Employment Agreement - Rentrak Corp. and Michael R. Lightbourne
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into as of this 10th day of
July, 1997 by and between RENTRAK CORPORATION, an Oregon
corporation (hereinafter referred to as "Employer"), and MICHAEL
R. LIGHTBOURNE (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employer wishes to engage Employee as Executive
Vice President of Employer; and
WHEREAS, Employee is willing to accept employment with
Employer on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements herein contained, the recitals set forth
hereinabove 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 Executive Vice
President for the Term of this Agreement as defined in Section 2,
pursuant to the terms and conditions set forth in this Agreement.
1.02 Duties and Place of Employment. Employee shall manage
customer service and supervise communications with retail
customers of Employer except for the Retailer Financing Program,
unless requested to do so, function as a resource for the Sales
Department as requested, and perform all other duties as may be
directed by the Chief Executive Officer, President or Chief
Operating Officer of Employer, including, without limitation,
travel as reasonably requested. Employee shall: (i) devote his
full business time during normal business hours to the business
and affairs of Employer; (ii) use his best efforts to promote the
interests of Employer; and (iii) perform faithfully and
efficiently his responsibilities. Employee shall perform his
duties at the Employer's principal executive offices which are
currently located at Portland, Oregon. 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.
SECTION 2. TERM and TERMINATION
2.01 Stated Term. Employment shall commence on July 10,
1997 and shall end on July 9, 2002 (the "End Date") or until
Employee's employment under this Agreement is terminated 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, or by Employee upon thirty (30) days
written notice to Employer.
2.03 For Cause Termination. Employee's employment may be
terminated by Employer for "cause" without notice. Termination
for "cause" is defined for purposes of this subsection as
termination for: (i) the final conviction of Employee for a
felony involving willful conduct materially injurious, harmful or
detrimental to Employer; or (ii) the final adjudication of
Employee in a civil proceeding for acts of omissions to act
involving willful conduct materially injurious, harmful or
detrimental to Employer. For the purposes of this subsection,
"final conviction" and "final adjudication" shall be and mean a
conviction or an adjudication, as the case may be, that is no
longer appealable due to the passage of time or otherwise, and
with respect to which a final judgment has been entered on the
judgment roles of the court in which the action was commenced.
Further, for the purposes of this subsection, no act or omission
to act on Employee's part shall be considered "willful" unless
done, or omitted to be done, by Employee in bad faith and without
reasonable belief that employee's act or omission was in the best
interest of Employer.
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
absence from Employee's full time duties with Employer as a
result of Employee's incapacity due to physical or mental
illness, such as will entitle Employee to disability benefits
pursuant to the terms of the disability insurance policy referred
to in Section 3.04E below. Nothing in this Section 2.04 is
intended to violate any federal or Oregon State law regarding
parental or family leave policies or any other applicable law.
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.
SECTION 3. COMPENSATION
3.01 Base Salary. Commencing July 10, 1997, Employee shall
be paid an annual base salary in the amount of One Hundred
Seventy Thousand dollars ($170,000) ("Base Salary"). The Base
Salary shall be paid to Employee in equal semi-monthly
installments in arrears on the seventh (7th) and twenty-second
(22nd) day of each month, commencing as of the first semi-monthly
pay period following the effective date of this Agreement.
Should the seventh (7th) or the twenty-second (22nd) day of any
month 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 date such semimonthly
installment is due (i.e., if the seventh (7th) day of the month
falls on a Saturday, the semi-monthly installment shall be paid
on the preceding business day or if the seventh (7th) day of the
month falls on a Sunday, the semi-monthly installment shall be
paid on the next following business day). Employee's Base Salary
shall be increased annually by the greater of five percent (5%)
or the change in the national Consumer
Price Index, the CPI-U, for the calendar year just ended, rather
than the CPI-U for the previous calendar year.
3.02 Bonus Compensation. Employee shall receive a sign-on
bonus upon execution of this Agreement in the amount of Seventy-
Five Thousand Dollars ($75,000). Employee shall receive an
additional bonus of Seventy-Five Thousand ($75,000) (the "Ending
Bonus") on July 9, 2002 if he is still employed by Employer on
that date. After the 30th month of Employee's employment
pursuant to this Agreement, the Ending Bonus shall vest at the
rate of 1/30 ($2,500) per month. Nothing herein shall preclude
the Employer from authorizing the payment of additional
compensation to Employee over and above the Base Salary at any
time payable to him under this Agreement, whether as a bonus or
otherwise. The payment of such additional compensation shall not
operate as an amendment obligating Employer to make any similar
payment or to pay additional compensation at any future time or
for any future period, or be deemed to affect Employee's Base
Salary in any manner. Employee will participate in whatever
bonus plan is adopted by Employer including any cash bonus pools
established from time to time by Employer for Corporate
Executives.
