ZOMAX OPTICAL MEDIA, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, made this ________ day of _______________, 19___, by
and between ZOMAX OPTICAL MEDIA, INC., a Minnesota corporation (the "Company"),
and _______________________________ (the "Optionee");
W I T N E S S E T H
WHEREAS, the Optionee on the date hereof is an employee of the Company
or a Subsidiary of the Company;
WHEREAS, to induce the Optionee to continue in its employ and to
further the Optionee's efforts in its behalf, the Company desires to grant to
the Optionee an incentive stock option to purchase shares of its Common Stock;
WHEREAS, the Company's Board of Directors has adopted a stock option
plan providing for the grant of incentive stock options known as "Zomax Optical
Media, Inc. 1996 Stock Option Plan" (hereinafter referred to as the "Plan"); and
WHEREAS, on the date hereof, the Company's Board of Directors (or, if
so appointed and empowered by the Board, the Board's Stock Option Committee)
authorized the grant of this incentive stock option to the Optionee;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Optionee hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee, on the
date of this Agreement, the option to purchase ___________ shares of Common
Stock of the Company (the "Option Stock") subject to the terms and conditions
herein contained, and subject only to adjustment in such number of shares as
provided in Section 13 of the Plan. This option is intended to be an incentive
stock option within the meaning of Section 422, or any successor provision, of
the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder.
2. Option Price. During the term of this option, the purchase price for
the shares of Option Stock granted herein is $_________ per share (not less than
the fair market value as of date of grant), subject only to adjustment of such
price as provided in Section 13 of the Plan.
3. Term of Option. Unless terminated earlier under the provisions of
Paragraphs 10, 11 or 12 below, this option shall terminate as of the close of
business on _____________________. During the first year after the date of this
Agreement, this option shall not be exercisable. Thereafter, this option shall
be exercisable to the extent of _____________ percent (_____%) of such total
number of shares during each succeeding year until the earlier of the time this
option shall have become exercisable to the extent of one hundred percent (100%)
of the total number of shares granted or its termination as provided herein. If
the Optionee does not purchase the full number of shares which the Optionee is
entitled to purchase upon an exercise of this option, the Optionee may purchase
upon any subsequent exercise prior to the option's termination such previously
unpurchased shares in addition to those the Optionee is otherwise entitled to
purchase. If this option has been granted prior to approval of the Plan by the
Company's shareholders, this option shall not be exercisable until such approval
is obtained.
4. Personal Exercise by Optionee. This option shall, during the
lifetime of the Optionee, be exercisable only by said Optionee, or by the
Optionee's guardian or other legal representative, and shall not be transferable
by the Optionee, in whole or in part, other than by will or by the laws of
descent and distribution.
5. Manner of Exercise of Option.
a. The option may be exercised only by Optionee (or other
proper party in the event of death), subject to the conditions of the Plan and
subject to such other administrative rules as the Board of Directors may deem
advisable, by delivering a written notice of exercise to the Company at its
principal office. The notice shall state the number of shares as to which the
option is being exercised and shall be accompanied by payment in full of the
option price for all shares designated in the notice. The exercise of the option
shall be deemed effective upon receipt of such notice by the Company and upon
payment that complies with the terms of the Plan and this Agreement. The option
may be exercised with respect to any number or all of the shares as to which it
can then be exercised and, if partially exercised, may be so exercised as to the
unexercised shares any number of times during the exercise period as provided
herein.
b. Payment of the option price by Optionee shall be in the
form of cash, certified check or previously acquired shares of Common Stock of
the Company, or any combination thereof; provided, however, that the Board or
any Committee appointed by the Board to administer the Plan may, in its sole
discretion, limit the form of payment to cash or certified check and may
exercise its discretion any time prior to the termination of this option or upon
any exercise of this option by the Optionee. Any stock so tendered as part of
such payment shall be valued at its fair market value as provided in the Plan.
As soon as practicable after the effective exercise of all or any part of the
option, the Optionee shall be recorded on the stock transfer books of the
Company as the owner of the shares purchased, and the Company shall deliver to
the Optionee one or more duly issued stock certificates evidencing such
ownership. All requisite original issue or transfer documentary stamp taxes
shall be paid by the Company.
