EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into effective January 1, 2001, by and between
Rentrak Corporation, an Oregon corporation (hereinafter referred to as
"Employer"), and Xxxxxxx X. Xxxxx (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, Employer currently employs Employee in the capacity of Vice
President, Customer Relations, and Employee is one of the key executives of the
Employer and desires to be so employed;
WHEREAS, Employer and Employee desire to enter into an Employment
Agreement memorializing the terms and conditions of the employment relationship;
WHEREAS, Employer considers it essential to the best interests of
its shareholders to xxxxxx the continuous employment of Employee;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
and agreements herein contained, the recitals set forth herein above which by
this reference are incorporated herein, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereby
agree as follows:
SECTION 1. EMPLOYMENT
1.01 Position and Title. Employer shall employ and engage the
services of Employee, in the position of Vice President, Customer Relations,
pursuant to the terms and conditions set forth in this Agreement.
1.02 Duties and Place of Employment.
(a) Employee shall be responsible for, and perform duties
customarily performed by executives employed in the position of Vice President,
Customer Relations or other duties as may be directed by the Employer, from time
to time. Employee shall: (i) devote his full business time which shall include
the time he reasonably and in good xxxxx xxxxx necessary to the business and
affairs of Employer; (ii) use his best efforts to promote the interests of
Employer; (iii) perform faithfully and efficiently his responsibilities and
duties; and (iv) refrain from any endeavor outside of his employment which
interferes with his ability to perform his obligations hereunder. Employee shall
perform the majority of his duties in Portland, Oregon, provided, however, that
both parties understand that the position may require frequent travel to other
locations as may be directed by Employer from time to time. Subject to the terms
of this Agreement, Employee shall comply promptly and faithfully with all of
Employer's policies, instructions, directions, requests, rules and regulations.
(b) After a Change of Control (as defined below) during the
Term of this Agreement, Employee shall continue to serve Employer in the
substantially similar capacity and have the substantially similar authority,
responsibilities and status as he had as of the date
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immediately prior to the Change of Control. After a Change of Control,
Employee's services shall be performed at the location where Employee was
employed as of the date immediately prior to the Change of Control, or at such
other location as may be mutually agreed between Employer and Employee.
(c) For purposes of this Agreement, a "Change of Control" shall
be deemed to have occurred upon the first fulfillment of the conditions set
forth in any one of the following three paragraphs:
(i) Any "person" (as such term is defined in Sections
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than a trustee or other fiduciary holding securities
under an employee benefit plan of Employer, is or becomes a beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of securities of Employer, representing twenty-five percent (25%)
or more of the combined voting power of Employer's then outstanding securities;
or
(ii) A majority of the directors elected at any annual or
special meeting of stockholders are not individuals nominated by Employer's then
incumbent Board; or
(iii) The shareholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than a merger or
consolidation which would result in the voting securities of Employer
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least seventy-five percent (75%) of the combined voting
power of the voting securities of Employer or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of Employer
approve a plan of complete liquidation of Employer or an agreement for the sale
or disposition by Employer of all or substantially all of its assets.
SECTION 2. TERM AND TERMINATION
2.01 Stated Term. Employment shall commence on the effective date of
this Agreement and shall continue for a term of five years, until December 31,
2006, unless terminated sooner pursuant to this Section 2 ("Term").
2.02 At Will Termination. Notwithstanding anything herein to the
contrary, Employee's employment may be terminated at any time with or without
reason by Employer upon thirty (30) days written notice to Employee. At
Employer's election, Employee may be relieved of his duties and responsibilities
immediately and provided pay in lieu of the thirty (30) days notice. Such pay in
lieu of notice shall be in addition to severance owed pursuant to Section 4.03.
2.03 For Cause Termination. Employee's employment may be terminated
by Employer at any time without notice for "cause." Termination for "cause" is
defined for purposes of this subsection as termination for: (a) failure of
Employee to perform his duties or insubordination; or (b) violation by Employee
of any provision of this Agreement.
