<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Under Rule 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
[_] 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 0-11 (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 registrant statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
August 8, 2000
To Our Shareholders:
Our 2000 Annual Meeting of Shareholders will be held on Tuesday, September
19, 2000, at 9:00 a.m., Pacific Daylight Savings Time, at our executive
offices, located at One Airport Center, 7700 N.E. Ambassador Place, Portland,
Oregon 97220. On the following pages you will find the formal Notice of Annual
Meeting and Proxy Statement. Our 2000 Annual Report is also enclosed.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted at the meeting. ACCORDINGLY, PLEASE
DATE, SIGN AND RETURN THE ENCLOSED WHITE PROXY CARD PROMPTLY. If you attend
the meeting, there will be an opportunity to revoke your proxy and to vote in
person if you prefer.
If you have any questions or need assistance voting your proxy please call
our proxy solicitor Corporate Investor Communications, Inc. toll-free at 1-
888-560-9906 and ask for Bill Fiske.
Sincerely yours,
/s/ Ron Berger
Ron Berger
Chairman of the Board
<PAGE>
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 19, 2000
To the Shareholders of
Rentrak Corporation:
The Annual Meeting of Shareholders of Rentrak Corporation ("Rentrak") will
be held on Tuesday, September 19, 2000, at 9:00 a.m., Pacific Daylight Savings
Time, at Rentrak's executive offices, located at One Airport Center, 7700 N.E.
Ambassador Place, Portland, Oregon 97220, for the following purposes:
1. To elect a board of directors consisting of nine or five members,
depending on the outcome of Proposal 2, each to serve until the next annual
meeting of shareholders and until his successor is duly elected and
qualified;
2. To act on a shareholder proposal to amend Rentrak's 1995 Restated
Bylaws to fix the size of the board of directors at five (the "Shareholder
Bylaw Proposal"), which is opposed by the board of directors;
3. To hear general reports about Rentrak's business from certain of its
officers. The shareholders will not be asked to act upon such reports; and
4. To 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 August 4, 2000 as
the record date for determining shareholders entitled to notice of, and to
vote at, the meeting and any adjournments or postponements thereof. The proxy
statement, proxy card and 2000 Annual Report to Shareholders accompany this
Notice.
If you plan to attend the Annual Meeting:
Please note that space limitations may make it necessary to limit attendance
only to Rentrak shareholders and the holders of shareholder proxies. Admission
to the meeting will be on a first-come, first-served basis. Registration will
begin at approximately 8:00 a.m., and seating will be available at
approximately 8:30 a.m. Cameras and recording devices will not be permitted at
the meeting. "Street name" shareholders will need to bring a copy of a
brokerage statement reflecting stock ownership as of the record date in order
to be admitted to the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, please fill out, sign,
date and promptly return the enclosed proxy in the enclosed postage paid
envelope. You may revoke your proxy in writing or at the Annual Meeting if you
wish to vote in person.
By Order of the Board of Directors:
/s/ F. Kim Cox
F. Kim Cox,
President and Secretary
Portland, Oregon
August 8, 2000
<PAGE>
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 19, 2000
----------------
Date, Time, Place of Meeting
The board of directors of Rentrak Corporation ("Rentrak") is furnishing this
proxy statement and the accompanying Annual Report to Shareholders, notice of
annual meeting, and the enclosed WHITE form of proxy card in connection with
the board's solicitation of proxies for use at Rentrak's 2000 Annual Meeting
of Shareholders (the "Annual Meeting"). The Annual Meeting will be held
Tuesday, September 19, 2000, at 9:00 a.m. Pacific Daylight Savings Time, at
Rentrak's executive offices, located at One Airport Center, 7700 N.E.
Ambassador Place, Portland, Oregon 97220.
Solicitation and Revocation of Proxies
Shares represented by the WHITE proxy that are properly dated, executed and
returned will be voted as directed on the proxy form. If no direction is
given, proxies will be voted FOR each of the director nominees selected by the
board of directors and AGAINST the Shareholder Bylaw Proposal (as defined
below). If other matters properly come before the Annual Meeting, the persons
named in the accompanying proxy will vote in accordance with their best
judgment with respect to such matters. Any proxy given by a shareholder may be
revoked at any time prior to its use by execution of a later-dated proxy
delivered to Rentrak's Secretary, by personal vote at the Annual Meeting, or
by written notice of revocation delivered to Rentrak's Secretary.
Rentrak's board of directors has selected the two persons named on the
enclosed WHITE proxy card to serve as proxies in connection with the Annual
Meeting. These proxy materials and the accompanying Rentrak 2000 Annual Report
to Shareholders are being mailed on or about August 11, 2000 to shareholders
of record on August 4, 2000.
Purposes of the Annual Meeting
The Annual Meeting has been called for the following purposes:
. To elect a board of directors consisting of nine or five members,
depending on the outcome of the Shareholder Bylaw Proposal (as defined
below), each to serve until the next annual meeting of shareholders and
until his successor is duly elected and qualified;
. To act on a shareholder proposal to amend Rentrak's 1995 Restated Bylaws
to fix the size of the board of directors at five (the "Shareholder
Bylaw Proposal"), which is opposed by the board of directors;
. To hear general reports about Rentrak's business from certain of its
officers. The shareholders will not be asked to act upon such reports;
and
. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Section 2.3.1 of Rentrak's 1995 Restated Bylaws, as amended, sets forth
procedures to be followed for introducing business at a shareholders meeting.
Rentrak has no knowledge of any other matters that may be properly presented
at the Annual Meeting. If other matters do properly come before the Annual
Meeting in accordance with the 1995 Restated Bylaws, the persons named in the
proxy card will vote your proxy in accordance with their judgment on such
matters in the exercise of their sole discretion.
1
<PAGE>
Record Date and Shares Outstanding
Only shareholders of record at the close of business on August 4, 2000 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting.
At the close of business on the Record Date, 12,295,684 shares of Rentrak
common stock were outstanding and held of record by 324 stockholders. For
information regarding the ownership of Rentrak common stock by holders of more
than five percent (5%) of the outstanding shares and by Rentrak's directors
and executive officers, see "Security Ownership of Certain Beneficial Owners
and Management."
Voting; Quorum
Each share of common stock outstanding on the Record Date is entitled to one
vote per share at the Annual Meeting. Shareholders are not entitled to
cumulate their votes. The presence, in person or by proxy, of the holders of a
majority of Rentrak's outstanding shares of common stock is necessary to
constitute a quorum at the Annual Meeting.
Vote Required
If a quorum is present at the Annual Meeting, the Shareholder Bylaw Proposal
will be approved if the number of votes cast for the proposal exceed the
number of votes cast against it. If the Shareholder Bylaw Proposal is
rejected, the nine director nominees who receive the greatest number of votes
cast in person or by proxy will be elected as directors. If the Shareholder
Bylaw Proposal is approved, the five director nominees who receive the
greatest number of votes cast in person or by proxy will be elected as
directors.
Effect of Abstentions
If you abstain from voting, your shares will be deemed present at the Annual
Meeting for purposes of determining whether a quorum is present. However,
abstentions will not count as votes "for" or "against" a proposal. Directors
are elected by a plurality of the votes cast and only votes cast in favor of a
nominee will have an effect on the outcome. Therefore, abstention from voting
will not affect the outcome of the election of directors. Similarly,
abstentions will not affect the outcome of the vote on the Shareholder Bylaw
Proposal.
Effect of Broker Non-Votes
If a broker holds your shares in street name, you should instruct your
broker how to vote. Broker non-votes (i.e. shares held by a broker or nominee
which are represented at the meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular proposal) are deemed present
at the Annual Meeting for purposes of determining whether a quorum is present.
However, broker non-votes are not counted as votes "for" or "against" a
proposal and are not counted in determining the number of votes cast on a
proposal. Accordingly, broker non-votes will have no effect on the outcome of
the election of directors or the Shareholder Bylaw Proposal.
2000 Shareholder Proposals
The deadline for shareholders to submit proposals to be considered for
inclusion in the proxy statement for the 2001 Annual Meeting of Shareholders
is April 10, 2001. In addition, to be considered at the 2001 Annual Meeting of
Shareholders, Section 2.3.1 of Rentrak's 1995 Restated Bylaws, as amended,
requires shareholders to provide certain information and deliver notice of all
proposals, matters and other business to Rentrak's principal executive office
no later than sixty (60) calendar days and no earlier than ninety (90)
calendar days prior to the first anniversary of the 2000 Annual Meeting.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
On July 5, 2000, Rentrak's board of directors amended Section 3.2 of
Rentrak's 1995 Restated Bylaws to eliminate the staggered board of directors.
