1. Shareholder Proposal
Discussion

2. Shareholder Proposal
RESOLVED, that the shareholders of Lexmark International, Inc.
(“Lexmark” or the “Company”) urge the board of directors to adopt a
policy under which shareholders could vote at each annual meeting on
an advisory resolution, to be proposed by Lexmark’s management, to
ratify the compensation of the named executive officers (“NEOs”) set
forth in the proxy statement’s Summary Compensation Table (the
“SCT”) and the accompanying narrative disclosure of material factors
provided to understand the SCT (but not the Compensation Discussion
and Analysis). The proposal submitted to shareholders should make
clear that the vote is non-binding and would not affect any
compensation paid or awarded to any NEO.
1

3. Board Recommends a Vote Against
Adoption could put your company at a competitive disadvantage
and impact our ability to recruit and retain critical personnel
Advisory vote is not effective for conveying meaningful shareholder opinions
to the Compensation Committee or your Board
Shareholders already have an effective mechanism for expressing their views
to the Compensation Committee or your Board
The Compensation Committee’s compensation practices
and programs serve shareholders’ interests
2

4. Competitive Disadvantage
Issue: Perception of Less Compensation Opportunity
Key Competitors for Talent*
HP Xerox Kodak Brother
Epson Canon Samsung
Peer
Ricoh Oki Kyocera
Companies
*To our knowledge none of these competitors has adopted an advisory vote.
3

5. Not an Effective
Communication Vehicle
Shareholders Already Have
Advisory Vote is Not an
an Effective Mechanism
Effective Mechanism
• Would not provide: • Shareholders already have
direct access to their Board
– Any clear indication
of the meaning of vote
– Shareholder views of • Allows shareholders to:
merits, limitations, or – Voice specific observations
preferred enhancements or concerns
– Communicate clearly and
• Instead, requires Committee effectively with the Board
to speculate about the • An advisory vote does not
meaning of shareholder provide that communication
approval or disapproval
4

6. Lexmark Compensation Practices
Do Serve Shareholder Interests
Correct Peer Group for Benchmarking is Very Important
• Needs to Be
– Same Industry
– Similar Size
– Compete for Same Group of Talent
The Lexmark Compensation Committee Believes It Uses the
Correct Peer Group*
• Committee Directly Engages Consultants That Are Independent
of Management
– Pearl Meyer & Partners
– Mellon
• Further Validation by General Surveys
5 *Reference slide 9

7. Lexmark Compensation Practices
Do Serve Shareholder Interests
Lexmark Compensation is Aligned With Shareholder Interests*
• Market Competitive Opportunity (Attract / Retain Talent)
– Opportunity is competitive, not excessive
– Generally at or below peer median
• Compensation Opportunity is Significantly “At Risk”
– At risk % for 2003 – 2007 CEO compensation opportunity
ranges from 84% to 89%
– Only fixed portion is Base Salary
• Pay for Performance That Reflects Shareholder Returns
– Measured by a comparison of realized vs. opportunity
– Tracks financial results and shareholder returns
“ In a company, many times investors get frustrated because it seems management gets rewarded
regardless of financial performance or a firm’s share price. In this case, the board chose not to
reward management, and this accurately reflects Lexmark’s struggles the past two years.”
Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons, Lexington Herald-Leader, March 19, 2008
6 *Reference slide 10 on 2003 – 2007 CEO Compensation

8. Board Recommends a Vote Against
Adoption could put your company at a competitive disadvantage
and impact our ability to recruit and retain critical personnel
Advisory vote is not effective for conveying meaningful shareholder opinions
to the Compensation Committee or your Board
Shareholders already have an effective mechanism for expressing their views
to the Compensation Committee or your Board
The Compensation Committee’s compensation practices
and programs serve shareholders’ interests
7

9. Additional Data
8

10. Executive Compensation Peer Groups
2006 2007
Advanced Micro Devices * *
Agilent Technologies
* *
Analog Devices
* *
Apple Computer
* *
Applied Materials
* *
Avaya
* *
Computer Sciences
* *
EMC
* *
Gateway *
KLA-Tencor * *
LSI Logic * *
Maxtor *
National Semiconductor * *
NCR * *
Qualcomm
* *
Sanmina-SCI
* *
Scientific Atlanta *
Seagate Technology * *
Silicon Graphics *
Solectron * *
Sun Microsystems * *
Tektronix * *
Western Digital * *
Xerox * *
Xilinx * *
9

11. 2003-2007 CEO Compensation
Pay For Performance: Realized CEO
CEO Total Compensation Opportunity1 Compensation vs. Opportunity (as of 3/18/08)
Total Return
75th Percentile 30% 8% - 47% 63% - 52%
to Shareholders
Op Inc* / Share
65th Percentile 18% 22% - 19% 23% - 29%
Change
* Without Restructuring
Median
100%
% Opportunity
75%
Realized
25th Percentile
50%
25%
2003 2004 2005 2006 2007
0%
% At Risk 88% 84% 84% 89% 86% 2003 2004 2005 2006 2007
Note Notes
(1) Compensation opportunity is composed of base salary, short term (1) 2003-2007 stock option grants have a strike price ranging
incentive, long term incentive and equity incentive. from $48.05 to $84.80. All grants are unexercised and are
currently out of the money.
(2) 2006 performance based RSU retention grant is valued at
$1,071K using the March 18, 2008 closing stock price of
$32.45. Performance triggers were achieved in 2006. The
outstanding RSUs will vest 50% on February 22, 2009 and
50% on February 22, 2010.
10

12. Compensation Philosophy Serves
Shareholder Interests
Put pay
Pay for
significantly
performance
“at risk”
Aligned with
shareholder interests
Balance
Provide market
short-term and
competitive
long-term
opportunities
objectives
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