6. Employment; Rights as a Shareholder. This Agreement shall not confer
on Optionee any right with respect to continuance of employment by the Company
or any of its Subsidiaries, nor will it interfere in any way with the right of
the Company to terminate such employment. The Optionee or a transferee of this
option shall have no rights as a shareholder with respect to any shares covered
by this option until the date of the issuance of a stock certificate for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 13 of the Plan.
7. 1996 Stock Option Plan. The option evidenced by this Agreement is
granted pursuant to the Plan, a copy of which Plan has been made available to
the Optionee and is hereby made a part of this Agreement. This Agreement is
subject to and in all respects limited and conditioned as provided in the Plan.
The Plan governs this option, and, in the event of any question as to the
construction of this Agreement or of a conflict between the Plan and this
Agreement, the Plan shall govern, except as the Plan otherwise provides.
8. Withholding Taxes on Disqualifying Disposition by Optionee. In the
event of a disqualifying disposition of Option Stock by Optionee, Optionee
hereby agrees to inform the Company of such disposition. Upon notice of a
disqualifying disposition or upon independently learning of such a disposition,
the Company may take such action as it deems appropriate to insure that, if
necessary to provide the Company with the opportunity to claim the benefit of
any income tax deduction which may be available to it upon such disqualifying
disposition and to comply with all applicable federal or state income tax laws
or regulations, all applicable federal and state payroll, income or other taxes
are withheld from any amounts payable by the Company to Optionee. If the Company
is unable to withhold such federal and state taxes, for whatever reason, the
Optionee hereby agrees to pay to the Company an amount equal to the amount the
Company would otherwise be required to withhold under federal or state law. The
Optionee may, subject to the approval and discretion of the Board of Directors
or such other administrative rules it may deem advisable, elect to have all or a
portion of such tax withholding obligations satisfied by delivering shares of
the Company's Common Stock having a fair market value equal to such obligations.
9. Securities Law Compliance. The exercise of all or any parts of this
option shall only be effective at such time as counsel to the Company shall have
determined that the issuance and delivery of Common Stock pursuant to such
exercise will not violate any state or federal securities or other laws.
Optionee may be required by the Company, as a condition of the effectiveness of
any exercise of this option, to agree in writing that all Common Stock to be
acquired pursuant to such exercise shall be held, until such time that such
Common Stock is registered and freely tradable under applicable state and
federal securities laws, for Optionee's own account without a view to any
further distribution thereof, that the certificates for such shares shall bear
an appropriate legend to that effect and that such shares will be not
transferred or disposed of except in compliance with applicable state and
federal securities laws.
10. Termination of Employment (Other than for Death or Change of
Control). If Optionee ceases to be an employee of the Company or any Subsidiary
for any reason, other than because of a "change of control transaction" as
described in Paragraph 11 or because of death, this Option shall completely
terminate on the earlier of (i) the close of business on the three-month
anniversary date of such termination of employment, and (ii) the expiration date
of this Option stated in Paragraph 3 above. In such period following such
termination of employment, this option shall be exercisable only to the extent
the option was exercisable on the date of termination of employment, but had not
previously been exercised.
11. Change of Control. If Optionee's employment with the Company or any
Subsidiary is terminated because of a "change of control transaction," this
Option shall completely terminate on the earlier of (i) the close of business on
the three-month anniversary date of such termination of employment and (ii) the
expiration date of this Option stated in Paragraph 3 above; provided, however,
that if (a) such transaction is treated as a "pooling of interests" under
generally accepted accounting principles and (b) Optionee is an "affiliate" of
the Company or Subsidiary under applicable legal and accounting principles, this
Option shall completely terminate on the later of (A) the close of business on
the three-month anniversary date of such termination of employment or (B) the
close of business on the date that is sixty (60) days after the date on which
affiliates are no longer restricted from selling, transferring or otherwise
disposing of the shares of stock received in the change of control transaction.
In such period following the termination of Optionee's
employment upon a change of control transaction, this Option shall be fully
exercisable unless the acceleration of the exercisability of this Option has
been prevented as provided in Section 13 of the Plan, in which case, this Option
shall be exercisable only to the extent the Option was exercisable on the
vesting date immediately preceding such termination of employment, but had not
previously been exercised. To the extent this Option was not exercisable upon
such termination of employment or if Optionee does not exercise the Option
within the time specified in this Paragraph 11, all rights of Optionee under
this Option shall be forfeited. If Optionee exercises this Option on a date that
is after the three-month anniversary date of the termination of Optionee's
employment or on a date that is more than ten years (or five years, if
applicable) after the Date of Grant, this Option shall not be treated as an
incentive stock option within the meaning of Code Section 422.