Section 3.2 divided the board into three classes and provided that the
directors in each class would serve staggered three-year terms. As amended,
Section 3.2 of Rentrak's 1995 Restated Bylaws provides that the board of
directors shall consist of between three and nine members, with the specific
number to be established by resolution of the board. The board of directors
has established the number of directors to be nine, which is the current
number of directors. A group of shareholders identifying itself as the
Committee for the Achievement of Rentrak Excellence (the "Shareholder Group")
has proposed its own slate of five directors, contingent upon shareholder
approval of Proposal 2, the Shareholder Bylaw Proposal. The board of directors
eliminated the stagger provision at this time in order to remove potential
barriers to shareholder democracy and streamline the election process by
giving Rentrak's shareholders a meaningful choice between Rentrak's proposed
board nominees and, if Proposal 2 passes, the board nominees proposed by the
Shareholder Group. If Proposal 2 fails, the Shareholder Group's five nominees
will not be up for election. The Shareholder Group had also proposed to
eliminate Rentrak's staggered board of directors.
Notwithstanding the foregoing bylaw amendment, because current directors
were elected to three-year terms at a time when the board was divided into
three classes, the terms of only three directors legally expire at the Annual
Meeting. Under Oregon law, the other six directors would continue to serve the
remainder of the full three-year term for which they were elected by Rentrak's
shareholders. However, in order to effectuate the purpose of the board of
directors' recent bylaw amendment removing staggered terms, these six
directors have agreed to resign their position as such, effective at the
Annual Meeting immediately prior to the election of directors. Accordingly, in
the event Proposal 2 fails, shareholders will be asked to elect a board of
nine directors at the Annual Meeting, each to serve until the next annual
meeting of shareholders and until his successor is duly elected and qualified.
The board of directors has nominated the individuals named below to fill the
nine seats. 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 in its discretion may recommend. Proxies cannot be voted for more than
nine nominees. If a vacancy occurs after the Annual Meeting, the board of
directors may elect a replacement to serve for the remainder of the unexpired
term.
At the Annual Meeting, Proposal 2 will be the first agenda item. If Proposal
2 passes, the size of Rentrak's board of directors at the Annual Meeting would
be reduced to five members and the five nominees who receive the greatest
number of votes would be elected to fill the open seats. If Proposal 2 passes,
of the nine nominees listed below, the proxies will be voted for the five
nominees who receive the greatest number of votes in connection with the
solicitation of proxies by Rentrak. If Proposal 2 fails, the nine nominees who
receive the greatest number of votes will be elected as directors.
The board of directors recommends a vote "FOR" the election of each of the
following director nominees.
Peter Balner (53). Mr. Balner is currently the President and Chief Executive
Officer of Blowout Video, Inc., a wholly owned subsidiary of Rentrak, a
position he has held since September 1997. Prior to joining Blowout, Mr.
Balner served from May 1996 to August 1997 as a Director and Executive Vice
President, Corporate Retail Operations and Development, of West Coast
Entertainment Corporation, a publicly traded video retailer. He also served
from December 1981 to May 1996 as the President and Chief Executive Officer of
Palmer Corporation, a video retailer operating primarily in metropolitan New
York. Mr. Balner serves as a director of The Enterprise Bank. Mr. Balner has
been a director of Rentrak since May 2000.
Pradeep Batra (54). 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 point-of-sale ("POS") software
that some of Rentrak's retail video store customers use to capture rental and
sale activity and
3
<PAGE>
report such activity to Rentrak. UBS is party to a POS vendor agreement and
several other agreements with Rentrak and two Rentrak subsidiaries. Mr. Batra
also serves as a director of UBS and Synera Systems. Mr. Batra has been a
director of Rentrak since February 1998.
Skipper Baumgarten (53). 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., an insurance
company. Mr. Baumgarten has been a director of Rentrak since February 1998.
Ron Berger (52). Since founding Rentrak in 1977, Mr. Berger has served as
President (up until May 2000) and Chief Executive Officer of Rentrak, except
for brief periods in other positions in 1981 and 1984. Since September 1984,
he has also served as Rentrak'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, and BlowOut Video, Inc. Mr. Berger is a member of the board of directors
of American Contractors Indemnity Co., Fast Forward Foundation, and the Board
of Trustees of The Nature Conservancy of Oregon. He is also a past director of
the Video Software Dealers Association and the International Franchise
Association.
James Jimirro (63). Since 1986, Mr. Jimirro has been the Chairman of the
board of directors, President and Chief Executive Officer of J2
Communications, a company that owns and licenses the National Lampoon name and
operates the National Lampoon web site. Mr. Jimirro has been a director of
Rentrak since November 1990. Since April 1998, he has served as Chairman of
the Board and a director of Rentrak UK.
Takaaki Kusaka (47). Since April 1991, Mr. Kusaka has served as President
and as a director of Rentrak Japan. Rentrak currently owns a nine percent (9%)
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 has been a
director of Rentrak since 1999.
Bill LeVine (80). 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., Fast Frame, and American
Contractors Indemnity Co. Mr. LeVine has been a director of Rentrak since
April 1985.
Muneaki Masuda (49). Mr. Masuda founded Rentrak Japan, a joint venture
formed between Rentrak and Culture Convenience Club Co., Ltd. ("CCC"). Rentrak
currently owns a nine percent (9%) equity interest in Rentrak Japan. Mr.
Masuda is the controlling stockholder of So-Tsu Company, which in turn holds a
controlling interest in CCC and Rentrak Japan. Since founding CCC, Mr. Masuda
has served as President except for the period from October 1996, through
February 2000, when he served as its Chairman. Until February 2000, Mr. Masuda
also served as President of DIRECTV Japan. Mr. Masuda has been a director of
Rentrak since August 1990. Mr. Masuda is also a director of GAGA
Communications, Digital Hollywood and Rentrak Japan. Pursuant to a Common
Stock Purchase Agreement between Rentrak and CCC, entered into as of December
20, 1989, Rentrak'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 Rentrak's management and Board hold proxies or are otherwise
entitled to vote.
Stephen Roberts (62). Mr. Roberts is President and CEO of The S. Roberts
Company (founded in 1985), a consulting firm to the entertainment industry.
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 CTN Media
Group and Rentrak Japan. Mr. Roberts has been a director of Rentrak since
December 1988.
See "CERTAIN RELATIONSHIPS AND TRANSACTIONS" for a discussion of certain
agreements and relationships between Rentrak and its directors.
4
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD
The board of directors has a Compensation Committee and an Audit Committee.
The board of directors does not have a nominating committee.
The Compensation Committee is responsible for evaluating the performance of
Rentrak's management and determining the method of compensating Rentrak's
salaried employees. During the fiscal year ended March 31, 2000, the
Compensation Committee held two meetings. From the beginning of Rentrak's most
recent fiscal year until August 23, 1999, the Compensation Committee was
comprised of Skipper Baumgarten, Herbert Fischer and Bill LeVine. Mr. Fischer
resigned from Rentrak's board of directors on August 23, 1999, and was
subsequently replaced on the Compensation Committee by Takaaki Kusaka.
The Audit Committee is comprised of Pradeep Batra, James Jimirro and Bill
LeVine and is responsible for evaluating the integrity of Rentrak's financial
reporting to shareholders. During the fiscal year ended March 31, 2000, the
Audit Committee held four meetings.
During the fiscal year ended March 31, 2000, the board of directors held
four regular meetings, each of which was conducted in person, and six special
meetings, each of which was conducted by telephone conference call. While in
office, each director attended at least seventy-five percent (75%) 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, 2000, except for Muneaki Masuda, who attended seventy percent (70%) of
Rentrak's board of directors meetings.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 20, 2000, certain information
regarding the beneficial ownership of Rentrak common stock by (i) each person
believed by Rentrak to be the beneficial owner of five percent (5%) or more of
Rentrak's outstanding shares of common stock, (ii) each director of Rentrak,
(iii) Rentrak's Chief Executive Officer and the next four most highly
compensated executive officers during the last completed fiscal year who were
serving as executive officers at the end of the fiscal year (the "Named
Executive Officers") and (iv) the directors and the executive officers as a
group.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
---------------------------
Directors, Named Executive Officers and 5%
Shareholders (1) Number(2) Percentage(2)
------------------------------------------ --------- -------------
<S> <C> <C>
Peter Balner...................................... 67,250(3) *
Pradeep Batra..................................... 24,500(4) *
Skipper Baumgarten................................ 70,000(5) *
Ron Berger........................................ 1,768,366(6) 14.39%
F. Kim Cox........................................ 350,424 2.85%
Marty Graham...................................... 72,539(7) *
James Jimirro..................................... 45,566(8) *
Takaaki Kusaka.................................... 0 *
Bill LeVine....................................... 457,511(9) 3.72%
Muneaki Masuda.................................... 1,039,839(10) 8.44%
Carolyn Pihl...................................... 19,464(11) *
Christopher Roberts............................... 48,856(12) *
Stephen Roberts................................... 109,663(13) *
All executive officers and directors as a group
(17 persons)..................................... 4,334,307(14) 33.74%
Culture Convenience Club Co., Ltd................. 390,000(15) 3.17%
4-20-3 Ebisu-21st Floor
Shibuya-Ku, Tokyo 150, Japan
Rentrak Japan, K.K................................ 614,000(16) 5.00%
4-20-3 Ebisu-35th Floor
Shibuya-Ku, Tokyo 150, Japan
Walt Disney Company............................... 1,543,203(17) 11.16%
500 South Buena Vista St.
Burbank, CA
Committee for the Achievement of Rentrak Excel-
lence............................................ 1,119,480(18) 9.10%
6656 Penninsula Way
Laingsburg, MI 48848
</TABLE>
--------
* Less than 1%
(1) The address of all Directors and executive officers is Rentrak's address:
One Airport Center, 7700 N.E. Ambassador Place, Portland, Oregon 97220.
