**Exhibit10.11**

 

**EMPLOYMENTAGREEMENT**

 

This Employment Agreement (“Agreement”) is herebyentered into between Zomax Incorporated, a Minnesota corporation (the“Company”) and Anthony Angelini (“Executive”).

 

**PREAMBLE**

 

Executive has been employed as President and ChiefOperating Officer of Zomax Incorporated since 2000.  The Company desires to continue to have the benefit ofExecutive’s experience and loyalty, and Executive has indicated his willingnessto provide his services on the terms and conditions set forth below.

 

**AGREEMENT**

 

**1.             Definitions.**

 

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

 

*Agreement*shall mean this Agreement between the Company and Executive.

 

*BaseSalary* shall mean the annual base salary payable to Executivepursuant to Section 4(a) hereof, and “monthly Base Salary” shall mean the BaseSalary divided by twelve (12).

 

*Board*shall mean the Board of Directors of the Company.

 

*Cause*shall mean termination of the Executive’s employment with the Company becauseof (1) gross misconduct, dishonesty or disloyalty; (2) willful and materialbreach of this Agreement by Executive; or (3) conviction or entry of a plea ofguilty or nolo contendere to any felony or to any misdemeanor involving fraud,misrepresentation or theft.

 

A *Change of Control* shall be deemed to haveoccurred if (1) any “person” (as such term is used in Section 13(d) and 14(d)of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of theCompany representing 35% or more of the combined voting power (with respect tothe election of directors) of the Company’s then outstanding securities; (2) atany time after the execution of this Agreement, individuals who as of the dateof the execution of this Agreement constitute the Board (and any new directorwhose election to the Board or nomination for election to the Board by theCompany’s stockholders was approved by a vote of at least two-thirds (2/3) ofthe directors then still in office) cease for any reason to constitute amajority of the Board ; (3) the consummation of a merger or consolidation ofthe Company with or into any other corporation, other than a merger orconsolidation which would result in the voting securities of the Companyoutstanding immediately prior thereto continuing to represent (either byremaining outstanding or by being converted into voting securities of thesurviving entity) more than 60% of the combined voting power (with respect tothe election of directors) of the securities of the Company or of suchsurviving entity outstanding immediately after such merger or consolidation; or(4) the consummation of a plan of complete liquidation of the Company or of

 

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an agreement for the sale or disposition by the Company of all orsubstantially all of the Company’s business or assets.

 

*Changeof Control Payments* shall mean any payment (including anybenefit or transfer of property) in the nature of compensation to or for thebenefit of Executive under any arrangement which is partially or entirelycontingent on a Change of Control, or is deemed to be contingent on a Change ofControl for purposes of Section 280G of the Code.  As used in this definition, the term “arrangement” includes anyagreement between Executive and the Company and any and all of the Company’ssalary, bonus, incentive, compensation or benefit plans, programs orarrangements, 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 subsidiariesthereof, and any successors or assigns, including any Successor.

 

*CompanyProduct* means any product, product line or service (includingany component thereof or research to develop information useful in connectionwith a product or service) that is being designed, developed, manufactured,marketed or sold by the Company or with respect to which the Company hasacquired Confidential Information which it intends to use in the design,development, manufacture, marketing or sale of a product or service.

 

*CompetitiveProduct* means any product, product line or service (includingany component thereof or research to develop information useful in connectionwith a product or service) that is being designed, developed, manufactured,marketed or sold by anyone other than the Company and is of the same generaltype, performs similar functions, or is used for the same purposes as a CompanyProduct.

 

*ConfidentialInformation* means any information or compilation ofinformation that Executive learns or develops during the course of hisemployment with the Company that derives independent economic value from notbeing generally known, or readily ascertainable by proper means, by otherpersons who can obtain economic value from its disclosure or use.  It includes but is not limited to tradesecrets, inventions, discoveries, and may relate to such matters as researchand development, manufacturing processes, management systems and techniques andsales and marketing plans and information.

