Incentive Stock Option Agreement - Rentrak Corp. and Ron Berger
RENTRAK CORPORATION
1986 SECOND AMENDED AND RESTATED STOCK OPTION PLAN
INCENTIVE STOCK OPTION
AND
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option is granted, and this Incentive Stock Option
Agreement (the "Agreement") is executed to be effective as of December 20, 1994,
by Rentrak Corporation, an Oregon corporation (the "Company"), and Ron Berger
(the "Optionee).
RECITALS
A. The Company's Board of Directors has duly adopted, and the Company's
shareholders have approved, that certain 1986 Second Amended and Restated Stock
Option Plan (the "Plan"), a copy of which is available for review in the
Company's administrative offices.
B. The Plan authorizes the Company's Board of Directors or an
Administrative Committee thereof (the "Stock Option Committee") to grant
Incentive Stock Options to officers and employees of the Company and any of the
Company's Affiliates (as such term is defined in the Plan).
C. On or about April 8, 1994, the Stock Option Committee, upon due
consideration and as further inducement to the Optionee to enter into an
Employment Agreement with the Company, dated June 1, 1994 (the "Employment
Agreement"), designated the Optionee to receive an Incentive Stock Option under
the Plan covering a total of 70,949 shares of the Common Stock of the Company
and a Nonstatutory Stock Option covering a total of 929,051 shares of said
Common Stock (hereinafter the "April 8th Options"), the exercisability of which
were made subject to the Company's achievement of certain performance objectives
established by the Stock Option Committee. The April 8th Options were granted
subject to obtaining shareholder approval, which approval was obtained on
December 12, 1994.
D. Subsequent to the issuance of the April 8th Options the Stock Option
Committee and the Optionee first learned that keying the exercisability of the
April 8th Options to the satisfaction of future performance objectives subjected
the Company to the risk that it would have to book substantial charges against
its future income if the value of the Company's stock increased significantly
during the term of said options.
E. In order to avoid the adverse financial statement impact to the
Company from the use of performance objectives, the Optionee has agreed to
cancel the April 8th Options in consideration of the grant by the Stock Option
Committee of this replacement Incentive Stock Option and a Nonstatutory Option
of even date herewith covering a total of 1,000,000 shares, both bearing an
exercise price equal to the fair market value of the Company's Common Stock as
of the effective date of the grant of this Option.
1- Incentive Stock Option Agreement
<PAGE>
NOW, THEREFORE THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS:
1. NUMBER OF SHARES SUBJECT TO OPTION AND OPTION PRICE. The Company
hereby grants to the Optionee an Incentive Stock Option (the "Option") to
purchase from the Company 70,949 shares of the Common Stock of the Company at an
option price of $6.375 per share. The Option is exercisable upon the terms and
conditions contained herein. For the reasons stated in the Recitals hereto,
Optionee agrees that the April 8th Options are hereby cancelled and that the
Option granted hereby shall replace the April 8th Option.
2. ADDITIONAL TERMS OF THE OPTION. Subject to the provisions of
Paragraph 3 below, the Option shall have the following terms:
2.1 The effective date of the grant of the Option is December 20,
1994.
2.2 The Option shall vest on the dates set forth below ("Vesting
Dates") as to the number of shares set forth below.
<TABLE>
<CAPTION>
PERCENTAGE ANNUAL CUMULATIVE
---------- ------ ----------
DATE VESTED SHARES VESTED SHARES VESTED
---- ------ ------------- -------------
<S> <C> <C> <C>
March 31, 1995 20% 14,190 14,190
March 31, 1996 20% 14,190 28,380
March 31, 1997 20% 14,190 42,570
March 31, 1998 20% 14,190 56,760
March 31, 1999 20% 14,189 70,949
</TABLE>
2.3 Notwithstanding anything to the contrary in paragraph 2.2 above,
in the event the employment of the Optionee is terminated by the Company
pursuant to Section 5.4 of the Employment Agreement, this Option shall
immediately vest as to any Option shares that have not previously vested in
accordance with paragraph 2.2 above ("Unvested Shares").