(2) All percentages have been calculated based on the number of shares of
Rentrak common stock that were issued and outstanding as of June 20,
2000. In accordance with SEC regulations, the number of shares and
percentage calculation with respect to each shareholder assumes the
exercise of all outstanding options such shareholder holds and that can
be exercised within 60 days after the date of this proxy statement.
(3) Includes 26,250 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(4) Includes 10,000 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(5) Includes 10,000 shares of common stock subject to options exercisable
within 60 days of the date of the table.
6
<PAGE>
(6) Includes 52,200 shares held by Mr. Berger's parents, with respect to
which Mr. Berger disclaims beneficial ownership.
(7) Includes 72,535 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(8) Includes 22,646 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(9) Includes 10,000 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(10) Mr. Masuda is the controlling shareholder of So-Tsu Company, which in
turn holds a controlling interest in Culture Convenience Club Co., Ltd.
and Rentrak Japan, K.K. Includes 390,000 shares owned by Culture
Convenience Club Co., Ltd. and 614,000 shares owned by Rentrak Japan,
K.K. Also includes 35,839 shares of common stock exercisable within 60
days of the date of this table.
(11) Includes 19,464 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(12) Includes 47,558 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(13) Includes 59,281 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(14) Includes 555,114 shares of common stock subject to options exercisable
within 60 days of the date of the table.
(15) As indicated in footnote 10 to this table, these shares are beneficially
owned by Muneaki Masuda, a director of Rentrak and controlling
shareholder of So-Tsu Company. So-Tsu Company holds a controlling
interest in Culture Convenience Club Co., Ltd.
(16) As indicated in footnote 10 to this table, these shares are beneficially
owned by Muneaki Masuda, a director of Rentrak and controlling
shareholder of So-Tsu Company. So-Tsu Company holds a controlling
interest in Rentrak Japan, K.K.
(17) Includes 1,543,203 shares of common stock subject to warrants that are
exercisable within 60 days of the date of this table.
(18) Based on information set forth in the Amendment No. 2 to Schedule 13D,
filed on July 27, 2000 by the Committee for the Achievement of Rentrak
Excellence. According to the Schedule 13D, Cecil D. Andrus (1,000
shares), Michael Annechino (97,400 shares), Mark A. Brown (119,550
shares), Thomas S. Cousins, Jr. (65,000 shares), George H. Kuper (0
shares), Joon S. Moon (1,000 shares), James G. Petcoff (11,500 shares),
Gordon A. Reck (67,000 shares), Donald W. Remlinger (75,000 shares), Paul
Rosenbaum (250,730 shares), David R. Rosencrantz (63,700 shares), Guy R.
Wolcott (287,000 shares), and Frederick L. Zehnder (80,600 shares)
collectively are the beneficial owners of 1,119,480 shares. According to
the Schedule 13D, the foregoing persons may be deemed to be part of a
"group" within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934.
7
<PAGE>
EXECUTIVE OFFICERS
The names, ages, positions and backgrounds of Rentrak's current executive
officers are as follows:
<TABLE>
<CAPTION>
Position
Held Current Position(s) with Company and
Name Age Since Background
---- --- -------- ------------------------------------
<C> <C> <C> <S>
Ron Berger........... 52 1984 Chairman of the board of directors and
Chief Executive Officer. Since founding
Rentrak in 1977, Mr. Berger has served as
director, and Chief Executive Officer,
except for brief periods in other positions
in 1981 and 1984. From 1977 through May
2000, Mr. Berger also served as President
of Rentrak. Since September 1984, he has
also served as Rentrak's Chairman of the
Board. Mr. Berger serves as a member of the
following boards of directors: Rentrak
Japan K.K.; Rentrak UK; Blowout Video,
Inc.; American Contractors Indemnity Co.;
Fast Forward Foundation; and The Nature
Conservancy of Oregon.
F. Kim Cox........... 47 2000 President, Chief Financial Officer,
Secretary and Treasurer. In May 2000, Mr.
Cox was appointed President of Rentrak and
as of July 20, 2000, became Rentrak's Chief
Financial Officer on an interim basis while
Rentrak undertakes a search for a new Chief
Financial Officer to replace Carolyn Pihl,
who resigned to assume the position of
Chief Financial Officer at 3PF.COM, Inc., a
wholly owned subsidiary of Rentrak. From
1999 until May 2000, Mr. Cox served as
Executive Vice President, Secretary and
Treasurer. From 1995 until 1999, Mr. Cox
served as Executive Vice President, Chief
Financial Officer, Secretary and Treasurer.
From 1991 until 1995, Mr. Cox served as
Executive Vice President--Strategic
Planning, Secretary, and Treasurer. From
1985 until 1991, Mr. Cox served as Chief
Financial Officer and Vice President of
Finance. Prior to joining Rentrak 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
Arthur Andersen & Co.
Marty Graham......... 42 1991 Vice President, Product Development. Prior
to joining Rentrak in October 1988 as
Director of Product Development, Mr. Graham
had served as General Manager and
Secretary/Treasurer of Pacific Western
Video Corporation since 1984, which owned
and operated two video retailer outlets,
both of which participated in Rentrak's PPT
Program.
Richard Nida......... 53 1998 Vice President, Investor Relations. Prior
to joining Rentrak in September 1998, Mr.
Nida served as the Director of Corporate
Communications and Investor Relations for
Payless ShoeSource from 1988 to August
1998.
Christopher Roberts.. 32 1994 Vice President, Sales. Prior to becoming
Vice President, Sales, Mr. Roberts was
Rentrak's National Director of Sales, a
position he held since September 1992.
</TABLE>
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation paid by Rentrak to the Named
Executive Officers during the fiscal years ended March 31, 2000, 1999 and
1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual ---------------
Compensation Awards
------------------ ---------------
Fiscal Year Securities All Other
Name and Principal Ended March Underlying Compensation
Position (1) 31, Salary($) Bonus($) Options/SARs(#) ($)(2)
------------------ ----------- --------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Ron Berger, 2000 429,353 2,264 260,943(3) (3,324)
President and Chief Ex-
ecutive Officer 1999 405,540 0 510,481(3) 94,915
1998 408,972 62,258 0 31,241
F. Kim Cox, 2000 191,029 85,000 32,623 5,571
Executive Vice President
and Secretary 1999 181,136 0 63,805 6,065
1998 198,397 62,824 0 8,195
Marty Graham, 2000 152,265 35,000 10,000 3,835
Vice President, Product
Development 1999 140,083 15,000 0 4,032
1998 137,371 5,000 35,000 6,110
Carolyn Pihl, 2000 147,753 30,000 10,000 1,500
Chief Financial Officer 1999 134,515 5,000 0 1,500
1998 110,913 9,000 10,000 1,500
Christopher Roberts, 2000 137,596 26,750 10,000 1,500
Vice President of Sales 1999 135,854 20,000 0 1,500
1998 121,593 23,000 35,000 1,500
</TABLE>
--------
(1) Reflects principal position as of March 31, 2000. In May 2000, Mr. Cox was
appointed president. He is also currently serving as Rentrak's Chief
Financial Officer on an interim basis. Ms. Pihl resigned in July 2000, as
Rentrak's Chief Financial Officer to assume the Chief Financial Officer
position at Rentrak's wholly owned subsidiary, 3PF.COM, Inc.
(2) Amounts disclosed in this column reflect the following matching
contributions during fiscal 2000 on behalf of the Named Executive Officers
under Rentrak's 401(k) plan: Ron Berger $1,500, F. Kim Cox $1,500, Marty
Graham $1,500, Carolyn Pihl $1,500, and Christopher Roberts $1,500.
Rentrak also made payments to supplemental disability and life insurance
plans during fiscal 2000 for the following Named Executive Officers: Ron
Berger $22,948, F. Kim Cox $4,071, and Marty Graham $2,335. In addition,
other compensation for Ron Berger includes lease and maintenance payments
on an automobile and a fiscal 2000 credit of $47,717 related to a
correction to an overcalculation of compensation in 1999.
