SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss.
240.14a-12
RIMAGE CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined).
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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RIMAGE CORPORATION
7725 Washington Avenue South
Minneapolis, Minnesota 55439
(612) 944-8144
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 11, 1997
----------------------------
TO THE SHAREHOLDERS OF
RIMAGE CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Rimage Corporation, a Minnesota corporation, will be held on Wednesday, June 11,
1997, at 3:30 p.m. (Minneapolis time), at the Minneapolis Marriott Southwest,
5801 Opus Parkway, Minnetonka, Minnesota, for the following purposes:
1. To elect seven directors of the Company for the coming year.
2. To consider and act upon a proposal to amend the 1992 Stock
Option Plan to increase the number of shares reserved for
issuance thereunder.
3. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending December 31,
1997.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of record of Rimage Corporation's Common Stock at the
close of business on April 22, 1997, are entitled to notice of and to vote at
the Annual Meeting or any adjournment thereof.
Each of you is invited to attend the Annual Meeting in person if
possible. Whether or not you plan to attend in person, please mark, date and
sign the enclosed proxy, and mail it promptly. A return envelope is enclosed for
your convenience.
By Order of the Board of Directors
Bernard P. Aldrich
PRESIDENT AND CHIEF EXECUTIVE OFFICER
May 12, 1997
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WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING,
PLEASE SIGN THE PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
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RIMAGE CORPORATION
7725 Washington Avenue South
Minneapolis, Minnesota 55439
(612) 944-8144
----------------------------
PROXY STATEMENT
----------------------------
SOLICITATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Rimage Corporation, a Minnesota corporation (the "Company" or
"Rimage"), for use at the Annual Meeting of Shareholders (the "Annual Meeting")
on June 11, 1997, and any adjournment thereof. This Proxy Statement and the
accompanying form of proxy are being mailed to shareholders on or about May 12,
1997.
The expense of the solicitation of proxies for the Annual Meeting,
including the cost of mailing, has been or will be borne by the Company.
Arrangements will be made with brokerage houses and other custodian nominees and
fiduciaries to send proxies and proxy materials to their principals and the
Company will reimburse them for their expense in so doing. In addition to
solicitation by mail, proxies may be solicited by telephone, telegraph or
personally.
VOTING AND REVOCATION OF PROXY
Only holders of record of the Company's Common Stock at the close of
business on April 22, 1997, the record date for the Annual Meeting, are entitled
to notice of and to vote at the Annual Meeting. On the record date, there were
3,084,500 shares of Common Stock outstanding. Each share of Common Stock
entitles the holder thereof to one vote upon each matter to be presented at the
Annual Meeting.
Each proxy returned to the Company will be voted in accordance with the
instructions indicated thereon. If no instructions are indicated, the proxy will
be voted (i) FOR the election of the nominees for the Board of Directors named
in this Proxy Statement, (ii) FOR the approval of an amendment to the 1992 Stock
Option Plan to increase the number of shares reserved for issuance thereunder,
and (iii) FOR the ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending December 31, 1997. While the
Board of Directors knows of no other matters to be presented at the Annual
Meeting or any adjournment thereof, all proxies returned to the Company will be
voted on any such matter in accordance with the judgment of the proxy holders.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by (a)
giving written notice of such revocation to the Secretary of the Company, (b)
giving another written proxy bearing a later date, or (c) attending the Annual
Meeting and voting in person (although attendance at the Annual Meeting will not
in and of itself constitute a revocation of a proxy).
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the Inspectors of Election appointed for the meeting and will
determine if a quorum is present. A quorum, consisting of a majority of the
outstanding shares of the Common Stock entitled to vote at the Annual Meeting,
must be present in person or represented by proxy before action may be taken at
the Annual Meeting. If an executed proxy card is returned and the shareholder
has abstained from voting on any matter, the shares represented by such proxy
will be considered present at the meeting for purposes of determining a quorum
and for purposes of calculating the vote, but will not be considered to have
been voted in favor of such matter. If an executed proxy card is returned by a
broker holding shares in street name which indicates that the broker does not
have discretionary authority as to certain shares to vote on one or more
matters, such shares will be considered present at the meeting for purposes of
determining a quorum, but will not be considered to be represented at the
meeting for purposes of calculating the vote with respect to such matter.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The business and affairs of the Company are managed under the direction
of its Board of Directors, which currently consists of six members. Each
director is elected for a term of one year or until his or her successor is
elected. Shareholders will be asked at the Annual Meeting to increase the number
of directors to seven, and to elect seven directors. The Board has nominated the
seven individuals named below to serve as directors of the Company. Each of the
nominees named below, other than Dr. Joseph J. Miceli, is now a director of the
Company. All nominees have indicated a willingness to serve if elected. Unless
authority is withheld, all proxies received in response to this solicitation
will be voted for the election of the nominees named below. If any nominee
becomes unable to serve prior to the Annual Meeting, the proxies received in
response to this solicitation will be voted for a replacement nominee selected
in accordance with the best judgment of the proxy holders named therein.