For purposes of this Paragraph 11, a "change of control
transaction" means an acquisition of the Company through the sale of
substantially all of the Company's assets and the consequent discontinuance of
its business or through a merger, consolidation, exchange, reorganization,
reclassification, extraordinary dividend, divestiture (including a spin-off) or
liquidation of the Company.
12. Death of Optionee. If the Optionee dies (i) while in the employ of
the Company or any Subsidiary, or (ii) within the period of three months after
the termination of employment with the Company or any Subsidiary as provided in
Paragraph 10, this option shall terminate on the earlier of (i) the close of
business on the twelve-month anniversary date of the Optionee's death, and (ii)
the expiration date under this option. In such period following the Optionee's
death, this option may be exercised by the person or persons to whom the
Optionee's rights under this option shall have passed by the Optionee's will or
by the laws of descent and distribution only to the extent the option was
exercisable on the date of death but had not previously been exercised. To the
extent this option was not exercisable upon Optionee's death, or if the option
is not exercised within the time specified in this Paragraph 12, all rights
under this option shall be forfeited.
13. Recapitalizations, Sales, Mergers, Exchanges, Consolidations,
Liquidation. Pursuant and subject to Section 13 of the Plan, certain changes in
the number or character of the Common Stock of the Company (through sale,
merger, consolidation, exchange, reorganization, divestiture (including a
spin-off), liquidation, recapitalization, stock split, stock dividend or
otherwise) shall result in an adjustment, reduction or enlargement, as
appropriate, in Optionee's rights with respect to any unexercised portion of the
option (i.e., Optionee shall have such "anti-dilution" rights under the option
with respect to such events, but shall not have "preemptive" rights).
14. Scope of Agreement. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and the Optionee and any
successor or successors of the Optionee permitted by Paragraph 4 hereof.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in the manner appropriate to each, as of the day and year first above
written.
ZOMAX OPTICAL MEDIA, INC.
By _____________________________________
Its_____________________________________
COMPANY
_____________________________________
OPTIONEE
ZOMAX OPTICAL MEDIA, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made this ______ day of _____________, 19___, by and
between ZOMAX OPTICAL MEDIA, INC., a Minnesota corporation (the "Company"), and
_________________________ (the "Optionee");
W I T N E S S E T H
WHEREAS, the Optionee on the date hereof is an employee, officer,
director, consultant or advisor of the Company or a Subsidiary of the Company;
WHEREAS, to induce the Optionee to further the Optionee's efforts in
its behalf, the Company desires to grant to the Optionee a nonqualified stock
option to purchase shares of its Common Stock;
WHEREAS, the Company's Board of Directors has adopted a stock option
plan providing for the grant of nonqualified stock options known as "Zomax
Optical Media, Inc. 1996 Stock Option Plan" (hereinafter referred to as the
"Plan"); and
WHEREAS, on the date hereof, the Company's Board of Directors (or, if
so appointed and empowered by the Board, the Board's Stock Option Committee)
authorized the grant of this nonqualified stock option to the Optionee;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Optionee hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee, on the
date of this Agreement, the option to purchase _________ shares of Common Stock
of the Company (the "Option Stock") subject to the terms and conditions herein
contained, and subject only to adjustment in such number of shares as provided
in Section 13 of the Plan. This option is a nonqualified stock option and will
not be treated as an incentive stock option, as defined under Section 422, or
any successor provision, of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder.
2. Option Price. During the term of this option, the purchase price for
the shares of Option Stock granted herein is $___________ per share, subject
only to adjustment of such price as provided in Section 13 of the Plan.
