Document:

Exhibit 10.1 to Rimage Corporation Form 10-Q for quarterly period ended June 30, 2009

EXHIBIT 10.1  

RIMAGE CORPORATION

STOCK OPTION AGREEMENT

          THIS STOCK OPTION AGREEMENT (this
“Agreement”) is made as of the Grant Date set forth below, by and between
Rimage Corporation, a Minnesota corporation (the “Company”), and the Optionee
named below (the “Optionee”), and is not issued pursuant to any existing Stock
Incentive Plan of the Company. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
OPTIONEE:

	
Sherman L. Black

	
 

	
 

	
GRANT
 DATE:

	
April 1, 2009

	
 

	
 

	
NUMBER OF
 OPTION SHARES:

	
200,000 shares, common
 stock

	
 

	
 

	
OPTION
 PRICE PER SHARE:

	
$14.10 per Share

	
 

	
 

	
EXPIRATION
 DATE:

	
April 1, 2016

	
 

	
 

	
 

	
 

          1.     Grant of
Option.     The Company hereby grants to Optionee the
right and option (the “Option”) to purchase all or any part of the aggregate
number of shares of common stock of the Company set forth above (the “Option
Shares”), at the Option Price per Share set forth above, on the terms and
conditions set forth in this Agreement. The Option is not intended to be an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”). 

          2.     Administration of
Option.     The Option will be administered by the
Compensation Committee (the “Committee”) of the Board of Directors of the
Company (the “Board”). Any or all functions of the Committee specified in this
Agreement may be exercised by the Board unless this Agreement specifically
states otherwise. The Committee has the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Option as it
may, from time-to-time, deem advisable, to interpret the terms and provisions
of this Agreement and to otherwise supervise the administration of the Option.
The Committee may not take any action that would be treated as a “repricing” of
the Option and may not amend or alter the Option without the written consent of
Optionee. All decisions made by the Committee pursuant to this Agreement will
be final, conclusive and binding on all persons, including the Company, its
shareholders, members of the Board, Optionee and their respective estates and
beneficiaries. 

          3.     Term
and Exercise of Option.

          (a)
          Installment Exercise Provisions. The term
of the Option shall commence on the Grant Date set forth above and shall
continue until the Expiration Date set forth above, unless earlier terminated
as provided herein. Except as otherwise provided herein, the Option will be
exercisable in cumulative installments as follows: 

	
 

	
 

	
 

	
                (i)          Up
 to 25% of the Option Shares may be purchased at any time after the one-year
 anniversary of the Grant Date and prior to termination of the Option; 

	
 

	
 

	
 

	
               
 (ii)         Up to 50% of the
 Option Shares (less any shares previously purchased pursuant to the Option)
 may be purchased at any time on or after the second-year anniversary of the
 Grant Date and prior to termination of the Option;

1

EXHIBIT 10.1

	
 

	
 

	
 

	
               
 (iii)          Up to 75% of
 the Option Shares (less any shares previously purchased pursuant to the
 Option) may be purchased at any time on or after the third-year anniversary
 of the Grant Date and prior to termination of the Option; and 

	
 

	
 

	
 

	
               
 (iv)          Up to 100% of
 the Option Shares (less any shares previously purchased pursuant to the
 Option) may be purchased at any time on or after the fourth-year anniversary
 of the Grant Date and prior to termination of the Option. 

	
 

	
 

	
 

	
Neither
 Optionee nor Optionee’s legal representatives, legatees or distributees, as
 the case may be, will be, or will be deemed to be, a holder of any Option
 Shares for any purpose unless and until certificates for such shares are
 issued to Optionee or Optionee’s legal representatives, legatees or
 distributees, under the terms of this Agreement. 

          (b)          
Method of Exercise.     The
Option is exercisable by delivery of an exercise notice, in the form attached
as Exhibit A (the “Exercise Notice”), which shall state the election to
exercise the Option, the number of Option Shares in respect of which the Option
is being exercised (the “Exercised Shares”) and such other representations and
agreements as may be required by the Company. The Exercise Notice shall be
signed by Optionee and shall be delivered in person or by certified mail to the
principal financial officer of the Company in accordance with Section 11 of
this Agreement. The Exercise Notice shall be accompanied by payment of the
aggregate Option Price per Share. The Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Option Price per Share. 