(3) In May 1995, Rentrak adopted a shareholder rights plan designed to ensure
that all of Rentrak's shareholders receive fair and equal treatment in the
event of certain proposals to acquire Rentrak. Under the rights plan, each
shareholder received a dividend of one right for each share of Rentrak's
outstanding common stock, entitling the holder to purchase additional
shares of common stock. The rights become exercisable after any person or
group acquires beneficial ownership (as such term is defined in the rights
plan) of 15% or more of Rentrak's outstanding stock. As a result of stock
option grants made to Mr. Berger, his beneficial ownership (as such term
is defined in the rights plan) may be deemed to have exceeded 15%. As
permitted by the provisions of the rights plan, the board of directors has
determined that, to the extent Mr. Berger's beneficial ownership exceeded
15%, it was inadvertent. Following the board's determination, Mr. Berger
delivered for cancellation all of the options granted to him in fiscal
2000 (covering 260,943 shares) and a portion of the options granted to him
in fiscal 1999 (covering 243,659 shares). Under the rights plan, the board
of directors, at their discretion, retains the right to waive the 15%
threshold with respect to any person (including Mr. Berger) or transaction
or terminate the rights plan. After the cancellation of these options, Mr.
Berger's beneficial ownership (as such term is defined in the rights plan)
of Rentrak's outstanding stock is now less than 15%. The board of
directors has not waived the 15% threshold.
9
<PAGE>
Stock Option Grants
The following table sets forth information concerning stock option grants to
each of the Named Executive Officers during the fiscal year ended March 31,
2000. Rentrak did not grant any stock appreciation rights to the Named
Executive Officers during the fiscal year.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants (1)
----------------------------
Potential realizable value
Number of at assumed annual rates
securities % of total of stock price appreciation
underlying options granted for option term (2)
options to employees in Exercise Expiration ---------------------------
Name granted fiscal year(3) price(4) date 5% ($) 10% ($)
---- ---------- --------------- -------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Ron Berger(5)........... 260,943(7) 52.15% 4.750 8/23/09 779,502 1,975,411
F. Kim Cox(5)........... 32,623 6.52% 4.750 8/23/09 97,453 246,965
Marty Graham(5)......... 10,000 2.00% 2.813 4/01/09 17,691 44,832
Carolyn Pihl(6)......... 10,000 2.00% 2.813 4/01/09 17,691 44,832
Christopher Roberts(5).. 10,000 2.00% 2.813 4/01/09 17,691 44,832
</TABLE>
--------
(1) Options granted include both incentive stock options and nonqualified
stock options. All option grants are subject to the discretion of the
board of directors.
(2) These calculations are based on certain assumed annual rates of
appreciation as required by SEC rules and regulations governing the
disclosure of executive compensation. Under these rules, an assumption is
made that the shares underlying the stock options shown in this table
could appreciate at rates of five percent (5%) and ten percent (10%) per
annum on a compounded basis over the ten-year term of the stock options.
Actual gains, if any, on stock option exercises are dependent on the
future performance of Rentrak's common stock and overall stock market
conditions. There can be no assurance that the gains reflected in this
table will be achieved.
(3) In fiscal 2000, Rentrak granted options covering a total of 119,271 shares
to its non-executive officer employees and options covering a total of
62,500 shares to its non-employee directors.
(4) The exercise price per share equals the market price of Rentrak's common
stock on the date of grant.
(5) Option vests twenty percent (20%) per year on each anniversary of the
grant date.
(6) Option vests twenty-five percent (25%) per year on each anniversary of the
grant date.
(7) This option was cancelled in its entirety on June 21, 2000. See note 3 to
the Summary Compensation Table, above.
10
<PAGE>
Stock Option Exercises
The following table sets forth certain information concerning stock option
exercises by each of the Named Executive Officers during the fiscal year ended
March 31, 2000, 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, 2000. The value of 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, 2000, which was
$5.50.
Aggregated Option Exercises in Fiscal 2000
and Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options at Year
Options at Year End (#) End ($)
------------------------- -------------------------
Shares Value
Acquired on Realized
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ron Berger.............. 0 0 1,331,024 669,328(1) 860,697 279,479
F. Kim Cox.............. 5,357 19,317 301,336 110,807 319,880 41,507
Marty Graham............ 0 0 65,535 28,000 71,985 62,495
Carolyn Pihl............ 0 0 13,035 17,679 12,320 35,352
Christopher Roberts..... 0 0 44,850 30,500 42,960 45,620
</TABLE>
--------
(1) Effective June 21, 2000, the options granted to Mr. Berger in fiscal 2000
(covering 260,943 shares) were cancelled in their entirety and the options
granted to Mr. Berger in fiscal 1999 were cancelled with respect to
243,659 shares. See note 3 to the Summary Compensation Table, above. None
of the cancelled options were exercisable as of the end of fiscal 2000.
Compensation of Directors
Rentrak compensates directors, other than employees who are directors, for
their services by payment of $500 for each in-person board meeting they attend
and $500 for each telephone conference board meeting they attend. In addition,
each non-employee director is paid an annual board fee of $25,000. Rentrak
also reimburses directors for their travel expenses for each meeting attended
in person. On April 1, 2000, each nonemployee director was automatically
granted an option to purchase 10,000 shares of Rentrak common stock at an
exercise price of $5.375 per share, and each nonemployee Committee Chairman
was automatically granted an additional option to purchase 2,500 shares of
Rentrak common stock at an exercise price of $5.375 per share. All such grants
were made under Rentrak's 1997 Equity Participation Program.
Employment Contracts and Termination of Employment and Change-In-Control
Arrangements
Ron Berger. Effective April 21, 1998, Rentrak 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
Rentrak. Under the agreement, Mr. Berger's initial annual base salary was
$400,000, subject to increases on April 1 of each year during the term of the
agreement equal to the greater of four percent (4%) or the change in the
Consumer Price Index for the preceding calendar year. Mr. Berger is also
entitled to an annual bonus for each fiscal year equal to five percent (5%) of
the amount by which Rentrak's pre-tax profits (as defined in the agreement)
for such fiscal year exceed Rentrak's pre-tax profits in the prior fiscal
year. If Mr. Berger is terminated for "cause" (as defined in the agreement),
he will receive only the full amount of all compensation accrued as of the
date of termination. If Mr. Berger is terminated without cause or Mr. Berger
terminates his employment for "good reason" (as defined in the agreement), or
if Mr. Berger is terminated following a "change of control" or "potential
change of control" (both as defined in the agreement), Mr. Berger may elect to
receive a severance payment equal to the greater of: (i) the remaining
compensation payable under the agreement, with bonus calculated as the greater
of the bonus paid with respect to the immediately preceding fiscal year or the
average bonus paid for the three immediately preceding fiscal years; or (ii)
three times the sum of (a) Mr. Berger's base salary in the fiscal year of
termination plus (b) the greater of the bonus paid to
11
<PAGE>
Mr. Berger with respect to the immediately preceding fiscal year or the
average bonus paid for the three immediately preceding fiscal years. Rentrak
believes that the commencement of the Shareholder Group's proxy contest
constitutes a "potential change of control" and the election of the
Shareholder Group's nominees whereby they constituted a majority of Rentrak's
board of directors would constitute a "change of control" under Mr. Berger's
employment agreement. The estimated cost to Rentrak if Mr. Berger terminates
his employment in response to a change of control or the potential change of
control, or if he is involuntarily terminated following a change of control,
is approximately $1.36 million. If Mr. Berger is terminated due to his death
or disability, he or his estate or legal representative is entitled to
receive, in a lump sum, the amount of base salary and bonus accrued through
the date of termination plus one year's base salary. The agreement expires on
March 31, 2003.
F. Kim Cox. Effective April 1, 1998, Rentrak entered into a four year
employment agreement with Mr. Cox under which he is employed as an Executive
Vice President of Rentrak. Under the agreement, Mr. Cox received an annual
base salary of $178,500 for the period ending March 31, 1999 and $187,425 for
the period ending March 31, 2000, and will receive an annual base salary of
$196,796 for the period ending March 31, 2001 and $206,636 for the period
ending March 31, 2002. If Mr. Cox terminates his employment within two months
following a "change of control" (as defined in the agreement), he is entitled
to a severance payment equal to one year's base salary. Rentrak believes that
the election of the Shareholder Group's nominees whereby they constituted a
majority of Rentrak's board of directors would constitute a "change of
control" for the purpose of Mr. Cox's employment agreement. The estimated cost
to Rentrak if Mr. Cox were involuntarily terminated following such change of
control is approximately $197,000. If Mr. Cox is terminated without "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 estate or legal representative will receive all
compensation accrued as of the date of termination plus a lump sum severance
payment equal to 180 days' base salary. The agreement was extended by the
board of directors for one year and is now scheduled to expire on March 31,
2003.
Marty Graham. Effective May 17, 1997, Rentrak 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 and, annually,
an option to purchase 5,000 shares of Rentrak common stock. If Mr. Graham is
terminated without "cause" (as defined in the agreement) within two years
after a "change of control" (as defined in the agreement), or if Mr. Graham
terminates his employment for "good reason" (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.
