SC TO-I/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1
TO
SCHEDULE TO

(Rule 13e-4)

Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934

RealNetworks, Inc.

(Name of Subject Company (Issuer) and Filing Person (Offeror))

Options to Purchase Common Stock, $0.001 par value

(Title of Class of Securities)

75605L 10 4

(CUSIP Number of Class of Securities Underlying Options)

Robert Kimball
Executive Vice President, Corporate
Development and Law, General
Counsel and Corporate Secretary
2601 Elliott Avenue, Suite 1000
Seattle, WA 98121
(206) 674-2700

(Name, address and telephone numbers of person authorized to receive notices
and communications on behalf of filing persons)

Copies to:
Patrick J. Schultheis, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
701 Fifth Avenue, Suite 5100
Seattle, WA 98104
(206) 883-2500

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee
$35,845,340	$2,000.17

* Calculated solely for purposes of determining the filing fee. This amount assumes that options to purchase 26,319,598 shares of common stock of RealNetworks, Inc. having an aggregate value of approximately $35,845,340 as of November 13, 2009 will be exchanged or cancelled pursuant to this offer. The aggregate value of such securities was calculated based on the Black-Scholes option pricing model. The amount of the filing fee, calculated in accordance with the Securities Exchange Act of 1934, as amended, equals $55.80 for each $1,000,000 of the value of this transaction.

þ  Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	$2,000.17
Form or Registration No.:	Schedule TO-I
Filing party:	RealNetworks, Inc.
Date filed:	November 19, 2009

o  Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

o third party tender offer subject to Rule 14d-1.

þ issuer tender offer subject to Rule 13e-4.

o going-private transaction subject to Rule 13e-3.

o amendment to Schedule 13D under Rule 13d-2.

     Check the following box if the filing is a final amendment reporting the results of the tender offer: o

TABLE OF CONTENTS

	Item 2. Subject Company Information
	Item 11. Additional Information
	Item 12. Exhibits
SIGNATURE
INDEX TO EXHIBITS
Exhibit (a)(1)(M)

          This Amendment No. 1 (“Amendment No. 1”) amends and supplements the Tender Offer Statement on Schedule TO (the “Schedule TO”) filed on November 19, 2009 by RealNetworks, Inc., a Washington corporation (“RealNetworks” or the “Company”). The Schedule TO, as amended by Amendment No. 1, relates to the offer by the Company to exchange (the “Exchange Offer”) certain options to purchase up to an aggregate of 26,319,598 shares of the Company’s common stock, whether vested or unvested, with an exercise price per share greater than $4.48 (the “Eligible Options”).

          This Amendment No. 1 is being filed solely to amend “Item 2 — Subject Company Information” to reflect revisions to the information set forth in the Offer to Exchange under the caption “Risks of Participating in the Offer,” “Item 11 — Additional Information” to add information regarding the final order issued in RealNetworks’ arbitration action with VeriSign, Inc. and “Item 12 — Exhibits” to add Exhibit (a)(1)(M) (the Email to Eligible Employees Regarding Informational Sessions, dated December 8, 2009). Except as set forth above, there were no changes to the offer materials.

Item 2. Subject Company Information.

          (b) Securities.

          The risk factor set forth in the Offer to Exchange under the heading “Risks of Participating in the Offer — Our ongoing arbitration proceeding with VeriSign, Inc. could ultimately result in a damages award in favor of VeriSign that may be material to our financial condition and results of operations” is deleted in its entirety.

Item 11. Additional Information.

          (b) Other Material Information.

          As previously disclosed in the Offer to Exchange under the caption “Risks of Participating in the Offer,” RealNetworks was involved in an arbitration action with VeriSign, Inc. On December 4, 2009, the Arbitrator in the arbitration action issued his “Full and Final Reasoned Award” (“Final Award”) disposing of all claims pending in the arbitration. In the Final Award, the Arbitrator concluded that RealNetworks is not responsible for any damages to VeriSign. In addition, the Arbitrator reversed his prior determination that RealNetworks committed acts of tortious interference with existing and prospective business relationships and he dismissed VeriSign’s related tortious interference claims. Finally, the Arbitrator determined that VeriSign failed to prove that RealNetworks’ conduct related to VeriSign’s proposed sale of certain business units proximately caused VeriSign any measurable damages. We are pleased with these final decisions of the Arbitrator.

Item 12. Exhibits.

Exhibit
Number	Description
(a)(1)(A)†	Offer to Exchange Certain Outstanding Options for New Options, dated November 19, 2009.
(a)(1)(B)†	Email to All Eligible Employees from Sid Ferrales, dated November 19, 2009.
(a)(1)(C)†	Form of Email to Eligible Employees Forwarding Login Information, dated November 19, 2009.
(a)(1)(D)†	Form of Election Form.
(a)(1)(E)†	Form of Withdrawal Form.
(a)(1)(F)†	Form of Confirmation Email/Letter to Employees who Elect to Participate in or Withdraw From the Exchange Offer.
(a)(1)(G)†	Form of Reminder Email.
(a)(1)(H)†	Screen Shots of Offer Website.
(a)(1)(I)†	Notice to Eligible Employees Regarding Expiration of Offer Period.
(a)(1)(J)†	Employee Presentation Slide Deck.