3.03 Stock options. Upon the commencement of the Term of
this Agreement, Employer shall grant Employee an option to
purchase One Hundred Fifty Thousand (150,000) shares of
Employer's stock at the market rate as set forth in Employer's
Stock Option Plan on the date of execution of this Agreement.
Said options shall vest at a rate of Twenty percent (20%) per
year (i.e., 30,000 options shall vest at the end of each full
year of Employee's employment during the five-year Term of this
Agreement). Said options shall remain exercisable until July 9,
2007.
In addition to the aforementioned options, Employee
shall be granted additional options for 10,000 shares per grant
during each year that this Agreement remains in effect. The
first 10,000 options shall be granted on the earliest date that
such option shares are available at the lesser of the price then
available or the price as of June 15, 1997. All subsequent
grants of options pursuant to this paragraph shall be at a price
to be set by the Board of Directors of Employer and shall be the
same price at which options are offered to most other employees
during the year in which the options are granted. Said options
shall vest at a rate of Twenty percent (20%) per year (i.e.,
2,000 options shall vest at the end of each full year of
Employee's employment) and shall remain exercisable for a period
of ten (10) years from the issue date.
Should Employee's employment be terminated by Employer
other than for cause prior to the expiration of this Agreement,
all options granted through the date of termination will vest
immediately and all annual options granted for each year of
employment shall vest upon the day of such grant as if the
termination had not occurred. Should Employee be terminated for
cause, he shall be entitled only to those options which vested
through the date of termination.
3.04 Benefits.
3.04A Vacation and Holiday Pay. As of the
effective date of this Agreement, Employee will be
entitled to: (i) accrue vacation time at the rate of
four (4) weeks of paid vacation during each year of
employment; and (ii) will be eligible to receive pay
for Employer-paid holidays. In addition to vacation
set forth above, Employee shall have forty-five (45)
days (equivalent to nine weeks) of paid vacation on the
date that his employment pursuant to this Agreement
commences. Said forty-five (45) days of vacation may
be booked into a vacation bank or, at Employer's
option, paid to Employee in cash at Employee's Base
Salary rate within 30 days of execution of this
Agreement.
3.04B Insurance. Employee shall be entitled
to life, medical, worker's compensation, social
security and state unemployment insurance benefits as
provided under Employer's then current terms, policies
and procedures. Employer shall reimburse Employee for
the cost of continued health coverage under COBRA for
the first 90 days of Employee's employment. Employer
shall provide directors' and officers' liability
insurance covering Employee and will indemnify and hold
harmless Employee (and advance expenses) to the full
extent provided in the Articles of Incorporation and
Bylaws of Employer. If the directors' and officers'
liability insurance coverage levels are reduced during
the Term of this Agreement by Employer, then Employee
may seek additional coverage and Employer shall pay up
to Fifteen Thousand Dollars ($15,000) per year to
reimburse Employee for such additional coverage.
3.04C Tuition Reimbursement. Employee shall
be entitled to reimbursement for all tuition,
enrollment fees, and books pursuant to Employer's
education assistance program. Employee shall comply
with all Employer's terms, policies and procedures
regarding its education assistance program.
3.04D Business Expenses. During the Term of
this Agreement, Employee shall be entitled to receive
prompt 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.
3.04E Disability Insurance. Employer shall
purchase a disability insurance policy from Northwest
Mutual Life Insurance Company, naming Employee as the
beneficiary, and providing maximum benefits available
to Employee in the event
of Employee's partial or total disability.
Employer shall not terminate the disability policy or
allow its benefits to lapse for any reason during the
Term of this Agreement. Employer shall pay all
premiums due under the disability policy referred to
above until the End Date.
3.04F 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 receive all employee
benefits which Employer now provides or may from time
to time provide other executives (excluding the
President/CEO) at comparable or lower level positions,
except that Employee shall not be entitled to stock
option grants issued to other executives in comparable
or lower level positions unless grants in excess of
10,000 options are issued to such executives. In the
latter case, the Employee shall be entitled to an
additional grant of options in the incremental amount
in excess of 10,000. For example, if executives in
comparable or lower level positions are given options
for 15,000 shares of stock in any year during the Term
of this Agreement, then Employee would be entitled to
an additional grant of 5,000 options. Employer shall
also contribute to Employee's 401K Plan consistent with
Employer's contributions to the 401K Plans of employees
of comparable level.
SECTION 4. PAYMENTS UPON TERMINATION OF EMPLOYMENT
4.01 Termination for Cause. In the event of the termination
of Employee's employment by Employer for cause pursuant to
Section 2.02 within ten days of termination Employer shall pay to
Employee only the Base Salary, vacation and bonuses accrued and
vested stock options pursuant to Section 3 through and including
the date of termination. No other compensation shall be due or
payable under this Agreement in the event of a termination for
Cause.
