-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H9Xy0ilnQrolll/hfENop1Bl4UFcvE+PgmJZWayX3z71jt4P3vEzy5npRMFuAtmy LNNJ1BZxtrbIG96nZzn/zA== /in/edgar/work/20000731/0001032210-00-001484/0001032210-00-001484.txt : 20000921 0001032210-00-001484.hdr.sgml : 20000921 ACCESSION NUMBER: 0001032210-00-001484 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RENTRAK CORP CENTRAL INDEX KEY: 0000800458 STANDARD INDUSTRIAL CLASSIFICATION: [7822 ] IRS NUMBER: 930780536 STATE OF INCORPORATION: OR FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-15159 FILM NUMBER: 682942 BUSINESS ADDRESS: STREET 1: ONE AIRPORT CTR STREET 2: 7700 N E AMBASSADOR PL CITY: PORTLAND STATE: OR ZIP: 97220 BUSINESS PHONE: 5032847581 MAIL ADDRESS: STREET 1: 7227 NE 55TH AVENUE CITY: PORTLAND STATE: OR ZIP: 97218 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL VIDEO INC DATE OF NAME CHANGE: 19881004 10-K405/A 1 0001.txt AMENDMENT #1 TO FORM 10-K405 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A (Amendment No. 1) [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended March 31, 2000. [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________. Commission file number 000-15159 RENTRAK CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Oregon 93-0780536 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Airport Center, 7700 NE Ambassador Place, Portland, Oregon 97213 - -------------------------------------------------------------------------------- (Address of principal executive offices, including zip code) (503) 284-7581 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Exchange Act: None Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $.001 par value per share Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K. [X] As of June 20, 2000, the aggregate market value of the voting stock held by non- affiliates of the registrant, based on the last sales price as reported by NASDAQ was $34,042,760. (Excludes value of shares of Common Stock held of record by directors and officers and by shareholders whose record ownership exceeded five percent of the shares outstanding at June 20, 2000. Includes shares held by certain depository organizations.) Number of shares of issuer's common stock outstanding as of June 20, 2000: 12,289,883 EXPLANATORY NOTE Rentrak Corporation (the "Company") is filing this Amendment No. 1 on Form 10-K/A as an amendment to its Annual Report to Form 10-K for the fiscal year ended March 31, 2000 (the "Form 10-K"). The purposes of this Amendment are to: (a) amend and restate in its entirety Part III of the Form 10-K, (b) add Exhibits 3.5, 10.33, 10.34, 10.35, 10.36, and 10.37 to the Exhibit Index, and (c) add Exhibits 3.5, 10.33, 10.34, 10.35, 10.36, and 10.37 as exhibits to the Form 10-K. PART III Item 10. Directors and Executive Officers of the Registrant Certain Information Regarding Directors PETER BALNER (Age 53). Mr. Balner is currently the President and Chief Executive Officer of Blowout Video, Inc., a wholly owned subsidiary of the Company, a position he has held since September 1997. Prior to joining Blowout, Mr. Balner served from May 1996 to August 1997 as a Director and Executive Vice President, Corporate Retail Operations and Development, of West Coast Entertainment Corporation, a publicly traded video retailer. He also served from December 1981 to May 1996 as the President and Chief Executive Officer of Palmer Corporation, a video retailer operating primarily in metropolitan New York. Mr. Balner serves as a director of The Enterprise Bank and Supermax, Inc. Mr. Balner has been a director of The Company since May 2000. PRADEEP BATRA (Age 54). Since February 1985, Mr. Batra has served as President of Unique Business Systems ("UBS"), a vertical market software developer. Among other things, UBS develops and markets point-of-sale ("POS") software that the Company's retail video store customers use to capture rental and sale activity and report such activity to the Company. UBS is party to a POS vendor agreement and several other agreements with the Company and two of the Company's subsidiaries. Mr. Batra also serves as a director of UBS and Synera Systems. Mr. Batra has been a director of the Company since February 1998. SKIPPER BAUMGARTEN (Age 53). Since 1990, Mr. Baumgarten has served as President of Surety Associates Holding Company. Mr. Baumgarten also serves as CEO and Chairman of the Board of American Contractors Indemnity Co., an insurance company. Mr. Baumgarten has been a director of the Company since February 1998. RON BERGER (Age 52). Since founding the Company in 1977, Mr. Berger has served as President (up until May 2000) and Chief Executive Officer of the Company, except for brief periods in other positions in 1981 and 1984. Since September 1984, he has also served as the Company's Chairman of the Board. Mr. Berger also serves as Chairman and a Director of Rentrak Japan K.K., and as a Director of Rentrak UK, Rentrak Canada, and BlowOut Video, Inc. Mr. Berger is a member of the board of directors of American Contractors Indemnity Co., Fast Forward Foundation, and the Board of Trustees of The Nature Conservancy of Oregon. He is also a past director of the Video Software Dealers Association and the International Franchise Association. JAMES JIMIRRO (Age 63). Since 1986, Mr. Jimirro has been the Chairman of the board of directors, President and Chief Executive Officer of J2 Communications, a company that supplies video product to the Company. Mr. Jimirro has been a director of the Company since November 1990. Since April 1998, he has served as Chairman of the Board and a director of Rentrak UK. TAKAAKI KUSAKA (Age 47). Since April 1991, Mr. Kusaka has served as President and as a director of Rentrak Japan. The Company currently owns a nine percent (9%) equity interest in Rentrak Japan. Mr. Kusaka has also served as Chairman of BlowOut Japan and Top Share Co., Ltd., since April 1997. Mr. Kusaka has been a director of the Company since 1999. BILL LEVINE (Age 80). In January 1988, Mr. LeVine founded and became President of LeVine Enterprises, Inc., an investment firm. Mr. LeVine also serves as a director of Mellon West Coast Bank, B.C.T. Inc., Fast Frame, and American Contractors Indemnity Co. Mr. LeVine has been a director of the Company since April 1985. MUNEAKI MASUDA (Age 49). Mr. Masuda founded Rentrak Japan, a joint venture formed between the Company and Culture Convenience Club Co., Ltd. ("CCC"). The Company currently owns a nine percent (9%) equity interest in Rentrak Japan. Mr. Masuda is the controlling stockholder of So-Tsu Company, which in turn holds a controlling interest in CCC and Rentrak Japan. Since founding CCC, Mr. Masuda has served as President except for the period from October 1996, through February 2000, when he served as its Chairman. Until February 2000, Mr. Masuda also served as President of DIRECTV Japan. Mr. Masuda has been a director of the Company since August 1990. Mr. Masuda is also a director of GAGA Communications, Digital Hollywood and Rentrak Japan. Pursuant to a Common Stock Purchase Agreement between the Company and CCC, entered into as of December 20, 1989, the Company's board of directors is required, subject to fiduciary obligations to all shareholders, to nominate Mr. Masuda, CCC's designee, as a director and use its best efforts to vote in favor of Mr. Masuda those shares for which the Company's management and Board hold proxies or are otherwise entitled to vote. STEPHEN ROBERTS (Age 62). Mr. Roberts is President and CEO of The S. Roberts Company (founded in 1985), a consulting firm to the entertainment industry. Mr. Roberts is a member of the Academy of Motion Pictures Arts and Sciences, the Academy of Television Arts and Sciences, and a former director of the Motion Picture Association of America. Mr. Roberts is a director of CTN Media Group and Rentrak Japan. Mr. Roberts has been a director of the Company since December 1988. Certain Information Regarding Executive Officers The names, ages, positions and backgrounds of the Company's current executive officers are as follows: Position Name Age Held Since Current Position(s) with Company and Background - ---- --- ---------- ----------------------------------------------- Ron Berger 52 1984 Chairman of the board of directors and Chief Executive Officer. Since founding the Company in 1977, Mr. Berger has served as director, and Chief Executive Officer, except for brief periods in other positions in 1981 and 1984. From 1977 through May 2000, Mr. Berger also served as President of the Company. Since September 1984, he has also served as the Company's Chairman of the Board. Mr. Berger serves as a member of the following boards of directors: Rentrak Japan K.K.; Rentrak UK; Rentrak Canada; Blowout Video, Inc.; American Contractors Indemnity Co.; Fast Forward Foundation; and The Nature Conservancy of Oregon. F. Kim Cox 47 2000 President, Chief Financial Officer, Secretary and Treasurer. In May 2000, Mr. Cox was appointed President of the Company and as of July 1, 2000, became Rentrak's Chief Financial Officer on an interim basis while the Company undertakes a search for a new Chief Financial Officer to replace Carolyn Pihl, who resigned to assume the position of Chief Financial Officer of 3PF.COM, Inc., a wholly owned subsidiary of the Company. From 1999 until May 2000, Mr. Cox served as Executive Vice President, Secretary and Treasurer. From 1995 until 1999, Mr. Cox served as Executive Vice President, Chief Financial Officer, Secretary and Treasurer. From 1991 until 1995, Mr. Cox served as Executive Vice President - Strategic Planning, Secretary, and Treasurer. From 1985 until 1991, Mr. Cox served as Chief Financial Officer and Vice President of Finance. Prior to joining the Company in 1985, Mr. Cox was a practicing attorney with the firm Garvey, Schubert, Adams & Barer from 1983 to 1985, and with the firm of McClaskey & Greig from 1980 to 1983. Prior to that, Mr. Cox practiced accounting with Arthur Andersen & Co. Marty Graham 42 1991 Vice President, Product Development. Prior to joining the Company in October 1988 as Director of Product Development, Mr. Graham had served as General Manager and Secretary/Treasurer of Pacific Western Video Corporation since 1984, which owned and operated two video retailer outlets, both of which participated in the Company's PPT Program . Richard Nida 53 1998 Vice President, Investor Relations. Prior to joining the Company in September 1998, Mr. Nida served as the Director of Corporate Communications and Investor Relations for Payless ShoeSource from 1988 to August 1998. Christopher Roberts 32 1994 Vice President, Sales. Prior to becoming Vice President, Sales, Mr. Roberts was the Company's National Director of Sales, a position he held since September 1992. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934 Act requires the Company's directors and executive officers and persons who beneficially own more than ten percent (10%) of the outstanding shares of the Company's common stock ("ten percent shareholders"), to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of shares of common stock and other equity securities of the Company. To the Company's knowledge, based solely upon a review of the copies of Forms 3, 4 and 5 (and amendments thereto) furnished to the Company or otherwise in its files, all of the Company's officers, directors and ten percent shareholders complied with all applicable Section 16(a) filing requirements during the Company's last fiscal year. Item 11. Executive Compensation The following table sets forth all compensation paid by the Company to the Named Executive Officers during the fiscal years ended March 31, 2000, 1999 and 1998. Summary Compensation Table
