UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
RENTRAK CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
To Our Shareholders:
Our 2003 Annual Meeting of Shareholders will be held on Thursday,
August 21, 2003, at 10:00 a.m., Pacific Daylight Time, at our executive offices,
located at One Airport Center, 7700 N.E. Ambassador Place, Portland, Oregon,
97220. On the following pages you will find the formal Notice of Annual Meeting
and Proxy Statement. Our 2003 Annual Report is also enclosed.
Whether or not you plan to attend the meeting in person, it is
important that your shares be represented and voted at the meeting. ACCORDINGLY,
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. If you attend the
meeting, and the Board of Directors joins me in hoping that you will, there will
be an opportunity to revoke your proxy and to vote in person if you prefer.
Sincerely yours,
/s/ Paul A. Rosenbaum
----------------------
PAUL A. ROSENBAUM
Chairman of the Board
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 21, 2003
To the Shareholders of
Rentrak Corporation:
The Annual Meeting of Shareholders of Rentrak Corporation ("Rentrak")
will be held on Thursday, August 21, 2003, at 10:00 a.m., Pacific Daylight Time,
at Rentrak's executive offices, located at One Airport Center, 7700 N.E.
Ambassador Place, Portland, Oregon, 97220, for the following purposes:
1. To elect a Board of Directors consisting of six members, each to
serve until the next annual meeting of shareholders and until his
successor is duly elected and qualified;
2. To hear reports from various officers of Rentrak; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on June 23, 2003
as the record date for determining shareholders entitled to notice of, and to
vote at, the meeting and any adjournments or postponements thereof. The proxy
statement, proxy card and 2003 Annual Report to Shareholders accompany this
Notice.
Whether or not you plan to attend the Annual Meeting, please fill out,
sign, date and promptly return the enclosed proxy in the enclosed postage paid
envelope. You may revoke your proxy in writing or at the Annual Meeting if you
wish to vote in person.
By Order of the Board of Directors:
/s/ F. Kim Cox
--------------
F. KIM COX
President and Secretary
Portland, Oregon
July 8, 2003
RENTRAK CORPORATION
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
----------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 21, 2003
--------------------------
Date, Time, Place of Meeting
The board of directors of Rentrak Corporation ("Rentrak") is furnishing
this proxy statement and the accompanying 2003 Annual Report to Shareholders,
notice of annual meeting, and the enclosed proxy card in connection with the
board's solicitation of proxies for use at Rentrak's 2003 Annual Meeting of
Shareholders (the "Annual Meeting"). The Annual Meeting will be held Thursday,
August 21, 2003, at 10:00 a.m. Pacific Daylight Time, at Rentrak's executive
offices, located on the fourth floor at One Airport Center, 7700 N.E. Ambassador
Place, Portland, Oregon 97220.
Solicitation and Revocation of Proxies
Shares represented by a proxy card that is properly dated, executed and
returned will be voted as directed on the proxy. If no direction is given,
proxies will be voted FOR each of the director nominees selected by the board of
directors. If other matters properly come before the Annual Meeting, the persons
named in the accompanying proxy will vote in accordance with their best judgment
with respect to such matters. Any proxy given by a shareholder may be revoked at
any time prior to its use by execution of a later-dated proxy delivered to
Rentrak's Secretary, by vote in person at the Annual Meeting, or by written
notice of revocation delivered to Rentrak's Secretary.
Rentrak's board of directors has selected the two persons named on the
enclosed proxy card to serve as proxies in connection with the Annual Meeting.
These proxy materials and the accompanying Rentrak 2003 Annual Report to
Shareholders are being mailed on or about July 8, 2003 to shareholders of record
on June 23, 2003.
Purposes of the Annual Meeting
The Annual Meeting has been called for the following purposes:
o To elect a board of directors consisting of six members, each
to serve until the next annual meeting of shareholders and
until his successor is duly elected and qualified;
o To hear reports from various officers of Rentrak; and
o To transact such other business as may properly come before the
meeting or any adjournments thereof.
Section 2.3.1 of Rentrak's 1995 Restated Bylaws, as amended, sets forth
procedures to be followed for introducing business at a shareholders meeting.
Rentrak has no knowledge of any other matters that may be properly presented at
the Annual Meeting. If other matters do properly come before the Annual Meeting
in accordance with the 1995 Restated Bylaws, the persons named in the proxy card
will vote your proxy in accordance with their judgment on such matters in the
exercise of their sole discretion.
1
Record Date and Shares Outstanding
Only shareholders of record at the close of business on June 23, 2003
(the "Record Date"), are entitled to notice of, and to vote at, the Annual
Meeting. At the close of business on the Record Date, 9,505,956 shares of
Rentrak common stock were outstanding. For information regarding the ownership
of Rentrak common stock by holders of more than five percent of the outstanding
shares and by Rentrak's directors and executive officers, see "Security
Ownership of Certain Beneficial Owners and Management."
Voting; Quorum; Vote Required
Each share of common stock outstanding on the Record Date is entitled
to one vote per share at the Annual Meeting. Shareholders are not entitled to
cumulate their votes. The presence, in person or by proxy, of the holders of a
majority of Rentrak's outstanding shares of common stock is necessary to
constitute a quorum at the Annual Meeting. Assuming the existence of a quorum,
the affirmative vote of a plurality of the votes cast at the Annual Meeting, in
person or by proxy, will be required to elect persons nominated to be directors.
Effect of Abstentions
If you abstain from voting, your shares will be deemed present at the
Annual Meeting for purposes of determining whether a quorum is present. However,
only votes cast in favor of a nominee for director will have an effect on the
outcome of the election of directors
Effect of Broker Non-Votes
If a broker holds your shares in street name, you should instruct your
broker how to vote. A broker non-vote occurs when a nominee holding shares for a
beneficial owner does not vote on a proposal because the nominee does not have
discretionary voting power with respect to the matter being considered and they
did not receive voting instructions from the beneficial owner. Broker non-votes
are deemed present at the Annual Meeting for purposes of determining whether a
quorum is present, but will have no effect on the outcome of the election of
directors.
2004 Shareholder Proposals
The deadline for shareholders to submit proposals to be considered for
inclusion in the proxy statement for the 2004 Annual Meeting of Shareholders is
March 10, 2004. To be considered at the 2004 Annual Meeting of Shareholders,
Section 2.3.1 of Rentrak's 1995 Bylaws, as amended, requires shareholders to
deliver notice of all proposals, nominations for director and other business to
Rentrak's principal executive office no later than 60 calendar days (or by June
22, 2004) and no earlier than 90 calendar days prior to the first anniversary of
the date of the 2003 Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Rentrak's 1995 Restated Bylaws, as amended, provide that its board of
directors shall consist of six members. The board of directors has nominated the
individuals named below to fill the six positions. If for any reason any of the
nominees named below should become unavailable for election (an event that the
board does not anticipate), proxies will be voted for the election of such
substitute nominee as the board in its discretion may recommend. Proxies cannot
be voted for more than six nominees. If a vacancy occurs after the Annual
Meeting, the board of directors may elect a replacement to serve for the
remainder of the unexpired term.
