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**EXHIBIT 10.17**

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**RESTRICTED STOCK AGREEMENT**

 

**ZOMAX,INC.**

**2004EQUITY INCENTIVE PLAN**

 

 

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

 

W I T N E S S E TH:

 

                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 sharesof the Company’s Common Stock pursuant to the Company’s 2004 Equity IncentivePlan (the “Plan”); and

 

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

 

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

 

                1.             **Grant ofRestricted Stock Award**. The Company hereby grants to Participant on the date set forth above arestricted stock award (the “Award”) for _____________________ (               ) shares of Common Stockon the terms and conditions set forth herein, and subject to adjustmentpursuant to Section 12 of the Plan.  TheCompany shall cause to be issued a stock certificate representing such shares ofCommon Stock in the Participant’s name, and shall deliver such certificate tothe Participant; provided, however, that the Company shall place a legend onsuch certificate describing the risks of forfeiture and other transferrestrictions set forth in this Agreement and providing for the cancellation andreturn of such certificate if such shares of Common Stock are forfeited asprovided in Section 2 below.  Until suchrisks of forfeiture have lapsed or the shares subject to this Award have beenforfeited pursuant to Section 2 below, the Participant shall be entitled tovote the shares represented by such stock certificates and shall receive alldividends attributable to such shares, but the Participant shall not have anyother rights as a shareholder with respect to such shares.

 

                2.             **Vestingof Restricted Stock**.

 

                                a.              The shares of Stock subject tothis Award shall remain forfeitable until the risks of forfeiture lapseaccording 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 asubsidiary of the Company) ceases at any time prior to a Vesting Date for anyreason, including the Participant’s voluntary resignation or retirement but excludingtermination by the Company without “cause,” the Participant shall immediatelyforfeit all shares of Stock subject to this Award which have not yet vested andfor which the risks of forfeiture have not lapsed.  If the Participant’s employment or otherrelationship is terminated by the Company without “cause” prior to the vestingdate for this Award, all risks of forfeiture on the shares of Stock subject tothis 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) anyintentional and/or willful act of fraud or dishonesty by Participant related toor connected with Participant’s employment by the Company or any of itsAffiliates; (iii) the willful and/or continued failure, neglect or refusal byParticipant to perform his or her employment duties with the Company or any ofits Affiliates, (iv) a material violation of the Participant’s or anAffiliate’s policies or codes of conduct; or (v) the willful and/or materialbreach by Participant of any agreement between Participant and the Company orany of its Affiliates, including but not limited to an employment agreement ora noncompetition agreement.

 

                3.             **Miscellaneous**.

 

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

 

                                b.             **SecuritiesLaw Compliance**. Participant shall not transfer or otherwise dispose of the shares ofStock received pursuant to this Agreement until such time as counsel to theCompany shall have determined that such transfer or other disposition will notviolate any state or federal securities laws. The Participant may be required by the Company, as a condition of theeffectiveness of this restricted stock award, to agree in writing that all Stocksubject to this Agreement shall be held, until such time that such Stock isregistered and freely tradable under applicable state and federal securitieslaws, for Participant’s own account without a view to any further distributionthereof, that the certificates for such shares shall bear an appropriate legendto 

 

 

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thateffect and that such shares will be not transferred or disposed of except incompliance with applicable state and federal securities laws.

 

                                c.**             Mergers,Recapitalizations, Stock Splits, Etc. **Pursuant and subject to Section 12 of the Plan, certainchanges in the number or character of the Common Stock of the Company (throughmerger, consolidation, exchange, reorganization, divestiture (including aspin-off), liquidation, recapitalization, stock split, stock dividend orotherwise) shall result in an adjustment, reduction or enlargement, asappropriate, in Participant’s rights with respect to any unexercised portion ofthe Option (i.e., Participant shall have such “anti-dilution” rightsunder the Option with respect to such events, but shall not have “preemptive”rights).

 

                                d.             **SharesReserved**.  The Companyshall at all times during the term of this Agreement reserve and keep availablesuch number of shares as will be sufficient to satisfy the requirements of thisAgreement.