2.4 The Option shall expire on the earlier of April 7, 2004, or the
applicable date specified below (the "Expiration Date").
a) Six (6) months following the effective date of the termination of
the Optionee's employment by the Company on account of the Optionee's
disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the "Code");
b) One (1) year following the termination of the Optionee's
employment by the Company on account of the Optionee's death;
c) Thirty (30) days following the effective date of the termination
of the Optionee's employment by the Company for any reason other than
disability (as defined in paragraph (a) above) or death;
d) The date of any sale, transfer or hypothecation, or any attempted
sale, transfer or hypothecation in violation of Section 8 of the Plan which
provides that an Option shall not be transferable or exercisable by any
person other than the Optionee, except as provided in paragraphs (d)(1),
(d)(2), and (d)(3), below:
2- Incentive Stock Option Agreement
<PAGE>
1) In the event of the death of the Optionee, any Options held
by the Optionee shall pass to the person or persons entitled thereto
pursuant to the Will of the Optionee or the applicable laws of descent
and distribution (a "Qualified Successor"). Any right under the
Option which the Optionee could have exercised immediately prior to
the date of his death shall, subject to the terms of this paragraph
2.4 and paragraphs 2.6 and 2.7 below, be exercisable by his Qualified
Successor for a period of one (1) year following his death.
2) In the event of the death of the Optionee following
termination of his employment on account of disability, but prior to
the expiration of the six (6) month period specified in paragraph 2.4
(a) above, this Option shall pass to and be exercisable by the
Qualified Successor of the Optionee in the manner specified above for
a period of one (1) year following the original termination of his
employment.
3) In the event a guardian or conservator (a "Guardian") is
appointed for the Optionee as the result of the termination of the
Optionee's employment by the Company on account of Optionee's
disability (as defined above) any Option held by the Optionee, which
could have been exercised immediately prior to such termination of the
employment, shall, subject to this paragraph 2.4 and paragraphs 2.6
and 2.7 below, be exercisable by the Guardian of the Optionee for a
period of six (6) months following such termination of employment.
4) Options held by a Qualified Successor or a Guardian shall
continue to vest to the extent provided in paragraph 2.7 herein.
5) In the event that two or more persons constitute the
Qualified Successor or the Guardian of the Optionee, all rights of the
Qualified Successor or Guardian shall be exercisable, if at all, by
the unanimous agreement of these persons.
2.5 To the extent vested, the Option may be exercised in whole or in
part at any time and from time to time prior to the Expiration Date.
2.6 The Option must be exercised, if at all, as to a whole number of
shares. In addition, the Option may be exercised for not less than ten (10)
shares at any time, unless the total number of shares purchasable under the
Option at that time is less than ten (10), in which case the Option may be
exercised for that lesser number of shares.
2.7 If, because of death or disability, the Optionee is no longer
employed as an officer or employee of the Company, this Option shall continue to
vest in accordance with the schedule set forth in paragraph 2.2 above during the
period prior to termination of the Option as provided herein. If the Optionee
no longer is employed as an officer or employee of the Company for any reason
other than death, disability or a termination pursuant to Section 5.4 of the
Employment Agreement, the vesting of the Option shall cease and the Option
granted hereunder shall be limited to those shares which were immediately
exercisable by the Optionee as of the effective date of such termination.
3- Incentive Stock Option Agreement
<PAGE>
3. ADJUSTMENTS TO AND/OR CANCELLATIONS OF THE OPTION.
3.1 If there is a material alteration in the capital structure of the
Company on account of a reorganization, merger, recapitalization, exchange of
shares, stock split, reverse stock split, stock dividend, or otherwise, the
Stock Option Committee shall make such adjustments to the Plan and to the
Options then outstanding under the Plan as the Stock Option Committee determines
to be appropriate and equitable under the circumstances. Such adjustments may
include, without limitation, (a) a change in the number or kind of shares of
stock of the Company covered by the Options and/or (b) a change in the Option
Price payable per share; provided, however, that the aggregate Option Price
applicable to the unexercised portion of existing Options shall not be altered,
it being intended that any adjustments made with respect to these Options shall
apply only to the price per share and the number of shares subject thereto. For
purposes of this Section, neither (i) the issuance of additional shares of stock
of the Company in exchange for adequate consideration (including services), nor
(ii) the conversion of outstanding preferred shares of the Company into Common
Stock, shall be deemed a material alteration of the capital structure of the
Company. In the event the Stock Option Committee shall determine that the
nature of a material alteration in the capital structure of the Company is such
that it is not practical or feasible to make appropriate adjustments to the Plan
or to this Option, such event shall be deemed a Terminating Event subject to
paragraph 3.2 below.