Rentrak believes that the election of the Shareholder Group's nominees whereby
they constituted a majority of Rentrak's board of directors would constitute a
"change in control" for the purpose of Mr. Graham's employment agreement. The
estimated cost to Rentrak if Mr. Graham were involuntarily terminated
following a change of control is a maximum of approximately $160,000. If
Mr. Graham terminates his employment without good reason within two months
after a change of control, he is entitled to receive the greater of: (i) one
weeks' base salary for each full year he has been employed by Rentrak; or (ii)
two months' base salary. If Rentrak otherwise terminates Mr. Graham without
cause, he is entitled to receive six months' base salary, subject to reduction
should he find other employment or should he not exercise his best efforts to
find such other employment. If Mr. Graham is terminated for cause, he will
receive only the full amount of his base salary accrued through the date of
termination. If Mr. Graham is terminated due to his death, his estate or legal
representative will receive the full amount of his 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. Graham 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. Graham will
receive all compensation as set forth in the agreement.
12
<PAGE>
Carolyn Pihl. Effective March 1, 2000, Ms. Pihl entered into a three year
employment agreement with 3PF under which she is employed as 3PF's Chief
Financial Officer. Under the agreement, Ms. Pihl receives an annual salary of
$207,500, subject to automatic increases of five percent (5%) per year during
the term of the agreement. If Ms. Pihl is terminated without "cause" (as
defined in the agreement) within two years after a "change of control" (as
defined in the agreement), or if Ms. Pihl terminates her employment for "good
reason" (as defined in the agreement), she is entitled to receive the lesser
of: (i) her base salary through the end of the agreement; or (ii) one year's
base salary. Rentrak believes that the election of the Shareholder Group's
nominees whereby they constituted a majority of Rentrak's board of directors
would constitute a "change of control" for the purpose of Ms. Pihl's
employment agreement. The estimated cost to Rentrak if Ms. Pihl were
involuntarily terminated following a change of control is a maximum of
approximately $207,500. If Rentrak otherwise terminates Ms. Pihl without
cause, she is entitled to receive six months' base salary, subject to
reduction should Ms. Pihl find alternative employment of "comparable status"
(as defined in the agreement), or if she does not exercise her best efforts to
find such employment of comparable status. If Ms. Pihl is terminated for
cause, she will receive only the full amount of her base salary accrued
through the date of termination. If Ms. Pihl is terminated due to her death,
her estate or legal representative will receive the full amount of her base
salary accrued through the date of termination, plus a lump sum severance of
ninety days' base salary. If Ms. Pihl is terminated due to a disability, she
or her legal representative will receive only the full amount of her base
salary accrued through the date of termination. During any period of
disability, but prior to termination of employment, Ms. Pihl will receive all
compensation as set forth in the agreement.
Christopher Roberts. Effective October 27, 1997, Rentrak entered into a
five-year employment agreement with Mr. Roberts under which he is employed as
Rentrak's Vice President, Sales. Under the agreement, Mr. Roberts received an
initial base salary of $130,000, subject to increases of $5,000 on April 15 of
each year during the term of the agreement. If Mr. Roberts is terminated
without "cause" (as defined in the agreement) within two years after a "change
of control" (as defined in the agreement), or if Mr. Roberts terminates his
employment for "good reason" (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 Mr. Roberts
terminates his employment without good reason within two months after a change
of control, he is entitled to receive the greater of: (i) one weeks' base
salary for each full year of his employment by Rentrak; or (ii) two months'
base salary. Rentrak believes that the election of the Shareholder Group's
nominees whereby they constituted a majority of Rentrak's board of directors
would constitute a "change of control" for the purpose of Mr. Roberts'
employment agreement. The estimated cost to Rentrak if Mr. Roberts were
involuntarily terminated following a change of control is approximately
$140,000. The estimated cost to Rentrak if Mr. Roberts terminates his
employment without good reason following a change of control is a maximum of
approximately $32,300. If Rentrak otherwise terminates Mr. Roberts without
cause, he is entitled to receive six months' base salary, subject to reduction
should he find other employment or should he not exercise his best efforts to
find such other employment. If Mr. Roberts is terminated for cause, he will
receive only the full amount of his base salary accrued through the date of
termination. If Mr. Roberts is terminated due to his death, his estate or
legal representative will receive the full amount of his 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. Roberts 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.
Roberts will receive all compensation as set forth in the agreement.
Compensation Committee Interlocks and Insider Participation
From the beginning of fiscal 2000 through August 23, 1999, the Compensation
Committee was comprised of Skipper Baumgarten, Herbert Fischer and Bill
LeVine. Mr. Fischer resigned from the board of directors effective August 23,
1999, and was subsequently replaced on the Compensation Committee by Takaaki
Kusaka. Ron Berger is a director of American Contractors Indemnity Co., a
company for which Skipper Baumgarten serves as Chief Executive Officer. Ron
Berger is also Chairman of the board of directors of Rentrak Japan, a company
for which Takaaki Kusaka serves as President.
13
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE 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 Rentrak specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Compensation Committee of Rentrak determines the compensation of all
executive officers of Rentrak, including Ron Berger, Rentrak's Chairman of the
Board and Chief Executive Officer. Compensation decisions for all executive
officers of Rentrak are based on Rentrak'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 Rentrak 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 or her 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
subject to contractual arrangements (previously approved by the Compensation
Committee). 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
Rentrak 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 Rentrak'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 Rentrak against that unit's goals; and (iii) the
performance of Rentrak against company-wide 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 2000, 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 Rentrak's
long-term performance, and Rentrak 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
14
<PAGE>
all executive officers. The size of the grants is based upon the employees'
duties, responsibilities, performance, experience and anticipated contribution
to Rentrak.
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
2000, Rentrak granted options to purchase 338,566 shares of common stock to
its executive officers.
Section 162(m)
During 1993, the Internal Revenue Code of 1986, as amended (the "Code"), was
amended to include a provision which denies a deduction to any publicly held
corporation for compensation paid to any "covered employee" (defined as the
CEO and a corporation's other four most highly compensated officers, as of the
end of a taxable year) to the extent that the compensation exceeds $1 million
in any taxable year of the corporation beginning after 1993. It is Rentrak's
policy to qualify all compensation paid to its top executives, in a manner
consistent with Rentrak's compensation policies, for deductibility under the
1993 law in order to maximize Rentrak's income tax deductions. However, this
policy does not rule out the possibility that compensation may be approved
that may not qualify for the compensation deduction, if in light of all
applicable circumstances it would be in Rentrak's best interests for such
compensation to be paid.
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 Rentrak since September 1977. 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 Rentrak, including revenue and
profit levels as compared to Rentrak'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 Rentrak, and the successful implementation of Rentrak's
strategic goals and the compensation packages of chief executive officers of
other comparably sized companies. Mr. Berger was awarded a bonus of $2,264 for
fiscal 2000 in accordance with the formula in his employment contract.
By: The Compensation Committee:
Skipper Baumgarten Bill LeVine Takaaki Kusaka
15
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN OF
RENTRAK CORPORATION NASDAQ MARKET INDEX AND PEER INDUSTRY GROUP
The following chart compares the five year cumulative total return on
Rentrak's Common Stock with that of the NASDAQ Market Index and a peer
industry group. The graph also includes the "1999 Peer Group," as described
below. The comparison assumes $100 was invested on April 1, 1995 in each of
the foregoing and that all dividends, if any, were reinvested.
Method of Selecting the 1999 Peer Group. Rentrak selected the peer group
used in last year's proxy statement from the public companies reported by
Media General Services as having the same company-level Standard Industrial
Classification ("SIC") Code as Rentrak, and which also were generally involved
in the movie entertainment business (collectively, the "1999 Peer Group"). The
1999 Peer Group was comprised of the following corporations: AMC Entertainment
Inc., American Champion Entertainment, Avenue Entertainment Group, Carlton
Communications, Carmike Cinemas, Cinar Corp. SUB VTG CL B, Cinemastar Luxury
Theaters, Dick Clark Productions, Film Roman Inc., Four Media Company, GC
Companies Inc., Image Entertainment Inc., Iwerks Entertainment Inc., J2
Communications, Kushner-Locke Co., Las Vegas Entertainment Network, Laser-
Pacific Media Corp., Liberty Media Group B AT&T, Lions Gate Entertainment,
Loews Cineplex Entertainment CP., Macrovision Corp., Metro-Goldwyn-Mayer Inc.,
Netter Digital Entertainment, New Frontier Media Inc., Peach Arch
Entertainment Inc., VDI Multimedia.