-2-

Exhibit
Number	Description
(a)(1)(K)†	Frequently Asked Questions Regarding Stock Options.
(a)(1)(L)†	Frequently Asked Questions Regarding Exchange Offer.
(a)(1)(M)	Email to Eligible Employees Regarding Informational Sessions, dated December 8, 2009.
(b)	Not applicable.
(d)(1)*	RealNetworks, Inc. 1996 Stock Option Plan, as amended and restated on June 1, 2001 (incorporated by reference from Exhibit 10.1 to RealNetworks’ Quarterly Report on Form 10-Q filed for the quarterly period ended June 30, 2001 filed with the Securities and Exchange Commission on August 13, 2001).
(d)(2)*	RealNetworks, Inc. 2000 Stock Option Plan, as amended and restated on June 1, 2001 (incorporated by reference from Exhibit 10.2 to RealNetworks’ Quarterly Report on Form 10-Q filed for the quarterly period ended June 30, 2001 filed with the Securities and Exchange Commission on August 13, 2001).
(d)(3)*	Form of Stock Option Agreement under the RealNetworks, Inc. 1996 Stock Option Plan, as amended and restated (incorporated by reference from Exhibit 10.1 to RealNetworks’ Quarterly Report on Form 10-Q for the quarterly period ended September 20, 2002 filed with the Securities and Exchange Commission on November 14, 2002).
(d)(4)*	Form of Stock Option Agreement under the RealNetworks, Inc. 2000 Stock Option Plan, as amended and restated (incorporated by reference from Exhibit 10.2 to RealNetworks’ Quarterly Report on Form 10-Q for the quarterly period ended September 20, 2002 filed with the Securities and Exchange Commission on November 14, 2002).
(d)(5)†	RealNetworks, Inc. 2005 Stock Incentive Plan, as approved by the shareholders of the Company on September 21, 2009 and to be effective upon completion of the Exchange Offer.
(d)(6)†	Form of Non-Qualified Stock Option Terms and Conditions for use under the RealNetworks, Inc. 2005 Stock Incentive Plan.
(d)(7)†	Form of Non-Qualified Stock Option Terms and Conditions (For Optionees Located Outside the U.S.) for use under RealNetworks, Inc. 2005 Stock Incentive Plan.
(g)	Not applicable.
(h)	Not applicable.

†	Incorporated by reference to the Schedule TO filed by the Company on November 19, 2009, as amended.
*	Previously filed.

-3-

SIGNATURE

          After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in the Schedule TO, as amended, is true, complete and correct.

REALNETWORKS, INC.
 

/s/ Robert Kimball  

Robert Kimball 

Executive Vice President, Corporate Development
and Law, General Counsel and Corporate Secretary 

Date: December 8, 2009

-4-

INDEX TO EXHIBITS

Exhibit
Number	Description
(a)(1)(A)†	Offer to Exchange Certain Outstanding Options for New Options, dated November 19, 2009.
(a)(1)(B)†	Email to All Eligible Employees from Sid Ferrales, dated November 19, 2009.
(a)(1)(C)†	Form of Email to Eligible Employees Forwarding Login Information, dated November 19, 2009.
(a)(1)(D)†	Form of Election Form.
(a)(1)(E)†	Form of Withdrawal Form.
(a)(1)(F)†	Form of Confirmation Email/Letter to Employees who Elect to Participate in or Withdraw From the Exchange Offer.
(a)(1)(G)†	Form of Reminder Email.
(a)(1)(H)†	Screen Shots of Offer Website.
(a)(1)(I)†	Notice to Eligible Employees Regarding Expiration of Offer Period.
(a)(1)(J)†	Employee Presentation Slide Deck.
(a)(1)(K)†	Frequently Asked Questions Regarding Stock Options.
(a)(1)(L)†	Frequently Asked Questions Regarding Exchange Offer.
(a)(1)(M)	Email to Eligible Employees Regarding Informational Sessions, dated December 8, 2009.
(b)	Not applicable.
(d)(1)*	RealNetworks, Inc. 1996 Stock Option Plan, as amended and restated on June 1, 2001 (incorporated by reference from Exhibit 10.1 to RealNetworks’ Quarterly Report on Form 10-Q filed for the quarterly period ended June 30, 2001 filed with the Securities and Exchange Commission on August 13, 2001).
(d)(2)*	RealNetworks, Inc. 2000 Stock Option Plan, as amended and restated on June 1, 2001 (incorporated by reference from Exhibit 10.2 to RealNetworks’ Quarterly Report on Form 10-Q filed for the quarterly period ended June 30, 2001 filed with the Securities and Exchange Commission on August 13, 2001).
(d)(3)*	Form of Stock Option Agreement under the RealNetworks, Inc. 1996 Stock Option Plan, as amended and restated (incorporated by reference from Exhibit 10.1 to RealNetworks’ Quarterly Report on Form 10-Q for the quarterly period ended September 20, 2002 filed with the Securities and Exchange Commission on November 14, 2002).
(d)(4)*	Form of Stock Option Agreement under the RealNetworks, Inc. 2000 Stock Option Plan, as amended and restated (incorporated by reference from Exhibit 10.2 to RealNetworks’ Quarterly Report on Form 10-Q for the quarterly period ended September 20, 2002 filed with the Securities and Exchange Commission on November 14, 2002).
(d)(5)†	RealNetworks, Inc. 2005 Stock Incentive Plan, as approved by the shareholders of the Company on September 21, 2009 and to be effective upon completion of the Exchange Offer.
(d)(6)†	Form of Non-Qualified Stock Option Terms and Conditions for use under the RealNetworks, Inc. 2005 Stock Incentive Plan.
(d)(7)†	Form of Non-Qualified Stock Option Terms and Conditions (For Optionees Located Outside the U.S.) for use under RealNetworks, Inc. 2005 Stock Incentive Plan.
(g)	Not applicable.
(h)	Not applicable.

