UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
March 24,
2010
_______________
RENTRAK
CORPORATION
(Exact
name of registrant as specified in charter)
Oregon
(State or
other jurisdiction of incorporation)
|
0-15159
|
93-0780536
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
One
Airport Center
|
|
|
7700
N.E. Ambassador Place
|
|
|
Portland,
Oregon
|
97220
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code:
(503)
284-7581
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation
of the registrant under any of the following provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Amended and Restated
Employment Agreements with Certain Executive Officers
Effective
March 30, 2010, Rentrak Corporation ("Rentrak") entered into amended and
restated employment agreements with certain of its executive officers, including
Cathy Hetzel, Kenneth Papagan and Amir Yazdani, three of the executive officers
named in the Summary Compensation Table in Rentrak's definitive proxy statement
dated July 20, 2009. The Compensation Committee of Rentrak's
Board of Directors approved the amended agreements at its meeting held on March
24, 2010. A brief description of the terms of the amended employment
agreements and related compensation arrangements follows.
General
Terms
The
agreements with Ms. Hetzel and Messrs. Papagan and Yazdani provide
for:
|
·
|
A
term expiring March 31, 2011, with automatic renewal for successive
one-year periods unless Rentrak gives notice of nonrenewal by
January 31 each year.
|
|
·
|
An
annual base salary level effective April 1,
2010.
|
|
·
|
Opportunities
to receive annual cash bonus compensation under the Rentrak Corporation
Annual Cash Bonus Plan.
|
|
·
|
Receipt
of equity-based awards under Rentrak's Amended and Restated 2005 Stock
Incentive Plan (the "2005 Plan") as determined in the discretion of the
Compensation Committee.
|
The table
below shows annual base salary levels in effect for Ms. Hetzel and Messrs.
Papagan and Yazdani prior to and as of April 1, 2010, target cash bonus
amounts for the fiscal year ending March 31, 2011 described in more detail below
under "Annual Cash Bonus Plan," and grants of time-vested non-qualified stock
options approved on March 24, 2010, described in more detail under
"Equity-Based Grants" below.
|
Name
|
Position
|
|
Base Salary
Until
April 1, 2010
|
|
|
Base Salary
as of
April 1, 2010
|
|
|
Fiscal 2011
Annual Cash
Bonus Target
|
|
|
Shares
Subject to
Stock Options
|
|
|
Cathy
Hetzel
|
President,
AMI Division
|
|
$ |
283,250 |
|
|
$ |
215,270 |
|
|
$ |
100,000 |
|
|
|
12,000 |
|
|
Kenneth
Papagan
|
President
|
|
$ |
309,000 |
|
|
$ |
309,000 |
|
|
$ |
100,000 |
|
|
|
12,000 |
|
|
Amir
Yazdani
|
Executive
Vice President and Chief Information Officer
|
|
$ |
290,000 |
|
|
$ |
150,000 |
|
|
$ |
100,000 |
|
|
|
12,000 |
|
Severance
Provisions
If the
employment of an executive officer named above is terminated without cause or
for good reason, he or she will be entitled to receive severance payments in the
amount of his or her monthly base salary during a severance period of
(a) three months for each four full years of continuous service as a
Rentrak employee, (b) six months, or (c) the number of months
remaining in the term of the agreement, whichever is longest. Medical
benefits also continue during the severance period. No severance is
payable if the officer's employment is terminated for cause or the officer
terminates his or her employment voluntarily without good
reason. Severance payments are conditioned on compliance with
noncompete provisions and execution of a general release of claims against
Rentrak. Similar benefits are payable after the term of the agreement
expires if the officer has been employed for at least five consecutive
years.
Good
reason is defined as Rentrak's failure to comply with the material terms of the
agreement, an act or failure to act by Rentrak that constitutes a substantial
adverse change in the officer's position or responsibilities, a material
reduction in his or her base salary or failure to continue to provide employee
benefits, or specified changes in the location of the officer's
workplace. Cause is defined as willful material misconduct in the
performance of the officer's duties, a material breach of the agreement by the
officer, the officer's willful commission of a material act of malfeasance,
dishonesty or breach of trust that materially harms Rentrak, or the officer's
conviction of a felony involving moral turpitude.
Annual Cash Bonus
Plan
The
Compensation Committee reviewed and recommended adoption of the new Rentrak
Corporation Annual Cash Bonus Plan at its March 24, 2010 meeting and the Board
of Directors approved the plan at its meeting held the following
day. The Annual Cash Bonus Plan provides for the opportunity to earn
cash incentive awards by key members of Rentrak's management based on target
bonus levels and achievement of corporate and individual performance goals
approved by the Compensation Committee for executive officers, and by senior
management for other key employees, at the beginning of each fiscal
year. Award opportunities may be expressed as a dollar amount or a
percentage of annual base salary. In no event may an award payout to
a single individual for a given fiscal year exceed the lesser of 200% of the
target award and $2,000,000. Award payouts for financial goals are
based on actual financial performance and are prorated based on the degree of
achievement. The calculation of incentive award payouts is subject to
the approval of the Compensation Committee.