          
(c)          Method of Payment.   
Payment of the aggregate Option Price per Share shall be made by certified or
bank check, or by any other form of legal consideration deemed sufficient by
the Committee, including a properly executed Exercise Notice together with
irrevocable instructions to a broker acceptable to the Company to promptly
deliver to the Company the amount of sale proceeds to pay the aggregate Option
Price per Share. As determined by the Committee, in its sole discretion,
payment in full or in part may also be made in the form of unrestricted common
stock of the company already owned by Optionee. Any same day sale or cashless
exercise shall comply with regulations promulgated under the Securities
Exchange Act and the Federal Reserve Board. No shares of common stock of the
Company and no certificates for such shares shall be issued until full payment
therefore has been made. 

          4.   Change
in Control. 

          (a)          “Change
in Control” of the Company shall mean a change in control which would be
required to be reported in response to Item 5.01 of Form 8-K promulgated under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether
or not the Company is then subject to such reporting requirement, including
without limitation, if: 

	
 

	
 

	
 

	
              
 (i)          any “person”
 (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
 becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
 Act), directly or indirectly of securities of the Company representing 20% or
 more of the combined voting power of the Company’s then outstanding
 securities (other than an entity owned 50% or greater by the Company or an
 employee pension plan for the benefit of the employees of the Company); 

	
 

	
 

	
 

	
              
 (ii)         there ceases to be
 a majority of the Board comprised of (i) individuals who, on the date of this
 Agreement, constituted the Board of the Company; and (ii) any new director
 who subsequently was elected or nominated for election by a majority of the
 directors who held such office prior to a Change in Control; or 

	
 

	
 

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EXHIBIT 10.1 

	
 

	
 

	
 

	
               
 (iii)          the Company
 disposes of at least 75% of its assets, other than (i) to an entity owned 50%
 or greater by the Company or any of its subsidiaries, or to an entity in
 which at least 50% of the voting equity securities are owned by the
 shareholders of the Company immediately prior to the disposition in
 substantially the same percentage or (ii) as a result of a bankruptcy
 proceeding, dissolution or liquidation of the Company. 

          (b)          
Except as otherwise provided in this Agreement, if a Change in Control occurs,
all previously unexercised Option Shares shall be exercisable in full, without
regard to any installment exercise provisions; provided, however, that the
Committee, in its sole and absolute discretion, may, with respect to any or all
of such Option Shares, take any or all of the following actions to be effective
as of the date of the Change in Control (or as of any other date fixed by the
Committee occurring within the thirty (30) day period immediately preceding the
date of the Change in Control, but only if such action remains contingent upon
the effectuation of the Change in Control) (such date referred to as the
“Action Effective Date”): 

	
 

	
 

	
 

	
               
 (i)          Unilaterally
 cancel such Option Shares in exchange for whole and/or fractional shares of
 the common stock of the Company (or whole shares of common stock and cash in
 lieu of any fractional share of common stock) or whole and/or fractional
 shares of a successor (or whole shares of a successor and cash in lieu of any
 fractional share) that, in the aggregate, are equal in value to the product
 of (1) the excess, if any, of the Fair Market Value per share on the Action
 Effective Date over the Exercise Price or specified price per share,
 multiplied by (2) the number of Option Shares. 

	
 

	
 

	
 

	
               
 (ii)          Unilaterally
 cancel such Option Shares in exchange for cash or other property equal in
 value to the product of (1) the excess, if any, of the Fair Market Value per
 share on the Action Effective Date over the Exercise Price or specified price
 per share, multiplied by (2) the number of Option Shares. 

	
 

	
 

	
 

	
               
 (iii)          Unilaterally
 cancel such Option Shares after providing the holder of such Option Shares
 with (i) an opportunity to exercise such Option Shares to the extent vested
 within a specified period prior to the date of the Change in Control, and
 (ii) notice of such opportunity to exercise prior to the commencement of such
 specified period. The Committee may modify or waive any condition limiting the
 exercise of the Option to permit a cashless exercise of the Option. 

	
 

	
 

	
 

	
               
 (iv)          Provide for
 the assumption or substitution of the Option in accordance with Section 11
 below. 

          (c)
          Notwithstanding the
foregoing, payment of cash in lieu of whole or fractional shares of common
stock of the Company or shares of a successor may only be made to the extent
that such payment (i) has met the requirements of an exemption under Rule 16b-3
promulgated under the Exchange Act, or (ii) is a subsequent transaction the
terms of which were provided for in a transaction initially meeting the
requirements of an exemption under Rule 16b-3 promulgated under the Exchange
Act. The payment of cash in lieu of whole or fractional shares of common stock
of the Company or in lieu of whole or fractional shares of a successor shall be
considered a subsequent transaction approved by the original grant of the
Option. 

