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
RealNetworks, Inc.
(Exact name of registrant as specified in its charter)
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WASHINGTON
(State or other
jurisdiction
of incorporation)
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0-23137
(Commission File
Number)
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91-1628146
(I.R.S. Employer
Identification No.) |
(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
On
December 2, 2008, RealNetworks, Inc. (the
“Company”) and Mellon Investor Services LLC (the
“Rights Agent”), entered into an Amended and Restated Shareholder Rights Plan (the
“Amended and
Restated Rights Plan”) which amended and restated the existing Shareholder Rights Plan between the
Company and the Rights Agent (formerly known as ChaseMellon Shareholder Services, L.L.C.) dated
December 4, 1998, as amended (the
“Existing Rights Plan”). In connection with the Existing Rights Plan, the
Company’s Board of Directors (the
“Board”) previously declared a dividend of one right (a
“Right”) to purchase
one one-thousandth share of
the Company’s Series A Preferred Stock, par value $0.001 per share
(
“Series A Preferred”), for each share of common stock, par value $0.001 per share (
“Common
Shares”), of
the Company that was outstanding as of the close of business on
December 14, 1998 (the
“Record Date”).
The following summary of the principal terms of the Amended and Restated Rights Plan is a
general description only. It does not purport to be complete and is qualified in its entirety by
reference to the Amended and Restated Rights Plan. A copy of the Amended and Restated Rights Plan
is attached as
Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date (defined below). Certificates
for the Rights (“Rights Certificates”) will not be sent to shareholders, and the Rights will attach
to and trade only together with the Common Shares. Accordingly, Common Share certificates
outstanding on the Record Date will evidence the Rights related thereto, and Common Share
certificates issued after the Record Date will contain a notation incorporating the Amended and
Restated Rights Plan by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender or transfer of any certificates for Common Shares
outstanding as of the Record Date, even without notation or a copy of the Summary of Rights being
attached thereto, also will constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
Distribution Date
Subject to certain limited exceptions, the Rights will be separate from the Common Shares,
Rights Certificates will be issued and the Rights will become exercisable upon the earlier of
(a) the tenth business day (or such later date as may be determined by the Board) after a person or
group of affiliated or associated persons has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the Common Shares
then outstanding (such person or group, an
“Acquiring Person”) or (b) the
tenth business day (or such later date as may be determined by the Board) after a person or group
announces a tender or exchange offer, the consummation of which would
result in such person or group becoming an Acquiring Person. The earlier of
such dates is referred to as the
“Distribution Date.”
Notwithstanding the foregoing,
the Company’s Chairman and Chief Executive Officer,
Robert Glaser, is deemed not to be an Acquiring Person so long as he does not increase his beneficial
ownership of Common Shares above the number of Common Shares he holds as of the date of the Amended and
Restated Rights Plan, except for Common Shares he acquires from the exercise of stock options or from stock
awards granted to him in connection with his employment with
the Company.
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, a Rights Certificate will be mailed to
holders of record of the Common Shares as of the close of business on the Distribution Date and
such separate Rights Certificate alone will evidence the Rights from and after the Distribution
Date. The Rights will expire on the earliest of (i)
December 2, 2018, (the
“Final Expiration
Date”) or (ii) redemption or exchange of the Rights as described below.
Initial Exercise of the Rights
Following the Distribution Date, and until one of the further events described below, holders
of the Rights will be entitled to receive one one-thousandth share of the Series A Preferred upon
exercise and the payment of an exercise price of $30.00 (the “Exercise Price”), subject to
adjustment.
Right to Buy Company Common Shares
Unless the Rights are earlier redeemed, in the event that an Acquiring Person obtains 15% or
more of
the Company’s then outstanding Common Shares, then each holder of a Right which has not
theretofore been exercised (other than Rights beneficially owned by the Acquiring Person, which
will thereafter be void) will thereafter have the right to receive, upon exercise, Common Shares
having a value equal to two times the Exercise Price. Rights are not exercisable following the
occurrence of an event as described above until such time as the Rights are no longer redeemable by
the Company as set forth below.
Right to Buy Acquiring Company Shares
Similarly, unless the Rights are earlier redeemed, in the event that after an Acquiring
Person obtains 15% or more of
the Company’s then outstanding Common Shares, (i)
the Company is
acquired in a merger or other business combination transaction or (ii) 50% or more of the
Company’s consolidated assets or earning power are sold, proper provision must be made so that each
holder of a Right which has not theretofore been exercised (other than Rights beneficially owned by
the Acquiring Person, which will thereafter be void) will thereafter have the right to receive,
upon exercise, shares of common stock of the acquiring company having a value equal to two times
the Exercise Price.
