SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
RIMAGE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transactions applies:
(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.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
RIMAGE CORPORATION
7725 Washington Avenue South
Minneapolis, Minnesota 55439
(612) 944-8144
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
------------------------
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 Thursday, May 21,
1998, at 3:30 p.m. (Minneapolis time), at the Minneapolis Marriott Southwest,
5801 Opus Parkway, Minnetonka, Minnesota, for the following purposes:
1. To elect six directors of the Company for the coming
year.
2. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending December
31, 1998.
3. 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 10, 1998, 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
April 17, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING,
PLEASE SIGN THE PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
RIMAGE CORPORATION
7725 Washington Avenue South
Minneapolis, Minnesota 55439
(612) 944-8144
------------------------
PROXY STATEMENT
------------------------
SOLICITATION OF PROXIES
The accompanying Proxy is solicited on behalf of the Board of
Directors of Rimage Corporation (the "Company"or "Rimage") for use at the Annual
Meeting of Shareholders to be held on May 21, 1998, at 3:30 p.m. at the
Minneapolis Marriott Southwest, 5801 Opus Parkway, Minnetonka, Minnesota, and at
any adjournments thereof. The cost of solicitation, including the cost of
preparing and mailing the Notice of Annual Shareholders' Meeting and this Proxy
Statement, will be paid by the Company. Representatives of the Company may,
without cost to the Company, solicit Proxies for the management of the Company
by means of mail, telephone or personal calls.
Shares of the Company's common stock, $.01 par value (the "Common
Stock"), represented by proxies in the form solicited will be voted in the
manner directed by a shareholder. If no direction is made, the proxy will be
voted for the election of the nominees for director named in this Proxy
Statement and any other matters properly brought before the meeting. Shares
voted as a "withhold vote for" one or more directors will be counted as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum at the meeting and as unvoted, although present and entitled to
vote, for purposes of the election of the directors with respect to which the
shareholder has abstained. If a broker submits a proxy that indicates the broker
does not have discretionary authority to vote certain shares, those shares will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum at the meeting, but will not be considered
as present and entitled to vote with respect to the matters voted on at the
meeting.
Proxies may be revoked at any time before being exercised by
delivery to the Secretary of the Company of a written notice of termination of
the proxies' authority or a duly executed proxy bearing a later date.
Only holders of record of Common Stock at the close of business on
April 10, 1998, will be entitled to receive notice of and to vote at the
meeting. On April 10, 1998, the Company had 3,139,471 shares of Common Stock
outstanding. Each outstanding share is entitled to one vote on all matters
presented at the meeting.
So far as the management of the Company is aware, no matters other
than those described in this Proxy Statement will be acted upon at the Annual
Meeting. In the event that any other matters properly come before the Annual
Meeting calling for a vote of shareholders, the persons named as proxies in the
enclosed form of proxy will vote in accordance with their best judgment on such
other matters.
A copy of the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, is being furnished to each shareholder with this Proxy
Statement. This Proxy Statement is being mailed to shareholders on or about
April 17, 1998.
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Six persons have been nominated for election at the annual meeting:
Bernard P. Aldrich, Ronald R. Fletcher, George E. Kline, Richard F. McNamara,
James Reissner and David J. Suden. Each nominee is currently a director of the
Company. All nominees elected at the Annual Meeting will serve until the next
Annual Meeting or until their earlier death, resignation, removal, or
disqualification. The persons named in the accompanying Proxy intend to vote the
Proxies held by them in favor of the nominees named below as directors, unless
otherwise directed. The affirmative vote of a majority of the voting shares
represented at the meeting is required for the election of each director. Should
any nominee for director become unavailable for any reason, the Proxies will be
voted in accordance with the best judgment of the persons named therein. The
Board of Directors has no reason to believe that any candidate will be
unavailable.
The following information is furnished with respect to each nominee
as of February 28, 1998:
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE FOR PAST FIVE YEARS SINCE
- ------------ --------------------------------------- -----
Bernard P. Aldrich Director, Chief Executive Officer and 1996
Age 48 President of Rimage since December 1996.
