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Sample Business Contracts

Stock Option Agreement [2002 Director Stock Option Plan] - RealNetworks Inc.

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                               REALNETWORKS, INC.

                             STOCK OPTION AGREEMENT

                                [INITIAL GRANT A]


        RealNetworks, Inc. (the "Company"), has granted to _________ (the
"Optionee"), an option to purchase a total of ____ shares of the Company's
Common Stock, par value $.001 per share (the "Optioned Stock"), at the price
determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Company's 2002 Director Stock Option Plan (the
"Plan") adopted by the Company which is incorporated herein by reference. The
terms defined in the Plan shall have the same defined meanings herein.

        1. Nature of the Option. This Option is a nonstatutory option and is not
intended to qualify as an "incentive stock option," as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended.

        2. Exercise Price. The exercise price is $____ for each share of Common
Stock.

        3. Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of Section 8 of the Plan as follows:

               (i) Right to Exercise.

                      (a) This Option shall become exercisable in installments
cumulatively with respect to one-third (1/3) of the Optioned Stock one year
after the date of grant, and as to an additional one-third (1/3) of the Optioned
Stock on each anniversary of the date of grant, so that one hundred percent
(100%) of the Optioned Stock shall be exercisable three (3) years after the date
of grant, provided that the Optionee remains a Director on such dates.

                      (b) This Option may not be exercised for a fraction of a
share.

                      (c) In the event of Optionee's death, disability or other
termination of service as a Director, the exercisability of the Option is
governed by Section 8 of the Plan.

               (ii) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option and the
number of Shares in respect of which the Option is being exercised. Such written
notice, in the form attached hereto as Exhibit A (or such other notice as the
Company may specify), shall be signed by the Optionee and shall be delivered in
person or by mail to the Company. The written notice shall be accompanied by
payment of the exercise price.

        4. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee:

               (i) cash;

               (ii) check; or

<PAGE>

               (iii) delivery of a properly executed exercise notice, together
with such other documentation as the Company and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price.

        5. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulations, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

        6. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

        7. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, and may be exercised during such
period only in accordance with the Plan and the terms of this Option.

DATE OF GRANT:
               ------------------

RealNetworks, Inc.
(a Washington corporation)


By:
    -----------------------------
Its:
    -----------------------------

        Optionee acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of the terms
and provisions thereof. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board upon any questions
arising under the Plan.

Dated:
      ---------------------------


---------------------------------
Optionee

<PAGE>

                                    EXHIBIT A

                      DIRECTOR STOCK OPTION EXERCISE NOTICE

RealNetworks, Inc.
2601 Elliott Avenue, Suite 1000
Seattle, WA  98121

Attention:  Corporate Secretary

        1. Exercise of Option. The undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase ____ shares of the Common Stock, par
value $.001 per share (the "Shares"), of RealNetworks, Inc. (the "Company")
under and pursuant to the Company's 2002 Director Stock Option Plan and the
Director Option Agreement dated ________ (the "Agreement).

        2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Agreement.

        3. Federal Restrictions on Transfer. Optionee understands that the
Shares must be held indefinitely unless they are registered under the Securities
Act of 1933, as amended (the "1933 Act"), or unless an exemption from such
registration is available, and that the certificate(s) representing the Shares
may bear a legend to that effect. Optionee understands that the Company is under
no obligation to register the Shares and that an exemption may not be available
or may not permit Optionee to transfer Shares in the amounts or at the times
proposed by Optionee.

        4. Tax Consequences. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultant(s) Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

        5. Delivery of Payment. Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has elected to purchase
and has made provision for the payment of any federal or state withholding taxes
required to be paid or withheld by the Company.

        6. Entire Agreement. The Agreement is incorporated herein by reference.
This Exercise Notice and the Agreement constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of
the Company and Optionee with respect to the subject matter hereof. This
Exercise Notice and the Agreement are governed by Washington law except for that
body of law pertaining to conflict of laws.

Submitted by:                                Accepted by:

OPTIONEE:                                    REALNETWORKS, INC.