Equity-Based
Grants
At its
March 24, 2010 meeting, the Compensation Committee approved the grant of
non-qualified employee stock options to certain of Rentrak's executive officers
and other key employees under the 2005 Plan. The stock options have
an exercise price of $20.89 per share, will vest in four equal annual
installments beginning one year after the date of grant, and have a ten-year
term. The grants to Ms. Hetzel and Messrs. Papagan and Yazdani are
shown in the table under "Amended and Restated Employment Agreements with
Certain Executive Officers" above.
The
Compensation Committee also granted a non-qualified employee stock option to
purchase 75,000 shares of Rentrak common stock to Cathy Hetzel under the 2005
Plan with an exercise price of $20.89 per share and a term expiring December 31,
2013. The option will vest and become exercisable in three equal
installments on the 15th day of
June each year beginning in 2011, subject to the attainment of performance
criteria based 25% on target total operating income in the operating budget for
Rentrak approved by the Board of Directors for the preceding fiscal year and 75%
on target operating income included in the budget for the AMI Division or such
other business units as to which Ms. Hetzel may have supervisory responsibility
in the future. If the performance criteria for a given fiscal year
are not met, the shares covered by that installment of the option are
forfeited. If Ms. Hetzel's employment is terminated without
cause or for good reason after a change in control of Rentrak occurs, the
portion of the stock option that had not already vested or been forfeited will
vest in full.
The
Compensation Committee also approved the grant to Mr. Yazdani of 131,173
restricted stock units ("RSUs") under the 2005 Plan, each of which
represents a contingent right to receive one share of Rentrak common
stock. The RSUs will vest, if at all, upon satisfaction of
performance goals tied to achievement of (a) specified levels of earnings
before interest, taxes, depreciation and amortization ("EBITDA"), as modified by
subtracting certain other expenses, for the fiscal year ended March 31,
2010, and the following two fiscal years, or (b) trading-price targets for
Rentrak's common stock ranging from $25 to $40 per share for 65 consecutive
trading days during the period ending June 15, 2013. Vesting of
a portion or all of the RSUs will also occur if a change in control of Rentrak
occurs at price levels ranging from $25 to $40 per share. Upon
termination without cause or for good reason, 36,000 RSUs will vest if
termination is on or prior to June 30, 2010, 54,000 RSUs will vest if
termination occurs on or after July 1, 2010 and prior to July 1, 2011,
and 72,000 RSUs will vest if termination occurs on or after July 1, 2011
and on or prior to June 30, 2012.
Revised Compensation
Arrangements with Paul Rosenbaum
In June
2009, in contemplation of the transition associated with the hiring of Bill
Livek as Chief Executive Officer, Rentrak and Paul Rosenbaum entered into an
amended and restated employment agreement providing for his continued service in
a non-executive capacity as Chairman of the Board. In light of the
successful completion of the transition, at their March meetings the
Compensation Committee recommended and the Board of Directors approved revised
compensation arrangements for Mr. Rosenbaum effective March 31, 2010, pursuant
to which he will continue as Chairman of the Board in a non-employee capacity
through at least September 30, 2011. Mr. Rosenbaum's cash
compensation for continuing as Chairman of the Board was established at the
annual rate of $50,000.
In
addition, Mr. Rosenbaum received a lump sum payment in the amount of $298,739 in
full satisfaction of the balance of salary that would have been due under his
employment agreement during calendar 2010, and Rentrak has agreed to make an
additional lump sum payment of $190,000 on January 2, 2011, in full satisfaction
of the salary that would have been due for the period from January 1, 2011
through September 30, 2011 under his employment agreement. The lump
sum payments were reduced to reflect agreed upon contributions by Mr. Rosenbaum
toward premiums for the continuation of medical, dental and other welfare
benefits, and will be further reduced by required payroll
deductions. Rentrak also agreed to continue to provide life insurance
coverage for Mr. Rosenbaum in the amount of $300,000 through September 30, 2011
and to make a lump sum payment of $200,000 to Mr. Rosenbaum's heirs if he dies
on or after February 15, 2011 and on or before September 30, 2011.
Rentrak
and Mr. Rosenbaum also entered into a consulting agreement with a term expiring
September 30, 2013, under which Mr. Rosenbaum will provide investor relations
advice and such other services as Rentrak may request in exchange for a monthly
retainer of $833 through September 30, 2011 and $333 for the remainder of the
term, plus continuation of medical, dental and long-term care
benefits. In the event that Mr. Rosenbaum secures a contract or other
arrangement under which Rentrak is expected to receive revenue of $1,000,000 or
more in a 12-month period, Rentrak will negotiate with Mr. Rosenbaum in good
faith with regard to bonus compensation. Mr. Rosenbaum's employee
stock options and cash-settled stock appreciation rights will not terminate as a
result of the revised compensation arrangements.
|
|
|
RENTRAK
CORPORATION
|
| |
|
|
|
Dated: April 5,
2010
|
|
By:
|
/s/
David I. Chemerow |
|
|
|
|
David
I. Chemerow
Chief
Operating Officer and
Chief
Financial Officer
|