2
The board of directors recommends a vote "FOR" the election of each of
the following nominees for director:
CECIL D. ANDRUS (age 71). In 1995, Mr. Andrus founded and serves as the
chairman of the Andrus Center for Public Policy at Boise State University. Since
1995, Mr. Andrus has also been of counsel to the Gallatin Group, a public policy
consulting firm in Boise, Idaho. He was elected governor of the State of Idaho
for four terms (beginning in 1970, 1974, 1986, and 1990). Mr. Andrus also was
the U.S. Secretary of the Interior from 1977 to 1981. Mr. Andrus serves as a
director of Albertsons, Inc., KeyCorp, and Coeur d'Alene Mines.
GEORGE H. KUPER (age 62). Beginning April 2001, Mr. Kuper served as
Chief Operating Officer of Rentrak's e-fulfillment subsidiary 3PF.COM, Inc.,
through December 2001, on a part-time consulting basis. For several years, Mr.
Kuper has been an independent consultant in the areas of public policy,
environmental and energy issues and provides advice to small and start-up
companies in the chemical, electronics, and software industries. Mr. Kuper has
also served as president, chief executive officer, and a director of the Council
of Great Lake Industries ("CGLI") located in Ann Arbor, Michigan, since 1994.
CGLI is affiliated with the World Business Council for Sustainable Development
located in Geneva, Switzerland and is a not-for-profit association consisting of
more than two dozen U.S. and Canadian companies. Since 1994, Mr. Kuper has also
served as the chairman of the Office of the Secretary of Defense Working Group
on Dual-Use Technology Policy. Prior to 1994, Mr. Kuper's activities included
serving for three years as the executive director of the National Center for
Productivity and Quality of Working Life, a Presidential appointment, working
for General Electric Company for five years to enhance its productivity
programs, and serving as executive director of the Manufacturing Studies Board
of the National Academy of Sciences, National Research Council, for five years.
Mr. Kuper received a B.A. in political science from The Johns Hopkins University
and an M.B.A. from the Harvard School of Business Administration.
JOON S. MOON, Ph.D. (age 65). Dr. Moon has served as the chairman of
Rooto Corporation, a manufacturer of industrial and household chemicals, for
more than the past five years. Dr. Moon's background is as a research chemist
with E.I. duPont de Nemours Company and Celanese Corporation. Dr. Moon received
a B.S. in chemical engineering from Michigan State University and a Ph.D. in
chemical engineering from the University of California at Berkeley. Dr. Moon
serves as a member of the board of directors of Thomas Jefferson University, and
has previously served as a director of Michigan State University Foundation,
Michigan Bank, Independence One Mutual Fund, Michigan General Corporation, Maxco
Energy, and Progressive Dynamics Corporation.
JAMES G. PETCOFF (age 47). Mr. Petcoff is chairman of the board of
North Pointe Financial Services, Inc., a provider of insurance and other
financial services, and served as president of North Pointe from 1986 until
2002. Since 1999, Mr. Petcoff has also served as president and chief executive
officer of Queensway Financial Holdings Limited, a Canadian holding company
affiliated with North Pointe Financial Services, Inc. He received an M.B.A. and
a J.D. from the University of Detroit. Mr. Petcoff is a director of Lease
Corporation of America.
PAUL A. ROSENBAUM (age 60). Mr. Rosenbaum serves Rentrak as its current
Chairman and Chief Executive Officer since his election on September 19, 2000.
Prior to his current position at Rentrak, Mr. Rosenbaum founded SWR Corporation
in 1994 and continues to serve as its chief executive officer. SWR Corporation
designs, tests, and markets industrial chemicals. Mr. Rosenbaum has also been
engaged in the private practice of law through his own firm specializing in
corporate and administrative law since 1978. He received a B.S. in American
studies from Springfield College and a J.D. from The George Washington
University Law School.
STANFORD C. STODDARD (age 72). Mr. Stoddard has been chairman of
LaGrande Capital, L.L.C., a financial consulting firm with offices in
Southfield, Michigan, since his retirement more than five years ago. During his
30-year banking career, Mr. Stoddard was President of Michigan National Bank of
Detroit, Chairman of the out state Michigan National Bank, and Founder,
President and Chairman of Michigan National Corporation, the
3
parent bank holding company of the banks. Mr. Stoddard is currently chairman of
MTC Capital Corporation, the holding company for Michigan Trust Bank. Mr.
Stoddard is a former director of Chatham Supermarkets, Inc., Michigan National
Corporation, Michigan National Bank, Michigan National Bank of Detroit, Florida
Leasing and Capital Corporation, Federal Home Life Insurance Company, FHF Life
Insurance Company and the Chamber of Commerce of the United States of America.
Mr. Stoddard graduated from the University of Michigan with a B.A. in business
administration.
COMMITTEES AND MEETINGS OF THE BOARD
The board of directors has a standing Finance Committee, Audit
Committee and Compensation Committee. The board of directors does not have a
nominating committee.
The Finance Committee is comprised of Joon Moon, Chair, George Kuper
and Paul Rosenbaum and is responsible for evaluating strategic financial issues
facing Rentrak. During the fiscal year ended March 31, 2003, the Finance
Committee met five times.
The Audit Committee is presently comprised of Cecil Andrus, Chair,
James Petcoff and Stanford Stoddard and is responsible for evaluating the
integrity of Rentrak's financial reporting to shareholders. During the fiscal
year ended March 31, 2003, the Audit Committee held five meetings.
Since March 31, 2002, the Compensation Committee has been comprised of
James Petcoff, Chair, and Cecil Andrus and is responsible for evaluating the
performance of Rentrak's management and making compensation decisions regarding
Rentrak's executive employees. During the fiscal year ended March 31, 2003, the
Compensation Committee met one time.
During the fiscal year ended March 31, 2003, the board of directors
held five meetings, each of which were conducted in person. Each director
attended at least 75 percent of the total number of meetings held by the board
of directors and the committees of the board of directors on which he served
during the fiscal year ended March 31, 2003.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 23, 2003, certain information
regarding the beneficial ownership of Rentrak common stock by (i) each person
known to be the beneficial owner of 5 percent or more of Rentrak's outstanding
shares of common stock, (ii) each director of Rentrak, (iii) Rentrak's Chief
Executive Officer and the next four most highly compensated executive officers
who were employed by Rentrak at March 31, 2003 (the "Named Executive Officers"),
and (iv) the present directors and executive officers of Rentrak as a group.