Long Term Annual Compensation Compensation -------------------------------------------------- Awards --------------------- Fiscal Securities Year Underlying All Other Name and Ended Salary Bonus Options/SARs Compensation Principal Position (1) March 31, ($) ($) (#) ($) (2) - ---------------------------------------------------------------------------------------------------------- Ron Berger, President 2000 429,353 2,264 260,943 (3) (3,324) and Chief Executive 1999 405,540 0 510,481 (3) 94,915 Officer 1998 408,972 62,258 0 31,241 F. Kim Cox, Executive 2000 191,029 85,000 32,623 5,571 Vice President and 1999 181,136 0 63,805 6,065 Secretary 1998 198,397 62,824 0 8,195 Marty Graham, Vice 2000 152,265 35,000 10,000 3,835 President, Product 1999 140,083 15,000 0 4,032 Development 1998 137,371 5,000 35,000 6,110
Long Term Annual Compensation Compensation -------------------------------------------------- Awards --------------------- Fiscal Securities Year Underlying All Other Name and Ended Salary Bonus Options/SARs Compensation Principal Position (1) March 31, ($) ($) (#) ($) (2) - ---------------------------------------------------------------------------------------------------------- Carolyn Pihl, Chief 2000 147,753 30,000 10,000 1,500 Financial Officer 1999 134,515 5,000 0 1,500 1998 110,913 9,000 10,000 1,500 Christopher Roberts, 2000 137,596 26,750 10,000 1,500 Vice President of Sales 1999 135,854 20,000 0 1,500 1998 121,593 23,000 35,000 1,500
(1) Reflects principal position as of March 31, 2000. In May 2000, Mr. Cox was appointed president. He is also currently serving as Rentrak's Chief Financial Officer on an interim basis. Ms. Pihl resigned in July 2000 as the Company's Chief Financial Officer to assume the Chief Financial Officer position at 3PF.COM, Inc., a wholly owned subsidiary of the Company. (2) Amounts disclosed in this column reflect the following matching contributions during fiscal 2000 on behalf of the Named Executive Officers under the Company's 401(k) plan: Ron Berger $1,500, F. Kim Cox $1,500, Marty Graham $1,500, Carolyn Pihl $1,500, and Christopher Roberts $1,500. The Company also made payments to supplemental disability and life insurance plans during fiscal 2000 for the following Named Executive Officers: Ron Berger $22,948, F. Kim Cox $4,071, and Marty Graham $2,335. In addition, other compensation for Ron Berger includes lease and maintenance payments on an automobile and a fiscal 2000 credit of $47,717 related to a correction to an overcalculation of compensation in 1999. (3) In May 1995, the Company adopted a shareholder rights plan designed to ensure that all of the Company's shareholders receive fair and equal treatment in the event of certain proposals to acquire the Company. Under the rights plan, each shareholder received a dividend of one right for each share of the Company's outstanding common stock, entitling the holder to purchase additional shares of common stock. The rights become exercisable after any person or group acquires beneficial ownership (as such term is defined in the rights plan) of 15% or more of the Company's outstanding stock. As a result of stock option grants made to Mr. Berger, his beneficial ownership (as such term is defined in the rights plan) may be deemed to have exceeded 15%. As permitted by the provisions of the rights plan, the board of directors has determined that, to the extent Mr. Berger's beneficial ownership exceeded 15%, it was inadvertent. Following the board's determination, Mr. Berger delivered for cancellation all of the options granted to him in fiscal 2000 (covering 260,943 shares) and a portion of the options granted to him in fiscal 1999 (covering 243,659 shares). Under the rights plan, the board of directors, at their discretion, retains the right to waive the 15% threshold with respect to any person (including Mr. Berger) or transaction or terminate the rights plan. After the cancellation of these options, Mr. Berger's beneficial ownership (as such term is defined in the rights plan) of the Company's outstanding stock is now less than 15%. The board of directors has not waived the 15% threshold. Stock Option Grants The following table sets forth information concerning stock option grants to each of the Named Executive Officers during the fiscal year ended March 31, 2000. The Company did not grant any stock appreciation rights to the Named Executive Officers during the fiscal year. Option Grants In Last Fiscal Year
Potential realizable value at assumed annual rates of stock price appreciation Individual Grants (1) for option term (2) - ----------------------------------------------------------------------------------------------------------------- Number of % of total securities options underlying granted to options employees in Exercise Expiration Name granted fiscal year (3) price (4) date 5% ($) 10% ($) - ----------------------------------------------------------------------------------------------------------------- Ron Berger (5) 260,943(7) 52.15% 4.750 8/23/09 779,502 1,975,411 F. Kim Cox (5) 32,623 6.52% 4.750 8/23/09 97,453 246,965 Marty Graham (5) 10,000 2.00% 2.813 4/01/09 17,691 44,832 Carolyn Pihl (6) 10,000 2.00% 2.813 4/01/09 17,691 44,832 Christopher Roberts (5) 10,000 2.00% 2.813 4/01/09 17,691 44,832
(1) Options granted include both incentive stock options and nonqualified stock options. All option grants are subject to the discretion of the board of directors. (2) These calculations are based on certain assumed annual rates of appreciation as required by SEC rules and regulations governing the disclosure of executive compensation. Under these rules, an assumption is made that the shares underlying the stock options shown in this table could appreciate at rates of five percent (5%) and ten percent (10%) per annum on a compounded basis over the ten-year term of the stock options. Actual gains, if any, on stock option exercises are dependent on the future performance of the Company's common stock and overall stock market conditions. There can be no assurance that the gains reflected in this table will be achieved. (3) In fiscal 2000, the Company granted options covering a total of 119,271 shares to its employees and options covering a total of 62,500 shares to its non-employee directors. (4) The exercise price per share equals the market price of the Company's common stock on the date of grant. (5) Option vests twenty percent (20%) per year on each anniversary of the grant date. (6) Option vests twenty-five percent (25%) per year on each anniversary of the grant date. (7) This option was cancelled in its entirety on June 21, 2000. See note 3 to the Summary Compensation Table, above. Stock Option Exercises The following table sets forth certain information concerning stock option exercises by each of the Named Executive Officers during the fiscal year ended March 31, 2000, and the value of in-the-money options (i.e., options in which the market value of the Company's common stock exceeds the exercise price of the options) held by such individuals on March 31, 2000. The value of in-the-money options is based on the difference between the exercise price of such options and the closing price of the Company's common stock on March 31, 2000, which was $5.50. Aggregated Option Exercises in Fiscal 2000 and Year End Option Values
Number of Securities Underlying Unexercised Value of Unexercised In-the- Options at Year End (#) Money Options at Year End ($) Shares --------------------------------- --------------------------------- Acquired on Value Name Exercise(#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable --------------------- --------------- --------------- --------------- --------------- --------------- --------------- Ron Berger 0 0 1,331,024 669,328 (1) 860,697 279,479 F. Kim Cox 5,357 19,317 301,336 110,807 319,880 41,507 Marty Graham 0 0 65,535 28,000 71,985 62,495 Carolyn Pihl 0 0 13,035 17,679 12,320 35,352 Christopher Roberts 0 0 44,850 30,500 42,960 45,620
(1) Effective June 21, 2000, the options granted to Mr. Berger in fiscal 2000 (covering 260,943 shares) were cancelled in their entirety and the options granted to Mr. Berger in fiscal 1999 were cancelled with respect to 243,659 shares. See note 3 to the Summary Compensation Table, above. None of the cancelled options were exercisable as of the end of fiscal 2000. Compensation of Directors The Company compensates directors, other than employees who are directors, for their services by payment of $500 for each in-person board meeting they attend and $500 for each telephone conference board meeting they attend. In addition, each non-employee director is paid an annual board fee of $25,000. The Company also reimburses directors for their travel expenses for each meeting attended in person. On April 1, 2000, each nonemployee director was automatically granted an option to purchase 10,000 shares of the Company's common stock, at an exercise price of $5.375 per share, and each nonemployee Committee Chairman was automatically granted an additional option to purchase 2,500 shares of the Company's common stock at an exercise price of $5.375 per share. All such grants were made under the Company's 1997 Equity Participation Program. Employment Contracts and Termination of Employment and Change-In-Control Arrangements RON BERGER. Effective April 21, 1998, Rentrak entered into a five year employment agreement with Mr. Berger under which Mr. Berger is employed as the Chairman of the board of directors, Chief Executive Officer and President of Rentrak. Under the agreement, Mr. Berger's initial annual base salary was $400,000, subject to increases on April 1 of each year during the term of the agreement equal to the greater of four percent (4%) or the change in the Consumer Price Index for the preceding calendar year. Mr. Berger is also entitled to an annual bonus for each fiscal year equal to five percent (5%) of the amount by which Rentrak's pre-tax profits (as defined in the agreement) for such fiscal year exceed Rentrak's pre-tax profits in the prior fiscal year. If Mr. Berger is terminated for "cause" (as defined in the agreement), he will receive only the full amount of all compensation accrued as of the date of termination. If Mr. Berger is terminated without cause or Mr. Berger terminates his employment for "good reason" (as defined in the agreement), or if Mr. Berger is terminated following a "change of control" or "potential change of control" (both as defined in the agreement), Mr. Berger may elect to receive a severance payment equal to the greater of: (i) the remaining compensation payable under the agreement, with bonus calculated as the greater of the bonus paid with respect to