Document:

exv10w2

Exhibit 10.2

April 16, 2010

Henry Skorny

c/o RealNetworks, Inc.

2601 Elliott Avenue, Suite 1000

Seattle, WA 98121

Dear Hank:

     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 thousand dollars ($350,000) and your target bonus will be forty-five
percent (45%) of your annual base salary. In 2010, you will be eligible to earn up
to an additional 30% of your annual base salary in the form of cash bonus
compensation that will be based on your achievement of special project-related
business milestones in both the first and second halves of 2010. Additionally,
RealNetworks granted you an option to purchase one hundred and thirty-five thousand
(135,000) shares of RealNetworks common stock on February 1, 2010 (the “Option”),
which is 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:

 

 

	 	•	 	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, 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 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/ Henry Skorny  	  Date: April 16, 2010 	 
	Henry Skornyexv10w3

Exhibit 10.3

REALNETWORKS, INC.

CHANGE IN CONTROL AND SEVERANCE AGREEMENT

     This Change in Control and Severance Agreement (the “Agreement”) is made and entered
into by and between Hank Skorny (“Executive”) and RealNetworks, Inc., a Washington
corporation (the “Company”), effective as of February 24, 2010 (the “Effective Date”).

RECITALS

     1. It is expected that the Company from time to time will consider the possibility of
an acquisition by another company or other change in control. The Board of Directors of the
Company (the “Board”) recognizes that such considerations can be a distraction to Executive
and can cause Executive to consider alternative employment opportunities. The Board has
determined that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication and objectivity of Executive,
notwithstanding the possibility, threat or occurrence of such a termination of employment in
connection with a Change in Control (as defined herein) of the Company.

     2. The Board believes that it is in the best interests of the Company and its
shareholders to provide Executive with an incentive to continue Executive’s employment and
to motivate Executive to maximize the value of the Company for the benefit of its
shareholders.

     3. The Board believes that it is imperative to provide Executive with certain severance
benefits upon Executive’s termination of employment in connection with a Change in Control.
These benefits will provide Executive with enhanced financial security, incentive and
encouragement to remain with the Company.

     4. Certain capitalized terms used in the Agreement are defined in Section 6 below.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties
hereto agree as follows:

     1. Term of Agreement. This Agreement will terminate (i) automatically upon the date
that all of the obligations of the parties hereto with respect to this Agreement have been
satisfied, or (ii) if sooner, upon the expiration of a period no less than twelve (12)
months following the Company’s written notice to Executive of the termination of the
Agreement.

     2. At-Will Employment. The Company and Executive acknowledge that Executive’s
employment is and will continue to be at-will, as defined under applicable law, except as
otherwise may be specifically provided under the terms of any written formal employment
agreement between the Company and Executive (an “Employment Agreement”).

 

 

     3. Severance Benefits. If the Company terminates Executive’s employment with the
Company for a reason other than Cause or Executive’s death or disability, or Executive
resigns for Good Reason and such termination occurs during the period commencing three (3)
months before and ending twenty-four (24) months following a Change in Control (the “Change
in Control Period”), then, in each case subject to Section 4, Executive will receive the
following severance from the Company:

          (a) Base Salary Severance. Executive will receive a lump sum severance payment
equal to one hundred twenty-five percent (125%) of Executive’s base salary as in
effect immediately prior to Executive’s termination of employment (unless the
termination occurs as a result of clause (ii) of the definition of “Good Reason”
under Section 6(c) below, in which case the amount will be equal to Executive’s
annual base salary in effect prior to such reduction) or, if greater, at the level
in effect immediately prior to the Change in Control, payable within forty-five (45)
days following the date of Executive’s termination of employment. In addition, as
set forth in the retention letter agreement between the Company and Executive dated
February 24, 2010, (the “Retention Letter”), within thirty (30) days following the
date of Executive’s termination of employment, the Company shall pay Executive the
remaining unpaid amount (as determined in accordance with the terms and conditions
of the Retention Letter), if any, of Executive’s Retention Payment (as defined under
the Retention Letter).

          (b) Target Bonus Severance. Executive will receive a lump sum severance
payment equal to one hundred twenty-five percent (125%) of Executive’s target bonus
as in effect for the fiscal year in which Executive’s termination occurs (unless the
termination occurs as a result of clause (iii) of the definition of “Good Reason”
under Section 6(c) below, in which case the amount will be equal to Executive’s
target bonus in effect prior to such reduction) or (if greater) at the level in
effect for the fiscal year in which the Change in Control occurs, payable within
forty-five (45) days following Executive’s termination date.