Directors are elected by a plurality of the votes cast for the election of
directors at the Annual Meeting.
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITIONS WITH THE COMPANY AGE SINCE
- ---- -------------------------- --- --------
<S> <C> <C> <C>
Ronald R. Fletcher Chairman of the Board and Director 56 1987
Richard F. McNamara Director 64 1987
Robert L. Hoffman Director and Secretary 69 1992
George E. Kline Director 61 1992
Bernard P. Aldrich Director, Chief Executive Officer and President 47 1996
David J. Suden Director and Chief Technology Officer 50 1995
Dr. Joseph J. Miceli Nominee 42 N/A
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS AS SET FORTH IN PROPOSAL 1.
INFORMATION CONCERNING DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
DIRECTORS AND NOMINEES
The following discussion sets forth certain information for the last
five years with respect to the directors and nominees of the Company.
RONALD R. FLETCHER has been a director of Rimage since its formation in
1987, Chairman of the Board since November 1992 and served as Chief Executive
Officer from September 1995 through November 1996. Mr. Fletcher has been the
owner and president of Aurora Service Corporation, a mortgage finance company,
since 1982. Mr. Fletcher received a B.S. degree and a J.D. degree from Drake
University.
RICHARD F. MCNAMARA has been a director of Rimage since its formation
in 1987. Mr. McNamara has been the owner of Activar, Inc., Minneapolis,
Minnesota, a company that provides management services to corporations related
to Activar, for more than five years. He is the owner of or partner in numerous
private companies. Mr. McNamara is also a director of Venturian Corporation.
ROBERT L. HOFFMAN has been a director and the Secretary of Rimage since
September 1992. Mr. Hoffman was a founder of the law firm of Larkin, Hoffman,
Daly & Lindgren, Ltd., Bloomington, Minnesota, and has practiced law with such
firm for more than five years. Mr. Hoffman is also a director of Ag-Chem
Equipment Company Inc. and Netco Communication Corporation.
GEORGE E. KLINE has been a director of Rimage since September 1992. Mr.
Kline has been General Partner of Brightstone Capital Ltd., a firm engaged in
providing venture capital to Minnesota businesses, for more than five years. Mr.
Kline is also a director of Applied Biometrics, Inc, CyberOptics Corporation,
Fieldworks, Inc., Health Fitness Physical Therapy, Inc. and Nutrition Medical,
Inc.
BERNARD P. ALDRICH has been a director, Chief Executive Officer and
President of Rimage since December 1996. For more than five years prior to
joining Rimage, Mr. Aldrich served in various financial and administrative
positions with Advance Machine Company and Colwell Industries. Mr. Aldrich
received a B.S. degree in accounting from St. Cloud State University and an
M.B.A. degree from the University of St. Thomas.
DAVID J. SUDEN has been Chief Technology Officer of Rimage since
December 1996 and a director since September 1995. He served as President of
Rimage from October 1994 through November 1996 and as Vice President Development
and Operations from February 1991 to October 1994. Mr. Suden received a B.S.E.E.
degree from Montana State, a M.S.E.E. degree from the University of Southern
California, and an M.B.A. degree from Pepperdine University.
DR. JOSEPH J. MICELI is a nominee for election as a director of Rimage
at the Annual Meeting. Dr. Miceli has been General Manager of Corporate Business
Development for Kodak Enterprises, a division of Eastman Kodak Co., since 1996.
He served as General Manager of Digital and Applied Imaging for the Optical
Storage Products Division of Kodak from 1994 through 1996 and as Director of
Research and Development for the Optical Storage Products Division of Kodak from
1991 through 1994. Dr. Miceli received a Ph.D. in Optics from the University of
Rochester and a B.S. degree in Physics from Worcester Polytechnic Institute.
The Company knows of no arrangements or understandings between a
director or nominee and any other person pursuant to which he has been selected
as a director or nominee. There is no family relationship between any of the
nominees, directors or executive officers of the Company.
BOARD COMMITTEES AND ACTIONS
During calendar year 1996, the Board of Directors met four times. The
Board of Directors has a Compensation Committee, a Stock Option Committee, an
Executive Committee and an Audit Committee. During 1996, the number of times
each of these committees met was one, four, twelve and one, respectively. Each
director attended at least 75% of the total number of meetings of the Board and
of committees on which the director served.
The Compensation Committee reviews and makes recommendations to the
Board of Directors regarding salaries, compensation and benefits of executive
officers and senior management of the Company. The entire Board of Directors
presently comprises the Compensation Committee.
The Stock Option Committee administers the Company's 1992 Stock Option
Plan. The members of the Stock Option Committee are Ronald R. Fletcher and
George E. Kline.
The Executive Committee has been delegated authority to act for the
full Board of Directors between regularly scheduled Board meetings. The members
of the Executive Committee are Ronald R. Fletcher, Richard F. McNamara, David J.
Suden (through November 1996) and Bernard P. Aldrich (since December 1996).
