REALNETWORKS INC (Form: 8-K, Received: 04/15/2016 17:19:48)

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) April 15, 2016

RealNetworks, Inc.

(Exact name of registrant as specified in its charter)




Washington	000-23137	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))

Item 1.01. Entry into a Material Definitive Agreement.

On April 15, 2016, RealNetworks, Inc. (the “Company”) entered into (1) an Amendment (the “Amendment”) to the Amended and Restated Shareholder Rights Plan, dated as of December 2, 2008 (the “Rights Agreement”), between the Company and Computershare Inc. (as successor to Mellon Investor Services LLC); and (2) a Shareholder Rights Plan Exception Agreement (the “Exception Agreement”) with Ariel Investments, LLC (“Ariel”).

The effect of the Amendment and the Exception Agreement is to permit Ariel, together with all of its Affiliates (as defined in Rights Agreement) and Associates (as defined in Rights Agreement), to become the Beneficial Owner (as defined in Rights Agreement) of no more than 19.9% of the Company’s common stock then outstanding.

Under the Exception Agreement, if Ariel, together with all of its Affiliates and Associates, is the Beneficial Owner of 15% or more of the Company’s common stock, then, in connection with (1) any meeting of the shareholders of the Company; (2) any action by written consent of the shareholders of the Company in lieu of a meeting; or (3) any other action by the shareholders of the Company, Ariel, together with its Affiliates and Associates, will not, directly or indirectly, exercise, permit or cause to be exercised any voting or other related rights (including, but not limited to, the right to a call a special meeting of the shareholders of the Company) with respect to the shares of the Company’s common stock for which Ariel is the Beneficial Owner and that are in excess of 15% of the Company’s common stock outstanding on the record date for such meeting, action by written consent or other action.

The foregoing is a summary of the terms of the Amendment and the Exception Agreement. The summary does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 4.1 and incorporated herein by reference, and the Exception Agreement, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.

Item 3.03. Material Modification to Rights of Security Holders.

The information set forth under Item 1.01 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.




Exhibit No.		Description

4.1		Amendment to Amended and Restated Shareholder Rights Plan, dated as of April 15, 2016, between RealNetworks, Inc. and Computershare Inc. (as successor to Mellon Investor Services LLC), as rights agent.
10.1		Shareholder Rights Plan Exception Agreement, dated as of April 15, 2016, between RealNetworks, Inc. and Ariel Investments, LLC.

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: April 15, 2016

EXHIBIT INDEX



Exhibit No.	Description

4.1	Amendment to Amended and Restated Shareholder Rights Plan, dated as of April 15, 2016, between RealNetworks, Inc. and Computershare Inc. (as successor to Mellon Investor Services LLC), as rights agent.
10.1	Shareholder Rights Plan Exception Agreement, dated as of April 15, 2016, between RealNetworks, Inc. and Ariel Investments, LLC.

Exhibit 4.1

AMENDMENT TO AMENDED AND RESTATED

SHAREHOLDER RIGHTS PLAN

by and between

RealNetworks, Inc.

and

Computershare Inc.

This Amendment to Amended and Restated Shareholder Rights Plan (this “Amendment”) is made and entered into as of April 15, 2016 between RealNetworks, Inc., a Washington corporation (the “Company”), and Computershare Inc., a Delaware corporation and successor-in-interest to Mellon Investor Services LLC, as rights agent (the “Rights Agent”). Except as otherwise provided herein, all capitalized terms used herein shall have the meanings ascribed thereto in the Amended and Restated Shareholder Rights Plan by and between the Company and the Rights Agent dated as of December 2, 2008 (the “Agreement”).

WHEREAS, the Company and the Rights Agent are parties to the Agreement.

WHEREAS, pursuant to Section 27 of the Agreement, prior to the occurrence of a Distribution Date, the Company may and the Rights Agent shall, if the Company so directs, amend the Agreement in any respect without the approval of any holders of Rights.

WHEREAS, no Distribution Date has occurred to date and the Company desires to amend certain provisions of the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth in the Agreement and this Amendment, the parties hereto hereby agree as follows:


1.	Amendment of Agreement . Section 1(a) of the Agreement, which sets forth the definition of “Acquiring Person,” is hereby amended to read in its entirety as follows:

“ Acquiring Person ” shall mean any Person, who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of fifteen percent (15%) or more of the Common Shares then outstanding, but shall not include


i.	the Company,


ii.	any Subsidiary of the Company,

iii.

Ariel Investments, LLC, a Delaware limited liability company (“Ariel”), together with all Affiliates and Associates of Ariel, for so long as (1) Ariel is a party to, and in the good faith determination of the Board is in compliance with, that certain Shareholder Rights Plan Exception Agreement by and between the Company and Ariel (the “Exception Agreement”) and (2) Ariel, together with its Affiliates and Associates, is the Beneficial Owner of no more than 19.9% of the Common Shares then outstanding,


iv.	the Grandfathered Shareholder or


v.	any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan.

Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to fifteen percent (15%) (or 19.9% in the case of Ariel and its Affiliates and Associates during such time as Ariel is, in the good faith determination of the Board, in compliance with the Exception Agreement) or more of the Common Shares of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of fifteen percent (15%) (or 19.9% in the case

Exhibit 4.1

of Ariel and its Affiliates and Associates during such time as Ariel is, in the good faith determination of the Board, in compliance with the Exception Agreement) or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), then such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional Common Shares of the Company such Person does not beneficially own fifteen percent (15%) (or 19.9% in the case of Ariel and its Affiliates and Associates during such time as Ariel is, in the good faith determination of the Board, in compliance with the Exception Agreement) or more of the Common Shares of the Company then outstanding. Notwithstanding the foregoing, if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a) , has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of the Common Shares that would otherwise cause such Person to be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a) , or (B) such Person was aware of the extent of the Common Shares it beneficially owned but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without any intention of changing or influencing control of the Company, and if such Person divested or divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a) , then such Person shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this Agreement including, without limitation Section 1(a) hereof.


