UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 18, 2005
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RENTRAK CORPORATION
(Exact name of registrant as specified in charter)
Oregon
(State or other jurisdiction of incorporation)
0-15159 93-0780536
(Commission File Number) (IRS Employer Identification No.)
One Airport Center
7700 N.E. Ambassador Place
Portland, Oregon 97220
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(503) 284-7581
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Effective as of May 18, 2005, Rentrak Corporation (the "Company")
has entered into a new rights plan to replace its existing rights agreement
which expires on May 18, 2005. The new rights plan is set forth in a Rights
Agreement dated as of May 18, 2005, between the Company and U.S. Stock Transfer
Corporation, as Rights Agent (the "Rights Agreement"). U.S. Stock Transfer
Corporation is also the Company's transfer agent. A brief description of the
terms and conditions of the Rights Agreement is set forth in Item 3.03 of this
Current Report on Form 8-K and is incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders.
Effective as of May 18, 2005, the Company's Board of Directors (the
"Board") adopted a new shareholder rights plan to replace the Company's existing
rights plan which expired as of that date. A brief description of the terms and
conditions of the Rights Agreement follows.
RIGHTS DIVIDEND
On May 6, 2005, the Board declared a dividend of one preferred share
purchase right (a "Right") for each share of common stock, $.001 par value (the
"Common Shares"), of the Company outstanding at the close of business on May 18,
2005 (the "Record Date"). As long as the Rights are attached to the Common
Shares, the Company will issue one Right (subject to adjustment) with each new
Common Share so that all such shares will have attached Rights. When
exercisable, each Right will entitle the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock (a "Preferred Share") at a price of $50.00 per one one-hundredth of a
Preferred Share, subject to adjustment (the "Purchase Price").
DISTRIBUTION DATE
Until the earlier to occur of (i) the 10th day after a public
announcement that a person or group of affiliated or associated persons (other
than the Company or any subsidiary or employee benefit plan of the Company (an
"Exempt Person")) has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Common Shares (an "Acquiring Person") or (ii) 10
business days (or such later date as the Board of Directors may determine prior
to such time as a person or group becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in the beneficial ownership by a
person or group of 15% or more of the Common Shares (the earlier of (i) and (ii)
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate together with a copy of the Summary of
Rights included as Exhibit C to the Rights Agreement.
The Rights Agreement provides that until the Distribution Date (or
earlier redemption, exchange, termination, or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange, termination or expiration of the Rights), the surrender for transfer
of any certificates
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for Common Shares, with or without such notation or a copy of the Summary of
Rights, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
EXPIRATION DATE
The Rights will expire on May 18, 2015, subject to the Company's
right to extend such date (the "Final Expiration Date"), unless earlier redeemed
or exchanged by the Company or terminated.
EXERCISE RIGHTS
The Rights are not exercisable until the Distribution Date. Until a
Right is exercised, the holder thereof, as such, will have no rights as a
shareholder of the Company beyond those as an existing shareholder, including,
without limitation, the right to vote, to receive dividends, or to receive
liquidation proceeds.
Once the Distribution Date has occurred, each Right may be exercised
for one one-hundredth of a Preferred Share upon delivery of a properly completed
and executed Form of Election to Purchase and payment of the Purchase Price.
Each Preferred Share purchasable upon exercise of the Rights will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend payment
of $1.00 per share but will be entitled to an aggregate dividend of 100 times
the dividend, if any, declared per Common Share. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $100 per share
(plus any accrued but unpaid dividends) but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes and will vote together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. Preferred Shares will not be redeemable.
These rights are protected by customary antidilution provisions. Because of the
nature of the Preferred Shares' dividend, liquidation and voting rights, the
value of one one-hundredth of a Preferred Share purchasable upon exercise of
each Right should approximate the value of one Common Share.
If a Person becomes an Acquiring Person or if the Company were the
surviving corporation in a merger with an Acquiring Person or any affiliate or
associate of an Acquiring Person and the Common Shares were not changed or
exchanged, each holder of a Right, other than Rights that are or were acquired
or beneficially owned by the Acquiring Person (which Rights will thereafter be
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the then current Purchase Price
of the Right. For example, at a Purchase Price of $50 per Right, upon exercise
the holder would be entitled to purchase $100 worth of Common Shares for $50.
