Exhibit 10.1
EXECUTION COPY
EMPLOYMENT
AGREEMENT
This Employment Agreement
(“Agreement”) is entered into as of June 15, 2009,
between WILLIAM P. LIVEK (“Executive”) and
RENTRAK CORPORATION , an Oregon corporation
(“Corporation”).
1. SERVICES
1.1 Employment Position .
Corporation agrees to employ Executive as Chief Executive Officer
and Executive accepts such employment, under the terms and
conditions of this Agreement. Executive also agrees to serve, if
elected, without separate compensation, as a director of
Corporation and an officer and/or director of any subsidiary or
affiliate of Corporation. Within three weeks following the
commencement of the Term, Corporation will take all steps necessary
to appoint Executive as a director of Corporation and will nominate
Executive for election as a director at Corporation’s annual
meeting of shareholders to be held in August 2009.
1.2 Term . The term of this
Agreement (the “Term”) will commence on June 15,
2009, and will expire on June 30, 2013.
1.3 Duties . During the Term,
Executive will serve in an executive capacity as Chief Executive
Officer of Corporation, subject always to the control of
Corporation’s Board of Directors (the “Board”).
Executive will, in his capacity as Chief Executive Officer,
supervise and manage the business and affairs and the other
officers of Corporation and perform such duties commonly incident
to the office of Chief Executive Officer and exercise such powers
as may from time to time be assigned to Executive or vested in
Executive by the Board. Executive may, in his capacity as Chief
Executive Officer, hire and fire employees in his discretion,
provided that Executive may not hire or fire any member of
Corporation’s senior executive team without consulting the
Board in advance. For purposes of the foregoing,
Corporation’s senior executive team will consist of the
President, any Vice President, and any other positions designated,
from time to time, by the Board. Executive, at his discretion, will
do such traveling as may be required in the performance of his
duties under this Agreement, including to various Rentrak offices
and to visit clients and prospective clients.
1.4 Outside Activities .
Except as expressly provided in this Section 1.4, during his
employment under this Agreement, Executive will devote his full
business time, energies, and attention to the business and affairs
of Corporation and to the promotion and advancement of its
interests. Executive will perform his services faithfully,
competently, and to the best of his abilities and, except as
approved in advance by the Board, will not engage in professional
or personal business activities that may require an appreciable
portion of Executive’s time or effort.
1.5 Application of Corporate
Policies . Executive will, except as otherwise provided in this
Agreement, be subject to Corporation’s rules, practices, and
policies applicable generally to Corporation’s directors and
employees, as such rules, practices, and policies may be revised
from time to time by the Board, as well as to all policies that
apply to the Chief Executive Officer.
2. COMPENSATION AND
EXPENSES
2.1 Base Salary . As
compensation for services under this Agreement, Corporation will
pay to Executive an initial annual base salary of $150,000 per
year, which will be increased by 10 percent on each
April 1 during the Term of this Agreement, unless
Executive’s employment has been terminated earlier pursuant
to this Agreement, payable in a manner consistent with
Corporation’s payroll practices for management employees, as
such practices may be revised from time to time. (In no event will
Executive’s base salary be payable less often than
monthly.)
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2.2 Bonus Compensation . For
the initial period of the Term ending March 31, 2010,
Executive will be eligible to receive a cash bonus of up to
$100,000 based on the achievement of performance measures (weighted
at 20% each) attached as Appendix 2.2. Such cash bonus, if
any, will be paid no later than May 30, 2010. For each
additional fiscal year in the Term beginning in 2011, Executive
will be eligible for an annual bonus of up to $100,000 payable in
cash within 60 days following the end of each fiscal year
based on the achievement of performance measures developed through
discussions between the Chairman of the Board and Executive and
subject to the approval of the Compensation Committee of the Board.
The Compensation Committee, after receiving input from Executive,
will determine the extent, if any, to which the applicable
performance measures for a given period or fiscal year have been
achieved in its sole discretion.
2.3 Equity-Based Compensation
.
2.3.1 Stock Option Grant .
Upon execution of this Agreement, Executive will be granted a
nonqualified stock option (the “Stock Option”) to
purchase an aggregate of 200,000 shares of Corporation’s
common stock with an exercise price equal to the fair market value
of the stock on the date of the grant, subject to the vesting and
other provisions set forth in the Stock Option Award Agreement in
the form attached as Appendix 2.3.1. The Compensation
Committee has approved the grant of the Stock Option.
2.3.2 Grant of Stock-Settled
Stock Appreciation Rights . Upon execution of this Agreement,
Executive will be granted 75,000 Stock-Settled Stock Appreciation
Rights (the “SSARs”) with a base price equal to the
fair market value of Corporation’s common stock on the date
of the grant, subject to the vesting and other provisions set forth
in the Stock-Settled Stock Appreciation Rights Award Agreement in
the form attached as Appendix 2.3.2. The Compensation
Committee has approved the grant of the SSARs.
