# **Exhibit 10.14**

# ** **

# **ZOMAX INCORPORATED**

 

**NONQUALIFIED STOCK OPTION AGREEMENT**

 

 

                THISAGREEMENT, made this ___ day of ________, 200_, by and between ZOMAXINCORPORATED, 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, consultantor 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, theCompany desires to grant to the Optionee a nonqualified stock option topurchase shares of its Common Stock; and

 

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

 

                NOW,THEREFORE, in consideration of the premises and the mutual covenants hereincontained, 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 ofCommon Stock of the Company (the “Option Stock”) subject to the terms andconditions herein contained, and subject only to adjustment in such number ofshares as provided in Paragraph 12 below. This Option is a nonqualified stock option and will not be treated as anincentive stock option, as defined under Section 422, or any successorprovision, of the Internal Revenue Code of 1986, as amended (the “Code”), andthe regulations thereunder.

 

**                2.             Option Price**.  During the term of this Option, the purchaseprice 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 theprovisions of Paragraphs 9, 10 or 11 below, this Option shall terminate as ofthe close of business on _____________, 20__. This Option shall not be exercisable during the first year.  Thereafter, this Option shall becomeexercisable to the extent of ____________ shares on each of the first _______anniversary dates of the date of grant until the earlier of the time this Optionshall have become exercisable to the extent of one hundred percent (100%) ofthe total number of shares granted or its termination as provided herein.  If the Optionee does not purchase the fullnumber of shares which the Optionee is entitled to purchase upon an exercise ofthis Option, the Optionee may purchase upon any subsequent exercise prior tothe Option’s termination such previously unpurchased shares in addition tothose the Optionee is otherwise entitled to purchase.

 

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

 

**                5.             Manner of Exercise of Option**.

 

                                a.             The Option may be exercised only bythe Optionee (or other proper party in the event of death), subject to suchadministrative rules as the Board of Directors may deem advisable, bydelivering a written notice of exercise to the Company at its principaloffice.  The notice shall state thenumber of shares as to which the Option is being exercised and shall beaccompanied by payment in full of the option price for all shares designated inthe notice.  The exercise of the Optionshall be deemed effective upon receipt of such notice by the Company and uponpayment that complies with the terms of this Agreement.  The Option may be exercised with respect toany number or all of the shares as to which it can then be exercised and, ifpartially exercised, may be so exercised as to the unexercised shares anynumber of times during the exercise period as provided herein.

 

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

 

**                6.             Employment; Rights as aShareholder**.  This Agreementshall not confer on the Optionee any right with respect to continuance ofemployment, if so employed, by the Company or any of its Subsidiaries, nor willit interfere in any way with the right of the Company to terminate suchemployment.  The Optionee or atransferee of this Option shall have no rights as a shareholder with respect toany shares covered by this Option until the date of the issuance of a stockcertificate for such shares.  Noadjustment shall be made for dividends (ordinary or extraordinary, whether incash, securities or other property), distributions or other rights for whichthe record date is prior to the date such stock certificate is issued, exceptas provided in Paragraph 12 below.

 

**                7.             Withholding Taxes**.  In order to provide the Company with theopportunity to claim the benefit of any income tax deduction which may beavailable to it upon the exercise of this Option and to permit the Company to complywith all applicable federal or state income tax laws or regulations, theCompany may take such action as it deems appropriate to insure that, ifnecessary, all applicable federal or state payroll, income or other taxes arewithheld from any amounts payable by the Company to the Optionee.  If the Company is unable to withhold suchfederal and state taxes, for whatever reason, the Optionee hereby agrees to payto the Company an amount equal to the amount the Company would otherwise berequired to withhold under federal or state law.  The Optionee may, subject to the discretion of the Board ofDirectors or such other administrative rules it may deem advisable, elect tohave all or a portion of such tax withholding obligations satisfied bydelivering shares of the Company’s Common Stock having a fair market valueequal to such obligations.

 

**                8.             Securities Law Compliance**.  The exercise of all or any parts of thisOption shall only be effective at such time as counsel to the Company shallhave determined that the issuance and delivery of Common Stock pursuant to suchexercise 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 inwriting that all Common Stock to be acquired pursuant to such exercise shall beheld, until such time that such Common Stock is registered and freely tradableunder applicable state and federal securities laws, for the Optionee’s ownaccount without a view to any further distribution thereof, that thecertificates for such shares shall bear an appropriate legend to that effectand that such shares will be not transferred or disposed of except incompliance with applicable state and federal securities laws.