the immediately preceding fiscal year or the average bonus paid for the three immediately preceding fiscal years; or (ii) three times the sum of (a) Mr. Berger's base salary in the fiscal year of termination plus (b) the greater of the bonus paid to Mr. Berger with respect to the immediately preceding fiscal year or the average bonus paid for the three immediately preceding fiscal years. Rentrak believes that the commencement of the Shareholder Group's proxy contest constitutes a "potential change of control" and the election of the Shareholder Group's nominees whereby they constituted a majority of Rentrak's board of directors would constitute a "change of control" under Mr. Berger's employment agreement. The estimated cost to Rentrak if Mr. Berger terminates his employment in response to a change of control or the potential change of control, or if he is involuntarily terminated following a change of control, is approximately $1.32 million. If Mr. Berger is terminated due to his death or disability, he or his estate or legal representative is entitled to receive, in a lump sum, the amount of base salary and bonus accrued through the date of termination plus one year's base salary. The agreement expires on March 31, 2003. F. KIM COX. Effective April 1, 1998, Rentrak entered into a four year employment agreement with Mr. Cox under which he is employed as an Executive Vice President of Rentrak. Under the agreement, Mr. Cox received an annual base salary of $178,500 for the period ending March 31, 1999 and $187,425 for the period ending March 31, 2000, and will receive an annual base salary of $196,796 for the period ending March 31, 2001 and $206,636 for the period ending March 31, 2002. If Mr. Cox terminates his employment within two months following a "change of control" (as defined in the agreement), he is entitled to a severance payment equal to one year's base salary. Rentrak believes that the election of the Shareholder Group's nominees whereby they constituted a majority of Rentrak's board of directors would constitute a "change of control" for the purpose of Mr. Cox's employment agreement. The estimated cost to Rentrak if Mr. Cox were involuntarily terminated following such change of control is approximately $197,000. If Mr. Cox is terminated without "cause" (as defined in the agreement), he is entitled to receive one year's base salary, subject to reduction should Mr. Cox find alternative employment of "comparable status" (as defined in the agreement), or if he does not exercise his best efforts to find such employment of comparable status. If Mr. Cox is terminated for cause, he will receive only the amount of compensation accrued through the date of termination. If Mr. Cox is terminated due to his death or disability, he or his estate or legal representative will receive all compensation accrued as of the date of termination plus a lump sum severance payment equal to 180 days' base salary. The agreement was extended by the board of directors for one year and is now scheduled to expire on March 31, 2003. MARTY GRAHAM. Effective May 17, 1997, Rentrak entered into a five-year employment agreement with Mr. Graham under which he is employed as the Vice President, Product Development. Under the agreement, Mr. Graham receives an annual salary of $130,000, with increases of $10,000 effective April 15 of each year during the term of the agreement. Mr. Graham is also entitled to receive certain cash bonuses for achieving specified objectives and, annually, an option to purchase 5,000 shares of Rentrak common stock. If Mr. Graham is terminated without "cause" (as defined in the agreement) within two years after a "change of control" (as defined in the agreement), or if Mr. Graham terminates his employment for "good reason" (as defined in the agreement), he is entitled to receive the lesser of: (i) his base salary through the end of the agreement; or (ii) one year's base salary during the current fiscal year. Rentrak believes that the election of the Shareholder Group's nominees whereby they constituted a majority of Rentrak's board of directors would constitute a "change in control" for the purpose of Mr. Graham's employment agreement. The estimated cost to Rentrak if Mr. Graham were involuntarily terminated following a change of control is a maximum of approximately $160,000. If Mr. Graham terminates his employment without good reason within two months after a change of control, he is entitled to receive the greater of: (i) one weeks' base salary for each full year he has been employed by Rentrak; or (ii) two months' base salary. If Rentrak otherwise terminates Mr. Graham without cause, he is entitled to receive six months' base salary, subject to reduction should he find other employment or should he not exercise his best efforts to find such other employment. If Mr. Graham is terminated for cause, he will receive only the full amount of his base salary accrued through the date of termination. If Mr. Graham is terminated due to his death, his estate or legal representative will receive the full amount of his base salary accrued through the date of termination, plus severance of ninety (90) days' base salary at the rate in effect on the date of his death. If Mr. Graham is terminated due to disability, he or his legal representative will receive only the full amount of the base salary accrued through the date of termination. During the period of disability, but prior to termination of employment, Mr. Graham will receive all compensation as set forth in the agreement. CAROLYN PIHL. Effective May 6, 1996, Rentrak entered into a five year employment agreement with Ms. Pihl under which she is employed as Rentrak's Chief Accounting Officer. Under the agreement, Ms. Pihl receives an annual salary of $103,000, subject to increases at Rentrak's discretion during the term of the agreement. If Ms. Pihl is terminated without "cause" (as defined in the agreement) within two years after a "change of control" (as defined in the agreement), or if Ms. Pihl terminates her employment for "good reason" (as defined in the agreement), she is entitled to receive the lesser of: (i) her base salary through the end of the agreement; or (ii) six months' base salary. Rentrak believes that the election of the Shareholder Group's nominees whereby they constituted a majority of Rentrak's board of directors would constitute a "change of control" for the purpose of Ms. Pihl's employment agreement. The estimated cost to Rentrak if Ms. Pihl were involuntarily terminated following a change of control is a maximum of approximately $104,000. If Rentrak otherwise terminates Ms. Pihl without cause, she is entitled to receive three months' base salary, subject to reduction should Ms. Pihl find alternative employment of "comparable status" (as defined in the agreement), or if she does not exercise her best efforts to find such employment of comparable status. If Ms. Pihl is terminated for cause, she will receive only the full amount of her base salary accrued through the date of termination. If Ms. Pihl is terminated due to her death or disability, she or her estate or legal representative will receive only the full amount of her base salary accrued through the date of termination. During any period of disability, but prior to termination of employment, Ms. Pihl will receive all compensation as set forth in the agreement. CHRISTOPHER ROBERTS. Effective October 27, 1997, Rentrak entered into a five-year employment agreement with Mr. Roberts under which he is employed as Rentrak's Vice President, Sales. Under the agreement, Mr. Roberts received an initial base salary of $130,000, subject to increases of $5,000 on April 15 of each year during the term of the agreement. If Mr. Roberts is terminated without "cause" (as defined in the agreement) within two years after a "change of control" (as defined in the agreement), or if Mr. Roberts terminates his employment for "good reason" (as defined in the agreement), he is entitled to receive the lesser of: (i) his base salary through the end of the agreement; or (ii) one year's base salary during the current fiscal year. If Mr. Roberts terminates his employment without good reason within two months after a change of control, he is entitled to receive the greater of: (i) one weeks' base salary for each full year of his employment by Rentrak; or (ii) two months' base salary. Rentrak believes that the election of the Shareholder Group's nominees whereby they constituted a majority of Rentrak's board of directors would constitute a "change of control" for the purpose of Mr. Roberts' employment agreement. The estimated cost to Rentrak if Mr. Roberts were involuntarily terminated following a change of control is approximately $140,000. The estimated cost to Rentrak if Mr. Roberts terminates his employment without good reason following a change of control is a maximum of approximately $32,300. If Rentrak otherwise terminates Mr. Roberts without cause, he is entitled to receive six months' base salary, subject to reduction should he find other employment or should he not exercise his best efforts to find such other employment. If Mr. Roberts is terminated for cause, he will receive only the full amount of his base salary accrued through the date of termination. If Mr. Roberts is terminated due to his death, his estate or legal representative will receive the full amount of his base salary accrued through the date of termination, plus severance of ninety (90) days' base salary at the rate in effect on the date of his death. If Mr. Roberts is terminated due to disability, he or his legal representative will receive only the full amount of the base salary accrued through the date of termination. During the period of disability, but prior to termination of employment, Mr. Roberts will receive all compensation as set forth in the agreement. Compensation Committee Interlocks and Insider Participation From the beginning of fiscal 2000 through August 23, 1999, the Compensation Committee was comprised of Skipper Baumgarten, Herbert Fischer and Bill LeVine. Mr. Fischer resigned from the board of directors effective August 23, 1999, and was subsequently replaced on the Compensation Committee by Takaaki Kusaka. Ron Berger is a director of American Contractors Indemnity Co., a company for which Skipper Baumgarten serves as Chief Executive Officer. Ron Berger is also Chairman of the board of directors of Rentrak Japan, a company for which Takaaki Kusaka serves as President. 9 Item 12. Security Ownership of Certain Beneficial Owners and Management The following table sets forth, as of June 20, 2000, certain information regarding the beneficial ownership of the Company's common stock by (i) each person believed by the Company to be the beneficial owner of five percent (5%) or more of the Company's outstanding shares of common stock, (ii) each director of the Company, (iii) the Company's Chief Executive Officer and the next four most highly compensated executive officers during the last completed fiscal year who were serving as executive officers at the end of the fiscal year (the "Named Executive Officers") and (iv) the directors and the executive officers as a group.