2.3.3 Restricted Stock Unit
Award . Upon execution of this Agreement, Executive will be
granted a restricted stock unit award (“Restricted Stock
Award”) relating to up to 213,750 shares of
Corporation’s common stock subject to the vesting and other
provisions set forth in the Restricted Stock Unit Award Agreement
in the form attached as Appendix 2.3.3. The Compensation
Committee has approved the grant of the Restricted Stock
Award.
2.3.4 Balance of Term .
Executive shall not be entitled to receive grants of any additional
equity-based compensation during the Term.
2.4 Additional Employee
Benefits . Executive may take vacation for up to four weeks
during each 12-month period during the Term at such time or times
as may be approved in advance by the Chairman of the Board. Subject
to the foregoing sentence, vacation and personal time off may be
taken in accordance with Corporation’s rules, practices, and
policies applicable to Corporation’s senior executive
employees, as such rules, practices, and policies may be revised
from time to time by the Board or the Compensation Committee.
Corporation will also employ one full-time administrative assistant
for Executive during the Term. Also, at all times during the Term,
Executive will be entitled to any other employee benefits approved
by the Board or the Compensation Committee, or available to
officers and other management employees generally, including any
life and medical insurance plans, disability insurance plans,
401(k) and other similar plans, and other health and welfare plans,
each whether now existing or hereafter approved by the Board or the
Compensation Committee (“Benefit Plans”). In addition,
such Benefit Plans will expressly include medical insurance
coverage for Executive’s spouse, reimbursement to Executive
of the cost of his existing UNUM supplemental disability insurance
policy in an amount not to exceed $3,000 per year, and long-term
care insurance benefits for Executive at a cost not to exceed
$7,000 per year. Except as provided in the preceding sentence, the
foregoing will not be construed to require Corporation to establish
any other such plans or to prevent Corporation from modifying or
terminating any such Benefit Plans.
2.5 Expenses . Subject to
review and approval by the Chairman of the Board, Corporation will
reimburse Executive for reasonable expenses actually incurred by
Executive in connection with the business of Corporation. Executive
will submit to Corporation such substantiation for such expenses as
may be reasonably required by Corporation. All domestic commercial
air travel will be reimbursed at the coach class fare level
unless
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otherwise approved in advance. International
travel (other than to or from Canada) will be reimbursed at the
business class fare level.
3. CONFIDENTIAL
INFORMATION
3.1 Definition .
“Confidential Information” is all nonpublic information
relating to Corporation or its business that is disclosed to
Executive, that Executive produces, or that Executive otherwise
obtains during employment. Confidential Information also includes
information received from third parties that Corporation has agreed
to treat as confidential; provided that Executive has knowledge
that Corporation has agreed to treat such information as
confidential. Examples of Confidential Information include, without
limitation, marketing plans, customer lists or other customer
information, product design and manufacturing information, and
financial information. Confidential Information does not include
any information that (i) is within the public domain other
than as a result of disclosure by Executive in violation of this
Agreement, (ii) was, on or before the date of disclosure to
Executive (whether such disclosure was made on, prior to, or
subsequent to the date of this Agreement), already known by
Executive, or (iii) Executive is required to disclose in any
governmental, administrative, judicial, or quasi-judicial
proceeding, but only to the extent that Executive is so required to
disclose and provided that Executive takes reasonable steps to
request confidential treatment of such information in such
proceeding.
3.2 Access to Information .
Executive acknowledges that in the course of his employment he will
have access to Confidential Information, that such information is a
valuable asset of Corporation, and that its disclosure or
unauthorized use will cause Corporation substantial and irreparable
harm.
3.3 Ownership . Executive
acknowledges that all Confidential Information will continue to be
the exclusive property of Corporation (or the third party that
disclosed it to Corporation), whether or not prepared in whole or
in part by Executive and whether or not disclosed to Executive or
entrusted to his custody in connection with his employment by
Corporation.
3.4 Nondisclosure and Nonuse
. Unless authorized or instructed in advance in writing by
Corporation, or required by law (as determined by licensed legal
counsel or judicial or quasi-judicial order), Executive will not,
except as required in the course of Corporation’s business,
during or after his employment, disclose to others or use any
Confidential Information, unless and until, and then only to the
extent that, such items become available to the public through no
fault of Executive.
3.5 Return of Confidential
Information . Upon request by Corporation during or after his
employment, and without request upon termination of employment
pursuant to this Agreement, Executive will deliver immediately to
Corporation all written, stored, saved, or otherwise tangible
materials containing Confidential Information without retaining any
excerpts or copies.
3.6 Duration . The
obligations set forth in this Section 3 will continue beyond
the term of employment of Executive by Corporation and for so long
as Executive possesses Confidential Information.
4. NONCOMPETITION
4.1 Definition of Competitive
Entity . For purposes of this Agreement, a Competitive Entity
is any firm, corporation, partnership, limited liability company,
business trust, or other entity that is directly competitive with a
business activity engaged in by Corporation (or an activity
specifically identified in Corporation’s strategic business
plan approved from time to time by the Board subsequent to the date
of this Agreement) as of the date of termination of
Executive’s employment with Corporation.