3.2 In the event of (a) the dissolution or liquidation of the
Company, (b) a reorganization, merger, or consolidation of the Company with one
or more corporations as a result of which the Company will not be a surviving
corporation, (c) the sale of all or substantially all of the assets of the
Company, (d) a sale or other transfer or m ore than eighty percent (80%) of the
then outstanding shares of Common Stock of the Company, or (e) a material change
in the capital structure of the Company that is subject to this Section in
accordance with the last sentence of Section 3.1 above (any of such events is
herein referred to as a "Terminating Event"), the Stock Option Committee shall
determine whether a provision will be made in connection with the Terminating
Event for an appropriate assumption of this Option or for substitution of
appropriate new options covering stock of a successor corporation employing the
Optionee or stock of an affiliate of such successor employer corporation. If
the Stock Option Committee determines that such an appropriate assumption or
substitution will be made, the Stock Option Committee shall give notice of the
determination to the Optionee and the provisions of such assumption or
substitution, and any adjustments made (i) to the number and kind of shares
subject to the Option outstanding under the Plan (or to options issued in
substitution therefor), (ii) to the Option price and/or (iii) to the terms and
conditions of this Option, which determination shall be binding upon the
Optionee. If the Stock Option Committee determines that no assumption or
substitution will be made, the Stock Option Committee shall give notice of this
determination to the Optionee, whereupon the Optionee shall have the right for a
period of thirty (30) days following the notice to exercise in full or in part
any unexercised or unexpired Option then held by him, without regarding to any
vesting provision to which the Option may have otherwise been subject pursuant
to paragraph 2.2 above. Upon the expiration of this thirty (30) day period,
this Option shall expire to the extent not earlier exercised, and the Plan shall
terminate.
4. EXERCISE OF THE OPTION. The Option shall be exercised, if at all, by
(a) delivering to the Company a written notice in the form of the document
attached as Exhibit A specifying the number of shares of Common Stock for which
exercise is made, (b) tendering full payment of the option price, as required by
Section 7 of the Plan, for the shares for which exercise is made, and (c)
tendering to the Company full payment of any amounts the Company determines must
be withheld
4- Incentive Stock Option Agreement
<PAGE>
for tax purposes from the Optionee as a result of the exercise of the Option and
the issuance of the shares.
5. TRANSFERABILITY OF THE OPTION. Except as provided in paragraph 2.4
above and Section 8 of the Plan, the Option shall not be transferable or
exercisable by any person other than the Optionee.
6. WARRANTIES, REPRESENTATIONS AND ACKNOWLEDGEMENTS OF THE OPTIONEE. By
executing this Agreement, the Optionee accepts the Option and agrees to be bound
by all of the terms of this Agreement and the Plan. In addition, the Optionee
acknowledges that exercise of the Option and the sale of the shares of Common
Stock acquired upon exercise thereof may have tax implications for which the
Optionee should seek individual advice by his or her own tax counselor or
advisor.
7. INDEMNIFICATION BY THE OPTIONEE. The Optionee agrees that, in the
event of a claim against the Company resulting from a breach by the Optionee of
the representations, warranties or provisions contained in this Agreement, the
Optionee will indemnify and hold the Company harmless from any loss or damage,
including attorney's fees or other legal expenses, incurred in the defense or
payment of any such claim against the Company.
8. NO RIGHT TO CONTINUED RELATIONSHIP. Nothing herein shall confer upon
the Optionee the right to continue as an officer or employee of the Company, nor
affect any right which the Company may have to terminate its relationship
(whether or not for cause) with the Optionee.
9. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder of the Company, including, without limitation, any rights to
dividends or other rights for which the record date is prior to the date the
certificate representing the shares acquired upon exercise of the Option is
issued, on account of the Option or on account of shares of Common Stock of the
Company which will be acquired upon exercise of the Option (but with respect to
which no certificates have been delivered to the Optionee).
10. FURTHER ASSURANCES. The Optionee agrees from time to time to execute
such additional documents as the Company may reasonably require in order to
effect the purposes of the Plan and this Agreement.
11. BINDING EFFECT. This Agreement shall be binding upon the Optionee and
the optionee's heirs, successors and assigns, including, without limitation, the
Qualified Successor or Guardian of the Optionee (as those terms are defined in
paragraph 2.4(d) above).
12. WAIVERS/MODIFICATIONS. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by the party
against whom enforcement of such waiver, alteration or modification is sought.
