EXHIBIT 10.18

 

RENTRAK CORPORATION

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS AGREEMENT, effective as of February 9, 2005, is made by and between Rentrak
Corporation, an Oregon corporation (hereinafter referred to as “Company”), and
Paul A. Rosenbaum, an employee of the Company or a Subsidiary of the Company
(hereinafter referred to as “Employee”):

 

WHEREAS, the Company wishes to afford the Employee the opportunity to purchase
shares of its $.001 par value Common Stock; and

 

WHEREAS, the Company has adopted the 1997 Equity Participation Plan of Rentrak
Corporation (hereinafter referred to as “Plan”); and

 

WHEREAS, the Committee appointed to administer the Plan has determined that it
would be to the advantage and best interest of the Company and its shareholders
to grant the Non-Qualified Stock Option (the “Option”) provided for herein to
the Employee as an inducement to remain in the service of the Company and as an
incentive for increased efforts during such service;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:

 

ARTICLE I.
GRANT OF OPTION

 

SECTION 1.1. - GRANT OF OPTION

 

In consideration of the Employee’s agreement to remain in the employ of the
Company or its Subsidiaries and for other good and valuable consideration,
effective as of the date hereof, the Company irrevocably grants to the Employee
an Option to purchase any part or all of an aggregate of 36,908 shares of its
$.001 par value Common Stock upon the terms and conditions set forth in this
Agreement.

 

SECTION 1.2. - PURCHASE PRICE

 

The purchase price of the shares of Common Stock covered by the Option shall be
$10.50 per share, without commission or other charge, subject to adjustment as
provided in Section 9.3(a) of the Plan.

 

SECTION 1.3. - CONSIDERATION TO COMPANY

 

In consideration of the granting of this Option by the Company, the Employee
agrees to render faithful and efficient services to the Company or a Subsidiary,
with such duties and responsibilities as the Company shall from time to time
prescribe.  Nothing in this Agreement or in the Plan shall confer upon the
Employee any right to continue in the employ of the Company or any Subsidiary,
or as a director of the Company, or shall interfere with or restrict in any way
the rights of the Company and its Subsidiaries, which are hereby expressly
reserved, to discharge the Employee at any time for any reason whatsoever, with
or without cause.

 

SECTION 1.4. - ADJUSTMENTS IN OPTION

 

The Committee shall have authority to make adjustments or take other actions
with respect to the Option in accordance with the provisions of Section 9.3 of
the Plan.

 

ARTICLE II.

PERIOD OF EXERCISABILITY

 

SECTION 2.1. - COMMENCEMENT OF EXERCISABILITY

 

(a)                                  Subject to Sections 2.1(b) and 2.3, the
Option shall become exercisable in four cumulative installments as follows:

 

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(i)                                     The first installment shall consist of
25 percent of the shares covered by the Option and shall become exercisable on
the first anniversary of the date the Option is granted.

 

(ii)                                  The second installment shall consist of 25
percent of the shares covered by the Option and shall become exercisable on the
second anniversary of the date the Option is granted.

 

(iii)                               The third installment shall consist of
25 percent of the shares covered by the Option and shall become exercisable on
the third anniversary of the date the Option is granted.

 

(iv)                              The fourth installment shall consist of
25 percent of the shares covered by the Option and shall become exercisable on
the fourth anniversary of the date the Option is granted.

 

(b)                                 No portion of the Option which is
unexercisable at Termination of Employment shall thereafter become exercisable.

 

SECTION 2.2. - DURATION OF EXERCISABILITY

 

Once the Option becomes exercisable pursuant to Section 2.1, it shall remain
exercisable until it becomes unexercisable under Section 2.3.

