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EXHIBIT 10.20
April 2, 2004
Sid Ferrales
3108 Alexander Circle NE
Atlanta, GA 30326
Dear Sid:
I am extremely pleased to offer you employment at RealNetworks,
Inc. as Senior
Vice President, Human Resources. Your start date will be finalized
at a later
time but we hope that it will be on or before April 12, 2004.
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 to $240,000 (subject to
normal
withholdings), payable semi-monthly in accordance with our normal
payroll
procedures. You are eligible to earn an annual bonus under the
Company's
Executive MBO Incentive Program. We expect that in 2004 executives
will be
eligible to earn an annual bonus of up to 30% of their base salary,
per the
terms of the Company's Executive MBO Incentive Program. As such,
you will be
eligible to earn an MBO bonus of up to $72,000, based on meeting
MBO target
goals, for a total target annual cash compensation of $312,000.
Performance
targets for the Program will be set in April this year and must be
approved by
the Board of Directors
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 on
200,000 shares, which will begin vesting on your hire date
according to the
vesting rules, and all other provisions contained in the Plan.
Under the Plan,
the first 30% of this grant will vest on the 18-month anniversary
of the grant,
and 10% will vest each six months thereafter. 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 is
forfeited upon
termination of employment.
Real will make the following payments to you in connection with
your relocation
from Austin, Texas to Seattle, WA:
1. A
signing bonus of $30,000 will be paid within 30 days of the
commencement
of your
employment with Real.
2. An
additional bonus of $60,000 will be paid to you in two separate
increments
to assist with relocation and housing costs. The first $10,000
will be
paid within 30 days of the commencement of your employment. The
additional
$50,000 will be paid on January 15, 2005, provided that you
have
purchased or leaseda permanent residence in the immediate
Seattle
area by
that date, or within 15 days of the date you do secure a
permanent
resident,
if later than January 15, 2005.
3. Up to
two 4 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.
4. Real
will cover the costs of those additional items set forth on the
attached
Compensation Summary attached as Attachment A upon the
presentation of receipts.
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Some or all of these bonus and relocation payments or costs may be
taxable
income. If you voluntarily resign your employment with Real within
12 months of
the date of completion of your relocation, or if Real terminates
your
employement for "Cause" (as defined in Real's 1996 Stock Option
Plan) during
such period, you agree to reimburse Real for a pro rata amount of
all of the
payments described above and you authorize Real to deduct from your
final
paycheck any amounts remaining due to Real as of your terminate
date.
You will receive paid vacation, paid holidays, paid sick leave,
and, upon
satisfaction of any eligibility or waiting requirements,
medical/dental
coverage, 401K participation, disability and life insurance
coverage, employee
stock purchase plan participation and other benefits ("Benefits")
as described
in the Real Employee Handbook, Benefit Plan descriptions, and Real
policies, as
they may be amended from time to time. All of these Benefits are
subject to
change upon notice from Real.
You will be regarded as a key employee under certain federal
regulations
governing family and medical leave. This status will require that
you work
closely with us in planning if you develop a need for family or
medical leave.
Also, as a corporate executive, you will be subject to the
Pre-Clearance
Procedures of the Policy on Avoidance of Insider Trading. A copy of
the policy
is attached.
It is our policy that employees may not use or disclose
confidential information
or trade secrets obtained from any source or during any prior
employment. Real
requires employees to abide by all contractual and legal
obligations they may
have to prior employers or others, such as limits on disclosure of
information
or competition. Prior to signing this letter, you must inform us if
you are
subject to any such obligations that would prevent you from working
at Real in
your intended capacity or that would otherwise restrict you in the
performance
of your services to Real. Violation of this requirement may result
in
termination of your employment with Real. By signing this letter,
you further
agree that you will not bring to Real any confidential documents of
another, nor
disclose any confidential information of another, and that you will
comply fully
with these requirements.
Our employment relationship will be terminable at will, which means
that either
you or Real may terminate your employment at any time and for any
reason or no
reason, subject only to the provisions below describing your
obligation to
provide Real with notice, and Real's obligation to make certain
payments if Real
terminates your employment for reasons other than cause. Your right
to receive
these payments described below are subject to and conditioned upon
your signing
a valid general and complete release of all claims (except those
relating to
Real's payment obligations under this letter agreement) against
Real (and its
related entities and persons) in a form provided by Real.
