SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ? 240.14a-11(c) or ? 240.14a-12
Rentrak Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
To Our Shareholders:
Our 1999 Annual Meeting of Shareholders will be held
at the Company's executive offices, One Airport
Center, 7700 N.E. Ambassador Place, Portland, Oregon,
97220, on August 23, 1999, at 8:00 a.m., Pacific
Daylight Time. The purpose of the meeting is to do
the following:
1. Elect three (3) Class II Directors to serve for
a term of three (3) years each and one (1) Class
I Director to serve for a term of two (2) years.
2. Approve an amendment to the 1997 Equity
Participation Plan of Rentrak Corporation to
increase the aggregate number of shares of
common stock that may be issued thereunder from
1,100,000 shares to 1,600,000 shares.
3. Hear and consider reports from certain officers
of the Company; and
4. Transact such other business as may properly
come before the meeting or any adjournments
thereof.
The formal notice of the meeting and the proxy
statement containing information pertaining to the
meeting follow this letter. The Company's 1999
Annual Report is also enclosed.
Please be sure to sign, date and return the enclosed
proxy card whether or not you plan to attend the
meeting so that your shares will be voted at the
meeting. If you attend the meeting, and the Board of
Directors joins me in hoping that you will, there
will be an opportunity to revoke your proxy and to
vote in person if you prefer.
Sincerely yours,
/s/ Ron Berger
RON BERGER
Chairman of the Board
June 30, 1999
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 23, 1999
The Annual Meeting of Shareholders of Rentrak
Corporation (the "Company") will be held on Monday,
August 23, 1999, at 8:00 a.m., Pacific Daylight Time,
at the Company's executive offices, One Airport
Center, 7700 N.E. Ambassador Place, Portland, Oregon,
97220, for the following purposes:
1. Elect three (3) Class II Directors to serve for
a term of three (3) years each; and one (1)
Class I Director to serve for a term of two (2)
years.
2. Approve an amendment to the 1997 Equity
Participation Plan of Rentrak Corporation to
increase the aggregate number of shares of
common stock that may be issued thereunder from
1,100,000 shares to 1,600,000 shares.
3. Hear and consider reports from certain officers
of the Company; and
4. Transact such other business as may properly
come before the meeting or any adjournments
thereof.
The Board of Directors has fixed the close of
business on June 23, 1999, as the record date for
determining shareholders entitled to notice of, and
to vote at, the meeting and any adjournments thereof.
The Proxy Statement accompanies this Notice.
By Order of the
Board of Directors
/s/ F. Kim Cox
F. Kim Cox, Secretary
June 30, 1999
Please sign, date and return the enclosed Proxy
as soon as possible. A return envelope is
enclosed for your convenience.
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held August 23, 1999
DATE, TIME, PLACE OF MEETING
This Proxy Statement and the accompanying proxy
and 1999 Annual Report are being mailed on or about
July 8, 1999, to the shareholders of Rentrak
Corporation (the "Company") in connection with the
solicitation by the Company's Board of Directors of
the enclosed proxy for use at the Company's 1999
Annual Meeting of Shareholders (the "Annual
Meeting"). The Annual Meeting will be held Monday,
August 23, 1999, at 8:00 a.m. Pacific Daylight Time,
at the Company's executive offices, One Airport
Center, 7700 N.E. Ambassador Place, Portland, Oregon
97220.
PURPOSE OF ANNUAL MEETING
The Annual Meeting has been called for the
following purposes: (i) to elect three (3) Class II
Directors to serve for a term of three (3) years
each; and one (1) Class I Director to serve for a
term of two (2) years; (ii) to approve an amendment
to the 1997 Equity Participation Plan of Rentrak
Corporation to increase the aggregate number of
shares of Common Stock that may be issued thereunder
from 1,100,000 shares to 1,600,000 shares; (iii) to
hear and consider reports from certain officers of
the Company; and (iv) to transact such other business
as may properly come before the meeting or any
adjournments thereof. Section 2.3.1 of the Company's
1995 Restated Bylaws, as amended, sets forth
procedures to be followed for introducing business at
a shareholders meeting.
All shares represented by the enclosed proxy, if
received prior to the meeting, will be voted in the
manner specified by the shareholder. To the extent
that a proxy is submitted without specification, the
shares represented by the proxy will be voted FOR
each Director nominee and FOR approval of the
amendment to the 1997 Equity Participation Plan of
Rentrak Corporation.
The Company has no knowledge of any other
matters to be presented at the Annual Meeting. In
the event that other matters do properly come before
the Annual Meeting in accordance with the Company's
1995 Restated Bylaws, the persons named in the proxy
will vote such proxy in accordance with their
judgment on such matters.
REVOCATION OF PROXIES
The execution of a proxy will not affect a
shareholder's right to attend the Annual Meeting and
vote in person. Any shareholder may revoke their
proxy either by giving written notice of such
revocation to the Secretary of the Company at its
principal executive offices at One Airport Center,
7700 N.E. Ambassador Place, Portland, Oregon 97220,
prior to the Annual Meeting, or by revoking the proxy
in person at the Annual Meeting. A proxy may also be
revoked upon the Company's timely receipt of a
properly executed, later dated proxy covering the
same shares as the earlier proxy.
SOLICITATION OF PROXIES
Proxies in the form enclosed with this Proxy
Statement are being solicited by the Company's Board
of Directors for use at the Annual Meeting. The two
persons named as proxies therein have been selected
by the Board of Directors and will vote all shares
for which valid proxies are granted to them. Unless
otherwise specified in the proxy, the proxy will be
voted to ELECT as Directors all of the nominees
listed under Proposal 1 below and to APPROVE the
amendment to the 1997 Equity Participation Plan of
Rentrak Corporation.
The cost of soliciting proxies for the Annual
Meeting will be borne by the Company. In addition to
solicitation by mail, Directors, officers and
employees of the Company may solicit proxies from
shareholders of the Company, personally or by
telephone or telegram, without receiving any
additional remuneration. The Company has asked
brokerage houses, nominees and other fiduciaries to
forward soliciting materials to beneficial owners of
the Company's Common Stock and will reimburse all
such persons for their expenses. In addition, the
Company reserves the right to use the services of an
independent proxy solicitation firm to assist with
the solicitation of proxies. If the services of an
independent proxy solicitation firm are used, the
cost is estimated not to exceed $35,000.
2000 SHAREHOLDER PROPOSALS
The deadline for shareholders to submit
proposals to be considered for inclusion in the Proxy
Statement for the 2000 Annual Meeting of Shareholders
is April 25, 2000. To be considered at the 2000
Annual Meeting of Shareholders, Section 2.3.1 of the
Company's 1995 Bylaws, as amended, requires
shareholders to deliver notice of all proposals,
matters and other business to the Company's principal
executive office no later than sixty (60) calendar
days (June 24, 2000) and no earlier than ninety (90)
calendar days (May 25, 2000) prior to the first
anniversary of the 1999 Annual Meeting.
VOTING SECURITIES
Only holders of record of the Company's Common
Stock on June 23, 1999, the record date fixed by the
Board of Directors for the Annual Meeting, are
entitled to notice of, and to vote at, the Annual
Meeting and any adjournments thereof. On June 23,
1999, 10,441,699 shares of the Company's Common
Stock, .001 par value, were outstanding and held of
record by approximately 352 shareholders of record.
All outstanding shares of the Company's Common Stock
are to be voted as a single class, and each share of
the Company's Common Stock is entitled to one vote.
The presence, in person or by proxy, of the holders
of a majority of the outstanding shares of the
Company's Common Stock constitutes a quorum.
Assuming the existence of a quorum, the
affirmative vote of a plurality of the votes cast at
the Annual Meeting, in person or by proxy, will be
required to elect persons to the Board of Directors.
Abstention from voting and broker non-votes will have
no effect on the outcome of the election of
Directors. Holders of Common Stock are not entitled
to cumulate their votes in the election of Directors.
As a result, the holders of more than 50% of the
shares voting for the election of Directors can elect
all of the Directors if they choose to do so.
Assuming the existence of a quorum, the affirmative
vote of a majority of the votes cast at the Annual
Meeting, in person or by proxy, will be required to
approve the amendment to the 1997 Equity
Participation Plan of Rentrak Corporation. With
respect to shares relating to any proxy as to which a
broker non-vote is indicated on a proposal, those
shares will not be considered present and entitled to
vote with respect to the amendment. Therefore, each
abstention or broker non-vote will have the same
effect as a vote against such amendment.
PROPOSAL 1: ELECTION OF DIRECTORS
The Company's 1995 Restated Bylaws provide that
the Board of Directors, presently consisting of nine
Directors, be divided into three classes, Class I,
Class II and Class III, with each class to be as
nearly equal in number as possible. At the Annual
Meeting, the shareholders are being asked to elect
three (3) Class II Directors, Messrs. Skipper
Baumgarten, Muneaki Masuda and Stephen Roberts for a
term of three (3) years each; and one (1) Class I
Director, Mr. Takaaki Kusaka for a term of two (2)
years. Each Director will hold office until the
annual meeting at which his term expires and until
his successor is duly elected and qualified. If
vacancies occur, the Board of Directors may elect a
replacement to serve for the remainder of the
unexpired term.
The Board of Directors believes that each
nominee will be available to serve as a Director.
However, if any nominee is not a candidate on the
date of the Annual Meeting or otherwise declines to
or cannot serve as a Director, the proxy will be
voted for such other person or persons as the Board
of Directors may recommend. Proxies cannot be voted
for more than four (4) nominees.
The Board of Directors recommends a vote FOR the
election of each of the following Director nominees.
NOMINEES AS CLASS II DIRECTORS (TERMS EXPIRE IN 2002)
SKIPPER BAUMGARTEN (52). Since 1990, Mr.
