Exhibit 10.1


 


OFFICERS AGREEMENT


 


This Agreement (this “Agreement”),
effective as of December 8, 2004, is between Fargo Electronics, Inc.,
a Delaware corporation located at 6533 Flying Cloud Drive, Eden Prairie,
Minnesota 55344 (“Fargo”) and                 ,
an individual residing at (the ”Executive”).


 


A.            The Executive is currently employed as
Fargo’s.


 


B.            The Board considers that the Executive’s
services are of significant value to the Company and its shareholders.   Therefore, the Fargo and the Board believe
that the establishment and maintenance of a program that provides the Executive
with security if a Change of Control of Fargo occurs is in the best interests
of the Company and its shareholders.


 


C.            This Agreement, which has been approved
by the Board, sets forth the benefits that the Fargo agrees will be provided to
the Executive in the event the Executive’s employment with Fargo or its
Successor is terminated in connection with a Change in Control under the
circumstances described below.


 


Accordingly, the
Company and Executive each intending to be legally bound, agree as follows:


 


1.             Definitions 


 


For purposes of the
Agreement, the following terms will have the meaning set forth below unless the
context clearly requires otherwise. 
Terms defined elsewhere in the Agreement will have the same meaning
throughout the Agreement.


 


A.            “Base Pay” means the Executive’s
annual base salary from Fargo or any Successor at the rate in effect
immediately prior to a Change in Control or at the time Notice of Termination
is given, whichever is greater.  Base Pay
includes only the gross cash salary excluding incentive compensation.


 


B.            “Board” means the board of
directors of Fargo or any Successor duly qualified and acting at the time in
question.  On and after the date of a
Change in Control, any duty of the Board in connection with this Agreement is
nondelegable and any attempt by the Board to delegate any such duty is
ineffective.


 


C.            “Cause” means:


 


(i)            the Executive’s gross misconduct that is
materially and demonstrably injurious to Fargo or any Successor;


 


(ii)           the Executive’s willful and continued
failure to perform substantially the Executive’s duties with Fargo or any
Successor (unless the


 


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Executive cannot perform these duties due to bodily
injury or physical or mental illness or if the Change in Control has so changed
the Executive’s responsibilities that the change constitutes a Good Reason for
termination.  If Fargo or any Successor
determines that the Executive has not performed his or her duties under the
terms of this clause after a Change of Control occurs, Fargo or any Successor
will specifically identify these areas and provide the Executive a reasonable
period of time to take corrective actions; or


 


(iii)          the Executive’s conviction (including a
plea of nolo contendere) of willfully engaging in illegal conduct constituting
a felony or gross misdemeanor under federal or state law which is materially
and demonstrably injurious to Fargo or any Successor or which impairs the
Executive’s ability to perform substantially the Executive’s duties for the
Company.


 


For the purpose of this
clause, a “gross or willful” action will mean an act that is done by the
Executive in bad faith and without reasonable belief that it was in, or not
opposed to, the best interests of Fargo or any Successor.  Any action based on a resolution of the Board
of Directors or a committee thereof will be conclusively presumed to be done in
good faith. If the Executive has other duties not related to Fargo (such as
charitable or service on other Boards) prior to the Change of Control,
continuation of those actions is conclusively presumed to be done in good
faith. If there is a dispute regarding the termination of the Executive for
cause, such dispute shall be subject to the dispute resolution as described in Section 5(g) of
this Agreement.


 


D.            “Change in Control” means the
occurrence of any of the following on or after April 30, 2001:


 


(i)            the sale, lease, exchange or other
transfer, directly or indirectly, of all or substantially all of the assets of
Fargo or any Successor, in one transaction or in a series of related
transactions, to any Successor;


 


(ii)           the approval by the stockholders of Fargo
or any Successor of any plan or proposal for the liquidation or dissolution of
Fargo or any Successor;


 


(iii)          any entity, other than a “bona fide
underwriter,” becomes, after the date of this Agreement, the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of (i) 20 percent or more, but not more than 50 percent, of the combined
voting power of Fargo’s or any Successor’s outstanding securities ordinarily
having the right to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by the “continuity
directors” or (ii) more than 50 percent of the combined voting power of
Fargo’s or any Successor’s outstanding securities ordinarily having the right
to vote at elections of directors (regardless of any approval by the continuity
directors);


