Document:

Prepared by R.R. Donnelley Financial -- Stock Option Agreement

 EXHIBIT 10.4 
  
 For Post-IPO Grants 
  
 NETFLIX, INC. 
  
 2002 STOCK PLAN 
  
 STOCK OPTION AGREEMENT

  
 Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this
Option Agreement. 
  
 I.    NOTICE OF STOCK OPTION GRANT 
  
 [Optionee’s Name and Address] 
  
 You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows: 
  
 
	  
	 Grant Number
 	  	  
	  	  	 

	 
	 Date of Grant
 	  	  
	  	  	 

	 
	 Vesting Commencement Date
 	  	  
	  	  	 

	 
	 Exercise Price per Share
 	  	 $
 
	  	  	 

	 
	 Total Number of Shares Granted
 	  	  
	  	  	 

	 
	 Total Exercise Price
 	  	 $        
 
	  	  	 

	 
	 Type of Option:
 	  	          Incentive Stock Option
 
	 
	  	  	          Nonstatutory Stock Option
 
	 
	 Term/Expiration Date:
 	  	  
	  	  	 

 
  
 Vesting Schedule: 
  
 This Option may be exercised, in whole or in part, in accordance with the following schedule: 
  
 [25% of the Shares subject to the Option shall vest twelve months after the Vesting Commencement Date, and 1/48 of the Shares subject
to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date, subject to the Optionee continuing to be a Service Provider on such dates.] 
 

  
 Termination Period: 
  

This Option may be exercised for three months after Optionee ceases to be a Service Provider. Upon the death or Disability of the Optionee, this Option may be
exercised for twelve months after Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. 
  
 II.    AGREEMENT 
  
 A.  Grant of Option. 
  
 The Administrator hereby grants to the Optionee named in
the Notice of Grant attached as Part I of this Agreement (the “Optionee”) an option (the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of
Grant (the “Exercise Price”), subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 16(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. 
  
 If designated
in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option, to the extent
that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”). 
  
 B.  Exercise of Option. 
  
 (a)  Right to
Exercise.    This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. 
  
 (b)  Method of Exercise.    This Option is exercisable by delivery of an exercise notice, in the form
attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations
and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be properly completed by the Optionee and delivered to the
             of the Company (or his or her designee). The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares
shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares. 
  
 C.  Method of Payment. 
  
 Payment of the aggregate Exercise Price shall be by any
of the following, or a combination thereof, at the election of the Optionee: 
  
 1.  cash;
or 
  
 2.  check; or 
 

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 3.  consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the Plan; or 
  
 4.  surrender of other Shares which (i) in the case of Shares acquired from the Company, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date
of surrender equal to the aggregate Exercise Price of the Exercised Shares. 
  
 D.  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 Optionee only by the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

  
 E.  Term of Option. 
  
 This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance
with the Plan and the terms of this Option Agreement. 
  
 F.  Tax Consequences. 

 
 Some of the federal tax consequences relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY
IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 
  
 G.  Exercising the Option. 
  
 1.  Nonstatutory Stock Option.    The Optionee may incur regular federal income tax liability upon exercise of a NSO. The Optionee will be treated as having received compensation income (taxable
at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise
and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 
  
 2.  Incentive Stock Option.    If this Option qualifies as an ISO, the Optionee will have no regular federal income tax liability upon its exercise, although the excess, if any, of the Fair Market
Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal tax purposes and may subject the Optionee to alternative minimum tax in the
year of exercise. In the event that the Optionee ceases to be an Employee but remains a Service Provider, any Incentive Stock Option of the Optionee that remains unexercised shall cease to qualify as an Incentive Stock Option and will be treated for
tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1) day following such change of status. 
  
 3.  Disposition of Shares. 
  
 (a)  NSO.    If the Optionee holds NSO Shares for more than one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

 

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 (b)  ISO.    If the Optionee
holds ISO Shares for more than one year after exercise and more than two years after the grant date, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. If the Optionee disposes
of ISO Shares within one year after exercise or two years after the grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the lesser of (A)
the difference between the Fair Market Value of the Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference between the sale price of such Shares and the aggregate Exercise Price. Any additional gain will be
taxed as capital gain, short-term or long-term depending on the period that the ISO Shares were held. 
  
