EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This is an Employment Agreement (Agreement) between ZOMAX INCORPORATED, a
Minnesota corporation, (hereinafter “Zomax”), and Anthony Angelini (hereinafter
“Executive”).

 

Section 1

 

DEFINITIONS

 

1.                                      Definitions.

 

The following capitalized terms used in this Agreement shall be defined as
follows:

 

Agreement shall mean this Agreement between Zomax and Executive.

 

Base Salary shall mean the annual base salary payable to Executive pursuant to
Section 3.1 hereof, and “monthly Base Salary” shall mean the Base Salary divided
by twelve (12).

 

Board shall mean the Board of Directors of Zomax.

 

Cause shall mean termination of the Executive’s employment with Zomax by the
Board because of (1) gross misconduct, dishonesty or disloyalty which results in
material harm to Zomax; (2) willful and material breach of this Agreement by
Executive (other than Executive’s failure to perform his duties hereunder
resulting from incapacity due to physical or mental illness) which has not been
corrected by Executive within two weeks of receipt of notice from Zomax of the
occurrence of such event; (3) conviction or entry of a plea of guilty or nolo
contendere to any felony or to any misdemeanor involving fraud,
misrepresentation or theft; or (4) the failure of Executive to comply in all
material respects with policies and procedures adopted by the Board of Directors
and committees of the Board of Directors relating to and including, but not
limited to, governance, securities trading, corporate disclosure practices and
executive annual training and education.  Zomax acknowledges that it has been
the subject of a civil investigation for the past several years, that Executive
served as an officer of Zomax during the period covered by the investigation and
that Executive’s actions during this period do not constitute cause as defined
herein. No act, or failure to act, by Executive shall be considered “willful”
unless committed without good faith and without a reasonable belief that the act
or omission was in Zomax’s best interest.

 

A Change of Control shall be deemed to have occurred if (1) any “person” (as
such term is used in Section 13(d) and 14(d) of the Exchange Act) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Zomax representing 30% or more of the combined
voting power (with respect to the election of directors) of Zomax’s then
outstanding securities; (2) at any time after the execution of this Agreement,
individuals who as of the date of the execution of this Agreement constitute the

 

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Board (and any new director whose election to the Board or nomination for
election to the Board by Zomax’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office) cease for any reason to
constitute a majority of the Board; (3) the consummation of a merger or
consolidation of Zomax with or into any other corporation, other than a merger
or consolidation which would result in the holders of the voting securities of
Zomax outstanding immediately prior thereto continuing to continue to hold
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 70% of the combined voting power (with respect
to the election of directors) of the securities of Zomax or of such surviving
entity outstanding immediately after such merger or consolidation; or (4) the
consummation of a plan of complete liquidation of Zomax or of an agreement for
the sale or disposition by Zomax of all or substantially all of Zomax’s business
or assets.

 

Change of Control Payments shall mean any payment (including any benefit or
transfer of property) in the nature of compensation to or for the benefit of
Executive under any arrangement which is partially or entirely contingent on a
Change of Control, or is deemed to be contingent on a Change of Control for
purposes of Section 280G of the Code.  As used in this definition, the term
“arrangement” includes any agreement between Executive and Zomax and any and all
of Zomax’s salary, bonus, incentive, compensation or benefit plans, programs or
arrangements, and shall include this Agreement.

 

Code shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

Company shall mean Zomax Incorporated, a Minnesota corporation, any subsidiaries
thereof, and any successors or assigns, including any Successor.

 

Company Product means any product, product line or service (including any
component thereof or research to develop information useful in connection with a
product or service) that is being designed, developed, manufactured, marketed or
sold by Zomax at the time of the termination of Executive’s employment with
Zomax or with respect to which Zomax has acquired, prior to termination of
Executive’s employment, Confidential Information which it intends to use in the
design, development, manufacture, marketing or sale of a product or service.

 

Competitive Product means any product, product line or service (including any
component thereof or research to develop information useful in connection with a
product or service) that is being designed, developed, manufactured, marketed or
sold by anyone other than Zomax and is of the same general type, performs
similar functions, or is used for the same purposes as a Company Product.