Shares Beneficially Owned - -------------------------------------------------------------- ---------------------------------------------------- Directors, Executive Officers and 5% Shareholders (1) Number (2) Percentage (2) - -------------------------------------------------------------- ----------------------- ----------------------- Peter Balner 67,250 (3) * Pradeep Batra 24,500 (4) * Skipper Baumgarten 70,000 (5) * Ron Berger 1,759,366 (6) 14.32% F. Kim Cox 350,424 2.85% Marty Graham 72,539 (7) * James Jimirro 45,566 (8) * Takaaki Kusaka 0 * Bill LeVine 457,511 (9) 3.72% Muneaki Masuda 1,039,839 (10) 8.44% Carolyn Pihl 19,464 (11) * Christopher Roberts 48,856 (12) * Stephen Roberts 109,663 (13) * * All executive officers and directors as a group (17 persons) 4,334,307 (14) 33.74% Culture Convenience Club Co., Ltd. 390,000 (15) 3.17% 1-4-70 Shiromi, 16th Floor Chuo-ku, Osaka 540, Japan Rentrak Japan, K.K. 614,000 (16) 5.00% 4-20-3 Ebisu Shibuya-Ku, Tokyo 150, Japan Walt Disney Company 1,543,203 (17) 11.16% 500 South Buena Vista St. Burbank, CA Committee for the Achievement of Rentrak Excellence 1,119,480 (18) 9.10% 6656 Penninsula Way Laingsburg, MI 48848 * Less than 1%
(1) The address of all Directors and executive officers is the Company's address: One Airport Center, 7700 N.E. Ambassador Place, Portland, Oregon 97220. (2) All percentages have been calculated based on the number of shares of the Company's common stock that were issued and outstanding as of June 20, 2000. In accordance with SEC regulations, the number of shares and percentage calculation with respect to each shareholder assumes the exercise of all outstanding options such shareholder holds and that can be exercised within 60 days after the date of this proxy statement. (3) Includes 26,250 shares of common stock subject to options exercisable within 60 days of the date of the table. 10 (4) Includes 10,000 shares of common stock subject to options exercisable within 60 days of the date of the table. (5) Includes 10,000 shares of common stock subject to options exercisable within 60 days of the date of the table. (6) Includes 43,200 shares held by Mr. Berger's parents, with respect to which Mr. Berger disclaims beneficial ownership. (7) Includes 72,535 shares of common stock subject to options exercisable within 60 days of the date of the table. (8) Includes 22,646 shares of common stock subject to options exercisable within 60 days of the date of the table. (9) Includes 10,000 shares of common stock subject to options exercisable within 60 days of the date of the table. (10) Mr. Masuda is an officer and controlling shareholder of Culture Convenience Club Co., Ltd. and So-Tsu Company. So-Tsu Company and Mr. Masuda are controlling shareholders of Rentrak Japan, K.K. Includes 390,000 shares owned by Culture Convenience Club, Ltd. and 614,000 shares owned by Rentrak Japan, K.K. Also includes 35,839 shares of common stock exercisable within 60 days of the date of this table. (11) Includes 19,464 shares of common stock subject to options exercisable within 60 days of the date of the table. (12) Includes 47,558 shares of common stock subject to options exercisable within 60 days of the date of the table. (13) Includes 59,281 shares of common stock subject to options exercisable within 60 days of the date of the table. (14) Includes 555,114 shares of common stock subject to options exercisable within 60 days of the date of the table. (15) As indicated in footnote 10 to this table, these shares are beneficially owned by Muneaki Masuda, a director of the Company and controlling shareholder of Culture Convenience Club Co., Ltd. (16) As indicated in footnote 10 to this table, these shares are beneficially owned by Muneaki Masuda, a director of the Company and controlling shareholder of Rentrak Japan, K.K. (17) Includes 1,543,203 shares of common stock subject to warrants that are exercisable within 60 days of the date of this table. (18) Based on information set forth in the Amendment No. 2 to Schedule 13D, filed on July 5, 2000 by the Committee for the Achievement of Rentrak Excellence. According to the Schedule 13D, Cecil D. Andrus (1,000 shares), Michael Annechino (97,400 shares), Mark A. Brown (119,550 shares), Thomas S. Cousins, Jr. (65,000 shares), George H. Kuper (0 shares), Joon S. Moon (1,000 shares), James G. Petcoff (11,500 shares), Gordon A. Reck (67,000 shares), Donald W. Remlinger (75,000 shares), Paul Rosenbaum (250,730 shares), David R. Rosencrantz (63,700 shares), Guy R. Wolcott (287,000 shares), and Frederick L. Zehnder (80,600 shares), collectively, are the beneficial owners of 1,119,480 shares. According to the Schedule 13D, the foregoing persons may be deemed to be part of a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934. Item 13. Certain Relationships and Transactions Stephen Roberts, a stockholder and a member of the Company's board of directors, provided general consulting services to the Company during fiscal 2000, for which he received $142,181. The Company does not plan to continue to use Mr. Roberts as a general consultant during fiscal 2001. In April 2000, the Company entered into an agreement with the S. Roberts Company, a Delaware corporation owned by Mr. Roberts, to assist the Company in the exploration of the possible sale of part or all of the Company's PPT video distribution and information processing business to one or more major motion picture studios, exploring certain strategic dispositions of assets. In the event of successful implementation of this strategy, Mr. Roberts would receive a success fee equal to two percent (2%) of the total consideration paid, but not less than $200,000. This agreement will expire on December 31, 2000. Dr. Pradeep Batra, a member of the Company's board of directors, is the President and controlling shareholder of Unique Business Systems ("UBS"). In addition to other business activities, UBS develops and sells point-of-sale ("POS") software that retail video stores use to track rental and sale activity. The Company and UBS have entered into various agreements pursuant to which, among other things: (i) they agree to cooperate to make 11 UBS's POS software compatible with the Company's PPT system; (ii) the Company agrees to pay a commission for each PPT customer referred by UBS; and (iii) UBS agrees to share software maintenance fees with the Company relating to a 1995 transaction in which UBS purchased certain assets from the Company. In addition, Rentrak UK, a subsidiary of the Company that distributes videocassettes in the United Kingdom, is party to a POS software agreement with UBS, and BlowOut Video, Inc., a wholly owned subsidiary of the Company that owns and operates a chain of retail video stores and a retail video Web site, purchased computer hardware and a POS software system from UBS. During fiscal 2000, the Company paid UBS an aggregate of $62,000, Rentrak UK paid UBS an aggregate of $70,000, and BlowOut Video, Inc. paid UBS an aggregate of $80,678. Muneaki Masuda, a member of the Company's board of directors, holds a controlling interest in So-Tsu Company, which in turn holds a controlling interest in CCC and Rentrak Japan. Pursuant to an agreement between the Company and Rentrak Japan, Rentrak Japan pays the Company an annual royalty, based on a June 1 to May 31 royalty year, equal to one and sixty-seven hundredths percent (1.67%) of the first $47.9 million of Rentrak Japan's sales and one-half of one percent (.5%) of Rentrak Japan's sales in excess of such amount. In fiscal 2000, Rentrak Japan paid the Company a total of approximately $4 million in royalty fees, which amount included an advance royalty payment of $2.5 million and a on time royalty payment of $480,000. The $2.5 million advance payment will offset $4 million of future royalties. Of the $2.5 million advance royalty fees, approximately $1.6 million has been recorded as deferred revenue to be recognized in future periods. In August 1999, the Company and Rentrak Japan formed Rentrak International, LLC, an Oregon limited liability company, for the purpose of developing the PPT system in certain international markets. The Company and Rentrak Japan each contributed US$180,000 to Rentrak International during fiscal 2000, as well as the development rights to the PPT system in certain countries, excluding the United States, Canada, the United Kingdom, Ireland, Brazil, and Japan. Rentrak Japan and the Company each own a fifty percent (50%) membership interest in Rentrak International, and profits and losses are allocated equally between the two parties. During the Company's last fiscal year, Rentrak Japan loaned (Yen)120 million (approximately US$200,000) to Rentrak UK. The loan is non-interest bearing and is due on March 31, 2001. During the term of the loan, Rentrak Japan is entitled to 10% of the Company's share of Rentrak UK royalties. No such share of royalties was earned by or paid to Rentrak Japan during the Company's last fiscal year. In August 1999, Bill LeVine, a member of the Company's board of directors, provided a line of credit to BlowOut Video Holding Company ("Borrower"), a wholly-owned subsidiary of the Company, in the principal amount of up to $3 million (the "Loan"), of which Borrower borrowed $500,000 during its last fiscal year. The largest outstanding principal amount of the Loan during fiscal 2000 was $500,000. The Loan bears interest at the prime rate plus one and one-half percent (1.5%) and Borrower paid Mr. LeVine $17,860 in interest during the Company's last fiscal year. Borrower paid Mr. LeVine a $30,000 loan origination fee and $12,500 in closing costs in connection with the Loan. The Loan is secured by all of Borrower's assets and is due and payable three years from the date of execution of the Loan and Security Agreement. In consideration of a $4 million unsecured note payable with Bill LeVine, of which approximately $2.5 million was used to fund the operations of the Company's wholly-owned subsidiary, 3PF.COM, Inc. ("3PF"), 3PF issued a warrant to Mr. LeVine to purchase 14,814 shares of 3PF common stock at an exercise price of $6.75 per share. The exercise period for the warrant commenced on November 29, 1999 and expires on November 30, 2000. The Note payable carried interest at the rate of ten percent (10%), payable monthly, and the largest outstanding principal amount of the note during fiscal 2000 was $4 million. The Company paid Mr. LeVine $310,278 in interest in connection with this note payable during the Company's last fiscal year. The note was paid in its entirety in January 2000. In June 2000, the board of directors approved an offer to make loans available to those officers of the Company who were under an employment contract for the purpose of allowing them to exercise their vested, unexercised "out of the money" employee stock options. The purpose of this program was to enable executives to exercise certain of their options and thereby hold shares resulting from the exercise of such options in advance of a possible spin-off or split-up of 3PF, and to enhance Rentrak's efforts to retain its key employees. The vested option program was initially proposed to the Compensation Committee in March 2000, approved by the Compensation Committee in April 2000, and approved by the board of directors in May 2000. The loans under this program bear interest at the federal funds rate in effect on the date of the loan and interest is payable annually. The principal amount of the loan is due on the earliest to occur of: (1) one year prior to the expiration of the term of the borrower's current employment agreement with the Company, (2) one year after borrower leaves the Company's employment unless such departure follows a "change of 12 control" (as defined in the loan agreements), (3) five years from the date of the loan, or (4) one year from the date of the borrower's death. The loans are secured by the stock purchased upon the exercise of the options. The loans are without recourse (except as to the stock securing the loans) as to principal and are with full recourse against the borrower as to interest. The offer to make these loans expires September 30, 2000. On June 16, 2000, two officers, Ron Berger and Kim Cox, accepted this offer and obtained loans from the Company. Mr. Berger entered into a loan agreement, promissory note in the amount of $6,629,386.00 and stock pledge agreement in connection with his exercise of options to purchase 1,362,008 shares of common stock. Mr. Cox entered into a loan agreement, promissory note in the amount of $1,468,250.42 and stock pledge agreement in connection with his exercise of options to purchase 301,518 shares of common stock. Because the loan proceeds were immediately used to pay the exercise price of the options to the Company, there was no net outflow of cash from the Company in connection with these loans. As a result of these loans and the option exercises, Messrs. Berger and Cox will be able to vote the acquired shares at the annual meeting. As of July 26, 2000, no other officers have elected to accept loans under the program. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. RENTRAK CORPORATION (Registrant) July 31, 2000 By: /s/ F. Kim Cox - ------------- ------------------ Date F. Kim Cox, President, Chief Financial Officer, Secretary and Treasurer (Principal Financial and Accounting Officer) 13 EXHIBIT INDEX The Exhibit Index to the Form 10-K is hereby amended by adding the following exhibits, which are attached to this Amendment No. 1 on Form 10-K/A.
