Document:

Exhibit 10.1 - Q1 2014 Exhibit A.Bali Offer Letter

Exhibit 10.1

February 21, 2014

        
Atul Bali
Via e-mail
 

Dear Atul,

I am extremely pleased to offer you employment at RealNetworks, Inc. (“Real”, the “Company” or “us”) as President, Games, reporting directly to me.  Your start date will be mutually determined between us but in no case later than April 15, 2014. 

This offer is for a full-time, exempt, regular position with RealNetworks.  Your responsibilities will be as directed by RealNetworks commensurate with your title.  You will be paid a salary, which is equivalent on an annualized basis to $400,000 (subject to normal withholdings), payable semi-monthly in accordance with our normal payroll procedures.  You are eligible to participate in the Executive MBO Plan with an annual target bonus equivalent to 75% of your base salary, or $300,000, for an annual target total cash compensation of $700,000.  You will have an opportunity to earn more than your target bonus (at least 100% of base salary) if you overattain the targets set forth in your Executive MBO Plan.    Specific targets will be established by the Compensation Committee of our Board of Directors annually.  For the 2014 plan year, your eligibility in the Executive MBO Plan will be pro-rated based on full months’ eligibility.   Eligible employees hired after the first of the month will not begin pro-ration of their  target bonus until the first day of the next month.  

You will be eligible to receive equity awards subject to the terms of the RealNetworks 2005 Stock Incentive Plan (the “Plan”).  Subject to and effective upon the commencement of your employment and the approval of the Compensation Committee, you will receive a grant of stock options for the purchase of 400,000 shares of RealNetworks common stock, which will begin vesting on the first day of your employment and will be subject to all other provisions contained in the Plan and your stock option award agreement. These stock options will fully vest after four years of continuous employment in accordance with Real’s standard vesting practices for new employees (i.e. vesting of 25% after the first 12 months of employment and vesting of 12.5% at the expiration of each successive six months of employment).   Your stock options will be granted by the Compensation Committee no later than 10 business days after your employment start date (the “Grant Date”).  The exercise price of the stock options granted to you shall be equal to the fair market value of RealNetworks common stock on the Grant Date.  Fair market value shall equal the closing price for a share of RealNetworks common stock on the Grant Date as reported by The NASDAQ Stock Market.  Please be aware that unvested stock options are forfeited upon termination of employment, except as otherwise provided. 

Also, you will be eligible to receive a grant of performance contingent restricted stock options for the purchase of 400,000 shares of RealNetworks common stock, subject to the approval of the Compensation Committee and the terms of the Plan and your stock option award agreement.  These options will be subject to performance objectives to be set within 90 days of your start date by the Compensation Committee. You and I will agree on proposed objectives and discuss our thoughts with the Compensation Committee before it sets the final objectives.  Once the objectives have been set, the options will be granted, with performance-contingent vesting adjusted so that you will be eligible to exercise up to 25% of the options on the one year anniversary of your start date, with annual performance-contingent vesting of up to an additional 25% on each of the next 3 years thereafter,

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in each case subject to attainment of the performance objectives and you remaining continuously employed with RealNetworks through the relevant vesting date.   If you underperform the performance objectives for one year (thereby vesting fewer than 25% of the option grant) and over perform in a subsequent year (up through the 4th anniversary of your start date), the plan will be designed to enable you to “catch up” and vest the options that you did not earn in the underperforming year(s).  

You will receive a sign-on bonus of $225,000, of which $150,000 will be paid within 30 days of your start date and $75,000 will be paid within 30 days of your family’s relocation to Seattle.  The sign-on bonus is subject to repayment by you in full if you voluntarily leave RealNetworks within 18 months of your start date other than for “good reason” (as hereinafter defined).   

Further, in accordance with its relocation guidelines, RealNetworks will pay or reimburse you for all your reasonable expenses incurred in connection with relocating yourself and your family to Seattle up to a maximum of $100,000, unless authorized by RealNetworks.  RealNetworks will also reimburse you for the closing costs in connection with the sale of your current home and the purchase of a home in the Seattle area.  It is understood that these expenses may be incurred over time, as the move of your family may be delayed due to school scheduling. RealNetworks will reimburse you for the relocation expenses and closing costs within 30 days of your submission of your reimbursement requests. This relocation benefit shall expire on August 31, 2015. These relocation reimbursements and payments may be reported as taxable income. If you voluntarily leave your employment with RealNetworks within one year of your relocation, (other than for “good reason” as defined on Exhibit A) you will be required to reimburse RealNetworks on a pro-rated basis all relocation expenses incurred by RealNetworks on your behalf. For example, if you voluntarily leave RealNetworks six months after your relocation date (other than for “good reason”), you would be responsible for repayment of 50% of all relocation expenses incurred to date.

