**EXHIBIT 10.17**

 

**RENTRAK CORPORATION**

 

**INCENTIVE STOCK OPTION AGREEMENT**

 

THIS AGREEMENT, effective asof February 9, 2005, is made by and between Rentrak Corporation, an Oregoncorporation (hereinafter referred to as “Company”), and Paul Rosenbaum, anemployee of the Company or a Subsidiary of the Company (hereinafter referred toas “Employee”):

 

WHEREAS, the Company wishesto afford the Employee the opportunity to purchase shares of its $.001 parvalue Common Stock; and

 

WHEREAS, the Company hasadopted the 1997 Equity Participation Plan of Rentrak Corporation (hereinafterreferred to as “Plan”); and

 

WHEREAS, the Committeeappointed to administer the Plan has determined that it would be to theadvantage and best interest of the Company and its shareholders to grant theIncentive Stock Option (the “Option”) provided for herein to the Employee as aninducement to remain in the service of the Company and as an incentive forincreased efforts during such service;

 

NOW, THEREFORE, inconsideration of the mutual covenants herein contained and other good andvaluable consideration, receipt of which is hereby acknowledged, the partiesagree as follows:

 

**ARTICLE I**

 

**GRANT OF OPTION**

 

Section 1.1- Grant of Option

 

In consideration of theEmployee’s agreement to remain in the employ of the Company or its Subsidiariesand for other good and valuable consideration, effective as of the date hereof,the Company irrevocably grants to the Employee an Option to purchase any partor all of an aggregate of 38,092 shares of its $.001 par value Common Stockupon the terms and conditions set forth in this Agreement.

 

Section 1.2- Purchase Price

 

The purchase price of theshares of Common Stock covered by the Option shall be $10.50 per share, withoutcommission or other charge, subject to adjustment as provided in Section 9.3(a) ofthe Plan.

 

Section 1.3- Consideration to Company

 

In consideration of thegranting of this Option by the Company, the Employee agrees to render faithfuland efficient services to the Company or a Subsidiary, with such duties andresponsibilities as the Company shall from time to time prescribe.  Nothing in this Agreement or in the Planshall confer upon the Employee any right to continue in the employ of theCompany or any Subsidiary, or as a director of the Company, or shall interferewith 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 forany reason whatsoever, with or without cause.

 

Section 1.4- Adjustments in Option

 

The Committee shall haveauthority to make adjustments or take other actions with respect to the Optionin accordance with the provisions of Section 9.3 of the Plan; provided,however, that each such adjustment shall be made in such manner as not toconstitute a “modification” within the meaning of Section 424(h)(3) ofthe Code, unless the Optionee consents to an adjustment which would constitutesuch a “modification”.

 

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**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:

 

(i)                                     The first installment shall consist of25 percent of the shares covered by the Option and shall becomeexercisable on the first anniversary of the date the Option is granted.

 

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

 

(iii)                               The third installment shall consist of25 percent of the shares covered by the Option and shall becomeexercisable on the third anniversary of the date the Option is granted.

 

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

 

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

 

Section 2.2- Duration of Exercisability

 

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

 

Section 2.3- Expiration of Option

 

The Option may not beexercised to any extent by anyone after the first to occur of the followingevents:

 

(a)                                  The expiration of seven years from the datethe Option was granted; or

 

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

 

(c)                                  The expiration of one (1) month from thedate of the Employee’s voluntary Termination of Employment; or

 

(d)                                 The expiration of three (3) months fromthe date of the Employee’s Termination of Employment by reason of hisretirement or his being discharged not for good cause (for purposes of thisAgreement, “good cause” means any act of fraud by the Employee, any act ofdishonesty by the Employee involving the Company or its business, the Employee’sconviction of or a plea of nolo contendere to a felony, or the commission ofany act in direct or indirect competition with or materially detrimental to thebest interests of the Company that is in breach of the Employee’s fiduciaryduties to the Company), unless the Employee dies within said three-monthperiod; or

 

(e)                                  The expiration of one (1) year from thedate of the Employee’s Termination of Employment by reason of his permanent andtotal disability (within the meaning of Section 22(e)(3) of theCode); or