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2.04 Disability or Death. Employee's employment shall be terminable
immediately upon Employee's death or disability. "Disability" is defined for
purposes of this subsection as a condition that renders Employee unable to
perform the essential functions of his employment hereunder with or without
reasonable accommodation. The parties agree that due to the importance of
Employee's position with Employer, either an indefinite leave or a leave of
absence for a period in excess of ninety (90) days (calculated on the same
annual basis used by Employer to calculate FMLA leave entitlement) would cause
an undue hardship to the Company and would not constitute a reasonable
accommodation. Nothing in this Section 2.04 is intended to violate any federal
or state law regarding parental or family leave, if applicable.
2.05 Termination by Employee for Good Reason. Employee's employment
may be terminated by Employee at any time for "Good Reason" as that term is
defined below. Employee's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder. "Good Reason" shall mean a material breach by employer of
the terms of this Agreement; provided that Employee shall have no right to
terminate this Agreement pursuant to this clause unless Employer has had at
least 15 days to cure such failure.
2.06 Other Termination by Employee. Employee's employment may be
terminated by Employee at any time without Good Reason upon thirty (30) days
prior written notice to Employer.
SECTION 3. SALARY AND BENEFITS
3.01 Base Salary. Commencing on the complete execution of this
Agreement, Employee shall be paid an annual base salary in the amount of One
Hundred Ten Thousand Dollars ($110,000) ("Base Salary"). The Base Salary shall
be paid to Employee in equal semi-monthly installments in arrears, commencing as
of the month following the effective date of this Agreement. Should the normal
payroll date not be a business day, Employee's semi-monthly installment of the
Base Salary otherwise due on such date shall be paid to Employee on the business
day closest to the normal payroll date (i.e., if the normal payroll date falls
on a Saturday, the semi-monthly installment shall be paid on the preceding
business day or if the normal payroll date falls on a Sunday, the semi-monthly
installment shall be paid on the next following business day). Employee's Base
Salary may be increased by four percent (4%) per annum during the Term of this
Agreement, at the discretion of Employer.
3.02 Bonus. Commencing on the complete execution of this Agreement,
Employee shall be eligible to receive an annual bonus as is generally given to
Employer's Vice Presidents in accordance with the policies and procedures
currently in effect for such bonus program.
3.03 Vacation and Holidays. Employee shall be entitled to four (4)
weeks of paid vacation during each year of his employment during the Term of
this Agreement. In addition to the above vacation, Employee shall be entitled to
the number of paid holidays provided for under the current policies and
procedures in effect from time to time.
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3.04 Other Benefits. Employee shall be entitled to medical, dental,
life insurance, worker's compensation, social security, long-term disability,
and state unemployment insurance benefits as provided under Employer's then
current terms, policies, and procedures.
3.05 Business Expenses. During the Term of this Agreement, Employee
shall be entitled to receive reimbursement for all reasonable expenses incurred
by Employee in the performance of his duties pursuant to this Agreement in
accordance with the policies and procedures of Employer now or hereinafter in
effect.
3.06 Stock Options. Commencing on the complete execution of this
Agreement, the Company shall grant Executive an option to purchase Twenty Five
Thousand (25,000) shares of the Company's stock at the market rate as set forth
in the Company's Stock Option Plan on the date of the execution of this
Agreement. Said options shall vest at a rate of 5,000 per year. Such vesting to
occur on each anniversary of this Agreement. Said options shall remain
exercisable for a period of Ten (10) years from the issue date.
3.07 Miscellaneous Benefits. In addition to any other compensation
or benefits to be received by Employee pursuant to the terms of this Agreement,
Employee shall be entitled to participate in any benefits which Employer may
from time to time provide all of its Vice Presidents.