 


(iv)          a merger or consolidation to which Fargo
or any Successor is a party if the stockholders of Fargo or any Successor
immediately prior to the


 


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effective date of such merger or consolidation have,
solely on account of ownership of securities of Fargo or any Successor at such
time, “beneficial ownership” (as defined in Rule 13d-3 under the Exchange
Act) immediately following the effective date of such merger or consolidation of
securities of the surviving corporation representing (i) 50 percent or
more, but not more than 80 percent, of the combined voting power of the
surviving corporation’s then outstanding securities ordinarily having the right
to vote at elections of directors, unless such merger or consolidation has been
approved in advance by the continuity directors, or (ii) less than 50
percent of the combined voting power of the surviving corporation’s then
outstanding securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuity directors); or


 


(v)           the continuity directors cease for any
reason to constitute at least a majority of the Board.


 


A “continuity director”
means any individual who is a member of the Board on the date of the Agreement,
and any individual who subsequently becomes a member of the Board whose
election or nomination for election by Fargo’s or any Successor’s stockholders
was approved by a vote of at least a majority of the directors who are continuity
directors (either by a specific vote or by approval of the proxy statement of
Fargo or any Successor in which such individual is named as a nominee for
director without objection to such nomination). A “bona fide underwriter” means
an entity engaged in business as an underwriter of securities that acquires
securities of Fargo or any Successor through such entity’s participation in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.


 


E.             “Code” means the Internal Revenue
Code of 1986, as amended.  Any reference
to a specific provision of the Code includes a reference to such provision as
it may be amended from time to time and to any successor provision.


 


F.             “Date of Termination” means the
last day of regular paid employment.


 


G.            “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.  Any reference to a specific provision of
ERISA includes a reference to such provision as it may be amended from time to
time and to any successor provision.


 


H.            “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
Any reference to a specific provision of the Exchange Act or to any rule or
regulation thereunder includes a reference to such provision as it may be
amended from time to time and to any successor provision.


 


I.              “Good Reason” means:


 


(i)            a change in the Executive’s title(s),
status, position(s), authority, duties or responsibilities as an executive of
Fargo or any Successor as in effect immediately prior to the Change in Control
which, in the Executive’s reasonable judgment, is material and adverse.  However, if the changes are those that are


 


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consistent with working for a subsidiary of another
company or if the change in duties is directly attributable to the fact that
Fargo or any Successor is no longer publicly owned, then these will not be
material and adverse.  Provided, that
Good Reason does not include such a change that is remedied by the Company
promptly after receipt of notice of such change is given by the Executive;


 


(ii)           a reduction by Fargo or any Successor in
the Executive’s Base Pay, or an adverse change in the form or timing of the
payment thereof, as in effect immediately prior to the Change in Control or as
thereafter increased; provided, however, that Good Reason does not include such
a reduction that applies to all employees of Fargo or any Successor and is not
more than 20% of the Executive’s Base Pay;


 


(iii)          the failure by Fargo or any Successor to
provide to the Executive (and/or the Executive’s family and dependents)
substantially similar benefits to those the Successor provides to its
employees;


 


(iv)          Fargo or any Successor’s requiring the
Executive to be based in a different metropolitan area (other than the
Minneapolis or St. Paul metropolitan area) 
from where the Executive’s office is located immediately prior to the
Change in Control, except for required travel on Fargo’s or any Successor’s
business, and then only to the extent substantially consistent with the
business travel obligations which the Executive undertook on behalf of Fargo
during the 90-day period immediately preceding the Change in Control (without
regard to travel related to or in anticipation of the Change in Control);


 


(v)           the failure by Fargo to obtain from any
Successor the assent to this Agreement contemplated by Section 5(a) of
the Agreement;


 


(vi           any purported termination by Fargo or any
Successor of the Executive’s employment that is not properly effected pursuant
to a Notice of Termination and pursuant to any other requirements of this
Agreement, and, for purposes of this Agreement, no such purported termination
will be effective; or


 


The Executive’s continued
employment does not constitute consent to, or waiver of any rights arising in
connection with, any circumstances constituting Good Reason.  The Executive’s termination of employment for
Good Reason as defined above will constitute Good Reason for all purposes of
the Agreement notwithstanding that the Executive may also thereby be deemed to
have retired under any applicable benefit plan, policy or practice of Fargo or
any Successor.


