Rentrak 8-K 2006
This Employment Agreement is entered into as of January 1, 2006, between TIMOTHY J. IRWIN (Executive) and RENTRAK CORPORATION, an Oregon corporation (Corporation).
1.1 Employment Position. Corporation agrees to employ Executive as Vice President Sales and Customer Relations of the Retailer Services Department of Corporation's Pay Per Transaction ("PPT") Division, and Executive accepts such employment, under the terms and conditions of this Agreement. Executive also agrees to serve, if elected, without separate compensation, as an officer and/or director of any subsidiary or affiliate of Corporation. Corporation represents to Executive that it currently has and will maintain directors and officers liability insurance.
1.2 Term. The term of this Agreement (the Term) will commence on January 1, 2006, and will expire December 31, 2006 (except as expressly provided in Section 7). Notwithstanding the foregoing, (a) in the event of a Change in Control of Corporation, as defined in Section 8.1 of this Agreement, during the Term of this Agreement, the Term will automatically be extended to December 31 of the second calendar year following the year in which the Change in Control occurs; and (b) the parties acknowledge that Executive will be an at-will employee of Corporation and nothing in this Agreement will limit the right of Corporation or Executive to terminate this Agreement at any time for any reason or for no reason, subject to the provisions of this Agreement describing the compensation payable, if any, in connection with such a termination of employment.
1.3 Duties. During the Term, Executive will serve in an executive capacity as Vice President Sales and Customer Relations of the Retailer Services Department of Corporation's PPT Division. Executive will report directly to the President of the PPT Division. Executive will be responsible for sales and customer relations for the PPT Division and such other or different duties on behalf of Corporation as may be assigned from time to time by the President of Corporation's PPT Division or by Corporations Chief Executive Officer or Board of Directors (the Board). Executive will do such traveling as may be required in the performance of his duties under this Agreement.
1.4 Outside Activities. 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 will not engage in professional or personal business activities that may require an appreciable portion of Executives time or effort to the detriment of Corporations business.
1.5 Application of Corporate Policies. Executive will, except as otherwise provided in this Agreement, be subject to Corporations rules, practices, and policies applicable generally to Corporations senior executive employees, as such rules, practices, and policies may be revised from time to time by the Board.
2. COMPENSATION AND EXPENSES
2.1 Base Salary. As compensation for services under this Agreement, Corporation will pay to Executive a base salary of $162,000 per year, payable in a manner consistent with Corporations payroll practices for management employees, as such practices may be revised from time to time.
2.2 Retailer Services Department Performance Improvement Incentive Plan.
2.3 Equity-Based or Other Long-Term Incentive Compensation. Executive will participate, together with Corporations other senior executives, in Corporations 2005 Stock Incentive Plan (the Plan). Executive will be granted options to purchase shares of Corporations common stock and/or other equity-based awards under the Plan, or under another long-term incentive compensation plan that may be developed by Corporation for its senior executives, at the times and in the amounts determined by the Committee. All awards will be subject to the provisions of the Plan or such other long-term plan.
2.4 Additional Employee Benefits. Executive will receive an annual grant of 208hours of credit (or such higher number of hours as are credited to Corporations other senior executives) under Corporations Personal Time Off (PTO) program. Personal time off and vacation may be taken in accordance with Corporations rules, practices, and policies applicable to Corporations senior executive employees, as such rules, practices, and policies may be revised from time to time by the Board or the Committee. During the Term, Executive will be entitled to any other employee benefits approved by the Board or the Committee, or available to officers and other management employees generally, including any life and medical insurance plans, 401(k) and other similar plans, and health and welfare plans, each whether now existing or hereafter approved by the Board or the Committee (Benefit Plans). The foregoing will not be construed to require Corporation to establish any 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 Corporations audit committee, 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.
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. 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, 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 has had and 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 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), Executive will not, except as required in the course of Corporations 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.
4.1 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 engaged in all or any of the following business activities:
4.2 Covenant. During the Term of 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:
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 that it be reformed and enforced to the maximum extent permitted under applicable law.
