Exhibit 10.4
RIMAGE CORPORATION
1992 STOCK OPTION PLAN
As amended March 20, 1997
The purpose of the Rimage Corporation 1992 Stock Option Plan (the
"Plan") is to promote the growth and profitability of Rimage Corporation (the
"Company") and its Affiliates by providing its employees and directors with an
incentive to achieve long-term corporate objectives, to attract and retain
employees and directors of outstanding competence, and to provide such employees
and directors with an equity interest in the Company.
1. STOCK SUBJECT TO PLAN. An aggregate of 1,000,000 shares (the
"Shares") of the Common Stock, $.01 par value, of the Company ("Common Stock")
may be subject to options granted under the Plan. Such Shares may be authorized
but unissued Common Stock or authorized and issued Common Stock that has been or
may be acquired by the Company. Shares that are subject to an option which
expires or is terminated unexercised shall again be available for issuance under
the Plan.
2. ADMINISTRATION.
a. COMMITTEE. The Plan shall be administered by the
Stock Option Committee (the "Committee") of the Board of Directors
of the Company (the "Board"). The Committee shall be comprised of
two or more members of the Board, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended.
b. POWERS AND DUTIES. The Committee shall have the
authority to make rules and regulations governing the administration
of the Plan; to select the eligible employees to whom options shall
be granted; to determine the type, amount, size, and terms of
options; to determine the time when options shall be granted; to
determine whether any restrictions shall be placed on Shares
purchased pursuant to any option; and to make all other
determinations necessary or advisable for the administration of the
Plan. The Committee's determinations need not be uniform, and may be
made by it selectively among persons who are eligible to receive
options under the Plan, whether or not such persons are similarly
situated. All interpretations, decisions, or determinations made by
the Committee pursuant to the Plan shall be final and conclusive.
3. ELIGIBILITY. Any employee, director or consultant of the Company
or of any of its Affiliates shall be eligible to receive options under the Plan.
A persons who has been granted an option under this Plan, or under any
predecessor plan, may be granted additional options if the Committee shall so
determine. Except to the extent otherwise provided in the agreement evidencing
an option, the granting of an option under this Plan shall not affect any
outstanding option previously granted under this Plan or under any other plan of
the Company or any Affiliate. For purposes of the Plan, the term "Affiliate"
shall mean any "parent corporation" or "subsidiary corporation" of the Company,
as those terms are defined in Sections 425(e) and 425(f) of the Internal Revenue
Code of 1986, as amended.
4. EMPLOYEE STOCK OPTIONS. The Committee may grant to eligible
employees stock options which are intended to qualify as "Incentive Stock
Options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, and may grant to employees, directors or consultants stock options
which are not intended to so qualify ("Nonqualified Options"), or any
combination thereof. A stock option granted pursuant to the Plan shall entitle
the optionee, upon exercise, to purchase Shares at a specified price during a
specified period. Options shall be subject to such terms and conditions as
the Committee shall from time to time approve; provided, that each option shall
be subject to the following requirements:
a. TYPE OF OPTION. Each option shall be identified in
the agreement pursuant to which it is granted as an Incentive Stock
Option or as a Nonqualified Option, as the case may be.
b. TERM. No option shall be exercisable
more than 121 months after the date on which it is
granted.
c. PAYMENT. The purchase price of Shares subject to an
option shall be payable in full at the time the option is exercised.
Payment may be made in cash, in shares of Common Stock having an
aggregate fair market value on the date of exercise which is not
less than the option price, or by a combination of cash and such
shares, as the Committee may determine, and subject to such terms
and conditions as the Committee deems appropriate.
d. OPTIONS NOT TRANSFERABLE. Options shall not be
transferable except to the extent permitted by the agreement
evidencing such option; provided, that in no event shall any option
be transferable by the optionee, other than by will or the laws of
descent and distribution. Options shall be exercisable during an
optionee's lifetime only by such optionee. If, pursuant to the
agreement evidencing any option, such option remains exercisable
after the optionee's death, it may be exercised, to the extent
permitted by such agreement, by the personal representative of the
optionee's estate or by any person who acquired the right to
exercise such option by bequest, inheritance, or otherwise by reason
of the optionee's death.
e. INCENTIVE STOCK OPTIONS. If an option is an Incentive
Stock Option, it shall be subject to the following additional
requirements:
i. The purchase price of Shares that are
subject to an Incentive Stock Option shall not be less
than 100% of the fair market value of such Shares at the
time the option is granted, as determined in good faith
by the Committee.
ii. The aggregate fair market value
(determined at the time the option is granted) of the
Shares with respect to which Incentive Stock Options are
exercisable by the optionee for the first time during
any calendar year, under this Plan or any other plan of
the Company or any Affiliate, shall not exceed $100,000.
iii. An Incentive Stock Option shall not be
exercisable more than ten years after the date on which
it is granted.
iv. The purchase price of Shares that are
subject to an Incentive Stock Option granted to an
employee who, at the time such option is granted, owns
10% or more of the total combined voting power of all
classes of stock of the Company or of any Affiliate
shall not be less than 110% of the fair market value of
such Shares on the date such option is granted, and such
option may not be exercisable more than five years after
the date on which it is granted. For the purposes of
this subparagraph, the rules of Section 425(d) of the
Code shall apply in determining the stock ownership of
any employee.