 

Confidential Information means any information or compilation of information
that Executive learns or develops during the course of his employment with Zomax
that derives independent economic value from not being generally known, or
readily ascertainable by proper means, by other persons who can obtain economic
value from its disclosure or use.  It includes but is not limited to trade
secrets, inventions, discoveries, and may relate to such matters as research and
development, manufacturing processes, management systems and techniques and
sales and marketing plans and information.

 

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Good Reason shall mean (1) a substantial reduction in the nature or status of
Executive’s responsibilities hereunder, including if Executive should no longer
serve as the Chief Executive Officer, or report to the board of directors, of
Zomax or an ultimate parent entity; (2) a reduction by the Company in the
Executive’s Base Salary or target bonus opportunity except a reduction may be
permitted if the Company reduces the base salaries or target bonus opportunities
of its senior executives generally provided that such reduction shall not exceed
the average percentage reduction of all senior executives of this Agreement; (3)
the failure to comply with the Section 3.3 of this Agreement; (4) a requirement
to relocate outside of the San Francisco Bay Area; (5) failure by Zomax to allow
Executive to participate to the full extent in all plans, programs or benefits
in accordance with this Agreement; (6) failure by Zomax to nominate and endorse
Executive for reelection to the Board during the Term; and (7) failure by a
successor to assume all of the terms and conditions of this Agreement. 
Notwithstanding the foregoing, “Good Reason” shall be deemed to occur only if
such event enumerated in (1), (2), (3), (4) or (5) above has not been corrected
by Zomax within two weeks of receipt of notice from Executive of the occurrence
of such event, which notice shall specifically describe such event.

 

Inventions means any inventions, discoveries, improvements, ideas or works of
authorship (whether patentable or not and including those which may be subject
to copyright protection) generated, conceived, authored or reduced to practice
by Executive alone or in conjunction with others, during or after working hours,
while an employee of Zomax, and that:

 

(i)                                     are derived in whole or in part from, or
use, incorporate or represent any improvement to any Invention or trade secret
of Zomax; or

 

(ii)                                  result from any work Executive performs
for Zomax; or

 

(iii)                               use any of Zomax’s equipment, supplies,
facilities or trade secret information; or

 

(iv)                              otherwise relate to Zomax’s products or
Zomax’s present or reasonably foreseeable future research or development.

 

Term shall mean the term of Executive’s employment under Section 2.3 below.

 

Person shall mean an individual, partnership, corporation, estate or trust or
other entity.

 

Successor shall be any entity acquiring substantially all of the assets of Zomax
or a corporation into which Zomax is merged or with which it is consolidated.

 

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Section 2

 

EMPLOYMENT AND TERMS OF AGREEMENT

 

2.1                               Employment.  Zomax hereby agrees to continue
to employ Executive, and Executive hereby agrees to continue his employment as
President and Chief Executive Officer of Zomax, subject to the terms and
conditions of this Agreement and shall report directly to the Board.  At all
relevant times during the Term, Zomax agrees to nominate Executive for election
to the Board.  Executive understands and agrees that he will immediately resign
from the Board (and from any other Zomax directorships or offices) upon
termination of his employment for any reason.

 

2.2                               Duties.

 

a.                                       During the term of his employment
pursuant to this Agreement, Executive shall serve Zomax faithfully and to the
best of his ability and shall devote substantially all his business and
professional time, energy, and diligence to the performance of the duties of
such office and he shall perform such service and duties in connection with the
business and affairs of Zomax (i) as are customarily incident to such office and
(ii) as may reasonably be assigned or delegated to him by the Board and/or its
director designee.  Executive may engage in appropriate civic, charitable or
religious activities and devote a reasonable amount of time to private
investments or, with the consent of Zomax’s Board of Directors which shall not
be withheld unreasonably, serve on up to two (2) boards of directors of other
entities, in each case, as long as such activities and service do not interfere
or conflict with Executive’s duties and responsibilities to Zomax and its
affiliates.

