**Exhibit 10.13**

 

 

 

August 29, 2002

 

 

Mr. Michael L. Miller

18317 Overland Trail

Eden Prairie, MN55347

 

 

Dear Mike,

 

Welcome to Zomax!  It is my pleasure to make you the followingoffer of employment:

 
| **Position Title:**                         |   | Executive Vice  President, Sales and Business Development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Location:**                               |   | Plymouth, MN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Status:**                                 |   | Regular Full Time,  Exempt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Start Date:**                             |   | September 16, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **Reporting To:**                           |   | Jim Anderson, Chairman  and CEO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Pay Rate:**                               |   | $225,000.00 Annually                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Bonus:**                                  |   | Target bonus equals  100% of base salary, low equals 50% of base salary, high (maximum) equals  150% of base salary.  There will not  be a payout if the low target(s) isn’t reached.  60% of bonus is based on year over year EPS improvement.  40% of bonus is based on defined  goals.  You will be eligible to participate  in a pro-rata share of the bonus for the balance of 2002.  Your 2002 defined goals will be set by  September 30, 2002.                                                                                                                                                                    |
| **Group Insurance:**                        |   | You become eligible to  participate in the Zomax medical, dental and life plans effective the first  day of the month following your start date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Paid Time Off (PTO):**                    |   | Initially you will  accrue PTO at the rate of 5.23 hours per pay period. (26 pay periods per  year)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **401 (k):**                                |   | You become eligible to  participate in the Zomax 401 (k) plan effective the beginning of the calendar  quarter following the 60th day of employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Stock Options:**                          |   | You will receive  Non-Qualified Stock Options of 200,000 shares priced at the market price on  the first trading day of the month following your start date.  Share options vest at 20% annually over 5  years beginning one year from the grant date.                                                                                                                                                                                                                                                                                                                                                                                             |
| **Stock Purchase Plan:**                    |   | On either January 1 or  July 1 following the 60th day of employment you will be eligible  to join the Zomax Stock Purchase Plan which will allow you to purchase Zomax  stock at a discount.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Introductory Period:**                    |   | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Termination, Change of Control:**

  |   | Executive’s employment  may be terminated by Zomax or Executive at any time for any reason.  Notwithstanding the foregoing, if  Executive’s employment is terminated by the Company for a reason other than  for Cause (as defined below) or Executive terminates his employment with the  Company for Good Reason (as defined below) within his 1st year of  employment, he shall be entitled to receive a lump sum amount equal to 6  months base salary and all accrued PTO time.   After one year of employment, he shall be entitled to receive a lump  sum amount equal to 12 months of base salary and all accrued PTO time. |
|                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                        |   | For purposes of this  section, “Cause” shall mean only the following: gross misconduct, dishonesty  or disloyalty; indictment, conviction or entry of a plea of                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |

 

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|   |   | nolo contendere to any  felony or to any misdemeanor involving fraud, misrepresentation or theft; or  material failure to perform the substantial duties of the position, which is  not rectified within 30 days after notice of such failure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |   For purposes of this section, “Good  Reason” shall mean (1) a substantial reduction in the nature or status of  Executive’s position, duties or responsibilities; (2) a reduction in the Base  Salary of Executive exceeding the average percentage reduction for all such  executive employees made at the same time, however Good Reason will apply if  Executive’s Base Salary is reduced and no other executive salaries are  reduced at the same time; (3) failure by the Company to allow Executive to  participate to the full extent in all plans, programs and benefits offered to  other executives at the Company; or (4) the Company’s principal office is  relocated more than 50 miles from Executive’s home.  Notwithstanding the foregoing, “Good Reason” shall be deemed to  occur only if such event(s) enumerated in (1) through (4) above has not been  corrected by the Company within thirty (30) days of receipt of notice from  Executive of the occurrence of such event, which notice shall specifically  describe such event. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |  If Executive is terminated from his  employment, has a substantial reduction in the nature or status of his  responsibilities, has a reduction in his Base Salary, or the company’s  principal office is relocated more than 50 miles from executive’s home within  one (1) year after a Change of Control, Executive shall be entitled to  receive the following from the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Executive shall receive  from the Company within thirty (30) days after such termination or  resignation an amount equal to 12 months Base Salary, 12 months of bonus paid  at the targeted rate and all accrued PTO time as in effect on the effective  date of such termination.  The Company  shall be entitled to deduct or withhold all taxes and charges which the  Company may be required to deduct or withhold therefrom. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | With respect to any  stock options, SARs, restricted stock awards or performance share awards  granted to Executive and outstanding immediately prior to such termination,  all restrictions on all shares of restricted stock awards shall lapse  immediately, all outstanding options and SARs will become exercisable  immediately, and all performance share objectives shall be deemed to be met. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | Date of Termination or  Resignation.  The date of termination of Executive’s  employment by the Company under a Change of Control shall be one (1) month  after receipt of written notice of termination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | Limitation on Change of  Control Compensation.  In the event that Executive  is a “disqualified individual” within the meaning of Section 280G of the  Code, the parties expressly agree that the payments described in this Section  6 shall be considered together with all Change of Control Payments so that,  with respect to Executive, all Change of Control 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 Control Payments is considered  a “parachute payment” within the meaning of Section 280G of the                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

