8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): January 29, 2009

Rimage Corporation

(Exact name of Registrant as Specified in its Charter)

Minnesota

(State Or Other Jurisdiction Of Incorporation)

000-00619	41-1577970
(Commission File Number)	(I.R.S. Employer Identification No.)

7725 Washington Avenue South Minneapolis, MN	55439
(Address Of Principal Executive Offices)	(Zip Code)

(952) 944-8144

Registrant’s Telephone Number, Including Area Code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Items under Sections 1 through 4 and 6 through 8 are not applicable and therefore omitted.

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

On January 29, 2009, the Board of Directors of Rimage Corporation (the “Company”) appointed Sherman Black as the Company’s President and Chief Operating Officer effective April 1, 2009, the scheduled first day of his employment. Mr. Black will report to Bernard P. Aldrich, the Company’s current President and Chief Executive Officer, who will continue to serve as the Company’s Chief Executive Officer following Mr. Black’s appointment.

Sherman Black, age 44, has served in a variety of executive positions with Seagate Technology (Nasdaq: STX) over the past twenty years. Seagate is a world leader in the design, manufacturing and marketing of hard disk drives and storage devices. Since September 2008, Mr. Black has served as Seagate’s Senior Vice President, Marketing and Strategy, of the Core Products Business Group. From November 2005 to August 2008, he served as General Manager and Senior Vice President of the Enterprise Storage business unit at Seagate and previous to that, Mr. Black served as Seagate’s Vice President of Global OEM Sales, Vice President of Business Development, and Vice President of Enterprise Product Line Management. A 1987 graduate of the University of Arkansas with a bachelor’s degree in electrical engineering, Mr. Black also earned his master’s degree in business administration from the University of Oklahoma in 1991.

The Company offered Mr. Black the position by an offer letter that was accepted by him on January 29, 2009, a copy of which is attached hereto as Exhibit 10.1. The Board of Directors and Compensation Committee approved the compensation described in the offer letter, which includes a base salary of $325,000 per year, a hiring bonus of $25,000 that is required to be repaid if Mr. Black terminates his employment with the Company during the first twelve months, an opportunity to earn a cash bonus equal to 50% of his base salary under the Company’s cash bonus program for executive officers, and equity compensation. Mr. Black is also eligible to participate in the Company’s benefit programs. In addition, Mr. Black will enter into the Company’s form of non-disclosure and non-competition agreement and the Company’s current form of severance and change of control letter agreement, a copy of which was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 22, 2008.

In connection with Mr. Black’s hiring, the Company will grant Mr. Black on the first day of his employment a non-qualified stock option to purchase 200,000 shares of the Company’s common stock and 10,000 shares of restricted stock. The restrictions on the restricted stock award will lapse in full on January 1, 2010. The restricted stock award will also be subject to the form of restricted stock agreement attached hereto as Exhibit 10.2, as well as the terms and conditions of the Company’s 2007 Stock Incentive Plan. The stock option will be granted outside of the Company’s current equity incentive plan, the 2007 Stock Incentive Plan, as an “inducement award” pursuant to Nasdaq Marketplace Rule 4350(i)(1)(A)(iv). The option will have an exercise price equal to the closing price of the Company’s common stock as reported by the Nasdaq Stock Market on the date Mr. Black’s employment with the Company commences, will vest in four equal installments on each of the first four anniversaries of the date of grant, and will have a term of seven years. In other respects, the option was structured to mirror the terms of options granted under the Company’s 2007 Stock Incentive Plan and will be subject to the form of stock option agreement attached hereto as Exhibit 10.3.

The Company announced Mr. Black’s appointment and related matters by a press release issued on February 3, 2009, which is attached hereto as Exhibit 99.1.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

Exhibit No.	Description
10.1	Letter from Rimage Corporation to Sherman Black regarding offer of employment, accepted on January 29, 2009.
10.2	Form of Restricted Stock Agreement by and between Sherman Black and the Company to be entered into as of the first day of Mr. Black’s employment with the Company.
10.3	Form of Stock Option Agreement by and between Sherman Black and the Company to be entered into as of the first day of Mr. Black’s employment with the Company.
99.1	Press Release dated February 3, 2009

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

RIMAGE CORPORATION
By:	/s/ Robert M. Wolf
	Robert M. Wolf Chief Financial Officer

Date:  February 4, 2009

EX-10.1

Exhibit 10.1

[Rimage Letterhead]

January 28, 2009

Mr. Sherman Black

[Address]

[Address]

Dear Sherman:

I am pleased to confirm Rimage’s offer of employment to you, as we discussed. The terms of the offer are as follows:

Title:	President and Chief Operating Officer
Reports to:	Bernie Aldrich
Base Salary:	$325,000 on an annualized basis
Bonus Opportunity:	50% of Base Salary
Start Bonus:	$25,000 hiring bonus, (in lieu of car allowance) to be paid with first payroll after start date. If you should terminate your employment with Rimage during the first twelve months of employment, you agree to pay Rimage a prorated portion of the bonus at time of separation.
Restricted Stock:	10,000 shares vesting 1/1/2010
Stock Options:	200,000 option shares issued on start date, vesting in equal amounts over four years
Annual Physical:	Mayo Clinic Executive Health Physical
Benefits Programs:	As outlined in the attached benefits summary, includes Health Plan, Dental Plan, Paid Time-off (PTO) at the 24 day per year level, 401k with company match of $.50 to every dollar up to 6% of employee’s salary

I have enclosed a Nondisclosure and Non-competition and Severance/Change of Control Letter Agreement for your review, which you will be required to sign as a condition of employment. Rimage will also require an I-9 form that will need to be completed and turned in on your first day of work along with proof of your employment eligibility. Employment with Rimage Corporation is on an “at-will” basis. This offer does not constitute a contract of employment.