The Audit Committee reviews the internal and external financial
reporting of the Company, and reviews the scope of the independent audit. The
members of the Audit Committee are George E. Kline and Robert L. Hoffman.
The Board of Directors does not have a nominating committee. Directors
currently receive a fee of $1,000 for each meeting of the Board of Directors
which they attend.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following discussion sets forth information about the executive
officers of the Company who are not directors.
<TABLE>
<CAPTION>
OFFICER
NAME POSITIONS WITH THE COMPANY AGE SINCE
- ---- -------------------------- --- -------
<S> <C> <C> <C>
Konrad Rotermund Managing Director - Rimage Europe 49 1995
Emmett M. Day Vice President - Sales for Rimage Services Group 39 1996
Richard Gardner President - Duplication Technology 44 1994
Marvin J. Hohl Controller 32 1996
</TABLE>
KONRAD ROTERMUND has been Managing Director of Rimage Europe since
1995, and was General Manager of Rimage Europe from 1992 to 1994. From 1984 to
1991, Mr. Rotermund was President of Inverdata Electronics, a major European
distributor of media duplication equipment.
EMMETT M. DAY has been Vice President - Sales for Rimage Services Group
since December 1996. He was an independent agent for the sale of life and health
insurance from June 1995 to December 1996, and was Vice President - Sales and
Marketing for Braun Media Services from May 1994 to May 1995. For more than five
years prior thereto, Mr. Day was employed by Dunhill Software Services, Inc.,
most recently as Production and Operations Manager. Mr. Day received a B.A.
degree in business administration from the University of Wisconsin - Eau Claire.
RICHARD GARDNER has been President - Duplication Technology since its
acquisition by the Company in December 1993. He served as President of
Duplication Technology from its inception in 1984 until its acquisition by
Rimage in December 1993.
MARVIN J. HOHL has been Controller of Rimage since December 1996. He
served as Assistant Controller from June 1993 to December 1996. Prior to joining
Rimage, Mr. Hohl was employed by KPMG Peat Marwick LLP in various audit
positions. Mr. Hohl received a B.A. degree in accounting from the University of
Wisconsin - Madison.
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for
each of the past three fiscal years earned by each person who served as Chief
Executive Officer during 1996 and four other executive officers of Rimage whose
salary and bonus earned for 1996 exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------- ----------------------------
AWARDS
OTHER ANNUAL --------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION(1) OPTIONS(#) COMPENSATION
- --------------------------- ---- ------ --------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Ronald R. Fletcher (2) 1996 $ 68,619 $ 0 0 $ 1,229(3)
Interim Chief Executive Officer 1995 15,000 0 70,000 0
1994 -- -- -- --
Bernard P. Aldrich (4) 1996 $ 7,019 $ 0 0 $ 0
Chief Executive Officer and 1995 -- -- -- --
President 1994 -- -- -- --
David J. Suden (5) 1996 $ 141,177 $ 0 0 $ 8,999(6)
Chief Technology Officer 1995 140,000 20,000 15,000 8,021(6)
1994 119,167 20,000 0 1,979(6)
Konrad Rotermund (7) 1996 $ 142,500 $ 0 0 $ 0
Managing Director of Rimage 1995 136,002 13,947 0 0
Europe 1994 -- -- -- --
Richard Gardner 1996 $ 122,577 $ 3,583 0 $ 3,843
President - Duplication Technology 1995 107,000 10,626 0 2,675
1994 98,126 9,915 0 2,001
Boyce R. McCorkle (8) 1996 $ 139,896 $ 10,315 0 $ 7,525(9)
Former Vice President - Marketing 1995 91,354 25,000 0 5,100(9)
1994 109,467 10,000 0 5,100(9)
</TABLE>
- --------------------
(1) Each of the executive officers receives an annual bonus in an amount
determined by the Board of Directors.
(2) Mr. Fletcher served as Chief Executive Officer from September 1995 to
November 1996.
(3) Represents the Company's matching contributions under its 401(k)
retirement savings plan.
(4) Mr. Aldrich was named President and Chief Executive Officer of the Company
in December 1996.
(5) Mr. Suden served as President of the Company from October 1994 to November
1996 and was named Chief Technology officer in December 1996.
(6) Represents Mr. Suden's automobile allowance of $6,000 in 1996 and 1995 and
the Company's matching contributions under its 401(k) retirement savings
plan of $2,999, $2,021 and $1,979 for 1996, 1995 and 1994, respectively.
(7) Mr. Rotermund became an executive officer of the Company in 1995.
(8) Mr. McCorkle, who served as Vice President - Marketing of the Company,
ceased to be employed by the Company in December 1996.
(9) Represents Mr. McCorkle's automobile allowance of $5,400, $5,100 and
$5,100 in 1996, 1995 and 1994, respectively, and the Company's matching
contribution under its 401(k) retirement savings plan of $2,125 in 1996.
RETIREMENT SAVINGS PLAN
Rimage adopted a profit sharing and savings plan in 1991 under Section
401(k) of the Internal Revenue Code, which allows employees to contribute up to
15% of their pre-tax income to the plan. The 401(k) Plan includes a
discretionary matching contribution by the Company. These discretionary
contributions totaled $207,459, $132,865 and $113,561 in 1996, 1995 and 1994,
respectively.