Baumgarten has served as President of Surety
Associates Holding Company. Mr. Baumgarten also
serves as CEO and Chairman of the Board of American
Contractors Indemnity Co., Los Angeles, California,
an insurance company. Mr. Baumgarten has been a
Director of the Company since February 1998.
MUNEAKI MASUDA (48). Mr. Masuda founded Rentrak
Japan, a joint venture formed with Culture
Convenience Club Co., Ltd. ("CCC"). The Company
currently owns a ten percent equity interest in
Rentrak Japan and CCC's parent company is the
controlling stockholder. Since founding CCC, Mr.
Masuda has served as President except for the period
from October, 1996, through February, 1999, when he
served as Chairman. Until February, 1999, Mr. Masuda
also served as President of DIRECTV Japan. Mr.
Masuda has been a Director of the Company since
August 1990. Pursuant to a Common Stock Purchase
Agreement between the Company and CCC, entered into
as of December 20, 1989, the Company's Board of
Directors is required, subject to fiduciary
obligations to all shareholders, to nominate Mr.
Masuda, CCC's designee, as a Director and use its
best efforts to vote in favor of Mr. Masuda those
shares for which the Company's management and Board
hold proxies or are otherwise entitled to vote. Mr.
Masuda is also a Director of GAGA Communications,
Digital Hollywood and Rentrak Japan. Until November,
1998, Mr. Masuda also served as a Director of BlowOut
Entertainment, Inc.
STEPHEN ROBERTS (61). In July 1990, Mr. Roberts
formed R&G Video, which acquired the home video
rights for the New World film library. Mr. Roberts
is President of the S. Roberts Co., R&G
Communications and R&G Video LP. Mr. Roberts is a
member of the Academy of Motion Pictures Arts and
Sciences, the Academy of Television Arts and
Sciences, and a former Director of the Motion Picture
Association of America. Mr. Roberts is a Director of
College Television Network and of Rentrak Japan. Mr.
Roberts has been a Director of the Company since
December 1988 and currently serves as a consultant to
the Company.
NOMINEE AS CLASS I DIRECTOR (TERM EXPIRES IN 2001)
TAKAAKI KUSAKA (46). Since April, 1991, Mr.
Kusaka has served as President and as a Director of
Rentrak Japan. The Company currently owns a ten
percent equity interest in Rentrak Japan. Mr. Kusaka
has also served as Chairman of BlowOut Japan and Top
Share Co., Ltd., since April, 1997. Mr. Kusaka is
currently a Class I Director, having been elected by
the Board of Directors in June, 1999, to fill the new
Class I seat created when the Board of Directors
increased the number of Directors from eight to nine.
Under the Company's 1995 Restated Bylaws, as amended,
Directors such as Mr. Kusaka, who are elected by the
Board of Directors to fill a newly created seat, may
serve only until the Company's next Annual Meeting of
Shareholders. For this reason, Mr. Kusaka's current
term expires on the date of the Annual Meeting, while
the terms of the Company's other Class I Directors do
not expire until the date of the Company's 2001
Annual Meeting of Shareholders.
DIRECTORS WHOSE TERMS OF OFFICE CONTINUE
The remaining Class I and Class III Directors
whose terms have not yet expired and are therefore
not standing for election this year are as follows:
CLASS I DIRECTORS (TERMS EXPIRE IN 2001)
PRADEEP BATRA (53). Since February 1985, Mr.
Batra has served as President of Unique Business
Systems (UBS), a vertical market software developer.
Among other things, UBS develops and markets POS
software which is used by retailers of the Company to
capture transaction activity which is reported to
the Company. UBS has a POS vendor agreement with the
Company. Mr. Batra also serves as a Director of UBS.
Mr. Batra has been a Director of the Company since
February 1998.
RON BERGER (51). Since founding the Company in
1977, Mr. Berger has served as President and Chief
Executive Officer of the Company, except for brief
periods in other positions in 1981 and 1984. Since
September 1984, he has also served as the Company's
Chairman of the Board. Mr. Berger also serves as
Chairman and a Director of Rentrak Japan K.K., and as
a Director of Rentrak UK, Rentrak Canada, and BlowOut
Video Holding Company. Mr. Berger is a member of the
Board of Directors of American Contractors Indemnity
Co., Los Angeles, California, the Video Software
Dealers Association, Fast Forward Foundation, and the
Board of Trustees of The Nature Conservancy of
Oregon.
CLASS III DIRECTORS (TERMS EXPIRE IN 2000)
JAMES JIMIRRO (62). Since 1986, Mr. Jimirro has
been the Chairman of the Board of Directors,
President and Chief Executive Officer of J2
Communications, a program supplier to the Company.
Mr. Jimirro has been a Director of the Company since
November 1990. Since April 1998, he has served as
Chairman of the Board and a Director of Rentrak UK.
BILL LEVINE (79). In January 1988, Mr. LeVine
founded and became President of LeVine Enterprises,
Inc., an investment firm. Mr. LeVine also serves as
a Director of Mellon West Coast Bank, B.C.T. Inc.,
Fort Lauderdale, Florida, Fast Frame of Los Angeles
and American Contractors Indemnity Co., Los Angeles,
California. Mr. LeVine has been a Director of the
Company since April 1985.
HERBERT FISCHER (60). Since 1990, Mr. Fischer
has served as President or Chairman of Mediacopy, a
company that duplicates video cassettes for major
movie studios. Mr. Fischer has been a Director of
the Company since February 27, 1997.
See "CERTAIN RELATIONSHIPS AND TRANSACTIONS" for
a discussion of certain agreements and relationships
between the Company and its Directors.
COMMITTEES AND MEETINGS OF THE BOARD
The Board of Directors has a Compensation
Committee and an Audit Committee. The Board does not
have a nominating committee.
The Compensation Committee was comprised of
Skipper Baumgarten, Herbert Fischer and Bill LeVine
and was responsible for evaluating the performance of
the Company's management and determining the method
of compensating the Company's salaried employees.
During the fiscal year ended March 31, 1999, the
Compensation Committee held three (3) meetings.
The Audit Committee was comprised of Pradeep
Batra, James Jimirro and Bill LeVine and was
responsible for evaluating the integrity of the
Company's financial reporting to shareholders.
During the fiscal year ended March 31, 1999, the
Audit Committee held four (4) meetings.
During the fiscal year ended March 31, 1999,
there were four (4) regular meetings of the Company's
Board of Directors which were held in person, and
eight (8) special meetings which were conducted by
telephone conference call. While in office, each
Director attended at least 75 percent of the total
number of meetings held by the Board of Directors and
the committees of the Board of Directors on which he
served during the fiscal year ended March 31, 1999
except for Muneaki Masuda, who attended 50 percent of
the Company's Board meetings. The Board of Directors
also took action pursuant to one unanimous written
consent in fiscal 1999.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the 1934 Act requires the
Company's Directors and executive officers and
persons who beneficially own more than ten percent of
the outstanding shares of the Company's common stock
("ten percent shareholders"), to file with the SEC
initial reports of beneficial ownership and reports
of changes in beneficial ownership of shares of
common stock and other equity securities of the
Company. To the Company's knowledge, based solely
upon a review of the copies of Forms 3, 4 and 5 (and
amendments thereto) furnished to the Company or
otherwise in its files, all of the Company's
officers, Directors and ten percent shareholders
complied with all applicable Section 16(a) filing
requirements except as follows: Messrs. Batra,
Baumgarten, Berger, Fischer, Jimirro, LeVine, Masuda
and Roberts each failed to timely report on Form 5 an
option grant received in Fiscal 1999. Each of these
individuals has since filed the required Form 5.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND DIRECTORS
The following table sets forth, as of May 28, 1999,
information furnished to the Company with respect to the
ownership of the Company's Common Stock by each of the
Company's Directors and nominees to the Board of Directors,
the Chief Executive and the named executive officers, all
officers and Directors as a group, and each person
(including any group) known by the Company to be beneficial
owner of more than 5% of the Company's Common Stock.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Beneficial Of Shares
Name and Address of Beneficial Owner (1) Ownership Outstanding
<S> <C> <C>
Pradeep Batra 14,500 (2) *
Skipper Baumgarten 40,000 (2) *
Ron Berger 1,654,270 (3) 14.14%
F. Kim Cox 306,498 (4) 2.86%
Herbert Fischer 25,000 (5) *
Marty Graham 64,539 (6) *
Jim Jimirro 38,486 (7) *
Bill Levine 447,511 (5) 4.28%
Michael Lightbourne 66,000 (8) *
Muneaki Masuda 1,034,459 (9) 9.88%
Stephen Roberts 122,118 (10) 1.16%
Amir Yazdani 70,906 (11) *
All Officers and Directors as a group (16 persons) 4,006,740 (12) 32.05%
Culture Convenience Club Co., Ltd. 390,000 (13) 3.74%
1-4-70 Shiromi, 16th Floor
Chuo-ku, Osaka 540, Japan
Rentrak Japan, K.K 614,000 (14) 5.88%
4-20-3 Ebisu
Shibuya-Ku, Tokyo 150, Japan
Blockbuster Videos, Inc. 1,000,000 (15) 8.74%
1201 Elm Street
Dallas, Texas 75270
Walt Disney Company 1,543,203 (16) 12.88%
500 South Buena Vista St.
Burbank, CA
</TABLE>
(*) Less than 1.00%.
(1) The address of each of the directors is the Company's
address, One Airport Center, 7700 N.E. Ambassador Place,
Portland, Oregon 97220.
(2) Includes 10,000 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(3) Includes 37,200 shares of Common Stock held by Mr.