          (c) Prorated Annual Incentive Bonus. Executive will receive a lump sum
severance payment equal to Executive’s prorated bonus for any partial annual
incentive bonus period (based on the number of days Executive remained an employee
of the Company) through the date of Executive’s termination of employment (at an
assumed 100% on-target achievement of applicable goals) to the extent not already
paid, payable within forty-five (45) days following the date of Executive’s
termination of employment.

          (d) Equity. All of Executive’s unvested and outstanding equity awards granted
on or after February 1, 2010, will vest immediately and become exercisable as of the
date of Executive’s termination of employment. In addition, Executive will have
twelve (12) months following the date of Executive’s termination of employment in
which to exercise Executive’s equity awards that are or become vested, and are
outstanding, as of the date of Executive’s termination of employment; provided,
however, (A) in no event will Executive’s equity awards be permitted to be exercised
beyond their original maximum term to expiration and (B) notwithstanding the
foregoing, the extension of post-termination exercisability described in this
Section 3(d) will not apply to any of Executive’s stock options to purchase shares
of the Company’s common stock granted prior to the Effective Date to the extent such options are intended to constitute and do qualify as
incentive stock options within the meaning of Section 422 of the Code.

-2-

 

          (e) Continued Employee Benefits. If Executive elects continuation coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) for Executive and Executive’s eligible dependents (as applicable), within
the time period prescribed pursuant to COBRA, the Company will reimburse Executive
for, or pay directly on Executive’s behalf, the COBRA premiums for such coverage (at
the coverage levels in effect immediately prior to Executive’s termination of
employment) until the earlier of (A) a period of eighteen (18) months from the last
date of employment of the Executive with the Company, or (B) the date upon which
Executive and/or Executive’s eligible dependents becomes covered under similar
plans.

          (f) Voluntary Resignation Without Good Reason; Termination for Cause; Death or
Disability. If Executive’s employment with the Company terminates voluntarily by
Executive (except upon resignation for Good Reason during the Change in Control
Period), for Cause by the Company, without Cause by the Company (except during the
Change in Control Period) or due to Executive’s death or disability, then (i) all
vesting will terminate immediately with respect to Executive’s outstanding equity
awards, (ii) all payments of compensation by the Company to Executive hereunder will
terminate immediately (except as to amounts already earned), and (iii) Executive
will only be eligible for severance benefits in accordance with the Company’s
established policies, if any, as then in effect.

          (g) Exclusive Remedy. In the event of a termination of Executive’s employment,
the provisions of this Agreement (including, for the avoidance of doubt, the
Retention Letter) are intended to be and are exclusive and in lieu of and supersede
any other rights or remedies to which Executive or the Company otherwise may be
entitled, whether at law, tort or contract or in equity. Executive will be entitled
to no benefits, compensation or other payments or rights upon termination of
employment other than those benefits expressly set forth in this Agreement.

     4. Conditions to Receipt of Severance

          (a) Release of Claims Agreement. The receipt of any severance payments or
benefits pursuant to this Agreement is subject to Executive signing and not revoking
a separation agreement and release of claims in a form acceptable to the Company
(the “Release”), which must become effective and irrevocable no later than the
sixtieth (60th) day following Executive’s termination of employment (the
“Release Deadline”). If the Release does not become effective and irrevocable by the
Release Deadline, Executive will forfeit any right to severance payments or benefits
under this Agreement. In no event will severance payments or benefits be paid or
provided until the Release actually becomes effective and irrevocable.

               (i) In the event the termination occurs at a time during the calendar
year when the Release could become effective in the calendar year following
the calendar year in which Executive’s termination of employment occurs
(whether or not it actually becomes effective in the following year), then
any severance payments and benefits under Section 3 of this Agreement that
would be considered Deferred Payments (as defined in Section 4(c) below) will be paid on the first
payroll date to occur during the calendar year following the calendar year
in which such termination occurs, or, if later, (A) the date the Release
actually becomes effective, (B) such time as required by the payment
schedule applicable to each payment or benefit as set forth in Section
4(a)(ii), or (C) such time as required by Section 4(c).

-3-

 

               (ii) No severance payments and benefits under Section 3 of this
Agreement will be paid or provided until the Release becomes effective and
irrevocable, and any such severance payments and benefits otherwise payable
between the date of Executive’s termination of employment and the date the
Release becomes effective and irrevocable will be paid on the date the
Release becomes effective and irrevocable. In the event of Executive’s
death before all of the severance payments and benefits under Section 3 have
been paid, such unpaid amounts will be paid in a lump sum payment promptly
following such event to Executive’s designated beneficiary, if living, or
otherwise to the personal representative of Executive’s estate.