 

SECTION 2.3. - EXPIRATION OF OPTION

 

The Option may not be exercised to any extent by anyone after the first to occur
of the following events:

 

(A)                                  THE EXPIRATION OF SEVEN YEARS FROM THE DATE
THE OPTION WAS GRANTED; OR

 

(b)                                 If the Employee owned (within the meaning of
Section 424(d) of the Code), at the time the Option was granted, more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code), the expiration of five (5) years from the date the
Option was granted; or

 

(C)                                  THE EXPIRATION OF ONE (1) MONTH FROM THE
DATE OF THE EMPLOYEE’S VOLUNTARY TERMINATION OF EMPLOYMENT; OR

 

(D)                                 THE EXPIRATION OF THREE (3) MONTHS FROM THE
DATE OF THE EMPLOYEE’S TERMINATION OF EMPLOYMENT BY REASON OF HIS RETIREMENT OR
HIS BEING DISCHARGED NOT FOR GOOD CAUSE (FOR PURPOSES OF THIS AGREEMENT, “GOOD
CAUSE” MEANS ANY ACT OF FRAUD BY THE EMPLOYEE, ANY ACT OF DISHONESTY BY THE
EMPLOYEE INVOLVING THE COMPANY OR ITS BUSINESS, THE EMPLOYEE’S CONVICTION OF OR
A PLEA OF NOLO CONTENDERE TO A FELONY, OR THE COMMISSION OF ANY ACT IN DIRECT OR
INDIRECT COMPETITION WITH OR MATERIALLY DETRIMENTAL TO THE BEST INTERESTS OF THE
COMPANY THAT IS IN BREACH OF THE EMPLOYEE’S FIDUCIARY DUTIES TO THE COMPANY),
UNLESS THE EMPLOYEE DIES WITHIN SAID THREE-MONTH PERIOD; OR

 

(E)                                  THE EXPIRATION OF ONE (1) YEAR FROM THE
DATE OF THE EMPLOYEE’S TERMINATION OF EMPLOYMENT BY REASON OF HIS PERMANENT AND
TOTAL DISABILITY; OR

 

(F)                                    THE EXPIRATION OF ONE (1) YEAR FROM THE
DATE OF THE EMPLOYEE’S DEATH; OR

 

(g)                                 Immediately following the Employee’s
Termination of Employment by reason of being discharged for good cause; or

 

(H)                                 THE EFFECTIVE DATE OF EITHER THE MERGER OR
CONSOLIDATION OF THE COMPANY WITH OR INTO ANOTHER CORPORATION, OR THE
ACQUISITION BY ANOTHER CORPORATION OR PERSON OF ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S ASSETS OR EIGHTY PERCENT (80%) OR MORE OF THE COMPANY’S THEN
OUTSTANDING VOTING STOCK, OR THE LIQUIDATION OR DISSOLUTION OF THE COMPANY,
UNLESS THE COMMITTEE WAIVES THIS PROVISION IN CONNECTION WITH SUCH TRANSACTION. 
AS SOON AS PRACTICABLE PRIOR TO THE EFFECTIVE DATE OF SUCH MERGER,
CONSOLIDATION, ACQUISITION, LIQUIDATION OR DISSOLUTION, THE COMMITTEE SHALL GIVE
THE EMPLOYEE NOTICE OF SUCH EVENT IF THE OPTION HAS THEN NEITHER BEEN FULLY
EXERCISED NOR BECOME UNEXERCISABLE UNDER THIS SECTION 2.3.

 

SECTION 2.4. - ADJUSTMENTS TO AND/OR CANCELLATION OF THE OPTION

 

NEITHER  (I)  THE ISSUANCE OF ADDITIONAL SHARES OF STOCK OF THE COMPANY IN
EXCHANGE FOR ADEQUATE CONSIDERATION (INCLUDING SERVICES), NOR  (II)  THE
CONVERSION OF OUTSTANDING PREFERRED SHARES OF THE COMPANY INTO COMMON STOCK,
SHALL BE DEEMED TO REQUIRE AN ADJUSTMENT IN THE SHARES COVERED BY THE OPTION OR
IN THE PURCHASE PRICE OF SHARES SUBJECT TO THE OPTION PURSUANT TO
SECTION 9.3(A) OF THE PLAN.  IN THE EVENT THE COMMITTEE SHALL DETERMINE THAT AN
EVENT HAS OCCURRED AFFECTING THE

 

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COMPANY SUCH THAT AN ADJUSTMENT TO THE OPTION UNDER SECTION 9.3(A) OF THE PLAN
SHOULD BE MADE BUT THAT IT IS NOT PRACTICAL OR FEASIBLE TO MAKE SUCH AN
ADJUSTMENT, SUCH EVENT SHALL BE DEEMED A TERMINATING EVENT SUBJECT TO THE
FOLLOWING PARAGRAPH.