President from January 1995 to December 1996
of several manufacturing companies controlled
by Activar, Inc., including Eiler Spring,
Comfort Ride and Bending Technologies;
President from December 1992 to December 1994
of the Color Merchandising Group of Colwell
Industries; Various management positions with
Advance Machine, including Chief Financial
Officer and General Manager, from 1973 to
1991.
Ronald R. Fletcher Owner and President of Aurora Service 1987
Age 57 Corporation, a savings and loan holding
company, since 1982; Chairman of the Company
from November 1992 to February 1998 and Chief
Executive Officer of the Company from
September 1995 to November 1996.
George E. Kline President of Venture Management, a financial 1992
Age 62 management services company, since 1966;
General Partner of Brightstone Capital Ltd., a
venture capital firm, since 1985. Director of
CyberOptics Corporation, Nutrition Medical,
Inc., Virtualfund.com and FieldWorks, Incorporated.
Richard F. McNamara Chairman of the Board of the Company since 1987
Age 65 February 1998; Owner of Activar, Inc.,
Minneapolis, Minnesota, a company that
provides management services to corporations
related to Activar, for more than five years;
Owner of or partner in numerous private
companies. Director of Venturian Corporation.
<PAGE>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE FOR PAST FIVE YEARS SINCE
- ------------ --------------------------------------- -----
James L. Reissner President of Activar, Inc., since January 1996 1998
Age 58 and Chief Financial Officer of Activar from
1992 until becoming President. Various
management and financial management capacities
during the past twenty years, including
Managing Director of the Minnesota Regional
Operations of First Bank until 1990. Director
of The Barbers, Inc. and Toro Credit
Corporation.
David J. Suden Chief Technology Officer of Rimage since 1995
Age 51 December 1996 and a director since September
1995; President of Rimage from October 1994
through November 1996; Vice President --
Development and Operations of Rimage from
February 1991 to October 1994.
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 1997, the Board of Directors met three times.
The Board of Directors has a Compensation Committee and an Audit Committee.
During 1997, the Compensation Committee (including the former stock option
committee) met three times and the Audit Committee met once. 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 Compensation Committee also has assumed the responsibility
of the Stock Option Committee, which formerly administered the Company's 1992
Stock Option Plan. The current members of the Compensation Committee are Mr.
Kline, Mr. Reissner and Mr. McNamara. 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 Mr. Kline and Mr.
Reissner. The Board of Directors does not have a nominating committee. Except
for Mr. McNamara, who missed one meeting of the Board, each nominee for director
attended at least 75% of the meetings of the Board and committees on which he
served during 1997.
Directors currently receive a fee of $1,000 for each meeting of the
Board of Directors which they attend. During 1997, each director also received,
as a one time grant, a stock option to purchase 25,000 shares of common stock at
an exercise price of $3.00 per share (the market price on the date of grant).
These options were exercisable with respect to 6,667 shares on the date of grant
and become exercisable with respect to an additional 6,666 shares on December
31, 1997 and December 31, 1998.
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.
<PAGE>
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Current executive officers of the Company who are not also directors
include the following:
Kenneth J. Klinck, 51, started with the Company in June 1997 and has
been Vice President, Sales and Marketing of the Company since September 1997.
For the thirty-one years prior to joining the Company, Mr. Klinck was with
Advance Machine Company, as Vice President of International Operations since
October 1992, and prior to that time as President of Advance Machine's European
Operations.
Robert Wolf, 29, has been Controller of the Company since September
1997. From March 1995 until joining the Company, Mr. Wolf was a CPA and audit
manager with Deloitte & Touche LLP. From December 1991 until March 1995 , Mr.