The failure of any party to enforce any of its rights against the other party
for breach of any of the terms of this Agreement shall not be construed a waiver
of such rights as to any continued or subsequent breach.
13. MODIFICATION AND TERMINATION. The rights of the Optionee hereunder
are subject to modification and termination in certain events as provided in the
Plan.
14. RESTRICTION ON SALE OF SHARES. Optionee represents and agrees that
upon his exercise of the Option, in whole or in part, unless there is in effect
at the time under the Securities Act of 1933, as amended, a registration
statement relating to the shares acquired, such shares will
5- Incentive Stock Option Agreement
<PAGE>
be acquired for his own account, for investment purposes only and not with a
view toward the distribution or public offering thereof nor with any present
intention of reselling or distributing the shares at any particular future time,
and that upon exercise thereof he will furnish to the Company a written
statement to such effect, satisfactory to the Company in form and substance.
Optionee agrees that any certificates issued upon exercise of this Option may
bear a legend indicating that their transferability is restricted in accordance
with applicable state or federal securities law. Any person or persons entitled
to the Option under circumstances in which Optionee would be required to furnish
such a written statement shall furnish to the Company a written statement to the
same effect, satisfactory to the Company in form and substance.
15. PLAN GOVERNS. This Agreement and the Option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of that Plan, as it may be amended from time
to time and construed by the Committee.
16. NOTICES. All notices to the Company shall be addressed to the members
of the Stock Option Committee with a copy to the Secretary of the Company at the
principal office of the Company at 7227 N.E. 55th Avenue, Portland, Oregon
97218, and all notices to Optionee shall be addressed to Optionee at the address
of Optionee on file with the Company or its Affiliates, or to such other address
as either may designate to the other in writing. A notice shall be deemed to be
duly given upon the earlier of receipt by the addressee or three days following
deposit of such notice in a properly addressed sealed envelope, postage prepaid,
with the United States Postal Service. In lieu of giving notice by mail as
provided above, written notice under this Agreement may be given by personal
delivery to Optionee or to the Chairman of the Board of Directors of the Company
(as the case may be).
17. SALE OR OTHER DISPOSITION. Optionee hereby agrees that if Optionee
disposes (whether by sale, exchange, gift or otherwise) of any of the shares
acquired by exercise of this Option within two years of the grant date or within
one year after the transfer of such shares to Optionee upon exercise of this
Option, then Optionee shall notify the Company of such disposition in writing
within thirty (30) days from the date of such disposition. Said written notice
shall state the date of such disposition, and the type and amount of the
consideration received for such share or shares by Optionee in connection
therewith. In the event of any such disposition, the Company shall have the
right to require Optionee to immediately pay the Company the amount of taxes (if
any) which the Company is required to withhold under federal and/or state law in
order to obtain the benefit of any deduction that would otherwise be available
as a result of the granting or exercise of the subject Option or the disposition
of the subject shares.
18. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Oregon.
6- Incentive Stock Option Agreement
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
RENTRAK CORPORATION
By /s/ Bill LeVine
---------------------------
Bill LeVine
Member, Stock Option Committee
By /s/ James Jimirro
---------------------------
James Jimirro
Member, Stock Option Committee
OPTIONEE:
By /s/ Ron Berger
---------------------------
Ron Berger
7- Incentive Stock Option Agreement
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE OF INCENTIVE OPTION
To: RENTRAK CORPORATION
7227 N.E. 55th Avenue
Post Office Box 18888
Portland, Oregon 97218
The undersigned exercises the option to purchase _____________ shares of
common stock of Rentrak Corporation (the "Company") granted to the undersigned
pursuant to the terms of the Company's 1986 Second Amended and Restated Stock
Option Plan (the "Plan") and the Incentive Stock Option and Incentive Stock
Option Agreement effective as of December 20, 1994.
Accompanying this notice is: [select one] (1) ____ cash, certified check
or cashier's check in the amount of $_________, or (2) a certificate
representing ____ shares of Common Stock of the Company valued at $____________
per share (the fair market price of those shares on the day preceding the date
hereof) representing the option price of $____________ per share plus the amount
the Company has determined must be withheld for tax purposes; or (3)
____________ I hereby request to exercise this option through a cashless
transaction and have provided the name and address of my broker below. I
understand that if I elect to pursue a cashless transaction, Rentrak Corporation
will request and authorize the stock transfer company to issue the
certificate(s) in the name of my broker to facilitate completion of the
transaction.