Exhibit Exhibit Page Number 3.5 Amendment No. 3 to Rentrak's 1995 Restated Bylaws 14 10.33* Stock Pledge Agreement executed by Ron Berger, dated June 16, 2000 15 10.34* Stock Pledge Agreement executed by F. Kim Cox, dated June 16, 2000 20 10.35* Loan Agreement with Ron Berger, dated June 16, 2000 25 10.36* Loan Agreement with F. Kim Cox, dated June 16, 2000 29 10.37* Amendment to 1997 Equity Participation Plan 33 * Management Contract
EX-3.5 2 0002.txt AMENDMENT 3 TO THE 1995 RESTATED BYLAWS Exhibit 3.5 Exhibit (3)(ii) AMENDMENT NUMBER 3 TO THE 1995 RESTATED BYLAWS OF RENTRAK CORPORATION WHEREAS, Section 3.2 of the Company's 1995 Restated Bylaws (the "Bylaws") currently provides that the number of directors shall range from three (3) to nine (9), with the specific number to be established by resolution of the Board of Directors; WHEREAS, Section 3.2 of the Bylaws further provides that, as long as there are six or more directors, the directors shall be divided into three classes as nearly equal in number as possible, and that the directors in each class shall serve staggered three (3) year terms; and WHEREAS, the Board of Directors desires to amend Section 3.2 of the Bylaws to eliminate the provision regarding classification of directors and staggered terms. NOW THEREFORE, Section 3.2 of the Bylaws be, and it hereby is, amended in its entirety to read as follows: Section 3.2 Number, Tenure and Qualifications. ----------------------------------------------- The number of directors of the corporation shall be not less than three or more than nine, with the number of directors to be established by resolution of the Board of Directors. A director shall hold office until the annual meeting of shareholders for the year in which his or her term expires or until his or her successor is elected and qualified, or until death, resignation or removal. /s/ F. Kim Cox - ----------------------------------- F. Kim Cox, President and Secretary EX-10.33 3 0003.txt STOCK PLEDGE AGMT BY RON BERGER, JUNE 16, 2000 EXHIBIT 10.33 STOCK PLEDGE AGREEMENT DATE: June 16, 2000 BETWEEN: Ron Berger (Pledgor) AND: Rentrak Corporation ("Secured Party" or "Company") RECITALS A. Pledgor and Secured Party entered into a Loan Agreement of even date herewith (the "Loan Agreement"), wherein the Secured Party agreed to loan funds to Pledgor to exercise certain options to purchase stock of the Company, and Pledgor agreed to execute and deliver a Promissory Note to the Secured Party in payment therefor, a copy of which is attached to the Loan Agreement as Exhibit A (the "Note"). B. Pledgor agreed within the Loan Agreement to grant Secured Party a security interest in the shares of the common stock of the Company that Pledgor purchased with the proceeds of the Note (the "Shares" or "Pledged Shares"), to secure payment of Pledgor's obligations under the Loan Agreement and the Note. NOW, THEREFORE, in order to secure payment of the Note, the parties agree as follows: AGREEMENT 1. Grant of Security Interest. Pledgor grants to Secured Party a first priority security interest in the Shares. 2. Obligations. The obligations secured by this Agreement are the obligations of Pledgor on the Note, the Loan Agreement and this Agreement, including the obligation to make all payments on the Note. 3. Delivery of Certificates for Pledged Shares. Pledgor has delivered to Secured Party one or more stock certificates evidencing the Pledged Shares (the "Certificates"), together with a stock power endorsed in blank, to hold subject to the terms of this Agreement. 4. Care of Certificates. Secured Party shall take reasonable care in the custody and the preservation of the Certificates. On performance in full of all obligations secured by this Agreement, Secured Party shall deliver the Certificates to Pledgor, together with the stock power endorsed by Pledgor in blank. Page 1 - STOCK PLEDGE AGREEMENT 5. Covenants of Pledgor with Respect to Pledged Shares. Pledgor agrees that: (a) Pledgor shall not allow or grant any other lien or security interest with respect to the Pledged Shares. (b) Pledgor shall procure, execute, and deliver from time to time any endorsements, assignments, financing statements, and other writings deemed necessary or appropriate by Secured Party to perfect, maintain, and protect Secured Party's security interest and priority in the Pledged Shares. 6. Authorized Action by Secured Party; Proxy. Pledgor irrevocably appoints Secured Party as attorney-in-fact and grants Secured Party a proxy to do (but Secured Party shall not be obligated to, and shall incur no liability to, Pledgor or any third party for failure to, do so), after and during the continuance of an Event of Default (as defined in Section 8, below), any act that Pledgor is obligated by this Agreement to do and to exercise such rights and powers as Pledgor might exercise with respect to the Pledged Shares. With respect to voting the Pledged Shares, this Section 6 constitutes an irrevocable appointment of a proxy, coupled with an interest, which shall continue until all obligations secured hereunder are performed in full, provided, however, Secured Party shall have no rights under such proxy unless and until there is an occurrence of an Event of Default by Pledgor hereunder. 7. Voting Pledged Shares; Custody of Certificates. (a) As long as no Event of Default (as defined in Section 8, below) shall have occurred, and further subject to the other provisions of this Agreement, Pledgor shall be entitled to vote the Pledged Shares. (b) If at any time or from time to time, with respect to the Pledged Shares, Pledgor shall receive or shall become entitled to receive any dividend, warrant, option, or any other distribution (including bonus payments as discussed in the Loan Agreement), whether in securities or other property, for any reason, including without limitation, liquidation, stock split, spin-off, split-up or reclassification, combination of shares, or the like, or in case of any reorganization, consolidation, or merger, Pledgor shall immediately deliver all such dividends or other distribution, in pledge, to Secured Party as security for the payment and performance of the obligations secured by this Agreement. Pledgor shall immediately notify the Company to make all such distributions directly to Secured Party. Secured Party may endorse, in Secured Party's name or in the name of Pledgor, any and all instruments by which any payment on the Pledged Shares may be made and may take such action as Secured Party may deem appropriate from time to time, in Secured Party's name or in the name of Pledgor, to enforce collection of the Pledged Shares. For such purpose, Pledgor appoints Secured Party the attorney-in-fact of Pledgor, under a power coupled with an interest, with full power of substitution. Page 2 - STOCK PLEDGE AGREEMENT (c) So long as the obligations secured by this Agreement remain outstanding, Pledgor will not transfer, whether by sale, gift, or otherwise, any ownership interest in the Shares without Secured Party's prior written approval. 8. Events of Default. Any one or more of the following events constitutes an event of default under this Agreement ("Event of Default"): (a) The occurrence of an Event of Default under the Loan Agreement, as such term is defined in the Loan Agreement, specifically including, without limitation, failure of the Pledgor to comply with any term or condition of, or fulfill any of Pledgor's obligations under, the Note attached as an Exhibit to the Loan Agreement within the applicable cure periods, if any, set forth therein. (b) A breach of or failure to perform any of the terms of this Agreement, which has not been cured within 5 days after notice has been given of such breach or failure, including, without limitation, the covenants contained in this Agreement. 9. Remedies Upon Default. Upon the occurrence of any Event of Default by Pledgor, Secured Party may, in Secured Party's sole discretion, take the following steps: (a) Secured Party may foreclose on its security interest in the Pledged Shares in accordance with the Oregon Uniform Commercial Code, provided, however, in no event shall Pledgor be personally liable for any Principal Deficiency (such term meaning that portion of the Note balance attributable to principal (but not to interest) under the terms of the Note and Loan Agreement) in any action or suit to foreclose on Secured Party's security interest in the Pledged Shares, or any deficiency resulting from the sale of the Pledged Shares, nor shall any action or proceeding be brought against Pledgor to recover judgment against Pledgor upon any outstanding obligations or liabilities of Pledgor under the Loan Agreement or any of the Agreements attached as Exhibits thereto; and (b) Pursue any other remedy available at law or equity to recover any sums other than a Principal Deficiency. 10. Limited Recourse. Notwithstanding any provision express or implied herein to the contrary, in the event of the occurrence of an Event of Default by Pledgor hereunder, including a default by Pledgor in the payment of principal, on the Note, Pledgor shall not be personally liable therefor and Secured Party's sole remedy for such default shall be limited to the remedies set forth in Section 9 above. This Agreement and the Note are non-recourse to Pledgor with respect to Principal Deficiencies, but not with respect to payment of interest. In no event shall Pledgor be personally liable for any Principal Deficiency in any action or suit to foreclose on Secured Party's security interest in the Pledged Shares. Page 3 - STOCK PLEDGE AGREEMENT 11. Miscellaneous. 11.1 Entire Agreement; Amendment. This document and the documents referenced herein are the entire, final and complete Agreement and understanding of the parties with respect to the subject manner hereof, and supersedes and replaces all written and oral agreements and understandings heretofore made or existing by and between the parties or their representatives with respect thereto. No supplement, modification or amendment of this Agreement shall be valid, unless the same is in writing and signed by all parties hereto. 11.2 Waiver. No waiver of any provision of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 11.3 Binding Effect. All rights, remedies and liabilities herein given to or imposed upon the parties shall extend to, inure to the benefit of and bind, as the circumstances may require, the parties and their respective heirs, personal representatives, administrators, successors and assigns. 