Document:

exv10w1

Exhibit 10.1

REALNETWORKS, INC.

2005 Stock Incentive Plan,

as amended and restated effective December 17, 2009

1. PURPOSE OF THE PLAN

     Purpose. The purpose of the RealNetworks, Inc 2005 Stock Incentive Plan (the “Plan”), as
amended and restated effective as of December 17, 2009 (the “Restatement Effective Date”), is to
assist RealNetworks, Inc., a Washington corporation (the “Company”), and its subsidiaries in
attracting and retaining selected individuals to serve as employees, directors, consultants and/or
advisors of the Company who are expected to contribute to the Company’s success and to achieve
long-term objectives which will inure to the benefit of all shareholders of the Company through the
additional incentives inherent in the Awards hereunder.

2. DEFINITIONS

     2.1. “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Award, Other Share-Based Award or any other right, interest or option relating to
Shares or other property (including cash) granted pursuant to the provisions of the Plan.

     2.2. “Award Agreement” shall mean any agreement, contract or other instrument or document,
including through an electronic medium, evidencing any Award granted by the Committee hereunder.

     2.3. “Board” shall mean the board of directors of the Company.

     2.4. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

     2.5. “Committee” shall mean the Compensation Committee of the Board or a subcommittee thereof
formed by the Compensation Committee to act as the Committee hereunder. The Committee shall consist
of no fewer than two Directors, each of whom is (i) a “Non-Employee Director” within the meaning of
Rule 16b-3 of the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of
the Code, and (iii) an “independent director” for purpose of the rules and regulations of the
NASDAQ Stock Market.

     2.6. “Covered Employee” shall mean a “covered employee” within the meaning of Section 162(m)
of the Code.

     2.7. “Director” shall mean a non-employee member of the Board.

     2.8. “Employee” shall mean any employee of the Company or any Subsidiary and any prospective
employee conditioned upon, and effective not earlier than, such person’s becoming an employee of
the Company or any Subsidiary. Solely for purposes of the Plan, an Employee shall also mean any
consultant or advisor who provides services to the Company or any Subsidiary, so long as such
person (i) renders bona fide services that are not in connection with the offer and sale of the
Company’s securities in a capital-raising transaction and (ii) does not directly or indirectly
promote or maintain a market for the Company’s securities.

     2.9. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

 

     2.10. “Fair Market Value” shall mean, with respect to any property other than Shares, the
market value of such property determined by such methods or procedures as shall be established from
time to time by the Committee. The Fair Market Value of Shares as of any date shall be the per
Share closing price of the Shares as reported on the NASDAQ Stock Market on that date (or if there
was no reported price on such date, on the last preceding date on which the price was reported); if
the Company is not then listed on the NASDAQ Stock Market but is listed on the New York Stock
Exchange, the Fair Market Value of the Shares shall be the per Share closing price of the Shares as
reported on the New York Stock Exchange on that date (or if there was no reported price on such
date, on the last preceding date on which the price was reported); or, if the Company is not then
listed on the NASDAQ Stock Market or the New York Stock Exchange, the Fair Market Value of Shares
shall be determined by the Committee in its sole discretion using appropriate criteria.

     2.11. “Freestanding Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

     2.12. “Limitations” shall have the meaning set forth in Section 10.5.

     2.13. “Option” shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period or periods as the
Committee shall determine.

     2.14. “Other Share-Based Award” shall have the meaning set forth in Section 8.1.

     2.15. “Participant” shall mean an Employee or Director who is selected by the Committee to
receive an Award under the Plan.

     2.16. “Payee” shall have the meaning set forth in Section 13.1.

     2.17. “Performance Award” shall mean any Award of Performance Shares or Performance Units
granted pursuant to Article 9.

     2.18. “Performance Period” shall mean that period established by the Committee at the time any
Performance Award is granted or at any time thereafter during which any performance goals specified
by the Committee with respect to such Award are to be measured.

     2.19. “Performance Share” shall mean any grant pursuant to Article 9 of a unit valued by
reference to a designated number of Shares, which value may be paid to the Participant by delivery
of such property as the Committee shall determine, including cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the Performance Period as
the Committee shall establish at the time of such grant or thereafter.

     2.20. “Performance Unit” shall mean any grant pursuant to Section 9 of a unit valued by
reference to a designated amount of property (including cash) other than Shares, which value may be
paid to the Participant by delivery of such property as the Committee shall determine, including
cash, Shares, other property, or any combination thereof, upon achievement of such performance
goals during the Performance Period as the Committee shall establish at the time of such grant or
thereafter.

     2.21. “Permitted Assignee” shall have the meaning set forth in Section 12.3.

 

 

     2.22. “Prior Plans” shall mean, collectively, the Company’s 1996 Stock Option Plan, 2000 Stock
Option Plan, 2002 Director Stock Option Plan, Director Compensation Stock Plan, and the 2005 Stock
Incentive Plan prior to the Restatement Effective Date.

     2.23. “Restricted Stock” shall mean any Share issued with the restriction that the holder may
not sell, transfer, pledge or assign such Share and with such other restrictions as the Committee,
in its sole discretion, may impose (including any restriction on the right to vote such Share and
the right to receive any dividends), which restrictions may lapse separately or in combination at
such time or times, in installments or otherwise, as the Committee may deem appropriate.

     2.24. “Restricted Stock Award” shall have the meaning set forth in Section 7.1.

     2.25. “Shares” shall mean the shares of common stock of the Company, par value $0.001 per
share.

     2.26. “Stock Appreciation Right” shall mean the right granted to a Participant pursuant to
Section 6.

     2.27. “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the Award, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
the chain.

     2.28. “Substitute Awards” shall mean Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or the right or
obligation to make future awards, by a company acquired by the Company or any Subsidiary or with
which the Company or any Subsidiary combines.

     2.29. “Tandem Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

     2.30. “Vesting Period” shall mean the period of time specified by the Committee during which
vesting restrictions for an Award are applicable.