Wolf was a CPA with House, Nezerka & Froelich PA.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is currently comprised
of Mr. Kline, Mr. Reissner and Mr. McNamara, but the recommendations of the
Compensation Committee were approved during 1997 by all of the members of the
Board of Directors. 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 base compensation
levels should be established by comparison of job responsibility to similar
positions in comparable companies and be adequate to retain highly-qualified
personnel and (2) variable compensation should be established to provide
incentive to improve performance and shareholder value. 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.
During 1997, the Company retained new executives in a number of key
roles. The compensation of such executives, including the Company's Chief
Executive Officer, was set at levels that were necessary to attract qualified
individuals. Salaries of continuing officers, including the Company's Chief
Technical Officer, were set at levels that recognized increased salary rates in
the industry. The Company believes that such salaries approximate the salaries
of similarly situated individuals at comparable companies.
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. Because much of executive management was new, and because the
Company substantially reorganized operations during 1997 rendering it difficult
to establish meaningful goals at the beginning of the year, bonuses were granted
retroactively based on performance at the end of year. The Compensation
Committee and the Board as a whole recognized the significant improvement in
operations, and particularly its profitability, during 1997 and accordingly
granted Mr. Aldrich a $25,000 bonus. The Compensation Committee is establishing
specific performance goals for 1998 upon which cash bonuses will be established.
<PAGE>
The Company provides long-term incentive to its executives, and ties
a portion of executive compensation to Company performance, through grants of
stock options under the Company's 1992 Stock Option Plan. During 1997, the
Company granted Mr. Aldrich an option to purchase 100,000 shares as part of its
agreement with such officer when he was initially employed. The Compensation
Committee, and the Board of Directors as a whole, believed that it was important
to provide Mr. Aldrich a significant incentive to improve the performance of the
Company and the performance of its common stock in the market. In addition, for
continuing officers, directors and employees, the Company reset option prices
effective April 15, 1997. Many options that were outstanding were significantly
under water, having been issued before 1996. The Compensation Committee, and the
Board as a whole, believed that such options no longer reflected market prices
and provided little incentive to employees. Further, the Board of Directors
believed that it was important to provide continuing employees with a stock
based benefit during the changes made in operations and the retention of new
management. Options were repriced by exchanging outstanding options with new
options having an exercise price equal to the market value on April 15, 1997
($3.00 per share) and with new ten year terms.
The Compensation Committee believes that the objectives of the
Company's compensation policy in providing fixed compensation to management
adequate to avoid attrition and providing variable compensation in amounts and
forms that encourage generation of value for shareholders were achieved during
1997.
By the Compensation Committee:
Richard F. McNamara
George E. Kline
James Reissner
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for
each of the past three fiscal years earned by the Chief Executive Officer and by
the only other of the Company's executive officers whose salary and bonus earned
for 1997 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- ----------------------------------------------
AWARDS PAYOUTS
NAME OTHER ---------------------- ------- ALL
AND ANNUAL RESTRICTED OTHER
PRINCIPAL COMPEN- STOCK LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARDS OPTIONS(#) PAYOUTS SATION(1)
-------- ---- ------ ----- ------ ------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bernard P. Aldrich (2) 1997 $162,231 $ 25,525 100,000
Chief Executive Officer 1996 7,019
and President 1995 --
David J. Suden (3) 1997 $151,625 $ 12,990 16,500 $4,076
Chief Technology 1996 141,177 20,000 2,999
Officer 1995 140,000 20,000 15,000 2,021
</TABLE>
- ---------------
(1) Represents the Company's matching contributions under its 401(k) retirement
savings plan.
(2) Mr. Aldrich was named President and Chief Executive Officer of the Company
in December 1996.
(3) Mr. Suden served as President of the Company from October 1994 to November
1996 and was named Chief Technology Officer in December 1996.