Sherman, this is an exciting time at Rimage Corporation, and we believe you will be a strong contributor to and participant in our success. We look forward to your favorable reply and will hold this offer open through Friday, January 30, 2009. With your favorable reply, your start date will be Wednesday, April 1, 2009.

Sincerely,

/s/ Bernard P. Aldrich

Bernard P. Aldrich

President and Chief Executive Officer

If you are in agreement with the above and are not a party toa non-compete or other employment agreement that would conflict with your employment at Rimage, please sign belowand return one copy to my attention.
/s/ Sherman Black	January 29, 2009
Name: Sherman Black	Date:

EX-10.2

Exhibit 10.2

RIMAGE CORPORATION

2007 STOCK INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

PARTICIPANT:	Sherman L. Black
AWARD DATE:	April 1, 2009
SHARES OF RESTRICTED STOCK:	10,000
RESTRICTED PERIOD:	From April 1, 2009 until January 1, 2010
LAPSE OF RESTRICTIONS:	Restrictions on the Restricted Stock lapse on January 1, 2010

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made as of the Award Date set forth above, by and between Rimage Corporation, a Minnesota corporation (the “Company”), and the Participant named above (“Participant”) setting forth the terms and conditions of an award of Restricted Stock granted to “Key Employees” pursuant to Section 7.4 of the Rimage Corporation 2007 Stock Incentive Plan (the “Plan”).

Capitalized terms used herein and not defined shall have the meaning given such terms in the Plan.

1.         Grant of Restricted Stock. In accordance with the terms of the Plan and subject to the further terms, conditions and restrictions contained in this Agreement, the Company hereby grants to Participant the number of shares of Restricted Stock set forth above. “Restricted Stock” means shares of the Company’s common stock (the “Shares”) subject to the Restrictions set forth in Section 3 of this Agreement.

2.         Certificates for Shares. Certificates evidencing Restricted Stock shall be deposited with the Company to be held in escrow until such Shares are released to Participant or forfeited in accordance with this Agreement. Participant shall, simultaneously with the delivery of this Agreement, deliver to the Company a stock power, in blank, executed by Participant. If any shares of Restricted Stock are forfeited, the Company shall direct the transfer agent of the Shares to make the appropriate entries in its records showing the cancellation of the certificate or certificates for such shares of Restricted Stock and the Shares represented thereby shall have the status as authorized but unissued Shares.

3.         Restrictions. During the Restricted Period as set forth above and subject to earlier termination of the Restricted Period or forfeiture of the Restricted Stock, the Restricted Stock, and all rights with respect to the Restricted Stock, may not be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered or disposed of and shall be subject to the risk of forfeiture contained in Section 4 of this Agreement (such limitations on transferability and risk of forfeiture being herein referred to as “Restrictions”), but Participant shall have all other rights of a stockholder, including, but not limited to, the right to vote and receive dividends on the Restricted Stock.

4.         Forfeiture of Restricted Stock.

(a)        Termination of Employment. If Participant’s employment with the Company and/or a subsidiary of the Company terminates during the Restricted Period for any reason, including, but not limited to death, Disability or Retirement, the Restricted Stock shall be forfeited to the Company without payment of any consideration therefor as of the date of such termination unless the Committee determines that the Restricted Stock of Participant shall vest as of the date of such termination.

(b)        Change in Control. Notwithstanding any other provision of this Agreement and except as provided in the Plan, if there is a Change in Control of the Company during the Restricted Period and if the agreements effectuating the Change in Control do not provide for the assumption or substitution of the Restricted Stock, the Restrictions shall lapse on the Restricted Stock to the extent such Restrictions have not already lapsed pursuant to Section 5.

5.         Lapse of Restrictions. Except as provided in Section 4, the Restrictions on the Restricted Stock granted under this Agreement shall lapse as to the number of shares of Restricted Stock and on the dates stated above under “Lapse of Restrictions.”Upon lapse of the Restrictions in accordance with this Section, the Company shall, as soon as practicable thereafter, deliver to Participant a certificate for the Shares with respect to which such Restrictions have lapsed.

6.         Non-Transferability. Neither the Restricted Stock nor this Agreement nor any interest in the Shares or this award may be anticipated, alienated, encumbered, sold, pledged, assigned, transferred or subjected to any charge or legal process, other than by will or the laws of descent and distribution, so long as the Restrictions have not lapsed as to any share of Restricted Stock and the Shares have not been delivered in accordance with the Plan, and any sale, pledge, assignment or other attempted transfer shall be null and void.

