Document:

Exhibit 10.63

 

MERGER
TERMINATION AGREEMENT

 

This Merger Termination Agreement (this “Agreement”)
is entered into as of December 13, 2005 by and among Medicis
Pharmaceutical Corporation, a Delaware corporation (“Parent”),
Masterpiece Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent (“Merger Sub”), and Inamed Corporation, a Delaware
corporation (the “Company”).

 

RECITALS

 

WHEREAS, Parent, Merger Sub and the Company
have entered into an Agreement and Plan of Merger dated as of March 20,
2005 (the “Merger Agreement”) (capitalized terms used but not otherwise
defined herein shall have the respective meanings provided for such terms in
the Merger Agreement); and

 

WHEREAS, Parent, Merger Sub and the Company
desire to terminate the Merger Agreement as provided herein effective
immediately upon execution of this Agreement and Medicis’ receipt of the
Company Termination Fee and Reimbursement Fees pursuant to Section 1(b) hereof.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises
and the agreements set forth herein, and intending to be legally bound hereby, the parties agree as follows:

 

1.             Termination
of Merger Agreement.

 

(a)           Parent,
Merger Sub and the Company hereby terminate the Merger Agreement pursuant to Section 7.01
of the Merger Agreement, effective immediately upon the execution of this
Agreement and Medicis’ receipt of the Company Termination Fee and Reimbursement
Fees pursuant to Section 1(b) hereof.

 

(b)           The
Company shall pay to Parent (i) the Company Termination Fee of $90,000,000
and (ii) $481,985 pursuant to Section 5.10(a) of the Merger
Agreement (the “Reimbursement Fees”), concurrently with the execution of this
Agreement.  Payment of the Company
Termination Fee and the Reimbursement Fees by the Company shall be made by wire
transfer of immediately available funds to the account designated on Schedule 1
hereto.  Parent and Merger Sub agree and
acknowledge that payment of the Termination Fee and the Reimbursement Fees
shall constitute full and final satisfaction of any and all obligations of the
Company under Section 5.10 of the Merger Agreement.

 

2.             Effect
of Termination; Mutual Discharge and Release.

 

Each party hereto, on behalf of itself and,
to the extent permitted by law, its affiliates, subsidiaries, directors,
officers, stockholders, employees, agents, financial and legal advisors and
other Representatives, and the successors and assigns of each of them (each, a “Releasing
Party”), hereby fully, finally and forever releases each other party hereto
and each of their respective affiliates, subsidiaries, directors, officers,
stockholders, employees, agents, financial and legal advisors and other
representatives, and the successors and assigns of each of

 

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them, from any and all
liabilities and obligations, claims, causes of action and suits, at law or in
equity, whether now known or unknown, based on or arising out of facts of which
such party has Knowledge (as defined below) on or prior to the date hereof,
whether arising under any United States federal, state or local or any foreign
law or otherwise, that any Releasing Party has or has had arising out of,
relating to, or in connection with the Merger Agreement and the transactions
contemplated thereby, including, without limitation, any liability or
obligation arising out of any breach based on facts of which such party has
Knowledge on or before the date hereof of any representation, warranty,
covenant or agreement contained in the Merger Agreement, provided that
nothing in this Section 2 shall impair the survival and full force of the
terms of the Confidentiality Agreement or Parent’s right to receive immediate
payment of the Company Termination Fee and the Reimbursement Fees pursuant to Section 1
hereof and Section 5.10 of the Merger Agreement.

 

3.             Survival
of Confidentiality Agreement.

 

(a)           Notwithstanding
anything contained in this Agreement to the contrary, the provisions of the
Confidentiality Agreement dated as of November 17, 2004 between Parent and
the Company (the “Confidentiality Agreement”) shall survive and remain in full
force and effect in accordance with their terms.

 

(b)           Each
of Parent and Merger Sub, on the one hand, and the Company, on the other hand,
shall promptly deliver to the other all Proprietary Information of the other
party, and, at the other party’s sole election, return or destroy (provided
that any such destruction shall be certified by a duly authorized
Representative of the party) all copies, reproductions, summaries, analyses or
extracts thereof or based thereon (whether in hard-copy form or on intangible
media, such as electronic mail or computer files) in the party’s possession or
in the possession of any of its Representatives; provided, that if a
legal proceeding has been instituted to seek disclosure of the Proprietary
Information, such material shall not be destroyed until the proceeding is
settled or a final judgment with respect thereto has been rendered; and provided,
further, that all documents reflecting the party’s final evaluation of
the Merger Agreement and the reasons for its decision to proceed or not to
proceed with the transactions contemplated thereby will not be required to be
returned or destroyed, however, the Confidentiality Agreement will continue to
apply to any such information on the terms set forth herein.  Notwithstanding the return or destruction of
any Proprietary Information, or documents or material containing or reflecting
any Proprietary Information, the parties will continue to be bound by their
obligations of confidentiality and other obligations hereunder for the term of
the Confidentiality Agreement (or such other term as may be applicable to the
specific obligation).