 

*GoodReason* shall mean (1) a substantial reduction in the natureor status of Executive’s responsibilities hereunder; (2) a reduction by theCompany in the Base Salary of Executive except to the extent permitted by thisAgreement; and (3) failure by the Company to allow Executive to participate tothe full extent in all plans, programs or benefits in accordance with thisAgreement.  Notwithstanding theforegoing, “Good Reason” shall be deemed to occur only if such event enumeratedin (1) through (3) above has not been corrected by the Company within thirtydays of receipt of notice from Executive of the occurrence of such event, whichnotice 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 tocopyright protection) generated, conceived, authored or reduced to practice byExecutive alone or in

 

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conjunction with others, during or after working hours, while anemployee of the Company, and that:

 

(i)                                     arederived in whole or in part from, or use, incorporate or represent anyimprovement to any Invention or trade secret of the Company; or

 

(ii)                                  resultfrom any work Executive performs for the Company; or

 

(iii)                               useany of the Company’s equipment, supplies, facilities or trade secretinformation; or

 

(iv)                              otherwiserelate to the Company’s products or the Company’s present or possible futureresearch or development.

 

*Term*shall mean the term of Executive’s employment under Section 3 hereof.

 

*PermanentlyDisabled* shall mean permanently disabled in accordance withthe disability policy (as defined by the Company’s Long-Term DisabilityInsurance Plan) of the Company as in effect on the date of this Agreement andas evaluated by sufficient documentation including doctors’ statements, etc. asrequested by the Company.

 

*Person*shall mean an individual, partnership, corporation, estate or trust or otherentity.

 

*Successor*shall be any entity acquiring substantially all of the assets of the Company ora corporation into which the Company is merged or with which it isconsolidated.

 

**2.             Employment and Duties.**

 

(a)           General.  The Company hereby agrees to employExecutive as its President and Chief Operating Officer upon the terms andconditions set forth in this Agreement and Executive agrees to serve asPresident and Chief Operating Officer of the Company.  Executive shall report directly to the Chief Executive Officer ofthe Company.  Executive shall performthe duties and assume the responsibilities and obligations contemplated by histitle of President and Chief Operating Officer and shall perform such otherduties and undertake such other responsibilities and obligations, consistentwith his position, as the Chief Executive Officer shall determine from time totime.

 

(b)           ExclusiveServices.  The Executive shall (i)devote his full business time and attention and best efforts to the businessand affairs of the Company and its affiliates, (ii) use his best efforts topromote and further the interests of the Company, (iii) faithfully anddiligently perform his responsibilities and duties hereunder; and (iv) conducthimself in a competent and professional manner which reflects positively uponthe Company.

 

(c)           NoOther Employment.  Throughout theTerm, Executive shall not, directly or indirectly, render services to any otherperson or organization for which he receives compensation (excluding volunteerservices or outside Board activities with modest time commitments) without theprior consent of the Chief Executive Officer or otherwise engage in activitieswhich would interfere significantly with the performance of his duties hereunder.

 

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**3.             Term of Employment.**

 

## (a)                                  Commencement.  This Agreement shall be effective as ofJanuary 1, 2002.

 

## (b)                                 Term.  This agreement shall automatically terminateon each one-year anniversary of the commencement unless renewed by mutualagreement as provided in 3(c) below.

 

(c)                                  Thisagreement will renew automatically each year for the subsequent one-year periodunless notice of non-renewal is given by either party on or before September 30of each contract year.

 

**4.             Compensation and Other Benefits.**  Subject to the provisions of this Agreement,the Company shall pay and provide the following compensation and other benefitsto Executive during the Term as compensation for services rendered hereunder.