 (c)  Notice of Disqualifying Disposition of ISO Shares.    If the Optionee sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years
after the grant date, or (ii) one year after the exercise date, the Optionee shall immediately notify the Company in writing of such disposition. The Optionee agrees that he or she may be subject to income tax withholding by the Company on the
compensation income recognized from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to the Optionee. 
  
 H.  Entire Agreement; Governing Law. 
  
 The Plan is
incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but
not the choice of law rules, of the State of California. 
  
 I.  No Guarantee of Continued Service.

  
 Optionee acknowledges and agrees that the vesting of Shares pursuant to the vesting schedule hereof is earned
only by continuing as a Service Provider at the will of the Company (and not through the act of being hired, being granted an Option or purchasing Shares hereunder). Optionee further acknowledges and agrees that this Option Agreement, the
transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as a Service Provider for the vesting period, for any period, or at all, and shall not interfere
with Optionee’s right or the Company’s right to terminate Optionee’s relationship as a Service Provider at any time, with or without cause. 
 

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 By your signature and the signature of the Company’s representative below,
you and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  
 
	 OPTIONEE:
 	  	 NETFLIX, INC.
 
	 
	 
Signature
 	  	 
By
 
	 
	 
Print Name
 	  	 
Title
 
	 
	 
Residence Address
 	  	  
	 
	 
	  	  

 
  
 

 -5- 

 For Post-IPO Grants 
  
 EXHIBIT A 
  
 NETFLIX, INC. 
  
 2002 STOCK PLAN 
  
 EXERCISE NOTICE

  
 Netflix, Inc. 
 [Address] 
  
 Attention: [Title] 

 
 1.  Exercise of Option.    Effective as of
today,             ,            , the undersigned (“Purchaser”) hereby elects to
purchase
                 shares (the “Shares”) of the Common Stock of Netflix, Inc. (the “Company”) under and pursuant to the 2002 Stock Plan
(the “Plan”) and the Stock Option Agreement dated,            (the “Option Agreement”). The purchase price for the Shares shall be
$        , as required by the Option Agreement. 
  
 2.  Delivery of Payment.    Purchaser herewith delivers to the Company the full purchase price for the Shares. 
  
 3.    Representations of Purchaser.    Purchaser acknowledges that Purchaser has received, read and understood the Plan and
the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
  
 4.  Rights
as Shareholder.    Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 14 of the Plan. 
  
 5.  Tax Consultation.    Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the
Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

  
 6.  Entire Agreement; Governing Law.    The
Plan and Option Agreement are incorporated herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement
is governed by the internal substantive laws, but not the choice of law rules, of the State of California. 
  
 
	 Submitted by:
 	    	 Accepted by:
 
	 
	 PURCHASER:
 	    	 NETFLIX, INC.
 
	 
	 
Signature
 	    	 
By
 
	 
	 
Print Name
 	    	 
Its
 
	 
	 
Address:
 	    	 
Address:
 
	  	    	 NETFLIX, INC.
 
	 
	    	 [address]
 
	 
	 
	    	 
Date Received
 

 
  
 

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 For Post-IPO Grants 
  
 NETFLIX, INC. 
  
 2002 STOCK PLAN

  
 NOTICE OF GRANT OF STOCK PURCHASE RIGHT 
  
 Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice of Grant. 
  
 [Grantee’s Name and Address] 
  
 You have been granted the right to purchase Common Stock of the Company, subject to the Company’s Repurchase Option and your ongoing status as a Service Provider (as described in the Plan and the
attached Restricted Stock Purchase Agreement), as follows: 
  
 
	  	  	  	  
	 Grant Number
 	  	  	  
	  	  	 
	 

	 Date of Grant
 	  	  	  
	  	  	 
	 

	 Price Per Share
 	  	 $
 	                                       
                                        
      
 
	  	  	 
	 

	 Total Number of Shares Subject to
  This Stock Purchase Right
 	  	  	  
	  	  	 
	 

	 Expiration Date:
 	  	  	  
	  	  	 
	 

 
  
 YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION
DATE OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES. By your signature and the signature of the Company’s representative below, you and the Company agree that this Stock Purchase Right is granted under and
governed by the terms and conditions of the 2002 Stock Plan and the Restricted Stock Purchase Agreement, attached hereto as Exhibit A-1, both of which are made a part of this document. You further agree to execute the attached Restricted Stock
Purchase Agreement as a condition to purchasing any shares under this Stock Purchase Right. 
  