STOCK OPTIONS
The Rimage Corporation 1992 Stock Option Plan (the "Plan") provides for
the granting of "incentive stock options" and non-qualified stock options to
employees of the Company. "Incentive stock options" are options which meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), and non-qualified stock options are options which do not meet the
requirements of Section 422. A total of 500,000 shares of the Company's common
stock has been reserved for issuance pursuant to options granted under the Plan.
As of December 31, 1996, 290,453 shares were subject to outstanding stock
options and 175,047 shares were available for grant. Effective March 20, 1997,
the Board of Directors increased the number of shares reserved for issuance
under the Plan to 1,000,000 shares, subject to the approval of the Company's
shareholders at this Annual Meeting. See "Approval of Amendment to 1992 Stock
Option Plan to Increase Number of Shares Reserved for Issuance Thereunder
(Proposal 2).
The Plan is administered by the Stock Option Committee of the Board of
Directors. The Plan gives broad powers to the Committee to administer and
interpret the Plan, including the authority to select the individuals to be
granted options and to prescribe the particular form and conditions of each
option granted. Options are granted on the basis of various factors, including
the individual's capacity for contributing to the successful performance of the
Company, the nature of the operations for which the individual is responsible,
and the period for which the individual has served or will have served the
Company at the vesting of the option. Options may be granted under the Plan
through September 2002. The Plan may be terminated earlier by the Board of
Directors in its sole discretion.
No stock options were granted in 1996 to any of the executive officers
named in the summary compensation table. The following table provides
information with respect to stock options held at December 31, 1996, by the
named executive officers.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR-END(#) AT YEAR-END($)(1)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------ ------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Ronald R. Fletcher -- -- 82,000 / 0 $0 / $0
Bernard P. Aldrich -- -- 0 / 0 $0 / $0
David J. Suden -- -- 53,500 / 0 $9,750 / $0
Konrad Rotermund -- -- 5,000 / 0 $0 / $0
Richard Gardner -- -- 20,271 / 0 $0 / $0
Boyce R. McCorkle -- -- 0 / 0 $0 / $0
</TABLE>
- --------------------
(1) Based on the difference between the December 31, 1996 closing price of
$2.875 per share as reported on The Nasdaq Stock Market and the exercise
price of the options.
CERTAIN TRANSACTIONS
Rimage leases approximately 29,000 square feet of office, manufacturing
and warehouse space from a corporation owned by Messrs. Fletcher and McNamara,
pursuant to a lease dated July, 1992. The lease expires on July 31, 2007. Rent
is approximately $237,000 per year, including a pro rata share of operating
costs.
In September 1995, Rimage consummated a merger with Dunhill Software
Services, Inc. ("Dunhill"), pursuant to which Rimage, as the surviving
corporation, issued 1,100,000 shares of Rimage common stock to the shareholders
of Dunhill. Prior to the merger, Messrs. Fletcher and McNamara were the
directors and sole shareholders of Dunhill. Messrs. Fletcher and McNamara owned
13.4% and 14.2%, respectively, of the outstanding common stock of Rimage before
the merger, and owned 26.7% and 27.1%, respectively, of the outstanding common
stock of Rimage immediately following the merger.
Rimage leases approximately 28,500 square feet of office, manufacturing
and warehouse space to house the continuing operations of its Dunhill division.
Such space is leased from a corporation owned by Messrs. Fletcher and McNamara
pursuant to a lease dated August, 1992. The lease expires on August 31, 2007.
Rent is approximately $150,000 per year, including a pro rata share of operating
costs.
Prior to the merger with Dunhill, Rimage from time to time sold
equipment to Dunhill. The aggregate amounts of such sales were approximately
$1,428,000, $978,000 and $1,522,158 during the fiscal years ended December 31,
1993 and 1994 and the nine months ended September 30, 1995.
The Company believes that all prior transactions between the Company
and its officers, directors, or other affiliates of the Company have been on
terms no less favorable than could have been obtained from unaffiliated third
parties on an arm's length basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Decisions and recommendations regarding compensation paid to the
Company's executive officers in 1996 were made by a Compensation Committee
consisting of the entire Board of Directors. See "Report of the Compensation
Committee." Bernard P. Aldrich and David J. Suden, executive officers of the
Company who serve on the Board of Directors, abstain from voting on compensation
matters affecting compensation of executive officers.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is comprised of all
members of the Board of Directors. For 1996, the Committee consisted of Ronald
D. Fletcher, Richard F. McNamara, Robert L. Hoffman, George E. Kline, and David
J. Suden, but did not include Bernard P. Aldrich, who became a director in
December 1996. The Committee reviews and makes recommendations to the Board of
Directors regarding the salaries, compensation and benefits of executive
officers and senior management of the Company.