By:                                          By:
   --------------------------------             --------------------------------
                                             Its:
                                                 -------------------------------

Dated:                                       Dated:
      ----------------------------                 ----------------------------

<PAGE>

                               REALNETWORKS, INC.

                             STOCK OPTION AGREEMENT

                     [INITIAL GRANT B AND SUBSEQUENT OPTION]


        RealNetworks, Inc. (the "Company"), has granted to _________ (the
"Optionee"), an option to purchase a total of ____ shares of the Company's
Common Stock, par value $.001 per share (the "Optioned Stock"), at the price
determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Company's 2002 Director Stock Option Plan (the
"Plan") adopted by the Company which is incorporated herein by reference. The
terms defined in the Plan shall have the same defined meanings herein.

        1. Nature of the Option. This Option is a nonstatutory option and is not
intended to qualify as an "incentive stock option," as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended.

        2. Exercise Price. The exercise price is $____ for each share of Common
Stock.

        3. Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of Section 8 of the Plan as follows:

               (i) Right to Exercise.

                      (a) This Option shall become exercisable as to 100% of the
Optioned Stock one year after the date of grant; provided that the Optionee
remains a Director on such date.

                      (b) This Option may not be exercised for a fraction of a
share.

                      (c) In the event of Optionee's death, disability or other
termination of service as a Director, the exercisability of the Option is
governed by Section 8 of the Plan.

               (ii) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option and the
number of Shares in respect of which the Option is being exercised. Such written
notice, in the form attached hereto as Exhibit A (or such other notice as the
Company may specify), shall be signed by the Optionee and shall be delivered in
person or by mail to the Company. The written notice shall be accompanied by
payment of the exercise price.

        4. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee:

               (ii) cash;

               (iii) check; or

               (iv) delivery of a properly executed exercise notice, together
with such other documentation as the Company and the broker, if applicable,
shall require to effect an exercise of

<PAGE>

the Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price.

        5. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulations, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

        6. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

        7. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, and may be exercised during such
period only in accordance with the Plan and the terms of this Option.

DATE OF GRANT:
               ------------------

RealNetworks, Inc.
(a Washington corporation)


By:
   ------------------------------
Its:
    -----------------------------

        Optionee acknowledges receipt of a copy of the Plan, a copy of which is
attached hereto, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of the terms
and provisions thereof. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board upon any questions
arising under the Plan.

Dated:
      ---------------------------


---------------------------------
Optionee

<PAGE>

                                    EXHIBIT A

                      DIRECTOR STOCK OPTION EXERCISE NOTICE

RealNetworks, Inc.
2601 Elliott Avenue, Suite 1000
Seattle, WA  98121

Attention:  Corporate Secretary

        1. Exercise of Option. The undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase ____ shares of the Common Stock, par
value $.001 per share (the "Shares"), of RealNetworks, Inc. (the "Company")
under and pursuant to the Company's 2002 Director Stock Option Plan and the
Director Option Agreement dated ________ (the "Agreement).

        2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Agreement.

        3. Federal Restrictions on Transfer. Optionee understands that the
Shares must be held indefinitely unless they are registered under the Securities
Act of 1933, as amended (the "1933 Act"), or unless an exemption from such
registration is available, and that the certificate(s) representing the Shares
may bear a legend to that effect. Optionee understands that the Company is under
no obligation to register the Shares and that an exemption may not be available
or may not permit Optionee to transfer Shares in the amounts or at the times
proposed by Optionee.

        4. Tax Consequences. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultant(s) Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

        5. Delivery of Payment. Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has elected to purchase
and has made provision for the payment of any federal or state withholding taxes
required to be paid or withheld by the Company.

        6. Entire Agreement. The Agreement is incorporated herein by reference.
This Exercise Notice and the Agreement constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of
the Company and Optionee with respect to the subject matter hereof. This
Exercise Notice and the Agreement are governed by Washington law except for that
body of law pertaining to conflict of laws.

Submitted by:                                Accepted by:

OPTIONEE:                                    REALNETWORKS, INC.

By:                                          By:
   --------------------------------             --------------------------------
                                             Its:
                                                 -------------------------------

Dated:                                       Dated:
      -----------------------------                -----------------------------