exv10w2











Exhibit 10.2




RealNetworks, Inc. Executive Compensation Program –MBO Plan Document




Objective of the Plan



The objective of the RealNetworks’ FY 2008 Executive MBO Incentive Plan is to reward business
leaders for their contribution to the Company’s success and ensure market competitiveness as we
work to attract and retain executive-level talent. RealNetworks has adopted this plan to reward
high performance consistent with our core business objectives.




Effective Date




The effective date of this Plan is January 1, 2008 – December 31, 2008.




Target Goals




Target goals for the plan will be based upon Revenue and EBITDA plan goals for the fiscal year.



Semi-annual assessment of goal attainment will be completed after the close of the six month
period. Corresponding payout based on goal attainment will typically occur 30 to 45 days after the
close of the six month period.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	Divisional	 	BU	 	Sales	 	 
	Exec Level	 	Revenue	 	EBITDA	 	Revenue	 	EBITDA	 	Revenue	 	Revenue	 	Discretionary
	Corp Leader
	 	 	50.0	%	 	 	50.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sr Divisional Leader
	 	 	25.0	%	 	 	25.0	%	 	 	25.0	%	 	 	25.0	%	 	 	 	 	 	 	 	 	 	 	 	 
	BU Leader
	 	 	12.5	%	 	 	12.5	%	 	 	 	 	 	 	37.5	%	 	 	37.5	%	 	 	 	 	 	 	 	 
	Divisional Leader
	 	 	12.5	%	 	 	12.5	%	 	 	37.5	%	 	 	37.5	%	 	 	 	 	 	 	 	 	 	 	 	 
	Sales Leader
	 	 	10.0	%	 	 	10.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	80.0	%	 	 	 	 
	Finance Leader
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100.0	%






MBO Payout Mechanics




Revenue:





	 	•	 	Revenue – in order to maintain consistent revenue growth year over year, performance
under 90% of the revenue target goal will not be rewarded.





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Example
	Attainment	 	Incentive Payout	 	Actual Attainment	 	Actual Payout
	< 90%
	 	No Payout	 	 	75%	 	 	No Payout
	90% - 100%
	 	 	40% - 100	%	 	 	98%	 	 	 	88%	 
	>100% - 110%
	 	Up to 160%	 	 	110%	 	 	 	160%	 






EBITDA:





	 	•	 	EBITDA attainment will be paid out linearly to a maximum of 160% for profitable units.
There is no threshold for payout except in rare instances where the EBITDA target is a
negative number. In order for the payout to exceed 100% corresponding revenue attainment
must be greater than 100%.






	 	o	 	EBITDA targets set at a negative number require setting a reverse
attainment percentage to ensure that performance against goal is appropriately
measured.
	 
	 	o	 	Performance that results in progress towards shrinking the loss will be
rewarded. A maximum loss will also be established during the target phase beyond
which there will be no payout.





Positive EBITDA Target Example




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Example
	Attainment	 	Incentive Payout	 	Actual Attainment	 	Actual Payout
	0 - 100%
	 	 	0-100%	 	 	 	89.50%	 	 	 	89.50%	 
	>100% -160%
	 	Up to 160%*	 	 	130%	 	 	 	130%*	 








 




			
	*	 	EBITDA payout is capped at 100% unless revenue attainment is at or above 100% of target.




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Negative EBITDA Target Example




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Example
	Attainment	 	Incentive Payout	 	Actual Attainment	 	Actual Payout
	<50%

	 	No Payout
	 	 	49.5%	 	 	No Payout

	50% - 100%

	 	0-100%
	 	 	98%	 	 	 	98%	 






Terms and Conditions





	 	•	 	MBO calculations are completed and payments are made every six months with payout timing
approximately 30 – 45 days after the close of the six month period. In all circumstances,
any payouts that are earned in the plan year will be paid by March 15, 2009, at the latest.
	 
	 	•	 	You must be in an eligible position on the first and last day of the quarter to
participate in the MBO program for that quarter.
	 
	 	•	 	Salary, eligible position changes and/or transfers from one eligible group to another
within a quarter will be based on salary and change at the beginning of the quarter.
Changes after the first day of the quarter will be reflected in the next quarter.
	 
	 	•	 	In order to receive a payout from the plan you must be on the company’s payroll as of
the last day of each six month period and on the company’s payroll as of the date the award
is paid, subject to the following. If your employment terminates due to your total and
permanent disability or death, you or your estate, still may be eligible to receive any
payout that otherwise was earned. If the Company terminates your employment other than for
cause, you may also be eligible to receive any payout that was otherwise earned.
	 
	 	•	 	Notwithstanding any other provision of the plan the Compensation Committee, in its sole
discretion, may increase, reduce or eliminate a participant’s award at any time before it
is paid, whether or not calculated on the basis of pre-established performance goals or
formulas.
	 
	 	•	 	The Compensation Committee has all power and discretion to interpret and administer the
Plan, including (but not limited to) the power to determine who is eligible for the Plan
and the size of any payouts.
	 
	 	•	 	The compensation Committee may delegate all or any part of its powers under the Plan to
the company’s CEO and SVP HR, except that the CEO and SVP HR may not administer the Plan
with respect to participants who are executive officers of the company. (For this purpose,
an individual will be considered an executive officer of the company if his or her role at
the company falls within the definition of “officer” under Rule 16a-1(f) promulgated under
the Securities Exchange Act of 1934, as amended.)
	 
	 	•	 	The Compensation Committee reserves the right to adjust targets/measurements based on
acquisition or disposition of businesses/assets.






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