Document:

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:

 

1

 

(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 

 

2

 

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

 

3

 

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.

 

4

 

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:  ###-##-####

 

5EXHIBIT 10.34

 

SEPARATION AGREEMENT AND MUTUAL RELEASE

 

The
parties to this Separation Agreement and Release (“Agreement”) are Rentrak
Corporation (the “Company”) and Craig M. Berardi (“Employee”).  Employee and the Company desire to terminate
Employee’s employment on a mutually agreeable basis.  Employee and the Company therefore agree as
follows:

 

1.                                       Employee’s
employment with the Company is terminated, effective March 17, 2005.

 

2.                                       After the
expiration of seven days after the Company receives this Agreement signed and
dated by Employee without Employee revoking it, the Company will pay to
Employee as severance to which Employee would not otherwise be entitled a total
of $112,500, payable in 18 equal semi-monthly installments and less legally
required deductions and withholdings. 
The Company will deposit each payment due under this paragraph
electronically by electronic funds transfer (EFT) directly into Employee’s
designated bank account or financial institution and provide written
verification of each EFT to Employee.

 

3.                                       The Company
will also pay the same amount it paid during Employee’s employment toward the
cost of the premiums for continuation of group health insurance coverage for
Employee and Employee’s covered spouse and dependents for the months of April 2005
to and including December 2005, if continuation coverage is elected by
Employee.  The Company will provide
Employee with written verification of payment of monthly health insurance
premiums for the months of April 2005 to and including December 2005.  Thereafter, Employee will be entitled to
continue group health insurance coverage at Employee’s own expense in
accordance with COBRA.

 

4.                                       In addition
to the severance payments, Employee will be paid for all of Employee’s accrued
but unused PTO concurrent with the first severance payment installment made by
the Company to Employee.

 

5.                                       This
Agreement will be enforceable in full, regardless of whether Employee obtains
or begins any subsequent employment at any time during the period the Company
is obligated to make any payments under this Agreement.  Also, Employee will have no affirmative
obligation to seek or obtain subsequent employment during this period.  The Company’s obligation to make any and all
payments due under this Agreement will not be construed in any way to be
contingent upon Employee’s remaining unemployed for any given period of time.

 

6.                                       The Company
will not contest any claim for unemployment insurance benefits by Employee
relating to Employee’s employment with the Company.

 

7.                                       If the
Company receives a reference request from a prospective employer of Employee,
the Company will disclose only Employee’s dates of employment and last position
held (Vice President of Operations, Executive Level and Officer of the Company)
with the Company.  The Company will also
give Employee a letter of reference in the form of attached Exhibit A to
this Agreement, signed by Paul Rosenbaum (CEO). 
Employee may give this letter to any prospective employer in furtherance
of Employee’s seeking new employment.

 

8.                                       Employee and
the Company each hereby completely release and forever discharge the other and
each of the other’s past, present, and future related entities and each of
their respective past, present, and future members, managers, partners,
shareholders, officers, directors, agents, employees, attorneys, insurers,
successors, and assigns from any and all claims, rights, demands, actions,
liabilities, and causes of action of every kind and character, whether known or
unknown, matured or unmatured, which either Employee or the Company may now
have or has ever had arising from or in any way related to Employee’s
employment with the Company, including without limitation the conditions of
employment or the termination thereof, whether based on tort, contract (express
or implied), other common law, or any federal state or local statute,
regulation, ordinance, or other law, including but not limited to, Title VII of
the Civil Rights Act of 1964, 

 

 

the Age Discrimination
in Employment Act, and the Americans with Disabilities Act, based on any act or
omission prior to Employee’s execution of this Agreement.

 

9.                                       Employee and
the Company will treat this Agreement as confidential and will not disclose
this Agreement or any of its provisions to any person or entity, except as
required by law;  including, without
limitation, inclusion of information regarding or a copy of the Agreement in
reports filed by the Company with the Securities and Exchange Commission (the “SEC”)
and publicly available on the SEC’s and the Company’s web sites”; to implement
or enforce this Agreement or any provision of it; or, to the extent necessary
to receive professional services, to their respective accountants, professional
tax preparers, or attorneys.

 

10.                                 Both the
Company and Employee specifically deny any liability or wrongdoing
whatsoever.  Neither this Agreement nor
any of its provisions, terms, or conditions constitute an admission of
liability or wrongdoing or may be offered or received in evidence in any action
or proceeding as evidence of an admission of liability or wrongdoing.