 
	 GRANTEE:
 	 	  	 	  	 	 NETFLIX, INC.
 
	 
	 
Signature
 	 	  	 	  	 	 
By
 
	 
	 
Print Name
 	 	  	 	  	 	 
Title
 

 
  

  
 For Post-IPO Grants 
  
 EXHIBIT A-1 
  
 NETFLIX, INC.

  
 2002 STOCK PLAN 
  
 RESTRICTED STOCK PURCHASE AGREEMENT 
  
 Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Restricted Stock Purchase Agreement. 
  
 WHEREAS the Purchaser named in the Notice of Grant, (the “Purchaser”) is a Service Provider, and the Purchaser’s continued participation is considered by the Company to be important for the Company’s continued
growth; and 
  
 WHEREAS in order to give the Purchaser an opportunity to acquire an equity interest in the Company as
an incentive for the Purchaser to participate in the affairs of the Company, the Administrator has granted to the Purchaser a Stock Purchase Right subject to the terms and conditions of the Plan and the Notice of Grant, which are incorporated herein
by reference, and pursuant to this Restricted Stock Purchase Agreement (the “Agreement”). 
  
 NOW
THEREFORE, the parties agree as follows: 
  
 1.  Sale of Stock.    The Company
hereby agrees to sell to the Purchaser and the Purchaser hereby agrees to purchase shares of the Company’s Common Stock (the “Shares”), at the per Share purchase price and as otherwise described in the Notice of Grant. 

 
 2.  Payment of Purchase Price.    The purchase price for the Shares may be paid by
delivery to the Company at the time of execution of this Agreement of cash, a check, or some combination thereof. 
  
 3.  Repurchase Option. 
  
 (a)  In the event the Purchaser
ceases to be a Service Provider for any or no reason (including death or disability) before all of the Shares are released from the Company’s Repurchase Option (see Section 4), the Company shall, upon the date of such termination (as reasonably
fixed and determined by the Company) have an irrevocable, exclusive option (the “Repurchase Option”) for a period of sixty (60) days from such date to repurchase up to that number of shares which constitute the Unreleased Shares (as
defined in Section 4) at the original purchase price per share (the “Repurchase Price”). The Repurchase Option shall be exercised by the Company by delivering written notice to the Purchaser or the Purchaser’s executor (with a copy to
the Escrow Holder) AND, at the Company’s option, (i) by delivering to the Purchaser or the Purchaser’s executor a check in the amount of the aggregate Repurchase Price, or (ii) by canceling an amount of the Purchaser’s indebtedness to
the Company equal to the aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so that the combined payment and cancellation of indebtedness equals the aggregate Repurchase Price. Upon delivery of such notice and the payment of the
aggregate Repurchase Price, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name
the number of Shares being repurchased by the Company. 
 

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 (b)  Whenever the Company shall have the right to
repurchase Shares hereunder, the Company may designate and assign one or more employees, officers, directors or shareholders of the Company or other persons or organizations to exercise all or a part of the Company’s purchase rights under this
Agreement and purchase all or a part of such Shares. If the Fair Market Value of the Shares to be repurchased on the date of such designation or assignment (the “Repurchase FMV”) exceeds the aggregate Repurchase Price of such Shares, then
each such designee or assignee shall pay the Company cash equal to the difference between the Repurchase FMV and the aggregate Repurchase Price of such Shares. 
  
 4.  Release of Shares From Repurchase Option. 
  
 (a)                           percent (        %) of the
Shares shall be released from the Company’s Repurchase Option [one year] after the Date of Grant and                  percent
(        %) of the Shares [at the end of each month thereafter], provided that the Purchaser does not cease to be a Service Provider prior to the date of any such release. 
  
 (b)  Any of the Shares that have not yet been released from the Repurchase Option are referred to herein as
“Unreleased Shares.” 
  
 (c)  The Shares that have been released from the
Repurchase Option shall be delivered to the Purchaser at the Purchaser’s request (see Section 6). 
  
 5.  Restriction on Transfer.    Except for the escrow described in Section 6 or the transfer of the Shares to the Company or its assignees contemplated by this Agreement, none of the Shares or any
beneficial interest therein shall be transferred, encumbered or otherwise disposed of in any way until such Shares are released from the Company’s Repurchase Option in accordance with the provisions of this Agreement, other than by will or the
laws of descent and distribution. 
  
