**EXHIBIT 10.18**

 

**RENTRAK CORPORATION**

 

**NON-QUALIFIED 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 A. Rosenbaum, an employeeof the Company or a Subsidiary of the Company (hereinafter referred to as “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 theNon-Qualified Stock Option (the “Option”) provided for herein to the Employeeas an inducement to remain in the service of the Company and as an incentivefor increased 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 36,908 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 toCompany

##  

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.

 

# **ARTICLE II.**

# **PERIOD OF EXERCISABILITY**

 

## Section 2.1. - Commencement ofExercisability

##  

(a)                                  Subject toSections 2.1(b) and 2.3, the Option shall become exercisable in fourcumulative installments as follows:

 

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

 

(ii)                                  The secondinstallment shall consist of 25 percent of the shares covered by the Option andshall become exercisable on the second anniversary of the date the Option isgranted.

 

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

 

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

 

(b)                                 No portion ofthe Option which is unexercisable at Termination of Employment shall thereafterbecome exercisable.

 

## Section 2.2. - Duration ofExercisability

##  

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 yearsfrom the date the Option was granted; or

######  

(b)                                 If the Employeeowned (within the meaning of Section 424(d) of the Code), at the timethe Option was granted, more than ten percent (10%) of the total combinedvoting power of all classes of stock of the Company or any Subsidiary or parentcorporation thereof (within the meaning of Section 422 of the Code), theexpiration of five (5) years from the date the Option was granted; or

 

###### (c)                                  The expiration of one (1) monthfrom the date of the Employee’s voluntary Termination of Employment; or

######  

###### (d)                                 The expiration of three (3) monthsfrom the 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) yearfrom the date of the Employee’s Termination of Employment by reason of hispermanent and total disability; or

######  

###### (f)                                    The expiration of one (1) yearfrom the date of the Employee’s death; or

######  

(g)                                 Immediatelyfollowing the Employee’s Termination of Employment by reason of beingdischarged for good cause; or

 

###### (h)                                 The effective date of eitherthe merger or consolidation of the Company with or into another corporation, orthe acquisition by another corporation or person of all or substantially all ofthe Company’s assets or eighty percent (80%) or more of the Company’s thenoutstanding voting stock, or the liquidation or dissolution of the Company,unless the Committee waives this provision in connection with suchtransaction.  As soon as practicableprior to the effective date of such merger, consolidation, acquisition,liquidation or dissolution, the Committee shall give the Employee notice of suchevent if the Option has then neither been fully exercised nor becomeunexercisable under this Section 2.3.

######  

## Section 2.4. - Adjustments to and/orCancellation of the Option

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###### Neither (i)  the issuance of additional shares of stock of the Company inexchange for adequate consideration (including services), nor  (ii)  the conversion of outstandingpreferred shares of the Company into Common Stock, shall be deemed to requirean adjustment 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 

 

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###### 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)  thedissolution or liquidation of the Company, (b)  a reorganization, merger,or consolidation of the Company with one or more corporations as a result ofwhich the Company will not be a surviving corporation, (c)  the sale ofall 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 willbe made, the Committee shall give notice of the determination to the Employeeand the 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 theEmployee,  whereupon the Employee shallhave the right for a period of thirty (30) days following the notice toexercise in full or in part the unexercised and unexpired portion of thisOption without regard to the limitation on exercisability 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.

 

# **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.

 

## 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 complyingwith the applicable rules established by the Committee stating that theOption, or a portion thereof, is exercised. The notice shall be signed by the Employee or other person then entitledto exercise the Option or such portion.

######  

###### (b)                                 Full payment to the Companyfor the shares with respect to which such Option or portion is exercised, whichshall be:

######  

(i)  In cash; or

 

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

 

(iii)  With the consent of the Committee, by delivery of a noticethat the Employee has placed a market sell order with a broker with respect toshares 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 netproceeds of the sale to the Company in satisfaction of the purchase price ofthe shares as to which the Option is exercised.

 

###### (c)                                  A bona fide writtenrepresentation and agreement, in a form satisfactory to the Committee, signedby the Employee or other person then entitled to exercise such Option orportion, as the Committee in its discretion shall determine is necessary orappropriate to effect compliance with the Securities Act of 1933 and any otherfederal or state securities 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 the Optiondoes not violate the Securities Act of 1933, and may issue stop-transfer orderscovering such shares.  Share certificatesevidencing stock issued on exercise of this Option shall bear an appropriatelegend referring to the provisions of this subsection (c) and theagreements

 

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###### herein.  The written representation and agreementreferred to in the first sentence of this subsection (c) shall,however, not be required if the shares to be issued pursuant to such exercisehave been registered under the Securities Act of 1933, and such registration isthen effective in respect of such shares.

######  

###### (d)                                 Full payment to the Company(or other employer corporation) of all amounts which, under federal, state orlocal tax law, it is required 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 orportion shall be exercised pursuant to Section 4.1 by any person orpersons other than the Employee, appropriate proof of the right of such personor persons to exercise the Option.

######  

## Section 3.3. - Rights as Shareholder

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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.  Neither theOption nor any interest or right therein or part thereof shall be liable forthe debts, contracts or engagements of the Employee or his successors ininterest or shall be subject to disposition by transfer, alienation,anticipation, pledge, encumbrance, assignment or any other means whether suchdisposition 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 andvoid and of no effect, except to the extent that such disposition is permittedby the preceding sentence.

 

## Section 4.2. - Shares to Be Reserved

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

 

## Section 4.3. - Notices

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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 a notice given pursuant to this Section 4.3,either party may hereafter designate a different address for notices to begiven.  Any notice which is required tobe given to the Employee shall, if the Employee is then deceased, be given tothe Employee’s personal representative if such representative has previouslyinformed the Company of his status and address by written notice under this Section 4.3.  Any notice shall be deemed duly given whenenclosed in a properly sealed envelope or wrapper addressed as aforesaid,deposited (with postage prepaid) in a post office or branch post officeregularly maintained by the United States Postal Service.

 

## Section 4.4. - Titles

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

 

## Section 4.5.- Construction

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

 

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## Section 4.6. - Conformity toSecurities Laws

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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 4.7 - 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.

 
| ** **            | **RENTRAK  CORPORATION** |
|-----------------------|--------------------------|
|                  |                     |
|                  | By                       | /s/  Paul A. Rosenbaum |   |
|                  |                     | Paul  A. Rosenbaum |
|                  |                     |
| /s/ Paul A. Rosenbaum |                     |   |
| Paul A. Rosenbaum     |                     |
|                       |                          |  |  |  |

 

Address:

c/oRentrak Corporation

7700NE Ambassador Place

Portland,Oregon  97220-1393

 

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

 

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