 

b.                                      Subject to the terms of this Agreement,
Executive agrees to be subject to Zomax’s control, rules, regulations, policies
and programs.

 

2.3                               Term of Employment.

 

a.                                       The term of this Agreement shall be
effective as of the date hereof and shall extend until terminated as expressly
provided herein.

 

b.                                      Unless extended by mutual consent or as
provided in Section 2.3(c) below, this Agreement shall terminate one year from
the date hereof (the “Initial Term”).

 

c.                                       On and after the Initial Term, this
Agreement shall be deemed extended from year to year (“Extension Year”) unless,
no later than three (3) months prior to the end of the Initial Term or
applicable Extension Year (as the case may be), Zomax or the Executive shall
have notified the other party in writing that it or he does not elect to extend
the Initial Term or applicable Extension Year (as the case may be) past its then
expiration date.

 

Section 3

 

COMPENSATION, BENEFITS AND OTHER ENTITLEMENTS

 

3.1                               Base Salary.  As compensation for his services
to Zomax and as compensation for his confidentiality and noncompetition
agreements provided in Sections 7 and 9 of this

 

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Agreement, Executive shall be paid a bi-weekly salary of $17,307.69.  The Base
Salary may be increased or reduced; provided, however, that any reduction shall
be permitted only if the Company reduces the base salary of its senior
executives generally and such reduction shall not exceed the average percentage
reduction for all senior executives.  The base annual salary shall be inclusive
of all applicable income, Social Security, and other taxes and charges that are
required by law to be withheld by Zomax or that are requested to be withheld by
Executive.

 

3.2                               Bonus.  In addition to the base salary payable
to Executive pursuant to Section 3.1 above, Executive will be eligible to
receive an annual bonus for each year of service under this Agreement.  During
the Term, the bonus shall be targeted at no less than 70% of Base Salary, unless
the Company reduces the target bonus of its senior executives generally and such
reduction does not exceed the average percentage reduction for all senior
executives.  The criteria for payout of Executive’s bonus and his target bonus
opportunity for a particular year shall, subject to the preceding sentence, be
determined solely within the discretion of the Board or Compensation Committee
of Zomax and shall be communicated to Executive no later than March 1 of each
year.  The bonus earned by Executive, if any, will be paid to Executive no later
than March 1 of the following year.

 

3.3                               Long-Term Incentives.  In addition to the base
salary and bonus payable to Executive pursuant to Sections 3.1 and 3.2,
Executive will be eligible to receive annual equity based awards for each year
of service under this Agreement.  The Compensation Committee in its sole
discretion will determine whether to grant to Executive any equity based awards
in a particular year and the size of such awards.  The terms and conditions of
such awards shall be no less favorable than awards granted to other senior
executives.  In making these determinations, the Compensation Committee will
take into account the Company’s and Executive’s performances.

 

3.4                               Benefits.  Executive shall be eligible to
participate in or receive benefits under all senior executive and employee
benefit plans, health plans, or arrangements, if any, made available from time
to time by Zomax to its senior executive employees as set forth in an employee
manual or otherwise, including but not limited to deferred compensation,
supplemental retirement and Section 401(k) plans, disability, life and other
insurance plans and programs, all hospitalization and health and welfare plans
and programs, and stock options, restricted share, incentive or other bonus
plans.  Subject to Sections 3.2 and 3.3, Zomax retains the right to amend,
modify or terminate any of its benefits or benefit plans during the term of
Executive’s employment.

 

3.5                               Miscellaneous Benefits.  Zomax shall provide
Executive the following additional benefits:

 

a.                                       Reimbursement of all ordinary and
necessary expenses incurred by Executive for Zomax business, and

 

b.                                      As of the effective date of this
Agreement, Executive had approximately 87 days of accrued vacation benefits,
valued at approximately $ 150,000, pursuant to the

 

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Company’s current vacation policy, and such benefits will continue to accrue
under the terms of the Company’s current vacation policy until the Company
effects a new vacation policy which is currently in process.  When the new
vacation policy is implemented, Executive’s accrued vacation benefits will be
frozen.  Thereafter, Executive agrees to be bound by the terms and conditions of
the new policy.  The accrued vacation days as frozen may be utilized by
Executive from time to time at his reasonable discretion.  On the termination of
this Agreement or his employment for any reason, Executive will be paid in cash
in an amount equal to the value of the vacation days remaining in the frozen
account.  This amount will be paid in full within five (5) days of the effective
date of the termination of his employment or this Agreement for any reason.