11.4 Notices. Any notice or other communication required or permitted under this Agreement shall be in writing and shall be deemed given on the date of transmission when sent by telex or facsimile transmission, on the third business day after the date of mailing when mailed by certified mail, postage prepaid, return receipt requested, from within the United States, or on the date of actual delivery, whichever is the earliest, and shall be sent to the following addresses, or to such other address as any party may hereafter designate by written notice to the others: Secured Party Pledgor ------------- ------- Rentrak Corporation Ron Berger One Airport Center 20929 SE Tillstrom Road 7700 N.E. Ambassador Place Gresham, Oregon 97030 Portland, Oregon 97220 11.5 Severability. If any portion of this Agreement or its application is construed to be invalid, illegal or unenforceable, then the other portions of the Agreement or its application thereof shall not be affected thereby and shall be given full force and effect without regard to the invalid or unenforceable portions. 11.6 Attorney's Fees. In the event any suit, action or other legal proceeding shall be instituted to declare or enforce any right created by this Agreement, or by reason of any breach of this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees as fixed by the trial court and all appellate courts. Page 4 - STOCK PLEDGE AGREEMENT 11.7 Governing Law. This Agreement shall be governed, construed and enforced in accordance with the laws of the State of Oregon, excluding its conflict of law principles. 11.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed in duplicate as of the day and year first above written. PLEDGOR: ---------------------------------------- Name: Ron Berger SECURED PARTY: RENTRAK CORPORATION By: F. Kim Cox Title: President Page 5 - STOCK PLEDGE AGREEMENT EX-10.34 4 0004.txt STOCK PLEDGE AGREEMENT BY KIM COX, JUNE 16, 2000 EXHIBIT 10.34 STOCK PLEDGE AGREEMENT DATE: June 16, 2000 BETWEEN: F. Kim Cox (Pledgor) AND: Rentrak Corporation ("Secured Party" or "Company") RECITALS A. Pledgor and Secured Party entered into a Loan Agreement of even date herewith (the "Loan Agreement"), wherein the Secured Party agreed to loan funds to Pledgor to exercise certain options to purchase stock of the Company, and Pledgor agreed to execute and deliver a Promissory Note to the Secured Party in payment therefor, a copy of which is attached to the Loan Agreement as Exhibit A (the "Note"). B. Pledgor agreed within the Loan Agreement to grant Secured Party a security interest in the shares of the common stock of the Company that Pledgor purchased with the proceeds of the Note (the "Shares" or "Pledged Shares"), to secure payment of Pledgor's obligations under the Loan Agreement and the Note. NOW, THEREFORE, in order to secure payment of the Note, the parties agree as follows: AGREEMENT 1. Grant of Security Interest. Pledgor grants to Secured Party a first priority security interest in the Shares. 2. Obligations. The obligations secured by this Agreement are the obligations of Pledgor on the Note, the Loan Agreement and this Agreement, including the obligation to make all payments on the Note. 3. Delivery of Certificates for Pledged Shares. Pledgor has delivered to Secured Party one or more stock certificates evidencing the Pledged Shares (the "Certificates"), together with a stock power endorsed in blank, to hold subject to the terms of this Agreement. 4. Care of Certificates. Secured Party shall take reasonable care in the custody and the preservation of the Certificates. On performance in full of all obligations secured by this Agreement, Secured Party shall deliver the Certificates to Pledgor, together with the stock power endorsed by Pledgor in blank. Page 1 - STOCK PLEDGE AGREEMENT 5. Covenants of Pledgor with Respect to Pledged Shares. Pledgor agrees that: (a) Pledgor shall not allow or grant any other lien or security interest with respect to the Pledged Shares. (b) Pledgor shall procure, execute, and deliver from time to time any endorsements, assignments, financing statements, and other writings deemed necessary or appropriate by Secured Party to perfect, maintain, and protect Secured Party's security interest and priority in the Pledged Shares. 6. Authorized Action by Secured Party; Proxy. Pledgor irrevocably appoints Secured Party as attorney-in-fact and grants Secured Party a proxy to do (but Secured Party shall not be obligated to, and shall incur no liability to, Pledgor or any third party for failure to, do so), after and during the continuance of an Event of Default (as defined in Section 8, below), any act that Pledgor is obligated by this Agreement to do and to exercise such rights and powers as Pledgor might exercise with respect to the Pledged Shares. With respect to voting the Pledged Shares, this Section 6 constitutes an irrevocable appointment of a proxy, coupled with an interest, which shall continue until all obligations secured hereunder are performed in full, provided, however, Secured Party shall have no rights under such proxy unless and until there is an occurrence of an Event of Default by Pledgor hereunder. 7. Voting Pledged Shares; Custody of Certificates. (a) As long as no Event of Default (as defined in Section 8, below) shall have occurred, and further subject to the other provisions of this Agreement, Pledgor shall be entitled to vote the Pledged Shares. (b) If at any time or from time to time, with respect to the Pledged Shares, Pledgor shall receive or shall become entitled to receive any dividend, warrant, option, or any other distribution (including bonus payments as discussed in the Loan Agreement), whether in securities or other property, for any reason, including without limitation, liquidation, stock split, spin-off, split-up or reclassification, combination of shares, or the like, or in case of any reorganization, consolidation, or merger, Pledgor shall immediately deliver all such dividends or other distribution, in pledge, to Secured Party as security for the payment and performance of the obligations secured by this Agreement. Pledgor shall immediately notify the Company to make all such distributions directly to Secured Party. Secured Party may endorse, in Secured Party's name or in the name of Pledgor, any and all instruments by which any payment on the Pledged Shares may be made and may take such action as Secured Party may deem appropriate from time to time, in Secured Party's name or in the name of Pledgor, to enforce collection of the Pledged Shares. For such purpose, Pledgor appoints Secured Party the attorney-in-fact of Pledgor, under a power coupled with an interest, with full power of substitution. Page 2 - STOCK PLEDGE AGREEMENT (c) So long as the obligations secured by this Agreement remain outstanding, Pledgor will not transfer, whether by sale, gift, or otherwise, any ownership interest in the Shares without Secured Party's prior written approval. 8. Events of Default. Any one or more of the following events constitutes an event of default under this Agreement ("Event of Default"): (a) The occurrence of an Event of Default under the Loan Agreement, as such term is defined in the Loan Agreement, specifically including, without limitation, failure of the Pledgor to comply with any term or condition of, or fulfill any of Pledgor's obligations under, the Note attached as an Exhibit to the Loan Agreement within the applicable cure periods, if any, set forth therein. (b) A breach of or failure to perform any of the terms of this Agreement, which has not been cured within 5 days after notice has been given of such breach or failure, including, without limitation, the covenants contained in this Agreement. 9. Remedies Upon Default. Upon the occurrence of any Event of Default by Pledgor, Secured Party may, in Secured Party's sole discretion, take the following steps: (a) Secured Party may foreclose on its security interest in the Pledged Shares in accordance with the Oregon Uniform Commercial Code, provided, however, in no event shall Pledgor be personally liable for any Principal Deficiency (such term meaning that portion of the Note balance attributable to principal (but not to interest) under the terms of the Note and Loan Agreement) in any action or suit to foreclose on Secured Party's security interest in the Pledged Shares, or any deficiency resulting from the sale of the Pledged Shares, nor shall any action or proceeding be brought against Pledgor to recover judgment against Pledgor upon any outstanding obligations or liabilities of Pledgor under the Loan Agreement or any of the Agreements attached as Exhibits thereto; and (b) Pursue any other remedy available at law or equity to recover any sums other than a Principal Deficiency. 10. Limited Recourse. Notwithstanding any provision express or implied herein to the contrary, in the event of the occurrence of an Event of Default by Pledgor hereunder, including a default by Pledgor in the payment of principal, on the Note, Pledgor shall not be personally liable therefor and Secured Party's sole remedy for such default shall be limited to the remedies set forth in Section 9 above. This Agreement and the Note are non-recourse to Pledgor with respect to Principal Deficiencies, but not with respect to payment of interest. In no event shall Pledgor be personally liable for any Principal Deficiency in any action or suit to foreclose on Secured Party's security interest in the Pledged Shares. Page 3 - STOCK PLEDGE AGREEMENT 11. Miscellaneous. 11.1 Entire Agreement; Amendment. This document and the documents referenced herein are the entire, final and complete Agreement and understanding of the parties with respect to the subject manner hereof, and supersedes and replaces all written and oral agreements and understandings heretofore made or existing by and between the parties or their representatives with respect thereto. No supplement, modification or amendment of this Agreement shall be valid, unless the same is in writing and signed by all parties hereto. 11.2 Waiver. No waiver of any provision of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 11.3 Binding Effect. All rights, remedies and liabilities herein given to or imposed upon the parties shall extend to, inure to the benefit of and bind, as the circumstances may require, the parties and their respective heirs, personal representatives, administrators, successors and assigns. 11.4 Notices. Any notice or other communication required or permitted under this Agreement shall be in writing and shall be deemed given on the date of transmission when sent by telex or facsimile transmission, on the third business day after the date of mailing when mailed by certified mail, postage prepaid, return receipt requested, from within the United States, or on the date of actual delivery, whichever is the earliest, and shall be sent to the following addresses, or to such other address as any party may hereafter designate by written notice to the others: Secured Party Pledgor ------------- ------- Rentrak Corporation F. Kim Cox One Airport Center 8636 SE 141st Court 7700 N.E. Ambassador Place Portland, Oregon 97236 Portland, Oregon 97220 11.5 Severability. If any portion of this Agreement or its application is construed to be invalid, illegal or unenforceable, then the other portions of the Agreement or its application thereof shall not be affected thereby and shall be given full force and effect without regard to the invalid or unenforceable portions. 