EXHIBIT 10.17


 


RESTRICTED STOCK AGREEMENT


 


ZOMAX,
INC.


2004
EQUITY INCENTIVE PLAN


 


 


                THIS
AGREEMENT, made effective as of this        day of                        , 20__, by and
between Zomax, Inc., a Minnesota corporation (the “Company”), and ___________________
(“Participant”).


 


W I T N E S S E T
H:


 


                WHEREAS,
the Participant on the date hereof is a key employee or officer of the Company;
and


 


                WHEREAS,
the Company wishes to grant a restricted stock award to Participant for shares
of the Company’s Common Stock pursuant to the Company’s 2004 Equity Incentive
Plan (the “Plan”); and


 


                WHEREAS,
the Administrator of the Plan has authorized the grant of a restricted stock
award to the Participant;


 


                NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
contained, the parties hereto agree as follows:


 


                1.             Grant of
Restricted Stock Award. 
The Company hereby grants to Participant on the date set forth above a
restricted stock award (the “Award”) for 
_____________________ (         
      ) shares of Common Stock
on the terms and conditions set forth herein, and subject to adjustment
pursuant to Section 12 of the Plan.  The
Company shall cause to be issued a stock certificate representing such shares of
Common Stock in the Participant’s name, and shall deliver such certificate to
the Participant; provided, however, that the Company shall place a legend on
such certificate describing the risks of forfeiture and other transfer
restrictions set forth in this Agreement and providing for the cancellation and
return of such certificate if such shares of Common Stock are forfeited as
provided in Section 2 below.  Until such
risks of forfeiture have lapsed or the shares subject to this Award have been
forfeited pursuant to Section 2 below, the Participant shall be entitled to
vote the shares represented by such stock certificates and shall receive all
dividends attributable to such shares, but the Participant shall not have any
other rights as a shareholder with respect to such shares.


 


                2.             Vesting
of Restricted Stock.


 


                                a.              The shares of Stock subject to
this Award shall remain forfeitable until the risks of forfeiture lapse
according to the following vesting schedule:


 


 


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                                Vesting Date                                                        Cumulative Percentage of Shares Vested


 


 


 


 


 


 


 


If the Participant’s employment with the Company (or a
subsidiary of the Company) ceases at any time prior to a Vesting Date for any
reason, including the Participant’s voluntary resignation or retirement but excluding
termination by the Company without “cause,” the Participant shall immediately
forfeit all shares of Stock subject to this Award which have not yet vested and
for which the risks of forfeiture have not lapsed.  If the Participant’s employment or other
relationship is terminated by the Company without “cause” prior to the vesting
date for this Award, all risks of forfeiture on the shares of Stock subject to
this Award shall immediately lapse.


 


                b.             Solely for purposes of this Paragraph 2(b),
“cause” shall mean (i) Participant charged with a felony or convicted of any criminal misdemeanor or more serious act; (ii) any
intentional and/or willful act of fraud or dishonesty by Participant related to
or connected with Participant’s employment by the Company or any of its
Affiliates; (iii) the willful and/or continued failure, neglect or refusal by
Participant to perform his or her employment duties with the Company or any of
its Affiliates, (iv) a material violation of the Participant’s or an
Affiliate’s policies or codes of conduct; or (v) the willful and/or material
breach by Participant of any agreement between Participant and the Company or
any of its Affiliates, including but not limited to an employment agreement or
a noncompetition agreement.


 


                3.             Miscellaneous.


 


                                a.             Employment-at-Will.  This Agreement shall not confer on
Participant any right with respect to continuance of employment by the Company
or any of its Affiliates, nor will it interfere in any way with the right of
the Company to terminate such employment. 
Participant’s employment relationship with the Company and its
Affiliates shall be employment-at-will, and nothing in this Agreement shall be
construed as creating an employment contract for any specified term between
Participant and the Company or any Affiliate.


 


                                b.             Securities
Law Compliance. 
Participant shall not transfer or otherwise dispose of the shares of
Stock received pursuant to this Agreement until such time as counsel to the
Company shall have determined that such transfer or other disposition will not
violate any state or federal securities laws. 
The Participant may be required by the Company, as a condition of the
effectiveness of this restricted stock award, to agree in writing that all Stock
subject to this Agreement shall be held, until such time that such Stock is
registered and freely tradable under applicable state and federal securities
laws, for Participant’s own account without a view to any further distribution
thereof, that the certificates for such shares shall bear an appropriate legend
to 


 


 


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that
effect and that such shares will be not transferred or disposed of except in
compliance with applicable state and federal securities laws.


 


                                c.             Mergers,
Recapitalizations, Stock Splits, Etc. 
Pursuant and subject to Section 12 of the Plan, certain
changes in the number or character of the Common Stock of the Company (through
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 Participant’s rights with respect to any unexercised portion of
the Option (i.e., Participant shall have such “anti-dilution” rights
under the Option with respect to such events, but shall not have “preemptive”
rights).