 

Section 4

 

TERMINATION OF EMPLOYMENT

 

4.1                               Termination.  Notwithstanding any other
provision of this Agreement to the contrary or appearing to be to the contrary,
Executive’s employment shall terminate as follows:

 

a.                                       By mutual written agreement of the
parties.

 

b.                                      Upon Executive’s death.

 

c.                                       Zomax shall have the right to terminate
Executive’s employment upon Executive’s inability to perform the essential
functions of his position due to physical or mental disability as determined in
the good faith judgment of the Board of Directors, provided such inability
continues for a period of ninety (90) consecutive days, one hundred twenty (120)
non-consecutive days in any twelve (12) month period, or longer period as may be
required by applicable law.

 

d.                                      Subject to Sections 4.1(c) and 4.1(f),
upon ninety (90) days’ written notice to Executive by Zomax.

 

e.                                       Subject to Sections 4.1(g) and 4.1(h),
upon ninety (90) days’ written notice by Executive to Zomax.

 

f.                                         Zomax shall have the right to
terminate Executive’s employment immediately for “Cause” as defined in Section 1
above.

 

g.                                      Executive shall have the right to resign
from his employment immediately for “Good Reason” as defined in Section 1 above.

 

h.                                      Executive shall have the right to resign
from his employment immediately for any reason at any time during the one (1)
year period after a Change of Control.

 

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4.2                               Payment Upon Termination of Employment for
Cause or Resignation Without Good Reason.

 

a.                                       If Executive’s employment is terminated
by Zomax for Cause or if Executive resigns from his employment hereunder other
than for Good Reason, then Executive shall only be entitled to receive the
“Accrued Benefits.”  For purposes of this Agreement, the “Accrued Benefits”
shall mean any accrued and unpaid Base Salary through the termination date, any
other benefits under any plan or program in accordance with the terms of such
plan or program (including any vesting requirements) and benefits provided in
accordance with customary practices of Zomax at Executive’s expense (e.g.,
hospitalization and medical insurance).

 

b.                                      The date of termination of Executive’s
employment by Zomax under the circumstances described in this Section 4.2 shall
be effective immediately upon receipt by Executive of written notice of
termination.  The date of resignation by Executive under the circumstances
described in this Section 4.2 shall be ninety (90) days after receipt by Zomax
of written notice of resignation.

 

4.3                               Payment Upon Termination of Employment Without
Cause, Resignation for Good Reason, Termination or Resignation Following Change
of Control and Failure to Extend Employment Agreement.

 

a.                                       If Executive’s employment is terminated
Without Cause, Executive resigns from his employment hereunder for Good Reason,
Executive is terminated or resigns from his employment hereunder for any reason
within one (1) year after a Change of Control, or Zomax or its successor fails
to extend this Agreement at the end of the Initial Term or any Extension Year,
Executive shall be entitled to the Accrued Benefits and to receive the
following:

 

(i)                                     Executive shall receive, within thirty
(30) days after any such termination without cause or resignation for good
reason or without an extension by Zomax at the end of the Initial Term of this
agreement or any Extension Year, a lump sum payment in an amount equal to 1.7
times his Base Salary in effect on the effective date of such termination or
resignation or as of the end of the Initial Term or Extension Year.  Zomax shall
be entitled to deduct or withhold all taxes and charges which may be required to
be deducted or withheld therefrom.  It is understood by the parties that in the
event of a Change of Control, Executive will be entitled to receive the
above-described lump sum payment from Zomax or its successor within thirty (30)
days after:  (i) a Change of Control if Executive declines to begin working for
successor; (ii) Executive is terminated by successor for any reason within one
(1) year after a Change of Control; or (iii) Executive resigns from his
employment by successor for any reason.