Date:_________________________
BROKER OPTIONEE
- ------------------------------
------------------------------
Address: Address:
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
8- Incentive Stock Option Agreement
<PAGE>
RENTRAK CORPORATION
1986 SECOND AMENDED AND RESTATED STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION
AND
NONSTATUTORY STOCK OPTION AGREEMENT
This Nonstatutory Stock Option is granted, and this Nonstatutory Stock
Option Agreement (the "Agreement") is executed to be effective as of December
20, 1994, by Rentrak Corporation, an Oregon corporation (the "Company"), and Ron
Berger (the "Optionee).
RECITALS
A. The Company's Board of Directors has duly adopted, and the Company's
shareholders have approved, that certain 1986 Second Amended and Restated Stock
Option Plan (the "Plan"), a copy of which is available for review in the
Company's administrative offices.
B. The Plan authorizes the Company's Board of Directors or an
Administrative Committee thereof (the "Stock Option Committee") to grant
Incentive Stock Options to officers and employees of the Company and any of the
Company's Affiliates (as such term is defined in the Plan).
C. On or about April 8, 1994, the Stock Option Committee, upon due
consideration and as further inducement to the Optionee to enter into an
Employment Agreement with the Company, dated June 1, 1994 (the "Employment
Agreement"), designated the Optionee to receive an Incentive Stock Option under
the Plan covering a total of 70,949 shares of the Common Stock of the Company
and a Nonstatutory Stock Option covering a total of 929,051 shares of said
Common Stock (hereinafter the "April 8th Options"), the exercisability of which
were made subject to the Company's achievement of certain performance objectives
established by the Stock Option Committee. The April 8th Options were granted
subject to obtaining shareholder approval, which approval was obtained on
December 12, 1994.
D. Subsequent to the issuance of the April 8th Options the Stock Option
Committee and the Optionee first learned that keying the exercisability of the
April 8th Options to the satisfaction of future performance objectives subjected
the Company to the risk that it would have to book substantial charges against
its future income if the value of the Company's stock increased significantly
during the term of said options.
E. In order to avoid the adverse financial statement impact to the
Company from the use of performance objectives, the Optionee has agreed to
cancel the April 8th Options in consideration of the grant by the Stock Option
Committee of this replacement Nonstatutory Option and an Incentive Stock Option
of even date herewith covering a total of 1,000,000 shares, both bearing an
exercise price equal to the fair market value of the Company's Common Stock as
of the effective date of the grant of this Option.
1 - Nonstatutory Stock Option Agreement
<PAGE>
NOW, THEREFORE THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS:
1. NUMBER OF SHARES SUBJECT TO OPTION AND OPTION PRICE. The Company
hereby grants to the Optionee an Nonstatutory Stock Option (the "Option") to
purchase from the Company 929,051 shares of the Common Stock of the Company at
an option price of $6.375 per share. The Option is exercisable upon the terms
and conditions contained herein. For the reasons stated in the Recitals hereto,
Optionee agrees that the April 8th Options are hereby cancelled and that the
Option granted hereby shall replace the April 8th Option.
2. ADDITIONAL TERMS OF THE OPTION. Subject to the provisions of
Paragraph 3 below, the Option shall have the following terms:
2.1 The effective date of the grant of the Option is December 20,
1994.
2.2 The Option shall vest on the dates set forth below ("Vesting
Dates") as to the number of shares set forth below.
<TABLE>
<CAPTION>
Percentage Annual Cumulative
---------- ------ ----------
Date Vested Shares Vested Shares Vested
---- ------ ------------- -------------
<S> <C> <C> <C>
March 31, 1995 20% 185,810 185,810
March 31, 1996 20% 185,810 371,620
March 31, 1997 20% 185,810 557,430
March 31, 1998 20% 185,810 743,240
March 31, 1999 20% 185,811 929,051
</TABLE>
2.3 Notwithstanding anything to the contrary in Section 2.2 above, in
the event the employment of the Optionee is terminated by the Company pursuant
to Section 5.4 of the Employment Agreement, this Option shall immediately vest
as to any Option shares that have not previously vested in accordance with
Section 2.2 above ("Unvested Shares".
