*Portions of this exhibit are considered confidential by the Registrant and have
been omitted from filing and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into effective as of November 1, 2002,
by and between Xxxxxxxxxxx X. Xxxxxxx ("Executive") and RENTRAK CORPORATION, an
Oregon corporation (the "Corporation").
1. SERVICES
1.1 Employment Position. Corporation agrees to employ Executive as Vice
President, Sales, and Executive accepts such employment, under the terms and
conditions of this Agreement.
1.2 Term. The term of this Agreement (the "Term") commences on November 1,
2002, and will expire October 31, , 2005. Notwithstanding the foregoing, in the
event of a Change in Control of Corporation, as defined in Section 7 of this
Agreement, during the Term of this Agreement, the Term will automatically be
extended to December 31 of the second calendar year following the year in which
the Change in Control occurs.
1.3 Duties. During the Term, Executive will serve in an executive capacity
as Vice President, Sales. Executive will report directly to Corporation's
President. Executive will be responsible for direction and supervision of all
store sales activities on behalf of Corporation and such other or different
duties on behalf of Corporation as may be assigned from time to time by
Corporation's President, Chief Executive Officer, or Board of Directors (the
"Board"). Executive will do such traveling as may be required in the performance
of his duties under this Agreement.
1.4 Outside Activities. During his employment under this Agreement,
Executive will devote his full business time, energies, and attention to the
business and affairs of Corporation, and to the promotion and advancement of its
interests. Executive will perform his services faithfully, competently, and to
the best of his abilities and will not engage in professional or personal
business activities that may require an appreciable portion of Executive's time
or effort to the detriment of Corporation's business.
1.5 Application of Corporate Policies. Executive will, except as otherwise
provided in this Agreement, be subject to Corporation's rules, practices, and
policies applicable generally to Corporation's senior executive employees, as
such rules, practices, and policies may be revised from time to time by the
Board.
2. COMPENSATION AND EXPENSES
2.1 Base Salary. As compensation for services under this Agreement,
Corporation will pay to Executive a base salary of $170,000 per year, payable in
a manner consistent with Corporation's payroll practices for management
employees, as such practices may be revised from time to time. Annually, during
the Term, Corporation's Compensation Committee (the "Committee") will review
Executive's performance, the performance of Corporation, and Corporation's
economic prospects for the coming year, and will consider in its sole discretion
whether to increase (but not decrease) the base salary payable to Executive.
1
2.2 Bonus Compensation.
2.2.1 General. Executive will participate, together with Corporation's
other senior executives, in Corporation's Annual Incentive Compensation
Plan under which Executive will be assigned predetermined incentive target
levels and performance criteria and factors established in the discretion
of the Committee and will have the opportunity to receive bonus
compensation based on such criteria.
2.2.2 Fiscal 2003-2004. For the fiscal year ending March 31, 2004, in
lieu of participation in the Annual Incentive Compensation Plan described
above, Corporation and Executive will enter into a separate program
providing Executive an opportunity to earn a commission bonus in accordance
with the terms and conditions set forth on Appendix 2.2.2, based on the
extent to which Corporation achieves or exceeds specified revenue goals
during the fiscal year ending March 31, 2004.
2.3 Stock Options. Executive will participate, together with Corporation's
other senior executives, in Corporation's 1997 Equity Participation Plan (the
"Plan"). Executive will be granted options to purchase shares of Corporation's
common stock and/or other awards under the Plan at the times and in the amounts
determined by the Committee. All options will be subject to the provisions of
the Plan.
2.4 Additional Employee Benefits Executive will receive an annual grant of
208 hours of credit (or such higher number of hours as are credited to
Corporation's other senior executives) under Corporation's Personal Time Off
(PTO) program. Personal time off and vacation may be taken in accordance with
Corporation's rules, practices, and policies applicable to Corporation's senior
executive employees, as such rules, practices, and policies may be revised from
time to time by the Board or the Committee. During the Term, Executive will be
entitled to any other employee benefits approved by the Board or the Committee,
or available to officers and other management employees generally, including any
life and medical insurance plans, 401(k) and other similar plans, and health and
welfare plans, each whether now existing or hereafter approved by the Board or
the Committee ("Benefit Plans"). The foregoing will not be construed to require
Corporation to establish any such plans or to prevent Corporation from modifying
or terminating any such Benefit Plans.