 

(a)           BaseSalary.  The Company shall pay toExecutive a Base Salary at the rate of $300,000 per annum, payable inaccordance with the Company’s standard payroll practices.  The Company shall be entitled to deduct orwithhold all taxes and charges which the Company may be required to deduct orwithhold therefrom.  The Base Salary maybe reviewed at any time and may be increased or reduced; provided, however,that any reduction shall be permitted only if the Company then reduces the basecompensation of its executive employees generally and shall not exceed theaverage percentage reduction for all such executive employees.

 

(b)           IncentiveCompensation.  During the term ofthis Agreement, Executive will be eligible to earn an annual bonus, normallyconsisting of a combination of cash and stock options, based on his performanceand the performance of the Company against a business plan approved by theBoard of Directors.  The terms of theincentive compensation award will be determined by the Chief Executive Officerand Board and communicated to Executive no later than February 28 of eachcalendar year.

 

## (c)           Other Plans.  The Executive shall be entitled toparticipate in additional Company stock option plans or other equity plans orprograms, if any, in which executives of the Company are eligible toparticipate generally as may be determined from time to time by the Board ofDirectors.

 

(d)           ExecutiveBenefit Plans.  At all times duringthe Term, Executive shall, unless prohibited by the Code or other applicablelaw, be eligible to participate in pension and welfare plans and programs ofthe Company for executive employees, currently existing or subsequentlyadopted, including the following:

 

(i)                                     allqualified benefit plans and programs (e.g. defined contribution, supplementalretirement and Section 401(k) plans, long-term disability and life insuranceplans and programs);

 

(ii)                                  allhospitalization and medical plans and programs; and

 

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(iii)                               allretirement plans and programs.

 

**5.****                                      Terminationof Employment for Cause; Resignation Without Good Reason; Resignation NotFollowing a Change of Control.**

 

(a)           Compensation and Benefits.  If Executive’s employment is terminated bythe Company for Cause or if Executive resigns from his employment hereunderother than for Good Reason or other than within one year after a Change ofControl, then Executive shall be paid through the effective date of terminationas set forth in 5(b) below and shall not be eligible to receive any compensationor benefits, or to participate in any plans or programs under Section 4 hereofwith respect to future periods after the date of such termination orresignation except for the right to receive benefits under any compensation orother plan or program, to the extent vested, in accordance with the terms ofsuch plan or program and except for benefits provided in accordance withcustomary practices of the Company at Executive’s expense (e.g.,hospitalization and medical insurance).

 

(b)           Dateof Termination.  The date oftermination of Executive’s employment by the Company under this Section 5 shallbe effective immediately after written notice of termination.  The effective date of resignation byExecutive under this Section 5 shall be three (3) months after receipt by theCompany of written notice of resignation.

 

**6.****                                      Terminationof Employment Without Cause; Resignation for Good Reason; Resignation FollowingChange of Control.**

 

(a)           Compensationand Benefits.  If Executive’semployment is terminated by the Company without Cause prior to the expirationof the Term; Executive resigns from his employment hereunder for Good Reason;or if Executive resigns from his employment hereunder for any reason within one(1) year after a Change of Control, but only if at the time of such resignationJames T. Anderson, the current chief executive officer of the Company, is notthen employed by the Company or the surviving corporation as chief executiveofficer or in some other senior executive management position; Executive shall beentitled to receive the following from the Company:

 

(i)                                     Executiveshall receive from the Company within thirty (30) days after such terminationor resignation a lump sum amount equal to his Base Salary and all unusedvacation allowances as in effect on the effective date of such termination orresignation.  The Company shall beentitled to deduct or withhold all taxes and charges which the Company may berequired to deduct or withhold therefrom.

 

(ii)                                  Executiveshall receive from the Company within thirty (30) days after such terminationor resignation an amount equal to Executive’s bonus payment(s) under Section4(b) above earned for the fiscal year of the Company ending immediately priorto such termination or resignation or the target amount Executive is eligibleto earn in the current fiscal year, whichever is greater.  The Company shall be entitled to deduct orwithhold all taxes and charges which the Company may be required to deduct orwithhold therefrom.