 

(ii)                                  With respect to any outstanding stock
options, SARs, restricted stock awards, performance share awards or other
equity-based awards granted to

 

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Executive, all restrictions shall lapse immediately and such awards shall fully
vest, all outstanding options and SARs will become exercisable immediately, and
all performance share objectives shall be deemed to have been meet.

 

(iii)                               Executive and his family shall be entitled
to continued participation in hospital and medical plans and programs of Zomax
at Zomax’s expense for a twelve (12) month period following such termination,
resignation or end of the Initial Term or Extension Year subject to early
termination of participation upon Executive becoming entitled to comparable
benefits on subsequent employment.

 

(iv)                              Executive shall be entitled to payment in
full, upon the effective date of Termination or Resignation for Good Reason, or
the failure to extend Executive’s employment at the end of the Initial Year or
Extension Year, of all unpaid vacation allowances.

 

b.                                      The date of termination of Executive’s
employment by Zomax Without Cause shall be ninety (90) days after receipt by
Executive of written notice of termination.  The date of termination or
resignation by Executive for any reason within one (1) year after a Change of
Control or Resignation for Good Reason shall be effective immediately upon
receipt by Zomax of written notice of resignation or the date of receipt by
Executive of the termination notice.  The date of termination of Executive’s
employment for failure to extend his employment shall be the date on which the
Initial Term or Extension Year terminates.

 

c.                                       Anything in the Agreement to the
contrary notwithstanding, if any payment or benefit of any type to or for the
benefit of Executive by Zomax, by any of its affiliates, by any person who
acquires ownership or effective control or ownership of a substantial portion of
Zomax’s assets (within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder (the “Code”)) or by any
affiliate of such person, whether paid or payable or distributed or
distributable pursuant to the terms of the Agreement or otherwise (the
“Payments”), would, but for this sentence, be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest or penalties, are
collectively referred to as the “Excise Tax”), then such Payment(s) shall be
equal to the Greater Amount.  The “Greater Amount” shall be either (1) the
largest portion of the Payment(s) that would result in no portion of the
Payment(s) being subject to the Excise Tax or (2) the Payment(s) in full,
whichever amount after taking into account all applicable federal, state and
local taxes and the Excise Tax (all computed at the highest applicable marginal
rate), results in the Executive’s receipt, on an after-tax basis, of the
greatest amount of the Payment(s).  If a reduction in payments or benefits is
necessary so that the Payment(s) equals the Greater Amount, reduction shall
occur in the following order unless Executive elects in writing a different
order:  reduction of cash payments; reduction of non-cash payments.

 

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4.4.                            Payment Upon Termination of Employment by
Disability or Death.

 

a.                                       In the event of termination of
Executive’s employment pursuant to Section 4.1(b) or 4.1(c), the Executive
and/or his family (or Executive’s estate, as the case may be), shall be entitled
to the Accrued Benefits and the following:

 

(i)                                     Executive shall receive, within thirty
(30) days after any such termination, resignation, or without an extension by
Zomax at the end of the Initial Term of this agreement or any Extension Year, a
lump sum payment in an amount equal to 1.7 times his Base Salary in effect on
the effective date of such termination or resignation or as of the end of the
Initial Term or Extension Year.  Zomax shall be entitled to deduct or withhold
all taxes and charges which Zomax may be required to deduct or withhold
therefrom.

 

(ii)                                  With respect to any outstanding stock
options, SARs, restricted stock awards, performance share awards or other
equity-based awards granted to Executive, all restrictions shall lapse
immediately and such awards shall fully vest, all outstanding options and SARs
will become exercisable immediately, and all performance share objectives shall
be deemed to have been meet.

 

(iii)                               Executive and/or his family shall be
entitled to continue participation in hospital and medical plans and programs of
Zomax at Zomax’s expense for an eighteen (18) month period.  Thereafter, Zomax
shall pay to Executive and/or his family the sum of $6,000 per year to be
prorated for a partial year, during the period of disability or, if later, until
Executive reaches age 62 or would have reached age 62 if he had survived;
provided, that the first payment shall be payable on the day following the
expiration of such eighteen (18) month period and any subsequent payments shall
be payable on each anniversary of such day.