 


                                d.             Shares
Reserved.  The Company
shall at all times during the term of this Agreement reserve and keep available
such number of shares as will be sufficient to satisfy the requirements of this
Agreement.


 


                                e.             Withholding
Taxes.  In order 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
Participant.  If the Company is unable to
withhold such federal and state taxes, for whatever reason, the Participant
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.


 


                                f.              2004
Equity Incentive Plan. 
The Award evidenced by this Agreement is granted pursuant to the Plan, a
copy of which Plan has been made available to Participant and is hereby
incorporated into this Agreement.  This
Agreement is subject to and in all respects limited and conditioned as provided
in the Plan.  The Plan governs this
Agreement and, in the event of any questions as to the construction of this
Agreement or in the event of a conflict between the Plan and this Agreement,
the Plan shall govern, except as the Plan otherwise provides.


 


                                g.             Lockup
Period Limitation. 
Participant agrees that in the event the Company advises Participant
that it plans an underwritten public offering of its Common Stock in compliance
with the Securities Act of 1933, as amended, and that the underwriter(s) seek
to impose restrictions under which certain shareholders may not sell or
contract to sell or grant any option to buy or otherwise dispose of part or all
of their stock purchase rights of the underlying Common Stock, Participant
hereby agrees that for a period not to exceed 180 days from the prospectus,
Participant will not sell or contract to sell or grant an option to buy or
otherwise dispose of this Agreement or any of the underlying shares of Common
Stock without the prior written consent of the underwriter(s) or its
representative(s).


 


                                h.             Blue Sky
Limitation.  Notwithstanding
anything in this Agreement to the contrary, in the event the Company makes any
public offering of its securities and determines, in its sole discretion, that
it is necessary to reduce the number of issued but unexercised stock purchase
rights so as to comply with any state securities or Blue Sky law limitations
with respect thereto, the 


 


 


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Board
of Directors of the Company shall accelerate the vesting of this restricted
stock award, provided that the Company gives Participant 15 days’ prior written
notice of such acceleration.  Notice
shall be deemed given when delivered personally or when deposited in the United
States mail, first class postage prepaid and addressed to Participant at the
address of Participant on file with the Company.


 


                                i.              Accounting
Compliance.  Participant
agrees that, if a merger, reorganization, liquidation or other “transaction” as
defined in Section 12 of the Plan occurs, and Participant is an “affiliate” of
the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of such transaction, Participant will comply with all
requirements of Rule 145 of the Securities Act of 1933, as amended, and the
requirements of such other legal or accounting principles, and will execute any
documents necessary to ensure such compliance.


 


                                j.              Stock
Legend.  The Administrator
may require that the certificates for any shares of Common Stock purchased by
Participant (or, in the case of death, Participant’s successors) shall bear an
appropriate legend to reflect the restrictions of Paragraph 4(b) and Paragraphs
4(g) through 4(j) of this Agreement; provided, however, that failure to so endorse any of
such certificates shall not render invalid or inapplicable Paragraph 4(j).


 


                                k.             Scope of
Agreement.  This Agreement
shall bind and inure to the benefit of the Company, its Affiliates and its
successors and assigns and Participant and any successor or successors of
Participant permitted by this Agreement.


 


                l.              Binding
Agreement.  This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns, and shall bind and inure
to the benefit of Participant and any successor or successors of the
Participant.  This Award is expressly
subject to all terms and conditions contained in the Plan and in this
Agreement, and Participant’s failure to execute this Agreement shall not
relieve Participant from complying with such terms and conditions.


                m.            Arbitration.  Any dispute arising out of or relating to
this Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of
any such controversy.  If,
notwithstanding, such dispute cannot be resolved, such dispute shall be settled
by binding arbitration.  Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  The arbitrator
shall be a retired state or federal judge or an attorney who has practiced
securities or business litigation for at least 10 years.  If the parties cannot agree on an arbitrator
within 20 days, any party may request 
that the chief judge of the District Court of Hennepin County,
Minnesota, select an arbitrator. 
Arbitration will be conducted pursuant to the provisions of this
Agreement, and the commercial arbitration rules of the American Arbitration
Association, unless such rules are inconsistent with the provisions of this
Agreement.  Limited civil discovery shall
be permitted for the production of documents and taking of depositions.  Unresolved discovery disputes may be brought
to the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. 
The arbitrator may award to 


 


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the prevailing
party, if any, as determined by the arbitrator, all of its costs and fees,
including the arbitrator’s fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys’ fees.  Unless otherwise agreed by the parties, the
place of any arbitration proceedings shall be Hennepin County, Minnesota.


 


 


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