 

Subject to Section 9.3(b)(vii) of the Plan, in the event of  (a)  the
dissolution or liquidation of the Company, (b)  a reorganization, merger, or
consolidation of the Company with one or more corporations as a result of which
the Company will not be a surviving corporation, (c)  the sale of all or
substantially all of the assets of the Company,  (d)  a sale or other transfer
of more than eighty percent (80%) of the then outstanding shares of Common Stock
of the Company, or  (e) the occurrence of an event in accordance with the last
sentence of the previous paragraph  (any of such events is herein referred to as
a “Terminating Event”), the Committee shall determine whether a provision will
be made in connection with the Terminating Event for an appropriate assumption
of the Option by or substitution of appropriate new options covering stock of, a
successor corporation employing the Employee or stock of an affiliate of such
successor employer corporation.  If the Committee determines that such an
appropriate assumption or substitution will be made, the Committee shall give
notice of the determination to the Employee and the terms of such assumption or
substitution, and any adjustments made  (i)  to the number and kind of shares
subject to the Option outstanding under the Plan (or to options issued in
substitution therefor),  (ii)  to the Option purchase price and (iii) to the
terms and conditions of the Option, shall be binding upon the Employee.  If the
Committee determines that no assumption or substitution will be made, the
Committee shall give notice of this determination to the Employee,  whereupon
the Employee shall have the right for a period of thirty (30) days following the
notice to exercise in full or in part the unexercised and unexpired portion of
this Option without regard to the limitation on exercisability specified in
Section 2.1(a) above.  Upon the expiration of this thirty (30) day period, the
option shall expire to the extent not earlier exercised.

 

ARTICLE III.
EXERCISE OF OPTION

 

SECTION 3.1. - PARTIAL EXERCISE

 

Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 2.3;
provided, however, that each partial exercise shall be for not less than 100
shares and shall be for whole shares only.

 

SECTION 3.2. - MANNER OF EXERCISE

 

The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Company’s Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under
Section 2.3:

 

(A)                                  A WRITTEN NOTICE COMPLYING WITH THE
APPLICABLE RULES ESTABLISHED BY THE COMMITTEE STATING THAT THE OPTION, OR A
PORTION THEREOF, IS EXERCISED.  THE NOTICE SHALL BE SIGNED BY THE EMPLOYEE OR
OTHER PERSON THEN ENTITLED TO EXERCISE THE OPTION OR SUCH PORTION.

 

(B)                                 FULL PAYMENT TO THE COMPANY FOR THE SHARES
WITH RESPECT TO WHICH SUCH OPTION OR PORTION IS EXERCISED, WHICH SHALL BE:

 

(i)  In cash; or

 

(ii)  With the consent of the Committee, shares of the Company’s Common Stock
owned by the Employee (and, if acquired from the Company, held for at least six
months), duly endorsed for transfer to the Company, with a Fair Market Value on
the date of delivery equal to the aggregate purchase price of the shares as to
which the Option is exercised; or

 

(iii)  With the consent of the Committee, by delivery of a notice that the
Employee has placed a market sell order with a broker with respect to shares of
the Company’s Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net proceeds of
the sale to the Company in satisfaction of the purchase price of the shares as
to which the Option is exercised.

 

(C)                                  A BONA FIDE WRITTEN REPRESENTATION AND
AGREEMENT, IN A FORM SATISFACTORY TO THE COMMITTEE, SIGNED BY THE EMPLOYEE OR
OTHER PERSON THEN ENTITLED TO EXERCISE SUCH OPTION OR PORTION, AS THE COMMITTEE
IN ITS DISCRETION SHALL DETERMINE IS NECESSARY OR APPROPRIATE TO EFFECT
COMPLIANCE WITH THE SECURITIES ACT OF 1933 AND ANY OTHER FEDERAL OR STATE
SECURITIES LAWS OR REGULATIONS.  WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE COMMITTEE MAY REQUIRE AN OPINION OF COUNSEL ACCEPTABLE TO IT TO
THE EFFECT THAT ANY SUBSEQUENT TRANSFER OF SHARES ACQUIRED ON EXERCISE OF THE
OPTION DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AND MAY ISSUE STOP-TRANSFER
ORDERS COVERING SUCH SHARES.  SHARE CERTIFICATES EVIDENCING STOCK ISSUED ON
EXERCISE OF THIS OPTION SHALL BEAR AN APPROPRIATE LEGEND REFERRING TO THE
PROVISIONS OF THIS SUBSECTION (C) AND THE AGREEMENTS