 

**                9.             Termination of Relationship WithCompany (Other than Because of Death or Change of Control)**.  If the Optionee ceases to be an employee ordirector of or a consultant or advisor to the Company or any Subsidiary for anyreason, other thanbecause of a “change of control transaction” as described in Paragraph 10 orbecause of death, this Option shall completely terminate on the earlier of(i) the close of business on the one-month anniversary date of suchtermination of such relationship, and (ii) the expiration date of this Option stated in Paragraph 3above.  In such period following termination of such relationship, this Optionshall be exercisable only to the extent the Option was exercisable on the dateof 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 anemployee or director of or a consultant or advisor to the Company or anySubsidiary because of a “change of control transaction,” this Option shallcompletely terminate on the earlier of (i) the close of business on the one-monthanniversary date of such termination of employment and (ii) the expiration dateof this Option stated in Paragraph 3 above; provided, however, that if (a) suchtransaction is treated as a “pooling of interests” under generally acceptedaccounting principles and (b) the Optionee is an “affiliate” of the Company orSubsidiary under applicable legal and accounting principles, this Option shallcompletely 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 onwhich affiliates are no longer restricted from selling, transferring orotherwise disposing of the shares of stock received in the change of controltransaction.

 

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

 

                                c.             For purposes of this Paragraph 10,a “change of control transaction” means an acquisition of the Company throughthe sale of substantially all of the Company’s assets and the consequentdiscontinuance 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 employeeor director of or consultant or advisor to the Company or any Subsidiary, or(ii) within the period of one month after the termination ofthe Optionee’s relationship with the Company or any Subsidiary as provided inParagraph 9, this Option shall terminate on the earlier of (i) the close ofbusiness 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 beexercised by the person or persons to whom the Optionee’s rights under thisOption shall have passed by the Optionee’s will or by the laws of descent anddistribution only to the extent the Option was exercisable on the date of deathbut 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 Paragraph11, all rights under this Option shall be forfeited.

 

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

 

                                a.             Certain changes in the number orcharacter 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) shallresult in an adjustment, reduction or enlargement, as appropriate, in theOptionee’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 respectto such events, but shall not have “preemptive” rights).  In the event of an increase or decrease inthe number of shares of Common Stock resulting from a subdivision orconsolidation of shares or the payment of a stock dividend or any otherincrease or decrease in the number of shares of Common Stock effected withoutreceipt of consideration by the Company, the number of shares of Option Stockand the price per share thereof shall be adjusted by the Board to reflect suchchange.  Additional shares which may becredited pursuant to such adjustment shall be subject to the same restrictionsas are applicable to the shares with respect to which the adjustment relates.

 

                                b.             In the event of an acquisition ofthe Company through the sale of substantially all of the Company’s assets andthe consequent discontinuance of its business or through a merger,consolidation, exchange, reorganization, reclassification, extraordinarydividend, divestiture or liquidation of the Company (collectively referred toas a “transaction”), this Option shall become immediately exercisable, whetheror not the Option had become exercisable prior to the transaction; provided,however, that if the acquiring party seeks to have the transaction accountedfor on a “pooling of interests” basis and, in the opinion of the Company’sindependent certified public accountants, accelerating the exercisability ofthe Option would preclude a pooling of interests under generally acceptedaccounting principles, the exercisability of this Option shall notaccelerate.  In addition to theforegoing, in the event of such a transaction, the Board may provide for one ormore of the following:

 

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

 

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

 

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

 

                                c.             The Board may restrict the rightsof or the applicability of this Paragraph 12 to the extent necessary to complywith Section 16(b) of the Securities Exchange Act of 1934, the Internal RevenueCode or any other applicable law or regulation.  The grant of this Option shall not limit in any way the right orpower of the Company to make adjustments, reclassifications, reorganizations orchanges of its capital or business structure or to merge, exchange orconsolidate or to dissolve, liquidate, sell or transfer all or any part of itsbusiness or assets.

 

**                13.          Scope of Agreement**.  This Agreement shall bind and inure to thebenefit of the Company and its successors and assigns and the Optionee and anysuccessor or successors of the Optionee permitted by Paragraph 4 hereof.

 

 

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

 
|   |   |   |   |   |   | ZOMAX INCORPORATED |
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|   |   |   |   |   |   |               |   |
|   |   |   |   |   |   | By                 |   |
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|   |   |   |   |   |   |               | COMPANY |
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|   |   |   |   |   |   |               |   |
|   |   |   |   |   |   |               | OPTIONEE |

 

 

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