Shares Beneficially Owned
-------------------------------------------------------------------------------------------
Name Number (1) Percentage (1)
Cecil Andrus 31,000 *
F. Kim Cox 369,250 3.8%
Marty Graham 84,540 *
George Kuper 31,500 *
Joon Moon 32,000 *
James Petcoff 27,500 *
Paul Rosenbaum 609,720 6.2%
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
Stanford Stoddard 87,650 *
Mark Thoenes 22,500 *
Amir Yazdani 165,968 1.7%
All Officers and Directors as a group (15 persons) 1,581,172 14.7%
Neil Gagnon 823,099(2) 8.7%
1370 Avenue of the Americas, Suite 2002
New York, New York 10019
Royce & Associates, LLC 527,500(3) 5.5%
1414 Avenue of the Americas
New York, New York 10019
Dimensional Fund Advisors, Inc. 503,770(4) 5.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
* Less than one percent
(1) Unless otherwise indicated, each person has sole voting and dispositive
power over the shares listed opposite his name. All percentages have
been calculated assuming that 9,505,956 shares of Rentrak's common
stock are issued and outstanding as of June 23, 2003. In accordance
with SEC regulations, the number of shares and percentage calculation
with respect to each shareholder assumes the exercise of all
outstanding options such shareholder holds and that can be exercised
within 60 days after June 23, 2003, as follows:
5
Cecil Andrus, 30,000 shares; F. Kim Cox, 317,083 shares; Marty Graham,
84,536 shares; George Kuper, 27,500 shares; Joon Moon, 30,000 shares;
James Petcoff, 27,500 shares; Paul Rosenbaum, 400,000 shares; Stanford
Stoddard, 15,000 shares; Mark Thoenes, 22,500 shares; Amir Yazdani,
152,639 shares; and all executive officers and directors as a group,
1,225,677 shares.
(2) Neil Gagnon files a Schedule 13G reporting as of December 31, 2002,
sole voting power as to 196,425 shares, shared voting power as to
200,250 shares, sole dispositive power as to 165,155 shares, and shared
dispositive power as to 626,674 shares.
(3) Royce & Associates, LLC, a registered investment advisor, filed a
Schedule 13G reporting as of December 31, 2002, sole voting and
dispositive power as to 527,500 shares.
(4) Dimensional Fund Advisors, Inc., a registered investment advisor, filed
a Schedule 13G reporting as of December 31, 2002, sole voting and
dispositive power as to 503,770 shares.
6
EXECUTIVE OFFICERS
The names, ages, positions and backgrounds of Rentrak's present
executive officers in addition to Paul Rosenbaum are as follows:
Position
Name Age Held Since Current Position(s) with Rentrak and Background
---- --- ---------- -----------------------------------------------
F. Kim Cox 51 2000 President and Secretary. From 1999 until 2000, Mr. Cox served
as Executive Vice President, Secretary and Treasurer. From 1995
until 1999, Mr. Cox served as Executive Vice President, Chief
Financial Officer, Secretary and Treasurer. Prior to joining
Rentrak in 1985, Mr. Cox was an attorney in private practice and,
prior to that, an accountant with the firm Arthur Andersen LLP.
Craig Berardi 45 1998 Vice President, Product Development Operations. Mr. Berardi
joined Rentrak in 1994. From 1994 to 1998, he held a variety
of operational positions with Rentrak. Beginning in 1998, he
served as Vice President, International and was promoted to his
current position in June, 2003. Prior to joining Rentrak, Mr.
Berardi served from 1985 to 1993 as Director of Finance for the
Film & Video Services Division at Warner Bros. Studio. From 1979
to 1985 Mr. Berardi worked in the banking industry.
Timothy Erwin 34 2000 Vice President, Customer Relations. Mr. Erwin has been with
Rentrak for 15 years and, prior to his promotion in June 2000,
held positions including Manager of Customer Services and Key
Accounts and Director of Customer Relations.
Ron Giambra 41 2003 Senior Vice President, Theatrical. Mr. Giambra joined Rentrak in
2001 as Vice President, Theatrical and now serves as Senior Vice
President, Theatrical, since his promotion in early 2003. Prior
to joining Rentrak, Mr. Giambra held various management positions
with motion picture distribution companies, including Tribune
Media from 2000 to 2001, Destination Films in 1999 and 2000,
Polygram Film Entertainment from 1997 to 1999 and Orion Films
from 1983 to 1997.
Marty Graham 45 2002 Senior Vice President, Studio Relations. Mr. Graham has served
in his current position since May 2002. Previously, he served
Rentrak as Vice President, Product Development beginning in
1991. Mr. Graham joined Rentrak in October 1988 as Director of
Product Development. Prior to joining Rentrak, Mr. Graham served
as General Manager and Secretary/Treasurer of Pacific Western
Video Corporation.
Kenneth Papagan 51 2002 Executive Vice President, Business Development. Prior to
joining Rentrak in November 2002, Mr. Papagan held positions as
President for Delmar Media.Net, a consulting services firm
focused on media, broadband and telecommunications companies,
from 2001 to 2002, as Senior Vice President and General Manager
from 1997 to 2001 at Digital Media and Broadband Solutions, iXL
Inc., a global strategic internet consulting firm, and as
Principal of Delmar Media, a media services consulting firm, from
1991 to 1997. Mr. Papagan began his career working for a variety
of media organizations, including the JCPenney Shopping Channel,
the Fashion Channel, the consulting firm PRO, Oak Media and
ON-TV.
7
Christopher Roberts 35 2003 Senior Vice President, Sales. Mr. Roberts was promoted to his
present position in June 2003. Prior to becoming Vice President,
Sales in 1994, which position he held until 2003, Mr. Roberts was
Rentrak's National Director of Sales, a position he held
beginning in September 1992. Previously, Roberts worked as an
account executive for Rentrak.
Mark Thoenes 50 2003 Senior Vice President and Chief Financial Officer. From July 1,
2000, to December 31, 2000, Mr. Thoenes was engaged as an outside
consultant to serve as Rentrak's Chief Financial Officer. He
became Chief Financial Officer of Rentrak on January 1, 2001 and
was promoted to his present position in June 2003. Prior to
joining Rentrak, Mr. Thoenes worked in the healthcare industry
for 14 years in various financial and operational management
positions, most recently as Chief Operating Officer for Physician
Partners, Inc. and as Chief Financial Officer for PhyCor of
Vancouver, Inc., both health care companies, beginning in 1996.