 

(f)                                    The expiration of one (1) year from thedate of the Employee’s death; or

 

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

 

(h)                                 The effective date of either the merger orconsolidation of the Company with or into another corporation, or theacquisition by another corporation or person of all or substantially all of theCompany’s assets or eighty percent (80%) or more of the Company’s thenoutstanding voting stock, or the liquidation or dissolution of the Company, unless

 

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the Committee waives thisprovision in connection with such transaction.  As soon as practicableprior to the effective date of such merger, consolidation, acquisition,liquidation or dissolution, the Committee shall give the Employee notice ofsuch event if the Option has then neither been fully exercised nor becomeunexercisable under this Section 2.3.

 

Section 2.4- Adjustments to and/or Cancellation of the Option

 

Neither (i) the issuanceof additional shares of stock of the Company in exchange for adequate consideration(including services), nor (ii) the conversion of outstanding preferredshares of the Company into Common Stock, shall be deemed to require anadjustment in the shares covered by the Option or in the purchase price ofshares subject to the Option pursuant to Section 9.3(a) of thePlan.  In the event the Committee shalldetermine that an event has occurred affecting the Company such that anadjustment to the Option under Section 9.3(a) of the Plan should bemade but that it is not practical or feasible to make such an adjustment, suchevent shall be deemed a Terminating Event subject to the following paragraph.

 

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

 

Section 2.5- Special Tax Consequences

 

The Employee acknowledgesthat, to the extent that the aggregate Fair Market Value of stock with respectto which “incentive stock options” (within the meaning of Section 422 ofthe Code, but without regard to Section 422(d) of the Code),including the Option, are exercisable for the first time by the Employee duringany calendar year (under the Plan and all other incentive stock option plans ofthe Company, any Subsidiary and any parent corporation thereof (within themeaning of Section 422 of the Code)) exceeds $100,000, such options shallbe treated as Non-Qualified Options to the extent required by Section 422of the Code.  The Employee furtheracknowledges that the rule set forth in the preceding sentence shall beapplied by taking options into account in the order in which they weregranted.  For purposes of these rules,the Fair Market Value of stock shall be determined as of the time the optionwith respect to such stock is granted.

 

**ARTICLE III**

 

**EXERCISE OF OPTION**

 

Section 3.1 - Partial Exercise

 

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

 

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Section 3.2- Manner of Exercise

 

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

 

(a)                                  A written notice complying with the applicablerules established by the Committee stating that the Option, or a portionthereof, is exercised.  The notice shallbe signed by the Employee or other person then entitled to exercise the Optionor such portion.

 

(b)                                 Full payment to the Company for the shareswith respect to which such Option or portion is exercised, which shall be:

 

(i)                                     In cash; or

 

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

 

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

 

(c)                                  A bona fide written representation andagreement, in a form satisfactory to the Committee, signed by the Employee orother person then entitled to exercise such Option or portion as the Committeein its discretion, shall determine is necessary or appropriate to effectcompliance with the Securities Act of 1933 and any other federal or statesecurities laws or regulations.  Without limiting the generality of theforegoing, the Committee may require an opinion of counsel acceptable to it tothe effect that any subsequent transfer of shares acquired on exercise of theOption does not violate the Securities Act of 1933, and may issue stop-transferorders covering such shares.  Share certificates evidencing stock issuedon exercise of this Option shall bear an appropriate legend referring to theprovisions of this subsection (c) and the agreements herein. The written representation and agreement referred to in the first sentence ofthis subsection (c) shall, however, not be required if the shares tobe issued pursuant to such exercise have been registered under the SecuritiesAct of 1933, and such registration is then effective in respect of such shares.

 

(d)                                 Full payment to the Company (or other employercorporation) of all amounts which, under federal, state or local tax law, it isrequired to withhold upon exercise of the Option.  With the consent of the Committee, (i) sharesof the Company’s Common Stock owned by the Employee, duly endorsed fortransfer, 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 uponexercise of the Option with a Fair Market Value equal to the sums required tobe withheld, may be used to make all or part of such payment.

