EXHIBIT 10.14

 

ZOMAX INCORPORATED

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

 

                THIS AGREEMENT, made this ___ day of ________, 200_, by and
between ZOMAX INCORPORATED, a Minnesota corporation (the “Company”), and
______________________ (the “Optionee”);

 

W I T N E S S E T H

 

                WHEREAS, the Optionee on the date hereof is an employee,
officer, director, consultant or advisor of the Company or a Subsidiary of the
Company; and

 

                WHEREAS, to induce the Optionee to further the Optionee’s
efforts in its behalf, the Company desires to grant to the Optionee a
nonqualified stock option to purchase shares of its Common Stock; and

 

                WHEREAS, on the date hereof, the Company’s Board of Directors
(or, if so appointed and empowered by the Board, the Board’s Stock Option
Committee) authorized the grant of this nonqualified stock option outside of any
Company option plan to the Optionee;

 

                NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Optionee hereby agree as
follows:

 

                1.             Grant of Option.  The Company hereby grants to
the Optionee, on the date of this Agreement, the Option to purchase _________
shares of Common Stock of the Company (the “Option Stock”) subject to the terms
and conditions herein contained, and subject only to adjustment in such number
of shares as provided in Paragraph 12 below.  This Option is a nonqualified
stock option and will not be treated as an incentive stock option, as defined
under Section 422, or any successor provision, of the Internal Revenue Code of
1986, as amended (the “Code”), and the regulations thereunder.

 

                2.             Option Price.  During the term of this Option,
the purchase price for the shares of Option Stock granted herein is $_______ per
share, subject only to adjustment of such price as provided in Paragraph 12
below.

 

                3.             Term of Option.  Unless terminated earlier under
the provisions of Paragraphs 9, 10 or 11 below, this Option shall terminate as
of the close of business on _____________, 20__.  This Option shall not be
exercisable during the first year.  Thereafter, this Option shall become
exercisable to the extent of ____________ shares on each of the first _______
anniversary dates of the date of grant until the earlier of the time this Option
shall have become exercisable to the extent of one hundred percent (100%) of the
total number of shares granted or its termination as provided herein.  If the
Optionee does not purchase the full number of shares which the Optionee is
entitled to purchase upon an exercise of this Option, the Optionee may purchase
upon any subsequent exercise prior to the Option’s termination such previously
unpurchased shares in addition to those the Optionee is otherwise entitled to
purchase.

 

                4.             Personal Exercise by Optionee.  This Option
shall, during the lifetime of the Optionee, be exercisable only by said
Optionee, or by the Optionee’s guardian or other legal representative, and shall
not be transferable by the Optionee, in whole or in part, other than by will or
by the laws of descent and distribution.

 

                5.             Manner of Exercise of Option.

 

                                a.             The Option may be exercised only
by the Optionee (or other proper party in the event of death), subject to such
administrative rules as the Board of Directors may deem advisable, by delivering
a written notice of exercise to the Company at its principal office.  The notice
shall state the number of shares as to which the Option is being exercised and
shall be accompanied by payment in full of the option price for all shares
designated in the notice.  The exercise of the Option shall be deemed effective
upon receipt of such notice by the Company and upon payment that complies with
the terms of this Agreement.  The Option may be exercised with respect to any
number or all of the shares as to which it can then be exercised and, if
partially exercised, may be so exercised as to the unexercised shares any number
of times during the exercise period as provided herein.

 

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                                b.             Payment of the option price by
the Optionee shall be in the form of cash, certified check or previously
acquired shares of Common Stock of the Company, or any combination thereof;
provided, however, that the Board or any Committee appointed by the Board to
administer this Agreement  may, in its sole discretion, limit the form of
payment to cash or certified check and may exercise its discretion any time
prior to the termination of this Option or upon any exercise of this Option by
the Optionee.  Any stock so tendered as part of such payment shall be valued at
its “fair market value” on the date of exercise.  For purposes hereof, if such
stock is then reported in the national market system or is listed upon an
established exchange or exchanges, “fair market value” of the Common Stock per
share shall be the highest closing price of such stock in such national market
system or on such stock exchange or exchanges on the date the Option is
exercised or, if no sale of such stock shall have occurred on that date, on the
next preceding day on which there was a sale of stock.  If such stock is not so
reported in the national market system or listed upon an exchange, “fair market
value” shall be the mean between the “bid” and “asked” prices quoted by a
recognized specialist in the Common Stock of the Company on the date the Option
is exercised, or if there are no quoted “bid” and “asked” prices on such date,
on the next preceding date for which there are such quotes.  If such stock is
not publicly traded as of the date the Option is granted, the “fair market
value” of the Common Stock shall be determined by the Board in its sole
discretion by applying principles of valuation with respect to the Option.   As
soon as practicable after the effective exercise of all or any part of the
Option, the Optionee shall be recorded on the stock transfer books of the
Company as the owner of the shares purchased, and the Company shall deliver to
the Optionee one or more duly issued stock certificates evidencing such
ownership.  All requisite original issue or transfer documentary stamp taxes
shall be paid by the Company.