2.5 Expenses. Subject to review and approval by the chairman of
Corporation's audit committee, Corporation will reimburse Executive for
reasonable expenses actually incurred by Executive in connection with the
business of Corporation. Executive will submit to Corporation such
substantiation for such expenses as may be reasonably required by Corporation.
3. CONFIDENTIAL INFORMATION
3.1 Definition. "Confidential Information" is all nonpublic information
relating to Corporation or its business that is disclosed to Executive, that
Executive produces, or that Executive otherwise obtains during employment.
Confidential Information also includes information received from third parties
that Corporation has agreed to treat as confidential. Examples of Confidential
Information include, without limitation, marketing plans, customer lists or
other customer information, product design and manufacturing information, and
financial
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information. Confidential Information does not include any information that (i)
is within the public domain other than as a result of disclosure by Executive in
violation of this Agreement, (ii) was, on or before the date of disclosure to
Executive, already known by Executive, or (iii) Executive is required to
disclose in any governmental, administrative, judicial, or quasi-judicial
proceeding, but only to the extent that Executive is so required to disclose and
provided that Executive takes reasonable steps to request confidential treatment
of such information in such proceeding.
3.2 Access to Information. Executive acknowledges that in the course of his
employment he will have access to Confidential Information, that such
information is a valuable asset of Corporation, and that its disclosure or
unauthorized use will cause Corporation substantial harm.
3.3 Ownership. Executive acknowledges that all Confidential Information
will continue to be the exclusive property of Corporation (or the third party
that disclosed it to Corporation), whether or not prepared in whole or in part
by Executive and whether or not disclosed to Executive or entrusted to his
custody in connection with his employment by Corporation.
3.4 Nondisclosure and Nonuse. Unless authorized or instructed in advance in
writing by Corporation, or required by law (as determined by licensed legal
counsel), Executive will not, except as required in the course of Corporation's
business, during or after his employment, disclose to others or use any
Confidential Information, unless and until, and then only to the extent that,
such items become available to the public through no fault of Executive.
3.5 Return of Confidential Information. Upon request by Corporation during
or after his employment, and without request upon termination of employment
pursuant to this Agreement, Executive will deliver immediately to Corporation
all written, stored, saved, or otherwise tangible materials containing
Confidential Information without retaining any excerpts or copies.
3.6 Duration. The obligations set forth in this Section 3 will continue
beyond the term of employment of Executive by Corporation and for so long as
Executive possesses Confidential Information.
3.7 Effect of Prior Agreement. Executive acknowledges that the provisions
of this Section 3 are in addition to and do not supersede the provisions of that
Employee Confidentiality Agreement (the "Prior Agreement") between Corporation
and Executive dated effective June 17, 1992, and that the Prior Agreement
remains in full force and effect.
4. NONCOMPETITION
4.1 Competitive Entity. For purposes of this Agreement, a Competitive
Entity is any firm, corporation, partnership, limited liability company,
business trust, or other entity that is engaged in all or any of the following
business activities:
(a) The wholesale and/or revenue sharing physical or electronic
distribution of home entertainment software in any media, including
without
3
limitation video cassettes, DVDs, video games, and PC software
("Entertainment Software");
(b) The fulfillment, warehouse, or distributing business in
connection with the Entertainment Software industry;
(c) The collection, aggregation, tracking, and dissemination of
market information and data (such as sales, marketing, inventory,
occurrence, expenditure, and advertising data) related to consumer
activity in various industries including, but not limited to, the
entertainment industry;
(d) The delivery of technological intelligence, industry
analysis, and strategic and tactical guidance with respect to consumer
activity in various industries including, but not limited to the
entertainment industry; or
(e) Any business directly competitive with a business then
engaged in by Corporation or identified in Corporation's three-year
business plan.
4.2 Covenant. During the Term and for a period ending on the last day of
the applicable Noncompete Period described in Section 5.7, Executive will not,
within any geographical area where Corporation engages in business:
(a) Directly or indirectly, alone or with any individual,
partnership, limited liability company, corporation, or other entity,
become associated with, render services to, invest in, represent,
advise, or otherwise participate in any Competitive Entity; provided,
however, that nothing contained in this Section 4.2 will prevent
Executive from owning less than 5 percent of any class of equity or
debt securities listed on a national securities exchange or market,
provided such involvement is solely as a passive investor;
(b) Solicit any business on behalf of a Competitive Entity from
any individual, firm, partnership, corporation, or other entity that
is a customer of Corporation during the 12 months immediately
preceding the date Executive's employment with Corporation is
terminated; or
(c) Employ or otherwise engage, or offer to employ for Executive
or any other person, entity, or corporation, the services or
employment of any person who has been an employee, sales
representative, or agent of Corporation during the 12 months preceding
the date Executive's employment with Corporation is terminated.