3. Term of Option. Unless terminated earlier under the provisions of
Paragraphs 10, 11 or 12 below, this option shall terminate as of the close of
business on _________________. During the first year after the date of this
Agreement, this option shall not be exercisable. Thereafter, this option shall
be exercisable to the extent of ____________ percent (____%) of such total
number of shares during each succeeding year until the earlier of the time this
option shall have become exercisable to the extent of one hundred percent (100%)
of the total number of shares granted or its termination as provided herein. If
the Optionee does not purchase the full number of shares which the Optionee is
entitled to purchase upon an exercise of this option, the Optionee may purchase
upon any subsequent exercise prior to the option's termination such previously
unpurchased shares in addition to those the Optionee is otherwise entitled to
purchase. If this option has been granted prior to approval of the Plan by the
Company's shareholders, this option shall not be exercisable until such approval
is obtained.
4. Personal Exercise by Optionee. This option shall, during the
lifetime of the Optionee, be exercisable only by said Optionee, or by the
Optionee's guardian or other legal representative, and shall not be transferable
by the Optionee, in whole or in part, other than by will or by the laws of
descent and distribution.
5. Manner of Exercise of Option.
a. The option may be exercised only by Optionee (or other
proper party in the event of death), subject to the conditions of the Plan and
subject to such other administrative rules as the Board of Directors may deem
advisable, by delivering a written notice of exercise to the Company at its
principal office. The notice shall state the number of shares as to which the
option is being exercised and shall be accompanied by payment in full of the
option price for all shares designated in the notice. The exercise of the option
shall be deemed effective upon receipt of such notice by the Company and upon
payment that complies with the terms of the Plan and this Agreement. The option
may be exercised with respect to any number or all of the shares as to which it
can then be exercised and, if partially exercised, may be so exercised as to the
unexercised shares any number of times during the exercise period as provided
herein.
b. Payment of the option price by Optionee shall be in the
form of cash, certified check or previously acquired shares of Common Stock of
the Company, or any combination thereof; provided, however, that the Board or
any Committee appointed by the Board to administer the Plan may, in its sole
discretion, limit the form of payment to cash or certified check and may
exercise its discretion any time prior to the termination of this option or upon
any exercise of this option by the Optionee. Any stock so tendered as part of
such payment shall be valued at its fair market value as provided in the Plan.
As soon as practicable after the effective exercise of all or any part of the
option, the Optionee shall be recorded on the stock transfer books of the
Company as the owner of the shares purchased, and the Company shall deliver to
the Optionee one or more duly issued stock certificates evidencing such
ownership. All requisite original issue or transfer documentary stamp taxes
shall be paid by the Company.
6. Employment; Rights as a Shareholder. This Agreement shall not confer
on Optionee any right with respect to continuance of employment, if so employed,
by the Company or any of its Subsidiaries, nor will it interfere in any way with
the right of the Company to terminate such employment. The Optionee or a
transferee of this option shall have no rights as a shareholder with respect to
any shares covered by this option until the date of the issuance of a stock
certificate for such shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 13 of the Plan.
7. 1996 Stock Option Plan. The option evidenced by this Agreement is
granted pursuant to the Plan, a copy of which Plan has been made available to
the Optionee and is hereby made a part of this Agreement. This Agreement is
subject to and in all respects limited and conditioned as provided in the Plan.
The Plan governs this option, and, in the event of any question as to the
construction of this Agreement or of a conflict between the Plan and this
Agreement, the Plan shall govern, except as the Plan otherwise provides.
8. Withholding Taxes. In order to provide the Company with the
opportunity to claim the benefit of any income tax deduction which may be
available to it upon the exercise of this option and to permit the Company to
comply with all applicable federal or state income tax laws or regulations, the
Company may take such action as it deems appropriate to insure that, if
necessary, all applicable federal or state payroll, income or other taxes are
withheld from any amounts payable by the Company to the Optionee. If the Company
is unable to withhold such federal and state taxes, for whatever reason, the
Optionee hereby agrees to pay to the Company an amount equal to the amount the
Company would otherwise be required to withhold under federal or state law. The
Optionee may, subject to the discretion of the Board of Directors or such other
administrative rules it may deem advisable, elect to have all or a portion of
such tax withholding obligations satisfied by delivering shares of the Company's
Common Stock having a fair market value equal to such obligations.
9. Securities Law Compliance. The exercise of all or any parts of this
option shall only be effective at such time as counsel to the Company shall have
determined that the issuance and delivery of Common Stock pursuant to such
exercise will not violate any state or federal securities or other laws.