†	Incorporated by reference to the Schedule TO filed by the Company on November 19, 2009, as amended.
*	Previously filed.

EX-99.(A)(1)(M)

Exhibit (a)(1)(M)

FORM OF EMAIL ANNOUNCEMENT OF EXCHANGE OFFER
INFORMATIONAL SESSIONS
(From stock@real.com)

Date: December 8, 2009

Subject: Stock Option Exchange Program Informational Sessions

Dear Eligible RealNetworks Employees:

As previously communicated, the voluntary stock option exchange program began on November 19, 2009. The program gives eligible employees a one-time opportunity to surrender certain outstanding underwater stock options for a lesser amount of new stock options with a lower exercise price and an extended vesting schedule. Eligibility criteria are explained in detail in the program materials sent to eligible employees on November 19, 2009. Communication for this program has been limited to employees who are eligible to participate in the program and hold eligible stock options and not to our full employee population. Generally speaking, the program is open to current employees (other than our senior executives) who hold outstanding stock options having an exercise price greater than $4.48 and who remain employed when the new options are granted.

Informational sessions are available to assist eligible employees in understanding the key elements and timeframe of the stock option exchange program as well as how to participate, including:

1.	In-Person Brown Bag Sessions
2.	On-line Virtual Brown Bag Sessions
3.	24/7 Web Presentation on RNN

Dates:	Location	Time (U.S. Pacific Time)
Wed, Dec 9	HQ — Forum South	Noon — 1:00 pm
	Salzburg Office	Noon — 1pm (local time)
	Eindhoven Office	1pm — 2pm (local time)
Thurs, Dec 10	On-line	9:00 am — 10:00 am
	HQ — Forum North	Noon — 1:00 pm
	Salzburg Office	1pm — 2pm (local time)
	Eindhoven Office	Noon — 1pm (local time)
	On-line	5:30 pm — 6:30 pm
Fri, Dec 11	On-line	7:30 am — 8:30 am
Mon, Dec 14	On-line	8:30 am — 9:30 am
	HQ- Forum South	Noon — 1:00pm

It is recommended that you review the online web presentation and access the stock option exchange website at https://realnetworks.equitybenefits.com prior to attending your session.

In-Person Brown Bag Sessions: Unless otherwise noted, the in-person sessions will be held at the corporate office in the Forum meeting rooms on the second floor.

On-line Brown Bag Sessions: To attend one of the on-line sessions you will need to register at the link provided below and then select the date and time you wish to attend. Access is limited to 100 per meeting. You will receive an email prior to the online meeting with instructions on how to attend. http://p43a.prognet.com:8000/OA_HTML/RF.jsp?function_id=1015146&resp_id=-1&resp_appl_id=-1&security_ group_id=0&lang_code=US&params=qCTnu1QosloD9jZGzaaHduT5ujcbXvO0QHmCQrjPVuyNVdMdaQPj2PMByNIfz9AWFGEqg 5sESwg-kAMrmVUJEQ&oas=M-o6TFcUpuurGqDQW5CybA

Web Presentation: If you are unable to attend one of the brown bag meetings either in person or on-line you may access the stock option exchange presentation at your convenience, 24 hours a day, seven days a week, on RNN where you will be guided through the 20 minute video presentation.

If you have questions about the stock option exchange program please contact us at stock@real.com or via fax (206) 674-2695.

Remember, this offer will expire on December 17, 2009 at 9:00 p.m., U.S. Pacific Time, unless otherwise extended, so please plan to have your election submitted prior to the expiration if you wish to participate in this one-time voluntary program.