Berger's parents and 1,259,912 shares of Common Stock
subject to options exercisable within 60 days of the
date of the table. Mr. Berger disclaims beneficial
ownership of all shares held by his parents.
(4) Includes 293,780 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(5) Includes 15,000 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(6) Includes 64,535 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(7) Includes 33,066 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(8) Includes 66,000 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(9) Mr. Masuda is an officer and controlling shareholder of
Culture Convenience Club Co., Ltd. and So-Tsu Company.
So-Tsu Company and Mr. Masuda are controlling
shareholders of Rentrak Japan, K.K. Includes 390,000
shares owned by Culture Convenience Club, Ltd., and 614,000
shares owned by Rentrak Japan, K.K. Also includes 25,839 shares of
Common Stock exercisable within 60 days of the date of
the table.
(10) Includes 85,136 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(11) Includes 68,995 shares of Common Stock subject to
options exercisable within 60 days of the date of the
table.
(12) Includes 2,061,542 shares of Common Stock subject
to options exercisable within 60 days of the date of the
table.
(13) As indicated in footnote 9 to this table, these
shares are beneficially owned by Muneaki Masuda, a
Director of the Company and controlling shareholder of
Culture Convenience Club Co., Ltd.
(14) As indicated in footnote 9 to this table, these
shares are beneficially owned by Muneaki Masuda, a
Director of the Company and controlling shareholder of
Rentrak Japan, K.K.
(15) Includes 1,000,000 shares of Common Stock subject
to warrants exercisable within 60 days of the date of
the table.
(16) Includes 1,543,203 shares of Common Stock subject
to warrants exercisable within 60 days of the date of
the table.
Unless otherwise indicated in the notes to the foregoing
table, beneficial ownership of each of the shares of Common
Stock listed in the foregoing table is comprised of sole
voting power and sole investment power.
EXECUTIVE OFFICERS
The following table identifies the executive officers of the
Company as of March 31, 1999, the age of each
executive officer, the positions they hold, the year in
which they began serving in their respective capacities, and
their past business experience:
Position Current Position(s)
Held with Company and
Name Age Since Past Business Experience
Ed Barnick 42 1992 Vice President,
Distribution. Distribution
Director from 1988 until
January 1, 1992. Prior to
joining the Company in May of
1988, Mr. Barnick served as
Distribution Manager for
Bergen Brunswig Medical and
was employed with both Payless
Northwest Distribution Center
and United Parcel Service.
Ron Berger 50 1984 President, Chief
Executive Officer and Chairman
of the Board; Since founding
the Company in 1977, Mr.
Berger has served as President
and Chief Executive Officer,
except for brief periods in
other positions in 1981 and
1984. Since September 1984,
he has also served as the
Company's Chairman of the
Board. Mr Berger also serves
as a member of the following
Boards of Directors: Rentrak
Japan K.K.; Rentrak UK;
Rentrak Canada; Blowout Video
Holding Company; American
Contractors Indemnity Co.;
Video Software Dealers
Association; Fast Forward
Foundation; and The Nature
Conservancy of Oregon.
F. Kim Cox 46 1995 Executive Vice
President, Chief Financial
Officer, Secretary, Treasurer;
From 1991 until 1995, Mr. Cox
served as Executive Vice
President - Strategic
Planning, Secretary,
Treasurer; From 1985 until
June 1, 1991, Mr. Cox served
as Chief Financial Officer and
Vice President of Finance.
Prior to joining the Company
in 1985, Mr. Cox was a
practicing attorney with the
firm Garvey, Schubert, Adams &
Barer from 1983 to 1985, and
with the firm of McClaskey &
Greig from 1980 to 1983.
Prior to that, Mr. Cox
practiced accounting with the
firm Arthur Andersen & Co.
Marty Graham 41 1991 Vice President,
Product Development. Prior to
joining the Company in October
of 1988 as Director of
Product Development, Mr.
Graham served as General
Manager and Secretary/
Treasurer of Pacific Western
Video Corporation since 1984,
which owns and operates two
video retailer outlets, both
of which participate in the
Company's PPT Program.
Michael
Lightbourne 52 1997 Executive Vice
President. Mr. Lightbourne
was Senior Vice President,
Marketing from 1992 to 1996,
and served as Vice President,
Marketing from 1991 to 1992.
Prior to joining the Company
as Director of Sales in
September of 1988, Mr.
Lightbourne was President and
founder of MRL Enterprises, a
sales and marketing consulting
firm which he began in 1982.
Richard Nida 52 1998 Vice President,
Investor Relations. Prior to
joining the Company in 1998,
Mr. Nida was Director of
Corporate Communications and
Investor Relations for Payless
ShoeSource from 1988 to
August 1998.
Carolyn Pihl 41 1998 Vice President,
Finance, Chief Accounting
Officer. From May 1996 until
February 1998, Ms. Pihl served
as Chief Accounting Officer.
Prior to joining the Company
in 1996, Ms. Pihl was a Senior
Manager in the Audit and
Business Advisory Group with
Arthur Andersen & Co. from
1991 to 1996.
Christopher
Roberts 31 1994 Vice President,
Sales. Prior to becoming Vice
President, Sales, Mr. Roberts
was National Director of Sales
for the Company, a position he
held since September 1992.
Amir Yazdani 39 1993 Vice President,
Management Information
Systems. Prior to becoming
Vice President, Management
Information Systems, Mr.
Yazdani served as the
Company's Director of
Management Information
Systems.
EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years ended
March 31, 1999, 1998 and 1997, all compensation earned by
the Chief Executive Officer and the four highest paid
executive officers whose salary and bonus for the last
completed fiscal year exceeds $100,000 (the Named Executive
Officers).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
Other
Fiscal Year Annual
Name and Ended Bonus Compen-
Principal Position March 31, Salary ($) ($) sation ($)
<S> <C> <C> <C> <C> <C>
Ron Berger, President 1999 405,540 0 0
and Chief Executive 1998 408,972 62,258 0
Officer 1997 349,393 268,665 0
F. Kim Cox, Executive 1999 181,136 0 0
Vice President, Chief 1998 198,397 62,824 0
Financial Officer 1997 187,344 21,000 0
Marty Graham, Vice 1999 140,083 15,000 0
President, Product 1998 137,371 5,000 0
Development 1997 102,685 10,000 0
Michael Lightbourne, 1999 178,037 0 0
Executive Vice President 1998 200,239 89,000 0
1997 100,159 5,000 0
Amir Yazdani, Vice 1999 179,998 0 0
President, Information 1998 187,127 10,000 0
Systems 1997 142,549 15,000 0
</TABLE>
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
Restricted Securities
Fiscal Year Stock Underlying LTIP All Other
Name and Ended Award(s) Options/ Payouts Compen-
Principal Position March 31, ($) SARs (#) ($) sation ($)(2)
<S> <C> <C> <C> <C> <C>
Ron Berger, President 1999 0 510,481 0 94,915
and Chief Executive 1998 0 0 0 31,241
Officer 1997 0 0 0 125,435
F. Kim Cox, Executive 1999 0 63,805 0 6,065
Vice President, Chief 1998 0 0 0 8,195
Financial Officer 1997 0 0 0 4,899
Marty Graham, Vice 1999 0 0 0 4,032
President, Product 1998 0 35,000 0 6,110
Development 1997 0 0 0 1,500
Michael Lightbourne, 1999 0 0 0 7,987
Executive Vice President 1998 0 170,000 0 4,251
1997 0 0 0 3,533
Amir Yazdani, Vice 1999 0 0 0 3,053
President, Information 1998 0 10,000 0 3,711
Systems 1997 0 0 0 3,788
</TABLE>
(1) Includes one option for 10,000 shares subject to
antidilution adjustment following the spin-off of
Blowout Entertainment, Inc. in fiscal 1997. Such
adjustment did not change the aggregate exercise price
of the outstanding option.
(2) Amounts disclosed in this column reflect the following
matching contributions during fiscal 1999 on behalf of
the named executives with regard to Rentrak's 401-K
plan: Ron Berger $1,500, F. Kim Cox $1,500, Marty Graham
$1,500, Michael Lightbourne $1,500 and Amir
Yazdani $1,500. The Company also made payments to
supplemental disability and life insurance plans
during fiscal 1999 for the following named executives:
Ron Berger $86,874, F. Kim Cox $4,565, Marty Graham $2,532,
Michael Lightbourne $6,487 and Amir Yazdani
$1,553. In addition, other compensation for Ron
Berger includes lease and maintenance
payments on automobile.
STOCK OPTION AWARDS
The following table sets forth information concerning stock
option grants to the Named Executive Officers during the
fiscal year ended March 31, 1999. The Company did not grant
any stock appreciation rights to the Named Executive
Officers during such fiscal year.
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN FISCAL 1999
Individual Grants
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) (1) Fiscal Year ($/Sh) Date
<S> <C> <C> <C> <C>
Ron Berger 355,560 36.68% 5.219 08/24/2008
154,921 16.85% 5.469 06/08/2008
F. Kim Cox 44,440 4.83% 5.219 08/24/2008
19,365 2.11% 5.469 06/08/2008
Marty Graham 0 0 0 0
Michael Lightbourne 0 0 0 0
Amir Yazdani 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN FISCAL 1999-continued-
Potential Realizable Value
at Assumed Annual Rates
of stock Price Appreciation
for Option Term
5% 10%
<S> <C> <C>
Ron Berger $1,167,019 $2,957,456
$532,839 $1,350,319
F. Kim Cox $145,861 $369,640
$66,604 $168,789
Marty Graham 0 0
Michael Lightbourne 0 0
Amir Yazdani 0 0
</TABLE>
(1) The stock options vest 20% per year over a period of 5 years.
