EXHIBIT 10.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into effective as of
the effective date (the "Grant Date") set forth in the Notice of Grant of Stock
Options and Option Agreement attached hereto (the "Notice of Grant"), by
RealNetworks, Inc., a Washington corporation (the "Company"), and you (the
"Holder").
RECITALS
A. The Company has adopted the RealNetworks, Inc. 1996 Stock Option Plan, as
amended and restated (the "Plan"), a copy of which has been provided to the
Holder (capitalized terms that are used but not defined in this Agreement
will have the meanings given those terms in the Plan).
B. The Holder is an employee of the Company or one of its Affiliates (as
defined in the Plan), and has been designated by the Administrative
Committee to receive a stock option under the Plan.
NOW, THEREFORE, the Company and the Holder covenant and agree as follows:
1. GRANT OF THE OPTION. Subject to the terms of this Agreement and the Plan,
the Company hereby grants to the Holder a stock option (the "Option") to
acquire from the Company the number of shares of the Common Stock, par value
$.001, of the Company (the "Common Stock") set forth in the Notice of Grant,
at the price set forth in the Notice of Grant (the "Option Price"). The
Option is not intended to qualify as an "incentive stock option", as that
term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended.
2. TERM OF THE OPTION. Unless earlier terminated in accordance with the
provisions of the Plan, the Option will terminate on the earliest to occur
of (a) the expiration of Twenty (20) years from the Grant Date; (b) the
expiration of ninety (90) days following termination of the Holder's
employment with the Company for any reason other than death, Disability or
Cause (as defined in Section 7.2(b) of the Plan); (c) the expiration of One
(1) year following termination of the Holder's employment with the Company
on account of death or Disability; and (d) the date of termination of the
Holder's employment with the Company for Cause (as defined in Section 7.2(b)
of the Plan); provided, however, that, in the case of termination of the
Holder's employment with the Company for any reason other than death,
Disability or Cause (as defined in Section 7.2(b) of the Plan), if the
Holder dies after such termination but prior to termination of the Option as
set forth in this Section 2 above, the Option will not terminate as set
forth in this Section 2 above, but rather shall terminate on the earlier to
occur of the expiration of Twenty (20) years from the Grant Date or the
expiration of One (1) year following the Holder's death.
3. VESTING. The vesting schedule applicable to the Option shall be as set forth
in the Notice of Grant, subject to sub-paragraphs (a) and (b) below. On any
scheduled vesting date, vesting actually will occur only if you remain an
employee of the Company or any of its Affiliates (as defined in the Plan)
through the vesting date.
(a) Notwithstanding anything in this Agreement to the contrary, if
the Company terminates Holder's employment for any reason other
than for Cause (as defined in Section 7.2(b) of the Plan) and
Holder executes and delivers a Settlement Agreement and Release
("Release") satisfactory to the Company on or before the
Effective Date (as defined in the Release), the vesting schedule
set forth below shall apply instead of the vesting schedule
described in the Notice of Grant.
VESTING UPON EXECUTION OF RELEASE. 1/60 of the shares subject to
the Option shall vest upon the completion of one month of
employment following the date on which the
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vesting of the Option commences, and an additional 1/60 of the
shares subject to the Option shall vest upon the completion of
each successive month of employment thereafter, up to the
Holder's date of termination (as defined in the Release).
(b) If the Holder's employment with the Company terminates for any
reason other than the Holder's death, the Option will not vest
further following such termination. If the Holder's employment
with the Company terminates due to the Holder's death, the Option
will fully vest on the date of termination of employment. In
either case, to the extent the Option is vested, it shall be
exercisable only prior to its termination as provided in Section
2.
4. OTHER LIMITATIONS OF THE OPTION. The Option is subject to all of the
provisions of the Plan, including but not limited to Section 4.2 (which
permits adjustments to the Option upon the occurrence of certain corporate
events such as stock dividends, extraordinary cash dividends,
reclassifications, recapitalizations, reorganizations, split-ups, spin-offs,
combinations, exchanges of shares, and warrants or rights offerings) and
Section 7.1 (which applies in the event of an Approved Transaction or
Control Purchase).
5. EXERCISE OF THE OPTION. To exercise the Option, the Holder must do the
following:
(a) deliver to the Company a written notice, in the form attached to
this Agreement as Exhibit A, specifying the number of shares of
Common Stock for which the Option is being exercised;
(b) tender payment of the aggregate Option Price for the shares for
which the Option is being exercised, which payment may be made (i)
in cash or by check; or (ii) by such other means as the
Administrative Committee, in its sole discretion, shall permit at
the time of exercise;
(c) pay, or make arrangements satisfactory to the Administrative
Committee for payment to the Company of all federal, state and local
taxes, if any, required to be withheld by the Company in connections
with the exercise of the Option; and
(d) execute and deliver to the Company the documents required by the
Plan and any other documents required from time to time by the
Administrative Committee in order to promote compliance with
applicable laws, rules and regulations.