The 2000 Peer Group. Rentrak believes the 1999 Peer Group is no longer an
appropriate comparison for purposes of assessing the performance of Rentrak
common stock, because the corporations within the group consist primarily of
movie distributors that face different business conditions. For this reason,
Rentrak has compiled a new peer industry group that includes corporations
within the video distribution business and internet fulfillment business,
which are more closely aligned with Rentrak's core businesses. The 2000 peer
group is comprised of the following corporations: Hastings Entertainment,
Inc., Blockbuster, Inc., Big Star Entertainment, Inc., Hollywood Entertainment
Corp., Movie Gallery, Inc., TCI Satellite Entertainment, Inc., Valley Media,
Inc., West Coast Entertainment Corp., Video City, Inc., Ascendant Solutions,
Inc., and PFS Web, Inc.
16
<PAGE>
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 Rentrak specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG RENTRAK CORPORATION, 1999 PEER GROUP INDEX,
NASDAQ MARKET INDEX, AND 2000 PEER GROUP INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period Rentrak 1999 Peer 2000 Peer NASDAQ
(Fiscal Year Covered) Corp. Group Index Group Index Market Index
--------------------- ------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
3/31/95 $100.00 $100.00 $100.00 $100.00
3/31/96 80.77 130.74 81.67 134.51
3/31/97 42.31 108.59 103.20 150.48
3/31/98 146.15 113.18 63.13 227.41
3/31/99 43.27 71.29 78.11 297.18
3/31/00 84.62 78.08 33.68 547.25
</TABLE>
17
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Stephen Roberts, a stockholder and a member of Rentrak's board of directors,
provided general consulting services to Rentrak during fiscal 2000, for which
he received $142,181. Rentrak does not plan to continue to use Mr. Roberts as
a general consultant during fiscal 2001. In April 2000, Rentrak entered into
an agreement with the S. Roberts Company, a Delaware corporation owned by Mr.
Roberts, to assist Rentrak in the exploration of the possible sale of part or
all of Rentrak's PPT video distribution and information processing business to
one or more major motion picture studios. In the event of successful
implementation of this strategy, Mr. Roberts would receive a success fee equal
to two percent (2%) of the total consideration paid, but not less than
$200,000. This agreement will expire on December 31, 2000.
Dr. Pradeep Batra, a member of Rentrak's board of directors, is the
President and controlling shareholder of Unique Business Systems ("UBS"). In
addition to other business activities, UBS develops and sells point-of-sale
("POS") software that retail video stores use to track rental and sale
activity. Rentrak and UBS have entered into various agreements pursuant to
which, among other things: (i) they agree to cooperate to make UBS's POS
software compatible with Rentrak's PPT system; (ii) Rentrak agrees to pay a
commission for each PPT customer referred by UBS; and (iii) UBS agrees to
share software maintenance fees with Rentrak relating to a 1995 transaction in
which UBS purchased certain assets from Rentrak. In addition, Rentrak UK, a
subsidiary of Rentrak that distributes videocassettes in the United Kingdom,
is party to a POS software agreement with UBS, and BlowOut Video, Inc., a
wholly owned subsidiary of Rentrak that owns and operates a chain of retail
video stores and a retail video Web site, purchased computer hardware and a
POS software system from UBS. During fiscal 2000, Rentrak paid UBS an
aggregate of $62,000, Rentrak UK paid UBS an aggregate of $70,000, and BlowOut
Video, Inc. paid UBS an aggregate of $80,678.
Muneaki Masuda, a member of Rentrak's board of directors, holds a
controlling interest in So-Tsu Company, which in turn holds a controlling
interest in CCC and Rentrak Japan. Pursuant to an agreement between Rentrak
and Rentrak Japan, Rentrak Japan pays Rentrak an annual royalty, based on a
June 1 to May 31 royalty year, equal to one and sixty-seven hundredths percent
(1.67%) of the first $47.9 million of Rentrak Japan's sales and one-half of
one percent (.5%) of Rentrak Japan's sales in excess of such amount. In fiscal
2000, Rentrak Japan paid Rentrak a total of approximately $4 million in
royalty fees, which amount included an advance royalty payment of $2.5 million
and a one-time royalty payment of $480,000. The $2.5 million advance payment
will offset $4 million of future royalties. Of the $2.5 million advance in
royalty fees, approximately $1.6 million has been recorded as deferred revenue
to be recognized in future periods.
In August 1999, Rentrak and Rentrak Japan formed Rentrak International, LLC,
an Oregon limited liability company, for the purpose of developing the PPT
system in certain international markets. Rentrak and Rentrak Japan each
contributed US$180,000 to Rentrak International during fiscal 2000, as well as
the development rights to the PPT system in certain countries, excluding the
United States, Canada, the United Kingdom, Ireland, Brazil, and Japan. Rentrak
Japan and Rentrak each own a fifty percent (50%) membership interest in
Rentrak International, and profits and losses are allocated equally between
the two parties.
During Rentrak's last fiscal year, Rentrak Japan loaned (Yen)120 million
(approximately US$200,000) to Rentrak UK The loan is non-interest bearing and
is due on March 31, 2001. During the term of the loan, Rentrak Japan is
entitled to ten percent (10%) of Rentrak's share of Rentrak UK royalties. No
such share of royalties was earned by or paid to Rentrak Japan during
Rentrak's last fiscal year.
In August 1999, Bill LeVine, a member of Rentrak's board of directors,
provided a line of credit to BlowOut Video Holding Company ("Borrower"), a
wholly-owned subsidiary of Rentrak, in the principal amount of up to $3
million (the "Loan"), of which Borrower borrowed $500,000 during its last
fiscal year. The largest outstanding principal amount of the Loan during
fiscal 2000 was $500,000. The Loan bears interest at the prime rate plus one
and one-half percent (1.5%) and Borrower paid Mr. LeVine $17,860 in interest
during Rentrak's last fiscal year. Borrower paid Mr. LeVine a $30,000 loan
origination fee and $12,500 in closing costs in
18
<PAGE>
connection with the Loan. The Loan is secured by all of Borrower's assets and
is due and payable three years from the date of execution of the Loan and
Security Agreement.
In consideration of a $4 million unsecured note payable with Bill LeVine, of
which approximately $2.5 million was used to fund the operations of Rentrak's
wholly-owned subsidiary, 3PF.COM, Inc. ("3PF"), 3PF issued a warrant to Mr.
LeVine to purchase 14,814 shares of 3PF common stock at an exercise price of
$6.75 per share. The exercise period for the warrant commenced on November 29,
1999 and expires on November 30, 2000. The Note payable carried interest at
the rate of ten percent (10%), payable monthly, and the largest outstanding
principal amount of the note during fiscal 2000 was $4 million. Rentrak paid
Mr. LeVine $310,278 in interest in connection with this note payable during
Rentrak's last fiscal year. The note was paid in its entirety in January 2000.
In June 2000, the board of directors approved an offer to make loans
available to those officers of Rentrak that were under an employment contract
for the purpose of allowing them to exercise their vested, unexercised "out of
the money" employee stock options. The purpose of this program was to enable
executives to exercise certain of their options and thereby hold shares
resulting from the exercise of such options in advance of a possible spin-off
or split-up of 3PF, and to enhance Rentrak's efforts to retain its key
employees. The vested option loan program was initially proposed to the
Compensation Committee in March 2000, approved by the Compensation Committee
in April 2000, and approved by the board of directors along with certain
amendments to the Company's 1986 Stock Option Plan and 1997 Equity
Participation Plan in May 2000 and June 2000.
The concept for the vested option loan program was first proposed by Kim Cox
to Ron Berger in January 2000 and Mr. Berger discussed the vested option loan
program with certain members of the Compensation Committee in February 2000.
The full Compensation Committee approved the vested option loan program in
April 2000, well before the Shareholder Group submitted their demand for a
special shareholders meeting on May 15, 2000. The Compensation Committee had
no knowledge of the Shareholder Group's proxy contest or of any shareholder's
intent to initiate a proxy contest when the Compensation Committee approved
the vested option loan program. Members of the Compensation Committee were
aware of a request by Paul Rosenbaum to meet with the board of directors to
discuss concerns about the future of Rentrak prior to approving the vested
loan program.
The Compensation Committee approved the vested option loan program in order
to encourage executive officers to own Rentrak shares and facilitate the
ability of executive officers to hold shares, rather than options, which would
enable them to participate in a potential spin-off of 3PF. At the time the
board of directors approved the vested option loan program in May and June
2000, the board of directors had knowledge of the Shareholder Group's proxy
contest. The board of directors approved the vested option loan program for
all of the reasons that the Compensation Committee approved and recommended
the vested option loan program to the board of directors. In addition, the
board of directors also considered the following factors: (1) stock ownership
was a way to promote key employee retention (2) the vested option loan program
would incentivize executives to promote shareholder value by further aligning
the interests of management more directly with the interests of the
shareholders, and (3) executives should be given the opportunity to vote and
protect their economic interest in Rentrak through share ownership.