For purposes of this Section 4, "Corporation" means Corporation and its
subsidiaries (whether now existing or subsequently created) and their successors
and assigns.
4.3 Severability; Reform of Covenant. If, in any judicial proceeding, a
court refuses to enforce this covenant not to compete because it covers too
extensive a geographic area, is too long in its duration, or for any other
reason, the parties intend that it be reformed and enforced to the maximum
extent permitted under applicable law.
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5. TERMINATION
Executive's employment under this Agreement will terminate prior to the end
of the Term as follows:
5.1 Death. Executive's employment will terminate automatically upon the
date of Executive's death.
5.2 Disability. Company may, at its option, terminate Executive's
employment under this Agreement upon written notice to Executive if Executive,
because of physical or mental incapacity or disability, fails to perform the
essential functions of his position, with reasonable accommodation, required of
him under this Agreement for a continuous period of 120 days or any 180 days
within any 12-month period.
5.3 Termination by Corporation for Cause. Corporation may terminate
Executive's employment under this Agreement for Cause at any time. For purposes
of this Agreement, "Cause" means: (a) a material breach of this Agreement by
Executive; (b) Executive's refusal, failure, or inability to comply with the
general policies or standards of Corporation or to perform any job duties of
Executive; (c) any act of fraud by Executive, (d) any act of dishonesty by
Executive involving Corporation or its business; (e) Executive's conviction of
or a plea of nolo contendere to a felony; or (f) the commission of any act in
direct or indirect competition with or materially detrimental to the best
interests of Corporation that is in breach of Executive's fiduciary duties to
Corporation; provided that Cause will not include any actions or circumstances
constituting Cause under (a) or (b) above if Executive cures such actions or
circumstances within 30 days of receipt of written notice from Corporation
setting forth the actions or circumstances constituting Cause.
5.4 Termination by Executive for Good Reason. Executive may terminate his
employment with Corporation under this Agreement for "Good Reason" if
Corporation has not cured the actions or circumstances which are the basis for
such termination within 30 days following receipt by the Board of written notice
from Executive setting forth the actions or circumstances constituting Good
Reason. For purposes of this Agreement, "Good Reason" means:
(a) Failure of Corporation to comply with the terms of this
Agreement; or
(b) The occurrence (without Executive's express written consent)
of any of the following acts by Corporation or failures by Corporation
to act:
(i) A substantial adverse alteration in the nature or status of
Executive's title, position, duties, or reporting responsibilities as
an executive of Corporation;
(ii) A reduction in Executive's base salary as set forth in this
Agreement or as the base salary may be increased from time to time;
5
(iii) The failure by Corporation to continue to provide Executive
with benefits and participation in Benefit Plans made available by
Corporation to its senior executives; or
(iv) The relocation of Corporation's executive offices at which
Executive is to provide services to a location more than 35 miles from
its current location on N.E. Ambassador Place in Portland, Oregon.
5.5 Termination by Corporation Without Cause. Corporation may terminate
Executive's employment with Corporation without Cause at any time by written
notice to Executive.
5.6 Termination by Executive Without Good Reason. Executive may terminate
Executive's employment with Corporation other than for Good Reason at any time
by written notice to the Secretary of the Corporation.
5.7 Applicable Noncompete Periods upon Termination. The duration of
Executive's obligations under Section 4 (the "Noncompete Period") will be as
follows:
5.7.1 In the event Executive terminates his employment with Corporation
for Good Reason under Section 5.4 or Corporation terminates Executive's
employment with Corporation without Cause under Section 5.5, the Noncompete
Period will continue so long as Executive receives Monthly Severance
Payments under Section 6.2. Executive's obligations under this Agreement
will terminate immediately if Corporation fails to make a Monthly Severance
Payment within 15 days after it is due. For this purpose, a check for a
Monthly Severance Payment mailed within such 15-day period (as evidenced by
official postmark) will be deemed to be made within such 15-day period.
