0001046327-20-000043.txt : 20200619 0001046327-20-000043.hdr.sgml : 20200619 20200619163112 ACCESSION NUMBER: 0001046327-20-000043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20200618 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200619 DATE AS OF CHANGE: 20200619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REALNETWORKS INC CENTRAL INDEX KEY: 0001046327 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 911628146 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37745 FILM NUMBER: 20976021 BUSINESS ADDRESS: STREET 1: 1501 FIRST AVENUE SOUTH STREET 2: SUITE 600 CITY: SEATTLE STATE: WA ZIP: 98134 BUSINESS PHONE: 2066742700 MAIL ADDRESS: STREET 1: 1501 FIRST AVENUE SOUTH STREET 2: SUITE 600 CITY: SEATTLE STATE: WA ZIP: 98134 8-K 1 a8-k2020executivebonusplan.htm 8-K 2020 BONUS PLAN Document





UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) June 18, 2020
RealNetworks, Inc.
(Exact name of registrant as specified in its charter)
Washington
 
001-37745
 
91-1628146
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
1501 First Avenue South, Suite 600
Seattle, Washington 98134
(Address of principal executive offices) (Zip code)
(206) 674-2700
Registrant's telephone number, including area code
Not Applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
□     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
□     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
□     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
□     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
 
 
 
 
 
Title of each class
 
Trading
symbol(s)
 
Name of each exchange
on which registered
Common stock, par value $0.001 per share
 
RNWK
 
The NASDAQ Stock Market
Preferred Share Purchase Rights
 
RNWK
 
The NASDAQ Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
 o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o







Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On June 18, 2020, the Compensation Committee of the Board of Directors of RealNetworks, Inc. (the "Company") approved the 2020 Executive MBO Plan. The Compensation Committee will administer this plan, which is pursuant to the RealNetworks 2005 Stock Incentive Plan, as amended and restated.

Payouts under the 2020 Executive MBO Plan will be determined by our Compensation Committee and will be based on company financial performance and individual performance. Financial performance will be measured by the achievement of specific financial goals related to contribution margin, with a revenue achievement requirement. Contribution margin is a non-GAAP measure that we define as operating income (loss) including other income (expense) net, but excluding the impact of the following: depreciation and amortization, acquisitions related intangible asset amortization, fair value adjustments to contingent consideration liability, stock-based compensation, restructuring and other charges, and foreign exchange gain (loss). Individual performance will be measured based on specified individual strategic and commercial business objectives.

Any bonuses payable pursuant to the 2020 Executive Bonus Plan will be paid in cash or in the form of fully vested restricted stock units, or a combination thereof.

Item 8.01. Other Events.

As reported in the Current Report on Form 8-K filed by RealNetworks, Inc. on April 29, 2020, the Company received a letter dated April 23, 2020 from the Listing Qualifications Staff of The Nasdaq Stock Market LLC ("Nasdaq Staff") indicating that, based upon the closing bid price of the Company's common stock for the last 30 consecutive business days, the Company no longer met the Nasdaq Listing Rule requirement that listed companies maintain a minimum bid price of at least $1 per share.    

On June 1, 2020, the Company received a second letter from Nasdaq Staff indicating that the Company had regained compliance with Nasdaq Listing Rule 5450(a)(1) based on its determination that for the last 10 business days, from May 15 to May 29, 2020, the closing bid price of the Company's common stock had been at $1.00 per share or greater. Nasdaq Staff further indicated that the matter is now closed.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits
Exhibit No.
 
Description
 
 
10.1
 
 
 









SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
REALNETWORKS, INC.
 
 
By:
 
/s/ Michael Parham
 
 
Michael Parham
 
 
Senior Vice President, General Counsel and Corporate Secretary
Dated: June 18, 2020





EX-10.1 2 ex-2020executivemboplan.htm EXHIBIT 10.1 Exhibit


Exhibit 10.1

RealNetworks, Inc. Executive MBO Plan - Section 16(b) Executive Officers
OBJECTIVE OF THE PLAN
The objective of the RealNetworks’ Executive MBO Plan is to reward participants for their contribution to the company’s success and ensure market competitiveness as we work to attract and retain high caliber talent. RealNetworks has adopted this plan to reward high performance consistent with our core business objectives. The Executive MBO Plan is administered under RealNetworks’ 2005 Stock Incentive Plan, as amended and restated.
EFFECTIVE DATE
The effective date of the 2020 Executive MBO Plan is January 1, 2020 - December 31, 2020. Payout, if earned, will be made by no later than March 15, 2021.
PLAN METRICS
Total attainment for the target period is based on (i) contribution margin by reportable segment (weighted at 75%), with a requirement that a threshold revenue target be achieved, and (ii) strategic leadership and business objectives (weighted at 25%).
Contribution margin is a non-GAAP measure that we define as operating income (loss) and includes other income (expense) net, but excludes the impact of the following: depreciation and amortization; acquisitions related intangible asset amortization; fair value adjustments to contingent consideration liability; stock-based compensation; restructuring and other charges; and foreign currency gain (loss).
MBO PAYOUT MECHANICS
Any bonuses payable pursuant to the Plan may be payable in the form of cash or fully vested equity, or a combination thereof.
Contribution Margin:
 
 
 
With a focus on maintaining fiscal responsibility, the financial portion of the Plan is funded at $0.50 for every $1.00 of corporate contribution margin overachievement of budget. Individual payouts are calculated as % funded multiplied by individual bonus target multiplied by 75% weighting of financial portion of Plan.
Payouts for contribution margin are dependent upon achieving a minimum of 95% of corporate revenue budget.
TERMS AND CONDITIONS





 
 
 
Executive MBO Plan calculations and payments are completed and made after the end of the plan year with payout timing approximately 30 - 45 days after the close of the plan year. In all circumstances, any payouts that are earned in the plan period will be paid by March 15 of the following year, at the latest.

 
 
 
You must be in an eligible position on the first and last day of the month to participate in the plan for that month.

 
 
 
Salary, eligible position changes and/or transfers from one eligible group to another within a month will be based on status at the beginning of the month. Changes after the first day of the month will be reflected in the next month.

 
 
 
In order to receive a payout from the plan you must be on the company’s payroll as of the last day of the plan year and on the company’s payroll as of the date the award is scheduled to be paid, subject to the following. If your employment terminates due to your total and permanent disability or death, you or your estate, still may, in the discretion of the Compensation Committee be eligible to receive any payout that otherwise was earned.

 
 
 
Notwithstanding any other provision of the plan, the Compensation Committee may, in its sole discretion, increase (other than for an officer), reduce or eliminate a participant’s award at any time before it is paid, whether or not calculated on the basis of pre-established performance goals or formulas.

 
 
 
The Compensation Committee has all power and discretion to interpret and administer the plan, including (but not limited to) the power to determine who is eligible for the plan and the size of any payouts.

 
 
 
The Compensation Committee may delegate all or any part of its powers under the plan to the company’s chief executive officer or head of human resources, except that such individual may not administer the plan with respect to participants who are executive officers of the company. (For this purpose, an individual will be considered an executive officer of the company if his or her role at the company falls within the definition of “officer” under Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended.)

 
 
 
The Compensation Committee reserves the right to adjust targets/measurements based on acquisition or disposition of businesses/assets.

 
 
 
The Section 162(m) Participants are the company’s chief executive officer, chief financial officer, and any president or executive vice president.