The loans under this program bear interest at the federal funds rate in
effect on the date of the loan and interest is payable annually. The principal
amount of the loan is due on the earliest to occur of: (1) one year prior to
the expiration of the term of the borrower's current employment agreement with
Rentrak, (2) one year after borrower leaves Rentrak's employment unless such
departure follows a "change of control" (as defined in the loan agreements),
(3) five years from the date of the loan, or (4) one year from the date of the
borrower's death. The loans are secured by the stock purchased upon the
exercise of the options. The loans are without recourse (except as to the
stock securing the loans) as to principal and are with full recourse against
the borrower as to interest. The offer to make these loans expires September
30, 2000.
On June 16, 2000, two officers, Ron Berger and Kim Cox, accepted this offer
and obtained loans from Rentrak. Mr. Berger entered into a loan agreement,
promissory note in the amount of $6,629,386.00 and stock
19
<PAGE>
pledge agreement in connection with his exercise of options to purchase
1,362,008 shares of common stock. Mr. Cox entered into a loan agreement,
promissory note in the amount of $1,468,250.42 and stock pledge agreement in
connection with his exercise of options to purchase 301,518 shares of common
stock. Because the loan proceeds were immediately used to pay the exercise
price of the options to Rentrak, there was no net outflow of cash from Rentrak
in connection with these loans. As a result of the loans and option exercises,
Messrs. Berger and Cox will be able to vote the acquired shares at the Annual
Meeting, which could have an impact on the Shareholder Group's proxy contest.
As of July 26, 2000, no other officers have elected to accept loans under this
program.
PROPOSAL 2
SHAREHOLDER BYLAW PROPOSAL
A shareholder group identifying itself as the Committee for the Achievement
of Rentrak Excellence (the "Shareholder Group") has proposed an amendment to
Section 3.2 of Rentrak's 1995 Restated Bylaws to fix the number of directors
at five, instead of the current range of three to nine directors.
Specifically, Section 3.2, as proposed to be amended, would read as follows:
Section 3.2. Number, Tenure and Qualifications. The board of directors
shall consist of five persons. Each director shall hold office until the
next annual meeting of the shareholders and until his or her successor is
elected and qualified or until death, resignation or removal.
If approved, the size of Rentrak's board of directors at the Annual Meeting
would be fixed at five and the five nominees who receive the greatest number
of votes would be elected to fill the open seats. Proposal 2 will be the first
agenda item at the Annual Meeting. If Proposal 2 passes, the Shareholder Group
intends to present their nominees for election of a five member board of
directors and the Rentrak board of directors intends to present for election
to a five member board of directors, those five director nominees that receive
the most votes in connection with Rentrak's solicitation of proxies relating
to Proposal 1. If Proposal 2 passes, the five nominees proposed by the
Shareholder Group and Rentrak board of directors that receive the most votes
will be elected. If Proposal 2 fails, the Shareholder Group's five nominees
will not be up for election and the Rentrak shareholders will be asked to
elect the nine director nominees proposed by Rentrak's board of directors.
Given Rentrak's broad range of operations, including several different
businesses involving retail, wholesale, website and fulfillment operations,
Rentrak believes that a broad range of skills and experience drawn from a nine
member board as opposed to a five member board is necessary and appropriate.
Accordingly, the board of directors unanimously recommends a vote AGAINST
Proposal 2.
PARTICIPANTS IN RENTRAK'S SOLICITATION
Under applicable SEC regulations, each member of Rentrak's board of
directors is, and certain employees and agents of Rentrak may be deemed to be,
a "participant" in Rentrak's solicitation of proxies. The principal occupation
and business address of each person who may be deemed a participant are set
forth in Appendix A hereto. Information required to be provided regarding each
participant, including their present ownership of Rentrak common stock, is
provided in this proxy statement and the attached Appendix A.
PROXY LITIGATION
On June 13, 2000 in the United States Federal District Court in Portland,
Oregon, Rentrak filed a lawsuit against Donald Kundinger, Paul Bogdanich,
Jackson Hole Advisors, Paul Rosenbaum, and a number of other shareholders and
prospective board nominees who had either been identified in a Schedule 13D
filed by Mr. Rosenbaum or had served on Rentrak a demand for a special
shareholders meeting. The suit claims that the defendants have violated
Sections 13 and 14 of the Securities Exchange Act by, among other things,
filing a late and misleading Schedule 13D and engaging in false and misleading
solicitations. The suit also alleges that Messrs. Kundinger and Bogdanich and
Jackson Hole Advisors have breached a contract entered into with
20
<PAGE>
Rentrak and their fiduciary duties owed to Rentrak and that they have engaged
in fraud. The suit prays for declaratory and preliminary and permanent
injunctive relief against all the defendants and seeks compensatory and
punitive damages against Messrs. Kundinger and Bogdanich and Jackson Hole
Advisors. Rentrak has sought and obtained a court order authorizing expedited
discovery and is vigorously conducting discovery against the defendants and
certain third parties.
On July 7, 2000, certain of the defendants who purport to be members of a
shareholder group identifying itself as the Committee for Achievement of
Rentrak Excellence filed their answer denying the material allegations of the
complaint, asserting various affirmative defenses and asserting a counterclaim
against Rentrak, its directors, Rentrak Japan, K.K. and Culture Convenience
Club Co., Ltd. alleging that Rentrak and the other defendants have violated
Section 13(d) of the Securities Exchange Act by failing to file a Schedule 13D
within 10 days after they allegedly formed a group to acquire Rentrak stock
with the purpose or effect of influencing control of Rentrak. As part of their
allegations, the counterclaimants allege that Rentrak has violated Regulation
U promulgated by the Board of Governors of the Federal Reserve System by
granting loans to Messrs. Berger and Cox to enable them to exercise certain
stock options for the purpose of defeating an impending proxy fight for
control of Rentrak. The counterclaimants pray for declaratory and preliminary
and permanent injunctive relief. On August 1, 2000 the counterclaimants filed
a motion seeking a preliminary injunction enjoining all Rentrak directors and
Mr. Cox from voting the shares of Rentrak common stock acquired on and after
May 30, 2000.
Rentrak does not believe that it or any of the other counterclaim defendants
have violated Section 13(d) or have formed any group. In addition, Rentrak
believes that the loans made to Messrs. Berger and Cox in connection with the
exercise of their stock options complied with Regulation U. A representative
of the Board of Governors of the Federal Reserve System recently confirmed
Rentrak's position with respect to Regulation U and informed Rentrak that he
had personally contacted Mr. Rosenbaum to inform him that the loans complied
with margin loan regulations and that the Federal Reserve Board does not
intend to take any action against Rentrak, Mr. Berger or Mr. Cox in response
to Mr. Rosenbaum's allegations. Rentrak and the other counterclaim defendants
are vigorously defending against the allegations contained in the
counterclaims and the relief sought.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the 1934 Act requires Rentrak's directors and executive
officers and persons who beneficially own more than ten percent (10%) of the
outstanding shares of Rentrak'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 Rentrak. To Rentrak's knowledge, based solely upon a review of
the copies of Forms 3, 4 and 5 (and amendments thereto) furnished to Rentrak
or otherwise in its files, all of Rentrak's officers, directors and ten
percent shareholders complied with all applicable Section 16(a) filing
requirements during Rentrak's last fiscal year.
INDEPENDENT ACCOUNTANTS
Rentrak's independent public accountants for the fiscal year ended March 31,
2000, were Arthur Andersen LLP. Management intends to continue to retain
Arthur Andersen LLP during the current fiscal year. No election, approval or
ratification of the choice of independent public accountants 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.
FINANCIAL INFORMATION
A copy of Rentrak's 2000 Annual Report, including audited financial
statements, is being sent to shareholders with this proxy statement.
21
<PAGE>
REPORT ON FORM 10-K
RENTRAK'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE YEAR ENDED MARCH 31, 2000, WILL BE AVAILABLE TO
SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO RICHARD NIDA, VICE
PRESIDENT, INVESTOR RELATIONS, 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.
INFORMATION CONCERNING THE SOLICITATION
Rentrak will bear all costs and expenses associated with this solicitation.
In addition to solicitation by mail, directors, officers, and employees of
Rentrak may solicit proxies from shareholders, personally or by telephone or
telegram, without receiving any additional remuneration. Rentrak has asked
brokerage houses, nominees and other agents and fiduciaries to forward
soliciting materials to beneficial owners of Rentrak common stock and will
reimburse all such persons for their expenses.
Rentrak has also retained Corporate Investor Communications, Inc. ("CIC") to
aid in the solicitation of proxies by personal interview, telephone or other
means of communication. CIC expects to use approximately twenty (20) persons
to conduct the solicitation. Rentrak estimates that its total expenditures
relating to the solicitation of proxies will be approximately $895,000. Total
cash expenditures to date have been approximately $450,000.
If you have any questions or need assistance voting your proxy please call
our proxy solicitor Corporate Investor Communications, Inc. toll-free at 1-
888-560-9906 and ask for Bill Fiske.