7.         Successors and Heirs. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. In the event of Participant’s death, any Shares to which Participant may become entitled pursuant to this Agreement or the Plan will be delivered to his or her heirs or personal representative in accordance with the terms of the Plan.

2

8.         Governing Law. This Agreement and any matter relating to the Restricted Stock will be construed, administered and governed in all respects under and by the applicable laws of the State of Minnesota, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this agreement, the Plan, the award of Restricted Stock or the Restricted Stock to the substantive law of another jurisdiction.

9.         Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require Participant to remit to the Company, as a condition precedent for the delivery by the Company of the Shares deliverable upon lapse of Restrictions, an amount in Shares or cash sufficient to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the grant, lapse of the Restrictions or settlement of the Restricted Stock. Notwithstanding the foregoing, in no event shall payment of withholding taxes be made by retention of Shares by the Company unless the Company retains only Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld. To the extent that Participant is an Insider, satisfaction of withholding requirements by having the Company withhold Shares may only be made to the extent that such withholding of Shares (a) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (b) 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 Company may also deduct from any award under the Plan payment of any other amounts due by Participant to the Company.

10.       Plan Controls. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan. In accordance with the Plan, all decisions of the Committee shall be final and binding upon Participant and the Company.

IN WITNESS WHEREOF, the Company and Participant have each executed and delivered this Agreement as of the date first above written.

	RIMAGE CORPORATION
	By:
	Its:
PARTICIPANT:
Sherman L. Black

3

EX-10.3

EXHIBIT 10.3

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:	$______ 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;

1

EXHIBIT 10.3

(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;

(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);

2

EXHIBIT 10.3

(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

(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.

3

EXHIBIT 10.3

          (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 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.

4

EXHIBIT 10.3

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 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.

5

EXHIBIT 10.3

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 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
		Bernard P. Aldrich Chief Executive Officer
OPTIONEE:
	Sherman L. Black

6

EXHIBIT 10.3

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 10.3

Submitted by:	Accepted by:
OPTIONEE:	RIMAGE CORPORATION
	By:
Signature	Its:
Sherman L. Black
Social Security Number
Address:

2

EX-99.1

Exhibit 99.1

Rimage Corporation Announces Appointment of Sherman L. Black

As President and Chief Operating Officer

Minneapolis, MN—February 3, 2009—Rimage Corporation (Nasdaq: RIMG) today announced the appointment of Sherman L. Black as President and Chief Operating officer.

Black, 44, is scheduled to start April 1, 2009. He will report to Bernard P. Aldrich, the Company’s current President and Chief Executive Officer, who will continue to serve as Chief Executive Officer following Mr. Black’s appointment.

Aldrich commented, “We are very pleased to have an executive of Sherman’s capabilities join Rimage. Given his wide-ranging and highly successful career with Seagate Technology, his appointment will significantly strengthen our senior management team. In addition to being responsible for Rimage’s daily operations, he will help us formulate a long-range strategic plan and explore new business opportunities and technologies.”

Black most recently served as Senior Vice President, Marketing and Strategy, of the Core Products Business Group of Seagate Technology (Nasdaq: STX), a world leader in the design, manufacturing and marketing of hard disk drives and storage devices. During his 20-year career with Seagate, Black also held a range of other executive positions, including General Manager and Senior Vice President of the Enterprise Storage business unit, Vice President of Global OEM Sales, Vice President of Business Development, and Vice President of Enterprise Product Line Management.

Disclosure Regarding Equity Award

In connection with his appointment as President and Chief Operating Officer, Mr. Black will receive an "inducement award" as defined by Nasdaq Marketplace Rules, consisting of a nonqualified stock option to purchase 200,000 shares of the Company's common stock.  The option will be granted on the date Mr. Black’s employment with the Company commences and will have an exercise price equal to the fair market value of the Company's common stock on the date of the grant. The shares will vest in four equal installments on each of the first four anniversaries of the date of grant and will have a term of seven years. The inducement award will be granted outside of the terms of the existing Company equity incentive plans, was approved by the Compensation Committee of the Company's Board of Directors, and was granted pursuant to Nasdaq Marketplace Rule 4350(i)(1)(A)(iv). 

About Rimage

Rimage Corporation (www.rimage.com) is the world’s leading provider of recordable CD, DVD and Blu-ray (BD) publishing systems, which are used by businesses to produce discs with customized digital content on an on-demand basis. Rimage’s publishing systems, which span the range from high to low CD/DVD/BD production volumes, integrate robotics, software and surface label printers into a complete publishing solution. Rimage is focusing its CD/DVD/BD publishing solutions on a set of vertical markets with special needs for customized, on-demand digital information, including retail, medical and business services.

Statements regarding Rimage’s anticipated performance are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions, competitive products, changes in technology, conditions in overseas markets that could affect international sales, and other factors set forth in Rimage’s filings with the Securities and Exchange Commission.

#      #      #

For additional information, contact:

Bernard P. (Bernie) Aldrich, CEO	Richard G. Cinquina
Robert M. Wolf, CFO	Equity Market Partners
Rimage Corporation	904/415-1415
952/944-8144