3. SHARES SUBJECT TO THE PLAN

     3.1. Number of Shares. (a) Subject to adjustment, as provided in Section 12.2, the number of
Shares authorized and available for grant under the Plan effective as of the closing date of the
Company’s one-time stock option exchange program to exchange certain eligible outstanding stock
options as described in the Company’s 2009 proxy statement (the “Exchange Program”) shall be equal
to the sum of (i) 8,245,000 and (ii) the result of multiplying seven-tenths (0.7) by the difference
between (x) the number of Shares subject to stock options that are cancelled in the Exchange
Program and (y) the number of Shares subject to stock options that are issued under the Exchange
Program. For example, if 29,000,000 Shares subject to stock options are tendered in the Exchange
Program and 11,565,000 Shares subject to stock options are issued under the Exchange Program, for
purposes of the prior sentence the difference between the number of Shares subject to stock options
that are cancelled and the number of Shares subject to stock options that are issued would be
17,435,000 (29,000,000 minus 11,565,000 = 17,435,000). As a result, 12,204,500 Shares (17,435,000
multiplied by 0.7) would be added to 8,245,000, for a total of

 

 

20,449,500 Shares authorized and available for grant under the Plan following the closing date
of the Exchange Program (the “Exchange Program Closing Date”). The total number of shares
authorized for grant under the Plan shall be equal to the sum of (a) the number of Shares
authorized and available for grant under the Plan effective as Exchange Program Closing Date, as
calculated above, plus (b) the number of Shares issued and outstanding under the Plan as of the
Exchange Program Closing Date, as calculated using the Share counting rules in the next paragraph.

     Any Shares that are subject to Awards of Options, Stock Appreciation Rights (other than Tandem
Stock Appreciation Rights) granted on or after the Exchange Program Closing Date, shall be counted
against this limit as one (1) Share for every one (1) Share granted. Any Shares that are subject to
Awards other than Options or Stock Appreciation Rights granted after the Exchange Program Closing
Date, shall be counted against this limit as one and six-tenths (1.6) Shares for every one (1)
Share granted.

     (b) If, after the Exchange Program Closing Date, any Shares subject to an Award or to an award
under the Prior Plans are forfeited or expire, or any Award or award under the Prior Plans is
settled for cash, the Shares subject to such Award or to such award under the Prior Plans shall, to
the extent of such forfeiture, expiration or cash settlement, again be available for Awards under
the Plan, subject to Section 3.1(d) below. Notwithstanding anything to the contrary contained
herein, the following Shares shall not be added to the Shares authorized for grant under paragraph
(a) of this Section: (i) Shares tendered by the Participant or withheld by the Company in payment
of the purchase price of an Option or an option granted under the Prior Plans, or to satisfy any
tax withholding obligation with respect to an Option or Stock Appreciation Right or options or
stock appreciation rights granted under the Prior Plans, and (ii) Shares subject to a Stock
Appreciation Right or a stock appreciation right granted under the Prior Plans that are not issued
in connection with its stock settlement on exercise thereof and (iii) Shares reacquired by the
Company on the open market or otherwise using cash proceeds from the exercise of Options or options
granted under the Prior Plans.

     (c) Substitute Awards may be issued under the Plan and such Substitute Awards shall not reduce
the Shares authorized for grant under the Plan or the Limitations applicable to a Participant under
Section 10.5, nor shall Shares subject to a Substitute Award again be available for Awards under
the Plan to the extent of any forfeiture, expiration or cash settlement as provided in paragraph
(b) above. Additionally, in the event that a company acquired by the Company or any Subsidiary or
with which the Company or any Subsidiary combines has shares available under a pre-existing plan
approved by shareholders and not adopted in contemplation of such acquisition or combination, the
shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used
in such acquisition or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for Awards under the
Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards
using such available shares shall not be made after the date awards or grants could have been made
under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be
made to individuals who were not Employees or Directors prior to such acquisition or combination.

     (d) Any Shares that again become available for grant pursuant to this Article on or after the
Exchange Program Closing Date shall be added back as one (1) Share if such Shares were subject to
Options or Stock Appreciation Rights granted under the Plan or options or stock appreciation rights
granted under the Prior Plans, and as one and six-tenths (1.6) if such Shares were subject to

 

 

Awards other than Options or Stock Appreciation Rights granted under the Plan or options or
stock appreciation rights granted under the Prior Plans.

     3.2. Character of Shares. Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares or shares purchased in the open market or otherwise.

4. ELIGIBILITY AND ADMINISTRATION

     4.1. Eligibility. Any Employee or Director shall be eligible to be selected as a Participant.

     4.2. Administration. (a) The Plan shall be administered by the Committee. The Committee shall
have full power and authority, subject to the provisions of the Plan and subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by
the Board, to: (i) select the Employees and Directors to whom Awards may from time to time be
granted hereunder; (ii) determine the type or types of Awards, not inconsistent with the provisions
of the Plan, to be granted to each Participant hereunder; (iii) determine the number of Shares to
be covered by each Award granted hereunder; (iv) determine the terms and conditions, not
inconsistent with the provisions of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other
property, subject to Section 8.1; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other property and other amounts payable with respect to an Award made
under the Plan shall be deferred either automatically or at the election of the Participant; (vii)
determine whether, to what extent and under what circumstances any Award shall be canceled or
suspended; (viii) interpret and administer the Plan and any instrument or agreement entered into
under or in connection with the Plan, including any Award Agreement; (ix) correct any defect,
supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to
the extent that the Committee shall deem desirable to carry it into effect; (x) establish such
rules and regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (xi) make any other determination and take any other action that
the Committee deems necessary or desirable for administration of the Plan.

     (b) Decisions of the Committee shall be final, conclusive and binding on all persons or
entities, including the Company, any Participant, and any Subsidiary. A majority of the members of
the Committee may determine its actions and fix the time and place of its meetings. Notwithstanding
the foregoing or anything else to the contrary in the Plan, any action or determination by the
Committee specifically affecting or relating to an Award to a Director shall require the prior
approval of the Board.

     (c) To the extent not inconsistent with applicable law, including Section 162(m) of the Code,
or the rules and regulations of the NASDAQ Stock Market, the Committee may delegate to (i) a
committee of one or more directors of the Company any of the authority of the Committee under the
Plan, including the right to grant, cancel or suspend Awards and (ii) to the extent permitted by
law, to one or more executive officers or a committee of executive officers the right to grant
Awards to Employees who are not Directors or executive officers of the Company and the authority to
take action on behalf of the Committee pursuant to the Plan to cancel or suspend Awards to
Employees who are not Directors or executive officers of the Company.