By Order of the Board of Directors,
/s/ F. Kim Cox
_____________________________________
President and Secretary
Portland, Oregon
Date: August 8, 2000
22
<PAGE>
APPENDIX A
Information Concerning the Directors and
Executive Officers of Rentrak Who May Solicit Proxies
Participants
Rentrak's directors are, and certain of its executive officers may be deemed
to be, participants in Rentrak's solicitation of proxies from Rentrak
shareholders (collectively, "Participants"). The following table sets forth
the name and business address of Rentrak's directors, which is also the
principal business address of the directors' employers. Their principal
occupations are set forth in this proxy statement under the heading "Proposal
1: Election of Directors."
<TABLE>
<S> <C>
Peter Balner Blowout Video, Inc.
2400 Morris Ave.
Union, NJ 07083
Predeep Batra Unique Business Systems
2901 Ocean Park Blvd. Suite 215
Santa Monica, CA 90405
Skipper Baumgarten American Contractors Indemnity
841 Airport Blvd. 9th Floor
Los Angeles, CA 90045
Ron Berger Rentrak Corporation
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
James Jimirro J2 Communications
10850 Wilshire Blvd. Suite 1000
Los Angeles, CA 90024
Takaaki Kusaka Rentrak Japan
Yebisu Garden Place Tower
4-20-3 Ebisu--35th Floor
Tokyo 150 Japan
Bill LeVine LeVine Enterprises
211 Spalding Drive
#604 South
Beverly Hills, CA 90212
Muneaki Masuda Culture Convenience Club
Yebisu Garden Place Tower
4-20-3 Ebisu--21st Floor
Tokyo 150 Japan
Stephen Roberts The S. Roberts Company
1321 7th Street, Suite 205
Santa Monica, CA 90401
</TABLE>
The names and principal occupations of Rentrak's executive officers who may
be deemed Participants are set forth below. The principal business address of
each such person is Rentrak's address: One Airport Center, 7700 N.E.
Ambassador Place, Portland, Oregon 97220.
<TABLE>
<S> <C>
Ron Berger Chairman and Chief Executive Officer
F. Kim Cox President, Secretary and Treasurer
Richard Nida Vice President, Investor Relations
</TABLE>
A-1
<PAGE>
Information Regarding Ownership of Rentrak Securities by Participants
None of the Participants owns any shares of Rentrak common stock of record
but not beneficially. The number of shares of Rentrak common stock held by
each Participant and their associates, other than Mr. Nida, is set forth in
this proxy statement under the heading "Security Ownership of Certain
Beneficial Owners and Management." Mr. Nida beneficially owns 17,500 shares of
Rentrak common stock, which includes options to purchase 5,000 shares of
Rentrak common stock that are exercisable within 60 days after the date of
this proxy statement.
Information Regarding Participant Transactions in Rentrak Common Stock
The following table sets forth certain information regarding purchases and
sales of Rentrak common stock by each Participant during the past two years.
<TABLE>
<CAPTION>
No. of
Shares
Purchased
Name Date or (Sold)
---- ---- ---------
<S> <C> <C>
Peter Balner..................................... 2/2/99 20,000 (2)
6/15/99 20,000 (6)
7/23/99 20,000 (2)
8/4/99 3,000 (2)
9/3/99 3,000 (6)
10/6/99 20,000 (2)
10/27/99 2,000 (6)
11/8/99 600 (6)
11/9/99 1,400 (6)
12/7/99 2,000 (6)
12/15/99 2,000 (6)
12/30/99 2,000 (6)
1/4/00 2,000 (6)
1/26/00 2,000 (6)
2/15/00 5,000 (6)
3/1/00 5,000 (6)
Pradeep Batra.................................... 6/8/00 10,000 (1)
Skipper Baumgarten............................... 6/28/99 8,000 (2)
6/29/99 2,000 (2)
9/13/99 1,000 (2)
9/14/99 9,000 (2)
6/15/00 10,000 (1)
Ron Berger....................................... 4/13/99 1,000 (3)
12/16/99 (3,000)(3)
6/6/00 10,000 (2)
6/8/00 4,892 (2)
6/9/00 5,000 (2)
6/13/00 1,000 (2)
6/15/00 4,000 (2)
6/16/00 1,362,008 (1)(4)
F. Kim Cox....................................... 10/23/98 10,714 (1)
4/18/00 30,381 (1)
6/16/00 301,518 (1)(5)
James Jimirro.................................... 6/15/00 17,500 (1)
Takaaki Kusaka................................... None
Bill LeVine...................................... 6/13/00 15,000 (1)
Muneaki Masuda................................... None
Richard Nida..................................... 11/9/98 7,500 (2)
8/4/99 2,500 (2)
6/8/00 1,250 (1)
6/13/00 1,250 (2)
Stephen Roberts.................................. 6/9/00 15,000 (1)
6/9/00 (1,600)(6)
</TABLE>
--------
(1) Stock option exercise.
(2) Open market purchase.
(3) Gift made (received).
(4) Mr. Berger borrowed the full amount of the exercise price from Rentrak
pursuant to a loan transaction disclosed in this proxy statement under the
heading "Certain Relationships and Related Transactions."
(5) Mr. Cox borrowed the full amount of the exercise price from Rentrak
pursuant to a loan transaction disclosed in this proxy statement under the
heading "Certain Relationships and Related Transactions."
(6) Open market sale.
A-2
<PAGE>
Miscellaneous Information Concerning Participants
Except as described in this Appendix A or in this proxy statement, none of
the Participants nor any of their respective associates (together, the
"Participant Associates") (i) directly or indirectly beneficially owns any
shares of Rentrak common stock or any securities of any Rentrak subsidiary or
(ii) has had any relationship with Rentrak in any capacity other than as a
stockholder, employee, officer or director. Furthermore, except as described
in this Appendix A or the proxy statement under the caption "Certain
Relationships and Related Transactions," no Participant Associate is either a
party to any transaction or series of transactions since April 1, 1999, or has
knowledge of any currently proposed transaction or series of transactions, (i)
to which Rentrak or any of its subsidiaries was or is to be a party, (ii) in
which the amount involved exceeds $60,000, and (iii) in which any Participant
Associate had, or will have, a direct or indirect material interest.
Except as described below in this Appendix A or in the proxy statement under
the heading "Employment Contracts and Termination of Employment and Change in
Control Arrangements," no Participant Associate has entered into any agreement
or understanding with any person respecting any future employment by Rentrak
or its affiliates or any future transactions to which Rentrak or any of its
affiliates will or may be a party. Mr. Nida is party to an employment contract
with Rentrak. Under the contract, which commenced on September 1, 1998 and
terminates on August 31, 2002, Mr. Nida is paid a base salary of $128,000 and
is eligible for a bonus upon the achievement of certain performance
objectives.
A-3
<PAGE>
[LOGO OF RENTRAK CORPORATION APPEARS HERE]
RENTRAK CORPORATION
This proxy is solicited on behalf of the board of directors of Rentrak
Corporation (the "Company").
The undersigned hereby appoints each of Ron Berger and F. Kim Cox as
proxies, with full power of substitution, and hereby authorizes them to
represent and to vote as designated below, all the shares of Rentrak common
stock held of record by the undersigned on August 4, 2000, at the annual meeting
of the shareholders to be held at the Company's executive offices, located at
One Airport Center, 7700 N.E. Ambassador Place, Portland, Oregon 97220, on
September 19, 2000, at 9:00 a.m., Pacific Daylight Savings Time, or any
adjournments or postponements thereof.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned shareholder. If no direction is provided, the proxy holders
will vote FOR each director nominee named in Proposal 1 and AGAINST Proposal 2.
<PAGE>
<TABLE>
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Proposal 1: Election of Directors
The board of directors unanimously recommends a vote FOR each of the nominees named in Proposal 1.
Nominees: Peter Balner, Pradeep Batra, Skipper [_] FOR election of [_] WITHHOLD vote
Baumgarten, Ron Berger, James Jimirro, Takaaki all director from all nominees
Kusaka, Bill LeVine, Muneaki Masuda, and Stephen nominees (except as
Roberts noted below)
If Proposal 2 is approved, this proxy will be voted for the five nominees above who receive the greatest number of
votes, and the five nominees who receive the highest number of votes will be elected as directors.
To withhold authority to vote for any individual nominee, identify the nominee in the space below:
Exceptions:
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Proposal 2: Amendment to Bylaws
The board of directors unanimously recommends a vote AGAINST Proposal 2.
Proposal: Amend Rentrak's 1995 Restated Bylaws to [_] FOR [_] AGAINST [_] ABSTAIN
fix the number of directors at five.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Proposal 3: Other Proper Action
---------------------------------------------------------------------------------------------------------------------
In their discretion, the proxies are authorized to
vote upon such other business as may properly
come before the meeting.
---------------------------------------------------------------------------------------------------------------------
</TABLE>
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: _____________________, 2000
Signature ___________________ Signature if held jointly________________
Please mark, sign, date and return the proxy using the enclosed envelope.