 

(e)                                  In the event the Option or portion shall beexercised pursuant to Section 4.1 by any person or persons other than theEmployee, appropriate proof of the right of such person or persons to exercisethe Option.

 

Section 3.3- Rights as Shareholder

 

The holder of the Optionshall not be, and shall not have any of the rights or privileges of, ashareholder of the Company in respect of any shares purchasable upon theexercise of any part of the Option unless and until certificates representingsuch 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 anyinterest or right therein or part thereof shall be sold, pledged, assigned, ortransferred in any manner other than by will or the laws of descent anddistribution, unless and until such Option has been exercised, or the sharesunderlying such Option have been issued, and all restrictions applicable tosuch shares have lapsed.  

 

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Neither the Option nor anyinterest or right therein or part thereof shall be liable for the debts,contracts or engagements of the Employee or his successors in interest or shallbe subject to disposition by transfer, alienation, anticipation, pledge,encumbrance, assignment or any other means whether such disposition bevoluntary 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 precedingsentence.

 

Section 4.2- Shares to Be Reserved

 

The Company shall at alltimes during the term of the Option reserve and keep available such number of sharesof Common Stock as will be sufficient to satisfy the requirements of thisAgreement.

 

Section 4.3- Notices

 

Any notice to be given underthe terms of this Agreement to the Company shall be addressed to the Company incare of its Secretary, and any notice to be given to the Employee shall beaddressed to him at the address given beneath his signature hereto.  By anotice given pursuant to this Section 4.3, either party may hereafterdesignate a different address for notices to be given.  Any notice which is required to be given tothe Employee shall, if the Employee is then deceased, be given to the Employee’spersonal representative if such representative has previously informed theCompany 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 sealedenvelope or wrapper addressed as aforesaid, deposited (with postage prepaid) ina post office or branch post office regularly maintained by the United StatesPostal Service.

 

Section 4.4- Titles

 

Titles are provided hereinfor convenience only and are not to serve as a basis for interpretation orconstruction of this Agreement.

 

Section 4.5- Notification of Disposition

 

The Employee shall giveprompt notice to the Company of any disposition or other transfer of any sharesacquired under this Agreement if such disposition or transfer is made (a) withintwo (2) years from the date of granting the Option with respect to suchshares or (b) within one (1) year after the transfer of such sharesto him.  Such notice shall specify the date of such disposition or othertransfer and the amount realized, in cash, other property, assumption ofindebtedness or other consideration, by the Employee in such disposition orother transfer.

 

Section 4.6- Construction

 

This Agreement shall beadministered, interpreted and enforced under the internal laws of the State ofOregon without regard to conflicts of laws thereof.

 

Section 4.7-Conformity to Securities Laws

 

The Employee acknowledgesthat the Plan is intended to conform to the extent necessary with allprovisions of the Securities Act of 1933 and the Exchange Act and any and allregulations and rules promulgated by the Securities and ExchangeCommission thereunder, including without limitation Rule 16b-3.  Notwithstanding anything herein to thecontrary, the Plan shall be administered, and the Option is granted and may beexercised, only in such a manner as to conform to such laws, rules andregulations.  To the extent permitted byapplicable law, the Plan and this Agreement shall be deemed amended to theextent necessary to conform to such laws, rules and regulations.

 

Section 4.8- Incorporation of Terms of Plan and Definitions

 

The terms of the Plan areincorporated by reference herein and made a part of this Agreement.  All capitalized terms used herein withoutdefinition have the meanings ascribed to such terms in the Plan.

 

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

 

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| ** **         | ** ** | **RENTRAK CORPORATION**           |
|--------------------|------------|-----------------------------------|
|               |       |
|               |       |
|               | By:        | Paul  Rosenbaum                   |
|               |       |                              |
|               | Title:     | Chairman/Chief  Executive Officer |
|               |       |                              |
| /s/ Paul Rosenbaum |       |                              |   |
| (Paul Rosenbaum)   |       |                              |
|                    |            |                                   |  |  |

 

Address:

c/o7700 NE Ambassador Place

Portland,OR  97220

 

Employee’sTaxpayer Identification Number: ###-##-####

 

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