5. OPTIONS

     5.1. Grant of Options. Options may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan. Any Option shall be subject to the terms and

 

 

conditions of this Article and to such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall deem desirable.

     5.2. Award Agreements. All Options granted pursuant to this Article shall be evidenced by an
Award Agreement in such form and containing such terms and conditions as the Committee shall
determine which are not inconsistent with the provisions of the Plan. The terms of Options need not
be the same with respect to each Participant. Granting of an Option pursuant to the Plan shall
impose no obligation on the recipient to exercise such
Option. Any individual who is granted an Option pursuant to this Article may hold more than one
Option granted pursuant to the Plan at the same time.

     5.3. Option Price. Other than in connection with Substitute Awards, the option price per each
Share purchasable under any Option granted pursuant to this Article shall not be less than 100% of
the Fair Market Value of such Share on the date of grant of such Option. Other than pursuant to
Section 12.2, the Committee shall not without the approval of the Company’s shareholders (a) lower
the option price per Share of an Option after it is granted, (b) cancel an Option in exchange for
cash or another Award (other than in connection with Substitute Awards or a Change of Control (as
that term may be defined in an Award Agreement), and (c) take any other action with respect to an
Option that would be treated as a repricing under the rules and regulations of the NASDAQ Stock
Market.

     5.4. Option Term. The term of each Option shall be fixed by the Committee in its sole
discretion; provided that no Option shall be exercisable after the expiration of seven (7) years
from the date the Option is granted, except in the event of death or disability.

     5.5. Exercise of Options. (a) Vested Options granted under the Plan shall be exercised by the
Participant or by a Permitted Assignee thereof (or by the Participant’s executors, administrators,
guardian or legal representative, as may be provided in an Award Agreement) as to all or part of
the Shares covered thereby, by the giving of notice of exercise to the Company or its designated
agent, specifying the number of Shares to be purchased, accompanied by payment of the full purchase
price for the Shares being purchased. Unless otherwise provided in an Award Agreement, full payment
of such purchase price shall be made at the time of exercise and shall be made (i) in cash or cash
equivalents (including certified check or bank check or wire transfer of immediately available
funds), (ii) by tendering previously acquired Shares (either actually or by attestation), valued at
their then Fair Market Value, (iii) with the consent of the Committee, by delivery of other
consideration (including, where permitted by law and the Committee, other Awards) having a Fair
Market Value on the exercise date equal to the total purchase price, (iv) with the consent of the
Committee, by withholding Shares otherwise issuable in connection with the exercise of the Option,
(v) through any other method specified in an Award Agreement, or (vi) any combination of any of the
foregoing. The notice of exercise, accompanied by such payment, shall be delivered to the Company
at its principal business office or such other office as the Committee may from time to time
direct, and shall be in such form, containing such further provisions consistent with the
provisions of the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. No adjustment shall be made for
cash dividends or other rights for which the record date is prior to the date of such issuance.

     (b) Notwithstanding the foregoing, an Award Agreement may provide that if on the last day of
the term of an Option the Fair Market Value of one Share exceeds the option price per Share, the
Participant has not exercised the Option or a Tandem Stock Appreciation Right (if applicable) and
the Option has not expired, the Option shall be deemed to have been exercised by the

 

 

Participant on such day with payment made by withholding Shares otherwise issuable in
connection with the exercise of the Option. In such event, the Company shall deliver to the
Participant the number of Shares for which the Option was deemed exercised, less the number of
Shares required to be withheld for the payment of the total purchase price and required withholding
taxes; provided, however, any fractional Share shall be settled in cash, rounded down to the
nearest $.01.

     5.6. Form of Settlement. In its sole discretion, the Committee may provide, at the time of
grant, that the Shares to be issued upon an Option’s exercise shall be in the form of Restricted
Stock or other similar securities, or may reserve the right so to provide after the time of grant.

     5.7. Incentive Stock Options. The Committee may grant Options intended to qualify as
“incentive stock options” as defined in Section 422 of the Code, to any employee of the Company or
any Subsidiary, subject to the requirements of Section 422 of the Code. Notwithstanding anything in
Section 3.1 to the contrary and solely for the purposes of determining whether Shares are available
for the grant of “incentive stock options” under the Plan, the maximum aggregate number of Shares
with respect to which “incentive stock options” may be granted under the Plan shall be 3,000,000
Shares. In addition, and notwithstanding anything in this Section 5 to the contrary, if an
incentive stock option is granted to a Participant who at the time such grant owns (within the
meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent corporation or of any Subsidiary (i)
the option price per Share under the incentive stock option shall be not less than 110% of the Fair
Market Value of a Share on the date of grant of the incentive stock option and (ii) such incentive
stock option shall expire and no longer be exercisable no later than 5 years from the date of
grant.

6. STOCK APPRECIATION RIGHTS

     6.1. Grant and Exercise. The Committee may provide Stock Appreciation Rights (a) in
conjunction with all or part of any Option granted under the Plan or at any subsequent time during
the term of such Option (“Tandem Stock Appreciation Right”), (b) in conjunction with all or part of
any Award (other than an Option) granted under the Plan or at any subsequent time during the term
of such Award, or (c) without regard to any Option or other Award (a “Freestanding Stock
Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in
its sole discretion.

     6.2. Terms and Conditions. Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to
time by the Committee, including the following:

     (a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to
receive the excess of (i) the Fair Market Value of one Share on the date of exercise (or such other
amount less than such Fair Market Value as the Committee shall so determine at any time during a
specified period before the date of exercise) over (ii) the grant price of the Stock Appreciation
Right as specified by the Committee in its sole discretion, which, except in the case of Substitute
Awards or in connection with an adjustment provided in Section 12.2, shall not be less than the
Fair Market Value of one Share on such date of grant or, if applicable, the exercise price of the
related Option with respect to a Tandem Stock Appreciation Right granted subsequent to the related
Option (subject to the requirements of Section 409A of the Code).

 

 

     (b) The Committee shall determine in its sole discretion whether payment shall be made in
cash, in whole Shares or other property, or any combination thereof.

     (c) Any Tandem Stock Appreciation Right may be granted at the same time as the related Option
is granted or at any time thereafter before exercise or expiration of such Option.