Executives employment under this Agreement may terminate 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 Executives employment under this Agreement upon written notice to Executive if Executive, because of physical or mental incapacity or disability, fails to perform the essential functions of his position, with reasonable accommodation, required of him under this Agreement for a continuous period of 120 days or any 180 days within any 12-month period.
5.3 Termination by Corporation for Cause. Corporation may terminate Executives employment under this Agreement for Cause at any time. For purposes of this Agreement, Cause means: (a) Executives willful material misconduct in performance of the duties of his position with Corporation or a material breach by Executive of this Agreement, (b) Executives willful commission of a material act of malfeasance, dishonesty, or breach of trust against Corporation or its successors that materially harms or discredits Corporation or its successors or is materially detrimental to the reputation of Corporation or its successors, or (c) Executives conviction of or a plea of nolo contendere to a felony involving moral turpitude. In all cases, Corporation will give Executive notice setting for forth in reasonable detail the specific respects in which the Corporation believes it has Cause to terminate Executive and allow Executive a reasonable opportunity to correct such conduct.
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. For purposes of this Agreement, Good Reason means:
5.5 Termination by Corporation Without Cause. Corporation may terminate Executives employment with Corporation without Cause for any reason or for no reason at any time by written notice to Executive.
5.6 Termination by Executive Without Good Reason. Executive may terminate Executives employment with Corporation other than for Good Reason for any other reason or for no reason at any time by written notice to the Chief Executive officer of the Corporation.
5.7 Applicable Noncompete Periods upon Termination. The duration of Executives obligations under Section 4 (the Noncompete Period) will be as follows:
6.1 Definitions. For purposes of Section 6.3 and Section 7.2, the following terms have this meanings set forth below:
6.2 Death or Disability. Upon termination of Executives employment pursuant to Section 5.1 or Section 5.2 prior to the expiration of the Term, all obligations of Corporation under this Agreement will cease, except that Executive will be entitled to:
6.3 Termination Without Cause or by Executive for Good Reason.
6.4 Termination For Cause or by Executive Without Good Reason. In the event that, prior to the expiration of the Term, Corporation terminates Executives employment with Corporation for Cause under Section 5.3, or Executive terminates his employment with Corporation for other than Good Reason under Section 5.6, Corporations obligations under this Agreement will cease and Executive will be entitled to that portion of his base salary and employment benefits for which he is qualified as of the date of termination and Executive will not be entitled to any other compensation or consideration.
6.5 Compliance with IRC Section 409A. To the extent required by IRC § 409A as enacted by the American Jobs Creation Act of 2004, and regulations under that section, payment of severance benefits to Executive under any provision of Sections 6, 7, or 8 of this Agreement will not be paid, or commenced, until the expiration of six months following the date of termination of Executives employment with Corporation. If monthly payments are deferred pursuant to this Section, all such deferred amounts will be paid in a lump sum on the expiration of the six-month period.
7. COMPENSATION UPON TERMINATION FOLLOWING TERM OF AGREEMENT
7.1 Application of Section. The provisions of this Section 7 apply only to officers of Corporation who have five or more continuous years of employment with Corporation.
7.2 Termination Without Cause or by Executive for Good Reason.
7.3 Effect of Expiration of Term. The provisions of this Section 7 will continue to apply and will be binding on Corporation and Executive after the expiration of the Term for so long as Executive continues to be an employee of Corporation unless expressly revoked or modified in writing by Corporation and Executive.
8. EFFECT OF CHANGE IN CONTROL
Change in Control. For purposes of this Agreement, a Change in Control will be deemed to have occurred upon the first fulfillment of the conditions set forth in any one of the following three paragraphs:
Other Payment means any payment or benefit payable to Executive in connection with a Change in Control of Corporation pursuant to any plan, arrangement, or agreement (other than this Agreement) with Corporation, a person whose actions result in such Change in Control, or any person affiliated with Corporation or such person.
Total Payments means all payments or benefits payable to Executive in connection with a Change in Control, including Change in Control Payments pursuant to this Agreement and any Other Payments pursuant to any other plan, agreement, or arrangement with Corporation, a person whose actions result in the Change in Control, or any person affiliated with Corporation or such person.