The Company's policy with respect to the compensation of executive
officers is based upon the following principals: (1) executive compensation
levels should be established by comparison of job responsibility to similar
positions in comparable companies; and (2) the Company's compensation system
should attract and retain highly-qualified personnel. In determining executive
officers' annual compensation, the Committee considers the overall performance
of the Company, as well as the particular executive officer's position at the
Company and the executive officer's performance on behalf of the Company. Rather
than applying a formulaic approach to determining annual compensation, the
Committee uses various surveys of executive compensation for companies of a
similar size in comparable industries as a basis for determining competitive
levels of cash compensation.
Executive officers are also eligible for discretionary bonuses, which
the Board of Directors awards based upon the Company's overall performance and
the contribution to such performance made by the executive officers' areas of
responsibility. Another component of executive compensation is the granting of
stock options under the Company's 1992 Stock Option Plan. The 1992 Stock Option
Plan is administered by the Stock Option Committee. No discretionary bonuses or
stock options were awarded to the executive officers named in the summary
compensation table during 1996.
Annual compensation for the Company's Chief Executive Officer is set by
the Committee using a philosophy similar to that used for all other executive
officers. Ronald R. Fletcher served as interim Chief Executive Officer of the
Company from September 1995 until December 1996. In determining Mr. Fletcher's
annual compensation, the Committee considered the Company's performance, as well
as Mr. Fletcher's interest in the Company's long-term performance as one of the
Company's principal shareholders. As a result of these factors, Mr. Fletcher's
annual compensation was modest in comparison to the compensation of chief
executive officers of some similar companies.
Bernard P. Aldrich joined the Company as Chief Executive Officer in
December 1996. In setting the annual compensation for the Company's new Chief
Executive Officer, the Committee applied the principles outlined above, and
emphasized slightly the need to establish a rate of compensation that would
attract a highly-qualified individual for the position of Chief Executive
Officer.
By the Compensation Committee:
Ronald R. Fletcher
Richard F. McNamara
Robert L. Hoffman
George E. Kline
David J. Suden
PERFORMANCE GRAPH
The Company's common stock is quoted on The Nasdaq National Market.
Prior to November 4, 1992, there was no public market for the Company's common
stock. The following graph shows changes during the period from November 4, 1992
(the date on which the Company's common stock was first publicly traded) to
December 31, 1996, in the value of $100 invested in: (1) the Company's common
stock; (2) the CRSP Index for The Nasdaq National Stock Market (US); and (3)
Nasdaq Non-Financial Stocks. The values of each investment as of the dates
indicated are based on share prices plus any dividends paid in cash, with the
dividends reinvested on the date they were paid. The calculations exclude
trading commissions and taxes.
<TABLE>
<CAPTION>
- --------------------------------- ------------ ------------ ------------ ------------- ------------ ------------
11/4/92 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
- --------------------------------- ------------ ------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Rimage Corporation $100.00 $150.00 $160.00 $80.00 $152.50 $57.50
- --------------------------------- ------------ ------------ ------------ ------------- ------------ ------------
CRSP Index for Nasdaq
National Stock Market (US) $100.00 $111.93 $128.49 $125.60 $177.62 $218.48
- --------------------------------- ------------ ------------ ------------ ------------- ------------ ------------
Nasdaq Non-Financial Stocks $100.00 $111.68 $128.94 $123.98 $172.78 $209.93
- --------------------------------- ------------ ------------ ------------ ------------- ------------ ------------
</TABLE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth as of April 30, 1997, the number of
shares of Common Stock beneficially owned by (i) each person who is the
beneficial owner of more than five percent of the outstanding shares of the
Company's common stock, (ii) each executive officer of the Company named in the
Summary Compensation Table herein, (iii) each director, and (iv) all executive
officers and directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OUTSTANDING(2)
--------------------- --------------
<S> <C> <C>
Ronald R. Fletcher (3)(4)............................ 848,533 26.7%
4125 Parkglen Court N.W.
Washington, D.C. 20007
Richard F. McNamara (3)(5)........................... 826,333 26.6%
7808 Creekridge Circle
Minneapolis, MN 55439
Robert L. Hoffman (3)................................ 20,333 *
7900 Xerxes Avenue South
Bloomington, MN 55439
George E. Kline (3)(6)............................... 80,333 2.6%
4700 IDS Tower
Minneapolis, MN 55402
Bernard P. Aldrich (3)............................... 33,333 1.1%
7725 Washington Ave. So.
Minneapolis, MN 55439
David J. Suden (3)................................... 58,833 1.9%
7725 Washington Ave. So.
Minneapolis, MN 55439
Dr. Joseph J. Miceli (3)............................. -- --
4196 Cream Ridge Road
Macedon, NY 14502
Konrad Rotermund (3)................................. 8,333 *
7725 Washington Ave. So.
Minneapolis, MN 55439
Richard Gardner (3).................................. 22,771 *
7725 Washington Ave. So.
Minneapolis, MN 55439
All executive officers and directors as a group
(11 persons) (3)................................. 1,902,969 56.6%
</TABLE>
- -----------------------
* Less than one percent
(1) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to such shares.