2.4 The Option shall expire on the earlier of April 7, 2004, or the
applicable date specified below (the "Expiration Date").
a) Six (6) months following the effective date of the termination of
the Optionee's employment by the Company on account of the Optionee's
disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the "Code");
b) One (1) year following the termination of the Optionee's
employment by the Company on account of the Optionee's death;
c) Thirty (30) days following the effective date of the termination
of the Optionee's employment by the Company for any reason other than
disability (as defined in paragraph (a) above) or death;
d) The date of any sale, transfer or hypothecation, or any attempted
sale, transfer or hypothecation in violation of Section 8 of the Plan
which provides that an Option shall not be transferable or exercisable by
any person other than the Optionee, except as provided in paragraphs
(d)(1), (d)(2), and (d)(3), below:
2 - Nonstatutory Stock Option Agreement
<PAGE>
1) In the event of the death of the Optionee, any Options held
by the Optionee shall pass to the person or persons entitled thereto
pursuant to the Will of the Optionee or the applicable laws of
descent and distribution (a "Qualified Successor"). Any right under
the Option which the Optionee could have exercised immediately prior
to the date of his death shall, subject to the terms of this
Paragraph 2.4, be exercisable by the Qualified Successor for a period
of one (1) year following his death.
2) In the event of the death of the Optionee following
termination of his employment on account of disability but prior to
the expiration of the six (6) month period specified above, this
Option shall pass to and be exercisable by the Qualified Successor of
the Optionee in the manner specified above for a period of one (1)
year following the original termination of his employment.
3) In the event a guardian or conservator (a "Guardian") is
appointed for the Optionee as the result of the termination of the
Optionee's employment by the Company on account of Optionee's
disability (as defined above) any Option held by the Optionee, which
could have been exercised immediately prior to such termination of
the employment, shall, subject to this Section 2.4, be exercisable by
the Guardian of the Optionee for a period of six (6) months following
such termination of employment.
4) Options held by a Qualified Successor or a Guardian shall
continue to vest to the extent provided in Section 2.7 herein.
5) In the event that two or more persons constitute the
Qualified Successor or the Guardian of the Optionee, all rights of
the Qualified Successor or Guardian shall be exercisable, if at all,
by the unanimous agreement of these persons.
2.5 To the extent vested, the Option may be exercised in whole or in
part at any time and from time to time prior to the Expiration Date.
2.6 The Option must be exercised, if at all, as to a whole number of
shares. In addition, the Option may be exercised for not less than ten (10)
shares at any time, unless the total number of shares purchasable under the
Option at that time is less than ten (10), in which case the Option may be
exercised for that lesser number of shares.
2.7 If, because of death or disability, the Optionee is no longer
employed as an officer or employee of the Company, this Option shall continue to
vest in accordance with the schedule set forth in Paragraph 2.2 above during the
period prior to termination of the Option as provided herein. If, for any
reason other than death or disability, the Optionee no longer is employed as an
officer or employee, the vesting of the Option shall cease and the Option
granted hereunder shall be limited to those shares which were immediately
exercisable by the Optionee as of the date of the effective date of such
termination.
3. ADJUSTMENTS TO AND/OR CANCELLATION OF THE OPTION.
3.1 If there is a material alteration in the capital structure of the
Company on account of a reorganization, merger, recapitalization, exchange of
shares, stock split, reverse stock split, stock dividend, or otherwise, the
Stock Option Committee shall make such adjustments to the Plan and to the
Options then outstanding under the Plan as the Stock Option Committee
3 - Nonstatutory Stock Option Agreement
<PAGE>
determines to be appropriate and equitable under the circumstances. Such
adjustments may include, without limitation, (a) a change in the number or
kind of shares of stock of the Company covered by the Options and/or (b) a
change in the Option Price payable per share; provided, however, that the
aggregate Option Price applicable to the unexercised portion of existing Options
shall not be altered, it being intended that any adjustments made with respect
to these Options shall apply only to the price per share and the number of
shares subject thereto. For purposes of this Section, neither (i) the issuance
of additional shares of stock of the Company in exchange for adequate
consideration (including services), nor (ii) the conversation of outstanding
preferred shares of the Company into Common Stock, shall be deemed a material
alteration of the capital structure of the Company. In the event the Stock
Option Committee shall determine that the nature of a material alteration in the
capital structure of the Company is such that it is not practical or feasible to
make appropriate adjustments to the Plan or to this Option, such event shall be
deemed a Termination Event as defined below.