STOCK OPTION EXERCISES
The following table sets forth information concerning stock
option exercises by the Named Executive Officers during the
fiscal year ended March 31, 1999, and the value of in-the-
money options (i.e., options in which the market value of
Rentrak Common Stock exceeds the exercise price of the
options) held by such individuals on March 31, 1999. No
stock appreciation rights ("SAR's") have been granted to, or
are currently held by, the Named Executive Officers. The
value of the in-the-money options is based on the difference
between the exercise price of such options and the closing
price of Rentrak Common Stock on March 31, 1999, which was
$2.81. The value realized on exercised options is based on
the difference between the exercise price for the options
and the closing price of Rentrak Common Stock on the date of
exercise.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options/SARs at FY-End at FY-End ($)
Acquired on Value
Exercise Realized (#) Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Ron Berger 0 0 1,012,325 / 727,084 0 / 0
F. Kim Cox 10,714 8,620 242,795 / 142,082 42,221 / 0
Marty Graham 0 0 59,535 / 24,000 0 / 0
Michael
Lightbourne 0 0 34,000 / 136,000 0 / 0
Amir Yazdani 1,355 3,190 65,035 / 12,492 18,637 / 0
</TABLE>
COMPENSATION OF DIRECTORS
The Company compensates Directors, other than
employees who are Directors, for their services by
payment of $500 for each Board meeting attended and
$500 for each telephone conference Board meeting. In
addition, each non-employee Director is paid an
annual board fee of $25,000. The Company also
reimburses Directors for their travelexpenses for
each meeting attended in person. During fiscal year
1999, each non-employee Director was granted an
option to acquire 5,000 shares of the Company's
Common Stock pursuant to the Company's Amended and
Restated Directors Stock Option Plan. Beginning
April 1, 1999, automatic grants of options to non-
employee Directors will occur annually under the
Company's 1997 Equity Participation Plan of Rentrak
Corporation. On April 1 of each year, the following
additional options will be granted: (i) an option to
purchase 10,000 shares of the Company's Common Stock
to each non-employee Director of the Company; and
(ii) an option to purchase 2,500 shares of the
Company's Common Stock to any non-employee Chairman
of the Board and to each non-employee Committee
Chairman.
EMPLOYMENT AGREEMENTS
RON BERGER. Effective April 21, 1998, the Company
entered into a five year employment agreement with
Mr. Berger under which Mr. Berger is employed as the
Chairman of the Board of Directors, Chief Executive
Officer and President of the Company. Under the
agreement, Mr. Berger is to receive an annual base
salary of $400,000 through March 31, 1999, subject to
increases on April 1 of each year during the term of
the agreement of the greater of four percent (4%) or
the change in the Consumer Price Index for the
preceding year. If Mr. Berger is terminated for
certain reasons other than for "cause," as defined in
the agreement, he is entitled to receive all of the
compensation set forth in the agreement for the
remaining term of the agreement. If Mr. Berger is
terminated for cause, he will receive only the full
amount of all compensation accrued as of the date of
termination. In the event of a "change of control"
of the Company, as defined in the agreement, Mr.
Berger may elect to receive severance equal to the
greater of: (i) the remaining compensation under the
agreement; or (ii) three times the amount received in
the prior fiscal year. If Mr. Berger is terminated
due to his health or disability, he (or his estate
or legal representative) is entitled to receive the
compensation set forth in the agreement for one year
following termination. The agreement expires on
March 31, 2003.
F. KIM COX. Effective April 1, 1998, the Company
entered into a four year employment agreement with
Mr. Cox under which he is employed as an Executive
Vice President of the Company. Under the agreement,
Mr. Cox receives an annual salary of $178,500 for the
period ending March 31, 1999, $187,425 for the period
ending March 31, 2000, $196,796 for the period ending
March 31, 2001 and $206,636 for the period ending
March 31, 2002. If Mr. Cox is terminated for certain
reasons other than for "cause," as defined in the
agreement, he is entitled to receive one year's base
salary, subject to reduction should Mr. Cox find
alternative employment of "comparable status," as
defined in the agreement, or if he does not exercise
his best efforts to find such employment of
comparable status. If Mr. Cox is terminated for
cause, he will receive only the amount of
compensation accrued through the date of termination.
If Mr. Cox is terminated due to his death or
disability, he (or his legal representative) is
entitled to receive all compensation accrued as of
the date of termination plus a lump sum severance
payment equal to 180 days' base salary. The
agreement expires on March 31, 2002.
MARTY GRAHAM. Effective May 17, 1997, the Company
entered into a five year employment agreement with
Mr. Graham under which he is employed as the Vice
President, Product Development. Under the agreement,
Mr. Graham receives an annual salary of $130,000,
with increases of $10,000 effective April 15 of each
year during the term of the agreement. Mr. Graham is
also entitled to receive certain cash bonuses for
achieving specified objectives. If Mr. Graham is
terminated for certain reasons other than for
"cause," as defined in the agreement, within two
years after a change of control of the Company, as
defined in the agreement, he is entitled to receive
the lesser of: (i) his base salary through the end
of the agreement; or (ii) one year of base salary.
If Mr. Graham is terminated due to death, his estate
(or his legal representative) will receive in a lump
sum, only the base salary amount of all compensation
accrued through and including the date of
termination, plus a lump sum severance of ninety (90)
days base salary at the rate in effect on the date of
termination. If Mr. Graham is terminated due to
disability, he (or his legal representative) will
receive only the base salary amount of all
compensation accrued through and including the date
of termination. If Mr. Graham is terminated for
cause, he will receive only the base salary amount of
all compensation accrued through and including the
date of termination. The agreement expires on April
15, 2002.
MICHAEL LIGHTBOURNE. Effective July 10, 1997, the
Company entered into a five year employment agreement
with Mr. Lightbourne under which he is employed as an
Executive Vice President of the Company. Under the
agreement, Mr. Lightbourne receives an annual salary
of $170,000, subject to increases each year during
the term of the agreement of the greater of five
percent (5%) or the change in the Consumer Price
Index for the preceding year. If the Company
terminates Mr. Lightbourne without cause, he is
entitled to receive the base salary accrued as of the
date of termination, plus severance of all
compensation payable in installments as if still
employed through the end of the agreement, subject to
reduction should Mr. Lightbourne find alternative
employment during the severance period. If Mr.
Lightbourne is terminated for cause, he will receive
only the full amount of all compensation accrued as
of the date of termination. If Mr. Lightbourne is
terminated due to his death or disability, he (or his
estate or legal representative), will receive in a
lump sum, all compensation which would otherwise have
been paid during the term of the agreement. The
agreement expires on July 9, 2002.
AMIR YAZDANI. Effective July 1, 1998, the Company
entered into a three year employment agreement with
Mr. Yazdani under which he is employed as the Vice
President, Management Information Systems, of the
Company. Under the agreement, Mr. Yazdani receives
an annual salary of $178,500 for the period ending
June 30, 1999, subject to increases on July 1 of each
year during the term of the agreement of 5%. If Mr.
Yazdani is terminated for certain reasons other than
for "cause," as defined in the agreement, within two
years after a change of control of the Company, as
defined in the agreement, he is entitled to receive
the lesser of: (i) his base salary through the end
of the agreement; or (ii) one year's base salary
during the current fiscal year. If the Company
terminates Mr. Yazdani without cause, he is entitled
to receive six months' base salary, subject to
reduction should Mr. Yazdani find other employment or
should he not exercise his best efforts to find such
other employment. If Mr. Yazdani is terminated for
cause, he will receive only the full amount of the
base salary accrued through the date of termination.
If Mr. Yazdani is terminated due to his death, he (or
his estate or legal representative), will receive
only the full amount of the base salary accrued
through the date of termination, plus severance of
ninety (90) days base salary at the rate in effect on
the date of his death. If Mr. Yazdani is terminated
due to disability, he (or his legal representative),
will receive only the full amount of the base salary
accrued through the date of termination. During the
period of disability, but prior to termination of
employment, Mr. Yazdani will receive all compensation
as set forth in the agreement. The agreement expires
on June 30, 2001.
REPORT OF THE COMPENSATION AND STOCK OPTION
COMMITTEES ON THE COMPENSATION OF THE CHIEF EXECUTIVE
OFFICER AND ALL EXECUTIVE OFFICERS
The "Report of the Compensation Committee on the
Compensation of the Chief Executive Officer and All
Executive Officers" shall not be deemed incorporated
by reference by any general statement incorporating
this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities
Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed
under such Acts.
The Compensation Committee of the Company
determines the compensation of all executive officers
of the Company, including Ron Berger, the Company's
Chairman of the Board and Chief Executive Officer.
Compensation decisions for all executive officers of
the Company are based on the Company's executive
compensation philosophy. This compensation
philosophy has four primary principles: (i) link
executive compensation to the creation of sustainable
increases in shareholder value; (ii) provide
executive compensation rewards contingent upon
organizational performance; (iii) differentiate
compensation based on individual executive
contribution; and (iv) encourage the retention of a
sound management team.
To implement this philosophy, the Compensation
Committee structures executive compensation by
employing three primary components - annual salary,
performance bonuses and a long-term incentive program
consisting of stock option grants. Ownership of
shares of the Company's Common Stock by executives is
encouraged and forms a significant component of the
total executive compensation package. The higher the
position of the executive, the greater the percentage
his compensation is likely to consist of long-term
incentive programs. In addition, the Compensation
Committee looks to competitive factors in the
development of total executive compensation packages.
