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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): August 10, 1999
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.)
2601 ELLIOTT AVENUE, SUITE 1000, SEATTLE, WA 98121
(Address of Principal Executive Offices)
(206) 674-2700
(Registrant's telephone number, including area code)
1111 THIRD AVENUE, SUITE 2900, SEATTLE, WA 98101
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On August 10, 1999, RealNetworks, Inc. ("RealNetworks") acquired all of
the outstanding capital stock of Xing Technology Corporation, a California
corporation ("Xing"), pursuant to an Agreement and Plan of Merger dated as of
April 12, 1999, as amended on July 28, 1999 (the "Merger Agreement"), among
RealNetworks, Xing, XTC Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of RealNetworks ("Xing Acquisition"), and certain shareholders
of Xing. In accordance with the terms of the Merger Agreement, Xing Acquisition
merged with and into Xing, with Xing as the surviving corporation (the
"Merger").
Xing, founded in 1989 and based in San Luis Obispo, California, is a
leading provider of high performance, standards-based digital audio and video
encoding and decoding technology, including MP3 software.
Pursuant to the Merger Agreement, RealNetworks issued an aggregate of
732,280 shares of RealNetworks common stock, par value $0.001 per share
("RealNetworks Common Stock"), and all outstanding options of Xing were replaced
by options to acquire shares of RealNetworks Common Stock pursuant to the
formula set forth below. Such consideration was determined in arm's-length
negotiations between RealNetworks and Xing.
At the effective time of the Merger, each outstanding share of Xing
common stock, no par value ("Xing Common Stock"), including shares of Xing
Common Stock issued upon conversion of outstanding shares of Xing preferred
stock or other residual equity interests, was converted into the right to
receive that number of shares of RealNetworks Common Stock determined (i) by
dividing $50,000,000, subject to certain adjustments set forth in the Merger
Agreement, by the total number of shares of Xing capital stock outstanding
immediately prior to the effective time on a fully diluted basis, assuming the
exercise of all outstanding options, warrants, or other rights to purchase
shares of Xing Common Stock, whether or not exercisable, and the conversion of
all residual equity interests, and (ii) further dividing the quotient obtained
by the average of the per share last daily closing price of the RealNetworks
Common Stock during the ten trading days ending on the trading day immediately
preceding the closing date (the "Average Closing Price").
The calculation of the Average Closing Price was subject to certain
adjustments including an adjustment such that if the Average Closing Price
exceeded $65.00, the Average Closing Price would be deemed to be equal to
$65.00. Similarly, if the Average Closing Price was less than $50.00, the
Average Closing Price would be deemed to be equal to $50.00.
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As a result of the Merger, the Xing shareholders received approximately
1% of the outstanding RealNetworks Common Stock, including the indemnification
shares described below.
In addition, each option to purchase shares of Xing Common Stock
outstanding at the effective time of the Merger was replaced by RealNetworks and
will be treated as an option to purchase that number of shares of RealNetworks
Common Stock equal to the product of the exchange ratio and the number of shares
of Xing Common Stock subject to such option.
The shares of RealNetworks Common Stock issued as a result of the
Merger were issued in reliance on the exemption from the registration
requirements of the Securities Act of 1933, as amended, provided by Section
3(a)(10) thereof.
The Merger will be accounted for as a pooling of interests.
Pursuant to the Merger Agreement, the shareholders of Xing have agreed
to indemnify and hold RealNetworks harmless from losses that RealNetworks or its
affiliates may suffer as a result of (i) any inaccuracy in, or breach of, any
representation or warranty made by Xing in the Merger Agreement or related
agreements; and (ii) any breach by, or failure of Xing to comply with, any
covenant or obligation in the Merger Agreement or related agreements. A total of
73,142 shares of RealNetworks Common Stock issued in connection with the Merger
have been deposited with an escrow agent to secure these indemnification
obligations.
The description of the Merger Agreement herein, which is incorporated
by reference as an exhibit to this Form 8-K, does not purport to be complete and
is qualified in its entirety by the provisions of the Merger Agreement.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits
2.1 Agreement and Plan of Merger by and among RealNetworks, Inc.,
Xing Technology Corporation, XTC Acquisition Corp. and certain
shareholders of Xing dated as of April 12, 1999 (incorporated by
reference to Exhibit 2.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999)
2.2 Amendment No. 1 to Agreement and Plan of Merger dated as of
July 28, 1999
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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/ Paul Bialek
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Paul Bialek
Senior Vice President - Finance and
Operations and Chief Financial Officer
Date: August 20, 1999
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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2.2 Amendment No. 1 to Agreement and Plan of Merger dated as of July
28, 1999
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