RealNetworks offers a comprehensive array of employee benefit programs.  You will receive paid time off and, upon satisfying plan applicable eligibility or waiting periods, medical/ dental/vision coverage, 401(k) participation, disability and life insurance coverage, employee stock purchase plan participation and other benefits (“Benefits”) as described in the RealNetworks Employee Handbook, Benefit Plan descriptions, and RealNetworks policies.  All of the Benefits are subject to change upon notice from RealNetworks.

You will be regarded as a key employee under certain federal regulations governing family and medical leave.  This status will require that you work closely with us in planning should you develop a need for family or medical leave.

In the event that RealNetworks terminates your employment without “cause” or if you terminate your employment for “good reason”, and in consideration for your signing (and not revoking) a customary separation and release agreement to be provided by RealNetworks at the time of termination, RealNetworks will provide you, at its option, with either (a) a lump sum payment equal to 15 months of your then current base salary, or (b) 15 monthly payments of your then current base salary. RealNetworks will also provide you with a pro-rated bonus as described in the paragraph below.  Also, RealNetworks will cover your COBRA costs for up to 12 months (until you have another employer covering your health care costs).  Finally, you shall also receive 1 year accelerated vesting of any unvested, non-performance based stock options.  Such severance benefits are subject to the terms set forth on Exhibit A under the section titled “Release and Section 409A.”  

With respect to the pro-rated bonus referenced in the preceding paragraph, it shall be deemed that your bonus for the year in question will be the greater of 37.5% of base salary or what you have actually earned under the bonus plan, in both cases, pro-rated based on the number of days in the year through your termination date. In addition, you will be paid your full bonus for the year prior to termination even if the termination occurs before the payment date(s) for such bonus.

You agree that in the event you wish to terminate your employment at RealNetworks other than for “good reason”, you will provide us with 90 days written notice and will continue to work fulltime for RealNetworks 

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during that 90 day period unless RealNetworks determines that it does not need your services.  You will be paid for any time actually worked.

In addition to the severance benefits offered above, in the event of a “Change in Control” (“CIC”), the Company agrees to provide you certain benefits as set forth in its Change of Control and Severance Agreement to be effective as of your start date, which agreement will be provided under separate cover (the “CIC Agreement”).  In the event that your employment terminates in a qualifying termination and subject to the other conditions in the CIC Agreement, you will receive 1.5 times your regular severance plus 1 year accelerated vesting of any unvested, non-performance based stock options. 

It is our policy that employees may not use or disclose confidential information or trade secrets obtained from any source or during any prior employment.  RealNetworks requires employees to abide by all contractual and legal obligations they may have to prior employers or others, such as limits on disclosure of information or competition.  Prior to signing this letter, you must inform us if you are subject to any such obligations that would prevent you from working at RealNetworks in your intended capacity or that would otherwise restrict you in the performance of your services to RealNetworks.  Violation of this requirement may result in termination of your employment with RealNetworks.  By signing this letter, you further agree that you will not bring to RealNetworks any confidential documents of another, nor disclose any confidential information of another, and that you will comply fully with these requirements. 

Our employment relationship will be terminable at will, which means that either you or RealNetworks may terminate your employment at any time and for any reason or no reason, subject only to our respective obligations set forth in this letter agreement.  Your right to receive payments described herein are subject to and conditioned upon your signing a valid general and complete release of all claims (except those relating to RealNetworks compensation obligations described under this letter agreement) against RealNetworks (and its related entities and persons) in a form provided by RealNetworks.  Notwithstanding anything in the preceding sentence or elsewhere in this letter agreement to the contrary, the release will preserve and not release (1) your rights to indemnification from RealNetworks or its insurers with respect to any claims against you and (2) your rights pursuant to the CIC Agreement in the event it is later determined that your termination occurred during a Change in Control Period (as defined in the CIC Agreement).