5.7.2 Subject to optional extension by Corporation as provided below,
in the event Executive terminates his employment with Corporation other
than for Good Reason under Section 5.6 or Executive's employment with
Corporation terminates due to the expiration of the Term, the Noncompete
Period will be through the date of termination. Corporation may in its sole
discretion extend the Noncompete Period for a period not to extend beyond
24 months from the date the Noncompete Period would otherwise expire by
agreeing to make Monthly Severance Payments to Executive during the
extended Noncompete Period. To extend the Noncompete Period, Corporation
must give Executive written notice (an "Extension Notice") no later than 60
days following the date of termination, stating the elected duration of the
extended Noncompete Period. The Extension Notice will constitute a binding
commitment by Corporation to make Monthly Severance Payments for the full
duration of the extended Noncompete Period and no further extension of the
Noncompete Period will be permitted. Executive's obligations under this
Agreement will terminate immediately if Corporation fails to make a Monthly
Severance Payment within 15 days after it is due.
5.7.3 In the event Corporation terminates Executive's employment for
Cause, the Noncompete Period will be through the date of termination.
6. COMPENSATION UPON TERMINATION
6
6.1 Death, Disability, or Expiration of Term. Upon termination of
Executive's employment pursuant to Section 5.1, Section 5.2, or due to the
Expiration of the Term, all obligations of Corporation under this Agreement will
cease, except that Executive will be entitled to:
(a) Accrued base salary through the date of Executive's
termination of employment;
(b) A prorated portion of the bonus described in Section 2.2 (not
less than a pro rata portion of the minimum bonus described in that
Section);
(c) Other benefits under Benefit Plans to which Executive was
entitled upon such termination of employment in accordance with the
terms of such Benefit Plans.
6.2 Salary Continuation Payments Upon Death or Disability. Upon termination
of Executive's employment pursuant to Section 5.1 or Section 5.2, Executive will
be entitled to the amounts described in Section 6.1, plus salary continuation
payments equal to six months multiplied by the base salary per month in effect
as of the date of termination, payable in equal monthly installments. Such
salary continuation payments will be payable in a manner consistent with
Corporation's payroll practices for management employees.
6.3 Termination Without Cause or by Executive for Good Reason.
6.3.1 Monthly Severance Payments.
(a) In the event that no Change in Control (as defined in Section
6) has occurred and, prior to the expiration of the Term, Executive
terminates his employment with Corporation for Good Reason under
Section 5.4 or Corporation terminates Executive's employment with
Corporation without Cause under Section 5.5, Executive will be
entitled to the amounts described in Section 6.1, plus severance
payments equal to twelve months multiplied by the base salary per
month in effect as of the date of termination, payable in equal
monthly installments (each installment, a "Monthly Severance
Payment").
(b) Corporation's obligations to pay Monthly Severance Payments
under this Section 6.3.1 are expressly conditioned on (i) Executive's
execution of a release (in the form attached to this Agreement as
Appendix 6.3.1(b), with such modifications specifically in response to
changes in applicable law as counsel for Corporation determines to be
reasonably necessary or desirable to ensure effective release of all
claims) of any and all claims that Executive may hold through the date
such release is executed against Corporation or any of its
subsidiaries or affiliates, and (ii) the expiration of any applicable
revocation period specified in such release without revocation of the
release by Executive.
(c) Monthly Severance Payments will be payable in a manner
consistent with Corporation's payroll practices for management
employees.
7
(d) Executive will not be required to mitigate the Monthly
Severance Payments pursuant to this Agreement by seeking other
employment; provided however, that amounts payable by Corporation as
Monthly Severance Payments will be reduced by compensation actually
received by Executive from a new employer during the severance period
described above.
6.3.2 Medical and Dental Insurance Benefits. In addition to Monthly
Severance Payments, Corporation will continue to provide or will arrange to
provide Executive with medical and dental insurance benefits substantially
similar to those to which Executive was entitled as of the date of
termination until Corporation's obligation to make Monthly Severance
Payments expires; provided, however, that if Executive is employed with
another employer and is eligible to receive medical and dental insurance
benefits under another employer-provided plan, Corporation's obligation to
provide the medical and dental benefits described in this paragraph will
terminate automatically.