SECTION 4. PAYMENTS UPON TERMINATION OF EMPLOYMENT
4.01 Termination for Cause. In the event of the termination of
Employee's employment by Employer pursuant to Section 2.03, Employer shall pay
to Employee the Base Salary accrued pursuant to Section 3.01 through and
including the date of termination payable in accordance with applicable state
and federal law, but in no event later than ten (10) days from the date of
termination. No other compensation shall be due or payable under this Agreement.
4.02 Termination for Death or Disability.
(a) Termination for Death. In the event of the termination of
Employee's employment pursuant to Section 2.04 due to his death, Employer shall
pay to Employee's estate or legal representative, as the case may be, in a lump
sum, the Base Salary accrued pursuant to Section 3.1 through and including the
date of termination plus a lump sum severance of Ninety (90) days Base Salary at
the rate in effect on the date of Employee's death payable in accordance with
applicable state and federal law, but in no event later than ten (10) days from
the date of termination. No other compensation shall be due or payable under
this Agreement in the event of a termination due to the Employee's death.
(b) Termination for Disability. In the event of the termination
of Employee's employment pursuant to Section 2.04 due to his disability,
Employer shall pay to Employee or his legal representative, as the case may be,
in a lump sum, the Base Salary accrued pursuant to Section 3.01 through and
including the date of termination, payable in accordance with applicable state
and federal law, but in no event later than ten (10) days from the date of
termination. During the period of Employee's disability, but prior to Employee's
termination of Employment, Employee shall be entitled to receive his
compensation as set forth in this
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Agreement. No other compensation shall be due or payable under this Agreement in
the event of a termination due to the Employee's disability.
4.03 Termination by Employer Without Cause After Change of Control
or by Employee for Good Reason. In the event of the termination of Employee's
employment by Employer pursuant to Section 2.02 within two (2) years after a
Change of Control or by Employee pursuant to Section 2.05, within ten (10) days
of termination, Employer shall pay to Employee, in a lump sum, the lesser of (a)
all Base Salary which Employer is obligated to pay to Employee pursuant to
Section 3.01 through the Term or (b) one year of Base Salary which Employer is
obligated to pay to Employee pursuant to Section 3.01 during the current fiscal
year.
4.04 Other Termination by Employer. In the event of termination of
Employee's employment by Employer pursuant to Section 2.02 prior to a Change of
Control or more than two (2) years after a Change of Control, Employer shall pay
Employee the Base Salary accrued pursuant to Section 3.01 as of the date of
termination plus a severance payment in an amount equal to six (6) months Base
Salary at the rate at which Employer is obligated to pay Employee pursuant to
Section 3.01 during the current fiscal year, paid pursuant to Employee's normal
payroll payment schedule; provided, however, that during the period that
Employer is making severance payments pursuant to this Section 4.04, Employer
shall have the right to request Employee to provide reasonable evidence that he
is using his best efforts to obtain other employment of comparable status in the
Portland metropolitan area, and in the event that Employee fails to provide such
reasonable evidence, then Employer shall not be obligated to pay any severance
payments; and provided further that if Employee is successful in obtaining such
employment, the amount of severance payments that would have been payable after
the time that Employee obtains such employment shall be reduced by the amount of
any remuneration received from such employment. For the purposes of this Section
(and solely this Section), "remuneration" shall be defined to include cash
payments, the face value of any promissory notes issued to Employee regardless
of the terms of payment or whether payments are ever received, stock or stock
options valued as of the day granted, or any other compensation given in any
form whatsoever.
4.05 Other Termination by Employee. In the event of the termination
of Employee's employment by Employee pursuant to Section 2.06 within ten (10)
days of termination, Employer shall pay to Employee only the amount of Base
Salary accrued pursuant to Section 3.01 through and including the date of
termination. No other compensation shall be due or payable under this Agreement
in the event of such a termination.