11.6 Attorney's Fees. In the event any suit, action or other legal proceeding shall be instituted to declare or enforce any right created by this Agreement, or by reason of any breach of this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees as fixed by the trial court and all appellate courts. Page 4 - STOCK PLEDGE AGREEMENT 11.7 Governing Law. This Agreement shall be governed, construed and enforced in accordance with the laws of the State of Oregon, excluding its conflict of law principles. 11.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed in duplicate as of the day and year first above written. PLEDGOR: ---------------------------------------- Name: F. Kim Cox SECURED PARTY: RENTRAK CORPORATION By: Ron Berger Title: Chairman & Chief Executive Officer Page 5 - STOCK PLEDGE AGREEMENT EX-10.35 5 0005.txt LOAN AGREEMENT WITH RON BERGER, JUNE 16, 2000 EXHIBIT 10.35 LOAN AGREEMENT THIS AGREEMENT is entered into this 16th day of June, 2000, by and between Rentrak Corporation ("Lender"), and Ron Berger ("Borrower"). Recitals WHEREAS, Borrower wishes to borrow funds from Lender on a limited-recourse basis, under the terms and conditions set forth in this Agreement, for the purpose of exercising certain "out of the money" stock options for the common stock of Rentrak Corporation ("Rentrak") pursuant to the Rentrak 2000 Employee Loan/Option Program (the "Rentrak Stock"); and WHEREAS, Lender, having determined that a loan for such purpose would be in furtherance of Lender's best interests, is willing to loan to Borrower such funds, in the amount of Six Million, Six Hundred Twenty Nine Thousand, Three Hundred Eighty Six Dollars and One Cent Dollars ($6,629,386.01) (the "Loan Funds"), under the terms and conditions set forth in this Agreement and the exhibits hereto; and WHEREAS, Lender wishes to clarify and confirm that Borrower shall be under no obligation to repay the principal portion of the Loan beyond the amount of funds received by Borrower or Lender pursuant to the sale of the Rentrak Stock which is purchased with the Loan Funds; and WHEREAS, Lender has simultaneously executed a Pledge Agreement and Promissory Note which provide for this Loan Agreement; NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows: Agreement 1. Loan. Upon the effective date of this Agreement specified above, Lender agrees to loan Borrower Six Million, Six Hundred Twenty Nine Thousand, Three Hundred Eighty Six Dollars and One Cent Dollars ($6,629,386.01) (the "Loan"). The Loan shall be evidenced by a Promissory Note in the form attached hereto as Exhibit "A". The Loan may be advanced in one or more disbursements, each of which shall be made upon Borrower's application to Lender for advances, as set forth below: Rentrak Corporation will issue a loan (or several loans, but not more than five (5)) to Borrower in an amount not more than the amount required for Borrower to purchase from Rentrak as many of your unexercised but fully vested "out of the money" Employee Stock Options ("ESO's") as Borrower wishes to exercise at the time. Example: You have an option for 100 shares of Rentrak, at a price of $6 per share, of which 60 shares are vested and 40 are not. On the day you borrow, the Rentrak common stock is trading at a price of $5.00. Consequently, your $6.00 stock option is "out of the money." We will lend you $360.00, if you wish to exercise the entire 60 share Page 1 - LOAN AGREEMENT option, or $300.00 if you wish to exercise only 50 shares and so on. You may also use a portion of your own funds to exercise the option. In the previous example where you were exercising only 50 shares, you could borrow $200 and combine it with $100 of your own funds to exercise the option. 2. Term. The principal of the Loan will be due in one balloon payment on the earliest to occur of : (a) One year prior to the expiration of the term of Borrower's current employment agreement with Rentrak; or (b) One (1) year after Borrower leaves Rentrak's employ for any other reason (unless such departure follows a Change in Control of Rentrak (as defined below, in which event this subsection 2(b) shall not be applicable); or (c) Five years from the date of the Loan; or (d) One year from the date of Borrower's death. Such date may be called the Maturity Date. 3. Interest. The Loan shall accrue interest at the federal funds interest rate in effect on the date of the Loan. Interest will be payable annually on the anniversary date of the Loan. 4. Security. The Loan shall be secured by a Pledge Agreement in the form attached hereto as Exhibit B encumbering all of the Rentrak Shares purchased with the proceeds of the Loan. 5. Payment. Payments shall be applied first to interest and then to unpaid principal. Payments shall continue until the earlier of the time at which all of the Loan has been repaid, together with interest, or the Maturity Date, whichever first occurs. 6. Limited-Recourse. The Loan shall be without recourse to Borrower except as expressly set forth in Section 9 below. 7. Event of Default. The following events shall be deemed events of default under this Agreement and, if such events occur, Lender may pursue those rights and remedies set forth herein and in the Note and Pledge Agreement. The events of default are: 7.1 Borrower's failure to pay any sums due under the Note when and as due; and 7.2 Any other default under this Agreement, the Note or the Pledge Agreement. 8. Bonus Payments. From time to time, Rentrak has issued bonuses to some employees, possibly including Borrower. By borrowing this money from Lender, Borrower agrees that, until the loan and all accrued interest is fully repaid, Rentrak will, if it elects to issue a bonus to Borrower, first apply 50% of the bonus, after taxes, to paying down the outstanding interest (first) and then principal of the Loan. In other words, Borrower may only receive half of any bonuses Borrower would otherwise be entitled to until Borrower's loan is paid off. Bonuses issued prior to June 30, 2000 will not be subject to this Section 8. Page 2 - LOAN AGREEMENT 9. Provision for Limited-Recourse. Lender's recourse under the Loan and this Agreement shall be and is limited to sale or disposition of the Rentrak Shares pledged to Rentrak as security for the Loan for recovery of principal due on the Loan. In addition, Lender may recover interest due from Borrower pursuant to the Note, Pledge Agreement or this Agreement. Except to recover such unpaid interest amounts, Lender shall have no other recourse to or against any other asset or property owned by Borrower other than the Rentrak Shares pledged to the Loan (and certain bonus payments as detailed in Section 8). Lender agrees, in any action to foreclose on the Rentrak Shares and/or an action upon an event of default, not to institute any action against Borrower individually for payment of any sum of money that is or may be payable hereunder (including interest thereon) other than an action to recover interest owing to Lender and remaining unpaid after sale or disposition of the Rentrak Shares pledged to the Loan. 10. Change of Control of Rentrak. A "Change of Control of Rentrak" shall be deemed to have occurred upon the first fulfillment of the conditions set forth in any one of the following three paragraphs: (a) any "person (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as an amended (the "Exchange Act")), other than a trustee or other fiduciary holding securities under an employee benefit plan of Rentrak Corporation, is or becomes a beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Rentrak Corporation, representing twenty-five percent (25%) or more of the combined voting power of Rentrak Corporation's then outstanding securities; or (b) a majority of the directors elected at any annual or special meeting of stockholders are not individuals nominated by Rentrak Corporation's then incumbent Board; or (c) the shareholders of Rentrak Corporation approve a merger or consolidation of Rentrak Corporation with any other corporation, other than a merger or consolidation which would result in the voting securities of Rentrak Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of Rentrak Corporation or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of Rentrak Corporation approve a plan of complete liquidation of Rentrak Corporation or an agreement for the sale or disposition by Rentrak Corporation of all or substantially all of its assets. In the event of and following any Change of Control of Rentrak, and unless Borrower shall then be in default pursuant to Section 7 hereof, Borrower may: 10.1 Advise Lender by written notice, of Borrower's termination of the Loan (Borrower's "Termination Notice") in which event the Loan shall be terminated and Page 3 - LOAN AGREEMENT Borrower shall waive all rights of Borrower in and to the Rentrak Shares securing Borrower's Loan in return for Lender's waiver of all claims to any recovery of principal or interest under the Loan except by acceptance of the Rentrak Shares which secures the Loan. Following delivery of a Termination Notice, Lender shall take no further collection action except to realize upon the Rentrak Shares pledged to the Loan and Borrower shall irrevocably forfeit any and all right to the Rentrak Shares pledged to the Loan. Borrower agrees to execute all such other and further documents as Lender shall require, evidencing the termination of the Loan or the waiver set forth herein; or 10.2 Advise the Lender in writing (Borrower's "Market Price Notice") of Borrower's election to have Lender purchase such percentage of Borrower's Rentrak Shares pledged to the Loan as Borrower shall designate in the Market Price Notice, at the market price for such Rentrak Shares as of the close of business on the day prior to Lender's receipt of such Market Price Notice. The proceeds of a purchase pursuant to a Market Price Notice shall be applied first to accrued but unpaid interest and the balance, if any, to principal of Borrower's Loan. After the Loan has been paid in full, any additional Rentrak Shares or proceeds from the sale of Rentrak Shares shall be delivered to Borrower. During the term of this Loan Agreement, Borrower may give as many Market Price Notices as Borrower shall desire. 11. Waiver. The waiver of strict compliance of any provision in this Agreement by Lender shall not constitute a waiver of strict compliance with that or any other provision thereafter. 12. Applicable Law. The enforceability and interpretation of this Agreement shall be governed by the laws of the State of Oregon. 