6.3.3 Effect of Competition. Corporation's obligation to make Monthly
Severance Payments and provide medical and dental insurance benefits to
Executive will terminate if Executive breaches a material provision of the
noncompetition provisions of the Prior Agreement described in Section 4.
6.4 Termination For Cause or by Executive Without Good Reason. In the
event that, prior to the expiration of the Term, Corporation terminates
Executive's employment with Corporation for Cause under Section 5.3, or
Executive terminates his employment with Corporation for other than Good
Reason under Section 5.6, Corporation's obligations under this Agreement
will cease and Executive will be entitled to that portion of his base
salary and employment benefits for which he is qualified as of the date of
termination and Executive will not be entitled to any other compensation or
consideration.
7. EFFECT OF CHANGE IN CONTROL
7.1 Definitions.
"Change in Control". For purposes of this Agreement, a "Change in Control"
will 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 that term is defined in Section 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding
securities under an employee benefit plan of 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 Corporation representing 30 percent or more of the
combined voting power of Corporation's then outstanding securities;
(b) A majority of the directors elected at any annual or special
meeting of shareholders are not individuals nominated by Corporation's
then incumbent Board; or
8
(c) The shareholders of Corporation approve a merger or
consolidation of Corporation with any other corporation, other than a
merger or consolidation which would result in the voting securities of
Corporation outstanding immediately prior to such transaction
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 51
percent of the combined voting power of the voting securities of
Corporation or of such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of Corporation
approve a plan of complete liquidation of Corporation or an agreement
for the sale or disposition by Corporation of all or substantially all
of its assets.
"Other Payment" means any payment or benefit payable to Executive in
connection with a Change in Control of Corporation pursuant to any plan,
arrangement, or agreement (other than this Agreement) with Corporation, a
person whose actions result in such Change in Control, or any person
affiliated with Corporation or such person.
"Total Payments" means all payments or benefits payable to Executive in
connection with a Change in Control, including Change in Control Payments
pursuant to this Agreement and any Other Payments pursuant to any other
plan, agreement, or arrangement with Corporation, a person whose actions
result in the Change in Control, or any person affiliated with Corporation
or such person.
7.2 Compensation Upon Termination Following a Change in Control.
7.2.1 Change in Control Payments. In the event of Corporation's
termination of Executive without Cause, or Executive's termination of
employment with Corporation for Good Reason, at any time following a Change
in Control during the Term of this Agreement (as extended pursuant to
Section 1.2), Executive will be entitled to the following payments (the
"Change in Control Payments"):
(a) A lump sum severance payment equal to the sum of Executive's
annual base salary as in effect immediately before the Change in
Control plus Executive's bonus compensation for the most recent fiscal
year ended prior to the Change in Control;
(b) Continuation for a period of one year following such
termination of Executive's participation in all Benefit Plans in which
Executive was entitled to participate immediately before the Change in
Control, provided that such continued participation is possible under
the general terms and provisions of such Benefit Plans. In the event
Executive's continued participation in any Benefit Plan is barred by
the provisions of the Benefit Plan, Corporation will arrange to
provide Executive with benefits substantially similar to those which
Executive was entitled to receive under the Benefit Plan.
7.2.2 Reduction. In the event that any portion of the Total Payments
payable to Executive in connection with a Change in Control of Corporation
would constitute an "excess parachute payment" within the meaning of IRC
ss. 280G(b) that is subject to the
9
excise tax imposed on so-called excess parachute payments pursuant to
IRC ss.4999 (an "Excise Tax"), the Change in Control Payments otherwise
payable under this Section 7.2.1 will be reduced to avoid such Excise Tax
if, and to the extent that, such reduction will result in a larger
after-tax benefit to Executive, taking into account all applicable federal,
state, and local income and excise taxes.
7.2.3 Application. For purposes of this Section 7.2:
(a) No portion of the Total Payments, the receipts or enjoyment
of which Executive has effectively waived in writing prior to the date
of payment of any Change in Control Payments, will be taken into
account;
(b) No portion of the Total Payments will be taken into account
which, in the opinion of tax counsel selected by Corporation and
reasonably acceptable to Executive ("Tax Counsel"), does not
constitute a "parachute payment" within the meaning of IRC ss. 280G;
(c) If Executive and Corporation disagree whether any payment of
Change in Control Payments will result in an Excise Tax or whether a
reduction in any Change in Control Payments will result in a larger
after-tax benefit to Executive, the matter will be conclusively
resolved by an opinion of Tax Counsel;
(d) Executive agrees to provide Tax Counsel with all financial
information necessary to determine the after-tax consequences of
payments of Change in Control Payments for purposes of determining
whether, or to what extent, Change in Control Payments are to be
reduced pursuant to Section 7.2.2; and
(e) The value of any noncash benefit or any deferred payment or
benefit included in the Total Payments, and whether or not all or a
portion of any payment or benefit is a "parachute payment" for
purposes of this Section 7.2, will be determined by Corporation's
independent accountants in accordance with the principles of IRC ss.