Assuming that the Common Shares had a per share value of $10 at that time, the
holder of each valid Right would be entitled to purchase ten Common Shares for
$50.
If, after a person has become an Acquiring Person, the Company were
acquired in a merger or other business combination transaction or more than 50%
of its assets or earning
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power were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction would have a
market value of two times the then current Purchase Price of the Right.
EXCHANGE
At any time after a Person becomes an Acquiring Person and prior to
the earlier of one of the events described in the last sentence of the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person, which will
have become void), in whole or in part, for Common Shares having an aggregate
value equal to the spread (the excess of the value of Common Shares issuable
upon exercise of a Right over the exercise price) for each Right (other than
Rights held by such Acquiring Person and its affiliates and associates).
REDEMPTION
The Rights may be redeemed in whole, but not in part, at a price of
$.001 per Right (the "Redemption Price") by the Board of Directors at any time
until a public announcement that a person has become an Acquiring Person. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
ADJUSTMENT
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares or convertible
securities at less than the current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness, cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the adjustment described in
clause (i) above)) or of subscription rights or warrants (other than those
referred to above).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Preferred Shares or Common Shares will be issued (other
than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depository receipts), and in lieu thereof, a payment in cash
will be made based
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on the market price of the Preferred Shares or Common Shares on the last trading
date prior to the date of exercise.
AMENDMENT
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company for so long as the Rights are then redeemable,
and after the Rights are no longer redeemable, the Company may amend or
supplement the Rights Agreement in any manner that does not adversely affect the
interests of the holders of the Rights (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person). The Company may, at any time
prior to such time as any person becomes an Acquiring Person, amend the Rights
Agreement to lower the thresholds described above to no less than the greater of
(i) any percentage greater than the largest percentage of the outstanding Common
Shares then known by the Company to be beneficially owned by any person or group
of affiliated or associated persons (other than an Exempt Person) and (ii) 10%.
ANTITAKEOVER EFFECTS
The Rights have certain anti-takeover effects. Exercise of the
Rights will cause substantial dilution to a person or group that attempts to
acquire the Company on terms not approved by the Board. The existence of Rights,
however, should not affect an offer at a price which is fair to all shareholders
and otherwise in the best interests of the Company and its shareholders as
determined by the Board because, in addition to the authority of the Board to
redeem the Rights or to amend the Rights Agreement at any time until a public
announcement that a person has become an Acquiring Person, the Rights will also
terminate upon the consummation of a merger or similar acquisition transaction
that is approved by the Board before a person becomes an Acquiring Person.
MISCELLANEOUS
A copy of the Rights Agreement is filed as Exhibit 4.1 to this
Current Report on Form 8-K and is incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference to
the Rights Agreement.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Effective May 18, 2005, the Company filed with the Oregon Secretary
of State Articles of Amendment whereby the Company authorized 300,000 shares of
its authorized preferred stock to be designated as Series A Junior Participating
Preferred Stock (the "Preferred Shares") and set forth the preferences,
limitations, and relative rights of the Preferred Shares as determined by the
Board. A brief description of the preferences, limitations and relative rights
of the Preferred Shares is set forth in Item 3.03 of this Current Report on Form
8-K and is incorporated herein by reference. The full text of the Articles of
Amendment is attached hereto as Exhibit A to Exhibit 4.1 and incorporated herein
by reference.
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Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
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3.1 Amendment to Articles of Incorporation of Rentrak Corporation
Designating Terms of Series A Junior Participating Preferred
Stock. Incorporated by reference to Exhibit A to Exhibit 4.1
to this Current Report on Form 8-K.
4.1 Rights Agreement, dated as of May 18, 2005, between Rentrak
Corporation and U.S. Stock Transfer Corporation, together
with: Exhibit A Form of Amendment to Articles of Incorporation
of Rentrak Corporation Designating Terms of Series A Junior
Participating Preferred Stock; Exhibit B Form of Right
Certificate; and Exhibit C Summary of Rights to Purchase
Preferred Shares.
99.1 Description of Rentrak Corporation Capital Stock.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RENTRAK CORPORATION
Dated: May 18, 2005 By: /s/ Mark L. Thoenes
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Mark L. Thoenes
Senior Vice President and Chief Financial
Officer
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