Annual Salary and Performance Bonuses
The Compensation Committee fixes the yearly
salary of each executive officer. The yearly salary
reflects the level of duties and responsibilities of
the executive officer, the executive officer's
experience and prior performance, industry practices
and the financial performance of the Company in both
absolute and relative terms. Salaries are reviewed
annually by the Compensation Committee and are
increased when warranted by executive performance and
competitive practices. In establishing various
compensation levels for executive officers, including
the Chief Executive Officer, the Compensation
Committee took into account the revenues generated by
domestic PPT, management's commitment to developing
new products and management's effort to diversify its
business within the video industry.
The Compensation Committee also awards
performance bonuses. Performance bonuses, if earned,
are generally paid once the Company's fiscal year end
results are known. Performance bonuses are based
upon: (i) the executive officer's performance against
individual goals; (ii) the performance of the
executive officer's unit within the Company against
that unit's goals; and (iii) the performance of the
Company against Company goals. Goals vary from year
to year and from unit to unit and, with regard to
executive officers, usually include both quantitative
and qualitative factors. In fixing the bonuses for
fiscal 1999, quantitative goals evaluated by the
Compensation Committee included goals based on
specific profit targets. Qualitative goals included
goals based on strategic positioning and business
development.
From time to time, the Compensation Committee
has awarded one-time bonus payments to certain
executive officers as a result of extraordinary
circumstances, such as the consummation of financing
or the attainment of special unit goals.
Long-Term Incentive Program
Stock option grants are used to motivate
employees to focus on the Company's long-term
performance, and the Company has long maintained
stock option plans for all qualified employees,
including all executive officers. The Compensation
Committee fixes the terms and the size of the grants
of stock options to all recipients, including all
executive officers. The size of the grants is based
upon the employees' duties, responsibilities,
performance, experience and anticipated contribution
to the Company.
The Compensation Committee typically awards
stock options to executive officers on an annual
basis in the exercise of their discretion.
Additional grants may be made in the event of an
executive officer's promotion. In fiscal 1999, the
Company granted options to purchase 574,286 shares of
Rentrak Common Stock to executive officers of the
Company.
Compensation of Ron Berger, Chairman of the Board and Chief
Executive Officer
Ron Berger has served as Chairman of the Board
and Chief Executive Officer of the Company since
September 1984. In fixing salary and target bonus
levels, as well as determining the size of any stock
option grants, the Compensation Committee reviewed
the financial performance of the Company, including
revenue and profit levels as compared to the
Company's performance goals. In addition, the
Compensation Committee reviewed the following
factors: Mr. Berger's performance as Chairman of the
Board and Chief Executive Officer, his importance to
the Company, and the successful implementation of the
Company's strategic goals and the compensation
packages of chief executive officers of other
comparably sized companies.
In fiscal 1999, Mr. Berger was not awarded a
bonus. He was awarded an option to purchase 510,481
shares of Rentrak Common Stock.
By: The Compensation Committee:
Skipper Baumgarten Herbert Fischer Bill LeVine
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
During fiscal 1999, the Compensation Committee
had the following members: Skipper Baumgarten,
Herbert Fischer and Bill LeVine.
Ron Berger is a director of American Contractors
Indemnity Co., a company for which Skipper
Baumgarten, a director of the Company, serves as
Chief Executive Officer. Mr. Baumgarten is a member
of the Company's Compensation Committee. Ron Berger
is also Chairman of the Board of Directors of Rentrak
Japan, a company for which Takaaki Kusaka, a director
of the Company, serves as President. Mr. Kusaka does
not serve on the Company's Compensation Committee.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN OF
RENTRAK CORPORATION NASDAQ MARKET INDEX AND PEER
INDUSTRY GROUP.
The Chart on page 21 compares the five year
cumulative total return on Rentrak's Common Stock
with that of the NASDAQ Market index and a peer
industry group. This graph assumes $100 was invested
on April 1, 1994 in the Company's Common Stock, the
NASDAQ market index and the peer group index and that
any dividends were reinvested. The peer group is
composed of: 800-JR Cigar Inc., Action Performance
Cos, Addvantage Media Grp Inc., Advanced Marketing
Svcs, Amway Asia Pacific Ltd., Amway Japan Ltd., BCT
International Inc., Boyd's Collection Ltd, Brass
Eagle Inc., Business Resource Group, Celebrity Inc.,
Central European Dist., Daisytek Internat Corp.,
Danka Business Syst Adr., Department 56 Inc., DSI
Toys Inc., Educational Developmnt CP., Enesco Group
Inc., Envirosource Inc., Euro Tech Holdings Ltd.,
Fibermark Inc., Finishmaster Inc., Fistcom Corp.,
Handleman Co., Las Vegas Disc Golf&Ten., Leading Edge
Packaging., Maxco Inc., Mikasa Inc., Navarre Corp.,
Noodle Kidoodle Inc., Platinum Entertainment.,
Precept Business Svcs A., Racing Champions Corp.,
Radica Games Ltd., SCP Pool Corp., Sodak Gaming Inc.,
Swiss Army Brands Inc., Toymax Internat Inc., U.S.A.
Floral Prdcts Inc., Unisource Worldwide Inc., United
Stationers Inc.
The following Chart shall not be deemed
incorporated by reference by any general statement
incorporating this proxy statement into any filing
under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates this
information by reference, and shall not otherwise be
deemed filed under such Acts.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG
RENTRAK CORPORATION, PEER GROUP INDEX AND NASDAQ
MARKET INDEX
Measurement
Period Rentrak Corp. Peer Group NASDAQ Market
(Fiscal Year Index
Covered)
<S> <C> <C> <C>
Measurement
PT-3/31/94 $100.00 $100.00 $100.00
3/31/95 $130.00 $112.52 $106.09
3/31/96 $105.00 $147.12 $142.70
3/31/97 $ 55.00 $122.18 $159.64
3/31/98 $190.00 $127.35 $241.26
3/31/99 $ 56.25 $ 80.22 $315.28
</TABLE>
PROPOSAL 2: ADOPTION OF AMENDMENT TO THE 1997
EQUITY PARTICIPATION PLAN OF RENTRAK
CORPORATION
INTRODUCTION
At the Annual Meeting, the Company's
shareholders are being asked to approve an amendment
to the 1997 Equity Participation Plan of Rentrak
Corporation (the "Plan"). The Board of Directors
initially approved the Plan on February 27, 1997, and
the Company's shareholders approved the Plan at the
1997 Annual Meeting of Shareholders. As of April 1,
1999, all shares of the Company's Common Stock
authorized for issuance under the Plan had either
been issued or been made subject to outstanding
options or other awards granted thereunder.
Accordingly, the Board of Directors approved an
amendment to the Plan (the "Amendment") to increase
the aggregate number of shares that may be issued
under the Plan from 1,100,000 shares to 1,600,000
shares. The full text of the Amendment is attached as
Exhibit A to this proxy statement.
The Board of Directors is of the opinion that
the Plan and its predecessor, the 1986 Plan, have
been of significant importance and benefit to the
Company and its shareholders by enabling the Company
to attract and retain officers and other key
employees and by increasing their commitment to the
Company's continued success and better aligning their
economic interest with the Company and its
shareholders. The Board of Directors is also of the
opinion that the Plan enables the Company to attract
and retain non-employee directors. In the view of
the Board of Directors, the proposed Amendment will
enable the Company to continue to realize the
benefits of stock options.
The Board recommends a vote FOR the approval of
the amendment to the 1997 Equity Participation Plan
of Rentrak Corporation.
SUMMARY DESCRIPTION OF THE PLAN
Eligibility
Under the Plan, all employees (including
officers) and consultants of the Company are eligible
to receive stock options, restricted stock awards,
performance awards, stock payments, deferred stock
awards and dividend equivalents (collectively,
"Incentive Awards"). On April 1 of each year in
which the Plan is in effect, all nonemployee
Directors of the Company will receive an automatic
annual grant of stock options, and any nonemployee
Chairman of the Board and all nonemployee Board
committee Chairs will receive an additional automatic
annual grant of stock options (collectively,
"Director's Options"). At present, there are
approximately 175 eligible employees and consultants
and 8 eligible nonemployee Directors.
Administration
The Stock Option Committee of the Board (the
"Committee"), or such other committee as the Board
may later designate, administers the Plan with
respect to Incentive Awards issuable to employees and
consultants. The Committee must be comprised of two
or more Directors, each of whom qualifies as both a
"nonemployee Director" for purposes of Rule 16b-3 of
the Securities Exchange Act of 1934 (the "Exchange
Act") and an "outside Director" for purposes of Code
Section 162(m). Such Committee members are appointed
by and serve at the pleasure of the Board. The
Committee is authorized to interpret the Plan and any
agreements pursuant to which Incentive Awards are
granted, to adopt rules that the Committee deems
appropriate for the administration of the Plan, and
to interpret, amend or revoke any such rules. Any
such interpretations and rules with respect to ISOs
must be consistent with Section 422 of the Code. The
full Board may at any time and from time to time
exercise any and all rights and duties of the
Committee under the Plan, except where such action
would conflict with Rule 16b-3 of the Exchange Act or
Section 162(m) of the Code.
The Plan authorizes the Committee to make such
adjustments as it deems necessary to preserve the
economic value of outstanding and future Incentive
Awards, if the Committee determines that an
adjustment is appropriate to prevent dilution or
enlargement of grantees' rights in the event of
certain distributions to stockholders, extraordinary
corporate transactions or other events specified in
the Plan. The Committee may also take certain other
action that it deems necessary and appropriate in
connection with such distributions, transactions and
events, including any one or more of the following:
(i) purchase Incentive Awards; (ii) prohibit the
exercise of Incentive Awards; (iii) accelerate the
vesting of Incentive Awards; (iv) provide that any
successor or survivor corporation shall assume the
Company's obligations with respect to Incentive
Awards; (v) adjust the number and type of shares
subject to and the criteria included in Incentive
Awards; and (vi) eliminate all restrictions and/or
forfeiture provisions in connection with restricted
stock or deferred stock awards.
