REALNETWORKS, INC. CHANGE IN CONTROL AND SEVERANCE AGREEMENT
Exhibit 10.4
REALNETWORKS, INC.
This Change in Control and Severance Agreement (the “Agreement”) is made and entered into by
and between Xxxxxx Xxxxxxx (“Executive”) and RealNetworks, Inc., a Washington corporation (the
“Company”), effective as of February 24, 2010 (the “Effective Date”).
RECITALS
1. It is possible that the Company could terminate Executive’s employment with the Company and
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 or the occurrence of 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 his 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 and with certain additional benefits upon 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.
(a) Termination without Cause or Resignation for Good Reason not in Connection with a
Change in Control. If the Company terminates Executive’s employment with the Company for a
reason other than Cause or Executive’s death or disability, or if Executive resigns for Good
Reason, and such termination occurs other than during the period commencing three (3) months before
and ending twenty-four (24) months following a Change in Control, then, in each case subject to
Section 4, Executive will receive the following severance benefits from the Company:
(i) Severance Payment. The Company will pay Executive a lump sum payment in an amount
equal to Executive’s base salary, as in effect immediately prior to Executive’s termination of
employment (unless such 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 base salary
as in effect immediately prior to such reduction), 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, if any, of (A) the maximum amount of
Executive’s future Retention Payments (as defined under the Retention Letter) and (B) the Bonus
Payment (as defined under the Retention Letter).
(ii) Equity. (A) Fifty percent (50%) of the shares of the Company’s common stock
(“Shares”) subject to the stock option award covering 500,000 Shares at an exercise price of $4.27
granted to Executive on February 1, 2010 (the “Promotion Option”), or such lesser number of Shares
subject to the Option that remain unvested and outstanding as of the date of Executive’s
termination of employment (i.e., up to a maximum of 250,000 outstanding and unvested Shares subject
to the Option as of the date of Executive’s termination of employment); and (B) one hundred percent
(100%) of the Shares subject to the stock option award covering 60,000 Shares at an exercise price
determined as of February 17, 2010, and with a vesting commencement date of January 12, 2010 (the
“Acting CEO Option”) that remain unvested and outstanding as of the date of Executive’s termination
of employment, in each case 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 later of (x) the date of Executive’s termination of employment or (y) the date of
Executive’s termination of service as a member of the Board, in which to exercise the Promotion
Option and the Acting CEO Option, but in no event will either option be permitted to be exercised
beyond such option’s original maximum term to expiration.
(iii) 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
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goals) to the extent not already paid, payable within forty-five (45) days following the date
of Executive’s termination of employment.
(b) Termination without Cause or Resignation for Good Reason in Connection with a Change
in Control. 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, then, in each case subject to Section 4, Executive will
receive the following severance from the Company:
(i) 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, within thirty (30) days following the date of Executive’s termination of employment, the
Company shall pay Executive the remaining unpaid amount, if any, of (A) the maximum amount of
Executive’s future Retention Payments and (B) the Bonus Payment.
(ii) 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 (iv) 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.
(iii) 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.
(iv) 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 later
of (x) the date of Executive’s termination of employment or (y) the date of Executive’s termination
of service as a member of the Board, 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(b)(iv) will not apply to
any of Executive’s stock options to purchase shares of the Company’s common stock
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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.
(v) 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.
(c) 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), for Cause by the Company 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.
(d) 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
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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).
(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 Sections 3(a) or (b) 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
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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 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 5
will be
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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 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
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(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 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
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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.
(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 a 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)); provided, however, that
a change in Executive’s position from Acting Chief Executive Officer of the Company to the position
of President of the Company will not constitute “Good Reason”;
(ii) Executive no longer retains the title of President or Chief Executive Officer of the
Company after Executive’s transition out of his role as Acting Chief Executive Officer of the
Company;
(iii) 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 (iii));
(iv) 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 (iv)); and
(v) 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 (v).
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.
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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. 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 General Counsel
of the Company (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.
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(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
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.
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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/ Xxxxx X. Xxx | |||||
| Title: Vice President, Corporate Development, Deputy | ||||||
| General Counsel and Corporate Secretary | ||||||
EXECUTIVE
|
By: | /s/ Xxxxxx Xxxxxxx | ||||
| Title: President and Acting Chief Executive Officer | ||||||
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