You represent that the execution of this letter agreement, your employment with RealNetworks, and the performance of your proposed duties to RealNetworks will not violate any agreements or obligations you may have to any former employer or third party and you are not subject to any restrictions that would prevent or limit you from carrying out your duties for RealNetworks.

This offer is contingent on:  (i) you providing evidence of employability as required by federal law (which includes providing RealNetworks, within three days after your employment commences, with acceptable evidence of your identity and US employment eligibility), (ii) RealNetworks receiving acceptable results from any background check or reference check and (iii) you signing the RealNetworks Development, Confidentiality and Noncompetition Agreement attached hereto.  

REALNETWORKS PROVIDES EQUAL OPPORTUNITY IN EMPLOYMENT AND WILL ADMINISTER ITS POLICIES WITH REGARD TO RECRUITMENT, TRAINING, PROMOTION, TRANSFER, DEMOTION, LAYOFF, TERMINATION, COMPENSATION AND BENEFITS WITHOUT REGARD TO RACE, RELIGION, COLOR, NATIONAL ORIGIN, CITIZENSHIP, MARITAL STATUS, SEX, SEXUAL ORIENTATION, AGE, DISABILITY OR STATUS AS A DISABLED VETERAN OR VETERAN OF THE VIETNAM ERA OR ANY OTHER CHARACTERISTIC OR STATUS PROTECTED BY APPLICABLE LAW. 

This letter agreement, the Development, Confidentiality and Noncompetition Agreement, the 2005 Stock Incentive Plan, the Change of Control and Severance Agreement, and your stock option award agreements contain the entire agreement between you and RealNetworks relating to your employment and supersede all prior oral and written discussion, agreements and understandings.  This letter 

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agreement may not be modified except in writing signed by both you and RealNetworks.  Any disputes regarding this letter agreement or your employment with RealNetworks shall be governed by and construed in accordance with the laws of the State of Washington.  If any provision of this letter agreement is deemed to be invalid or unenforceable, at RealNetworks option, the remaining terms shall continue in full force and effect.   

This offer is valid until March 14, 2014, and subject to final approval of Real’s Compensation Committee.  

We are excited about the prospect of you joining RealNetworks and look forward to working with you.  Please let me know if you have questions about this offer.

Sincerely, 

Rob Glaser
Interim Chief Executive Officer
RealNetworks, Inc.

I have read and agree to the terms of employment contained in this letter agreement and the attached Development, Confidentiality and Noncompetition Agreement, which represent a full, complete and fair statement of the offer of employment made to me by RealNetworks, Inc.

Atul Bali:                                        Date: March 12, 2014Exhibit 10.1

 

Terms and Conditions for Annual Restricted Stock Unit

Awards Overview

 

These Terms and Conditions apply to the grant awarded to you by Interval Leisure Group, Inc. (“ILG” or the “Company”) pursuant to Section 12 of the Interval Leisure Group 2013 Stock and Incentive Compensation Plan (the “Plan”) of restricted stock units (the “Award”). You were notified of your Award by way of an award notice (the “Award Notice”).

 

ALL CAPITALIZED TERMS USED HEREIN, TO THE EXTENT NOT DEFINED, SHALL HAVE THE MEANINGS SET FORTH IN THE PLAN.

 

Continuous Service

 

In order for your Award to vest, you must be continuously employed by ILG or any of its Subsidiaries during the Restriction Period (as defined below).  Nothing in your Award Notice, these Terms and Conditions, or the Plan shall confer upon you any right to continue in the employ or service of ILG or any of its Subsidiaries or interfere in any way with their rights to terminate your employment or service at any time.

 

Vesting

 

Subject to the Award Notice, these Terms and Conditions and the provisions of the Plan, the Restricted Stock Units (“RSUs”) in respect to your Award, shall vest and no longer be subject to any restriction (such period during which restrictions apply is the “Restriction Period”):

 

	
 
    	
 
    	
Percentage of Total
    	
 
    
	
Vesting Date
    	
 
    	
Award Vesting
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On the first year anniversary of the Award Date
    	
 
    	
25
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
On the second year anniversary of the Award Date
    	
 
    	
25
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
On the third year anniversary of the Award Date
    	
 
    	
25
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
On the fourth year anniversary of the Award Date
    	
 
    	
25
    	
%
    

 

Termination of Employment

 

Subject to the provisions of your employment agreement, if any, upon your Termination of Employment during the Restriction Period for any reason, other than your death, Disability or, as approved by the Committee, Retirement, any RSUs still subject to restriction shall vest or be forfeited and canceled in accordance with the terms of the Plan and this Award.  For the avoidance of doubt, a transfer of employment among the

 

 

Company and its Subsidiaries or other Affiliates, without any break in service, is not a Termination of Employment.