4.06 Insurance Benefits. Employee is entitled to elect to continue
the medical and dental insurance as described in Section 3.04 for a period of
eighteen (18) months following termination of employment. If Employee elects to
continue such coverage, Employer shall reimburse Employee for the premiums paid
by Employee for such insurance as such premiums are paid until such time as the
continued insurance terminates or Employee obtains replacement full-time
employment and is covered by such new employer's group medical, health, and life
insurance plan with benefits substantially similar to those provided by
Employer's insurance plan and without any pre-existing conditions, exclusions,
limitations or restrictions, whichever occurs first. Such reimbursement shall be
reduced for an amount equivalent to the amounts charged Employee for health
coverage immediately prior to the occurrence of the Change of Control.
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4.07 Other Compensation. Except as set forth in this Section 4, no
other compensation shall be due or payable to Employee upon termination of his
employment.
4.08 Right to Decline Payments. Employee, in his sole and absolute
discretion, shall have the right to decline all or a portion of any payments
under this Agreement.
SECTION 5. PERSONAL NATURE
This Agreement is personal, and is being entered into based upon the
singular skill, qualifications and experience of Employee. Employee shall not
assign this Agreement or any rights hereunder without the express written
consent of Employer which may be withheld with or without reason. Employee
hereby grants to Employer the right to use Employee's name, likeness, and/or
biography in connection with the services performed by Employee hereunder and in
connection with the advertising, promotion or implementation of any
Employer-related project with respect to which Employee performs services
hereunder.
SECTION 6. NOTICES
Any and all notices or other communications required or permitted by
this Agreement or by law shall be deemed duly served and given when personally
delivered to the party to whom such notice or communication is directed or, in
lieu of such personal service, when deposited in the United States mail,
certified, return receipt requested, first class postage prepaid, addressed as
follows:
EMPLOYER: Rentrak Corporation
Attn: Xxxx Xxx
0000 X.X. Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
EMPLOYEE: Xxxxxxx X. Xxxxx
0000 X.X. Xxxxx Xx.
Xxxxxxxxx, XX 00000
Each party may change its address for purposes of this Section by giving written
notice of such change in the manner provided for herein.
SECTION 7. WAIVER AND RELEASE OF CLAIMS
Employee agrees that one of the purposes of this Agreement is to
ensure an amicable relationship between the parties. Therefore, Employee agrees
that as a precondition to his entitlement to any severance payment under Section
4.03, he shall sign and deliver a Waiver and Release of Claims Agreement, in a
form to be submitted by the Employer at such time. Among other things, such
Waiver and Release of Claims Agreement shall fully and finally waive and release
any and all claims, demands, and causes of action that Employee might have
against Employer, Employer's subsidiaries, affiliates, related entities,
Employer's successors and predecessors, past and then current directors,
officers, employees, agents and representatives as of the date the waiver and
release of claims is signed. In addition, it shall provide that Employee
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shall not disparage such persons and entities in any manner, directly or
indirectly, at any time (except as required by lawful subpoena or court order).
SECTION 8. MISCELLANEOUS PROVISIONS
8.01 Attorney Fees; Disputes Concerning Termination.
(a) Subject to Section 8.01(b), in the event that it should
become necessary for any party to bring an action, either at law or in equity,
to enforce or interpret the terms of this Agreement, each party shall pay its
own attorney fees, including those incurred in resolving the dispute prior to
initiation of any litigation and at trial and on any appeal.
(b) The existence of a dispute concerning termination shall not
alter Employee's obligation under Section 7 to sign a full waiver and release of
claims as a pre-condition to severance payments under Section 4.03.
8.02 Applicable Law and Venue. This Agreement is executed and
intended to be performed largely in the State of Oregon and the laws of such
State shall govern its interpretation and effect. If suit is instituted by any
party hereto or by any other party for any cause or matter arising from or in
connection with the respective rights or obligations of the parties hereunder,
the sole jurisdiction and venue for such action shall be the Circuit Court of
the State of Oregon in and for the County of Multnomah. The parties hereby waive
any and all of their rights to challenge such venue.