You agree that you will provide Real four months notice prior to
you terminating
your employment in the first two years of your employment. In the
event that
Real terminates your employment without Cause in the first two
years of your
employment, we will provide you with four months notice or pay of
your
then-current base salary in lieu of notice through any remaining
portion of the
notice period.
This offer is contingent on: (i) you providing evidence of
employability as
required by federal law (which includes providing Real within 3
days after your
employment commences with acceptable evidence of your identity and
US employment
eligibility), (ii) Real receiving acceptable results from any
background check
or reference check, and (iii) you signing Real's Development,
Confidentiality
and Noncompetition Agreement, attached hereto.
REAL PROVIDES EQUAL OPPORTUNITY IN EMPLOYMENT AND WILL ADMINISTER
ITS POLICIES
WITH REGARD TO RECRUITMENT, TRAINING, PROMOTION,
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TRANSFER, DEMOTION, LAYOFF, TERMINATION, COMPENSATION AND BENEFITS
WITHOUT
REGARD TO RACE, RELIGION, COLOR, NATIONAL ORIGIN, CITIZENSHIP,
MARITAL STATUS,
SEX, SEXUAL ORIENTATION, AGE, DISABILITY OR STATUS AS A DISABLED
VETERAN OR
VETERAN OF THE VIETNAM ERA OR ANY OTHER CHARACTERISTIC OR STATUS
PROTECTED BY
APPLICABLE LAW.
This letter and the Development, Confidentiality and Noncompetition
Agreement,
the 1996 Stock Option Plan, and your Stock Option Agreement,
contain the entire
agreement between you and Real, and supersede all prior oral and
written
discussion, agreements and understandings. This letter may not be
modified
except in writing signed by both you and Real. Any disputes
regarding this
letter or your employment with Real shall be governed by and
construed in
accordance with the laws of the State of Washington. If any
provision of this
letter is deemed to be invalid or unenforceable, at Real's option,
the remaining
terms shall continue in full force and effect.
This offer is valid until April 9, 2004.
Sid, we are excited about the prospect of you joining RealNetworks,
Inc. and
know that you will make significant contributions to our continued
growth and
success. We look forward to working with you. Please call me or
Sandy Gould if
you have questions about this offer letter.
Sincerely,
/s/ Kelly Jo MacArthur
Kelly Jo MacArthur
Senior Vice President and Chief of Staff
RealNetworks, Inc.
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I have read and agree to the terms of employment contained in this
offer letter
and the attached Development, Confidentiality and Noncompetition
Agreement,
which represent a full, complete and fair statement of the offer of
employment
made to me by RealNetworks, Inc.
Sid Ferrales: /s/ Sid
Ferrales
Date: April 12, 2004
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ATTACHMENT A
COMPENSATION SUMMARY
SALARY: $240,000
TARGET BONUS: Up to 30% of base comp. based on meeting MBO
objectives, pending
approval by Comp. Cmte. of Company's 2004 MBO Program and payout
targets
SIGNING BONUS: $30,000
STOCK OPTIONS: 200,000 vesting over 5 years per Option Plan
RELOCATION EXPENSE ASSISTANCE: $60,000
SHIPMENT OF HOUSEHOLD GOODS: 21,000 lb. Maximum (incl. Up to 2
autos)
STORAGE OF HOUSEHOLD GOODS: Maximum 30 days
TEMPORARY HOUSING: Up to 6 months/2 return trips home per month
FINAL MOVE EXPENSES: Not to exceed $2,500
HOME FINDING TRIP: 2 roundtrips for employee & guest, 4-days,
$2000 max
INCIDENTAL EXPENSES: Up to $3000 Homeowner / up to $1500 Renter
TIME OFF FOR HOME FINDING / MOVING: 5 days
REPAYMENT OF ABOVE: Prorated if voluntarily resign or are
terminated for cause
within one year from completion of move
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REALNETWORKS, INC.
DEVELOPMENT, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT
THIS AGREEMENT is made and entered into as of the 12th day of
April, 2004, by
and between RealNetworks, In