 

                6.             Employment; Rights as a Shareholder.  This
Agreement shall not confer on the Optionee any right with respect to continuance
of employment, if so employed, by the Company or any of its Subsidiaries, nor
will it interfere in any way with the right of the Company to terminate such
employment.  The Optionee or a transferee of this Option shall have no rights as
a shareholder with respect to any shares covered by this Option until the date
of the issuance of a stock certificate for such shares.  No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property), distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Paragraph 12 below.

 

                7.             Withholding Taxes.  In order to provide the
Company with the opportunity to claim the benefit of any income tax deduction
which may be available to it upon the exercise of this Option and to permit the
Company to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to insure
that, if necessary, all applicable federal or state payroll, income or other
taxes are withheld from any amounts payable by the Company to the Optionee.  If
the Company is unable to withhold such federal and state taxes, for whatever
reason, the Optionee hereby agrees to pay to the Company an amount equal to the
amount the Company would otherwise be required to withhold under federal or
state law.  The Optionee may, subject to the discretion of the Board of
Directors or such other administrative rules it may deem advisable, elect to
have all or a portion of such tax withholding obligations satisfied by
delivering shares of the Company’s Common Stock having a fair market value equal
to such obligations.

 

                8.             Securities Law Compliance.  The exercise of all
or any parts of this Option shall only be effective at such time as counsel to
the Company shall have determined that the issuance and delivery of Common Stock
pursuant to such exercise will not violate any state or federal securities or
other laws.  The Optionee may be required by the Company, as a condition of the
effectiveness of any exercise of this Option, to agree in writing that all
Common Stock to be acquired pursuant to such exercise shall be held, until such
time that such Common Stock is registered and freely tradable under applicable
state and federal securities laws, for the Optionee’s own account without a view
to any further distribution thereof, that the certificates for such shares shall
bear an appropriate legend to that effect and that such shares will be not
transferred or disposed of except in compliance with applicable state and
federal securities laws.

 

                9.             Termination of Relationship With Company (Other
than Because of Death or Change of Control).  If the Optionee ceases to be an
employee or director of or a consultant or advisor to the Company or any
Subsidiary for any reason, other than because of a “change of control
transaction” as described in Paragraph 10 or because of death, this Option shall
completely terminate on the earlier of (i) the close of business on the
one-month anniversary date of such termination of such relationship, and 
(ii) the expiration date of this Option stated in Paragraph 3 above.  In such
period following termination of such relationship, this Option shall be
exercisable only to the extent the Option was exercisable on the date of
termination of such relationship, but had not previously been exercised.

 

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                10.          Change of Control.

 

                                a.             If the Optionee ceases to be an
employee or director of or a consultant or advisor to the Company or any
Subsidiary because of a “change of control transaction,” this Option shall
completely terminate on the earlier of (i) the close of business on the
one-month anniversary date of such termination of employment and (ii) the
expiration date of this Option stated in Paragraph 3 above; provided, however,
that if (a) such transaction is treated as a “pooling of interests” under
generally accepted accounting principles and (b) the Optionee is an “affiliate”
of the Company or Subsidiary under applicable legal and accounting principles,
this Option shall completely terminate on the later of (A) the close of business
on the one-month anniversary date of such termination or (B) the close of
business on the date that is sixty (60) days after the date on which affiliates
are no longer restricted from selling, transferring or otherwise disposing of
the shares of stock received in the change of control transaction.

 

                                b.             In such period following the
termination of the Optionee’s employment upon a change of control transaction,
this Option shall be fully exercisable unless the acceleration of the
exercisability of this Option has been prevented as provided in Paragraph 12, in
which case, this Option shall be exercisable only to the extent the Option was
exercisable on the vesting date immediately preceding such termination of
employment, but had not previously been exercised.  To the extent this Option
was not exercisable upon termination of such relationship or if the Optionee
does not exercise the Option within the time specified in this Paragraph 10, all
rights of the Optionee under this Option shall be forfeited.