(2) Based on 3,084,500 shares outstanding, which does not include
approximately 581,853 shares issuable upon exercise of stock options and
warrants outstanding at April 30, 1997. Each figure showing the percentage
of outstanding shares owned beneficially has been calculated by treating
as outstanding and owned the shares which could be purchased by the
indicated person(s) within 60 days upon the exercise of stock options.
(3) Includes shares which could be purchased within 60 days upon the exercise
of existing stock options, as follows: Mr. Fletcher, 90,333 shares; Mr.
McNamara, 20,333 shares; Mr. Hoffman, 20,333 shares; Mr. Kline, 20,333
shares; Mr. Aldrich, 33,333 shares; Mr. Suden, 56,833 shares; Mr.
Rotermund, 8,333 shares; Mr. Gardner, 22,771 shares; and all directors and
executive officers as a group 276,769 shares.
(4) Includes 8,000 shares held by Mr. Fletcher as custodian for his minor
child.
(5) Includes 65,000 shares held by a charitable foundation established by Mr.
McNamara. Mr. McNamara has sole voting power and sole dispositive power
with respect to such shares.
(6) Includes 60,000 shares which are owned by Venture Management Fund I, of
which Mr. Kline is a general partner.
COMPLIANCE WITH SECTION 16(a)
The Company's directors, its executive officers, and any persons
holding more than 10% of outstanding Common Stock are required to file reports
concerning their initial ownership of Common Stock and any subsequent changes in
that ownership. The Company believes that the filing requirements were
satisfied. In making this disclosure, the Company has relied solely on written
representations of its directors, executive officers and beneficial owners of
more than 10% of Common Stock and copies of the reports that they have filed
with the Securities and Exchange Commission.
APPROVAL OF AMENDMENT TO 1992 STOCK OPTION PLAN
TO INCREASE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER
(PROPOSAL 2)
The Rimage Corporation 1992 Stock Option Plan (the "Plan") was adopted
by the Board of Directors and approved by the shareholders of the Company in
1992. The Plan is intended to assist the Company in hiring and retaining
well-qualified employees, directors, and consultants by allowing them to
participate in the ownership and growth of the Company through the grant of
incentive and non-statutory stock options ("Options"). An aggregate of 250,000
shares was reserved for issuance under the Plan at the time of its adoption.
Amendments to the Plan, increasing the number of shares reserved for issuance
under the Plan to 500,000 shares, and providing for the automatic grant of
options to non-employee directors, were adopted by the Board of Directors in
December 1993 and approved by the shareholders in June 1994. The provisions for
automatic grants of stock options to non-employee directors were terminated in
1996, when the Board determined to pay a cash fee to directors. Effective March
20, 1997, the Board of Directors increased the number of shares reserved for
issuance under the Plan to 1,000,000 shares, subject to the approval of the
Company's shareholders on or before March 20, 1998.
The principal features and effects of the Plan are discussed below.
ADMINISTRATION
The Plan is administered by the Stock Option Committee of the Board of
Directors (the "Committee"), which selects the employees, directors and
consultants who will be granted Options under the Plan. Subject to the
provisions of the Plan, the Committee also determines the type, amount, size and
terms of Options; the time when Options should be granted; and all other
determinations necessary or advisable for the administration of the Plan. The
determinations by the Committee are final and conclusive. Grants of Options and
other decisions of the Committee are not required to be made on a uniform basis.
SHARES SUBJECT TO PLAN
The Plan, as amended, provides that the total number of shares of the
Company's common stock that may be purchased pursuant to the exercise of Options
shall not exceed 1,000,000 shares, subject to adjustment as provided in the
Plan. The shares to be issued upon the exercise of Options granted under the
Plan will be currently authorized but unissued shares of common stock of the
Company. The number of shares of the Company's common stock available under the
Plan and the exercise price of an Option may be adjusted by the Committee in its
sole discretion upon any stock dividend or split, recapitalization,
reclassification, combination, exchange of shares, or other similar corporate
change, if the Committee determines that such change necessarily or equitably
requires such an adjustment.
ELIGIBILITY
Employees of the Company and any of its "Affiliates" (as such term is
defined in the Plan) are eligible for selection to receive Options qualified as
incentive stock options ("ISOs") under Section 422 of the Code. Employees,
directors and consultants of the Company or its Affiliates may be granted
non-qualified Options ("NQOs") or restricted stock awards. Options have been
granted under the Plan to approximately 56 persons.
The following table sets forth certain information regarding the
allocation of the additional shares under the Plan, to the extent such
allocation is presently determinable.