 

11.                                 If any
action is brought to enforce this Agreement or any part of it, the prevailing
party will be entitled to recover its reasonable attorney fees and costs
incurred therein, including all attorney fees and costs on appeal.

 

12.                                 This
Agreement constitutes the entire agreement of the parties.  All agreements, covenants, and
representations, express or implied, oral or written, concerning the subject
matter of this Agreement are contained in this Agreement.  This is the entire integrated agreement.

 

13.                                 The parties
acknowledge that the only consideration for this Agreement is the consideration
expressly described herein and that this Agreement has been executed freely and
voluntarily without any undue influence or duress.

 

14.                                 This
Agreement will be construed and enforced in accordance with the laws of the
state of Oregon.  Any suit or action
relating to this Agreement will be commenced exclusively in the Circuit Court
for the County of Multnomah, State of Oregon, or the United States District
Court for the District of Oregon and both parties waive the right to change
such venue and consent to the jurisdiction of such courts for this purpose.

 

15.                                 The Company
hereby advises Employee to consult with an attorney before signing this
Agreement, and Employee acknowledges that he was given at least 21 days to
consider whether to execute this Agreement. 
Employee may revoke this Agreement by written notice delivered to Rita Coe
at the Company within seven days following the date Employee signed this
Agreement.  If not revoked under the
preceding sentence, this Agreement becomes effective and enforceable on the
eighth day following the date Employee signed this Agreement.

 

 

	
  /s/ Craig M. Berardi

  	
   

  	
  /s/

  	
  Paul Rosenbaum for Rentrak Corporation

  	
   

  
	
  Craig M. Berardi

  	
  Paul Rosenbaum

  
	
   

  	
  CEO & Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date 

  	
  March 17, 2005

  	
   

  	
  Date 

  	
  March 17, 2005

  	
   

  
									

 

 

EXHIBIT A

 

To Whom It
may Concern;

 

As CEO and Chairman of
Rentrak Corporation, I have known Craig during my four years since I joined
Rentrak.  When I arrived at Rentrak I had
reviewed my executive staff history and was impressed with Craig’s role in
taking control of difficult projects. 
Craig was a member of the Executive Management team involved in carrying
out the corporate strategy, and his contributions to managing our operations
successfully increased the profitability of our core business.  He was given additional operations
responsibilities and consistently improved the performance and significantly
reduced our operating expenses.  His
dedication to the company, working long hours, exceeding revenue projections
and reducing expenses has been instrumental to our bottom line.

 

During his eleven years at
Rentrak, Craig played a key role in the following areas:

 

•                  Three
years ago Craig was given operations responsibility for our Home Video Business
Intelligence tracking system.  With our
IT staff he managed the development of a critical system and was a key contact
with the studios in support of the system that has resulted in over $14,000,000
in 80% gross margin revenue.

•                  His focus
to the bottom-line to increase efficiency and reduce expenses has resulted in a
savings to the company of over $1,500,000 in the past four years.

•                  As member
of the Sarbanes-Oxley Steering Committee, he provided valuable support in
assisting our consultants utilizing his knowledge of the overall company
operations and his vast experience in controls.

•                  Last year
Craig managed the rapid transition to outsourcing our distribution after
closing our own warehouse.  This has
resulted in substantial savings to the company.

•                  Craig’s
role in an advisory capacity to the prior CEO, helped identify problems with
two troubled retail subsidiaries.  During
1996 at the request of the Board and CEO he spent most of that year living in
another city negotiating the sale of the assets and lease settlements and
closure of the remaining assets of one of these subsidiaries.  His hard work reduced the potential losses by
millions of dollars.

•                  Craig took
on the same role with a second subsidiary helping to eliminate a non-performing
asset.

•                  Two years
ago Craig was given the added responsibility for inventory control and greatly
improved an area that was for years problematic.  This resulted in turning unused inventory
into one million dollars annual  revenue at 70% gross margin with no
overhead.

•                  Seven
years ago we partnered with a major entertainment company in Quebec for Home
Video Distribution.  Craig has managed
the support of this partnership since the beginning and we have achieved 300%
ROI on our investment.

 

These are a few examples of
the vital role Craig has played at helping to improve Rentrak.   I highly recommend Craig in fulfilling an
executive operations position.  His many
years of management experience and hard work ethics are a tremendous asset.

 

Sincerely

 

 

Paul Rosenbaum

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