 

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(iii)                               Withrespect to any stock options, SARs, restricted stock awards or performanceshare awards granted to Executive and outstanding immediately prior to suchtermination or resignation all restrictions on all shares of restricted stockawards shall lapse immediately, all outstanding options and SARs will becomeexercisable immediately, and all performance share objectives shall be deemedto have been met.

 

(iv)                              Executiveand his family shall be entitled to continued participation in hospital andmedical plans and programs of the Company at the Company’s expense for aone-year period following such termination or resignation subject totermination of participation upon Executive becoming entitled to comparablebenefits on subsequent employment.

 

(b)           Dateof Termination or Resignation.  Thedate of termination of Executive’s employment by the Company under this Section6 shall be one (1) month after receipt by Executive of written notice oftermination.  The date of resignation byExecutive for Good Reason under this Section 6 shall be three (3) months afterreceipt by the Company of written notice of resignation, provided that the GoodReason specified in such notice shall not have been corrected by the Companyduring such three (3) month period following receipt of written notice ofresignation.

 

(c)           Limitationon Change of Control Compensation. In the event that Executive is a “disqualified individual” within themeaning of Section 280G of the Code, the parties expressly agree that thepayments described in this Section 6 shall be considered together with allChange of Control Payments so that, with respect to Executive, all Change ofControl Payments are collectively subject to an overall maximum limit.  Such maximum limit shall be One Dollar ($1.00)less than the largest amount under which no portion of the Change of ControlPayments is considered a “parachute payment” within the meaning of Section 280Gof the Code.  Accordingly, to the extentthat the Change of Control Payments would be considered a “parachute payment”with respect to Executive, then the portions of such Change of Control paymentsshall be reduced or eliminated in the following order until the remainingChange of Control Payments with respect to Executive is One Dollar ($1.00) lessthan the maximum allowable which would not be considered a “parachute payment”under the Internal Revenue Code:

 

(i)                                     First,any cash payment to Executive;

 

(ii)                                  Second,any Change of Control Payments not described in this Agreement; and

 

(iii)                               Third,any forgiveness of indebtedness of Executive to the Company.

 

Executive expressly and irrevocably waives any and all rights toreceive any Change of Control payments which would be considered a “parachutepayment” under the Code.

 

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**7.             Termination of Employment byDisability or Death.**

 

(a)           Compensationand Benefits.  If Executive becomesPermanently Disabled prior to the expiration of the Term, the Company shall beentitled to terminate Executive’s employment subject to the Company’s normalpolicies in such matters as applied to all other salaried employees.  In the event of such termination ofExecutive’s employment or termination of Executive’s employment by reason ofthe death of Executive prior to the expiration of the Term, the Executive (orExecutive’s estate, as the case may be), shall be entitled to receive from theCompany the following:

 

(i)                                     Inthe event of termination after Executive has become Permanently Disabled,Executive and his family shall be entitled to continue participation inhospital and medical plans and programs of the Company at the Company’s expensefor the period of said disability or until normal retirement age subject torules and practice of the plan(s).

 

(ii)                                  Executive(or, in the event of his death, Executive’s estate or his designatedbeneficiary) shall be entitled to receive benefits under any other Company planor program (to the extent Executive is vested) in accordance with the terms ofsuch plan or program.  Executive shallbe entitled to continued contributions under the Company’s qualified profitsharing plan 401(k) to the extent permitted in said Plan.

 

(b)           Dateof Termination.  The date oftermination of Executive’s employment under this Section 7 shall be the date Executivebecomes Permanently Disabled as defined in Section 1 of this agreement or thedate of Executive’s death, as the case may be.

 

**8.             Legal Fees and Expenses.**  The Company shall pay or reimburse Executivefor all reasonable legal fees and expenses incurred by Executive in seeking toand successfully obtaining or enforcing any right or benefit provided by thisAgreement from or against the Company in a proceeding before a court ofcompetent jurisdiction.