     (d) Any Tandem Stock Appreciation Right related to an Option may be exercised only when the
related Option would be exercisable and the Fair Market Value of the Shares subject to the related
Option exceeds the option price at which Shares can be acquired pursuant to the Option. In
addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of
Shares covered by a related Option, then an exercise or termination of such Option shall not reduce
the number of Shares to which the Tandem Stock Appreciation Right applies until the number of
Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock
Appreciation Right applies.

     (e) Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to
the extent the Tandem Stock Appreciation Right has been exercised.

     (f) The provisions of Stock Appreciation Rights need not be the same with respect to each
recipient.

     (g) The Committee may impose such other conditions or restrictions on the terms of exercise
and the exercise price of any Stock Appreciation Right, as it shall deem appropriate, including
providing that the exercise price of a Tandem Stock Appreciation Right may be less than the Fair
Market Value on the date of grant if the Tandem Stock Appreciation Right is added to an Option
following the date of the grant of the Option (subject to the requirements of Section 409A of the
Code). Notwithstanding the foregoing provisions of this Section 6.2(g), but subject to Section
12.2, a Freestanding Stock Appreciation Right shall generally have the same terms and conditions as
Options, including (i) an exercise price not less than Fair Market Value of one Share on the date
of grant or, if applicable, on the date of grant of an Option with respect to a Freestanding Stock
Appreciation Right granted in exchange for an Option (subject to the requirements of Section 409A
of the Code) except in the case of Substitute Awards or in connection with an adjustment provided
in Section 12.2, and (ii) a term not greater than seven (7) years.

     (h) An Award Agreement may provide that if on the last day of the term of a Stock Appreciation
Right the Fair Market Value of one Share exceeds the exercise price per Share of the Stock
Appreciation Right, the Participant has not exercised the Stock Appreciation Right or the tandem
Option (if applicable), and neither the Stock Appreciation Right nor the Option has expired, the
Stock Appreciation Right shall be deemed to have been exercised by the Participant on such day. In
such event, the Company shall make payment to the Participant in accordance with this Section,
reduced by the number of Shares (or cash) required for withholding taxes; any fractional Share
shall be settled in cash, rounded down to the nearest $.01.

     (i) Without the approval of the Company’s shareholders, other than pursuant to Section 12.2,
the Committee shall not (i) reduce the grant price of any Stock Appreciation Right after the date
of grant (ii) cancel any Stock Appreciation Right in exchange for cash or another Award (other than
in connection with a Change of Control, as defined in Section 11.3, or a Substitute Award), or
(iii) take any other action with respect to a Stock Appreciation Right that would be treated as a
repricing under the rules and regulations of the NASDAQ Stock Market.

 

 

     (j) The Committee may impose such terms and conditions on Stock Appreciation Rights granted in
conjunction with any Award (other than an Option) as the Committee shall determine in its sole
discretion.

7. RESTRICTED STOCK

     7.1. Grants. Awards of Restricted Stock may be issued hereunder to Participants either alone
or in addition to other Awards granted under the Plan (a “Restricted Stock Award”), and such
Restricted Stock Awards shall also be available as a form of payment of Performance Awards and
other earned cash-based incentive compensation. A Restricted Stock Award shall be subject to
vesting restrictions during the Vesting Period as specified by the Committee. The Committee has
absolute discretion to determine whether any consideration (other than services) is to be received
by the Company or any Subsidiary as a condition precedent to the issuance of Restricted Stock.

     7.2. Award Agreements. The terms of any Restricted Stock Award granted under the Plan shall
be set forth in an Award Agreement which shall contain provisions determined by the Committee and
not inconsistent with the Plan. The terms of Restricted Stock Awards need not be the same with
respect to each Participant. The Committee may, in its sole discretion and subject to the
limitations imposed under Section 162(m) of the Code and the regulations thereunder in the case of
a Restricted Stock Award intended to comply with the performance-based exception under Code Section
162(m), waive the forfeiture period and any other conditions set forth in any Award Agreement
subject to such terms and conditions as the Committee shall deem appropriate.

     7.3. Rights of Holders of Restricted Stock. Unless otherwise provided in the Award Agreement,
beginning on the date of grant of the Restricted Stock Award and subject to execution of the Award
Agreement, the Participant shall become a shareholder of the Company with respect to all Shares
subject to the Award Agreement and shall have all of the rights of a shareholder, including the
right to vote such Shares and the right to receive distributions made with respect to such Shares.
Except as otherwise provided in an Award Agreement, any Shares or any other property (other than
cash) distributed as a dividend or otherwise with respect to any Restricted Stock Award as to which
the restrictions have not yet lapsed shall be subject to the same restrictions as such Restricted
Stock Award. Notwithstanding the provisions of this Section, cash dividends with respect to any
Restricted Stock Award and any other property (other than cash) distributed as a dividend or
otherwise with respect to any Restricted Stock Award that vests based on achievement of performance
goals shall be subject to restrictions and risk of forfeiture to the same extent as the Restricted
Stock with respect to which such cash, Shares or other property has been distributed.

     7.4. Issuance of Shares. Any Restricted Stock granted under the Plan may be evidenced in such
manner as the Board may deem appropriate, including book-entry registration or issuance of a stock
certificate or certificates, which certificate or certificates shall be held by the Company. Such
certificate or certificates shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the restrictions applicable to such Restricted Stock.

8. OTHER SHARE-BASED AWARDS

     8.1. Grants. Other Awards of Shares and other Awards that are valued in whole or in part by
reference to, or are otherwise based on, Shares or other property (collectively “Other Share-Based
Awards”), including deferred stock units, may be granted hereunder to Participants, in addition to
other Awards granted under the Plan. Other Share-Based Awards shall also be

 

 

available as a form of payment of other Awards granted under the Plan and other earned
cash-based compensation (including Directors’ fees). Prior to granting any Other Share-Based Awards
to be settled upon a Change of Control (as that term may be defined in an Award Agreement), the
Committee shall consider the implications of Section 409A of the Code on, and take any action or
adopt any provision with respect to, such Other Share-Based Award that it deems necessary or
appropriate in its sole discretion.