 


J.             “Notice of Termination” means a
written notice given on or after the date of a Change in Control unless the
Executive’s termination before the date of the Change in Control was either a
condition of the Change in Control or was at the request or insistence of any
entity related to the Change in Control in which case the written notice may be
given before the date of the Change in Control which indicates the specific
termination provision in the Agreement pursuant to which the notice is given


 


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K.            “Other Arrangement” is any Benefit
Plan or other plan, policy or practice of the Company or any other agreement
between the Executive and Fargo, other than this Agreement.


 


L.             “Fargo” means Fargo Electronics, Inc.
and includes any successor to Fargo Electronics, Inc.


 


M .          “Successor” means any individual,
corporation partnership, group, association or other person,” as such term is
used in Section 13(d) or Section 14(d) of the Exchange Act,
other than the Fargo, any affiliate or any benefit plan(s) sponsored by the
Fargo that succeeds to, or has the practical ability to control (either
immediately or solely with the passage of time), the parent corporation’s
business directly, by merger, consolidation or other form of business
combination, or indirectly, by purchase of the parent corporation’s outstanding
securities ordinarily having the right to vote at the election of directors or
all or substantially all of its assets or otherwise.  Successor shall also mean the entity that
exists after the Change in Control occurs, regardless of what form such entity
shall take.


 


2.             Term of Agreement. 
This Agreement is effective January 1, 2005 and will have a term
ending on December 31, 2006.


 


Notwithstanding anything
to the contrary, if a Change in Control has occurred during the term of this
Agreement, this Agreement will continue in effect for a period of 12 months
following the month during which the Change in Control occurs.


 


3.             Benefits upon a Change in Control
Termination.  The Executive will become entitled to the
benefits described in this Section 2 if and only if (i) Fargo or any
Successor terminates the Executive’s employment for any reason other than the
Executive’s death or Cause, or the Executive terminates the Executive’s
employment with the Successor for Good Reason, and (ii) the termination is
within 12 months after the date of the Change in Control (or before the Change
in Control if at the request of or required by the Successor related to the
change in control.


 


(a)           Cash Payment. 
Not more than 30 days following the Date of Termination, or, if later,
not more than 30 days following the date of the Change in Control, the Company
or the Successor will make a lump-sum cash payment to the Executive in an
amount equal to the sum of (100%/150%) of the Executive’s Base Pay.


 


(b)           Stock Options. 
100% of the Executive’s unvested options under the 1998 Stock Option
Plan will vest fully upon a change of control and such options shall be
purchased by Successor at the Change of Control event in the same manner as
other vested shares.


 


(c)           Other Stock Options.  If
other stock options under any plans other than the 1998 Stock Option Plan are
issued, these stock options will be treated as if the stock options had vested
at 100% in connection with the Change in Control.  Any difference between the value of such
stock options that actually vested in


 


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connection with the
Change in Control and 100% vesting shall be calculated and Fargo or the
Successor will pay such amount not more than 30 days following the Date of
Termination.


 


4.             Indemnification. 
Following a Change in Control, Fargo or any Successor will indemnify and
advance expenses to the Executive for damages, costs and expenses (including,
without limitation, judgments, fines, penalties, settlements and reasonable
fees and expenses of the Executive’s counsel) incurred in connection with all
matters, events and transactions relating to the Executive’s service to or
status with Fargo’s or any Successor’s employee benefit plan or other
service.  Fargo or any Successor must do
so to the extent that would have been required under applicable law, corporate
articles, bylaws or agreements or instruments of any nature with or covering
the Executive, as in effect immediately prior to the Change in Control and to
any further extent as may be determined or agreed upon following the Change in
Control.