8.03 Integration. Employee has executed an Employee Confidentiality
and Noncompetition Agreement (a copy of which (i) as attached hereto as Annex A)
which remains in effect and is incorporated into the terms and conditions of
employment under this Agreement. Except as set forth in the preceding sentence,
this Agreement constitutes the entire agreement of the parties with respect to
the subject matter of this Agreement and supersedes and replaces all prior
agreements, negotiations, or understandings, whether oral or written, between
the parties with respect thereto.
8.04 Heirs and Assigns. Subject to any restriction on assignment
contained herein, this Agreement shall be binding upon and shall inure to the
benefit of the respective party's heirs, successors and assigns. Employer will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or subsequently all of the business and/or
assets of Employer, by agreement in form and substance satisfactory to Employee,
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that Employer would be required to perform it if no such
succession had taken place. This Agreement shall not be terminated by Employer's
voluntary or involuntary dissolution or by any merger or consolidation in which
Employer is not the surviving or resulting corporation, or on any transfer of
all or substantially all of the assets of Employer. In the event of any such
merger, consolidation or transfer of assets, the provisions of this Agreement
shall be binding on and inure to the benefit of the surviving business entity or
the business entity to which such assets shall be transferred.
8.05 Severability. Any provision in this Agreement which is, by
judicial authority, declared illegal, invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be
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ineffective to the extent of such illegality, invalidity or unenforceability
without invalidating the remaining provisions hereof or affecting the legality,
validity or enforceability of such provision in any other jurisdiction. The
parties hereto agree to negotiate in good faith to replace any illegal, invalid
or unenforceable provision that, to the extent possible, will preserve the
economic bargain of this Agreement, or otherwise to amend this Agreement.
8.06 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and the counterparts shall together
constitute one and the same agreement, notwithstanding that all of the parties
are not signatory to the original or the same counterpart.
8.07 Captions. The headings and captions herein are inserted solely
for the purpose of convenience of reference and are not intended to govern,
limit, or aid in the construction of any term or provision hereof.
8.08 Executions. Each of the parties hereto shall execute,
acknowledge and deliver any instrument necessary to carry out the provisions of
this Agreement.
8.09 Construction. This Agreement has been prepared by legal counsel
for Employer. Employee has been advised and by his execution hereof
acknowledges, that he has the right to and should have this Agreement reviewed
by his own separate legal counsel. This Agreement has been negotiated at arms'
length with the benefit of or opportunity to seek legal counsel and,
accordingly, shall not be construed against any of the parties.
8.10 Modification. No waiver, amendment or modification of this
Agreement or any portion thereof, including any future representations that are
inconsistent with the terms set forth herein, will be valid unless made in
writing and duly executed by each party hereto.
8.11 Acknowledgment. Employee acknowledges that he has read this
Agreement, that he has had an opportunity to consult with an attorney regarding
the terms and conditions hereof, that he fully understands the meaning and
significance of such conditions, and that he accepts and signs this Agreement as
his own free act and in full and complete understanding of its present and
future legal effect.
8.12 No Disparagement or Breach of Confidentiality and
Noncompetition. In the event that Employee's employment terminates under this
Agreement in any manner whatsoever, Employee agrees that, except under
compulsion of legal process or at Employer's request, he will make no oral or
written comments about Employer or its business for a period of one (1) year
following termination of his employment. In the event that Employee breaches
this provision of this Agreement, or violates the terms of the Employee
Confidentiality and Noncompetition Agreement executed by him, then all severance
obligations which Employer may then have under this Agreement shall immediately
cease and Employee shall be owed nothing under this Agreement other than wages
and benefits earned through the date of the termination of his employment.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
EMPLOYER: EMPLOYEE:
Rentrak Corporation
By: /s/ F. Xxx Xxx /s/ Xxxxxxx X. Xxxxx
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F. Xxx Xxx, President Xxxxxxx X. Xxxxx
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