<PAGE>
STOCK OPTIONS
The Company maintains a 1992 Stock Option Plan (the "Plan") that was
amended in 1997 to increase by 500,000 the number of shares of common stock
available for issuance upon exercise of options granted under the Plan. The
Company may grant incentive stock options or nonqualifed stock options to
executive officers, directors and other employees and consultants of the Company
under the Plan. The following table sets forth information with respect to
options granted to the named executive officers in 1997:
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS OPTIONS GRANTED EXERCISE OPTION TERM(1)
GRANTED TO EMPLOYEES PRICE PER EXPIRATION -----------------------
NAME (#) IN 1997 ($/Sh) DATE 5%($) 10%($)
---- ----- ------- -------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Bernard P. Aldrich 100,000 36.8% $3.00 4/15/07 $188,668 $478,123
David J. Suden 16,500 6.1% $3.00 4/15/07 $31,130 $78,890
</TABLE>
- -------------------
(1) These amounts represent the realizable value of the subject options ten
years from the date of grant (the term of each option), without discounting
to present value, assuming appreciation in the market value of the
Company's common stock from the market price on the date of grant at the
rates indicated. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock, and overall stock
market conditions. The amounts reflected in this table may not necessarily
be achieved.
Neither of the named executive officers exercised options during 1997. The
following table provides information with respect to stock options held at
December 31, 1997, by the named executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised In-the-Money Options
Acquired Value Options at Year-End (#) at Year-End ($)(1)
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Bernard P. Aldrich -- -- 66,667/33,333 $247,935/$123,965
David J. Suden -- -- 64,500/ 5,500 $185,934/$ 20,455
</TABLE>
- -------------------
(1) Based on the difference between the December 31, 1997 closing price of
$6.719 per share as reported on The Nasdaq Stock Market and the exercise
price of the options.
<PAGE>
The Company repriced options to continuing employees, officers and
directors effective April 15, 1997 and extended the terms of all repriced
options to April 15, 2007. The following table provides certain information
regarding the repricing of options held by the executive officers named in the
summary compensation table during the past ten years:
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
Number of Market Price Exercise Price Length of
Securities of Stock at at Time Original Option
Underlying Time of of New Term Remaining
Options Repricing Repricing Exercise at date of
Name Date Repriced(#) ($) ($) Price Repricing
- ---- ---- ----------- --- --- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
David J. Suden 4/15/97 15,000 $3.00 $7.25 $3.00 41 Months
4/15/97 12,500 $3.00 $8.38 $3.00 10 Months
</TABLE>
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
16% of their pre-tax income to the plan. The 401(k) Plan includes a
discretionary matching contribution by the Company. These discretionary
contributions totaled $137,159, $207,459 and $132,865 in 1997, 1996, and 1995,
respectively.
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.
<PAGE>
PERFORMANCE GRAPH
The Company's common stock is quoted on The Nasdaq National Market. The
following graph shows changes during the period from December 31, 1992 to
December 31, 1997, in the value of $100 invested in: (1) the Company's common
stock; (2) the Nasdaq National Market Index (US); and (3) Nasdaq Non-Financial
Stocks Index. 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.
[PLOT POINTS GRAPH]
<TABLE>
<CAPTION>
=======================================================================================================
12/31/92 12/31/93 12/30/94 12/29/95 12/31/96 12/31/97
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq National Market Index $100.00 $114.80 $112.21 $158.70 $195.19 $239.53
- -------------------------------------------------------------------------------------------------------
Nasdaq Non-Financial Stocks $100.00 $115.46 $111.02 $154.73 $188.02 $220.65
- -------------------------------------------------------------------------------------------------------
Rimage Corporation $100.00 $106.67 $53.33 $101.67 $38.33 $89.59
=======================================================================================================
</TABLE>
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth as of March 15, 1998, 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