 

If you have a Termination of Employment due to death, any unvested portion of the Award shall vest in full.  If you have a Termination of Employment as a result of a Disability, the Award shall continue to vest for up to four years after the effective date of such Termination of Employment provided you continue to comply with any applicable confidentiality and non-competition obligations you have to the Company and its Affiliates.  If you have a Termination of Employment due to Retirement on or after the first anniversary of the grant date, upon the approval of the Committee, the Award shall continue to vest for up to four years after the effective date of such Retirement provided you continue to comply with any applicable confidentiality and non-competition obligations you have to the Company and its Affiliates.

 

If your employment is terminated by ILG or any of its Subsidiaries for Cause, or if following any termination of employment between you and ILG or any of its Subsidiaries for any reason, ILG determines that during the two years prior to such termination there was an event or circumstance that would have been grounds for termination for Cause, your Award shall be forfeited and canceled in its entirety upon such termination, and ILG may cause you, immediately upon notice, either to return the shares issued upon the settlement of RSUs that vested during the two-year period after the events or circumstances giving rise to or constituting grounds for termination for Cause or to pay ILG an amount equal to the aggregate amount, if any, that you had previously realized in respect of any and all shares issued upon settlement of RSUs that vested during the two-year period after the events or circumstances giving rise to or constituting grounds for such termination for Cause (i.e., the value of the RSUs upon vesting), in each case, including any dividend equivalents or other distributions received in respect of any such RSUs. This remedy shall be without prejudice to, or waiver of, any other remedies ILG or its Subsidiaries may have in such event.

 

Settlement

 

Subject to your satisfaction of the tax obligations described immediately below under “Taxes and Withholding,” as soon as practicable after any RSUs in respect of your Award have vested and are no longer subject to the Restriction Period, such RSUs shall be settled. In no event shall settlement occur later than two and one half months after the end of the fiscal year in which the RSUs vest.  For each RSU settled, ILG shall issue one share of Common Stock for each RSU vesting. Notwithstanding the foregoing, ILG shall be entitled to hold the shares issuable to you upon settlement of all RSUs that have vested until ILG or the agent selected by ILG to administer the Plan (the “Agent”) has received from you (i) a duly executed Form W-9 or W-8 and (ii) payment for any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such RSUs.

 

 

Taxes and Withholding

 

No later than the date as of which an amount in respect of any RSUs first becomes includible in your gross income for federal, state, local or foreign income or employment or other tax purposes, ILG or its Subsidiaries shall, unless prohibited by law, have the right to deduct any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount due to you, including deducting such amount from the delivery of shares issued upon settlement of the RSUs that gives rise to the withholding requirement. In the event shares are deducted to cover tax withholdings, the number of shares withheld shall generally have a Fair Market Value equal to the aggregate amount of ILG’s withholding obligation. In the event that any such deduction and/or withholding is prohibited by law, you shall, prior to or contemporaneously with the vesting of your RSUs, pay to ILG, or make arrangements satisfactory to ILG regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount.

 

Adjustment in the Event of Change in Stock; Change in Control

 

Adjustment in the Event of Change in Stock.  In the event of (i) a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of ILG (each, a “Share Change”), or (ii) a merger, consolidation, acquisition of property or shares, separation, spin-off, reorganization, significant non-recurring cash dividend, stock rights offering, liquidation, Disaffiliation, or similar event affecting ILG or any of its Subsidiaries (each, a “Corporate Transaction”), the Compensation and Human Resources Committee (the “Committee”) or the Board shall make such substitutions or adjustments as it, in its good faith and sole discretion, deems appropriate and equitable to the number of RSUs and the number and kind of shares of Common Stock underlying the RSUs.  The determination of the Committee regarding any such adjustment will be final and conclusive and need not be the same for all RSU award recipients.

 

Change in Control.  Subject to the provisions of your employment agreement, if any, in the event you cease to be employed by either ILG or any of its Subsidiaries within the one (1) year period following a Change in Control of ILG (and not any of its Subsidiaries) as a result of (i) a termination by ILG or any of its Subsidiaries without Cause, or (ii) a resignation by you for Good Reason (as defined in the Plan), then upon the occurrence of such Termination of Employment, 100% of your Award shall automatically vest.