     8.2. Award Agreements. The terms of Other Share-Based Awards granted under the Plan shall be
set forth in an Award Agreement, or in a sub-plan forming part of the Plan, which shall contain
provisions determined by the Committee and not inconsistent with the Plan. The terms of such Awards
need not be the same with respect to each Participant. Notwithstanding the provisions of this
Section, any property (other than cash) distributed as a dividend or otherwise with respect to the
number of Shares covered by an Other Share-Based Award that vests based on achievement of
performance goals shall be subject to restrictions and risk of forfeiture to the same extent as the
Shares covered by such Award with respect to which such cash, Shares or other property has been
distributed. Other Share-Based Awards may be subject to vesting restrictions during the Vesting
Period as specified by the Committee.

     8.3. Payment. Except as provided in Article 10 or as may be provided in an Award Agreement,
Other Share-Based Awards may be paid in cash, Shares, other property, or any combination thereof,
in the sole discretion of the Committee at the time of payment. Other Share-Based Awards may be
paid in a lump sum or in installments or, in accordance with procedures established by the
Committee, on a deferred basis subject to the requirements of Section 409A of the Code.

     8.4. Deferral of Director Fees and Other Compensation. Directors shall, if determined by the
Board, receive Other Share-Based Awards in the form of deferred stock units in lieu of all or a
portion of their annual retainer. In addition, to the extent permitted by the Committee (i)
Directors may elect to receive Other Share-Based Awards in the form of deferred stock units in lieu
of all or a portion of their annual and committee retainers and annual meeting fees and (ii)
Employees may elect to receive Other Share-Based Awards in the form of deferred stock units in lieu
of all or a portion of their compensation for services to the Company. The Committee shall, in its
absolute discretion, establish such rules and procedures as it deems appropriate for such elections
and for the payment the deferred stock units, including (but not limited to) with respect to the
requirements of Section 409A of the Code.

9. PERFORMANCE AWARDS

     9.1. Grants. Performance Awards in the form of Performance Shares or Performance Units, as
determined by the Committee in its sole discretion, may be granted hereunder to Participants, for
no consideration or for such minimum consideration as may be required by applicable law, either
alone or in addition to other Awards granted under the Plan. The performance goals to be achieved
for each Performance Period shall be conclusively determined by the Committee and may be based upon
the criteria set forth in Section 10.2.

     9.2. Award Agreements. The terms of any Performance Award granted under the Plan shall be set
forth in an Award Agreement which shall contain provisions determined by the Committee and not
inconsistent with the Plan, including whether such Awards shall have Dividend Equivalents (subject
to the requirements of Section 12.6). The terms of Performance Awards need not be the same with
respect to each Participant.

 

 

     9.3. Terms and Conditions. The performance criteria to be achieved during any Performance
Period and the length of the Performance Period shall be determined by the Committee upon the grant
of each Performance Award. The amount of the Award to be distributed shall be conclusively
determined by the Committee.

     9.4. Payment. Except as provided in Article 11 or as may be provided in an Award Agreement,
Performance Awards will be distributed only after the end of the relevant Performance Period.
Performance Awards may be paid in cash, Shares, other property, or any combination thereof, in the
sole discretion of the Committee at the time of payment. Performance Awards may be paid in a lump
sum or in installments following the close of the Performance
Period or, in accordance with procedures established by the Committee, on a deferred basis subject
to the requirements of Section 409A of the Code.

10. CODE SECTION 162(m) PROVISIONS

     10.1. Covered Employees. Notwithstanding any other provision of the Plan, if the Committee
determines at the time a Restricted Stock Award, a Performance Award or an Other Share-Based Award
is granted to a Participant who is, or is likely to be, as of the end of the tax year in which the
Company would claim a tax deduction in connection with such Award, a Covered Employee, then the
Committee may provide that this Article 10 is applicable to such Award.

     10.2. Performance Criteria. If the Committee determines that a Restricted Stock Award, a
Performance Award or an Other Share-Based Award is subject to this Article 10, the lapsing of
restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as
applicable, shall be subject to the achievement of one or more objective performance goals
established by the Committee, which shall be based on the attainment of specified levels of one or
any combination of the following: net revenue; revenue growth; pre-tax income before allocation of
corporate overhead and bonus; earnings per share; net income; division, group or corporate
financial goals; return on shareholders’ equity; total shareholder return; return on assets;
attainment of strategic and operational initiatives; appreciation in and/or maintenance of the
price of the Shares or any other publicly-traded securities of the Company; market share; gross
profits; earnings before taxes, earnings before interest and taxes earnings before interest, taxes,
depreciation and amortization; economic value-added models; comparisons with various stock market
indices; reductions in costs; cash flow, cash flow per share; return on invested capital; cash flow
return on investment; and improvement in or attainment of expense levels on working capital levels
of the Company or any Subsidiary, division, business segment or business unit of the Company for or
within which the Participant is primarily employed. Such performance goals also may be based solely
by reference to the Company’s performance or the performance of a Subsidiary, division, business
segment or business unit of the Company, or based upon the relative performance of other companies
or upon comparisons of any of the indicators of performance relative to other companies. The
Committee may also exclude the impact of an event or occurrence which the Committee determines
should appropriately be excluded, including (a) restructurings, discontinued operations,
extraordinary items, and other unusual or non-recurring charges, (b) an event either not directly
related to the operations of the Company or not within the reasonable control of the Company’s
management, or (c) the cumulative effects of tax or accounting changes in accordance with generally
accepted accounting principles. Such performance goals shall be set by the Committee within the
time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of
the Code, and the regulations thereunder.

 

 

     10.3. Adjustments. Notwithstanding any provision of the Plan (other than Article 11), with
respect to any Restricted Stock Award, Performance Award or Other Share-Based Award that is subject
to this Section 10, the Committee may adjust downwards, but not upwards, the amount payable
pursuant to such Award, and the Committee may not waive the achievement of the applicable
performance goals except in the case of the death or disability of the Participant or as otherwise
determined by the Committee in special circumstances.

     10.4. Restrictions. The Committee shall have the power to impose such other restrictions on
Awards subject to this Article as it may deem necessary or appropriate to ensure that such Awards
satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)
of the Code.