          (b) Non-disparagement, No-hire, and Non-solicitation. Executive agrees, to the
extent permitted by applicable law, that in the event Executive receives severance
pay or other benefits pursuant to Section 3 above,

               (i) that Executive will refrain from any disparaging statements about
the Company and its officers, directors and affiliates, including, without
limitation, the business, products, intellectual property, financial
standing, future, or employment/compensation/benefit practices of the
Company; and

               (ii) that for a period of one (1) year immediately following the date
of Executive’s termination of employment, Executive will not, either
directly or indirectly, solicit, induce, recruit or encourage any of the
Company’s employees to leave their employment, or hire or take away such
employees, or attempt to solicit, induce, recruit, encourage, hire or take
away employees of the Company, either for Executive’s own purposes, or for
any other person or entity. Executive acknowledges and agrees that the
Company is relying on Executive’s compliance with this Section 4(b) as an
essential term of this Agreement. If Executive becomes entitled to receive
any benefits or payments pursuant to Section 3, and is determined to have
violated this Section 4(b), whether before or after Executive’s separation
from employment, the Company will be entitled to cease providing and/or
recover any payments made or benefits provided pursuant to Section 3. The
Company’s rights pursuant to this Section 4(b) are in addition to any
remedies it may have for breach of contract or otherwise; further, the
remaining terms of this Agreement, as well as the Release contemplated by
Section 4(a), as applicable, will remain in full force and effect.

          (c) Section 409A.

               (i) Notwithstanding anything to the contrary in this Agreement, no
severance payments or benefits payable to Executive, if any, pursuant to
this Agreement that, when considered together with any other severance
payments or separation benefits, is considered deferred compensation under
Internal Revenue Code Section 409A (together, the “Deferred Payments”) will
be payable until Executive has a “separation from service” within the
meaning of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”).
Similarly, no severance payable to Executive, if any, pursuant to this
Agreement that otherwise would be exempt from Section 409A pursuant to
Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive
has a “separation from service” within the meaning of Section 409A.

               (ii) Further, if Executive is a “specified employee” within the meaning
of Section 409A at the time of Executive’s separation from service (other
than due to death), any

-4-

 

Deferred Payments that otherwise are payable within the first six (6) months following Executive’s
separation from service will become payable on the first payroll date that occurs on or after the
date six (6) months and one (1) day following the date of Executive’s separation from service. All
subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit. Notwithstanding anything herein to the contrary, in the
event of Executive’s death following Executive’s separation from service but prior to the six (6)
month anniversary of Executive’s separation from service (or any later delay date), then any
payments delayed in accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Executive’s death and all other Deferred Payments
will be payable in accordance with the payment schedule applicable to each payment or benefit.
Each payment and benefit payable under the Agreement is intended to constitute a separate payment
for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

               (iii) The foregoing provisions are intended to comply with, or be
exempt from, the requirements of Section 409A so that none of the severance
payments and benefits to be provided under the Agreement 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 payments
hereunder are intended to be exempt from the requirements of Section 409A
under the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of
the Treasury Regulations. Executive and the Company agree to work together
in good faith to consider amendments to the Agreement and to take such
reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual
payment to Executive under Section 409A. In no event will the Company
reimburse Executive for any taxes that may be imposed on Executive as result
of Section 409A.

     5. Limitation on Payments. In the event that the severance and other benefits provided
for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments”
within the meaning of Section 280G of the Code and (ii) but for this Section 5, would be
subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance
benefits under Section 3 will be either:

	 	(a)	 	delivered in full, or
	 
	 	(b)	 	delivered as to such lesser extent which would result in no portion of such
severance benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an
after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some
portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the
Company and Executive otherwise agree in writing, any determination required under this Section 4
will be made in writing by the Company’s independent public accountants immediately prior to the
Change in Control (the “Accountants”), whose determination will be conclusive and binding upon
Executive and the Company for all purposes. For purposes of making the calculations required by
this Section 5, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations concerning the application
of

-5-

 

Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to make a
determination under this Section. The Company will bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section 5. If a reduction in
severance and other benefits constituting “parachute payments” is necessary so that benefits are
delivered to a lesser extent, reduction will occur in the following order: (1) reduction of the
cash severance payments; (2) cancellation of accelerated vesting of equity awards; and (3)
reduction of continued employee benefits. In the event that the accelerated vesting of equity
awards is to be cancelled, such vesting acceleration will be cancelled in the reverse chronological
order of the Executive’s equity awards’ grant dates.