 

The Disaffiliation of the Subsidiary of ILG by which you are employed or for which you are performing services at the time of such sale or other disposition by ILG shall be considered a Termination of Employment (not a Change in Control) and shall be governed by the applicable provisions of the Plan and the provision set forth under the caption “Termination of Employment” above; provided, however, that the Committee or the Board may deem it appropriate to make an equitable adjustment to the number of

 

 

RSUs and the number and kind of shares of Common Stock underlying the RSUs underlying your Award.

 

Non-Transferability of the RSUs

 

Until such time as your RSUs are ultimately settled, they shall not be transferable by you by means of sale, assignment, exchange, encumbrance, pledge, hedge or otherwise.

 

No Rights as a Stockholder

 

Except as otherwise specifically provided in the Plan, unless and until your RSUs are settled, you shall not be entitled to any rights of a stockholder with respect to the RSUs (including the right to vote the underlying shares). Notwithstanding the foregoing, if ILG declares and pays dividends on the Common Stock during the Restriction Period for particular RSUs in respect of your Award, you will be credited with additional amounts for each RSU underlying such Award equal to the dividend that would have been paid with respect to such RSU as if it had been an actual share of Common Stock, which amount shall remain subject to restrictions (and as determined by the Committee may be reinvested in RSUs or may be held in kind as restricted property) and shall vest concurrently with the vesting of the RSUs upon which such dividend equivalent amounts were paid. Notwithstanding the foregoing, dividends and distributions other than regular quarterly cash dividends, if any, may result in an adjustment pursuant to the “Adjustment in the Event of Change in Stock; Change in Control” section above.

 

Other Restrictions

 

The RSUs shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body is necessary or desirable as a condition of, or in connection with, the delivery of shares, then in any such event, the award of RSUs shall not be effective unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.

 

Conflicts and Interpretation

 

In the event of any conflict between these Terms and Conditions and the Plan, the Plan shall control; provided, that an action or provision that is permissive under the terms of the Plan, and required under these Terms and Conditions, shall not be deemed a conflict and these Terms and Conditions shall control.  In the event of any ambiguity in these Terms and Conditions, or any matters as to which these Terms and Conditions are silent, the Plan shall govern. In the event of any conflict between the Award Notice (or any other information posted on ILG’s extranet or given to you directly or indirectly through the Agent (including information posted on www.benefitaccess.com)) and ILG’s

 

 

books and records, or (ii) ambiguity in the Award Notice (or any other information posted on ILG’s extranet or given to you directly or indirectly through the Agent (including information posted on www.benefitaccess.com)), ILG’s books and records shall control.

 

Amendment

 

ILG may modify, amend or waive the terms of your RSUs, prospectively or retroactively, but no such modification, amendment or waiver shall materially impair your rights without your consent, except as required by applicable law, NASDAQ or stock exchange rules, tax rules or accounting rules.

 

Data Protection

 

The acceptance of your RSUs constitutes your authorization of the release from time to time to ILG or any of its Subsidiaries and to the Agent (together, the “Relevant Companies”) of any and all personal or professional data that is necessary or desirable for the administration of your RSUs and/or the Plan (the “Relevant Information”). Without limiting the above, this authorization permits your employing company to collect, process, register and transfer to the Relevant Companies all Relevant Information (including any professional and personal data that may be useful or necessary for the purposes of the administration of your RSUs and/or the Plan and/or to implement or structure any further grants of equity awards (if any)). The acceptance of your RSUs also constitutes your authorization of the transfer of the Relevant Information to any jurisdiction in which ILG, your employing company or the Agent considers appropriate. You shall have access to, and the right to change, the Relevant Information, which will only be used in accordance with applicable law.

 

Section 409A of the Code

 

Your Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations issued there under (“Section 409A”).   In no event shall ILG be required to pay you any “gross-up” or other payment with respect to any taxes or penalties imposed under Section 409A with respect to any amounts or benefits paid to you in respect of your Award.

 

Notification of Changes

 

Any changes to these Terms and Conditions shall either be posted on ILG’s intranet and www.benefitaccess.com or communicated (either directly by ILG or indirectly through any of its Subsidiaries or the Agent) to you electronically via e-mail (or otherwise in writing) promptly after such change becomes effective.

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