280(G)(d)(3) and (4).
7.2.4 Effect on Other Agreements. In the event that any other
agreement, plan, or arrangement providing for Other Payments (an "Other
Agreement") has a provision that requires a reduction in the Other Payment
governed by such Other Agreement to avoid or eliminate an "excess parachute
payment" for purposes of IRC ss. 280G, the reduction in Change in Control
Payments pursuant to Section 7.2.2 will be given effect before any
reduction in the Other Payment pursuant to the Other Agreement. To the
extent possible, Corporation and Executive agree that reductions in
benefits under any plan, program, or arrangement of Corporation will be
reduced (only to the extent described in Section 7.2.2) in the following
order of priority:
(a) Change in Control Payments under this Agreement;
(b) Benefit Plan benefit continuation pursuant to Section
7.2.1(b); and
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(c) The acceleration in the exercisability of any stock option or
other stock related award granted by Corporation.
8. REMEDIES
The respective rights and duties of Corporation and Executive under this
Agreement are in addition to, and not in lieu of, those rights and duties
afforded to and imposed upon them by law or at equity. Executive acknowledges
that any breach or threatened breach of Sections 3 or 4 of this Agreement will
cause irreparable harm to Corporation and that any remedy at law would be
inadequate to protect the legitimate interests of Corporation. Executive agrees
that Corporation will be entitled to specific performance, or to any other form
of injunctive relief to enforce its rights under Sections 3 or 4 of this
Agreement without the necessity of showing actual damage or irreparable harm or
the posting of any bond or other security. Such remedies will be in addition to
any other remedy available to Corporation at law or in equity.
9. SEVERABILITY OF PROVISIONS
The provisions of this Agreement are severable, and if any provision of
this Agreement is held invalid, unenforceable, or unreasonable, it will be
enforced to the maximum extent permissible, and the remaining provisions of the
Agreement will continue in full force and effect.
10. NONWAIVER
Failure of Corporation at any time to require performance of any provision
of this Agreement will not limit the right of Corporation to enforce the
provision. No provision of this Agreement or breach of this Agreement may be
waived by either party except in writing signed by that party. A waiver of any
breach of a provision of this Agreement will be construed narrowly and will not
be deemed to be a waiver of any succeeding breach of that provision or a waiver
of that provision itself or of any other provision. 11. NOTICES
11. NOTICES
All notices required or permitted under this Agreement must be in writing
and will be deemed to have been given if delivered by hand, or mailed by
first-class, certified mail, return receipt requested, postage prepaid, to the
respective parties as follows (or to such other address as any party may
indicate by a notice delivered to the other parties hereto): (i) if to
Executive, to his residence as listed in Corporation's records, and (ii) if to
Corporation, to the address of the principal office of Corporation, at:
One Airport Center
0000 X.X. Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
12. ATTORNEY FEES
In the event of any suit or action or arbitration proceeding to enforce or
interpret any provision of this Agreement (or which is based on this Agreement),
the prevailing party will be entitled to recover, in addition to other costs,
the reasonable attorney fees incurred by the
11
prevailing party in connection with such suit, action, or arbitration, and in
any appeal therefrom. The determination of who is the prevailing party and the
amount of reasonable attorney fees to be paid to the prevailing party will be
decided by the arbitrator or arbitrators (with respect to attorney fees incurred
prior to and during the arbitration proceedings) and by the court or courts,
including any appellate courts, in which the matter is tried, heard, or decided,
including the court which hears any exceptions made to an arbitration award
submitted to it for confirmation as a judgment (with respect to attorney fees
incurred in such confirmation proceedings).