          (d)          For
the purposes of this Agreement, “Fair Market Value” of a share of the common
stock of the Company shall be determined by the Committee as follows: (i) if
the common stock of the Company is listed for trading on one of more national
securities exchanges, or is traded on the Nasdaq Stock Market, the last reported
sales price on such principal exchange or the Nasdaq Stock Market on the 

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EXHIBIT 10.1 

date
in question, or if such common stock shall not have been traded on such
principal exchange or on the Nasdaq Stock Market on such date, the last
reported sales price on such principal exchange or the Nasdaq Stock Market on
the first day prior thereto on which such common stock was so traded; or (b) if
the common stock of the Company is not listed for trading on a national
securities exchange or the Nasdaq Stock Market, but is traded in the
over-the-counter market, including the Nasdaq Small Cap Market, the closing bid
price for such common stock on the date in question, or if there is no such bid
price for such common stock on such date, the closing bid price on the first
day prior thereto on which such price existed; or (c) if neither (a) or (b) is
applicable, a value determined by the reasonable application of a reasonable
valuation method as defined in regulations promulgated under Section 409A of
Code, which determination shall be final and binding on all parties. 

          5.    Termination of
Employment.

          (a)     If
Optionee ceases to be employed by the Company or a subsidiary of the Company as
a result of retirement for age or disability, or voluntary or involuntary
separation from employment, other than a termination for Cause (as defined
below), the Option may be exercised to the extent Optionee shall have been
entitled to do so at the date of termination of employment, within a period of
90 days after such termination of employment, but in no case later than the
Expiration Date set forth above. 

          (b)     If
Optionee’s employment is terminated for Cause, the right of Optionee to
exercise the Option shall terminate immediately upon such termination of
employment. For purposes of this Agreement, “Cause” shall have the same meaning
as in any employment or severance agreement between Optionee and the Company
governing Optionee’s termination of employment prior to a Change in Control. In
the absence of such a definition, Cause shall mean gross and willful misconduct
during the course of Optionee’s service to the Company, including but not
limited to wrongful appropriation of funds or property of the Company,
conviction of Optionee of a gross misdemeanor or felony or material violation
of any Company policy (including, without limitation, any policy contained in
the Company’s Code of Conduct), regardless of when facts resulting in a finding
of Cause are discovered by the Company. 

          (c)     The
Option will not confer upon Optionee any right with respect to continuance of
employment by the Company, nor will it interfere in any way with the right of
the Company or a subsidiary of the Company to terminate Optionee’s employment
at any time. 

          6.     Death of
Optionee. In the event of the death of Optionee while
in the employ of the Company, the Option may be exercised to the extent
Optionee shall have been entitled to do so at the date of death, within a
period of one year after the date of death, but in no case later than the
Expiration Date set forth above. In such event, the Option shall be exercisable
only by the executors or administrators of Optionee or by the person or persons
to whom Optionee’s rights under the Option shall pass by Optionee’s will or the
laws of descent and distribution. 

          7.  Limitations on Exercise
of Option.

          (a)     Except
as provided in paragraph 5 and 6 above, the Option may not be exercised unless
Optionee is, at the time of such exercise, in the employ of the Company, and
shall have been continuously so employed since the Grant Date of the Option. 

          
(b)     The issuance of Option Shares upon the
exercise of the Option shall be subject to all applicable laws, rules and
regulations, and shares shall not be issued except upon the approval of proper
government agencies or stock exchanges as may be required. Assuming compliance
with such laws, rules 

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EXHIBIT 10.1 

and
regulations, for income tax purposes the Option Shares shall be considered
transferred to Optionee on the date the Option is exercised with respect to
such Option Shares. 

          8.     Nontransferability
of Option.     The
Option shall not be transferable by Optionee, other than by will or the laws of
descent and distribution. During the lifetime of Optionee, the Option shall be
exercisable only by Optionee. 

          9.     Registration.     If any
law or regulation of the Securities
and Exchange Commission or of any other body having jurisdiction shall require
the Company or Optionee to take any action in connection with the exercise of
the Option, then, notwithstanding any contrary provision of this Agreement, the
date for exercise of the Option and the delivery of the Option Shares shall be
deferred until the completion of the necessary action. In the event that the
Company shall deem it necessary, the Company may condition the grant or
exercise of the Option upon the receipt of a satisfactory certificate that
Optionee is acquiring the Option Shares for investment purposes and not with
the view or intent to resell or otherwise distribute the Option or Option
Shares. In such event, the stock certificate evidencing such Option Shares
shall bear a legend referring to applicable laws restricting transfer of such
shares. In the event that the Company deems it necessary to register under the
Securities Act of 1933, as amended, or any other applicable statute, the
Options or any Option Shares, then Optionee shall cooperate with the Company
and take such action as is necessary to permit registration or qualification of
such Option or Option Shares. It is the Company’s intent, but not its
obligation, to register or qualify the offering or sale of Shares under the
Securities Act of 1933 of any other applicable state, federal or foreign law. 