     10.5. Limitations on Grants to Individual Participant. Subject, in each case, to adjustment
as provided in Section 12.2, the Company may grant (i) Options or Stock Appreciation Rights during
any 12-month period to a Participant for up to a maximum of 2,000,000 Shares and (ii) up to a
maximum of an additional 900,000 Shares with respect to Restricted Stock Awards, Performance Awards
and/or Other Share-Based Awards during any 12-month period that are intended to comply with the
performance-based exception under Code Section 162(m) and are denominated in Shares (collectively,
the “Share-Based Limitations”). In addition to the foregoing Share-Based Limitations, a Participant
may receive up to an additional $3,000,000 during any 12-month period with respect to Performance
Awards that are intended to comply with the performance-based exception under Code Section 162(m)
and are denominated in cash (the “Cash-Based Limitation and collectively with the Share-Based
Limitations, the “Limitations”). If an Award is cancelled, the cancelled Award shall continue to be
counted toward the applicable Limitations.

11. CHANGE OF CONTROL PROVISIONS

     11.1. Impact on Certain Awards. Award Agreements may provide that in the event of a Change of
Control of the Company (as that term may be defined therein), (a) Options and Stock Appreciation
Rights outstanding as of the date of the Change of Control immediately vest and become fully
exercisable, (b) that Options and Stock Appreciation Rights outstanding as of the date of the
Change of Control may be cancelled and terminated without payment therefor if the Fair Market Value
of one Share as of the date of the Change of Control is less than the per Share Option exercise
price or Stock Appreciation Right grant price, (c) restrictions and deferral limitations on
Restricted Stock lapse and the Restricted Stock becomes free of all restrictions and limitations
and becomes fully vested, (d) all Performance Awards shall be considered to be earned and payable
(either in full or pro rata based on the portion of Performance Period completed as of the date of
the Change of Control), and any limitations or other restrictions shall lapse and such Performance
Awards shall be immediately settled or distributed, and (e) the restrictions and deferral
limitations and other conditions applicable to any Other Share-Based Awards or any other Awards
shall lapse, and such Other Share-Based Awards or such other Awards shall become free of all
restrictions, limitations or conditions and become fully vested and transferable to the full extent
of the original grant.

     11.2. Assumption or Substitution of Certain Awards. (a) Unless otherwise provided in an Award
Agreement, in the event of a Change of Control of the Company of which the successor company
assumes or substitutes for an Option, Stock Appreciation Right, Restricted Stock Award or Other
Share-Based Award (or in which the Company is the ultimate parent corporation and continues the
Award), then each outstanding Option, Stock Appreciation Right, Restricted Stock Award or Other
Share-Based Award shall not be accelerated as described in Sections 11.1(a),

 

 

(c) and (e). For the purposes of this Section 11.2, an Option, Stock Appreciation Right,
Restricted Stock Award or Other Share-Based Award shall be considered assumed or substituted for if
following the Change of Control the Award confers the right to purchase or receive, for each Share
subject to the Option, Stock Appreciation Right, Restricted Stock Award or Other Share-Based Award
immediately prior to the Change of Control, the consideration (whether stock, cash or other
securities or property) received in the transaction constituting a Change of Control by holders of
Shares for each Share held on the effective date of such transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding Shares); provided, however, that if such consideration received in the transaction
constituting a Change of Control is not solely common stock of the successor company, the Committee
may, with the consent of the successor company, provide that the consideration to be received upon
the exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock Award or Other
Share-Based Award, for each Share subject thereto, will be solely common stock of the successor
company substantially equal in fair market value to the per Share consideration received by holders
of Shares in the transaction constituting a Change of Control. The determination of such
substantial equality of value of consideration shall be made by the Committee in its sole
discretion and its determination shall be conclusive and binding. Notwithstanding the foregoing, on
such terms and conditions as may be set forth in an Award Agreement, in the event of a termination
of a Participant’s employment in such successor company within a specified time period following
such Change in Control, each Award held by such Participant at the time of the Change in Control
shall be accelerated as described in Sections 11.1(a), (c) and (e).

     (b) The Committee, in its discretion, may determine that, upon the occurrence of a Change of
Control of the Company, each Option and Stock Appreciation Right outstanding shall terminate within
a specified number of days after notice to the Participant, and/or that each Participant shall
receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount
equal to the excess of the Fair Market Value of such Share immediately prior to the occurrence of
such Change of Control over the exercise price per Share of such Option and/or Stock Appreciation
Right; such amount to be payable in cash, in one or more kinds of stock or property (including the
stock or property, if any, payable in the transaction) or in a combination thereof, as the
Committee, in its discretion, shall determine; provided, however, that if the Fair Market Value of
one Share as of the date of the Change of Control is less than the per Share Option exercise price
or Stock Appreciation Right grant price, the Committee may, in its discretion, cancel and terminate
each such outstanding Option and/or Stock Appreciation Right without payment.

12. GENERALLY APPLICABLE PROVISIONS

     12.1. Amendment and Termination of the Plan. The Board may, from time to time, alter, amend,
suspend or terminate the Plan as it shall deem advisable, subject to any requirement for
shareholder approval imposed by applicable law, including the rules and regulations of the NASDAQ
Stock Market provided that the Board may not amend the Plan in any manner that would result in
noncompliance with Rule 16b-3 of the Exchange Act; and further provided that the Board may not,
without the approval of the Company’s shareholders, amend the Plan to (a) increase the number of
Shares that may be the subject of Awards under the Plan (except for adjustments pursuant to Section
12.2), (b) expand the types of awards available under the Plan, (c) materially expand the class of
persons eligible to participate in the Plan, (d) amend Section 5.3 or Section 6.2(g) to eliminate
the requirements relating to minimum exercise price and shareholder approval, (e) increase the
maximum permissible term of any Option specified by Section 5.4 or the maximum permissible term of
a Freestanding Stock Appreciation Right

 

 

specified in Section 6.2(g), or (f) increase the Limitations in Section 10.5. The Board may
not, without the approval of the Company’s shareholders, except as set forth in Section 12.2, (a)
lower, after it is granted, the option price per Share of an Option or the grant price per Share of
a Stock Appreciation Right, (b) cancel an Option or Stock Appreciation Right in exchange for cash
or another Award (other than in connection with Substitute Awards or a Change of Control, as
defined in Section 11.3), or (c) take any other action with respect to an Option or Stock
Appreciation Right that would be treated as a repricing under the rules and regulations of the
NASDAQ Stock Market. In addition, no amendments to, or termination of, the Plan shall in any way
impair the rights of a Participant under any Award previously granted without such Participant’s
consent.