4.02 Termination for Death or Disability. In the event of
the termination of Employee's employment pursuant to Section 2.03
due to his death or disability, within ten days of termination
Employer shall pay to Employee or Employee's estate or legal
representative, in a lump sum, the total value of all
compensation which would otherwise have been paid to Employee
pursuant to Section 3, including Base Salary, bonuses, stock
options and fringe benefits, less any amounts paid to Employee
under the terms of the disability policy purchased by Employer
pursuant to Section 3.04E and any life insurance policy purchased
by Employer for the benefits of Employee's dependents. Employer
shall convey to Employee or Employee's estate or legal
representative all options granted to Employee during his
employment, regardless of whether or not said options vested
prior to Employee's death. Said options shall vest immediately
and remain exercisable for a period of One (1) year from the date
of death. During the period of Employee's disability, but prior
to Employee's termination of Employment, Employee shall be
entitled to receive all compensation as set forth in this
Agreement. No other compensation shall be due or payable under
this Agreement in the event of a termination due to the
Employee's death.
4.03 Other Termination by Employer. In the event of
termination of Employee's employment by Employer for any reason
other than a termination for cause or termination for death or
disability pursuant to Sections 2.03 and 2.04, or in the event of
a termination by Employee for good reason pursuant to Section
2.05, Employer shall pay to Employee the Base Salary accrued
pursuant to Section 3.01 as of the date of termination plus
severance payments in an amount equal to Employee's Base Salary
and bonsues, payable in installments as if still employed,
through the end of this Agreement (the "Severance Period"),
provided, however, that Employer's obligation shall be reduced by
the amount of Remuneration received by Employee from all other
employment during the Severance Period. Employee shall continue
to receive stock options, to vest in issued options and to
receive other fringe benefits through the end of this Agreement.
For the purposes of this Agreement, "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 payment is ever received, stock or stock
options valued as of the day granted, or any other compensation
given in any form whatsoever.
4.04 Other Termination by Employee. In the event of the
termination of Employee's employment by Employee other than for
good reason pursuant to Section 2.05, within ten 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 a such a
termination.
4.05 Severance/Renewal. Employer and Employee will
negotiate a new five-year agreement in good faith prior to July
10, 2001. Alternatively, Employer may notify Employee prior to
such date that Employer does not intend to extend Employee's
employment. In the event of non-renewal or termination of this
Agreement for any reason other than for cause as defined in 2.03,
Employee shall receive one year's salary continuance at the Base
rate following expiration of this Agreement in addition to any
compensation payable under 4.03.
4.06 Except as set forth in this Section 4, no other
compensation shall be due or payable to Employee upon termination
of his employment.
4.07 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 or exploitation of
any 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
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
Attn: Ron Berger
EMPLOYEE: Michael R. Lightbourne
P.O. Box 510
Gresham, Oregon 97030
Each party may change its address for purposes of this
Section by giving written notice of such change in the manner
provided for in this Section.
SECTION 7. MISCELLANEOUS PROVISIONS.
7.01 Attorneys' Fees; Disputes Concerning Termination.
Should it become necessary for any party to bring an action,
including arbitration, either at law or in equity, to enforce or
interpret the terms of this Agreement, each party shall pay its
own attorneys' fees including those incurred in resolving the
dispute prior to initiation of any litigation and at trial and on
any appeal.
7.02 Applicable Law and Venue. This Agreement is executed
and intended to be performed 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.
7.03 Integration. Employee has executed an Incentive Stock
Option Agreement (a copy of which is attached hereto as Exhibit
A), and an Employee Confidentiality and Noncompetition Agreement
(a copy of which is attached hereto as Exhibit B) which remain in
effect and are 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 all prior
agreements, negotiations, or understandings, whether oral or
written, between the parties with respect thereto.
7.04 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 substantially all 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 the benefit of
the surviving business entity or the business entity to which
such assets shall be transferred.
7.05 Severability. Any provision in this Agreement which
is, by competent judicial authority, declared illegal, invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such illegality, invalidity or
unenforceability without invalidating the remaining provisions
hereof or affecting the legality, validity or enforceability or
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.
7.06 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.
7.07 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.
7.08 Execution. Each of the parties hereto shall execute,
acknowledge and deliver any instrument necessary to carry out the
provisions of this Agreement.
7.09 Construction. This Agreement has been prepared by
legal counsel for Employer. Employee has been advised of and by
his execution hereof acknowledges, that he has exercised the
right to have this Agreement reviewed by his own separate legal
counsel. This Agreement has been negotiated at arms' length and
Employee has had the benefit of legal counsel and, accordingly,
this Agreement shall not be construed against either of the
parties.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the day and year first above written.
EMPLOYER:
RENTRAK CORPORATION,
an Oregon corporation
By: s/s Ron Berger
Ron Berger, President
I acknowledge that I have read and agree to the foregoing
Agreement.
EMPLOYEE s/s Michael R. Lightbourne
Michael R. Lightbourne