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
OPTIONS EXERCISE EXPIRATION
NAME AND POSITION GRANTED(#) PRICE($/Sh) DATE
- ----------------- ---------- ----------- ----
<S> <C> <C> <C>
Bernard P. Aldrich (President and Chief 100,000 (1) $3.00 2007
Executive Officer)
David J. Suden (Chief Technology Officer) 10,000 (1) $3.00 2007
Konrad Rotermund (Managing Director of 10,000 (1) $3.00 2007
Rimage Europe)
Richard Gardner (President - Duplication 7,500 (1) $3.00 2007
Technology)
All current executive officers as a group
(6 persons, including those named above) 140,000 (1) $3.00 2007
Ronald R. Fletcher (Interim Chief 25,000 (1) $3.00 2007
Executive Officer)
Dr. Joseph J. Miceli (Nominee) 25,000 (1) $3.00 2007
All non-employee directors as a group 2007
(5 persons, including those named above) 125,000 (1) $3.00
All other employees as a group 100,000 (1) $3.00 2007
</TABLE>
- --------------------
(1) Each option will vest and become exercisable in three equal installments,
on the date of grant and the first and second anniversaries of the date of
grant, and will expire ten years after the date of grant.
The additional shares which are not currently allocated, together with
shares previously authorized and available for issuance under the Plan, may be
allocated to such employees as the Committee may determine. At March 31, 1997,
the closing price for the Company's common stock as reported on The Nasdaq Stock
Market was $2.875 per share.
TERMS OF OPTIONS
Upon the grant of an Option, the Committee fixes the number of shares
of the Company's common stock that the optionee may purchase upon exercise of
the Option and the price at which the shares may be purchased. With regard to
ISOs, the exercise price cannot be less than the "fair market value" of the
common stock at the time the ISO is granted or 110% of such fair market value in
certain cases (as set forth below). NQOs may be granted at less than the fair
market value of the common stock. See "Federal Income Tax Consequences."
With regard to ISOs only, the aggregate fair market value of common
stock (determined at the time the ISO is granted) subject to ISOs granted to an
employee under all stock option plans of the Company and any Affiliate of the
Company that become exercisable for the first time by such employee during any
calendar year may not exceed $100,000. Furthermore, no ISO may be granted to any
employee who, immediately after the grant of such ISO, would own more than 10%
of the total combined voting power of all classes of the Company's stock unless
such ISO has an exercise price equal to at least 110% of the common stock's fair
market value at the time of grant and the term of the ISO is no longer than five
years.
Each Option will be exercisable by the optionee only during the term
fixed by the Committee, with such term ending not later than 121 months after
the date of grant (ten years in the case of ISOs). Upon exercise of any Option,
payment for shares as to which the Option is exercised may be made in cash, in
shares of the Company's common stock having an aggregate fair market value on
the date of exercise which is not less than the exercise price of the Option, or
by a combination of cash and such shares, as the Compensation Committee may
determine.
TRANSFERABILITY OF OPTIONS; TERMINATION OF EMPLOYMENT
Options granted under the Plan are non-transferable except to the
extent permitted by the agreement evidencing such Option. However, no Option
will be transferable by any optionee other than by will or the laws of descent
and distribution. 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.
TERMINATION AND AMENDMENT
The Plan will terminate on the earlier of the date on which the Plan is
terminated by the Board of Directors of the Company or September 2002. Options
outstanding at the termination of the Plan may continue to be exercised in
accordance with their terms after such termination. The Plan may be amended at
any time by the Board of Directors. However, without the approval of a majority
of the Company's shareholders voting at a meeting at which a quorum is present,
no such amendment may (i) materially increase the benefits accruing to
participants under the Plan; (ii) increase the number of shares available for
issuance or sale pursuant to the Plan (other than as permitted in certain
circumstances provided by the Plan); or (iii) materially modify the requirements
as to eligibility for participation in the Plan, without the affirmative vote of
shareholders holding at least the majority of the voting stock of the Company
represented in person or by proxy at a duly held shareholders' meeting.
FEDERAL INCOME TAX CONSEQUENCES
The following description is a general summary of the current federal
income tax provisions relating to the grant and exercise of ISOs and NQOs under
the Plan and the sale of shares of common stock acquired upon exercise of
Options. The provisions summarized below are subject to changes in federal
income tax laws and regulations, and the effects of such provisions may vary
with individual circumstances.
INCENTIVE STOCK OPTIONS
ISOs granted under the Plan are intended to be "incentive stock
options" as defined by Section 422 of the Code. Under present law, the recipient
of an ISO will not realize taxable income upon the grant or the exercise of an
ISO; and the Company will not receive an income tax deduction at either such
time. Generally, if an optionee exercises an ISO at any time prior to three
months after termination of the optionee's employment and does not sell the
shares acquired upon exercise of an ISO within either (i) two years after the
grant of the ISO or (ii) one year after the date of exercise of the ISO, the
gain upon a subsequent sale of the shares will be taxed as long-term capital
gain. If the optionee does not satisfy these requirements, the optionee
generally will recognize ordinary income in an amount equal to the difference
between the exercise price paid in connection with exercise of the ISO and the
fair market value of the shares acquired as of the date of exercise of the ISO,
and will recognize capital gain on the difference between the sale price of the
shares and the fair market value of the shares as of the date of exercise. In
such event, the Company would be entitled to a corresponding income tax
deduction equal to the amount recognized as ordinary income by the optionee.