Mr. Thoenes began his career serving as a CPA with the accounting
firm Ernst & Young LLP.
Amir Yazdani 43 2001 Chief Information Officer. Mr. Yazdani was promoted to his
present position in July 2001. Previously, Mr. Yazdani was Vice
President, Management Information Systems of Rentrak's subsidiary
3PF.COM, Inc., from 1999 to June 2001 and Vice President,
Management Information Systems of Rentrak from 1993 to 1999.
8
EXECUTIVE COMPENSATION
The following table sets forth all compensation paid by Rentrak to the
Named Executive Officers during the fiscal years ended March 31, 2003, 2002 and
2001.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------------------------------ ------------------
Awards
------------------
Securities
Fiscal Year Other Annual Underlying All Other
Ended Salary Bonus Compensation Options/SARs Compensation
Name and Principal Position (1) March 31, ($) ($) ($)(2) (#) ($)(3)
------------------------------- --------- --- --- ------ --- ------
Paul Rosenbaum, 2003 $450,000 $50,000 $22,277 100,000 $1,500
Chairman and Chief 2002 391,186 100,000 55,095 200,000 1,500
Executive Officer 2001 152,500 87,500 23,703 100,000 0
F. Kim Cox, 2003 257,361 0 0 0 5,187
President and Secretary 2002 209,601 28,815 0 0 6,198
2001 201,044 20,000 0 5,000(4) 5,647
Marty Graham, 2003 193,139 0 0 50,000 3,371
Senior Vice President, Studio 2002 172,244 19,625 0 0 3,932
Relations 2001 160,598 5,000 0 10,000 3,635
Mark Thoenes, Chief Financial 2003 205,477 0 0 50,000 1,500
Officer 2002 191,606 20,000 0 0 1,500
2001 42,000 5,000 0 20,000 99,373
Amir Yazdani, Chief 2003 212,234 0 0 60,000 2,983
Information Officer 2002 205,074 26,000 0 120,000 3,220
2001 197,959 30,000 0 10,000 2,911
15,000(4)
(1) Reflects principal position as of March 31, 2003.
(2) Amounts disclosed in this column include monthly lease and maintenance
payments on automobile of $13,623 in 2003, $11,692 in 2002 and $3,302 in
2001 to Mr. Rosenbaum; payments to Mr. Rosenbaum for housing in
Portland, Oregon, of $37,931 in 2002 and $17,762 in 2001; and $8,654 for
a miscellaneous payment in 2003, $5,472 in 2002 and $2,639 in 2001.
(3) Amounts disclosed in this column reflect the following matching
contributions during fiscal 2003 on behalf of the Named Executive
Officers under Rentrak's 401-K plan: Paul Rosenbaum $1,500, F. Kim Cox
$1,500, Marty Graham $1,500, Mark Thoenes $1,500, and Amir Yazdani
$1,500. Rentrak also made payments to supplemental disability and life
insurance plans during fiscal 2003 for the following Named Executive
Officers: F. Kim Cox $3,687, Marty Graham $1,871, and Amir Yazdani
$1,483.
(4) Represents options to purchase shares of 3PF.COM, Inc. ("3PF"), common
stock.
9
Stock Option Grants
The following table sets forth information concerning stock option
grants to each of the Named Executive Officers during the fiscal year ended
March 31, 2003. Rentrak did not grant any stock appreciation rights to executive
officers during the fiscal year.
Option Grants in Last Fiscal Year
Potential realizable value
at assumed annual rates
of stock price appreciation
Individual Grants (1) for option term (2)
------------------------------------------------------------------------------------------------------------------------------
Number of % of Total
securities options
underlying granted to
options employees in Exercise Expiration
Name granted fiscal year price date 5% ($) 10% ($)
------------------------------------------------------------------------------------------------------------------------------
Paul Rosenbaum 100,000 (3) 17.75% $ 5.00 (5) 8/22/2007 $0 $128,099
F. Kim Cox - - - - - -
Marty Graham 50,000 (4) 8.88% $ 5.80 (6) 5/09/2007 80,122 177,048
Mark Thoenes 50,000 (4) 8.88% $ 5.80 (6) 5/09/2007 80,122 177,048
Amir Yazdani 60,000 (4) 10.65% $ 5.80 (6) 5/09/2007 96,146 212,457
--------------------------------
(1) Options granted include both incentive stock options and
nonqualified stock options.
(2) These calculations are based on certain assumed annual rates of
appreciation as required by SEC rules governing the disclosure of
executive compensation. Under these rules, an assumption is made
that the market price of the shares underlying the stock options
shown in this table could appreciate at rates of 5% and 10% per
annum on a compounded basis over the five or ten-year term of the
stock options. Actual gains, if any, on stock option exercises
are dependent on the future performance of the common stock of
Rentrak and overall market conditions. There can be no assurance
that the gains reflected in this table will be achieved.
(3) Option vests in full on August 22, 2003. (4) Option vests in four
equal annual installments.
(5) The exercise price is $5.00 through August 21, 2004; $5.25 from
August 22, 2004 through August 21, 2005; $5.50 from August 22,
2005 through August 21, 2006; and $5.75 from August 22, 2006
through August 21, 2007. The closing sales price of Rentrak's
common stock on the date of grant was $3.90 per share.
(6) The exercise price per share equals the closing sales price
on the date of grant.
10
Stock Option Exercises
The following table sets forth certain information concerning stock
option exercises by each of the Named Executive Officers during the fiscal year
ended March 31, 2003, and the value of in-the-money options (e.g., options as to
which the market value of Rentrak common stock exceeds the exercise price of the
options) held by such individuals on March 31, 2003. The value of in-the-money
options is based on the difference between the exercise price of such options
and the closing price of Rentrak common stock on March 31, 2003, which was $5.14
per share. As 3PF's common stock is not publicly traded, outstanding options are
not deemed to be in-the-money as the current value of the stock is not presently
ascertainable. Unless otherwise indicated, the options listed below are for
Rentrak common stock.
Aggregated Option Exercises in Fiscal 2003
and Fiscal Year-End Option Values
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at Fiscal
Options at Fiscal Year End (#) Year End ($)
--------------------------------- ------------------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------- ------------------------------------
Paul Rosenbaum 0 $0 300,000 100,000 $ 560,000 $ 14,000
F. Kim Cox 14,062 13,200 323,924 25,811 110,909 5,090
0 5,000(1) 0 0
Marty Graham 0 0 78,750 60,000 100,256 17,648
Mark Thoenes 0 0 10,000 60,000 29,520 29,520
Amir Yazdani 10,839 11,121 108,478 140,000 140,437 139,200
0 15,000(1) 0 0
-----------------------------------
(1) Option to purchase shares of 3PF's common stock.
