) years
after the date of the Participant’s death, but not after the
Expiration Date. In the event of the Participant’s
Disability, the exercise of the Option to the limited extent
provided for in the first sentence of this Section 6(d) may be
effected by the Participant at any time within two (2) years
after the date of the Participant’s Disability, but not after
the Expiration Date.
(e) In
the event the Company or a subsidiary terminates the
Participant’s employment with the Company and all
subsidiaries of the Company for any reason other than death,
Disability or Termination for Cause within two (2) years
following a Change 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 Participant’s
termination of employment, but not after the Expiration Date. In
the event that the provisions of this Section 6(e) result in
“payments” that are finally and conclusively determined
by a court or Internal Revenue Service proceeding to be subject to
the excise tax imposed by Section 4999 of the Code, and the
Participant has not received any additional cash payment from the
Company relating thereto under the provisions of Section 6 of
the Severance Agreement between the Company and the Participant
(the “Severance Agreement”), the Company shall pay to
the Participant an additional amount such that the net amount
retained by the Participant following realization of all
compensation under the Plan that resulted in such
“payments,” after allowing for the amount of such
excise tax and any additional federal, state and local income and
employment taxes paid on the additional amount, shall be equal to
the net amount that would otherwise have been retained by the
Participant if there were no excise tax imposed by
Section 4999 of the Code. If the Participant receives any
additional cash payment from the Company under Section 6 of
the Severance Agreement, the foregoing sentence shall be of no
force or effect and the provisions of the Severance Agreement shall
be deemed to supersede the foregoing sentence in its
entirety.
Section 7. Anti-Dilution and
Fundamental Change Adjustments .
(a) In
the event that 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.
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(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,
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