8.2 Compensation Upon Termination Following a Change in Control.
The respective rights and duties of Corporation and Executive under this Agreement are in addition to, and not in lieu of, those rights and duties afforded to and imposed upon them by law or at equity. Executive acknowledges that any breach or threatened breach of Sections 3 or 4 of this Agreement will cause irreparable harm to Corporation and that any remedy at law would be inadequate to protect the legitimate interests of Corporation. Executive agrees that Corporation will be entitled to specific performance, or to any other form of injunctive relief to enforce its rights under Sections 3 or 4 of this Agreement without the necessity of showing actual damage or irreparable harm or the posting of any bond or other security. Such remedies will be in addition to any other remedy available to Corporation at law or in equity.
10. SEVERABILITY OF PROVISIONS
The provisions of this Agreement are severable, and if any provision of this Agreement is held invalid, unenforceable, or unreasonable, it will be enforced to the maximum extent permissible, and the remaining provisions of the Agreement will continue in full force and effect.
Failure of Corporation at any time to require performance of any provision of this Agreement will not limit the right of Corporation to enforce the provision. No provision of this Agreement or breach of this Agreement may be waived by either party except in writing signed by that party. A waiver of any breach of a provision of this Agreement will be construed narrowly and will not be deemed to be a waiver of any succeeding breach of that provision or a waiver of that provision itself or of any other provision.
All notices required or permitted under this Agreement must be in writing and will be deemed to have been given if delivered by hand, or mailed by first-class, certified mail, return receipt requested, postage prepaid, to the respective parties as follows (or to such other address as any party may indicate by a notice delivered to the other parties hereto): (i) if to Executive, to his residence as listed in Corporations records, and (ii) if to Corporation, to the address of the principal office of Corporation, at:
13. ATTORNEY FEES
In the event of any suit or action or arbitration proceeding to enforce or interpret any provision of this Agreement (or which is based on this Agreement), the prevailing party will be entitled to recover, in addition to other costs, the reasonable attorney fees incurred by the prevailing party in connection with such suit, action, or arbitration, and in any appeal. The determination of who is the prevailing party and the amount of reasonable attorney fees to be paid to the prevailing party will be decided by the arbitrator or arbitrators (with respect to attorney fees incurred prior to and during the arbitration proceedings) and by the court or courts, including any appellate courts, in which the matter is tried, heard, or decided, including the court which hears any exceptions made to an arbitration award submitted to it for confirmation as a judgment (with respect to attorney fees incurred in such confirmation proceedings).
14. GOVERNING LAW
This Agreement will be construed in accordance with the laws of the state of Oregon, without regard to any conflicts of laws rules. Any suit or action arising out of or in connection with this Agreement, or any breach of this Agreement, must be brought and maintained in the Multnomah County Circuit Court of the State of Oregon. The parties irrevocably submit to the jurisdiction of such court for the purpose of such suit or action and expressly and irrevocably waive, to the fullest extent permitted by law, any claim that any such suit or action has been brought in an inconvenient forum.
15. GENERAL TERMS AND CONDITIONS
This Agreement constitutes the entire understanding of the parties relating to the employment of Executive by Corporation, and supersedes and replaces all written and oral agreements heretofore made or existing by and between the parties relating to such employment except that the Confidentiality and Noncompetition Agreement dated October 7, 1988, between Corporation and Executive will remain in full force and effect. Executive acknowledges that he has read and understood all of the provisions of this Agreement, that the restrictions contained in Sections 4 and 5.7 of this Agreement are reasonable and necessary for the protection of Corporations business and that Executive entered into this contract in connection with a bona fide advancement of Executive with Corporation in that Executive was granted a long-term employment contract. This Agreement will inure to the benefit of any successors or assigns of Corporation. All captions used in this Agreement are intended solely for convenience of reference and will in no way limit any of the provisions of this Agreement.
The parties have executed this Employment Agreement as of the date stated above.