Equity Compensation Plan Information
Equity Compensation Plan Information
The following table sets forth additional information as of March 31,
2003, about shares of the Rentrak Common Stock that may be issued upon the
exercise of options, warrants, and other rights under Rentrak existing equity
compensation plans and arrangements, divided between plans approved by Rentrak
shareholders and plans or arrangements not submitted to the shareholders for
approval. The information includes the number of shares covered by, and the
weighted average exercise price of, outstanding options, warrants, and other
rights and the number of shares remaining available for future grants excluding
the shares to be issued upon exercise of outstanding options, warrants, and
other rights.
11
Remaining Available For
Number of Securities to be Weighted-Average Future Issuance Under
Issued Upon Exercise of Exercise Price of Equity Compensation
Outstanding Options, Outstanding Options, Plans (excluding securities
Plan Category Warrants, and Rights Warrants, and Rights reflected in first column)
------------- -------------------- -------------------- --------------------------
Equity compensation plans 1,728,335 $4.4119 695,469
approved by shareholders (1)
286,584 $4.3170 337,776
Equity compensation plans -------- -------- -------
or arrangements not
approved by shareholders (2)
Total 2,014,919 $4.3984 1,033,245
---------- -------- ---------
(1) Equity compensation plans approved by shareholders include the 1986 Second
Amended and Restated Stock Option Plan, as amended, the 1997 Equity
Participation Plan, as amended, and the 1992 Employee Stock Purchase Plan.
(2) Equity compensation plans or arrangements approved by Rentrak's board of
directors but not submitted for shareholder approval include (a) the 1997
Non-Officer Employee Stock Option Plan and (b) warrants to purchase 30,000
shares of Common Stock with a purchase price of $7.50 per share and an
expiration date of May 16, 2009, issued to an investment banking firm as partial
consideration for financial advisory services in connection with strategic
opportunities or financing transactions of potential interest to Rentrak.
The 1997 Non-Officer Employee Stock Option Plan, as amended, provides
for the issuance of up to 800,000 shares of Common Stock pursuant to
nonstatutory options granted to employees or consultants of Rentrak who are not
officers or directors of Rentrak. The Compensation Committee determines the
terms of each option grant, including the number of shares covered, the exercise
price, the expiration date, and provisions regarding vesting and exercisability
following termination of employment.
Compensation of Directors
Rentrak compensates its non-employee directors for their services by
payment of $500 for each board meeting they attend in person or by telephone
conference call. Each director who serves on a board committee receives payment
of $500 for attending each in-person or telephone conference committee meeting.
In addition, three non-employee directors are each paid a retainer of $22,500
per year (including $2,500 for service on the Audit Committee) and two
non-employee directors are each paid a retainer of $20,000 per year. Rentrak
also reimburses directors for their travel expenses for each meeting attended in
person.
12
Each non-employee director receives an automatic grant, at the
beginning of each fiscal year, of a ten-year option to purchase 10,000 shares of
Rentrak common stock, with a grant of an option for an additional 2,500 shares
to each chairman of a board committee. Accordingly, on April 1, 2003, Messrs.
Andrus and Petcoff and Dr. Moon each received an option for 12,500 shares; and
Messrs. Kuper and Stoddard each received an option for 10,000 shares; each at an
exercise price of $5.20 per share and exercisable in full one year after the
date of grant. All grants to non-employee directors are made under Rentrak's
1997 Equity Participation Plan.
Employment Contracts and Termination of Employment and Change-In-Control
Arrangements
PAUL ROSENBAUM. Rentrak entered into an employment agreement effective
October 1, 2001, with Mr. Rosenbaum relating to his employment as Chairman and
Chief Executive Officer. The agreement has been extended pursuant to annual
renewal provisions to September 30, 2004. In the event of a change in control of
Rentrak, the term of the agreement will be automatically extended to December 31
of the third calendar year following the year in which the change in control
occurs. A change in control includes (1) the acquisition by a person or group of
beneficial ownership of 25% or more of the combined voting power of Rentrak's
then outstanding capital stock, (2) the election of directors a majority of whom
are not individuals nominated by Rentrak's then incumbent directors, and (3) the
approval by Rentrak's shareholders of a plan of complete liquidation, a sale of
substantially all of Rentrak's assets, or a merger or similar transaction other
than a transaction in which Rentrak's shareholders continue to hold at least 75%
of the combined voting power of the voting securities of the surviving entity
immediately following the transaction, in each case unless the event otherwise
constituting a change in control has been approved by two-thirds of Rentrak's
directors then in office. The agreement with Mr. Rosenbaum provides for an
annual base salary of $450,000, subject to annual review by the board of
directors in its sole discretion as to whether to increase (but not decrease)
his base salary level. The agreement also provides for the lease of an
automobile for use by Mr. Rosenbaum and for employee benefits available to
officers and other management employees generally. Upon termination of Mr.
Rosenbaum's employment by reason of death, his estate will be entitled to a lump
sum payment of $500,000 less any amounts payable under any life insurance
policies purchased by Rentrak for the benefit of Mr. Rosenbaum's dependents.
Upon termination of Mr. Rosenbaum's employment by Rentrak without cause or by
Mr. Rosenbaum with good reason before a change in control of Rentrak occurs, Mr.
Rosenbaum will be entitled to an additional 12 months' salary and benefits as
long as Mr. Rosenbaum does not compete with Rentrak during that 12-month period.
Cause is defined as a material breach of the agreement by Mr. Rosenbaum, his
failure to comply with Rentrak's general policies or standards or to perform any
job duties, a felony conviction or plea of no contest, or any act by Mr.
Rosenbaum constituting fraud, dishonesty involving Rentrak, or in competition
with or materially detrimental to Rentrak. Good reason is defined as Rentrak's
failure to comply with the agreement or an act or failure to act by Rentrak that
constitutes a substantial adverse change in Mr. Rosenbaum's position or
responsibilities or a reduction in his base salary. Upon termination without
cause or for good reason following a change in control and during the term of
the agreement, Mr. Rosenbaum will be entitled to a lump sum payment equal to
three times his annual base salary plus continuation of benefits for three
years, subject to reduction to the extent that Mr. Rosenbaum's after-tax benefit
would be larger after taking into account any excise tax payable on such
severance as an excess parachute payment.
