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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): DECEMBER 4, 1998
REALNETWORKS, INC.
(Exact name of registrant as specified in charter)
WASHINGTON
(State or other jurisdiction of incorporation)
0-23137
(Commission File Number)
91-1628146
(IRS Employer Identification No.)
1111 THIRD AVENUE, SUITE 2900, SEATTLE, WA 98101 (Address
of principal executive offices) (Zip Code)
(206) 674-2700
(Registrant's telephone number, including area code)
NONE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On October 16, 1998, the Board of Directors of RealNetworks, Inc. (the
"Company") declared a dividend of one preferred share purchase right (each a
"Right") for each outstanding share of common stock of the Company payable to
all shareholders of record on December 14, 1998.
Prior to the Distribution Date (as defined below), the Rights are
evidenced by and trade only with the common stock certificates. The Rights will
separate from the common stock and become exercisable and separately
transferable from the common stock following (a) the first date of public
announcement that a person has acquired 15% (an "Acquiring Person") or more of
the Company's outstanding common stock or (b) the tenth day (or such later date
as may be determined by the Board of Directors) after a person or group
announces a tender or exchange offer (other than certain board approved
transactions), the consummation of which would result in ownership by a person
or group of 15% or more of the Company's outstanding common stock (the earlier
to occur of (a) and (b) being referred to as the "Distribution Date").
After the Distribution Date, each Right will entitle the holder
to purchase for $150.00 (the "Exercise Price"), a fraction of a share of the
Company's Series A Preferred Stock with economic terms similar to that of one
share of the Company's common stock. In the event a person becomes an Acquiring
Person, then each Right (other than Rights owned by an Acquiring Person or its
affiliates) will entitle the holder thereof to purchase, upon payment of the
Exercise Price, a number of shares of the Company's common stock having a then
current market value of twice the Exercise Price.
If, after an Acquiring Person obtains 15% or more of the Company's
common stock, (a) the Company merges into another entity, (b) an acquiring
entity merges into the Company or (c) the Company sells more than 50% or more of
the Company's assets or earning power, then each Right (other than Rights owned
by an Acquiring Person or its affiliates or associates) will entitle the holder
thereof to purchase, for the Exercise Price, a number of shares of common stock
of the person engaging in the transaction having a then current market value of
twice the Exercise Price.
At any time after the date an Acquiring Person obtains 15% or more of
the Company's common stock and prior to the acquisition by the Acquiring Person
of 50% of the outstanding common stock, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by the Acquiring Person or its
affiliates), in whole or in part, for shares of common stock of the Company at
an exchange ratio of one share of common stock per Right (subject to certain
equitable adjustments).
Rights will be redeemable at the Company's option for $0.01 per Right at
any time on or prior to the earlier to occur of (i) the date a person publicly
announces that they have become and Acquiring Person, and (ii) the final
expiration of the Rights.
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The Rights expire on the earliest of (a) December 4, 2008, (b) exchange
or redemption of the Rights as described above, or (c) certain other limited
circumstances described in the Shareholder Rights Plan.
The foregoing brief summary of the terms and conditions of the Rights is
qualified in its entirety by reference to Item 1 of the Company's Form 8-A12G
("Form 8-A") filed with the Securities and Exchange Commission on December 14,
1998 and the Rights Agreement (including the exhibits) attached as an exhibit to
the Form 8-A, both of which are incorporated by reference herein and made a part
hereof. Please also refer to the press release filed as Exhibit 99.1 to this
report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
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<S> <C>
4.1 Shareholder Rights Plan dated as of December 4,
1998 between RealNetworks, Inc. and ChaseMellon
Shareholder Services, L.L.C., incorporated herein
by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A12G filed with
the Securities and Exchange Commission on December
14, 1998
99.1 Press Release dated December 11, 1998
</TABLE>
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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/ Robert Glaser
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Robert Glaser
Chairman of the Board and Chief
Executive Officer
Dated: December 21, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
4.1 Shareholder Rights Plan dated as of December 4,
1998 between RealNetworks, Inc. and ChaseMellon
Shareholder Services, L.L.C., incorporated herein
by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A12G filed with
the Securities and Exchange Commission on December
14, 1998
99.1 Press Release dated December 11, 1998
</TABLE>
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EXHIBIT 99.1
REALNETWORKS, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
SEATTLE, December 11, 1998 -- RealNetworks, Inc. (the "Company")
(Nasdaq: "RNWK"), the recognized leader in streaming media, today announced that
its Board of Directors has adopted a shareholder rights plan designed to enable
the Company's shareholders to realize the full value of their investment and to
provide for fair and equal treatment for all shareholders in the event that an
unsolicited attempt is made to acquire the Company.
"The Rights Plan should enhance the board's ability to protect
shareholder interests if the Company is ever faced with a coercive or unfair
takeover. It is intended as a means to guard against abusive takeover tactics
and is being adopted as part of prudent corporate governance," said Rob Glaser,
Chairman and Chief Executive Officer.
Terms of the Rights Plan provide for a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of common
stock to holders of record at the close of business on December 14, 1998. Each
Right will entitle shareholders to buy 1/1000th of a share of the Company's
Series A Preferred Stock at an exercise price of $150.00. Initially, the Rights
will not be exercisable and will trade with RealNetworks' common stock. The
Rights will become exercisable if an acquiring party accumulates 15% or more of
the Company's common stock, or if a party announces an offer to acquire 15% or
more of the Company's common stock. The Rights will expire on December 4, 2008,
unless earlier redeemed by the Company. The Company will be entitled to redeem
the Rights at $.01 per Right at any time on or before an acquiring party
accumulates 15% or more of the Company's common stock, and in certain
circumstances may redeem the Rights to permit transactions where all of the
Company's shareholders are treated equally.
The Rights are designed to assure that the Company's shareholders are
treated equitably in the event of any proposed takeover of the Company and to
guard against partial or two-tiered tender offers and other coercive tactics
that can be designed to gain control of the Company without paying all
shareholders the fair value for their shares, including a "control premium." The
Rights may increase the Company's ability to negotiate with would be acquirors
to maximize shareholder value.
The Company will mail to each shareholder a summary of the terms and
conditions of the Rights within approximately two weeks after December 14, 1998.
Further details of the terms and conditions of the Rights will be set forth in a
letter that will be mailed to all the Company's shareholders.
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ABOUT REALNETWORKS
RealNetworks, Inc. (Nasdaq: "RNWK"), based in Seattle, WA, is the
recognized leader in the streaming media market. It develops and markets
software products and services designed to enable users of personal computers
and other consumer electronic devices to send and receive audio, video and other
multimedia services using the Web. RealNetworks can be found on the World Wide
Web at www.real.com.
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