Mr. John J.
Giamatteo
c/o RealNetworks, Inc.
2601 Elliott Avenue
Seattle, WA 98121
This letter amends and
restates the terms of the letter dated June 24, 2008 related
to your promotion to Chief Operating Officer (“COO”)
for RealNetworks, Inc. and acts as an addendum to the original
offer letter you received on May 24, 2005; all other terms of
employment that you previously agreed to will apply.
This promotion has been
approved by the Board of Directors, and comes in recognition of the
outstanding work you have done at RealNetworks, Inc. since you
joined RealNetworks in 2005. Your new annual salary will be
increased to $435,000 per annum (subject to normal withholdings).
It will take effect upon the receipt of the written formal
acceptance of this offer.
As part of this promotion,
you will also continue to be eligible for the company’s
executive incentive MBO program, allowing you to earn an annual
bonus of up to 100% of your base salary, based on the achievement
of specific business goals. As such, you are eligible to earn
$435,000 upon meeting these MBO business goals, for an annual
targeted total compensation of $870,000. The Comp Committee of the
Board of Directors has approved, in principle, a modification to
your 2009 Executive MBO plan that will allow for a potential
maximum payout opportunity of 200%, depending on the achievement of
specified performance goals . Please note that your participation
will remain in effect only in those quarters during which you are
employed as an executive on the first and last day of the
quarter.
You will receive two
equity awards in connection with your appointment as COO of
RealNetworks. Upon your acceptance of the terms of this letter,
stock options for the purchase of 375,000 shares of RealNetworks
Common Stock will be granted to you having an exercise price equal
to the closing price of RealNetworks Common Stock as reported on
NASDAQ on the date the options are granted (the “Grant
Date”). These options will vest as follows, and as set forth
on Exhibit A (assuming continued employment with Real): 75,000
options will vest thirty months after the Grant Date, 75,000
options will vest thirty-six months after the Grant Date, 112,500
options will vest forty-two months after the Grant Date and the
remaining 112,500 options will vest forty-eight months after the
Grant Date. In addition, 208,333 restricted stock units
(“RSUs”) will be granted to you on the Grant Date. The
RSUs will vest as follows (assuming continued employment with
Real): 33,333 RSUs will vest twelve months after the Grant Date,
50,000 RSUs will vest twenty-four months after the Grant Date,
25,000 RSUs will vest thirty months after the Grant Date, 25,000
RSUs will vest thirty-six months after the Grant Date, 37,500 RSUs
will vest forty-two months after the Grant Date and the
remaining 37,500 RSUs will
vest forty-eight months after the Grant Date. The stock options and
RSUs will be granted pursuant to the RealNetworks, Inc. 2005 Stock
Incentive Plan, as amended and restated (the “2005
Plan”), and will be subject to all of the terms and
conditions of the 2005 Plan and the agreement evidencing each
equity award.
Additionally, in the event
that Real decides to terminate your employment without cause during
the first two years of vesting for these RSU and stock option
awards, there will be accelerated vesting applicable to the RSUs
and stock options as further described herein. If your employment
is termi
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