F. KIM COX. Effective April 1, 1998, Rentrak entered into a four-year
employment agreement with Mr. Cox. Under the agreement, Mr. Cox received an
annual salary of $ 257,361, for the fiscal year ended March 31, 2003. If Mr. Cox
is terminated for certain reasons other than for "cause" (as defined in the
agreement), he is entitled to receive one year's base salary, subject to
reduction should Mr. Cox find alternative employment of "comparable status" (as
defined in the agreement), or if he does not exercise his best efforts to find
such employment. If Mr. Cox is terminated for cause, he will receive only the
amount of compensation accrued through the date of termination. If Mr. Cox's
employment is terminated due to his death or disability, he (or his legal
representative) is entitled to receive all compensation accrued as of the date
of termination plus a lump sum severance payment equal to 180 days' base salary.
The agreement has been extended through March 31, 2004.
13
MARTY GRAHAM. Rentrak entered into an employment agreement with Mr.
Graham in June 1995 which was amended and restated in May 1997 and, as further
amended in September 2000, will expire on April 15, 2004.Under the agreement,
Mr. Graham's salary is increased automatically on each anniversary date by
$10,000 from its base of $130,000 on April 15, 1997. Mr. Graham is also entitled
to participate in any bonus plan established by Rentrak for its officers, as
well as a performance bonus ranging from $7,500 to $15,000 for achieving
specified sales objectives. The agreement also provides for annual option grants
to purchase 5,000 shares of Rentrak common stock vesting over five years. Under
the terms of the agreement, a loan to Mr. Graham extended in 1997 in the amount
of $35,000 was forgiven in full on April 15, 2002. Although Mr. Graham's
employment may be terminated by Rentrak or voluntarily by Mr. Graham at any time
upon 30 days' written notice, upon specified circumstances, he will be entitled
to severance as outlined in the agreement. First, if Mr. Graham's employment is
terminated by Rentrak without cause before, or more than two years after, a
change in control occurs, Mr. Graham will be entitled to receive six months'
base salary at the current rate as severance, reduced by the compensation
received from other employment during the six-month severance period, and to
continuation of specified insurance benefits. Termination of Mr. Graham's
employment by Mr. Graham for good reason or by Rentrak following a change in
control other than for cause would entitle Mr. Graham to receive, in a lump sum,
one year's base salary at the current rate or the salary payable through the
expiration date of the agreement, whichever is less, and to continuation of
specified insurance benefits. If Mr. Graham voluntarily terminated his
employment without good reason within two months following a change in control,
he would be entitled to receive severance equal to one week of base salary for
each full year that he has been employed by Rentrak. In the event of Mr.
Graham's death during the term of the agreement, his estate will be entitled to
receive a payment equal to 90 days' base salary and to exercise all unexpired
options granted to Mr. Graham, whether or not vested at the time of his death.
Mr. Graham will not be entitled to any additional compensation upon termination
of employment under any other circumstances.
MARK THOENES. Effective January 1, 2001, Rentrak entered into an
employment agreement expiring December 31, 2005, with Mr. Thoenes providing for
his employment as Rentrak's Chief Financial Officer. The agreement provides for
an annual base salary of $168,000, subject to a minimum annual increase of 5%
and other employee benefits provided from time to time to Rentrak's executives.
The agreement also provided for an initial option grant with respect to 20,000
shares of Rentrak common stock and for option grants as to an additional 7,500
shares each year. Upon termination of Mr. Thoenes's employment by reason of
death or disability, he or his estate will be entitled to a lump sum severance
payment equal to six months' salary. If Mr. Thoenes's employment is terminated
by Rentrak other than for cause within two years after a change in control of
Rentrak, or by Mr. Thoenes for good reason, he will be entitled to receive a
lump sum severance payment equal to one year's base salary or all base salary
payable during the remaining term of the agreement, whichever is less. If his
employment is terminated by Rentrak prior to a change in control or more than
two years after a change of control for reasons other than death, disability or
cause, he will be entitled to a lump sum severance payment equal to one year's
base salary. Upon termination for any reason other than cause, Mr. Thoenes's
options will vest in full to the extent not otherwise vested.
AMIR YAZDANI. Rentrak entered into a five-year employment agreement
with Mr. Yazdani effective July 1, 2001, relating to his employment as Rentrak's
Chief Information Officer. The term of the agreement will be extended
automatically for an additional 12 months unless either party gives notice that
the agreement will not be extended by December 31, 2004. The agreement provides
for an annual base salary of $206,634, subject to annual review for increase on
or before April 1 each year. Under the agreement, Mr. Yazdani also received an
option grant in 2001 relating to 120,000 shares of Rentrak common stock. Upon
termination of Mr. Yazdani's employment by Rentrak without cause or by Mr.
Yazdani for good reason, prior to or more than two years following a change in
control of Rentrak, Mr. Yazdani will be entitled to receive severance payments
equal to a continuation of his base salary through the later of one year
following the date of termination and June 30, 2004. If Mr. Yazdani's employment
is terminated during the term of the agreement without cause or for good reason
within two years following a change in control, the severance payments to which
he would otherwise be entitled as described in the preceding sentence will be
reduced if his after-tax benefit would thereby be larger after taking into
account all income and excise taxes.
14
REPORT OF THE AUDIT COMMITTEE
The "Report of the Audit Committee" shall not be deemed incorporated by
reference by any general statement incorporating this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that Rentrak specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Audit Committee of the board of directors reports to the board and
is responsible for overseeing Rentrak's financial reporting process, the systems
of internal accounting and financial controls established by management, and the
annual independent audit of Rentrak's financial statements. The Audit Committee
is comprised of three directors, each of whom meets the independence
requirements under current National Association of Securities Dealers corporate
governance standards. The Audit Committee's activities are governed by a written
charter adopted by the board on May 19, 2000.
In discharging its responsibilities, the Audit Committee and its
individual members have met with management and Rentrak's independent auditors,
KPMG LLP, the accounting firm selected by the board of directors at the Audit
Committee's recommendation (see "Independent Accountants" below) to review
Rentrak's accounting functions and the audit process. The Audit Committee
discussed and reviewed with its independent auditors all matters that the
independent auditors were required to communicate and discuss with the Audit
Committee under applicable auditing standards, including those described in
Statement on Auditing Standards No. 61, as amended, regarding communications
with audit committees. Audit Committee members also discussed and reviewed the
results of the independent auditors' examination of the financial statements,
the quality and adequacy of the Company's internal controls, and issues relating
to auditor independence. The Audit Committee has received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed with the independent auditors their independence.