          10.     Tax Withholding.
     Upon notification of the
amount due and prior to, or concurrently with, the delivery to Optionee of a
certificate representing any Option Shares purchased pursuant to the exercise
of the Option, Optionee shall promptly pay to the Company any amount necessary
to satisfy applicable federal, state and local withholding requirements. 

          11.     Adjustment.     In the
event of a stock
dividend, stock split, spin-off, rights offering, recapitalization through a
large, nonrecurring cash dividend, or a similar equity restructuring of the
Company, the Committee will adjust: (a) the number of Shares subject to the
Option, rounding all fractions downward, and (d) the Exercise Price of the
Option, or any combination thereof, in an equitable manner that will equalize
the fair value of the Option before and after the equity restructuring.
Furthermore, in the event of any corporate transaction described in Code
Section 424(a) that provides for the substitution or assumption of this Option,
the Committee will adjust the Option in a manner that satisfies the
requirements of Code Section 424(a) as to: (x) the number of Shares subject to
the Option, rounding all fractions downward, and (y) the Exercise Price of the
Option, or any combination thereof. An adjustment made under this Section by
the Committee shall be conclusive and binding on all affected persons. 

          12.     Notices.     Notices
required hereunder shall be given
in person or by first class mail to the address of Optionee shown on the
records of the Company, and to the Company at its principal executive office. 

          13.     Successors and
Assigns.     This Agreement
shall apply to and bind Optionee and the Company and their respective permitted
assignees and transferees, heirs, legatees, executors, administrators and legal
successors. 

          14.    Miscellaneous.     This
Agreement, together
with Exhibit A, constitutes the entire agreement of the parties with respect to
the subject matter of this Agreement and supersedes in its entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be amended or altered except by means of a
writing signed by the Company and Optionee. This 

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EXHIBIT 10.1

Agreement
is governed by the internal substantive laws of but not the choice of law rules
of the State of Minnesota. 

* * * * *

          IN WITNESS WHEREOF, the Company has
caused
this Agreement to be executed in its corporate name by its duly authorized
officer, and Optionee has executed this Agreement, as of the Grant Date set
forth above. 

	
 

	
 

	
 

	
 

	
COMPANY:

	
RIMAGE CORPORATION

	
 

	
 

	
 

	
 

	
By 

	
/s/ Bernard P. Aldrich

	
 

	
 

	
 

	
Bernard P. Aldrich

	
 

	
 

	
Chief Executive Officer

	
 

	
 

	
 

	
 

	
OPTIONEE:

	
/s/  Sherman L. Black

	
 

	
 

	
Sherman L. Black

6

EXHIBIT 10.1

EXHIBIT A

EXERCISE NOTICE

Rimage
Corporation

7725 Washington Avenue South

Edina, MN 55439

Attn: Chief Financial Officer

          1.
Exercise of Option.
Effective as of today, ___________________, 20___, the undersigned (“Optionee”)
hereby elects to purchase _________ shares (the “Shares”) of the Common Stock
of Rimage Corporation (the “Company”) under and pursuant to the Stock Option
Agreement dated __________ ___, 2009 (the “Option Agreement”). The purchase
price for the Shares shall be $______________ (the “Exercise Price”), as
required by the Option Agreement.

          2.
Delivery of Payment.
Optionee herewith delivers to the Company the full purchase price for the
Shares.

          3.
Representation of Optionee.
Optionee acknowledges that Optionee has received, read and understood the
Option Agreement and agrees to abide by and be bound by its terms and
conditions.

          4.
Tax Consultation. Optionee
understands that Optionee may suffer adverse tax consequences as a result of
Optionee’s purchase or disposition of the Shares. Optionee represents that
Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.

          5.
Entire Agreement; Governing Law.
The Option Agreement is incorporated herein by reference. This Exercise Notice
and the Option Agreement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof and thereof, and
such agreement is governed by Minnesota law except for that body of law
pertaining to conflict of laws.