 

(iv)                              Executive (or, in the event of his death,
Executive’s estate or his designated beneficiary) shall be entitled to receive
benefits under any other Company plan or program (to the extent Executive is
vested) in accordance with the terms of such plan or program.  Should
Executive’s employment terminate pursuant to Section 4.1(c), he shall be
entitled to continued contributions under Zomax’s qualified profit sharing plan
401(k) to the extent permitted in said Plan.

 

(v)                                 Executive shall be entitled to payment in
full, upon the effective date of termination, for Good Reason, retirement or the
end of the Initial Year or Extension Year, of all unpaid vacation allowances.

 

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b.                                      The date of termination of Executive’s
employment under the circumstances described in this Section 4.4 shall be the
date Executive’s employment is terminated pursuant to Section 4.1(c) or the date
of Executive’s death, as the case may be.

 

5.                                      Legal Fees and Expenses.  Zomax shall
pay for all legal fees and expenses incurred by Executive up to $18,000 in
connection with the negotiation, preparation, review, execution and
interpretation of this Agreement and other related documents (including any
amendment of this Agreement).

 

Prior to a Change of Control, if Executive is successful in seeking to obtain or
enforce any right or benefit provided by this Agreement from or against Zomax in
a proceeding before a court of competent jurisdiction or before an arbitrator or
arbitration panel, Zomax shall reimburse Executive for all reasonable legal fees
and expenses incurred by Executive in the pursuit of any employment right or
benefit.

 

If after a Change of Control, Executive is successful in seeking to obtain or
enforce any right or benefit provided by this Agreement from or against a
“Successor” of Zomax before a court of competent jurisdiction or before an
arbitrator or arbitrator panel, Successor shall advance Executive for all
reasonable legal fees and expenses incurred by Executive in the pursuit of any
employment right or benefit.

 

6.                                      Assignment of Inventions.  Executive
agrees to promptly disclose to Zomax in writing all Inventions; and all such
Inventions shall be the exclusive property of Zomax and are hereby assigned by
Executive to Zomax.  Further, Employee will, at Zomax’s expense, give Zomax all
assistance it reasonably requires to perfect, protect, and use its rights to
Inventions.  In particular, but without limitation, Executive will sign all
documents, do all things, and supply all information that Zomax may deem
necessary or desirable to:

 

(i)                                     transfer or record the transfer of his
entire right, title and interest in Inventions; and

 

(ii)                                  enable Zomax to obtain patent, copyright
or trademark protection for Inventions anywhere in the world.

 

The obligations of this Section 6 shall continue beyond the termination of
employment with respect to Inventions conceived or made by Executive during the
period of his employment and shall be binding upon assigns, executors,
administrators and other legal representatives.  For purposes of this Agreement,
any Invention relating to the business of Zomax on which Executive files a
patent application within six (6) months after termination of employment with
Zomax shall be presumed to cover Inventions conceived by Executive during the
term of his employment, subject to proof to the contrary by good faith, written
and duly corroborated records establishing that such Invention was conceived and
made following termination of employment.

 

NOTICE:  Pursuant to Minnesota Statutes § 181.78, Executive is hereby notified
that this Section 6 does not apply to any invention for which no equipment,
supplies, facility, or trade

 

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secret information of Zomax was used and which was developed entirely on
Executive’s own time, and (1) which does not relate (a) directly to the business
of Zomax or (b) to Zomax’s actual or demonstrably anticipated research or
development, or (2) which does not result from any work performed by the
employee for Zomax.

 

7.                                      Confidential Information.  Executive
agrees not to directly or indirectly use or disclose Confidential Information
for the benefit of anyone other than Zomax, either during or after employment,
for as long as the information retains the characteristics of Confidential
Information described in Section 1 above.