 6.  Escrow of Shares. 
  
 (a)  To ensure the availability for delivery of the Purchaser’s Unreleased Shares upon repurchase by the
Company pursuant to the Repurchase Option, the Purchaser shall, upon execution of this Agreement, deliver and deposit with an escrow holder designated by the Company (the “Escrow Holder”) the share certificates representing the Unreleased
Shares, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit A-2. The Unreleased Shares and stock assignment shall be held by the Escrow Holder, pursuant to the Joint Escrow Instructions of the Company and Purchaser
attached hereto as Exhibit A-3, until such time as the Company’s Repurchase Option expires. 
  
 (b)  The Escrow Holder shall not be liable for any act it may do or omit to do with respect to holding the Unreleased Shares in escrow while acting in good faith and in the exercise of its judgment. 
  
 (c)  If the Company or any assignee exercises the Repurchase Option hereunder, the Escrow Holder, upon receipt
of written notice of such exercise from the proposed transferee, shall take all steps necessary to accomplish such transfer. 
  
 (d)  When the Repurchase Option has been exercised or expires unexercised or a portion of the Shares has been released from the Repurchase Option, upon request the Escrow Holder shall
promptly cause a new certificate to be issued for the released Shares and shall deliver the certificate to the Company or the Purchaser, as the case may be. 
  
 (e)  Subject to the terms hereof, the Purchaser shall have all the rights of a shareholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to receive any cash dividends declared thereon. If, from time to time during the term of the
 
 

 -3- 

 
Repurchase Option, there is (i) any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the
Company, any and all new, substituted or additional securities to which the Purchaser is entitled by reason of the Purchaser’s ownership of the Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included
thereafter as “Shares” for purposes of this Agreement and the Repurchase Option. 
  
 7.  Legends.    The share certificate evidencing the Shares, if any, issued hereunder shall be endorsed with the following legend (in addition to any legend required under applicable state
securities laws): 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. 
  
 8.  Adjustment for Stock Split.    All references to the number of Shares and the purchase price of the Shares in this Agreement shall be appropriately adjusted to
reflect any stock split, stock dividend or other change in the Shares that may be made by the Company after the date of this Agreement. 
  
 9.  Tax Consequences.    The Purchaser has reviewed with the Purchaser’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. The Purchaser is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Purchaser understands that the Purchaser (and not the Company) shall
be responsible for the Purchaser’s own tax liability that may arise as a result of the transactions contemplated by this Agreement. The Purchaser understands that Section 83 of the Internal Revenue Code of 1986, as amended (the
“Code”), taxes as ordinary income the difference between the purchase price for the Shares and the Fair Market Value of the Shares as of the date any restrictions on the Shares lapse. In this context, “restriction” includes the
right of the Company to buy back the Shares pursuant to the Repurchase Option. The Purchaser understands that the Purchaser may elect to be taxed at the time the Shares are purchased rather than when and as the Repurchase Option expires by filing an
election under Section 83(b) of the Code with the IRS within 30 days from the date of purchase. The form for making this election is attached as Exhibit A-4 hereto. 
  
 THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE
PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S BEHALF. 
  
 10.  General Provisions. 
  
 (a)  This Agreement shall be
governed by the internal substantive laws, but not the choice of law rules of the State of California. This Agreement, subject to the terms and conditions of the Plan and the Notice of Grant, represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser. Subject to Section 16(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the
Plan shall prevail. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Agreement. 
  
 (b)  Any notice, demand or request required or permitted to be given by either the Company or the Purchaser pursuant to the terms of this Agreement shall be in writing and shall be deemed
given when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and 
 

 -4- 

 addressed to the parties at the addresses of the parties set forth at the end of this Agreement or such other address as
a party may request by notifying the other in writing. 
  
 Any notice to the Escrow Holder shall be
sent to the Company’s address with a copy to the other party hereto. 
  
 (c)  The
rights of the Company under this Agreement shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The
rights and obligations of the Purchaser under this Agreement may only be assigned with the prior written consent of the Company. 
  
 (d)  Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, nor prevent that party from thereafter
enforcing any other provision of this Agreement. The rights granted both parties hereunder are cumulative and shall not constitute a waiver of either party’s right to assert any other legal remedy available to it. 
  
