Lexmark 2012 Annual Report Download - page 166

3. SEVERANCE BENEFITS
3.1 Severance Benefits. If Executive’s employment terminates due to (a) an involuntary termination by the Company without Cause (as defined in
Section 5.1(b)) or (b) a voluntary termination by Executive with Good Reason (as defined in Section 5.1(d)), then Executive shall receive severance in an
amount equal to the sum of: (i) two times the average of the annual base salary and bonus compensation paid or payable to Executive under the Executive
Bonus Plan (and any predecessor plan to the Executive Bonus Plan) during the 24-months preceding termination of the Executive’s employment; and (ii) an
amount equal to the Award Share that Executive would have received under the Incentive Program if during the Fiscal Year of the Executive’s termination, and
in each Fiscal Year remaining under the term of the Incentive Program following the Executive’s termination, the Company calculated the Award Amount for
such Fiscal Year at the Plan Target Revenue; provided, however, that if, pursuant to the final paragraph of Section 2(a) of the Incentive Program, on or prior to
the date of the termination of Executive’s employment the Award Amount under the Incentive Plan is increased to the maximum Award Amount for each Fiscal
Year not yet completed under the Incentive Plan, then the Award Share under (ii) above shall be determined with reference to such maximum Award Amount.
The receipt of benefits under this Section 3.1 shall terminate all rights of Executive under the Incentive Program including, but not limited to, the provisions of
Section 2(c)(ii) of the Incentive Program. All capitalized terms in this section that are not otherwise defined in this Agreement shall have the meanings
prescribed in the Incentive Program.
The severance amount established above shall be payable with interest at eight percent (8%) per annum in twelve (12) monthly installments at regular payroll
dates of the Company commencing on the first payroll date following the Executive’s termination of employment, provided however, if any payments are
required to be delayed for the six-month period immediately following the effective date of Executive’s termination of employment to comply with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) because Executive is a “specified employee,” such delayed payments shall be made in a lump
sum payment on the first regular payroll date after the six-month period following the effective date of Executive’s termination of employment, with any
remaining payments to be paid in monthly installments in accordance with the schedule set forth above. Any such payments shall be subject to applicable tax
withholding. In addition, Executive and Executive’s covered dependents shall be eligible to continue their health care benefit coverage as permitted by COBRA
(Code Section 4980B) at the same cost to Executive as in effect immediately prior to such termination for the twelve (12) month period following such
termination. Executive shall be entitled to maintain coverage for Executive and Executive’s eligible dependents at Executive’s own expense for the balance of the
period that Executive is entitled to coverage under COBRA.
3.2 Change of Control Benefits. To the extent that benefits become payable to Executive pursuant to the Change of Control Agreement entered
concurrently with this Agreement, and such amounts are greater than the amounts that would become payable to Executive under Section 3.1, no severance
benefits shall be paid pursuant to Section 3.1 of this Agreement; provided, however, that the foregoing limitation shall not affect Company’s obligation for the
health care benefit coverage under COBRA as provided above.