 

**9.             Assignment of Inventions.**  Executive agrees to promptly disclose to theCompany in writing all Inventions; and all such Inventions shall be theexclusive property of the Company and are hereby assigned by Executive to theCompany.  Further, Employee will, at theCompany’s expense, give the Company all assistance it reasonably requires toperfect, protect, and use its rights to Inventions.  In particular, but without limitation, Executive will sign alldocuments, do all things, and supply all information that the Company may deemnecessary or desirable to:

 

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

 

(ii)                                  enablethe Company to obtain patent, copyright or trademark protection for Inventionsanywhere in the world.

 

The obligations of this Section shall continue beyondthe termination of employment with respect to Inventions conceived or made byExecutive during the period of his employment and shall be binding uponassigns, executors, administrators and other legal representatives.  For

 

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purposes of this Agreement, any Invention relating to the business ofthe Company on which Executive files a patent application within six (6) monthsafter termination of employment with the Company shall be presumed to coverInventions conceived by Executive during the term of his employment, subject toproof to the contrary by good faith, written and duly corroborated recordsestablishing that such Invention was conceived and made following terminationof employment.

 

NOTICE: Pursuant to Minnesota Statutes § 181.78, Executive is hereby notifiedthat this Section 11 does not apply to any invention for which no equipment,supplies, facility, or trade secret information of the Company was used andwhich was developed entirely on Executive’s own time, and (1) which does notrelate (a) directly to the business of the Company or (b) to the Company’sactual or demonstrably anticipated research or development, or (2) which doesnot result from any work performed by the employee for the Company.

 

**10.          Confidential Information.**  Executive agrees not to directly orindirectly use or disclose Confidential Information for the benefit of anyoneother than the Company, either during or after employment, for as long as theinformation retains the characteristics of Confidential Information describedin Section 1 above.

 

**11.          Return of Documents and Property.**  All documents and tangible items provided toExecutive by the Company, or possessed by or created by Executive for use inconnection with his employment, are the property of the Company and shall bepromptly returned to the Company on termination of employment together with allcopies, recordings, abstracts, notes or reproductions of any kind made from orabout the documents and tangible items or the information they contain.

 

**12.          Noncompetition.**  In consideration of Executive’s rights underthis Agreement, including without limitation Sections 5 through 7 hereof,Executive agrees that, from and after the Effective Date and continuing untilthe one-year anniversary of termination or cessation of Executive’s employmentwith the Company, Executive will not, alone or in any capacity with anotherlegal entity:

 

(i)                                     directlyor indirectly, own any interest in, control, be employed by or associated with,or render services to (including but not limited to services in research), anyperson, entity, or subsidiary, subdivision, division, or joint venture of suchentity in connection with the design, development, manufacture, marketing, orsale of a Competitive Product that is sold or intended for use or sale in anygeographic area in which the Company actively markets a Company Product orintends to actively market a Company Product of the same general type orfunction;

 

(ii)                                  directlyor indirectly, solicit any of the Company’s present or future employees for thepurpose of hiring them or inducing them to leave their employment with theCompany;

 

(iii)                               directlyor indirectly, solicit, attempt to solicit, interfere, or attempt to interferewith the Company’s relationship with its customers or potential customers, onbehalf of himself or any other person or entity engaged in

 

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the design, development,manufacture, marketing, or sale of a Competitive Product; or

 

(iv)                              directlyor indirectly design, develop, manufacture, market, or sell any CompetitiveProduct that is sold or intended for use or sale in any geographic area inwhich the Company actively markets a Company Product or intends to actively marketa Company Product of the same general type or function.