     12.2. Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other property, other than a
regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other
change in corporate structure affecting the Shares or the value thereof, such adjustments and other
substitutions shall be made to the Plan and to Awards as the Committee deems equitable or
appropriate taking into consideration the accounting and tax consequences, including such
adjustments in the aggregate number, class and kind of securities that may be delivered under the
Plan, the Limitations in Section 10.5, the maximum number of Shares that may be issued pursuant to
Incentive Stock Options, and in the number, class, kind and option or exercise price of securities
subject to outstanding Awards granted under the Plan (including, if the Committee deems
appropriate, the substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company) as the Committee may determine to be appropriate in
its sole discretion; provided, however, that the number of Shares subject to any Award shall always
be a whole number.

     12.3. Transferability of Awards. Except as provided below, no Award and no Shares subject to
Awards described in Article 8 that have not been issued or as to which any applicable restriction,
performance or deferral period has not lapsed, may be sold, assigned, transferred, pledged or
otherwise encumbered, other than by will or the laws of descent and distribution, and such Award
may be exercised during the life of the Participant only by the Participant or the Participant’s
guardian or legal representative. To the extent and under such terms and conditions as determined
by the Committee, a Participant may assign or transfer an Award (each transferee thereof, a
“Permitted Assignee”) to (i) the Participant’s spouse, children or grandchildren (including any
adopted and step children or grandchildren), parents, grandparents or siblings, (ii) to a trust for
the benefit of one or more of the Participant or the persons referred to in clause (i), (iii) to a
partnership, limited liability company or corporation in which the Participant or the persons
referred to in clause (i) are the only partners, members or shareholders or (iv) for charitable
donations; provided that such Permitted Assignee shall be bound by and subject to all of the terms
and conditions of the Plan and the Award Agreement relating to the transferred Award and shall
execute an agreement satisfactory to the Company evidencing such obligations; and provided further
that such Participant shall remain bound by the terms and conditions of the Plan.

     12.4. Termination of Employment. The Committee shall determine and set forth in each Award
Agreement whether any Awards granted in such Award Agreement will continue to be exercisable, and
the terms of such exercise, on and after the date that a Participant ceases to be employed by or to
provide services to the Company or any Subsidiary (including as a Director), whether by reason of
death, disability, voluntary or involuntary termination of employment or services, or otherwise.
The date of termination of a Participant’s employment or services will be determined by the
Committee, which determination will be final.

 

 

     12.5. One-Time Option Exchange Offer. Notwithstanding any other provision of the Plan to the
contrary, upon approval by the Company’s shareholders of this Section 12.5 in connection with the
Company’s 2009 Annual Meeting, the Committee may provide for, and the Company may implement, a
one-time-only option exchange offer, pursuant to which certain outstanding Options could, at the
election of the person holding such Option, be tendered to the Company for cancellation in exchange
for the issuance of a lesser amount of Options with a lower exercise price, provided that such
one-time-only option exchange offer is commenced within 12 months of the date of such shareholder
approval at the Company’s 2009 Annual Meeting.

     12.6. Deferral; Dividend Equivalents. The Committee shall be authorized to establish
procedures pursuant to which the payment of any Award may be deferred, subject to the requirements
of Code Section 409A. Subject to the provisions of the Plan and any Award Agreement, the recipient
of an Award other than an Option or Stock Appreciation Right may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, amounts equivalent to cash,
stock or other property dividends on Shares (“Dividend Equivalents”) with respect to the number of
Shares covered by the Award, as determined by the Committee, in its sole discretion. The Committee
may provide that the Dividend Equivalents (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested and may provide that the Dividend Equivalents are subject
to the same vesting or performance conditions as the underlying Award. Notwithstanding the
foregoing, Dividend Equivalents distributed in connection with an Award that vests based on the
achievement of performance goals shall be subject to restrictions and risk of forfeiture to the
same extent as the Award with respect to which such cash, stock or other property has been
distributed.

13. MISCELLANEOUS

     13.1. Award Agreements. Each Award Agreement shall either be (a) in writing in a form
approved by the Committee and executed by the Company by an officer duly authorized to act on its
behalf, or (b) an electronic notice in a form approved by the Committee and recorded by the Company
(or its designee) in an electronic recordkeeping system used for the purpose of tracking one or
more types of Awards as the Committee may provide; in each case and if required by the Committee,
the Award Agreement shall be executed or otherwise electronically accepted by the recipient of the
Award in such form and manner as the Committee may require. The Committee may authorize any officer
of the Company to execute any or all Award Agreements on behalf of the Company. The Award Agreement
shall set forth the material terms and conditions of the Award as established by the Committee
consistent with the provisions of the Plan.

     13.2. Tax Withholding. The Company shall have the right to make all payments or distributions
pursuant to the Plan to a Participant (or a Permitted Assignee thereof) (any such person, a
“Payee”) net of any applicable federal, state and local taxes required to be paid or withheld as a
result of (a) the grant of any Award, (b) the exercise of an Option or Stock Appreciation Right,
(c) the delivery of Shares or cash, (d) the lapse of any restrictions in connection with any Award
or (e) any other event occurring pursuant to the Plan. The Company or any Subsidiary shall have the
right to withhold from wages or other amounts otherwise payable to such Payee such withholding
taxes as may be required by law, or to otherwise require the Payee to pay such withholding taxes.
If the Payee shall fail to make such tax payments as are required, the Company or its Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to such Payee or to take such other action as may be necessary to satisfy
such withholding obligations. The Committee shall be authorized to establish procedures for
election by Participants to satisfy such obligation for the payment of such taxes by tendering
previously acquired Shares (either actually or by attestation,

 

 

valued at their then Fair Market Value), or by directing the Company to retain Shares (up to
the Participant’s minimum required tax withholding rate or such other rate that will not cause an
adverse accounting consequence or cost) otherwise deliverable in connection with the Award.