The full Board administers the Plan with respect
to Director's Options and has the same adjustment
authority as the Committee in connection with certain
distributions to stockholders, extraordinary
corporate transactions or other events specified in
the Plan; provided, however, that the Board may not
take any such action to the extent that it would be
inconsistent with the applicable exemptive conditions
of Rule 16b-3 under the Exchange Act.
Securities Subject To The Plan
At present, the Company may not issue more than
1,100,000 shares of its common stock (the "Shares")
under the Plan, which Shares may be made available
from the Company's authorized but unissued common
stock. If the Company's shareholders approve the
Amendment, then the Company may issue an additional
500,000 Shares (for a total of 1,600,000 Shares)
under the Plan. Shares subject to an Incentive Award
or Director's Option that expires or is canceled,
forfeited, settled in cash, or otherwise terminates
without a delivery of such Shares, including Shares
withheld or surrendered in payment of any exercise or
purchase price of, or taxes relating to, an Incentive
Award or Director's Option, will again be available
for Incentive Awards and Director's Options under the
Plan; provided, however, that no Shares may again be
optioned, granted or awarded if such action would
cause an ISO to fail to qualify as such.
On June 23, 1999, the closing price per share of
the Company's common stock was $3.8125.
Stock Option Grants
The Plan authorizes the Committee to exercise
its absolute discretion in determining which
employees and consultants will be granted stock
options; the number of Shares to be subject to stock
options granted to such employees or consultants,
which amount may not exceed 400,000 Shares per
person per year; whether stock options granted to
employees are to be ISOs or NSOs (consultants are not
eligible to receive ISOs); and the terms and
conditions of such stock options. The Committee also
has discretion with respect to the exercise price,
vesting period and exercise period of stock options,
subject to the limitations discussed below.
The exercise price per share of ISOs and stock
options intended to qualify as performance based
compensation under Code Section 162(m) may not be
less than 100 percent of the fair market value of a
share of the Company's common stock on the date the
option is granted. The exercise price of ISOs
granted to an individual then owning more than
10 percent of the total combined voting power of all
classes of stock of the Company or any subsidiary or
parent thereof may not be less than 110 percent of
the fair market value of a share of the Company's
common stock on the date the ISO is granted. For all
other options granted to employees and consultants
under the Plan, including NSOs, the Committee will
establish the exercise price per share, which in no
event may be less than the par value of a share of
the Company's common stock unless otherwise permitted
by applicable state law.
The exercise price for ISOs and NSOs granted
under the Plan may be paid in cash or in outstanding
shares of the Company's common stock. Options may
also be exercised on a cashless basis through the
same-day sale of the purchased shares. The Committee
may also permit the optionee to pay the exercise
price through a promissory note payable in
installments over a period of years. The amount
financed may include any federal or state income or
employment taxes incurred by reason of the option
exercise.
The Committee may exercise its discretion in
establishing a vesting period or schedule, if any,
for stock options granted to employees and
consultants; provided, however, that unless the
Committee provides otherwise, no stock option shall
be exercisable by an employee or consultant who is
then subject to Section 16 of the Exchange Act until
six months and one day after the grant date of such
stock option. The Committee may, in its sole and
absolute discretion and subject to whatever terms and
conditions it selects, accelerate the vesting period
of any stock option granted to an employee or
consultant.
The Committee may exercise its discretion in
establishing the exercise period of any stock option
granted to employees and consultants; provided,
however, that ISOs may not have a term of more than
ten years from the date of grant, or five years from
such date if the ISO is granted to an individual then
owning more than ten percent of the total combined
voting power of all classes of stock of the Company
or any subsidiary or parent corporation thereof.
As consideration for the grant of a stock option
to an employee or consultant, such employee or
consultant must agree to remain in the employ of or
to consult for the Company or any subsidiary of the
Company for a period of at least one year, or such
shorter period as the Committee may establish in the
stock option agreement or otherwise permit following
the grant date of such option.
Directors Options
Under the Plan, the Board will annually grant an
option to purchase ten thousand (10,000) Shares to
each Independent Director of the Company. The Board
will also grant an additional option to purchase two
thousand five hundred (2,500) Shares to any
nonemployee Chairman of the Board and to each
nonemployee Committee Chairman.
Options granted to Independent Directors
("Directors Options") must have an exercise price per
share equal to 100 percent of the fair market value
of a share of the Company's common stock on the date
the option is granted. The period during which the
right to exercise a Director Option in whole or in
part vests shall be set by the Board and the Board
may determine that such an Option may not be exercise
in whole or in part for a specified period after it
is granted; provided, however, that unless the Board
otherwise provides in the terms of the Option or
otherwise, no option shall be exercisable by any
Director within the period ending six months and one
day after the date the Option is granted. At any
time after grant of a Director Option, the Board
may, in its sole and absolute discretion and subject
to whatever terms and conditions it selects,
accelerate the period during which a Director Option
vests. In consideration of the grant of a
Director's Option, a non-employee Director must agree
to serve as a Director until the next annual meeting
of the Company's shareholders.
Award of Restricted Stock
The Plan authorizes the Committee to select from
time to time, in its absolute discretion, certain
employees or consultants for an award of restricted
stock. The Committee will establish the purchase
price, if any, and such restrictions as the Committee
determines to be appropriate, which restrictions may
include, without limitation, restrictions concerning
voting rights and transferability and restrictions
based on the duration of a recipient's employment
with the Company, Company performance and individual
performance. Unless the Committee otherwise
provides, no share of restricted stock granted to a
person subject to Section 16 of the Exchange Act may
be assigned or otherwise transferred until at least
six months and one day after the grant date of such
restricted stock. Restricted stock may not be sold
or encumbered until all restrictions terminate or
expire; provided, however, that the Committee may
remove any or all such restrictions on such terms and
conditions as the Committee determines to be
appropriate.
Following an award of restricted stock, the
Company will issue a certificate representing the
subject Shares in the name of each award recipient,
and the Company will hold such certificate in escrow
for the employee's or consultant's account. Upon the
delivery of such Shares into escrow, a restricted
stockholder will have, unless otherwise provided by
the Committee, all of the rights of a stockholder
with respect to such Shares, subject to the
restrictions in the restricted stock agreement,
including the right to receive all dividends and all
distributions paid or made with respect to the
Shares. However, the Company retains the right to
repurchase any restricted stock still subject to such
restrictions immediately upon a termination of
employment (as defined in the Plan) or, if
applicable, upon a termination of consultantcy (as
defined in the Plan) between the restricted
stockholder and the Company, with a cash price per
share equal to the price paid by the restricted
stockholder for such restricted stock. Provision may
be made that no such right of repurchase will exist
in the event of a termination of employment or
consultantcy without cause, following a change in
control of the Company, or because of the restricted
stockholder's retirement, death, or disability, or
otherwise.
If the Committee intends for particular
restricted stock awards to qualify as "performance
based compensation" that is not subject to the
limitation on tax deductibility imposed by Section
162(m) of the Code, the awards will be subject to
such other restrictions as may be required to so
qualify. These additional restrictions must include
the achievement of specific performance goals related
to one or more of the following: pre-tax income;
operating income; cash flow; earnings per share;
return on equity; return on invested capital or
assets; and cost reductions or savings. During the
first 90 days of each fiscal year, the Committee must
select those persons, if any, who will be granted
qualifying restricted stock awards, select the
performance goal or goals applicable to the fiscal
period in question, establish the various targets and
bonus amounts which may be earned during the fiscal
period in question, and specify the relationship
between the targets and amounts to be earned by each
recipient. Following the completion of the fiscal
period in question, the Committee must certify in
writing whether the applicable performance targets
have been achieved for such fiscal period. The
Committee may, in its discretion, reduce (but not
increase) the amount payable at a given level of
performance to take into account additional factors
that the Committee deems relevant to the assessment
of individual or corporate performance during the
fiscal period in question. A qualifying restricted
stock award may not cover more than 400,000 Shares
per recipient per year.
As consideration for the issuance of restricted
stock, in addition to the payment of any purchase
price, an employee or consultant must agree to remain
in the employ of or to consult for the Company or any
subsidiary of the Company for a period of at least
one year after the grant date of such restricted
stock.
Performance Awards, Deferred Stock, Stock
Payments And Dividend Equivalents
The Plan authorizes the Committee to grant one
or more "performance awards" to such employees or
consultants as the Committee may from time to time
select. Performance awards may be linked to the
market value, book value, net profits, or other
measure of the value of common stock or other
specific performance criteria determined appropriate
by the Committee, in each case on a specified date or
dates or over any period or periods determined by the
Committee, or may be based upon the appreciation and
the market value, book value, net profits or other
measure of the value of a specified number of shares
of common stock over a fixed period or periods
determined by the Committee. In making such
determinations, the Committee will consider the
contributions, responsibilities and other
compensation of the particular employee or
consultant, and any other such factors as the
Committee deems relevant in light of the specific
type of award. Payment of any performance award may
be made in cash, in common stock, or a combination of
both, as determined by the Committee.
The Plan also authorizes the Committee to grant
an award of "deferred stock" to such employees or
consultants as the Committee may from time to time
select, which award entitles the recipient to receive
Shares upon the satisfaction of any conditions the
Committee may impose. The number of Shares subject
to a deferred stock award will be determined by the
Committee and may be linked to the market value, book
value, net profits or other measure of the value of
the Company's common stock or other specific
performance criteria determined to be appropriate by
the Committee, in each cash on a specified date or
dates or over any period or periods determined by the
Committee. Common stock underlying a deferred stock
award will not be issued until the deferred stock
award has vested. Unless otherwise provided by the
Committee, a grantee of a deferred stock award shall
have no right as a Company stockholder with respect
to such deferred stock until such time as the award
has vested and the common stock underlying the award
has been issued.