2.	Confirmation of Agreement . Except as amended or modified hereby, all terms, covenants and conditions of the Agreement as heretofore in effect shall remain in full force and effect and are hereby ratified and confirmed in all respects.

Governing Law . This Amendment shall be deemed to be a contract made under the laws of the State of Washington and for all purposes shall be governed by and construed under the laws of such State applicable to contracts to be made and performed entirely within such State; provided , however , that all provisions regarding the rights, duties and obligations of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

Counterparts . This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Amendment executed and/or transmitted electronically shall have the same authority, effect, and enforceability as an original signature. This Amendment shall be effective as of the date hereof.


5.	Descriptive Headings . Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.


6.	Agreement as Amended . From and after the date hereof, any reference to the Agreement shall mean the Agreement as amended hereby.

[ Signature page(s) follow(s) ]

Exhibit 4.1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written.

REALNETWORKS, INC.

COMPUTERSHARE INC., as Rights Agent

[ Signature Page to Amendment to Amended and Restated Shareholder Rights Plan ]

Exhibit 10.1

SHAREHOLDER RIGHTS PLAN EXCEPTION AGREEMENT

This Shareholder Rights Plan Exception Agreement (hereinafter, “Agreement”) is entered into and effective as of April 15, 2016, by and between RealNetworks, Inc., a Washington corporation (hereinafter, “RealNetworks”), and Ariel Investments, LLC, a Delaware limited liability company (hereinafter, “Ariel”).

Whereas Ariel is an investment adviser registered with the United States Securities and Exchange Commission under the Investment Advisers Act of 1940, and provides investment management services to Ariel’s investment management clients.

Whereas RealNetworks is party to an Amended and Restated Shareholder Rights Plan, dated as of December 2, 2008 (hereinafter, and as may be amended from time to time, “Rights Plan”).

Whereas Rights Plan provides that any Person (as defined in Rights Plan) who becomes the Beneficial Owner (as defined in Rights Plan) of 15% or more of the Common Shares (as defined in Rights Plan) shall become an Acquiring Person (as defined in Rights Plan).

Whereas Ariel desires to become the Beneficial Owner of 15% or more of the Common Shares but not more than 19.9% of the Common Shares.

Whereas RealNetworks has determined that it is in the best interests of RealNetworks and its shareholders to permit Ariel, subject to its compliance with the terms and conditions of this Agreement, to become the Beneficial Owner of additional Common Shares.

Now, therefore, RealNetworks and Ariel agree as follows:


1.	RealNetworks shall permit Ariel, together with all of its Affiliates (as defined in Rights Plan) and Associates (as defined in Rights Plan), to become the Beneficial Owner of no more than 19.9% of the Common Shares then outstanding.

So long as Rights Plan or any successor thereto is in effect, to the extent that Ariel, together with all of its Affiliates and Associates, is the Beneficial Owner of 15% or more of the Common Shares, then, in connection with (i) any meeting of the shareholders of RealNetworks, (ii) any action by written consent of the shareholders of RealNetworks in lieu of a meeting or (iii) any other action by the shareholders of RealNetworks, Ariel, together with its Affiliates and Associates, will not, directly or indirectly, exercise, permit or cause to be exercised any voting or other related rights (including, but not limited to, the right to a call a special meeting of the shareholders of RealNetworks) with respect to Common Shares for which Ariel is the Beneficial Owner and that are in excess of 15% of the Common Shares outstanding on the record date for such meeting, action by written consent or other action.

Ariel represents and warrants that (a) this Agreement has been duly authorized, executed and delivered by it and is a valid and binding obligation of Ariel, enforceable against it in accordance with its terms; (b) as of the date of this Agreement, Ariel is the Beneficial Owner of 5,425,727 Common Shares; and (c) neither it nor its Affiliates or Associates is a party to any swap or hedging transactions or other derivative agreements of any nature with respect to any Common Shares.

Exhibit 10.1


4.	This Agreement shall be deemed to be a contract made under the laws of the State of Washington and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.


5.	This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the Parties do not perform the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that (i) the parties will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of this Agreement and to enforce specifically the terms and provisions hereof; and (ii) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, neither party would have entered into this Agreement. No party will raise any objections to (a) the granting of an injunction, specific performance or other equitable relief to prevent or restrain breaches or threatened breaches of this Agreement by the other party; and (b) the specific performance of the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants, obligations and agreements of the parties pursuant to this Agreement. Any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each party irrevocably waives any right that it may have to require the obtaining, furnishing or posting of any such bond or other security.

This Agreement constitutes the only agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. No party may assign or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party. Any purported transfer requiring consent without such consent shall be void. No amendment, modification, supplement or waiver of any provision of this Agreement shall be effective unless it is in writing and signed by the party affected thereby, and then only in the specific instance and for the specific purpose stated therein. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. This Agreement is for the sole and exclusive benefit of Ariel and RealNetworks.

Exhibit 10.1

Each of the parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed this Agreement with the advice of such counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation.

[ Signature page follows .]

Agreed:

REALNETWORKS, INC. ARIEL INVESTMENTS, LLC

_____________________________ _____________________________

By: Michael Parham Mareilé B. Cusack

Its: Senior Vice President, General Senior Vice President, General Counsel

Counsel and Corporate Secretary

[ Signature page to Shareholder Rights Plan Exception Agreement ]