3.2 In the event of (a) the dissolution or liquidation of the
Company, (b) a reorganization, merger, or consolidation of the Company with one
or more corporations as a result of which the Company will not be a surviving
corporation, (c) the sale of all or substantially all of the assets of the
Company, (d) a sale or other transfer or m ore than eighty percent (80%) of the
then outstanding shares of Common Stock of the Company, or (e) a material change
in the capital structure of the Company that is subject to this Section in
accordance with the last sentence of Section 3.1 above (any of such events is
herein referred to as a "Terminating Event"), the Stock Option Committee shall
determine whether a provision will be made in connection with the Terminating
Event for an appropriate assumption of this Option for stock or for substitution
of appropriate new options covering stock of a successor corporation employing
the Optionee under this Plan and Agreement or stock of an affiliate of such
successor employer corporation. If the Stock Option Committee determines that
such an appropriate assumption or substitution will be made, the Stock Option
Committee shall give notice of the determination to the Optionee and the
provisions of such assumption or substitution, and any adjustments made (i) to
the number and kind of shares subject to the Option outstanding under the Plan
(or to options issued in substitution therefor), (ii) to the Option price and/or
(iii) to the terms and conditions of this Option, shall be binding upon the
Optionee. If the Stock Option Committee determines that no assumption or
substitution will be made, the Stock Option Committee shall give notice of this
determination to the Optionee, whereupon the Optionee shall have the right for a
period of thirty (30) days following the notice to exercise in full or in part
any unexercised or unexpired Option then held by him or her, without regarding
to any contingent vesting provision to which the Option may have otherwise been
subject pursuant to Paragraph 2.2 above. Upon the expiration of this thirty
(30) day period, this Option shall expire to the extent not earlier exercised,
and the Plan shall terminate.
4. EXERCISE OF THE OPTION. The Option shall be exercised, if at all, by
(a) delivering to the Company a written notice in the form of the document
attached as Exhibit A specifying the number of shares of Common Stock for which
exercise is made, (b) tendering full payment of the option price, as required by
Section 7 of the Plan, for the shares for which exercise is made, and (c)
tendering to the Company full payment of any amounts the Company determines must
be withheld for tax purposes from the Optionee as a result of the exercise of
the Option and the issuance of the shares.
5. TRANSFERABILITY OF THE OPTION. Except as provided in Section 2.4
above and Paragraph 8 of the Plan, the Option shall not be transferable or
exercisable by any person other than the Optionee.
4 - Nonstatutory Stock Option Agreement
<PAGE>
6. WARRANTIES, REPRESENTATIONS AND ACKNOWLEDGEMENTS OF THE OPTIONEE. By
executing this Agreement, the Optionee accepts the Option and agrees to be bound
by all of the terms of the Option, this Agreement and the Plan. In addition,
the Optionee acknowledges that exercise of the Option and the sale of the shares
of Common Stock acquired upon exercise thereof may have tax implications for
which the Optionee should seek individual advice by his or her own tax counselor
or advisor.
7. INDEMNIFICATION BY THE OPTIONEE. The Optionee agrees that, in the
event of a claim against the Company resulting from a breach by the Optionee of
the representations, warranties or provisions contained in this Agreement, the
Optionee will indemnify and hold the Company harmless from any loss or damage,
including attorney's fees or other legal expenses, incurred in the defense or
payment of any such claim against the Company.
8. NO RIGHT TO CONTINUED RELATIONSHIP. Nothing herein shall confer upon
the Optionee the right to continue as an officer or employee of the Company, nor
affect any right which the Company may have to terminate its relationship
(whether or not for cause) with the Optionee.
9. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder of the Company, including, without limitation, any rights to
dividends or other rights for which the record date is prior to the date the
certificate representing the shares acquired upon exercise of the Option is
issued, on account of the Option or on account of shares of Common Stock of the
Company which will be acquired upon exercise of the Option (but with respect to
which no certificates have been delivered to the Optionee).
10. FURTHER ASSURANCES. The Optionee agrees from time to time to execute
such additional documents as the Company may reasonably require in order to
effect the purposes of the Plan and this Agreement.
11. BINDING EFFECT. This Agreement shall be binding upon the Optionee
and the optionee's heirs, successors and assigns, including, without limitation,
the Qualified Successor or Guardian of the Optionee (as those terms are defined
in Section 2.4(d) above).
12. WAIVERS/MODIFICATIONS. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by the party
against whom enforcement of such waiver, alteration or modification is sought.
The failure of any party to enforce any of its rights against the other party
for breach of any of the terms of this Agreement shall not be construed a waiver
of such rights as to any continued or subsequent breach.