 

8.                                      Return of Documents and Property.  All
documents and tangible items provided to Executive by Zomax, or possessed by or
created by Executive for use in connection with his employment, are the property
of Zomax and shall be promptly returned to Zomax on termination of employment
together with all copies, recordings, abstracts, notes or reproductions of any
kind made from or about the documents and tangible items or the information they
contain.

 

9.                                      Noncompetition.  In consideration of
Executive’s rights under this Agreement, Executive agrees that, from and after
the Effective Date and continuing until the one-year anniversary of termination
or cessation of Executive’s employment with Zomax, Executive will not, alone or
in any capacity with another legal entity:

 

(i)                                     directly or indirectly, own any interest
in, control, be employed by or associated in a material manner with, or render
services to (including but not limited to services in research), any person or
entity (or subsidiary, subdivision, division, or joint venture of such entity)
in connection with the design, development, manufacture, marketing, or sale of a
Competitive Product that is sold or intended for distribution or sale in any
geographic area in which Zomax actively markets, or in which, to the Executive’s
knowledge acquired through his employment with Zomax, Zomax intends to actively
market, a Company Product of the same general type or function;

 

(ii)                                  directly or indirectly, solicit any of
Zomax’s then current employees for the purpose of hiring them or inducing them
to leave their employment with Zomax;

 

(iii)                               directly or indirectly, solicit, attempt to
solicit, interfere, or attempt to interfere with Zomax’s relationship with its
then current customers or potential customers (of which Executive has knowledge
acquired through his employment with Zomax), on behalf of himself or any other
person or entity engaged in the design, development, manufacture, marketing, or
sale of a Competitive Product; or

 

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(iv)                              directly or indirectly design, develop,
manufacture, market, or sell any Competitive Product that is sold or intended
for distribution or sale in any geographic area in which Zomax actively markets,
or in which, to the Executive’s knowledge acquired through his employment with
Zomax, Zomax intends to actively market, a Company Product of the same general
type or function.

 

In the event that Executive receives a payment from Zomax pursuant to
Section 4.3 above, the reference to the “one-year anniversary” in the first
sentence of this Section shall be changed to the “eighteen-month anniversary”.

 

Notwithstanding the foregoing in no event shall ownership of less than four
percent (4%) of the outstanding publicly-traded equity or debt securities of any
issuer or less than four percent (4%) of the outstanding interests in a private
equity fund, mutual fund or other pooled investment account, in each case, in
which the Executive does not actively participate in the management thereof, be
prohibited by this Section 9.

 

10.                               Breach of Noncompetition Provisions of this
Agreement.  In addition to any other relief or remedies afforded by law or in
equity, if Executive breaches Section 9 of this Agreement, Executive agrees that
Zomax shall be entitled, as a matter of right, to injunctive relief in any court
of competent jurisdiction.  Executive recognizes and hereby admits that
irreparable damage will result to Zomax if he violates or threatens to violate
the terms of Section 9 of this Agreement.  This Section 10 shall not preclude
the granting of any other appropriate relief including, without limitation,
money damages against Executive for breach of Section 9 of this Agreement.

 

11.                               Indemnification.  The Company shall indemnify
Executive, for such expenses and liabilities, in such manner, under such
circumstances, and to such extent, as permitted by Minnesota Statutes,
Section 302A.521, as now enacted or hereafter amended.  The right to
indemnification includes the right to be paid by Zomax the expenses incurred in
defending any proceeding in advance of its final disposition.

 

Zomax agrees to provide to the Executive director’s and officer’s liability
insurance coverage that provides the maximum coverage provided to its other
officers and directors in respect of any liabilities that might arise out of his
service as a director and officer of Zomax.  The parties recognize and agree
that determination as to the amount of such insurance that is reasonable shall
reflect not only the need to protect the Executive against liability, but also
the cost and availability of such insurance.

 

After termination of employment, the Executive will be available to give
testimony and assistance in connection with any future litigation or arbitration
proceedings arising from activities of Zomax during the period of his
employment.  Such testimony and assistance will be scheduled at times and
locations convenient for the Executive and not inconsistent with his health and
the responsibilities that he then may have in connection with subsequent
employment or other rendering of services.  Zomax shall reimburse him for all
reasonable out-of-pocket travel

 

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and other expenses, including legal fees, incurred by him in connection with his
testimony and assistance pursuant to this Section 11.  Such fees and
reimbursements shall be paid promptly after the Executive’s submission to Zomax
of statements in such reasonable detail as to enable Zomax to make such payment.