6. DELIVERY OF SHARE CERTIFICATE. As soon as practicable after the Option has
been duly exercised, the Company will deliver to the Holder a certificate
for the shares of Common Stock for which the Option was exercised. Unless
the Option has expired or been exercised in full, the Company and the Holder
agree to execute a new Stock Option Agreement, covering the remaining shares
of Common Stock that may be acquired upon exercise of the Option, which will
be identical to this Agreement except as to the number of shares of Common
Stock subject thereto. In lieu of replacing this Agreement in such manner,
the Company may affix to this Agreement an appropriate notation indicating
the number of shares for which the Option was exercised and return this
Agreement to the Holder.
7. NONTRANSFERABILITY. The Option is not transferable other than by will or the
laws of descent and distribution, and the Option may be exercised during the
lifetime of the Holder only by the Holder or the Holder's court appointed
legal representative.
8. WARRANTIES AND REPRESENTATIONS OF THE HOLDER. By executing this Agreement,
the Holder accepts the Option, acknowledges receipt of a copy of the Plan
and the Prospectus, and agrees to comply with all of the provisions of this
Agreement.
9. RIGHTS OF THE SHAREHOLDER. The Holder will have no rights as a shareholder
of the Company on account of the Option or on account of shares of Common
Stock which will be acquired upon exercise of the Option (but with respect
to which no certificates have been issued).
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10. TAX WITHHOLDING. The Holder agrees to pay, or to make arrangements
satisfactory to the Administrative Committee for payment to the Company of,
all federal, state and local income and employment taxes, if any, required
to be withheld by the Company in connection with the exercise of the Option
or any sale, transfer or other disposition of any shares of Common Stock
acquired upon exercise of the Option. If the Holder fails to do so, then the
Holder hereby authorizes the Company to deduct all or any portion of such
taxes from any payment of any kind otherwise due to the Holder.
11. POLICY ON AVOIDANCE OF XXXXXXX XXXXXXX. The Holder acknowledges that he/she
has received and read the RealNetworks Policy on Avoidance of Xxxxxxx
Xxxxxxx, and, if applicable, the Addendum to the Policy on Avoidance of
Xxxxxxx Xxxxxxx, and the Holder agrees to comply with the Policy's terms,
together with the terms of the Addendum, if applicable.
12. FURTHER ASSURANCES. The Holder agrees from time to time to execute such
additional documents as the Company may reasonably require to effectuate the
purposes of the Plan and this Agreement.
13. BINDING EFFECT. This Agreement shall be binding upon the Holder and the
Holder's heirs, successors and assigns.
14. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement and the exhibits hereto,
together with the Plan and agreements referenced in this Agreement and/or
the Plan, constitutes the entire agreement and understanding between the
Company and the Holder regarding the subject matter hereof. Except as
otherwise provided in the Plan, no modification of the Option or this
Agreement, or waiver of any provision of this Agreement or the Plan, shall
be valid unless in writing and duly executed by the Company and the Holder.
The failure of any party to enforce any of that party's rights against the
other party for breach of any of the terms of this Agreement shall not be
construed as a waiver of such rights as to any continued or subsequent
breach.
15. COST OF LITIGATION. In any action at law or in equity to enforce any of the
provisions or rights under this Agreement, the unsuccessful party to such
litigation, as determined by the court in a final judgement or decree, shall
pay the successful party or parties all costs, expenses and reasonable
attorneys' fees incurred by the successful party or parties (including
without limitation costs, expenses and fees in any appellate proceedings),
and if the successful party recovers judgment in any such action or
proceeding, such costs, expenses and attorney's fees shall be included as
part of the judgment.
16. GOVERNING LAW. This Agreement shall be governed by the laws of the State of
Washington.
17. SEVERABILITY. If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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EXHIBIT A
FORM OF EXERCISE OF OPTION
To: RealNetworks, Inc.
0000 Xxxxxxx Xxxxxx, #0000
Xxxxxxx, XX 00000
The undersigned holds Option Number NQ-___ (the "Option"), represented by a
Stock Option Agreement dated effective as of ____________ (the "Agreement"),
granted to the undersigned pursuant to the RealNetworks, Inc. 1996 Stock Option
Plan, as Amended and Restated (the "Plan"). The undersigned hereby exercises the
Option and elects to purchase ______________ shares (the "Shares") of Common
Stock of RealNetworks, Inc. (the "Company") pursuant to the Option. This notice
is accompanied by full payment of the Option Price of $______ per share for the
Shares in cash or by check or in another manner permitted by Section 5(c) of the
Agreement. The undersigned has also paid, or made arrangements satisfactory to
the Administrative Committee administering the Plan for payment of, all federal,
state and local taxes, if any, required to be withheld by the Company in
connection with the exercise of the Option.
Date:
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SIGNATURE OF HOLDER
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