13. MODIFICATION AND TERMINATION. The rights of the Optionee hereunder
are subject to modification and termination in certain events as provided in the
Plan.
14. RESTRICTION ON SALE OF SHARES. Optionee represents and agrees that
upon his exercise of the Option, in whole or in part, unless there is in effect
at the time under the Securities Act of 1933, as amended, a registration
statement relating to the shares acquired, such shares will be acquired for his
or her own account, for investment purposes only and not with a view toward the
distribution or public offering thereof nor with any present intention of
reselling or distributing the shares at any particular future time, and that
upon exercise thereof he or she will furnish to the Company a written statement
to such effect, satisfactory to the Company in form and substance. Optionee
agrees that any certificates issued upon exercise of this Option may bear a
legend indicating that their transferability is restricted in accordance with
applicable state or federal securities law. Any person or persons entitled to
the Option under circumstances in which
5 - Nonstatutory Stock Option Agreement
<PAGE>
Optionee would be required to furnish such a written statement shall furnish to
the Company a written statement to the same effect, satisfactory to the Company
in form and substance.
15. PLAN GOVERNS. This Agreement and the Option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of that Plan, as it may be amended
from time to time and construed by the Committee.
16. NOTICES. All notices to the Company shall be addressed to the
members of the Stock Option Committee with a copy to the Secretary of the
Company at the principal office of the Company at 7227 N.E. 55th Avenue,
Portland, Oregon 97218, and all notices to Optionee shall be addressed to
Optionee at the address of Optionee on file with the Company or its Affiliates,
or to such other address as either may designate to the other in writing. A
notice shall be deemed to be duly given upon the earlier of receipt by the
addressee or three days following deposit of such notice in a properly addressed
sealed envelope, postage prepaid, with the United States Postal Service. In
lieu of giving notice by mail as provided above, written notice under this
Agreement may be given by personal delivery to Optionee or to the Chairman of
the Board of Directors of the Company (as the case may be).
17. SALE OR OTHER DISPOSITION. Optionee hereby agrees that if Optionee
disposes (whether by sale, exchange, gift or otherwise) of any of the shares
acquired by exercise of this Option within two years of the grant date or within
one year after the transfer of such shares to Optionee upon exercise of this
Option, then Optionee shall notify the Company of such disposition in writing
within thirty (30) days from the date of such disposition. Said written notice
shall state the date of such disposition, and the type and amount of the
consideration received for such share or shares by Optionee in connection
therewith. In the event of any such disposition, the Company shall have the
right to require Optionee to immediately pay the Company the amount of taxes (if
any) which the Company is required to withhold under federal and/or state law as
a result of the granting or exercise of the subject option in the disposition of
the subject shares.
18. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Oregon.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
RENTRAK CORPORATION
By /s/ Bill LeVine
--------------------------
Bill LeVine
Member, Stock Option Committee
By /s/ James Jimirro
----------------------------
James Jimirro
Member, Stock Option Committee
OPTIONEE:
By /s/ Ron Berger
--------------------------
Ron Berger
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE OF NONSTATUTORY OPTION
To: RENTRAK CORPORATION
7227 N.E. 55th Avenue
Post Office Box 18888
Portland, Oregon 97218
The undersigned exercises the option to purchase _____________ shares of
common stock of Rentrak Corporation (the "Company") granted to the undersigned
pursuant to the terms of the Company's 1986 Second Amended and Restated Stock
Option Plan (the "Plan") and the Nonstatutory Stock Option and Nonstatutory
Stock Option Agreement effective as of April 8, 1994.
Accompanying this notice is: [select one] (1) ____ cash, certified check
or cashier's check in the amount of $_________, or (2) a certificate
representing ____ shares of Common Stock of the Company valued at $____________
per share (the fair market price of those shares on the day preceding the date
hereof) representing the option price of $____________ per share plus the amount
the Company has determined must be withheld for tax purposes; or (3)
____________ I hereby request to exercise this option through a cashless
transaction and have provided the name and address of my broker below. I
understand that if I elect to pursue a cashless transaction, Rentrak Corporation
will request and authorize the stock transfer company to issue the
certificate(s) in the name of my broker to facilitate completion of the
transaction.
Date:
--------------------
BROKER OPTIONEE
_________________________ _________________________
Address: Address:
_________________________ _________________________
_________________________ _________________________
_________________________ _________________________