- ------------------------------------ --------------------- -----------
<S> <C> <C>
Ronald R. Fletcher (2)............................. 456,067 14.5%
4125 Parkglen Court N.W.
Washington, D.C. 20007
Richard F. McNamara................................ 569,667 18.0%
7808 Creekridge Circle
Minneapolis, MN 55439
George E. Kline (3)................................ 220,667 7.0%
4750 IDS Center
Minneapolis, MN 55402
Bernard P. Aldrich (4)............................. 69,867 2.2%
7725 Washington Ave. So.
Minneapolis, MN 55439
David J. Suden .................................... 66,500 2.1%
7725 Washington Ave. So.
Minneapolis, MN 55439
James L. Reissner.................................. 36,667 1.2%
7808 Creekridge Circle
Minneapolis, MN 55439
All executive officers and directors as a group
(8 persons) ................................. 1,440,436 41.5%
</TABLE>
- ------------------------
* Less than one percent
(1) Includes shares which could be purchased within 60 days upon the exercise
of the following stock options, Mr. Fletcher, 98,667 shares; Mr. McNamara,
20,333 shares; Mr. Kline, 28,667 shares; Mr. Aldrich, 66,667 shares; Mr.
Suden, 64,500 shares; Mr. Reissner, 36,667; and all directors and
executive officers as a group, 335,502 shares.
(2) Includes 8,000 shares held by Mr. Fletcher as custodian for his minor child
and 150,000 shares subsequently sold by Mr. Fletcher in April 1998.
(3) Includes 110,000 shares which are owned by limited partnerships that are
managed by a limited liability company for which Mr. Kline is a Managing
Partner. Mr. Kline has no voting or investment power with respect to such
shares and disclaims beneficial ownership.
(4) Includes 200 shares held as custodian for minor children.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 retained new executive management in late
<PAGE>
1996 and in 1997 as well as new counsel. Based upon a review of forms on file
with the Securities and Exchange Commission and in the Company's files, and
representations from officers and directors, and to the best knowledge of
current management, it appears that a number of reports of ownership were not
timely filed with the Securities and Exchange Commission between 1995 and the
Fall of 1997. In particular, it appears that Mr. Aldrich failed to timely file
his initial report of beneficial ownership (disclosing no security ownership)
and one report disclosing an open market purchase of securities; that during the
period from January 1, 1996 through September 1997, Mr. Fletcher failed to
timely file nine reports disclosing a total of ten gifts and eight sales; that
Mr. Kline failed to timely file three reports disclosing a total of eight
purchases in 1997; that Mr. McNamara failed to timely file one report disclosing
a sale of securities; and that Joseph Miceli, a former director of the Company,
failed to timely file his initial report of beneficial ownership (disclosing no
security ownership). All of such filings were corrected in October and November
1997 and the Company believes that all other filings by officers and directors
have been timely made.
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG Peat Marwick
LLP as independent auditors for the fiscal year ending December 31, 1998. 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 2.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any shareholder wishing to have a proposal considered for inclusion
in the Company's 1999 proxy solicitation materials must set forth such proposal
in writing and file it with the Secretary of the Company no later than December
19, 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 makers.
By Order of the Board of Directors
Bernard P. Aldrich
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Minneapolis, Minnesota
April 17, 1998
<PAGE>
RIMAGE CORPORATION
Proxy for the 1998 Annual Shareholders Meeting
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bernard P. Aldrich and David J. Suden and
each of them, with power to appoint a substitute, to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders of Rimage
Corporation, to be held on May 21, 1998, and at all adjournments thereof, as
specified below on the matters referred to, and, in their discretion, upon any
other matters which may be brought before the meeting:
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees (EXCEPT [ ] WITHHOLD AUTHORITY
AS MARKED TO THE CONTRARY BELOW) TO VOTE FOR ALL NOMINEES
TO WITHHOLD AUTHORITY FOR A SPECIFIC NOMINEE, PLACE A LINE THROUGH
HIS NAME BELOW:
Bernard P. Aldrich, Ronald R. Fletcher, George E. Kline,
Richard F. Mcnamara, James Reissner And David J. Suden
2. RATIFICATION OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO VOTE WITH DISCRETIONARY AUTHORITY ON ANY OTHER MATTER THAT MAY PROPERLY
COME BEFORE THE MEETING
(CONTINUED ON REVERSE SIDE)
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 all of the directors named in proposal 1 and for proposal 2.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated:__________________________, 1998
______________________________________
Signature
______________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