Subject to the foregoing, options may be made exercisable in one or more
installments, upon the happening of certain events, upon the fulfillment of
certain conditions, or upon such other terms and conditions as the Committee
shall determine.
5. AGREEMENTS. Each option granted pursuant to the Plan shall be
evidenced by an agreement setting forth the terms and conditions upon which it
is granted. Multiple options may be evidenced by a
single agreement. Subject to the limitations set forth in the Plan, the
Committee may, with the consent of the person to whom an option has been
granted, amend any such agreement to modify the terms or conditions governing
the option evidenced thereby.
6. ADJUSTMENTS. In the event of any change in the outstanding shares
of Common Stock by reason of any stock dividend or split, recapitalization,
reclassification, combination, or exchange of shares or other similar corporate
change, then if the Committee shall determine, in its sole discretion, that such
change necessarily or equitably requires an adjustment in the number of Shares
subject to an option, in the option price or value of an option, or in the
maximum number of Shares subject to this Plan, such adjustments shall be made by
the Committee and shall be conclusive and binding for all purposes of this Plan.
No adjustment shall be made in connection with the issuance by the Company of
any warrants, rights, or options to acquire additional Common Stock or of
securities convertible into Common Stock.
7. MERGER, CONSOLIDATION, REORGANIZATION, LIQUIDATION, ETC. Subject
to the provisions of the agreement evidencing any option, if the Company shall
become a party to any corporate merger, consolidation, major acquisition of
property for stock, reorganization, or liquidation, the Board of Directors of
the Company shall have the power to make any arrangement it deems advisable with
respect to outstanding options and in the number of Shares subject to this Plan,
which shall be binding for all purposes of this Plan, including, but not limited
to, the substitution of new options for any options then outstanding, the
assumption of any such options, and the termination of such options.
8. EXPENSES OF PLAN. The expenses of administering this Plan shall
be borne by the Company and its Affiliates.
9. RELIANCE ON REPORTS. Each member of the Committee and each member
of the Board of Directors shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of the Company
and its Affiliates and upon any other information furnished in connection with
this Plan by any person or persons other than himself. In no event shall any
person who is or shall have been a member of the Committee or of the Board of
Directors be liable for any determination made or other action taken or omitted
in reliance upon any such report or information, or for any action taken or
omitted, including the furnishing of information, in good faith.
10. RIGHTS AS STOCKHOLDER. Except to the extent otherwise
specifically provided hereon, no recipient of any option shall have any rights
as a stockholder with respect to Shares sold or issued pursuant to the Plan
until certificates for such Shares have been issued to such person.
11. GENERAL RESTRICTIONS. Each option granted pursuant to the Plan
shall be subject to the requirement that if, in the opinion of the Committee:
a. the listing, registration, or qualification of any
Shares related thereto upon any securities exchange or under any
state or federal law;
b. the consent or approval of any regulatory body; or
c. an agreement by the recipient with respect to the
disposition of any such Shares;
is necessary or desirable as a condition of the issuance or sale of such Shares,
such option shall not be consummated unless and until such listing,
registration, qualification, consent, approval, or agreement is effected or
obtained in form satisfactory to the Committee.
12. EMPLOYMENT RIGHTS. Nothing in this Plan, or in any agreement
entered into hereunder, shall confer upon any employee or director the right to
continue to serve as an employee or director of
the Company or an Affiliate, or affect the right of the Company or an Affiliate
to terminate such employee's or director's services at any time, with or without
cause.
13. WITHHOLDING. If the Company proposes or is required to issue
Shares pursuant to the Plan, it may require the recipient to remit to it, or may
withhold from such option or from the recipient's other compensation, an amount,
in the form of cash or Shares, sufficient to satisfy any applicable federal,
state, or local tax withholding requirements prior to the delivery of any
certificates for such Shares.
14. AMENDMENTS. The Board of Directors of the Company may at any
time, and from time to time, amend the Plan in any respect, except that no
amendment:
a. increasing the number of Shares available for
issuance or sale pursuant to the Plan (other than as permitted by
paragraphs 6 and 7);
b. changing the classification of persons eligible to
participate in the Plan or the definition of an "Affiliate"; or
c. materially increasing the benefits accruing to
participants under the Plan;
shall be made without the affirmative vote of stockholders holding at least a
majority of the voting stock of the Company represented in person or by proxy at
a duly held stockholders' meeting.
15. EFFECTIVE DATE; DURATION. The Plan initially become effective
with respect to 250,000 shares on September 24, 1992, upon its adoption by the
Board of Directors of the Company and approval by the shareholders of the
Company. The increase in the number of shares subject to the Plan from 250,000
shares to 500,000 shares became effective on December 31, 1993, and was approved
by the shareholders on June 5, 1994. The increase in the number of shares
subject to the Plan from 500,000 shares to 1,000,000 shares, shall become
effective on March 20, 1997, subject to shareholder approval of such amendments
on or before March 20, 1998. No options shall be granted under the Plan after
the earlier of: (a) the date on which the Plan is terminated by the Board of
Directors of the Company; or (b) September 24, 2002. Options outstanding at the
termination or expiration of the Plan may continue to be exercised in accordance
with their terms after such termination or expiration.