* * * * *

1

EXHIBIT 10.1

	
 

	
 

	
 

	
 

	
 

	
Submitted by:

	
 

	
Accepted by:

	
 

	
 

	
 

	
OPTIONEE:

	
 

	
RIMAGE CORPORATION

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Signature

	
 

	
Its:

	
 

	
 

	
 

	
 

	
 

	
Sherman L.
 Black

	
 

	
 

	
 

	
 

	
 

	
Social
 Security Number

	
 

	
 

	
 

	
 

	
 

	
Address:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

2Exhibit 10.2 to Rimage Corporation Form 10-Q for quarterly period ended June 30, 2009

EXHIBIT 10.2

FOURTH AMENDMENT TO CREDIT AGREEMENT 

          THIS
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of July 1,
2009, by and between RIMAGE CORPORATION, a Minnesota corporation (“Borrower”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 

RECITALS

          WHEREAS,
Borrower is currently indebted to Bank pursuant to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of March 29,
2004, as amended from time to time (“Credit Agreement”). 

          WHEREAS,
Bank and Borrower have agreed to certain changes in the terms and conditions
set forth in the Credit Agreement and have agreed to amend the Credit Agreement
to reflect said changes. 

          NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the Credit Agreement shall
be amended as follows: 

          1.     Section
1.1 (a) is hereby amended by deleting “July 1, 2009” as the last day on which
Bank will make advances under the Line of Credit, and by substituting for said
date “July 1, 2010,” with such change to be effective upon the execution and
delivery to Bank of a promissory note dated as of July 1, 2009 (which
promissory note shall replace and be deemed the Revolving Line of Credit Note
defined in and made pursuant to the Credit Agreement) and all other contracts,
instruments and documents required by Bank to evidence such change. 

          2.     Section
4.3 (c) is hereby deleted in its entirety, and the following substituted
therefor: 

          “(c)   contemporaneously
with each annual and quarterly financial statement of Borrower required hereby,
a certificate of the president or chief financial officer of Borrower that said
financial statements are accurate and that there exists no Event of Default nor
any condition, act or event which with the giving of notice or the passage of
time or both would constitute an Event of Default;” 

          3.     Section
4.9 is hereby deleted in its entirety, and the following substituted therefor: 

          “SECTION
4.9. FINANCIAL CONDITION. Maintain Borrower’s financial condition as follows
using generally accepted accounting principles consistently applied and used
consistently with prior practices (except to the extent modified by the
definitions herein): 

          (a)     Tangible
Net Worth not less than $80,000,000 at each fiscal quarter end, with “Tangible
Net Worth” defined as the aggregate of total stockholders’ equity plus subordinated
debt less any intangible assets. 

          (b)     Net
losses not greater than $500,000 at each fiscal quarter end.” 

-1-

EXHIBIT 10.2

          4.          The
following is hereby added to the Credit Agreement as Section 4.11: 

          “SECTION
4.11.      LIQUIDITY. Maintain unencumbered liquid
assets (defined as cash, cash equivalents and/or publicly traded/quoted
marketable securities acceptable to Bank in its sole discretion) with an
aggregate fair market value not at any time less than Thirty Five Million
Dollars ($35,000,000).” 

          5.     Section
5.3 is hereby deleted in its entirety, and the following substituted therefor: 

          “SECTION
5.3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with
any other entity; make any substantial change in the nature of Borrower’s
business as conducted as of the date hereof; acquire all or substantially all
of the assets of any other entity; nor sell, lease, transfer or otherwise
dispose of all or a substantial or material portion of Borrower’s assets except
in the ordinary course of its business, except acquisitions and mergers
exceeding an aggregate of $25,000,000 in purchase price.” 

          6.     Except
as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Credit Agreement shall have the same meaning when used in
this Amendment. This Amendment and the Credit Agreement shall be read together,
as one document. 

          7.     Borrower
hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default. 

          IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the day and year first written above. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
WELLS FARGO
 BANK,

	
RIMAGE
 CORPORATION

	
  NATIONAL
 ASSOCIATION

	
 

	
 

	
 

	
By:

	
/s/ Robert M.
 Wolf

	
 

	
By:

	
/s/ Cynthia S.
 Goplen

	
 

	
Robert M.
 Wolf, Secretary and

	
Cynthia S.
 Goplen, Vice President

	
Chief
 Financial Officer

	
 

	
 

	
 

	
 

	
By:

	
/s/ Bernard P.
 Aldrich

	
 

	
 

	
Bernard P.
 Aldrich, President and

	
 

	
Chief
 Executive Officer

	
 

-2-

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