The Plan also authorizes the Committee to grant
"stock payments" to any employee or consultant
selected by the Committee in a manner determined from
time to time by the Committee. The number of shares
shall be determined by the Committee and may be based
upon the fair market value, book value, net profits
or other measure of the value of common stock or
other specific performance criteria deemed
appropriate by the Committee, determined on the date
such stock payment is made or on any date thereafter.
The Plan also authorizes the Committee to grant
"dividend equivalents" to any employee or consultant
in connection with any other Incentive Award (other
than restricted stock) granted under the Plan.
Dividend equivalents provide an Incentive Award
recipient with cash payments equal to the dividend
amount paid on the number of Shares subject to
unvested and/or unexercised options, unvested
deferred stock awards, and unvested performance
awards. Dividend equivalents are payable in cash or
additional Shares in accordance with a formula and
are subject to such limitations as the Committee
establishes. Dividend equivalents granted with
respect to stock options intended to qualify as
performance-based compensation for purposes of Code
Section 162(m) will be payable regardless of whether
such stock options are exercised.
If the Committee intends for particular
performance awards, deferred stock awards and/or
stock payments to qualify as "performance based
compensation" that is not subject to the limitation
on tax deductibility imposed by Section 162(m) of the
Code, the awards and/or payments will be subject to
such other restrictions as may be required to so
qualify. These additional restrictions must include
the achievement of specific performance goals related
to one or more of the following: pre-tax income;
operating income; cash flow; earnings per share;
return on equity; return on invested capital or
assets; and cost reductions or savings. During the
first 90 days of each fiscal year, the Committee must
select those persons, if any, who will be granted
qualifying awards and/or payments, select the
performance goal or goals applicable to the fiscal
period in question, establish the various targets and
bonus amounts which may be earned during the fiscal
period in question, and specify the relationship
between the targets and amounts to be earned by each
recipient. Following the completion of the fiscal
period in question, the Committee must certify in
writing whether the applicable performance targets
have been achieved for such fiscal period. The
Committee may, in its discretion, reduce (but not
increase) the amount payable at a given level of
performance to take into account additional factors
that the Committee deems relevant to the assessment
of individual or corporate performance during the
fiscal period in question. A qualifying performance
award, deferred stock award or stock payment may not
cover more than 400,000 Shares per recipient per
year.
The Committee will establish, in its discretion,
the exercise and vesting period of any performance
award, deferred stock award, stock payment or
dividend equivalent. In consideration of the grant
of any performance award, deferred stock award, stock
payment or dividend equivalent, the grantee must
agree to remain in the employ of or to consult for
the Company or any subsidiary of the Company for a
period of at least one year after the grant date of
such performance award, deferred stock award, stock
payment or dividend equivalent (or such shorter
period as the Committee shall establish in the
agreement or by the Committee's action following such
grant).
Nature Of Plan Amendments That May Be Enacted
Without Stockholder Approval
The Board may amend or modify the Plan in any
and all respects, except that the Board may not,
without the approval of the Company's shareholders:
(i) increase the maximum number of shares issuable
under the Plan (except in connection with certain
changes in capitalization) or modify the Award Limit;
or (ii) take any other action that would otherwise
require shareholder approval under any applicable
law, regulation or rule.
Unless sooner terminated by the Board, the Plan
will, in all events, terminate ten years after the
date the Board adopted the Plan. Any Incentive
Awards or Director's Options outstanding at the time
of such termination will remain in force in
accordance with the provisions of the agreement
and/or instruments evidencing such Incentive Awards
or Director's Options.
New Plan Benefits
In February 1998, the Board of Directors
authorized the Company to enter into new long-term
employment agreements with Ron Berger, the Company's
Chairman and Chief Executive Officer, and Kim Cox,
the Company's Executive Vice President and Chief
Financial Officer. Mr. Berger and Mr. Cox have
served as Rentrak's senior executives since 1977 and
1985, respectively, and the Board determined that it
was in the best interests of the Company to retain
their services. In connection with its approval of
the employment agreements, the Compensation Committee
also authorized the issuance of an option to purchase
an aggregate 800,000 Shares to Mr. Berger and an
option to purchase an aggregate 100,000 Shares to Mr.
Cox. At that time, the Company's stock price was
$5.875 per share. The Committee's decision was
based on the significant benefit to the company of
retaining Mr. Berger and Mr. Cox and incentivizing
them to focus on the long-term performance of the
Company.
However, because at the time the Committee made
this decision, there were less than 900,000 Shares
available for issuance under the Plan, the Committee
subsequently decided to grant such options over time.
In June 1998, the Committee granted Mr. Berger an
option to purchase 154,920 Shares of Rentrak Common
Stock and granted Mr. Cox an option to purchase
19,365 Shares, both at an exercise price of $5.69 per
Share (the market price of the Company's stock on the
date of the grant). In August 1999, the Committee
granted Mr. Berger an option to purchase 355,560 and
44,440 shares respectively, both with an exercise
price of $5.219 per Share (the market price of the
Company's stock on the date of grant). In June,
1999, the Committee approved the Amendment to
increase the number of Shares issuable under the Plan
by 500,000 Shares. Assuming that the Amendment is
approved by the Company's shareholders, on the date
of such approval, the Committee intends to grant Mr.
Berger and Mr. Cox options to both with an exercise
price equal to the market price of the Company's
Common Stock at the time of the grant. The actual
number of options granted in fiscal 1999 would be
increased above or decreased below 289,520 and
36,195, respectively, depending on the value of the
options granted in 1998. The value of the options
would be estimated by the Committee using the Black-
Scholes model. For example, if the average exercise
price of the options granted in 1998 is greater than
$5.875, then the number of shares subject to the
options granted in 1999 will be increased.
Conversely, if the average exercise price of the
options granted in 1998 is less than $5.875, the then
the number of shares subject to the options granted
in 1999 will be decreased. The Committee's objective
in establishing this formula is to approximate the
economic benefit of a one-time grant of such options
to Messrs. Berger and Cox with an exercise price of
$5.875 per Share.
Federal Income Tax Consequences Of Awards
Granted Under The Plan
The following is a brief description of the
federal income tax treatment generally applicable to
ISOs, NSOs and restricted stock awards granted under
the Plan, based on the federal income tax laws in
effect on the date hereof. The exact federal income
tax treatment of an ISO, NSO or restricted stock
award will depend upon the specific nature of the
grant. Because the following is only a brief summary
of the federal income tax rules, grantees should not
rely thereon for individual tax advice, as each
taxpayer's situation and the consequences of any
particular transaction will vary depending upon the
specific facts and circumstances involved. Each
taxpayer is advised to consult with his or her own
tax advisor for particular federal, as well as state
and local, income and any other tax advice.
Incentive Stock Options. Generally, an optionee
recognizes no taxable income upon the grant or
exercise of an ISO that meets the requirements of
Code Section 422. However, the amount by which the
fair market value of the stock acquired at the time
of exercise exceeds the option exercise price (the
"spread") is taken into the account in determining
the amount, if any, of the alternative minimum tax
due from the optionee in the year in which the option
is exercised. In addition, if the optionee exercises
the option by paying the option price with shares of
stock, the transfer of such stock may result in
taxable income to the optionee even though the
transfer itself will not affect the favorable tax
treatment of the stock received as a result of
exercising the option.
If an optionee holds the stock acquired through
the exercise of the option for more than two years
from the date in which the option was granted and
more than one year from the date on which the option
was exercised, and if the optionee is an employee of
the Company at all times from the date of the grant
of the option through the date that is three months
before the date of exercise, any gain or loss on the
subsequent disposition of such stock will be taxed to
such optionee as mid-term or long-term capital gain
or loss equal to the difference between the
consideration received upon such disposition and the
option exercise price.
Generally, if an optionee disposes of the stock
received on exercise of an incentive stock option
less than two years after the date the option was
granted or less than one year
after the date the option was exercised, then, at the
time of disposition, the optionee will recognize
ordinary income in the amount equal to the lesser of
(i) the stock's fair market value on the date of
exercise over the option exercise price; or (ii) the
amount received for the stock over the option
exercise price. Any gain in excess of this amount
will be taxed as capital gain.
To the extent that an optionee recognizes
ordinary income by reason of a disqualifying
disposition of stock according to the exercise of an
incentive stock option, the Company generally will be
entitled to a corresponding business expense
deduction in the tax year in which the disqualifying
disposition occurs.
Non-Qualified Stock Options. NSOs are not
intended to be incentive stock options under Section
422 of the Code. An optionee does not recognize
taxable income upon the grant of an NSO, provided the
NSO does not have a readily ascertainable fair market
value at the time of grant.
Upon the exercise of an NSO, the optionee
generally will recognize ordinary income in an amount
equal to the difference between the fair market value
of the stock on the date of exercise and the exercise
price. However, in the event an optionee cannot sell
the stock acquired on exercise of an NSO without
incurring liability under Section 16(b) of the
Exchange Act, or the stock is otherwise subject to a
substantial risk of forfeiture, the optionee will not
recognize ordinary income with respect to the
issuance of the stock until such time as the optionee
can sell the stock without incurring liability under
Section 16(b) of the Act or the stock is no longer
subject to a substantial risk of forfeiture unless
the optionee files an election with the Internal
Revenue Service pursuant to Section 83(b) of the
Code. If such an election is made, the optionee will
be taxed in the year the option is exercised on the
difference between the exercise price and the fair
market value of the stock at the time of exercise.