4.2 Covenant . During the
Term and for a period ending on the last day of the applicable
Noncompete Period described in Section 5.7, Executive will
not, within any geographical area where Corporation engages in
business:
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(a) Directly or indirectly, alone or
with any individual, partnership, limited liability company,
corporation, or other entity, become associated with, render
services to, invest in, represent, advise, or otherwise participate
in any Competitive Entity; provided, however, that nothing
contained in this Section 4.2 will prevent Executive from
owning less than 5 percent of any class of equity or debt
securities listed on a national securities exchange or market,
provided such involvement is solely as a passive
investor;
(b) Solicit any business on behalf
of a Competitive Entity from any individual, firm, partnership,
corporation, or other entity that is a customer of Corporation
during the 12 months immediately preceding the date
Executive’s employment with Corporation is terminated;
or
(c) Employ or otherwise engage or
offer to employ the services of any person (other than
Executive’s assistant) who has been an employee, sales
representative, or agent of Corporation during the 12 months
preceding the date Executive’s employment with Corporation is
terminated.
For purposes of this Section 4,
“Corporation” means Corporation and its subsidiaries
(whether now existing or subsequently created) and their successors
and assigns.
4.3 Severability; Reform of
Covenant . If, in any judicial proceeding, a court refuses to
enforce this covenant not to compete because it covers too
extensive a geographic area or is too long in its duration, the
parties intend and agree that it be reformed and enforced to the
maximum extent permitted under applicable law.
5. TERMINATION
Executive’s employment under
this Agreement will terminate prior to the end of the Term as
follows:
5.1 Death . Executive’s
employment will terminate automatically upon the date of
Executive’s death.
5.2 Disability . Corporation
may, at its option, terminate Executive’s employment under
this Agreement upon written notice to Executive if Executive
becomes eligible to receive a “Total Disability Monthly
Benefit” under Corporation’s long-term disability
insurance program.
5.3 Termination by Corporation
for Cause . Corporation may terminate Executive’s
employment under this Agreement for Cause at any time. For purposes
of this Agreement, “Cause” means: (a) a material
breach of this Agreement by Executive; (b) Executive’s
refusal, failure, or inability to comply with any of the material
and lawful policies or standards of Corporation or to perform any
material job duties of Executive set forth in this Agreement;
(c) any act of fraud by Executive, (d) any act of
dishonesty or moral turpitude by Executive involving Corporation or
its business; (e) Executive’s conviction of or a plea of
nolo contendere to a felony; or (f) the commission of any act
in direct or indirect competition with or materially detrimental to
the best interests of Corporation that is in breach of
Executive’s fiduciary duties of care, loyalty and good faith
to Corporation. Cause will not, however, include any actions or
circumstances constituting Cause under (a) or (b) above
if Executive cures such actions or circumstances within
30 days of receipt of written notice from Corporation setting
forth the actions or circumstances constituting Cause; provided
that Executive will have only one opportunity to make any such
cure. If Corporation seeks to terminate Executive for Cause under
clauses (c), (d), (e), or (f) above, Executive may submit
the issue of whether Cause exists to expedited arbitration as
provided in Section 8 below; provided that Executive must give
notice of his intent to do so within 15 days of the written
notice referred to above.
5.4 Termination by Executive for
Good Reason . Executive may terminate his employment with
Corporation under this Agreement for “Good Reason” if
Corporation has not cured the actions or circumstances which are
the basis for such termination within 30 days following receipt by
the Board of written notice from Executive setting forth the
actions or circumstances constituting Good Reason, which notice
must be delivered to the Board within 90 days of the initial
existence of such actions or circumstances. In that event,
Corporation may submit the issue of whether Good Reason exists to
expedited arbitration as provided in Section 8 below;
provided
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that Corporation must give notice of its intent
to do so within 15 days of the written notice referred to
above. For purposes of this Agreement, “Good Reason”
means:
(a) Failure of Corporation to comply
with the material terms of this Agreement; or
(b) The occurrence (without
Executive’s express written consent) of any of the following
acts by Corporation or failures by Corporation to act:
(i) A substantial adverse alteration
in the nature or status of Executive’s title, position,
duties, or reporting responsibilities as an executive of
Corporation;
(ii) A material reduction in
Executive’s base salary specified in Section 2.1 above;
or
(iii) The failure by Corporation to
continue to provide Executive with benefits and participation in
Benefit Plans as provided in Section 2.4.
5.5 Termination by Corporation
Without Cause . Corporation may terminate Executive’s
employment with Corporation without Cause at any time by written
notice to Executive.
5.6 Termination by Executive
Other than for Good Reason . Executive may terminate
Executive’s employment with Corporation other than for Good
Reason at any time by written notice to the Secretary of the
Corporation.
5.7 Applicable Noncompete Periods
upon Termination . The duration of Executive’s
obligations und