13. GOVERNING LAW
This Agreement will be construed in accordance with the laws of the state
of Oregon, without regard to any conflicts of laws rules. Any suit or action
arising out of or in connection with this Agreement, or any breach of this
Agreement, must be brought and maintained in the Circuit Courts of the State of
Oregon. The parties hereby irrevocably submit to the jurisdiction of such court
for the purpose of such suit or action and hereby expressly and irrevocably
waive, to the fullest extent permitted by law, any claim that any such suit or
action has been brought in an inconvenient forum.
14. GENERAL TERMS AND CONDITIONS
This Agreement constitutes the entire understanding of the parties relating
to the employment of Executive by Corporation, and supersedes and replaces all
written and oral agreements heretofore made or existing by and between the
parties relating thereto. Executive acknowledges that he has read and understood
all of the provisions of this Agreement, that the restrictions contained in
Sections 4 and 5.7 of this Agreement are reasonable and necessary for the
protection of Corporation's business and that Executive entered into this
contract in connection with a bona fide advancement of Executive with
Corporation in that Executive was granted a long-term employment contract. This
Agreement will inure to the benefit of any successors or assigns of Corporation.
All captions used in this Agreement are intended solely for convenience of
reference and will in no way limit any of the provisions of this Agreement.
The parties have executed this Employment Agreement as of the date stated
above.
RENTRAK CORPORATION
/s/ Xxxxxxxxxxx X. Xxxxxxx By: /s/ F. Xxx Xxx
Xxxxxxxxxxx X. Xxxxxxx Title: President
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APPENDIX 2.2.2
COMMISSION BONUS PROGRAM
Fiscal Year Ending March 31, 2004
1. Terminology. Capitalized terms not otherwise defined in this Appendix or
the Agreement have the meanings set forth in paragraph 6.
2. Quarterly Bonuses. On or before each of July 31, 2003, October 30, 2003,
and January 31, 2004, subject to the overall limitations of paragraph 4,
Corporation will pay Executive a Quarterly Bonus equal to the sum of (a) $2,500
and (b) 0.001% of the Excess Quarterly Revenues for the preceding fiscal quarter
(ending June 30, September 30, and December 31, 2003 respectively).
3. Annual Bonus. On or before June 30, 2004, subject to the overall
limitations of paragraph 4, Corporation will pay Executive an Annual Bonus equal
to the excess (if any) over the aggregate amounts previously paid as Quarterly
Bonuses pursuant to paragraph 2 of the sum of (a) $10,000 plus (b) 0.003% of the
Excess Annual Revenues for the fiscal year ending March 31, 2004.
4. Overall Limitation. In no event will the aggregate of Quarterly Bonuses
and Annual Bonus payable to Executive for the Plan Year exceed $50,000. If
Qualified Revenues exceed $* million for the Plan Year, Corporation's
Compensation Committee may, in its sole discretion, consider payment of an
additional bonus.
5. Subsequent Fiscal Years. As provided in Section 2.2.1 of Participant's
Employment Agreement, for periods following Corporation's fiscal year ending
March 31, 2004, Participant will participate in Corporation's Annual Incentive
Compensation Plan.
6. Definitions. For purposes of this program:
"Annual Bonus" means the bonus payable pursuant to paragraph 3.
"Benchmark Amount" means an amount equal to *
"Excess Annual Revenues" means Corporation's Qualified Revenues for the
Plan Year in excess of the Benchmark Amount.
"Excess Quarterly Revenues" means, for each of the fiscal quarters
ending June 30, September 30, and December 31, 2003, Corporation's
Qualified Revenues for such quarter in excess of 25% of the Benchmark
Amount.
"Plan Year" means the fiscal year beginning April 1, 2003, and ending
March 31, 2004.
"Qualified Revenues" means the following categories of Corporation's
revenues from video leasing activities;
(a) Order processing fees;
(b) Transaction fees;
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(c) Sell-through fees;
(d) End of term fees; and
(e) Data communication fees
"Quarterly Bonus" means a bonus payable pursuant to paragraph 2.
*Confidential portions omitted pursuant to a request for confidential treatment.
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APPENDIX 6.3.1(b)
FORM OF
AGREEMENT AND RELEASE
THIS AGREEMENT AND RELEASE ("Release") is made on this ___ day of
_______________, 200__, by and between Rentrak Corporation, an Oregon
corporation ("Corporation") and _______________("Executive"). Corporation and
Executive agree as follows:
1. Payment to Executive.
(a) Upon the execution of this Release, and after expiration of the
revocation period specified in Section 9 of this Release, Corporation will
commence payment of the applicable Monthly Severance Payments described in
Section 6 of Executive's Employment Agreement dated __________, 2002 (the
"Employment Agreement"), less normal deductions and withholdings.