Based on its review and discussions with management and the independent
auditors, the Audit Committee recommended to the board of directors that the
audited financial statements for the fiscal year ended March 31, 2003, be
included in Rentrak's Annual Report on Form 10-K for filing with the Securities
and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors:
Cecil Andrus (Committee Chair) James Petcoff Stanford Stoddard
15
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The "Report of the Compensation Committee on Executive Compensation"
shall not be deemed incorporated by reference by any general statement
incorporating this proxy statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the extent that
Rentrak specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The Compensation Committee of Rentrak is charged with determining the
compensation of all executive officers of Rentrak. These decisions are based on
Rentrak's executive compensation philosophy. This compensation philosophy has
four primary principles: (i) linking executive compensation to the creation of
sustainable increases in shareholder value; (ii) providing executive
compensation rewards contingent upon organizational performance; (iii)
differentiating compensation based on individual contribution; and (iv)
encouraging the retention of a sound management team.
To implement this philosophy, executive compensation has been comprised
of three primary components - annual salary, performance bonuses and a long-term
incentive program consisting of stock option grants. Ownership of shares of
Rentrak's common stock by executives is encouraged and forms a significant
component of the total executive compensation package. In addition, competitive
factors are considered in determining executive compensation.
Annual Salary
-------------
Rentrak has entered into employment agreements with its executive
officers, including all of the officers named in the Summary Compensation Table
above, which typically establish a base annual salary rate and may provide for
annual increases in salary during the term of the agreement. Base salary rates
reflect the level of duties and responsibilities of each executive officer, the
executive officer's experience and prior performance, and competitive factors in
Rentrak's industry.
Performance Bonuses
-------------------
Rentrak has a discretionary bonus program pursuant to which performance
bonuses are considered following the end of each fiscal year. No performance
bonuses have been awarded to executive officers under this program for services
during fiscal 2003. A bonus separately awarded to Rentrak's chief executive
officer during fiscal 2003 is discussed below.
Long-Term Incentive Program
---------------------------
Stock option grants are used to motivate employees to focus on
Rentrak's long-term performance, and Rentrak has long maintained stock option
plans for key employees, including all executive officers. In some instances,
option grants are specified in an officer's employment agreement. The size of
each option grant is based upon such factors as the employee's duties,
responsibilities, performance, experience and anticipated contribution to
Rentrak.
Stock options are typically awarded to executive officers on an annual
basis. Additional grants may be made in the event of an executive officer's
promotion. In fiscal 2003, Rentrak granted options to purchase a total of
410,000 shares of common stock to its executive officers (excluding officers who
subsequently left Rentrak), including a 100,000 share grant to Mr. Rosenbaum as
discussed below.
16
Compensation of Paul A. Rosenbaum, Chairman and Chief Executive Officer
-----------------------------------------------------------------------
Effective October 2001, Rentrak entered into an employment agreement
with Paul Rosenbaum, Chairman and Chief Executive Officer, which, as extended
annually, has a current expiration of September 30, 2004. The agreement with Mr.
Rosenbaum provides for an initial annual base salary of $450,000, which remained
unchanged for fiscal 2003. The salary level was established based on Mr.
Rosenbaum's prior work experience and expectations and compensation levels at
companies of similar size and scope.
In August 2002, at the request of the chair of the Compensation
Committee, the full board of directors considered the award of a bonus and
option grant to Mr. Rosenbaum. Mr. Rosenbaum abstained from participation in the
deliberations regarding his compensation. The board of directors determined to
award Mr. Rosenbaum a cash bonus payable promptly thereafter in the amount of
$50,000. The board also authorized two additional performance bonuses in the
amount of $75,000 for each of the third and fourth quarters of fiscal 2003,
contingent upon the attainment of specified net income targets which were not
met. Finally, the board approved the grant to Mr. Rosenbaum of a stock option
for 100,000 shares with a five-year term, vesting in full one year after the
date of grant, and an exercise price of $5.00 per share through August 21, 2004,
with $0.25 per share increases annually thereafter. The fair market value of
Rentrak's common stock on the date of grant was $3.90. The board of directors
approved the option grant to Mr. Rosenbaum in furtherance of its objective of
aligning the economic interests of Rentrak's executive officers with the
interests of shareholders.
Submitted by the Compensation Committee of the Board of Directors and the full
Board of Directors:
James Petcoff (Committee Chair) Cecil Andrus
George Kuper, Joon Moon, Paul Rosenbaum, Stanford Stoddard
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF RENTRAK
CORPORATION, NASDAQ MARKET INDEX, AND PEER GROUP
The chart on the next page compares the five year cumulative total
return on Rentrak's common stock with that of the NASDAQ Market index, and a
group of peer companies selected by Rentrak. The chart assumes $100 was invested
on April 1, 1996 in Rentrak's common stock, the NASDAQ Market index, and the
peer group, and that any dividends were reinvested The peer group is composed of
the companies within the video distribution business and internet fulfillment
business reflected in the 2001 peer group appearing in both the 2001 and 2002
proxy materials as follows: Hastings Entertainment, Inc., Blockbuster, Inc., Big
Star Entertainment, Inc., Hollywood Entertainment Corp., Movie Gallery, Inc.,
Valley Media, Inc., and PFS Web, Inc.
17
The following chart shall not be deemed incorporated by reference by
any general statement incorporating this proxy statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934, except
to the extent that Rentrak specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
[OBJECT OMITTED]
Measurement Period NASDAQ Rentrak-Selected
(Fiscal Year Covered) Rentrak Corp. Market Index Peer Group
--------------------- ------------- ------------ ----------
Measurement PT - 3/29/98 $100.00 $100.00 $100.00
3/31/99 $29.61 $135.10 $100.94
3/31/00 $57.89 $251.32 $71.64
3/31/01 $38.82 $100.51 $62.71
3/31/02 $73.68 $101.13 $114.65
3/30/03 $54.10 $68.32 $86.27
18
CERTAIN RELATIONSHIPS AND TRANSACTIONS
In June 2000, the then directors of Rentrak approved a program to make
loans available to those officers of Rentrak who were parties to an employment
agreement with Rentrak for the purpose of allowing them to exercise their
vested, unexercised "out of the money" employee stock options. The loans bore
interest at the federal funds rate in effect on the date of each loan (6.5
percent per annum) payable annually. The principal amount of each loan was due
on the earliest to occur of: (1) one year prior to the expiration of the term of
the borrower's current employment agreement with Rentrak, (2) one year following
termination of employment unless such departure followed a "change of control"
(which occurred as a result of the replacement of Rentrak's board of directors
on September 19, 2000), (3) five years from the date of the loan, or (4) one
year from the date of the borrower's death. The loans were secured by the stock
purchased upon the exercise of the options. The loans were without recourse
(except as to the stock securing the loans) as to principal and were with full
recourse against the borrower as to interest. The Rentrak board of directors
discontinued the program as to new loans in November 2000.