     13.3. Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the grant of an
Award hereunder shall confer upon any Employee or Director the right to continue in the employment
or service of the Company or any Subsidiary or affect any right that the Company or any Subsidiary
may have to terminate the employment or service of (or to demote or to exclude from future Awards
under the Plan) any such Employee or Director at any time for any reason. Except as specifically
provided by the Committee, the Company shall not be liable for the loss of existing or potential
profit from an Award granted in the event of termination of an employment
or other relationship. No Employee or Director shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment of Employees or Directors under
the Plan.

     13.4. Prospective Recipient. The prospective recipient of any Award under the Plan shall not,
with respect to such Award, be deemed to have become a Participant, or to have any rights with
respect to such Award, until and unless such recipient shall have executed an agreement or other
instrument evidencing the Award and delivered a copy thereof to the Company, and otherwise complied
with the then applicable terms and conditions.

     13.5. Substitute Awards. Notwithstanding any other provision of the Plan, the terms of
Substitute Awards may vary from the terms set forth in the Plan to the extent the Committee deems
appropriate to conform, in whole or in part, to the provisions of the awards in substitution for
which they are granted.

     13.6. Cancellation of Award. Notwithstanding anything to the contrary contained herein, an
Award Agreement may provide that the Award shall be canceled if the Participant, without the
consent of the Company, while employed by the Company or any Subsidiary or after termination of
such employment or service, engages in activity that violates any agreement between the Company or
any Subsidiary and Participant, including any agreement not to compete with the Company, as
determined by the Committee in its sole discretion. The Committee may provide in an Award Agreement
that if within the time period specified in the Agreement the Participant establishes a
relationship with a competitor or engages in an activity referred to in the preceding sentence, the
Participant will forfeit any gain realized on the vesting or exercise of the Award and must repay
such gain to the Company.

     13.7. Stop Transfer Orders. All certificates for Shares delivered under the Plan pursuant to
any Award shall be subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

     13.8. Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company or any Subsidiary, division or business unit
of the Company. Any income or gain realized pursuant to Awards under the Plan and any Stock
Appreciation Rights constitute a special incentive payment to the Participant and shall not be
taken into account, to the extent permissible under applicable law, as compensation for purposes of
any of the employee benefit plans of the Company or any Subsidiary except as may

 

 

be determined by the Committee or by the Board or board of directors of the applicable
Subsidiary.

     13.9. Other Plans. Nothing contained in the Plan shall prevent the Board from adopting other
or additional compensation arrangements, subject to shareholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.

     13.10. Severability. The provisions of the Plan shall be deemed severable. If any provision
of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall
remain in full force and effect, and (b) not affect any other provision of the Plan or part
thereof, each of which shall remain in full force and effect. If the making of any payment or the
provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid
or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or
unenforceability shall not prevent any other payment or benefit from being made or provided under
the Plan, and if the making of any payment in full or the provision of any other benefit required
under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such
unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being
made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable,
and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be
made or provided under the Plan.

     13.11. Construction. As used in the Plan, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed
by the words “without limitation.”

     13.12. Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are greater than those of
a general creditor of the Company. In its sole discretion, the Committee may authorize the creation
of trusts or other arrangements to meet the obligations created under the Plan to deliver the
Shares or payments in lieu of or with respect to Awards hereunder; provided, however, that the
existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.

     13.13. Governing Law. The Plan and all determinations made and actions taken thereunder, to
the extent not otherwise governed by the Code or the laws of the United States, shall be governed
by the laws of the State of Washington, without reference to principles of conflict of laws, and
construed accordingly.

     13.14. Effective Date; Termination. This amendment and restatement of the Plan shall be
effective on Exchange Program Closing Date. The amendment and restatement of the Plan shall be null
and void and of no effect if the Company, for any reason, does not close the Exchange Program.
Awards may be granted under the Plan at any time and from time to time on or prior to the tenth
anniversary of the effective date of the amendment and restatement of the Plan, on which date the
Plan will expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall
remain in effect until they have been exercised or terminated, or have expired.

 

 

     13.15. Foreign Employees. Awards may be granted to Participants who are foreign nationals or
employed outside the United States, or both, on such terms and conditions different from those
applicable to Awards to Employees employed in the United States as may, in the judgment of the
Committee, be necessary or desirable in order to recognize differences in local law or tax policy.
The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize
the Company’s obligation with respect to tax equalization for Employees on assignments outside
their home country.

     13.16. Compliance with Section 409A of the Code. This Plan is intended to comply and shall be
administered in a manner that is intended to comply with Section 409A of the Code and shall be
construed and interpreted in accordance with such intent. To the extent that an Award or the
payment, settlement or deferral thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with Section 409A of the Code,
including regulations or other guidance issued with respect thereto, except as otherwise determined
by the Committee. Any provision of this Plan that would cause the grant of an Award or the payment,
settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended to
comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis,
in accordance with regulations and other guidance issued under Section 409A of the Code.

     13.17. Captions. The captions in the Plan are for convenience of reference only, and are not
intended to narrow, limit or affect the substance or interpretation of the provisions contained
herein.

     13.18. Conditions to Issuance of Shares. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may be necessary or
appropriate. Shares (or if applicable, cash or other property) shall not be issued pursuant to an
Award unless, as determined by the Company, the issuance and delivery of the Shares (or if
applicable, cash or other property) complies with all such laws, rules, regulations and approvals.exv10w2

Exhibit 10.2

RealNetworks, Inc.

Amendment No. 1 to the RealNetworks, Inc. 2000 Stock Option Plan,

as amended and restated on June 1, 2001

	1.	 	A new Section 7.13 is added to the RealNetworks, Inc. 2000 Stock Option Plan, as amended and
restated on June 1, 2001, to read as follows:

     “Section 7.13. Notwithstanding any other provision of the Plan to the contrary, upon
approval of the Company’s shareholders of this Section, the Administrative Committee may
provide for, and the company may implement, a one-time-only option exchange offer, pursuant
to which certain outstanding Options could, at the election of the person holding such
Option, be tendered to the Company for cancellation in exchange for the issuance of a
lesser amount of Options with a lower exercise price, provided that such one-time-only
option exchange offer is commenced within 12 months of the date of such shareholder
approval.”

     This Amendment No. 1 is effective on December 17, 2009, and was approved by the Board of
Directors of RealNetworks, Inc. on July 24, 2009 and by the shareholders of RealNetworks, Inc. on
September 21, 2009.

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