 

**13.          Breach of Noncompetition Provisions ofthis Agreement.**  Inaddition to any other relief or remedies afforded by law or in equity, ifExecutive breaches Section 12 of this Agreement, Executive agrees that theCompany shall be entitled, as a matter of right, to injunctive relief in anycourt of competent jurisdiction plus reasonable attorneys’ fees for securingsuch relief.  Executive recognizes andhereby admits that irreparable damage will result to the Company if he violatesor threatens to violate the terms of Section 12 of this Agreement.  This Section 13 shall not preclude thegranting of any other appropriate relief including, without limitation, moneydamages against Executive for breach of Section 12 of this Agreement.

 

**14.          Effect of Other Obligations.**  It is intended that the obligation of theparties to perform the terms of this Agreement is unconditional and does notdepend on the performance or non-performance of any terms, duties orobligations not specifically recited in this Agreement.

 

**15.          Binding Agreement.**  This Agreement shall be binding upon, andinure to the benefit of, the parties hereto, any Successor to or assigns of theCompany, and Executive’s heirs and the personal representative of Executive’sestate.

 

**16.          Severability.**  If the final determination of a court ofcompetent jurisdiction declares, after the expiration of the time within whichjudicial review (if permitted) of such determination may be perfected, that anyterm of provision hereof is invalid or unenforceable, (a) the remaining termsand provisions hereof shall be unimpaired, and (b) the invalid or unenforceableterm or provision shall be deemed replaced by a term or provision that is validand enforceable and that comes closest to expressing the intention of theinvalid or unenforceable term or provision.

 

**17.          Amendment; Waiver.**  This Agreement may not be modified, amendedor waived in any manner except by an instrument in writing signed by bothparties hereto.  The waiver by eitherparty of compliance with any provision of this Agreement by the other partyshall not operate or be construed as a waiver of any other provision of thisAgreement, or of any subsequent breach by such party of a provision of thisAgreement.

 

**18.          Governing Law.**  All matters affecting this Agreement,including the validity thereof, are to be governed by, interpreted andconstrued in accordance with the laws of the State of Minnesota.

 

**19.          Notices.**  Any notice hereunder by either party to theother shall be given in writing by personal delivery or certified mail, returnreceipt requested.  If addressed toExecutive, the notice shall be delivered or mailed to Executive at the homeaddress specified in Executive’s employment file, or if addressed to theCompany, the notice shall be delivered or mailed to the Company at itsexecutive offices to the attention of the Chief Executive Officer.  A notice shall

 

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be deemed given, if by personal delivery, on the date of such deliveryor, if by certified mail, on the date shown on the applicable return receipt.

 

**20.          Supersedes Previous Agreements.**  This Agreement supersedes all prior orcontemporaneous negotiations, commitments, agreements and writings with respectto the subject matter hereof, all such other negotiations, commitments,agreements and writings will have no further force or effect, and the partiesto any such other negotiation, commitment, agreement or writing will have nofurther rights or obligations thereunder.

 

**21.          Headings; Construction.**  The headings of Sections and paragraphsherein are included solely for convenience of reference and shall not controlthe meaning or interpretation of any of the provisions of this Agreement.  This Agreement shall be construed withoutregard to any presumption or other rule requiring construction hereof againstthe party causing this Agreement to be drafted.

 

**22.          Benefit.**  Nothing in this Agreement, expressed orimplied, is intended to confer on any person other than the parties hereto ortheir respective successors or assigns, any rights, remedies, obligations orliabilities under or by reason of this Agreement.

 

IN WITNESS WHEREOF, the Company has caused thisAgreement to be signed by its Chief Executive Officer and Chairman of the Boardpursuant to the authority of its Board, and Executive has executed thisAgreement, effective as of December 1, 2001.

 
|                 | ZOMAX INCORPORATED  |
|----------------------|---------------------|
|                 |                |
| By:                  |                |   | By: |   |   |
| Anthony Angelini     | James T.  Anderson  |
| President &  COO | Chairman &  CEO |
|                      |                     |  |  |  |  |

 

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