 (e)  The Purchaser agrees upon request to execute any further documents or instruments necessary or desirable to
carry out the purposes or intent of this Agreement. 
  
 (f)  Purchaser acknowledges and
agrees that the vesting of Shares pursuant to Section 4 is earned only by continuing service as a Service Provider at the will of the Company (and not through the act of being hired or purchasing Shares hereunder). Purchaser further acknowledges and
agrees that this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise for the vesting period, for any period, or at all, and shall not interfere with
Purchaser’s right or the Company’s right to terminate Purchaser’s relationship as a Service Provider at any time, with or without cause. 
  
 By Purchaser’s signature below, Purchaser represents that he or she is familiar with the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and
provisions thereof. Purchaser has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement. Purchaser
agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Agreement. Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant. 
  
 
	 DATED:
                                        
                        
 	  	  
	  
	 
	  	  
	  
	 PURCHASER:
 	  	 NETFLIX, INC.
 
	  
	 
	  	 

	 Signature
 	  	 By
 
	  
	 
	  	 

	 Print Name
 	  	 Title
 

 
 

 -5- 

 For Post-IPO Grants 
  
 EXHIBIT A-2 
  
 ASSIGNMENT SEPARATE FROM CERTIFICATE 
  
 FOR VALUE RECEIVED I,
                                        
          , hereby sell, assign and transfer unto               
                                (       
       ) shares of the Common Stock of Netflix, Inc., standing in my name of the books of said corporation represented by Certificate No.
             herewith and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the within named corporation with full power of substitution in the
premises. 
  
 This Stock Assignment may be used only in accordance with the Restricted Stock Purchase Agreement (the
“Agreement”) between
                                        
                     and the undersigned dated               
    ,         . 
  
 Dated:
                   ,         
  
 Signature: 
 
 
  
  
  
 INSTRUCTIONS:    Please do not
fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise the Repurchase Option, as set forth in the Agreement, without requiring additional signatures on the part of the Purchaser.

 

  
 For Post-IPO Grants 
  
 EXHIBIT A-3 
  
 JOINT ESCROW INSTRUCTIONS

  
             ,
             
  
 Corporate Secretary

 Netflix, Inc. 
 [address]

  
 Dear
                            : 
  
 As Escrow Agent for both Netflix, Inc., a Delaware corporation (the “Company”), and the undersigned purchaser of stock of the Company (the “Purchaser”),
you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Purchase Agreement (“Agreement”) between the Company and the undersigned, in accordance with the following
instructions: 
  
 1.  In the event the Company and/or any assignee of the Company (referred to collectively
as the “Company”) exercises the Company’s Repurchase Option set forth in the Agreement, the Company shall give to Purchaser and you a written notice specifying the number of shares of stock to be purchased, the purchase price, and the
time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

  
 2.  At the closing, you are directed (a) to date the stock assignments necessary for the transfer in
question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee, against the simultaneous delivery to you of the
purchase price (by cash, a check, or some combination thereof) for the number of shares of stock being purchased pursuant to the exercise of the Company’s Repurchase Option. 
  
 3.  Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and
substitutions to said shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser’s attorney–in-fact and agent for the term of this escrow to execute with respect to such securities all
documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent
to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, Purchaser shall exercise all rights and privileges of a shareholder of the Company while the stock is held by you. 
  
 4.  Upon written request of the Purchaser, but no more than once per calendar year, unless the Company’s Repurchase Option
has been exercised, you shall deliver to Purchaser a certificate or certificates representing so many shares of stock as are not then subject to the Company’s Repurchase Option. Within 90 days after Purchaser ceases to be a Service Provider,
you shall deliver to Purchaser a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company’s Repurchase
Option. 
 

  
 5.  If at the time of termination of this escrow you should have in
your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of the same to Purchaser and shall be discharged of all further obligations hereunder. 
  

6.  Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 
  
 7.  You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall
be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith. 
  
 8.  You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other
person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or
found to have been entered without jurisdiction. 
  
 9.  You shall not be liable in any respect on account
of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder. 
  
 10.  You shall not be liable for the outlawing of any rights under the statute of limitations with respect to these Joint Escrow Instructions or any documents
deposited with you. 
  
 11.  You shall be entitled to employ such legal counsel and other experts as you
may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 
  
 12.  Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent. 
  