Upon the exercise of an ISO, the excess of the stock's fair market
value on the date of exercise over the exercise price will be included in the
optionee's alternative minimum taxable income ("AMTI") and may result in the
imposition of a tax on such AMTI. Liability for the alternative minimum tax is
complex and depends upon an individual's overall tax situation.
NON-STATUTORY STOCK OPTIONS
Generally, upon the grant of an NQO, neither the Company nor the
optionee will experience any tax consequences. Upon exercise of an NQO granted
under the 1994 Option Plan, or upon the exercise of an Option initially intended
to be an ISO that does not qualify for the tax treatment described above, the
optionee will realize ordinary income in an amount equal to the excess of the
fair market value of the shares of common stock received over the exercise price
paid by the optionee with respect to such shares. The amount recognized as
ordinary income by the optionee will increase the optionee's basis in the stock
acquired pursuant to the exercise of the NQO. the Company will be allowed a
federal income tax deduction for the amount recognized as ordinary income by the
optionee upon the optionee's exercise of the NQO. Upon a subsequent sale of the
stock, the optionee will recognize short-term or long-term gain or loss
depending upon the holding period for the stock and upon the stock's subsequent
appreciation or depreciation in value.
SHAREHOLDER APPROVAL
The affirmative vote of a majority of the shares of common stock of the
Company represented at the Annual Meeting either in person or by proxy, assuming
a quorum is present, is required to approve the amendment to the Plan increasing
the number of share reserved for issuance thereunder.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
APPROVAL OF THE AMENDMENT TO THE 1992 STOCK OPTION PLAN AS SET FORTH IN PROPOSAL
2.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 3)
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP
as independent auditors for the fiscal year ending December 31, 1997. The firm
of KPMG Peat Marwick LLP has served as the Company's auditors since 1989. A
representative of KPMG Peat Marwick LLP will be present at the Annual Meeting,
will have an opportunity to make a statement if he desires to do so and will be
available to respond to appropriate questions from shareholders.
All proxies received in response to this solicitation will be voted in
favor of the ratification of the appointment of the independent auditors, unless
other instructions are indicated thereon. Ratification of the appointment of the
independent auditors requires the affirmative vote of a majority of the shares
represented in person or by proxy at the Annual Meeting and voting on the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS
AS SET FORTH IN PROPOSAL 3.
PROPOSALS OF SHAREHOLDERS
Any shareholder wishing to have a proposal considered for inclusion in
the Company's 1998 proxy solicitation materials must set forth such proposal in
writing and file it with the Secretary of the Company no later than January 12,
1998.
OTHER BUSINESS
At the date of this Proxy Statement, management knows of no other
business that may properly come before the Annual Meeting. However, if any other
matters properly come before the meeting, the persons named in the enclosed form
of proxy will vote the proxies received in response to this solicitation in
accordance with their best judgment on such matters.
FINANCIAL INFORMATION
The Company will provide without charge to any shareholder solicited
hereby, upon written request of such shareholder, a copy of its 1996 Annual
Report on Form 10-K filed with the Securities and Exchange Commission. Requests
should be directed to the Chief Financial Officer, Rimage Corporation, 7725
Washington Avenue South, Minneapolis, Minnesota 55439.
By Order of the Board of Directors
Bernard P. Aldrich
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Minneapolis, Minnesota
May 12, 1997
APPENDIX
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.
PROXY
RIMAGE CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1997
The undersigned, revoking all prior proxies, hereby appoints Ronald R. Fletcher
and Bernard P. Aldrich, or either of them, as proxy or proxies, with full power
of substitution and revocation, to vote all shares of Common Stock of Rimage
Corporation of record in the name of the undersigned at the close of business on
April 22, 1997, at the Annual Meeting of Shareholders to be held on Wednesday,
June 11, 1997, or at any adjournment thereof, upon the following matters:
1. Election of the following nominees as directors:
BERNARD P. ALDRICH, RONALD R. FLETCHER, ROBERT L. HOFFMAN, GEORGE E. KLINE,
RICHARD F. MCNAMARA, DR. JOSEPH J. MICELI AND DAVID J. SUDEN
|_| FOR ALL NOMINEES |_| WITHHOLD FOR ALL NOMINEES
|_| FOR ALL NOMINEES EXCEPT THE FOLLOWING:
(Write the name(s) of the nominee(s) withheld in the space provided
below.)
---------------------------------------------------------------------------
2. Approval of amendment to the 1992 Stock Option Plan to increase number of
shares reserved for issuance thereunder.
|_| FOR |_| AGAINST |_| ABSTAIN
3. Ratification of appointment of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending December 31, 1997.
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR Proposals 1, 2 and 3. The Board of Directors recommends a vote FOR Proposals
1, 2 and 3.
Dated: __________________________, 1997.
________________________________________
Signature of Shareholder
________________________________________
Signature of Shareholder
Please sign your name exactly as it
appears at left. In the case of shares
owned in joint tenancy or as tenants in
common, all should sign. Fiduciaries
should indicate their title and
authority.
PLEASE MARK, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