 

12.                               Effect of Other Obligations.  It is intended
that the obligation of the parties to perform the terms of this Agreement is
unconditional and does not depend on the performance or non-performance of any
terms, duties or obligations not specifically recited in this Agreement.

 

13.                               Binding Agreement.  This Agreement shall be
binding upon, and inure to the benefit of Zomax, its successors and assigns, but
without the prior written consent of Executive, this Agreement may not be
assigned other than in connection with a merger or sale of substantially all the
assets of Zomax or similar transaction.  The rights of the Executive hereunder
to payments and benefits shall inure to the benefit of, and be enforceable by,
the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

 

14.                               Severability.  If the final determination of a
court of competent jurisdiction declares, after the expiration of the time
within which judicial review (if permitted) of such determination may be
perfected, that any term of provision hereof is invalid or unenforceable, (a)
the remaining terms and provisions hereof shall be unimpaired, and (b) the
invalid or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.

 

15.                               Amendment; Waiver.  This Agreement may not be
modified, amended or waived in any manner except by an instrument in writing
signed by both parties hereto.  The waiver by either party of compliance with
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.

 

16.                               Governing Law.  All matters affecting this
Agreement, including the validity thereof, are to be governed by, interpreted
and construed in accordance with the laws of the State of Minnesota without
regard to the conflict of laws principles thereof.

 

17.                               Notices.  Any notice hereunder by either party
to the other shall be given in writing by personal delivery or certified mail,
return receipt requested.  If addressed to Executive, the notice shall be
delivered or mailed to Executive at the address most recently communicated in
writing by Executive to Zomax, or if addressed to Zomax, the notice shall be
delivered or mailed to Zomax at its executive offices to the attention of the
Board of Directors of Zomax.  A notice shall be deemed given, if by personal
delivery, on the date of such delivery or, if by certified mail, on the date
shown on the applicable return receipt.

 

18.                               Supersedes Previous Agreements.  This
Agreement supersedes all prior or contemporaneous negotiations, commitments,
agreements and writings with respect to the

 

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subject matter hereof, all such other negotiations, commitments, agreements and
writings will have no further force or effect, and the parties to any such other
negotiation, commitment, agreement or writing will have no further rights or
obligations thereunder.

 

19.                               Headings; Construction.  The headings of
Sections and paragraphs herein are included solely for convenience of reference
and shall not control the meaning or interpretation of any of the provisions of
this Agreement.  This Agreement shall be construed without regard to any
presumption or other rule requiring construction hereof against the party
causing this Agreement to be drafted.

 

20.                               Benefit.  Subject to Section 13, nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.

 

21.                               Release.  Executive understands and agrees
that he will be entitled to no severance payments under Section 4.3 and 4.4
above unless he executes and does not rescind a release agreement in the form
mutually agreed to be Zomax and Executive and that will provide for a mutual and
comprehensive release of claims by each party against the other party, except
for any of Executive’s contractual claims (including, without limitation under
this Agreement and any equity-based award agreements) or claims for accrued
benefits in favor of Executive.

 

22.                               No Mitigation.  Executive shall not be
required to mitigate the amount of any payment or benefit hereunder, nor shall
any payment or benefit be reduced by any earnings or benefits that Executive may
receive from another source.

 

IN WITNESS WHEREOF, Zomax has caused this Agreement to be signed by its Chairman
of the Compensation Committee pursuant to the authority of its Board, and
Executive has executed this Agreement, effective as of April 14, 2005.

 

 

ZOMAX INCORPORATED

 

 

 

 

 

By:

     /s/ Janice Ozello Wilcox

 

 

 

Chairman, Compensation Committee

 

 

 

 

 

           /s/ Anthony Angelini

 

 

Anthony Angelini

 

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