 

                                e.             **WithholdingTaxes**.  In order to permitthe Company to comply with all applicable federal or state income tax laws orregulations, the Company may take such action as it deems appropriate to insurethat, if necessary, all applicable federal or state payroll, income or othertaxes are withheld from any amounts payable by the Company to theParticipant.  If the Company is unable towithhold such federal and state taxes, for whatever reason, the Participanthereby agrees to pay to the Company an amount equal to the amount the Companywould otherwise be required to withhold under federal or state law.

 

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

 

                                g.             **LockupPeriod Limitation**. Participant agrees that in the event the Company advises Participantthat it plans an underwritten public offering of its Common Stock in compliancewith the Securities Act of 1933, as amended, and that the underwriter(s) seekto impose restrictions under which certain shareholders may not sell orcontract to sell or grant any option to buy or otherwise dispose of part or allof their stock purchase rights of the underlying Common Stock, Participanthereby 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 orotherwise dispose of this Agreement or any of the underlying shares of CommonStock without the prior written consent of the underwriter(s) or itsrepresentative(s).

 

                                h.             **Blue SkyLimitation**.  Notwithstandinganything in this Agreement to the contrary, in the event the Company makes anypublic offering of its securities and determines, in its sole discretion, thatit is necessary to reduce the number of issued but unexercised stock purchaserights so as to comply with any state securities or Blue Sky law limitationswith respect thereto, the 

 

 

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Boardof Directors of the Company shall accelerate the vesting of this restrictedstock award, provided that the Company gives Participant 15 days’ prior writtennotice of such acceleration.  Noticeshall be deemed given when delivered personally or when deposited in the UnitedStates mail, first class postage prepaid and addressed to Participant at theaddress of Participant on file with the Company.

 

                                i.              **AccountingCompliance**.  Participantagrees that, if a merger, reorganization, liquidation or other “transaction” asdefined in Section 12 of the Plan occurs, and Participant is an “affiliate” ofthe Company or any Affiliate (as defined in applicable legal and accountingprinciples) at the time of such transaction, Participant will comply with allrequirements of Rule 145 of the Securities Act of 1933, as amended, and therequirements of such other legal or accounting principles, and will execute anydocuments necessary to ensure such compliance.

 

                                j.              **StockLegend**.  The Administratormay require that the certificates for any shares of Common Stock purchased byParticipant (or, in the case of death, Participant’s successors) shall bear anappropriate legend to reflect the restrictions of Paragraph 4(b) and Paragraphs4(g) through 4(j) of this Agreement; provided, however, that failure to so endorse any ofsuch certificates shall not render invalid or inapplicable Paragraph 4(j).

 

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

 

                l.              **BindingAgreement**.  This Agreement shall bind and inure to thebenefit of the Company and its successors and assigns, and shall bind and inureto the benefit of Participant and any successor or successors of theParticipant.  This Award is expresslysubject to all terms and conditions contained in the Plan and in thisAgreement, and Participant’s failure to execute this Agreement shall notrelieve Participant from complying with such terms and conditions.

                m.            **Arbitration**.  Any dispute arising out of or relating tothis Agreement or the alleged breach of it, or the making of this Agreement,including claims of fraud in the inducement, shall be discussed between thedisputing parties in a good faith effort to arrive at a mutual settlement ofany such controversy.  If,notwithstanding, such dispute cannot be resolved, such dispute shall be settledby binding arbitration.  Judgment uponthe award rendered by the arbitrator may be entered in any court havingjurisdiction thereof.  The arbitratorshall be a retired state or federal judge or an attorney who has practicedsecurities or business litigation for at least 10 years.  If the parties cannot agree on an arbitratorwithin 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 thisAgreement, and the commercial arbitration rules of the American ArbitrationAssociation, unless such rules are inconsistent with the provisions of thisAgreement.  Limited civil discovery shallbe permitted for the production of documents and taking of depositions.  Unresolved discovery disputes may be broughtto the attention of the arbitrator who may dispose of such dispute. Thearbitrator shall have the authority to award any remedy or relief that a courtof this state could order or grant; provided, however, that punitive orexemplary damages shall not be awarded. The arbitrator may award to 

 

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the prevailingparty, 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, theplace of any arbitration proceedings shall be Hennepin County, Minnesota.

 

 

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