 

                                c.             For purposes of this Paragraph
10, a “change of control transaction” means an acquisition of the Company
through the sale of substantially all of the Company’s assets and the consequent
discontinuance of its business or through a merger, consolidation, exchange,
reorganization, reclassification, extraordinary dividend, divestiture (including
a spin-off) or liquidation of the Company.

 

                11.          Death of Optionee.  If the Optionee dies (i) while
an employee or director of or consultant or advisor to the Company or any
Subsidiary, or (ii) within the period of one month after the termination of the
Optionee’s relationship with the Company or any Subsidiary as provided in
Paragraph 9, this Option shall terminate on the earlier of (i) the close of
business on the twelve-month anniversary date of the Optionee’s death, and (ii)
the expiration date under this Option.  In such period following the Optionee’s
death, this Option may be exercised by the person or persons to whom the
Optionee’s rights under this Option shall have passed by the Optionee’s will or
by the laws of descent and distribution only to the extent the Option was
exercisable on the date of death but had not previously been exercised.  To the
extent this Option was not exercisable upon the Optionee’s death, or if the
Option is not exercised within the time specified in this Paragraph 11, all
rights under this Option shall be forfeited.

 

                12.          Recapitalizations, Sales, Mergers, Exchanges,
Consolidations, Liquidation.

 

                                a.             Certain changes in the number or
character of the Common Stock of the Company (through sale, merger,
consolidation, exchange, reorganization, divestiture (including a spin-off),
liquidation, recapitalization, stock split, stock dividend or otherwise) shall
result in an adjustment, reduction or enlargement, as appropriate, in the
Optionee’s rights with respect to any unexercised portion of the Option (i.e.,
the Optionee shall have such “anti-dilution” rights under the Option with
respect to such events, but shall not have “preemptive” rights).  In the event
of an increase or decrease in the number of shares of Common Stock resulting
from a subdivision or consolidation of shares or the payment of a stock dividend
or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company, the number of shares
of Option Stock and the price per share thereof shall be adjusted by the Board
to reflect such change.  Additional shares which may be credited pursuant to
such adjustment shall be subject to the same restrictions as are applicable to
the shares with respect to which the adjustment relates.

 

                                b.             In the event of an acquisition of
the Company through the sale of substantially all of the Company’s assets and
the consequent discontinuance of its business or through a merger,
consolidation, exchange, reorganization, reclassification, extraordinary
dividend, divestiture or liquidation of the Company (collectively referred to as
a “transaction”), this Option shall become immediately exercisable, whether or
not the Option had become exercisable prior to the transaction; provided,
however, that if the acquiring party seeks to have the transaction accounted for
on a “pooling of interests” basis and, in the opinion of the Company’s
independent certified public accountants, accelerating the exercisability of the
Option would preclude a pooling of interests under generally accepted accounting
principles, the exercisability of this Option shall not accelerate.  In addition
to the foregoing, in the event of such a transaction, the Board may provide for
one or more of the following:

 

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                                                                (i)  the
complete cancellation of this Option if not exercised prior to a date specified
by the Board (which date shall give the Optionee a reasonable period of time in
which to exercise the Option prior to the effectiveness of such transaction);

 

                                                                (ii)  that the
Optionee shall receive, with respect to each share of Option Stock subject to
this Option, as of the effective date of any such transaction, cash in an amount
equal to the excess of the fair market value of such Option Stock on the date
immediately preceding the effective date of such transaction over the option
price per share of the Option; provided that the Board may, in lieu of such cash
payment, distribute to the Optionee shares of stock of the Company or shares of
stock of any corporation succeeding the Company by reason of such transaction,
such shares having a value equal to the cash payment herein; or

 

                                                                (iii)  the
continuance of this Option with respect to the exercise of the Option and
provide to the Optionee the right to exercise this Option as to an equivalent
number of shares of stock of the corporation succeeding the Company by reason of
such transaction.

 

                                c.             The Board may restrict the rights
of or the applicability of this Paragraph 12 to the extent necessary to comply
with Section 16(b) of the Securities Exchange Act of 1934, the Internal Revenue
Code or any other applicable law or regulation.  The grant of this Option shall
not limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

 

                13.          Scope of Agreement.  This Agreement shall bind and
inure to the benefit of the Company and its successors and assigns and the
Optionee and any successor or successors of the Optionee permitted by Paragraph
4 hereof.

 

 

                IN WITNESS WHEREOF, the Company and the Optionee have executed
this Agreement in the manner appropriate to each, as of the day and year first
above written.

 

 

 

 

 

 

 

ZOMAX INCORPORATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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OPTIONEE

 

 

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