13. Binding Agreement. This Agreement shall be binding upon the parties, their heirs, personal representatives, successors and assigns. IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first above written. LENDER: BORROWER: Rentrak Corporation By: F. Kim Cox Name: Ron Berger Title: President Page 4 - LOAN AGREEMENT EX-10.36 6 0006.txt LOAN AGREEMENT WITH KIM COX, JUNE 16, 2000 EXHIBIT 10.36 LOAN AGREEMENT THIS AGREEMENT is entered into this 16th day of June, 2000, by and between Rentrak Corporation ("Lender"), and F. Kim Cox ("Borrower"). Recitals WHEREAS, Borrower wishes to borrow funds from Lender on a limited-recourse basis, under the terms and conditions set forth in this Agreement, for the purpose of exercising certain "out of the money" stock options for the common stock of Rentrak Corporation ("Rentrak") pursuant to the Rentrak 2000 Employee Loan/Option Program (the "Rentrak Stock"); and WHEREAS, Lender, having determined that a loan for such purpose would be in furtherance of Lender's best interests, is willing to loan to Borrower such funds, in the amount of One Million Four Hundred Sixty Eight Thousand, Two Hundred Fifty Dollars and Forty Two Cents Dollars ($1,468,250.42) (the "Loan Funds"), under the terms and conditions set forth in this Agreement and the exhibits hereto; and WHEREAS, Lender wishes to clarify and confirm that Borrower shall be under no obligation to repay the principal portion of the Loan beyond the amount of funds received by Borrower or Lender pursuant to the sale of the Rentrak Stock which is purchased with the Loan Funds; and WHEREAS, Lender has simultaneously executed a Pledge Agreement and Promissory Note which provide for this Loan Agreement; NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows: Agreement 1. Loan. Upon the effective date of this Agreement specified above, Lender agrees to loan Borrower One Million Four Hundred Sixty Eight Thousand, Two Hundred Fifty Dollars and Forty Two Cents Dollars ($1,468,250.42) (the "Loan"). The Loan shall be evidenced by a Promissory Note in the form attached hereto as Exhibit "A". The Loan may be advanced in one or more disbursements, each of which shall be made upon Borrower's application to Lender for advances, as set forth below: Rentrak Corporation will issue a loan (or several loans, but not more than five (5)) to Borrower in an amount not more than the amount required for Borrower to purchase from Rentrak as many of your unexercised but fully vested "out of the money" Employee Stock Options ("ESO's") as Borrower wishes to exercise at the time. Example: You have an option for 100 shares of Rentrak, at a price of $6 per share, of which 60 shares are vested and 40 are not. On the day you borrow, the Rentrak common stock is trading at a price of $5.00. Consequently, your $6.00 stock Page 1 - LOAN AGREEMENT option is "out of the money." We will lend you $360.00, if you wish to exercise the entire 60 share option, or $300.00 if you wish to exercise only 50 shares and so on. You may also use a portion of your own funds to exercise the option. In the previous example where you were exercising only 50 shares, you could borrow $200 and combine it with $100 of your own funds to exercise the option. 2. Term. The principal of the Loan will be due in one balloon payment on the earliest to occur of: (a) One year prior to the expiration of the term of Borrower's current employment agreement with Rentrak; or (b) One (1) year after Borrower leaves Rentrak's employ for any other reason (unless such departure follows a Change in Control of Rentrak (as defined below, in which event this subsection 2(b) shall not be applicable); or (c) Five years from the date of the Loan; or (d) One year from the date of Borrower's death. Such date may be called the Maturity Date. 3. Interest. The Loan shall accrue interest at the federal funds interest rate in effect on the date of the Loan. Interest will be payable annually on the anniversary date of the Loan. 4. Security. The Loan shall be secured by a Pledge Agreement in the form attached hereto as Exhibit B encumbering all of the Rentrak Shares purchased with the proceeds of the Loan. 5. Payment. Payments shall be applied first to interest and then to unpaid principal. Payments shall continue until the earlier of the time at which all of the Loan has been repaid, together with interest, or the Maturity Date, whichever first occurs. 6. Limited-Recourse. The Loan shall be without recourse to Borrower except as expressly set forth in Section 9 below. 7. Event of Default. The following events shall be deemed events of default under this Agreement and, if such events occur, Lender may pursue those rights and remedies set forth herein and in the Note and Pledge Agreement. The events of default are: 7.1 Borrower's failure to pay any sums due under the Note when and as due; and 7.2 Any other default under this Agreement, the Note or the Pledge Agreement. 8. Bonus Payments. From time to time, Rentrak has issued bonuses to some employees, possibly including Borrower. By borrowing this money from Lender, Borrower agrees that, until the loan and all accrued interest is fully repaid, Rentrak will, if it elects to issue a bonus to Borrower, first apply 50% of the bonus, after taxes, to paying down the outstanding interest (first) and then principal of the Loan. In other words, Borrower may only receive half of any bonuses Borrower would otherwise be entitled to until Borrower's loan is paid off. Bonuses issued prior to Page 2 - LOAN AGREEMENT June 30, 2000 will not be subject to this Section 8. 9. Provision for Limited-Recourse. Lender's recourse under the Loan and this Agreement shall be and is limited to sale or disposition of the Rentrak Shares pledged to Rentrak as security for the Loan for recovery of principal due on the Loan. In addition, Lender may recover interest due from Borrower pursuant to the Note, Pledge Agreement or this Agreement. Except to recover such unpaid interest amounts, Lender shall have no other recourse to or against any other asset or property owned by Borrower other than the Rentrak Shares pledged to the Loan (and certain bonus payments as detailed in Section 8). Lender agrees, in any action to foreclose on the Rentrak Shares and/or an action upon an event of default, not to institute any action against Borrower individually for payment of any sum of money that is or may be payable hereunder (including interest thereon) other than an action to recover interest owing to Lender and remaining unpaid after sale or disposition of the Rentrak Shares pledged to the Loan. 10. Change of Control of Rentrak. A "Change of Control of Rentrak" shall be deemed to have occurred upon the first fulfillment of the conditions set forth in any one of the following three paragraphs: (a) any "person (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as an amended (the "Exchange Act")), other than a trustee or other fiduciary holding securities under an employee benefit plan of Rentrak Corporation, is or becomes a beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Rentrak Corporation, representing twenty-five percent (25%) or more of the combined voting power of Rentrak Corporation's then outstanding securities; or (b) a majority of the directors elected at any annual or special meeting of stockholders are not individuals nominated by Rentrak Corporation's then incumbent Board; or (c) the shareholders of Rentrak Corporation approve a merger or consolidation of Rentrak Corporation with any other corporation, other than a merger or consolidation which would result in the voting securities of Rentrak Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of Rentrak Corporation or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of Rentrak Corporation approve a plan of complete liquidation of Rentrak Corporation or an agreement for the sale or disposition by Rentrak Corporation of all or substantially all of its assets. Page 3 - LOAN AGREEMENT In the event of and following any Change of Control of Rentrak, and unless Borrower shall then be in default pursuant to Section 7 hereof, Borrower may: 10.1 Advise Lender by written notice, of Borrower's termination of the Loan (Borrower's "Termination Notice") in which event the Loan shall be terminated and Borrower shall waive all rights of Borrower in and to the Rentrak Shares securing Borrower's Loan in return for Lender's waiver of all claims to any recovery of principal or interest under the Loan except by acceptance of the Rentrak Shares which secures the Loan. Following delivery of a Termination Notice, Lender shall take no further collection action except to realize upon the Rentrak Shares pledged to the Loan and Borrower shall irrevocably forfeit any and all right to the Rentrak Shares pledged to the Loan. Borrower agrees to execute all such other and further documents as Lender shall require, evidencing the termination of the Loan or the waiver set forth herein; or 10.2 Advise the Lender in writing (Borrower's "Market Price Notice") of Borrower's election to have Lender purchase such percentage of Borrower's Rentrak Shares pledged to the Loan as Borrower shall designate in the Market Price Notice, at the market price for such Rentrak Shares as of the close of business on the day prior to Lender's receipt of such Market Price Notice. The proceeds of a purchase pursuant to a Market Price Notice shall be applied first to accrued but unpaid interest and the balance, if any, to principal of Borrower's Loan. After the Loan has been paid in full, any additional Rentrak Shares or proceeds from the sale of Rentrak Shares shall be delivered to Borrower. During the term of this Loan Agreement, Borrower may give as many Market Price Notices as Borrower shall desire. 11. Waiver. The waiver of strict compliance of any provision in this Agreement by Lender shall not constitute a waiver of strict compliance with that or any other provision thereafter. 12. Applicable Law. The enforceability and interpretation of this Agreement shall be governed by the laws of the State of Oregon. 13. Binding Agreement. This Agreement shall be binding upon the parties, their heirs, personal representatives, successors and assigns. IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first above written. LENDER: BORROWER: Rentrak Corporation By: Name: ---------------------------------- --------------------------------- Title: ------------------------------- Page 4 - LOAN AGREEMENT EX-10.37 7 0007.txt AMENDMENT TO 1997 EQUITY PARTICIPATION PLAN Exhibit 10.37 AMENDMENT TO RENTRAK CORPORATION 1997 EQUITY PARTICIPATION PLAN Rentrak Corporation, an Oregon corporation (the "Company"), hereby amends the 1997 Equity Participation Plan (the "Plan") as set forth below. The Company wishes to make loans pursuant to the Vested Option Loan Program to certain optionees under the Plan for the purpose of exercising options granted thereunder, which loans may be without recourse. Accordingly, Section 5.2(d)(v) of the Plan is hereby amended in its entirety and shall read as follows: (v) Allow payment, in whole or in part, through the delivery of a promissory note (which may be without recourse or of limited recourse as determined by the Committee or the Board ) bearing interest (at no less than such rate as shall then preclude the imputation of interest under the Code) and payable upon such terms as may be prescribed by the Committee or the Board; -----END PRIVACY-ENHANCED MESSAGE-----