Exchange Provision
At any time after an Acquiring Person obtains 15% or more of
the Company’s then outstanding
Common Shares and prior to the acquisition by such Acquiring Person of 50% or more of
the Company’s
outstanding Common Shares, the Board may exchange the Rights (other than Rights owned by the
Acquiring Person), in whole or in part, at an exchange ratio of one Common Share per Right.
Redemption
At any time on or prior to the Close of Business on the earlier of (i) the fifth day following
the attainment of 15% or more of
the Company’s then outstanding Common Shares by an Acquiring
Person (or such later date as may be determined by action of the Board and publicly announced by
the Company) or (ii) the Final Expiration Date,
the Company may redeem the Rights in whole, but
not in part, at a price of $0.001 per Right.
Adjustments to Prevent Dilution
The Exercise Price, the number of Rights, and the number of Series A Preferred or Common
Shares or other securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time in connection with the dilutive issuances by
the Company as set forth
in the Amended and Restated Rights Plan. With certain exceptions, no adjustment in the Exercise
Price will be required until cumulative adjustments require an adjustment of at least 1% in such
Exercise Price.
Cash Paid Instead of Issuing Fractional Shares
No fractional shares of Series A Preferred less than one-thousandth of a share of Series A
Preferred will be issued upon exercise of a Right and, in lieu thereof, an adjustment in cash will
be made based on an amount equal to the current market value of a Preferred Share, which shall be
(x) one thousand multiplied by (y) the closing price of a Common Share for the trading day
immediately prior to the date of such exercise.
No Shareholders’ Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of
the Company (other than any rights resulting from such holder’s ownership of Common Shares),
including, without limitation, the right to vote or to receive dividends.
Amendment of Amended and Restated Rights Plan
The terms of the Rights and the Amended and Restated Rights Plan may be amended in any respect
without the consent of the Rights holders on or prior to the Distribution Date; thereafter, the
terms of the Rights and the Amended and Restated Rights Plan may be amended without the consent of
the Rights holders in order to cure any ambiguities, correct or supplement the provisions of the
Amended and Restated Rights Plan, shorten or lengthen any time period under the Amended and
Restated Rights Plan or to make changes which do not adversely affect the interests of Rights
holders (other than the Acquiring Person).
Rights and Preferences of the Series A Preferred
Each one one-thousandth of a share of Series A Preferred has rights and preferences
substantially equivalent to those of one Common Share.
No Voting Rights
Rights will not have any voting rights.
Certain Anti-Takeover Effects
The Rights approved by the Board are designed to protect and maximize the value of the
outstanding equity interests in
the Company in the event of an unsolicited attempt by an acquirer
to take over
the Company in a manner or on terms not approved by the Board. Takeover attempts
frequently include coercive tactics to deprive the Board and
the Company’s shareholders of any real
opportunity to determine the destiny of
the Company. The Rights have been declared by the Board in
order to deter such tactics, including a gradual accumulation of shares in the open market of 15%
or greater position to be followed by a merger or a partial or two-tier tender offer that does not
treat all shareholders equally. These tactics unfairly pressure shareholders, squeeze them out of
their investment without giving them any real choice and deprive them of the full value of their
shares.
The Rights are not intended to prevent a takeover of
the Company and will not do so. Subject
to the restrictions described above, the Rights may be redeemed by
the Company at $0.001 per Right
at any time prior to the Distribution Date. Accordingly, the Rights should not interfere with any
merger or business combination approved by the Board.
However, the Rights may have the effect of rendering more difficult or discouraging an
acquisition of
the Company deemed undesirable by the Board. The Rights may cause substantial
dilution to a person or group that attempts to acquire
the Company on terms or in a manner not
approved by the Board, except pursuant to an offer conditioned upon the negation, purchase or
redemption of the Rights.
Issuance of the Rights does not in any way weaken the financial strength of
the Company or
interfere with its business plans. The issuance of the Rights themselves has no dilutive effect,
will not affect reported earnings per share, should not be taxable to
the Company or to its
shareholders, and will not change the way in which
the Company’s shares are presently traded. The
Board believes that the Rights represent a sound and reasonable means of addressing the complex
issues of corporate policy created by the current takeover environment.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into
this Item 3.03 by reference.
