Exhibit 10.2
February 24, 2010
Michael Eggers
c/o RealNetworks, Inc.
2601 Elliott Avenue, Suite 1000
Seattle, WA 98121
Dear Michael:
     As you are aware, RealNetworks is going through a transition period. Your
continued dedication and commitment to RealNetworks will be instrumental in
successfully navigating this transition period.
     We understand that a change of this nature can create uncertainty. Thus, we
want to express our gratitude for your past service and our commitment to you as
a continuing member of RealNetworks by providing you with (1) additional
compensation, as detailed below; (2) the payment of a cash retention bonus (the
“Retention Payment”), as detailed below; and (3) certain severance benefits as
more fully detailed in the Change in Control Severance Agreement (the “CIC
Agreement”) if the Company terminates your employment without “Cause” or you
resign for “Good Reason” (for all purposes in this letter, as such terms are
defined in your CIC Agreement) during the period commencing three (3) months
prior to, and ending twenty-four (24) months following, a “Change in Control”
(for all purposes in this letter, as defined in the CIC Agreement) of
RealNetworks (the “CIC Period”).
     Effective February 1, 2010, your annual base salary will be three hundred
and fifty thousand dollars ($350,000) and your target bonus will be seventy-five
percent (75%) of your annual base salary. Additionally, RealNetworks granted you
an option to purchase four hundred thousand (400,000) shares of RealNetworks
common stock on February 1, 2010 (the “Option”), which will be scheduled to vest
as to twelve and one-half percent (12.5%) of the shares subject to the Option
after each successive six-month period following the vesting commencement date,
subject to your continued employment through each vesting date. The specific
terms of your Option will be set forth in the standard form of award agreement
entered into between you and RealNetworks.
     Subject to your continued full-time employment through each scheduled
payment date, you are eligible to receive a Retention Payment of up to a maximum
of seven hundred thousand dollars ($700,000), of which fifty percent (50%) is
guaranteed and fifty percent (50%) is discretionary. The exact amount of the
discretionary portion of our Retention Payment will be determined at the time of
payment by the Compensation Committee of the Board of Directors of RealNetworks
(the “Compensation Committee”) in its sole discretion, subject to applicable tax
withholdings, payable as follows:

 

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  •   On February 1, 2011, you will receive a Retention Payment of up to a
maximum of $466,666.67, of which fifty percent (50%) is a fixed amount and fifty
percent (50%) is a discretionary amount determined by the Compensation
Committee.     •   On August 1, 2011, you will receive a Retention Payment of up
to a maximum of $233,333.33, of which fifty percent (50%) is a fixed amount and
fifty percent (50%) is a discretionary amount determined by the Compensation
Committee.

     If RealNetworks terminates your employment without Cause or you resign for
Good Reason at any time, you will receive the remaining unpaid amount of the
maximum amount of your future Retention Payments, if any, within thirty
(30) days of your termination of employment, less applicable tax withholding.
     In the event of your death or permanent disability, you or your heirs will
be entitled to receive a prorated Retention Payment within thirty (30) days of
your death or permanent disability. The maximum amount of such prorated
Retention Payment will be based on the number of days between February 1, 2010,
and the date of your death or permanent disability relative to five hundred and
forty-seven (547) days, less any amount already paid to you, payment of fifty
percent (50%) of which remains subject to the discretion of the Compensation
Committee. In the event of any mutually agreed (1) change in your employment
status to part-time for a continuous period lasting greater than three
(3) months; or (2) your leave of absence for a continuous period lasting greater
than three (3) months, the amount of the Retention Payment may be adjusted, in
the Compensation Committee’s sole discretion, to reflect appropriately the
change in status (for example, by altering the payment schedule, prorating the
payments, tolling the payment schedule or such other method determined by the
Company).
     Under your CIC Agreement, if the Company terminates your employment without
Cause or you resign for Good Reason during the CIC Period, you generally will be
entitled to the following enhanced severance benefits: (1) a lump sum payment
equal to one hundred and twenty-five percent (125%) of your (a) annual base
salary and (b) target bonus opportunity, in each case as in effect at
termination of employment or, if greater, immediately prior to the Change in
Control; (2) a lump sum payment equal to the prorated bonus amount, if any, for
any partially completed bonus period, to the extent not already paid;
(3) accelerated vesting as to one hundred percent (100%) of your unvested equity
awards granted on or after February 1, 2010; (4) extension of the
post-termination exercise period on all of your vested equity awards to twelve
(12) months following the date of your termination of employment (except with
respect to your incentive stock options), but in no event beyond the original
term of the award; and (5) company-paid COBRA for up to eighteen (18) months
following your termination of employment. The foregoing is only a summary of the
benefits under your CIC Agreement. Your right to the above severance benefits is
subject to your execution of a release of claims in favor of the Company and
your compliance with the restrictive covenants in your CIC Agreement. You should
review your CIC Agreement for the specific details, a copy of which is attached
hereto as Attachment A. If there is a conflict between this letter and the CIC
Agreement, the terms of the CIC Agreement will control.
     The Company intends that the Retention Payments comply with, or be exempt
from, the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations and other guidance thereunder and any
state law of similar effect (collectively “Section 409A”) so that none of the
payments or benefits will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply or be
exempt. Specifically, the Retention Payment will be exempt from the requirements
of Section 409A because all such payments will be made within the applicable
short-term deferral period, in accordance with the requirements of
Section 1.409A-1(b)(4) of the Treasury Regulations. Each Retention Payment is
intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2)
of the Treasury

 

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Regulations. In no event will the Company reimburse you for any taxes that may
be imposed on you as a result of Section 409A.
     Although we intend the Retention Payment and the other benefits described
in this letter as an incentive for your continued employment with RealNetworks,
your employment remains at-will. RealNetworks or you may terminate your
employment at any time, with or without cause, for any reason or no reason,
except as may be restricted by law or contract.
     We are excited that we are able to provide you with the benefits described
in this letter. We appreciate your dedication and your past efforts and we look
forward to your ongoing contributions to the future success of RealNetworks.
Sincerely,

            By:   /s/ Robert Kimball       Robert Kimball      President and
Acting Chief Executive Officer     

ACCEPTED and AGREED:

     
/s/ Michael Eggers
  Date: February 24, 2010      
Michael Eggers