exv10w2







Exhibit 10.2








RealNetworks Inc, Executive MBO Incentive Program
 





Objective of the Plan



The objective of the RealNetworks’ FY 2010 Executive MBO Incentive Plan (the “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



This plan is effective January 1, 2010 through December 31, 2010.

 






Target Goals



Target goals for the plan are set semi-annually and approved by the Compensation Committee of
the Board of Directors. Plan objectives for 2010 are intended to be transitional and are designed
to recognize the following results: financial stability, effective execution of transformational
strategy milestones, and outstanding performance of key executives driving business results.



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.



Goal alignment is illustrated in the table below. For business leaders who are assigned to a
start-up division or business unit, the revenue and EBITDA metrics for the division or business
unit segment will be replaced with operating expense and divisional or business unit milestones
equally weighted, with the remaining fifty percent aligned to corporate financial and milestone
objectives.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Divisional	 	 	 	 	 	 	 
	 	 	Corporate	 	 	 	 	 	 	Operating	 	 	Bus Unit	 	 	 	 
	Exec Level	 	Milestones	 	 	Financial	 	 	Revenue	 	 	EBITDA	 	 	Revenue	 	 	Discretionary	 
	President & EVPs
	 	 	25.00	%	 	 	75.00	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	G&A, Shared Services
	 	 	25.00	%	 	 	75.00	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Divisional and Bus Unit VP level +
	 	 	12.50	%	 	 	37.50	%	 	 	25.00	%	 	 	25.00	%	 	 	 	 	 	 	 	 
	Bus Unit Sr Management
	 	 	6.25	%	 	 	18.75	%	 	 	 	 	 	 	37.50	%	 	 	37.50	%	 	 	 	 
	Divisional Sr Management
	 	 	6.25	%	 	 	18.75	%	 	 	37.50	%	 	 	37.50	%	 	 	 	 	 	 	 	 
	Finance – Chief Accounting Officer
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100.00	%






MBO Payout Mechanics




Financial Metrics:





	— 	 	 In order to maintain financial stability, revenue and operating expense attainment below
90% will not be rewarded.





	 	 	 
	Revenue & Operating	 	 
	Expense Attainment	 	Incentive Payout
	< 90%

	 	No Payout
	90% +
	 	Linear Payout







	— 	 	 EBITDA payout for attainment in the first half of the plan year will be binary with no
reward below target and a cap of 100% payout at or above target. Second half payout for
EBITDA attainment will be a linear payout capped at 200% for Executive Vice Presidents and
above and 160% for all other plan participants.





	 	 	 	 	 
	 	 	Operating EBITDA	 	 
	Plan Period	 	Attainment	 	Incentive Payout
	1 Half
	 	< 100%
	 	No Payout
	 	100% +
	 	Capped at 100%
	 	 	 	 
	2 Half
	 	0 – 100%+
	 	Linear Payout
	 	 	Capped at 200% for EVP +
	 
	 	Capped at 160% all others






 









 










Transformational Milestones:





	— 	 	 The Compensation Committee of the Board of Directors will
review and approve both the setting of the milestones at
the beginning of the measurement period and the
attainment of results at the end of the period.
Milestones may include discretionary assessment of
quality of completion towards goal and common sense
adjustment.




Individual Performance Modifier:





	— 	 	 To be used to reward exceptional individual contributions
as well as adjust for below average contributions by
multiplying the modifier to final payout calculation for
plan participants. The Chief Executive Officer and
senior staff will determine the individual contribution
levels and recommend the performance modifier to the
Compensation Committee of the Board for their approval.
Executive officers of the company will be excluded.





	 	 	 
	Individual Performance	 	Modifier
	Outstanding Contribution
	 	125%
	Full Contribution
	 	100%
	Less than Full Contribution
	 	75%






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 current plan year will be paid by March
15 of the next year 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 also may be eligible to receive any payout that otherwise was 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 CFO, except that the CEO and CFO 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.)






	 	 	 	 
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