     6. Definition of Terms. The following terms referred to in this Agreement will have
the following meanings:

          (a) Cause. For purposes of this Agreement, “Cause” means conduct involving one
or more of the following: (i) the conviction of Executive of, or plea of nolo
contendere by Executive to, a felony involving moral turpitude (including under
federal securities laws), resulting in material harm to the Company; (ii) the
substantial and continuing failure of Executive after written notice thereof to
render services to the Company in accordance with the terms or requirements of
Executive’s employment for reasons other than illness or incapacity; (iii) willful
misconduct, gross negligence, fraud, embezzlement, theft, misrepresentation or
dishonesty by Executive involving the Company or any of its subsidiaries, resulting
in any case in material harm to the Company; or (iv) Executive’s violation of any
confidentiality or non-competition agreements with the Company or its subsidiaries,
resulting in material harm to the Company.

          (b) Change in Control. “Change in Control” means the occurrence of any of the
following:

               (i) during any period of twenty-four (24) consecutive months,
individuals who, at the beginning of the period constitute the Board (the
“Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the Company’s initial public offering whose election or
nomination for election was approved by a vote of at least a majority of the
Incumbent Directors then on the Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named
as a nominee for director, without written objection to such nomination)
will be an Incumbent Director; provided, however, that no individual
initially elected or nominated as a director of the Company as a result of
an actual or threatened election contest with respect to directors or as a
result of any other actual or threatened solicitation of proxies by or on
behalf of any person other than the Board will be deemed to be an Incumbent
Director; or

               (ii) any “person” (as such term is defined in the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the
“Company Voting Securities”); provided, however, that the event

-6-

 

described in this paragraph (ii) will not be deemed to be a Change in Control by virtue of any of
the following acquisitions: (A) by the Company or any subsidiary, (B) by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any subsidiary, (C) by any underwriter
temporarily holding securities pursuant to an offering of such securities, or (D) pursuant to a
Non-Qualifying Transaction (as defined in clause (iii) below); or

               (iii) the consummation of a merger, consolidation, statutory share
exchange, reorganization or similar form of corporate transaction involving
the Company or any of its subsidiaries that requires the approval of the
Company’s shareholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately
following such Business Combination: (A) more than fifty percent (50%) of the
total voting power of (x) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (y) if applicable, the ultimate
parent corporation that directly or indirectly has beneficial ownership of
one hundred percent (100%) of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Company Voting Securities that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by
shares into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders thereof
is in substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of
fifty percent (50%) or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving Corporation) and (C) at
least half of the members of the board of directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving Corporation) following
the consummation of the Business Combination were Incumbent Directors at the
time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which
satisfies all of the criteria specified in (A), (B) and (C) above shall be
deemed to be a “Non-Qualifying Transaction”); or

               (iv) a change in the ownership of a substantial portion of the Company’s
assets which occurs on the date that any one person, or more than one person
acting as a group (“Person”) acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value
equal to or more than fifty percent (50%) of the total gross fair market
value of all of the assets of the Company immediately prior to such
acquisition or acquisitions. For these purposes, persons will be considered
to be acting as a group if they are owners of a corporation that enters into
a merger, consolidation, purchase or acquisition of stock, or similar
business transaction with the Company. For purposes of this subsection (iv), gross fair market value means the value of the assets
of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.

          Notwithstanding the foregoing, a Change in Control will not be deemed to occur
as a result of the sale, spin-off, or other divestiture of the Company’s Games
and/or Rhapsody businesses.

-7-

 

          (c) Good Reason. “Good Reason” means Executive’s resignation within thirty
(30) days following the expiration of any Company cure period following the
occurrence of one or more of the following, without Executive’s written consent:

               (i) a material reduction in Executive’s duties, authorities or
responsibilities relative to Executive’s duties, authorities or
responsibilities as in effect immediately prior to such reduction
(including, for example, but not by way of limitation, a material reduction
due to (A) the Company ceasing to be a publicly held company; or (B) the
Company becoming part of a larger entity (unless Executive receives
substantially the same level of duties, authorities and responsibilities
with respect to the total combined entity and not only with respect to the
Company as a division, subsidiary or business unit of the total combined
entity));