Optionee may be required by the Company, as a condition of the effectiveness of
any exercise of this option, to agree in writing that all Common Stock to be
acquired pursuant to such exercise shall be held, until such time that such
Common Stock is registered and freely tradable under applicable state and
federal securities laws, for Optionee's own account without a view to any
further distribution thereof, that the certificates for such shares shall bear
an appropriate legend to that effect and that such shares will be not
transferred or disposed of except in compliance with applicable state and
federal securities laws.
10. Termination of Relationship With Company (Other than Because of
Death or Change of Control). If the Optionee ceases to be an employee or
director of or a consultant or advisor to the Company or any Subsidiary for any
reason, other than because of a "change of control transaction" as described in
Paragraph 11 or because of death, this Option shall completely terminate on the
earlier of (i) the close of business on the three-month anniversary date of such
termination of such relationship, and (ii) the expiration date of this Option
stated in Paragraph 3 above. In such period following termination of such
relationship, this option shall be exercisable only to the extent the option was
exercisable on the date of termination of such relationship, but had not
previously been exercised.
11. Change of Control. If the Optionee ceases to be an employee or
director of or a consultant or advisor to the Company or any Subsidiary because
of a "change of control transaction," this Option shall completely terminate on
the earlier of (i) the close of business on the three-month anniversary date of
such termination of employment and (ii) the expiration date of this Option
stated in Paragraph 3 above; provided, however, that if (a) such transaction is
treated as a "pooling of interests" under generally accepted accounting
principles and (b) Optionee is an "affiliate" of the Company or Subsidiary under
applicable legal and accounting principles, this Option shall completely
terminate on the later of (A) the close of business on the three-month
anniversary date of such termination or (B) the close of business on the date
that is sixty (60) days after the date on which affiliates are no longer
restricted from selling, transferring or otherwise disposing of the shares of
stock received in the change of control transaction.
In such period following the termination of Optionee's
employment upon a change of control transaction, this Option shall be fully
exercisable unless the acceleration of the exercisability of this Option has
been prevented as provided in Section 13 of the Plan, in which case, this Option
shall be exercisable only to the extent the Option was exercisable on the
vesting date immediately preceding such termination of employment, but had not
previously been exercised. To the extent this Option was not exercisable upon
termination of such relationship or if Optionee does not exercise the Option
within the time specified in this Paragraph 11, all rights of Optionee under
this Option shall be forfeited.
For purposes of this Paragraph 11, a "change of control
transaction" means an acquisition of the Company through the sale of
substantially all of the Company's assets and the consequent discontinuance of
its business or through a merger, consolidation, exchange, reorganization,
reclassification, extraordinary dividend, divestiture (including a spin-off) or
liquidation of the Company.
12. Death of Optionee. If the Optionee dies (i) while an employee or
director of or consultant or advisor to the Company or any Subsidiary, or (ii)
within the period of three months after the termination of Optionee's
relationship with the Company or any Subsidiary as provided in Paragraph 10,
this option shall terminate on the earlier of (i) the close of business on the
twelve-month anniversary date of the Optionee's death, and (ii) the expiration
date under this option. In such period following the Optionee's death, this
option may be exercised by the person or persons to whom the Optionee's rights
under this option shall have passed by the Optionee's will or by the laws of
descent and distribution only to the extent the option was exercisable on the
date of death but had not previously been exercised. To the extent this option
was not exercisable upon Optionee's death, or if the option is not exercised
within the time specified in this Paragraph 12, all rights under this option
shall be forfeited.
13. Recapitalizations, Sales, Mergers, Exchanges, Consolidations,
Liquidation. Pursuant and subject to Section 13 of the Plan, certain changes in
the number or character of the Common Stock of the Company (through sale,
merger, consolidation, exchange, reorganization, divestiture (including a
spin-off), liquidation, recapitalization, stock split, stock dividend or
otherwise) shall result in an adjustment, reduction or enlargement, as
appropriate, in Optionee's rights with respect to any unexercised portion of the
option (i.e., Optionee shall have such "anti-dilution" rights under the option
with respect to such events, but shall not have "preemptive" rights).
14. Scope of Agreement. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and the Optionee and any
successor or successors of the Optionee permitted by Paragraph 4 hereof.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in the manner appropriate to each, as of the day and year first above
written.
ZOMAX OPTICAL MEDIA, INC.
By _____________________________________
Its_____________________________________
COMPANY
_____________________________________
OPTIONEE