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|   |   |  Code.   Accordingly, to the extent that the Change of Control Payments would  be considered a “parachute payment” with respect to Executive, then the  portions of such Change of Control payments shall be reduced or eliminated in  the following order until the remaining Change of Control Payments with  respect to Executive is One Dollar ($1.00) less than the maximum allowable  which would not be considered a “parachute payment” under the Internal  Revenue Code:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | (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 to receive any Change of Control  payments which would be considered a “parachute payment” under the Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | 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) is or becomes the “beneficial owner” (as defined  in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities  of the Company representing 40% or more of the combined voting power (with  respect to the election of directors) of the Company’s then outstanding  securities; (2) the consummation of a merger or consolidation of the Company  with or into any other corporation, other than a merger or  consolidation which would result in the voting securities of the Company  outstanding immediately prior thereto continuing to represent (either by  remaining outstanding or by being converted into voting securities of the  surviving entity) more than 60% of the combined voting power (with respect to  the election of directors) of the securities of the Company or of such  surviving entity outstanding immediately after such merger or consolidation;  or (3) the consummation of a plan of complete liquidation of the Company or  of an agreement for the sale or disposition by the Company of all or  substantially all of the Company’s business or assets. |

 

In consideration of andas a condition of your employment, you must sign the enclosed Non-Solicitation/ConfidentialityAgreement and a Non Compete Agreement and return to Zomax with your acceptanceof this offer*.*

 

Thisoffer is contingent based upon the successful completion of a backgroundinvestigation and your ability to comply with federal law requiring you to showproof of your ability to work in the United States on your first day ofemployment.  If you are currently employed, I urge you toawait our call with the investigation results prior to resigning from yourcurrent position.   This typically takes3 to 4 business days from our receipt of your signed acceptance.

 

While we look forward toa mutually beneficial employment relationship with you, it is important thatyou understand this letter is not an employment contract.  Employment with our company is at will, withthe right for either party to terminate employment at any time, for any reason,with or without notice.  No priorpromises, representations, or understandings relative to any terms or conditionsof your employment are to be considered as part of this letter unless expressedin writing in this letter.  Any future agreements, regarding employment orcompensation are binding only with the prior authorization of the ChiefExecutive Officer of Zomax Incorporated.

 

The compensation andbenefit plans referenced in this letter are offered with the understanding thatthey operate

 

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under the plan documentsas currently stated.  These compensationand benefit plans may be changed, amended or cancelled for any reason and/or atany time.

 

Thisis to confirm that you have no existing agreements with other parties thatprevent you from being hired by us or fully executing your new duties.  If this is not correct, prior to signingthis letter, please notify me immediately.

 

Pleasesign the original copies of this offer letter and return to me immediatelysignifying your acceptance of this offer. I have enclosed copies for your files.

 

This offer is valid until3PM on August 30, 2002.

 

Ilook forward to working with you and am confident your talents match our needsand will be well utilized.  Should youhave questions, please contact me at 763-577-3523.

 

Sincerely,

 

 

JamesT. Anderson

Chairmanand CEO

Zomax,Incorporated

 

Enclosures:

                  Confidentiality or Non-Solicitation/Confidentiality Agreement

                   Non-CompeteAgreement

 

Iacknowledge, understand, and agree to employment with Zomax under the terms andconditions outlined above.

 
|               |   | Date: |   |   |
|--------------------|--------|-------|--------|--------|
| Michael  L. Miller |   |