               (ii) a material reduction in Executive’s annual base compensation as in
effect immediately prior to such reduction (provided that a reduction of ten
percent (10%) or less will not constitute a material reduction under this
clause (ii));

               (iii) a material reduction in Executive’s annual target bonus
opportunity as in effect immediately prior to such reduction (provided that
a reduction of ten percent (10%) or less will not constitute a material
reduction under this clause (iii)); and

               (iv) a material change in the geographic location at which Executive
must perform services; provided, however, that any requirement of the
Company that Executive be based anywhere within fifty (50) miles from
Executive’s primary office location or within fifty (50) miles from
Executive’s principal residence will not constitute a material change under
this clause (iv).

               Executive will not resign for Good Reason without first providing the
Company with written notice within ninety (90) days of the event that
Executive believes constitutes “Good Reason” specifically identifying the
acts or omissions constituting the grounds for Good Reason and a reasonable
cure period of not less than thirty (30) days following the date of such
notice.

     7. Successors.

          (a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company’s business and/or assets will assume the
obligations under this Agreement and agree expressly to perform the obligations
under this Agreement in the same manner and to the same extent as the Company would
be required to perform such obligations in the absence of a succession. For all
purposes under this Agreement, the term “Company” will include any successor to the
Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 7(a) or which becomes bound by the terms of this
Agreement by operation of law.

          (b) Executive’s Successors. The terms of this Agreement and all rights of
Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

-8-

 

     8. Notice.

          (a) General. Notices and all other communications contemplated by this
Agreement will be in writing and will be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Executive, mailed notices
will be addressed to him or her at the home address which he or she most recently
communicated to the Company in writing. In the case of the Company, mailed notices
will be addressed to its corporate headquarters, and all notices will be directed to
the attention of the Company’s Chief Executive Officer (or in the absence of a Chief
Executive Officer, the President of the Company) and its General Counsel (or in the
absence of a General Counsel, the Deputy General Counsel of the Company).

          (b) Notice of Termination. Any termination by the Company for Cause or by
Executive for Good Reason will be communicated by a notice of termination to the
other party hereto given in accordance with Section 8(a) of this Agreement. Such
notice will indicate the specific termination provision in this Agreement relied
upon, will set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and will specify
the termination date (which will be not more than thirty (30) days after the giving
of such notice). The failure by Executive to include in the notice any fact or
circumstance which contributes to a showing of Good Reason will not waive any right
of Executive hereunder or preclude Executive from asserting such fact or
circumstance in enforcing Executive’s rights hereunder.

     9. Miscellaneous Provisions.

          (a) Waiver. No provision of this Agreement will be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing and
signed by Executive and by an authorized officer of the Company (other than
Executive). No waiver by either party of any breach of, or of compliance with, any
condition or provision of this Agreement by the other party will be considered a
waiver of any other condition or provision or of the same condition or provision at
another time.

          (b) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.

          (c) Entire Agreement. This Agreement, together with the Retention Letter and
the Development, Confidentiality and Noncompetition Agreement entered into between
you and the Company, constitutes the entire agreement of the parties hereto and
supersedes in their entirety all prior representations, understandings, undertakings
or agreements (whether oral or written and whether expressed or implied) of the
parties with respect to the subject matter hereof. No waiver, alteration, or
modification of any of the provisions of this Agreement will be binding unless in
writing and signed by duly authorized representatives of the parties hereto and
which specifically mention this Agreement.

          (d) Choice of Law. The validity, interpretation, construction, and performance
of this Agreement will be governed by the laws of the State of Washington (with the
exception of its

-9-

 

conflict of laws provisions). Any claims or legal actions by one party against the other arising
out of the relationship between the parties contemplated herein (whether or not arising under this
Agreement) will be commenced or maintained in any state or federal court located in the
jurisdiction where Executive resides, and Executive and the Company hereby submit to the
jurisdiction and venue of any such court.

          (e) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement will not affect the validity or enforceability of any
other provision hereof, which will remain in full force and effect.

          (f) Withholding. All payments made pursuant to this Agreement will be subject
to withholding of applicable income and employment taxes.

          (g) Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one and
the same instrument.

-10-

 

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth above.

     

	 	 	 	 	 
	COMPANY 	REALNETWORKS, INC.

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

	 	 	 	 	 
	EXECUTIVE 	 	 
	 	By:  	                              /s/ Henry Skorny
 	 
	 	 	Title:   Senior Vice President 	 
	 	 	 	 
	 

-11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]