 

4.             Representations
and Warranties of Parent and Merger Sub. 
Parent and Merger Sub hereby represent to the Company as follows:  Each of Parent and Merger Sub has full
corporate power and authority to execute, deliver and perform this Agreement;
this Agreement has been duly and validly authorized by their respective boards
of directors and executed and delivered by each of them, and constitutes a
valid binding obligation of each of them, enforceable against each of them in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors’ rights
generally and by general equitable principles; and neither Parent nor Merger
Sub have assigned, transferred or conveyed

 

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to any other Person any claim
or any portion thereof or interest therein relating to any of the matters that
are the subject of this Agreement.

 

5.             Representations
and Warranties of the Company.  The
Company hereby represents to Parent as follows: 
The Company has full corporate power and authority to execute, deliver
and perform this Agreement; this Agreement has been duly and validly authorized
by the Company’s board of directors and executed and delivered by the Company,
and constitutes a valid binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors’ rights generally and by general equitable principles; the Company
has available and ready funds sufficient to pay the amounts set forth in Section 1
hereof; and the Company has not assigned,
transferred or conveyed to any other Person any claim or any portion thereof or
interest therein relating to any of the matters that are the subject of this
Agreement.

 

6.             Public
Announcement.  Parent and the Company
acknowledge that each intends to issue a press release promptly after the date
of this Agreement with respect to this Agreement and the termination of the
Merger Agreement.  Each of Parent and the
Company shall use reasonable efforts to consult with the other before issuing
such press release, and in no event may either party issue such press until the
termination of the Merger Agreement has become effective pursuant to Section 1
hereof.

 

7.             Governing
Law; Waiver of Jury Trial.

 

(a)           This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to the conflict of law provisions
thereof.  This Agreement shall be binding
upon any successor to the Company or Parent or Merger Sub.  In addition, each of the parties hereto (a) irrevocably
and unconditionally consents to submit itself to the jurisdiction of the Court
of Chancery of the State of Delaware in the event any dispute arises out of
this Agreement or the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will
not bring any action relating to this Agreement or the transactions
contemplated by this Agreement in any court other than the Court of Chancery of
the State of Delaware, and each of the parties irrevocably waives the right to
trial by jury, (d) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action on the Court
of Chancery of the State of Delaware, and (e) irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid, to the address at which such party is to receive notice.

 

(b)           Each
of the parties hereto hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or the Merger Agreement.

 

8.             Specific
Performance.  The parties hereto
agree that irreparable damage would occur in the event any provision of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.  It is accordingly agreed that in any
proceeding

 

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seeking specific performance
each of the parties will waive the defense of adequacy of a remedy at law.

 

9.             Miscellaneous.

 

(a)           The
descriptive headings contained in this Agreement are included for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

(b)           Each
party agrees to use reasonable effort to take reasonable actions as any other
party may reasonably request to carry out the intent of this Agreement and to
take any other actions required under applicable Law to carry out and
effectuate the intent of this Agreement.

 

(c)           This
Agreement, the Merger Agreement and the Confidentiality Agreement constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement.  No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by either party hereto in
connection with this Agreement.

 

(d)           This
Agreement may be modified or amended only by a writing signed by the parties
hereto.  This Agreement may be executed
and delivered (including by facsimile transmission) in one of more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed and delivered shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.

 

(e)           If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future laws, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such illegal, invalid or unenforceable
provisions had never comprised a part hereof, and (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom.

 

(f)            If
any legal action, including, without limitation, an action for arbitration or
injunctive relief, is brought relating to this Agreement or the Merger
Agreement or the breach or alleged breach hereof or thereof, the prevailing
party in any final judgment or arbitration award, or the non-dismissing party
in the event of a voluntary dismissal by the party instituting the action,
shall be entitled to the full amount of all reasonable legal expenses,
including all court costs, arbitration fees and actual attorneys’ fees paid or
incurred in good faith.

 

(g)           A
party hereto shall be deemed to have “Knowledge” of a particular fact or other
matter, and a particular fact or other matter shall be deemed “known to” a
party hereto if any executive officer of such party (a) is actually aware
of such fact or matter, or (b) would be expected to discover or otherwise
become aware of such fact or other matter after consultation with its outside
legal advisors.

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

 

	
   

  	
  MEDICIS PHARMACEUTICAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Mark A. Prygocki, Sr.

  
	
   

  	
   

  	
  Name: Mark A. Prygocki, Sr.

  
	
   

  	
   

  	
  Title: Executive Vice
  President, Chief Financial

  Officer, Corporate Secretary and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MASTERPIECE
  ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Mark A. Prygocki, Sr.

  
	
   

  	
   

  	
  Name: Mark A.
  Prygocki, Sr.

  
	
   

  	
   

  	
  Title: Vice President,
  Secretary, Chief Financial

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INAMED CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Nicholas L. Teti

  
	
   

  	
   

  	
  Name: Nicholas L. Teti

  
	
   

  	
   

  	
  Title: Chairman,
  President and CEO

  

 

5Exhibit 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).

 

7

 

(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]

  

 

8

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