 


5.             Miscellaneous.


 


(a)           Successors.  Fargo must
have any Successor, by agreement in form and substance satisfactory to the
Executive, assent to the fulfillment by the Company of the Company’s
obligations under this Agreement.  Failure by any Successor to enter into such
agreement will constitute Good Reason for termination by the Executive of the
Executive’s employment.


 


(b)           Binding Agreement. 
This Agreement inures to the benefit of, and is enforceable by, the
Executive, or in the event of death or incapacity of the Executive, the
Executive’s personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.


 


(c)           No Mitigation. 
The Executive will not be required to mitigate the amount of any
benefits the Successor becomes obligated to provide to the Executive in
connection with this Agreement by seeking other employment or otherwise.


 


(d)           No Setoff.  The Successor
has no right to setoff benefits owed to the Executive under this Agreement
against amounts owed (or claimed to be owed) by the Executive to Fargo or the
Successor under this Agreement or otherwise.


 


(e)           Taxes.  All benefits
to be provided to the Executive in connection with this Agreement will be
subject to required withholding of federal, state and local income, excise and
employment-related taxes.  The Successor’s
good faith determination with respect to its obligation to withhold such taxes
relieves it of any obligation that such amounts should have been paid to the
Executive.


 


(f)            Notices.  For the
purposes of this Agreement, notices and all other communications provided for
in, or required under, this Agreement must be in writing and will be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested


 


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to the address of either party on the first page of
this Agreement or to any other address of which one party notifies the other.


 


(g)           Disputes.  The parties
agree that any dispute, controversy or claim arising under or in connection
with this Agreement will be settled exclusively by binding arbitration
administered by the American Arbitration Association in Minneapolis, Minnesota
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. 
The arbiter’s decision will be binding on both parties. The Successor
will pay all fees and costs of the arbitration including legal fees.


 


(h)           Related Agreements and Other Arrangements. 
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof other than the options outstanding under
the stock option plan, and no agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter to this Agreement have
been made by any party which are not expressly set forth in this
Agreement.  If there are any other
Agreements or provisions in other Agreements to the contrary, this Agreement
shall apply and take precedence.


 


(i)            No Employment or Service Contract. 
Nothing in this Agreement is intended to provide the Executive with any
right to continue in the employ of Fargo or the Successor for any period of
specific duration or interfere with or otherwise restrict in any way the
Executive’s rights or the rights of Fargo or the Successor.


 


(j)            Payment; Assignment. 
Benefits payable under this Agreement will be paid only from the general
assets of the Successor and the Executive will be a general unsecured creditor.


 


(k)           Late Payments. 
Benefits not paid under this Agreement when due will accrue interest at
the rate of 18% per year, or the maximum rate permitted under applicable law.


 


(l)            Survival.  The
respective obligations and benefits of this Agreement shall survive termination
until the obligations are satisfied.


 


(m)          Amendments; Waivers. 
No provision of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in writing signed by
the Executive and the Chief Operating Officer of Fargo.  No waiver of any breach of this Agreement, or
of compliance with any condition or provision of this Agreement will be deemed
a waiver of similar or dissimilar provisions or conditions at any time.


 


(n)           Governing Law. 
This Agreement and the legal relations among the parties as to all
matters shall be governed by the laws of the State of Minnesota (without regard
to the conflict of laws principles of any jurisdiction).


 


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(o)           Further Assurances. 
The parties to this Agreement agree to perform, or cause to be
performed, such further acts and deeds, and to execute and deliver, or cause to
be executed and delivered, such additional or supplemental documents or
instruments as may be reasonably required by the other party to carry into
effect the intent and purpose of this Agreement.


 


(p)           Interpretation. 
The invalidity or unenforceability of all or any part of any provision
of this Agreement will not affect the validity or enforceability of the
remainder of such provision or of any other provision of this Agreement, which
will remain in full force and effect.


 


(q)           Counterparts. 
This Agreement may be executed in several counterparts, each of which
will be deemed to be an original, but all of which together will constitute one
and the same instrument.


 


 


Fargo and the
Executive have executed this Agreement as of the date first above written.


 


	
   

  	
  FARGO
  ELECTRONICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Agreed to as of
  this 8th day of December, 2005

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of
  Executive]

  



 


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