This amount will be taxed as ordinary income.
If no election is made pursuant to Section 83(b)
of the Code, the recognition of income with respect
to the exercise will be delayed until the restriction
imposed by Section 16(b) of the Exchange Act or such
other risk of forfeiture (as the case may be) lapses,
and the optionee will be taxed at ordinary income
rates on the difference between the exercise price of
the NSO and the fair market value of the stock at the
time the restriction or risk of forfeiture lapses.
Provided the Company complies with applicable
federal income tax reporting requirements with
respect to payment of compensation, the Company will
generally be entitled to a business expense deduction
in the tax year in which the exercise occurs in an
amount equal to the ordinary income recognized by the
optionee.
Any gain or loss on a disposition of the stock
acquired upon the exercise of an NSO will be treated
as long-term, mid-term or short-term capital gain or
loss to the optionee, depending upon the period for
which the stock has been held. The gain or loss
recognized on a taxable disposition generally will be
an amount equal to the difference between the selling
price and the optionee's basis in such stock. The
optionee's basis generally is equal to the fair
market value of such stock on the date the NSO was
exercised (or on the date the risk of forfeiture
lapses, if such stock is subject to a substantial
risk of forfeiture).
There generally are no federal income tax
consequences to the Company by reason of the
disposition by an optionee of stock acquired upon the
exercise of an NSO.
Restricted Stock. A recipient of restricted
stock generally will recognize ordinary income, and
the Company will be entitled to a deduction, in an
amount equal to the excess of the fair market value
of the stock (determined without regard to any
restrictions other than those that by their terms
never lapse) over the amount, if any, paid for the
stock. For this purpose, the fair market value of
the stock is generally determined on the earlier of
the date on which the stock is no longer subject to a
substantial risk of forfeiture or is transferable
(without the transferee being subject to a
substantial risk of forfeiture) and the income with
respect to the receipt of the stock is reportable by
recipient in that year. In the event the recipient
cannot sell the stock without incurring liability
under Section 16(b) of the Exchange Act, the
recipient generally will not recognize ordinary
income with respect to the receipt of the stock until
the recipient can sell the stock without incurring
liability under Section 16(b) of the Act and the fair
market value of the stock (for purposes of
determining the recipient's income resulting from the
receipt of the stock) will be determined as of that
date.
If the recipient files an election with the
Internal Revenue Service pursuant to Section 83(b) of
the Code within 30 days of the receipt of the stock,
the recipient will be taxed in the year the stock is
received on the difference between the fair market
value of the stock at the time of receipt and the
amount paid for the stock, if any. This amount will
be taxed as ordinary income. If shares with respect
to which a Section 83(b) election has been made are
forfeited, the recipient generally will be entitled
to a capital loss equal to the amount, if any, that
the recipient had paid for the forfeited shares as
distinguished from the amount that the recipient had
recognized as income as a result of the Section 83(b)
election.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Stephen Roberts, a stockholder and a member of
the Company's Board of Directors, provided consulting
services to the Company during fiscal 1999, for which
he received $63,996. The Company plans to continue
to use Mr. Roberts as a consultant during fiscal
2000.
Marty Graham, an officer of the Company, holds
an interest in two retail outlets participating in
the Company's PPTr System. The Company realized
revenues of approximately $99,000 from these outlets
during fiscal 1999. The Company expects to continue
to do business with Mr. Graham's retail outlets in
fiscal 2000.
Dr. Pradeep Batra, a member of the Company's
Board of Directors, controls Unique Business Systems
("UBS") a company that provided marketing services to
the Company . The Company paid UBS $15,750 in
commissions during fiscal 1999. The Company's
contract with UBS expires December 31, 1999. The
Company is in the process of negotiating a new
contract with UBS.
Muneaki Masuda, a member of the Company's Board
of Directors, holds a controlling interest in CCC
which in turn holds a controlling interest in Rentrak
Japan. Pursuant to an agreement between the Company
and Rentrak Japan, Rentrak Japan pays the Company an
annual royalty, based on a June 1 to May 31 royalty
year, equal to 1.67 percent of the first $47.9
million of Rentrak Japan's sales and one-half of one
percent of Rentrak Japan's sales in excess of such
amount. In fiscal 1999, Rentrak Japan paid the
Company a total of approximately $2.2 million in
royalty fees, which amount included a one-time
royalty payment of $1 million.
In January 1999, the Company entered into a
$3,000,000 unsecured note payable with Bill LeVine.
The note bears interest at ten percent (10%), payable
monthly and is due in full on July 31, 1999.
INDEPENDENT ACCOUNTANTS
The Company's independent public accountants for its
fiscal year ended March 31, 1999, were Arthur
Andersen LLP, which management intends to continue to
retain during the current fiscal year. No election,
approval or ratification of the choice of independent
public accountant by the shareholders is required. A
representative of Arthur Andersen LLP is expected to
be present at the Annual Meeting and will have the
opportunity to make a statement if he or she desires
to do so. Such representative is also expected to be
available to respond to appropriate questions.
OTHER BUSINESS
Management does not presently know of any
matters that will be presented for action at the
Annual Meeting other than those herein set forth.
However, if any other matters properly come before
the Annual Meeting, the holders of proxies solicited
by the Board of Directors of the Company will have
discretionary authority to vote the shares
represented by all proxies granted to them on such
matters in accordance with their best judgment.
FINANCIAL INFORMATION
A copy of the 1999 Annual Report of the Company,
including audited financial statements, is being sent
to shareholders with this Proxy Statement.
REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE
YEAR ENDED MARCH 31, 1999, WILL BE AVAILABLE TO
SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO
CAROLYN A. PIHL, VICE PRESIDENT FINANCE/CHIEF
ACCOUNTING OFFICER, RENTRAK CORPORATION, ONE AIRPORT
CENTER, 7700 N.E. AMBASSADOR PLACE, PORTLAND, OR
97220. COPIES OF EXHIBITS TO THE ANNUAL REPORT ON
FORM 10-K ARE AVAILABLE, BUT A REASONABLE FEE WILL BE
CHARGED TO ANY SHAREHOLDER REQUESTING EXHIBITS.
By Order of the Board of Directors,
/s/ F. Kim Cox
F. Kim Cox
Secretary
Portland, Oregon
Date: June 30, 1999
[LOGO OF RENTRAK CORPORATION APPEARS HERE]
RENTRAK CORPORATION
This Proxy is Solicited on Behalf of the Board of
Directors.
The undersigned hereby appoints Ron Berger and F. Kim
Cox as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent
and to vote as designated below, all the shares of
Common Stock of Rentrak Corporation (the "Company")
held of record by the undersigned on June 23, 1999,
at the annual meeting of the shareholders to be held
at the Company's executive offices, One Airport
Center, 7700 N.E. Ambassador Place, Portland, Oregon
97220, on August 23, 1999, at 8 a.m., Pacific Time,
or any adjournment thereof.
1. Election of Directors to the Terms Specified:
[ ] FOR all nominees listed below (except
as marked to the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all
nominees listed below.
Instruction: To withhold authority to vote for
any individual nominee, strike a line through
the nominee's name in the list below:
Skipper Baumgarten, Muneaki Masuda, Stephen
Roberts, Takaaki Kusaka
2. Proposal to Approve the Amendment to the 1997
Equity Participation Plan of Rentrak
Corporation:
[ ] FOR approval of the Amendment.
[ ] AGAINST approval of the Amendment.
[ ] WITHHOLD AUTHORITY to vote to approve
the Amendment.
3. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting.
This proxy, when properly executed, will be
voted as directed herein. If no direction is made, this proxy will
be voted FOR the four nominees to the Board of
Directors of Rentrak Corporation and FOR approval of
the amendment to the 1997 Equity Participation Plan
of Rentrak Corporation.
Please date and sign exactly as name appears
hereon. When shares are held as joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
Dated: _____________________, 1999
Signature______________________
Signature if held jointly___________________
Please mark, sign, date and return the proxy using the
enclosed envelope.
Exhibit A
AMENDMENT TO
THE 1997 EQUITY PARTICIPATION PLAN
OF
RENTRAK CORPORATION
THIS AMENDMENT (the "Amendment") to the 1997 Equity
Participation Plan of Rentrak Corporation (the "Plan") is hereby
adopted by Rentrak Corporation, an Oregon corporation (the
"Company").
1. Incorporation; Definitions. The terms and provisions
of this Amendment are incorporated by this reference in the Plan
as though fully set forth therein. Terms not otherwise described
herein shall have the meanings ascribed to them in the Plan.
2. Conflicts. In the event of any conflict between the
terms and provisions of this Amendment and those of the Plan, the
terms and provisions of this Amendment shall control.
3. Amendment.
a. Shares Subject to Plan. Section 2.1(a) of the
Plan is hereby amended to read in its entirety as follows:
2.2 Shares Subject to Plan.
(a) The shares of stock subject to Options,
awards of Restricted Stock, Performance Awards, Dividend
Equivalents, awards of Deferred Stock or Stock Payments shall be
Common Stock, initially shares of the Company's Common Stock, par
value $.001 per share. The aggregate number of such shares which
may be issued upon exercise of such options or rights or upon any
such awards under the Plan shall not exceed one million one
hundred thousand (1,600,000). The shares of Common Stock
issuable upon exercise of such options or rights or upon any such
awards may be either previously authorized but unissued shares or
treasury shares.
4. No Other Change. Except as specifically modified in
this Amendment, all other provisions and terms of the Plan shall
remain unchanged and in full force and effect.
I hereby certify that the foregoing Amendment was duly
adopted by the Board of Directors of Rentrak Corporation on
____________, 1999.
Executed on this __ day of __________, 1999.
F. Kim Cox
Secretary