 

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HEREIN.  THE WRITTEN REPRESENTATION AND AGREEMENT REFERRED TO IN THE FIRST
SENTENCE OF THIS SUBSECTION (C) SHALL, HOWEVER, NOT BE REQUIRED IF THE SHARES TO
BE ISSUED PURSUANT TO SUCH EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AND SUCH REGISTRATION IS THEN EFFECTIVE IN RESPECT OF SUCH SHARES.

 

(D)                                 FULL PAYMENT TO THE COMPANY (OR OTHER
EMPLOYER CORPORATION) OF ALL AMOUNTS WHICH, UNDER FEDERAL, STATE OR LOCAL TAX
LAW, IT IS REQUIRED TO WITHHOLD UPON EXERCISE OF THE OPTION.  WITH THE CONSENT
OF THE COMMITTEE, (I) SHARES OF THE COMPANY’S COMMON STOCK OWNED BY THE
EMPLOYEE, DULY ENDORSED FOR TRANSFER, WITH A FAIR MARKET VALUE EQUAL TO THE SUMS
REQUIRED TO BE WITHHELD, OR (II) SHARES OF THE COMPANY’S COMMON STOCK ISSUABLE
TO THE EMPLOYEE UPON EXERCISE OF THE OPTION WITH A FAIR MARKET VALUE EQUAL TO
THE SUMS REQUIRED TO BE WITHHELD, MAY BE USED TO MAKE ALL OR PART OF SUCH
PAYMENT.

 

(E)                                  IN THE EVENT THE OPTION OR PORTION SHALL BE
EXERCISED PURSUANT TO SECTION 4.1 BY ANY PERSON OR PERSONS OTHER THAN THE
EMPLOYEE, APPROPRIATE PROOF OF THE RIGHT OF SUCH PERSON OR PERSONS TO EXERCISE
THE OPTION.

 

SECTION 3.3. - RIGHTS AS SHAREHOLDER

 

The holder of the Option shall not be, and shall not have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.

 

ARTICLE IV.
OTHER PROVISIONS

 

SECTION 4.1. - OPTION NOT TRANSFERABLE

 

Neither the Option nor any interest or right therein or part thereof shall be
sold, pledged, assigned, or transferred in any manner other than by will or the
laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed.  Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

 

SECTION 4.2. - SHARES TO BE RESERVED

 

The Company shall at all times during the term of the Option reserve and keep
available such number of shares of Common Stock as will be sufficient to satisfy
the requirements of this Agreement.

 

SECTION 4.3. - NOTICES

 

Any notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its Secretary, and any notice to be given to
the Employee shall be addressed to him at the address given beneath his
signature hereto.  By a notice given pursuant to this Section 4.3, either party
may hereafter designate a different address for notices to be given.  Any notice
which is required to be given to the Employee shall, if the Employee is then
deceased, be given to the Employee’s personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 4.3.  Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

 

SECTION 4.4. - TITLES

 

Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

 

SECTION 4.5.- CONSTRUCTION

 

This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Oregon without regard to choice-of-law principles.

 

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SECTION 4.6. - CONFORMITY TO SECURITIES LAWS

 

The Employee acknowledges that the Plan is intended to conform to the extent
necessary with all provisions of the Securities Act of 1933 and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3.  Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations.  To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

 

Section 4.7 - Incorporation of Terms of Plan and Definitions

 

The terms of the Plan are incorporated by reference herein and made a part of
this Agreement.  All capitalized terms used herein without definition have the
meanings ascribed to such terms in the Plan.

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

 

 

RENTRAK CORPORATION

 

 

 

By

/s/ Paul A. Rosenbaum

 

 

 

Paul A. Rosenbaum

 

 

/s/ Paul A. Rosenbaum

 

 

Paul A. Rosenbaum

 

 

Address:

c/o Rentrak Corporation

7700 NE Ambassador Place

Portland, Oregon  97220-1393

 

Employee’s Taxpayer Identification Number:  ###-##-####

 

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