Exhibit 10.1
May 24, 2005
John J. Giamatteo
Moto Azabu, Minato-ku, Japan
Dear John:
I am extremely pleased to offer
you employment at RealNetworks, Inc. (Real) as Executive Vice
President, Worldwide Business Products and Services. Your start
date will be determined at a later date.
This offer is for a full-time,
exempt, regular position with Real. Your responsibilities will be
as directed by Real. You will be paid a monthly salary, which is
equivalent on an annualized basis of $350,000.00 (subject to normal
withholdings), payable semi-monthly in accordance with our normal
payroll procedures. You are eligible to earn an annual bonus of up
to 100% of your base salary. Accordingly, you are eligible to earn
$350,000.00 (subject to normal withholdings) in bonus payments
based on meeting MBO target goals set by Real, for an annual target
total compensation of $700,000.00 if you succeed in meeting your
MBO target goals.
A signing bonus of $100,000.00
will be paid to you in two equal installments of $50,000 each: the
first within 30 days of the commencement of your employment
with Real, the second installment will be paid at your six month
anniversary date. This is taxable income. In the event that your
employment with Real is terminated for cause or you resign within
twelve months of the date of these payments, you must return to
Real the full amount of the payments. By signing below, you agree
to reimburse Real in full prior to your termination date, and in
the event that you have not done so, you agree that Real may deduct
the balance due from your final paycheck.
You will also earn equity in Real
under the terms of Real’s 1996 Stock Option Plan. Upon the
start of your employment, you will be eligible for options to
acquire 800,000 RealNetworks shares, which will begin vesting on
your hire date. Of the 800,000 total options, 50,000 options will
fully vest in six months according to the vesting schedule set
forth Attachment A Section 3-Special Acceleration (provided
that you must forfeit those vested options if you voluntarily
terminate your employment before May 1, 2006) and the
remaining 750,000 options will vest according to the seven year
vesting schedule (detailed in attachment A). All of the options
will vest according to the vesting rules and all other provisions
contained in the Plan subject only to the provisions in this letter
regarding acceleration of options vesting schedule. In the event
that you achieve defined and written Accelerating Management Target
Goals set by Real during your first 90 days of employment,
your options will accelerate their vesting as detailed in
attachment A, section 2. Your stock options will be granted on the
date the Compensation Committee of the Company’s Board of
Directors approves the grant of the option (the “Grant
Date”). The exercise price of the stock options granted to
you shall be equal to the fair market value of Real’s Common
Stock on the Grant Date. Fair market value shall equal the last
sales price for shares of Real’s Common Stock on the Grant
Date as reported by the NASDAQ National Market. Please be aware
that unvested stock options are forfeited upon termination of
employment.
Real will provide competitive
Relocation and Housing support to you in your
transition.
Real will specifically cover the
following expenses for you in connection with your relocation from
Tokyo, Japan to Seattle, Washington:
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1.
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You may take up
to two four-day house-hunting trips for you and your immediate
family, including coach airfare, accommodations, and reimbursement
for your reasonable rental car, food and incidental expenses. Real
will arrange for a realtor or apartment finder to show you
different neighborhoods in and around Seattle to assist you with
purchasing or renting a new residence.
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2.
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Real will cover
the costs of (a) moving up to two of your vehicles,
(b) moving your personal goods, (c) temporary housing
with one of Real’s pre-arranged rental agents for up to six
months, and (d) temporary storage for three months. Real will
also cover the cost of your final flight out to Seattle, for you
and your immediate family.
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3.
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In
consideration for incidental and unforeseen costs in the relocation
process, Real will extend a one-time bonus payment of $75,000.00
payable upon the relocation of you and your immediate family to the
Seattle area.
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Some or all of these bonus and
relocation payments or costs may be taxable income. In the event
that your employment with Real is terminated by your own volition,
within twelve months of the date of these payments, you must return
to Real the full amount of all of your relocation payments. By
signing below, you agree to reimburse Real in full prior to your
termination date, and in the event that you have not done so, you
agree that Real may deduct the balance due from your final
paycheck.
You will receive paid vacation,
paid holidays, paid sick leave, and, upon satisfaction of any
eligibility or waiting requirements, medical/dental coverage, 401K
participation, di