(b) Executive specifically acknowledges and agrees that Corporation has
paid Executive all wages and other compensation and benefits to which Executive
is entitled except those described in Paragraph 1(a) of this Release and that
the execution of this Release (and compliance with the noncompetition provisions
of Section 4 of the Employment Agreement) are conditions precedent to
Corporation's obligation to make the Monthly Severance Payments.
2. Release by Executive.
Executive hereby completely releases and forever discharges Corporation and
each of its past, present, and future parent and subsidiary corporations and
affiliates and each of their respective past, present, and future shareholders,
officers, directors, agents, employees, insurers, successors, and assigns
(collectively, the "Released Parties"), from any and all claims, liabilities,
demands, and causes of action of any kind, whether statutory or common law, in
tort, contract, or otherwise, in law or in equity, and whether known or unknown,
foreseen or unforeseen, in any way arising out of, concerning, or related to,
directly or indirectly, Executive's employment with Corporation, including, but
not limited to, the termination of Executive's employment based on any act or
omission on or prior to the effective date of this Release, but not including
any claim for workers' compensation or unemployment insurance benefits. Without
limiting the generality of the foregoing, this release specifically includes,
but is not limited to, a release of claims arising under Title VII of the Civil
Rights Act of 1964; the Age Discrimination in Employment Act; the Americans with
Disabilities Act; the Family and Medical Leave Act; the Employee Retirement
Income Security Act; the Worker Adjustment and Retraining Notification Act; and
ORS chapters 652, 653, and 659A, and any amendments to any of such laws.
3. Return of Corporation Property.
Executive represents and warrants that Executive has returned to
Corporation all property belonging to Corporation, including, but not limited
to, all documents or other media containing confidential or proprietary
information of Corporation (including without limitation customer,
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production, and pricing information), and all Corporation credit cards,
keys, cellular telephones, and computer hardware and software.
4. No Liability or Wrongdoing.
Corporation specifically denies any liability or wrongdoing whatsoever.
Neither this Release 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.
5. Severability.
If any provision of this Release is found by any court to be illegal or
legally unenforceable for any reason, the remaining provisions of this Release
will continue in full force and effect.
6. Attorney Fees.
If any action is brought to interpret or enforce this Release or any part
of it, the prevailing party will be entitled to recover from the other party its
reasonable attorney fees and costs incurred therein, including all attorney fees
and costs on any appeal or review.
7. Choice of Law.
This Release will be governed by the laws of the state of Oregon, without
regard to its principles of conflicts of laws.
8. Consideration of Agreement.
Executive acknowledges that Corporation has advised him in writing to
consult with an attorney before signing this Release and that he has been given
at least 21 days to consider whether to execute this Release. For purposes of
this 21-day period, Executive acknowledges that this Release was delivered to
him on ________, 20__, that the 21-day period will expire ___________, 20__, and
that he may have until that date to consider the Release.
9. Revocation.
Executive may revoke this Release by written notice, delivered to
___________ within seven days following his date of signature as set forth
below. This Release becomes effective and enforceable after such seven-day
period has expired.
10. Knowing and Voluntary Agreement.
Executive acknowledges and agrees that: (a) the only consideration for this
Release is the consideration expressly described in this document; (b) he has
carefully read the entire Release; (c) he has had the opportunity to review this
Release and to have it reviewed and explained to him by an attorney of his
choosing; (d) he fully understands the final and binding
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effect; and (e) he is signing this Release voluntarily and with the full intent
of releasing Corporation from all claims.
11. Miscellaneous.
The benefits of this Release will inure to the successors and assigns of
the parties. This is the entire agreement between Executive and Corporation
regarding the subject matter of this Release and neither party has relied on any
representation or statement, written or oral, that is not set forth in this
Release. Executive represents and warrants that Executive has not assigned any
claim that Executive may have against the Released Parties to any person or
entity.
RENTRAK CORPORATION
By:
---------------------- ----------------------------------
Title:
-------------------
Date: Date:
-------------------- ----------------------------------
STATE OF ___________________ )
) SS
COUNTY OF __________________ )
This instrument was acknowledged before me on __________, 20___, by ______