During fiscal 2001, several Rentrak officers obtained loans from
Rentrak under the option loan program. Prior to March 31, 2002, all but two of
the loans were cancelled in exchange for cancellation of the pledged shares to
Rentrak and, in some cases, reinstatement of the related options on their
original terms. During fiscal 2003, the remaining loans to two former officers
were satisfied. Michael Lightbourne exercised his right to tender his shares
subject to the loan back to Rentrak and received cash proceeds (before
withholding and payroll taxes) of approximately $264,000 in August 2002,
representing the fair market value of the 94,000 shares in excess of the loan
principal amount of $355,375 and accrued interest of approximately $38,700. The
other former officer's loans totaling $22,190 and accrued interest were
cancelled in August 2002 upon tender of the pledged 5,000 shares, which had a
fair market value less than the loan amount on the date of cancellation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Rentrak's
directors and officers and persons who beneficially own more than 10 percent of
the outstanding shares of Rentrak's common stock ("10 percent shareholders") to
file with the SEC initial reports of beneficial ownership and reports of changes
in beneficial ownership of shares of common stock and other equity securities of
Rentrak. To Rentrak's knowledge, based solely upon a review of the copies of
Forms 3, 4, and 5 (and amendments thereto) furnished to Rentrak or otherwise in
its files, all of Rentrak's officers, directors and 10 percent shareholders
complied in a timely manner with all applicable Section 16(a) filing
requirements during fiscal 2003, except that Stanford Stoddard, a director of
Rentrak, did not timely report a sale transaction in February 2003 relating to
20,000 shares.
INDEPENDENT ACCOUNTANTS
Until May 9, 2002, Rentrak's independent public accountants for several
years were Arthur Andersen LLP. On May 9, 2002, based upon a recommendation of
the Audit Committee, the board of directors approved the dismissal of Arthur
Andersen LLP as its independent public accountants. Arthur Andersen LLP's
reports on the consolidated financial statements of Rentrak and subsidiaries for
the fiscal years ended March 31, 2000, and March 31, 2001, did not contain an
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles or practices, financial
statement disclosure or auditing scope or procedure, or any reportable events as
defined under Item 304(a)(1)(v) of Regulation S-K promulgated by the Securities
and Exchange Commission. A copy of a letter addressed to the Securities and
Exchange Commission from Arthur Andersen LLP stating that it agrees with the
above statements was attached as Exhibit 16 to Form 8-K filed by Rentrak with
the Securities and Exchange Commission on May 10, 2002.
Also on May 9, 2002, based upon a recommendation of the Audit Committee
and approval of the board of directors, the firm of KPMG LLP was engaged to be
Rentrak's independent accountants. From March 31, 1999 until May 9, 2002,
Rentrak had not consulted KPMG LLP with respect to the application of accounting
principles to
19
a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on Rentrak's financial statements, or concerning
any disagreement or reportable event with Arthur Andersen LLP.
Rentrak's independent public accountants for the fiscal year ended
March 31, 2003, were KPMG LLP. The board of directors intends to continue to
retain KPMG LLP during the current fiscal year. No election, approval or
ratification of the choice of independent public accountants by the shareholders
is required. A representative of KPMG LLP is expected to be present at the
Annual Meeting and will have the opportunity to make a statement if he or she
desires to do so. Such representative is also expected to be available to
respond to appropriate questions.
Audit Fees
The aggregate fees billed by KPMG LLP for professional services
rendered for the audit of Rentrak's financial statements for the fiscal year
ended March 31, 2003, and their review of the interim financial statements
included in Rentrak's quarterly reports on Form 10-Q for that fiscal year, were
$130,145.
Financial Information Systems Design and Implementation Fees
During fiscal 2003, KPMG LLP did not provide any professional services
to Rentrak with regard to financial information systems design and
implementation.
All Other Fees
Fees billed for services provided to Rentrak by KPMG LLP during fiscal
2003, other than the services described above under "Audit Fees," were $146,511.
Such fees were for services rendered in connection with income tax consulting,
planning and return preparation and various other consulting matters. The Audit
Committee of the board has considered whether the provision of these services to
Rentrak is compatible with maintaining the independence of Rentrak's independent
public accountants.
FINANCIAL INFORMATION
A copy of Rentrak's 2003 Annual Report on Form 10-K, including audited
financial statements, is being sent to shareholders with this proxy statement.
INFORMATION CONCERNING THE SOLICITATION
Rentrak will bear all costs and expenses associated with this
solicitation. In addition to solicitation by mail, directors, officers, and
employees of Rentrak may solicit proxies from shareholders, personally or by
telephone, facsimile, or e-mail transmission, without receiving any additional
remuneration. Rentrak has asked brokerage houses, nominees and other agents and
fiduciaries to forward soliciting materials to beneficial owners of Rentrak
common stock and will reimburse all such persons for their expenses.
By Order of the Board of Directors,
/s/ F. Kim Cox
---------------
F. Kim Cox
President and Secretary
Portland, Oregon
July 8, 2003
20
RENTRAK CORPORATION
This proxy is solicited on behalf of the board of directors of Rentrak
Corporation (the "Company").
The undersigned hereby appoints each of Paul A. Rosenbaum and F. Kim
Cox as proxies, with full power of substitution, and hereby authorizes them to
represent and to vote as designated below, all the shares of the Company's
common stock held of record by the undersigned on June 23, 2003, at the annual
meeting of the shareholders to be held at the Company's executive offices, One
Airport Center, 7700 N.E. Ambassador Place, Portland, Oregon 97220, on August
21, 2003, at 10 a.m., Pacific Daylight Time, or any adjournments or
postponements thereof.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned shareholder. If no direction is provided, the
proxies named above will vote FOR each director nominee named in Proposal 1.
-------------------------------------------------------------------------------
Proposal 1: Election of Directors
The board of directors unanimously recommends a vote FOR each of the nominees
named in Proposal 1.
Nominees: Cecil D. Andrus, |_|FOR election |_|WITHHOLD
George H. Kuper, Joon S.Moon, of all director vote from all
James G. Petcoff, nominees (except nominees
Paul A. Rosenbaum, Stanford C. Stoddard as noted below)
To withhold authority to vote for any individual nominee, identify the nominee
in the space below:
Exceptions:_________________________________________________
-------------------------------------------------------------------------------
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please date and sign exactly as name appears hereon. When shares are
held as joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Dated: _____________________, 2003
Signature____________________ Signature if held jointly______________
Please mark, sign, date and return the proxy using the enclosed envelope.
21