 13.  If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

  
 14.  It is understood and agreed that should any dispute arise with respect to the delivery and/or
ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either
by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to
institute or defend any such proceedings. 
  
 15.  Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled
at the 
 

 -2- 

  
 following addresses or at such other addresses as a party may designate by ten days’ advance
written notice to each of the other parties hereto. 
  
 
	 COMPANY:
 	 	 NETFLIX, INC.
 [address]
 
	 
	 PURCHASER:
 	 	 
 
 
 
 

	 
	 ESCROW AGENT:
 	 	 Corporate Secretary
 Netflix,Inc.
 [address]
 

 
  
 16.  By signing these Joint Escrow Instructions, you
become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement. 
  
 17.  This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. 
  
 18.  These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with, the internal substantive laws, but not the choice of law
rules, of the State of California. 
  
 
	  	 	  	 	 Very truly yours,
 
	 
	  	 	  	 	 NETFLIX, INC.
 
	 
	  	 	  	 	  	 	  	 	 
By
 
	 
	  	 	  	 	  	 	  	 	 
Title
 
	 
	  	 	  	 	  	 	  	 	 PURCHASER:
 
	 
	  	 	  	 	  	 	  	 	 
Signature
 
	 
	  	 	  	 	  	 	  	 	 
Print Name
 
	  	 	 ESCROW AGENT:
  
 
Corporate Secretary
 	 	  	 	  	 	  

 
  
 

 -3- 

  
 For Post-IPO Grants 
  
 EXHIBIT A-4 
  
 ELECTION UNDER SECTION 83(b)

 OF THE INTERNAL REVENUE CODE OF 1986 
  
 The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of any compensation
taxable to taxpayer in connection with his or her receipt of the property described below: 
  
 1.  The
name, address, taxpayer identification number and taxable year of the undersigned are as follows: 
  
 
	 NAME:
 	 	 TAXPAYER:
 	 	 SPOUSE:
 
	 
	 ADDRESS:
 	 	  	 	  
	 
	 IDENTIFICATION NO.:
 	 	 TAXPAYER:
 	 	 SPOUSE:
 
	 
	 TAXABLE YEAR:
 	 	  	 	  

 
  
 2.  The property with respect to which the election is
made is described as follows:          shares (the “Shares”) of the Common Stock of Netflix, Inc. (the “Company”). 
  
 3.  The date on which the property was transferred is:                 ,
        . 
  
 4.  The property is subject to the following
restrictions: 
  
 The Shares may be repurchased by the Company, or its assignee, upon certain events. This right
lapses with regard to a portion of the Shares based on the continued performance of services by the taxpayer over time. 
  
 5.  The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is:
$        . 
  
 6.  The amount (if any) paid for such
property is: $                . 
  
 The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property. The transferee of such property is the
person performing the services in connection with the transfer of said property. 
  
 The undersigned understands
that the foregoing election may not be revoked except with the consent of the Commissioner. 
  
 
	 Dated:                
,        
 	 	  
	  	 	 
Taxpayer
 
	 The undersigned spouse of taxpayer joins in this election.
 	 	  
	 
	 Dated:
                ,        
 	 	  
	  	 	 
Spouse of TaxpayerPrepared by R.R. Donnelley Financial -- Stand-Alone Stock Option Agreement

 EXHIBIT 10.6 
  
 NETFLIX.COM, INC. 
  
 STAND-ALONE STOCK OPTION AGREEMENT 
  
 I.  NOTICE OF STOCK OPTION GRANT 
  
 Reed Hastings 
  
 Address:     604
Lighthouse Avenue 
  
 Santa Cruz, CA 95060 
  
 You have been granted a Nonstatutory Stock Option to purchase shares (the “Shares”) of Common Stock of the Company,
subject to the terms and conditions of this Stand-Alone Stock Option Agreement (the “Agreement”), as follows: 
  
 
	 Date of Grant
 	  	 July 18, 2001
 
	 
	 Vesting Commencement Date
 	  	 April 1, 2001
 
	 
	 Exercise Price per Share
 	  	 $1.00
 
	 
	 Total Number of Shares Granted
 	  	 1,500,000
 
	 
	 Total Exercise Price
 	  	 $1,500,000.00
 
	 
	 Term/Expiration Date:
 	  	 July 18, 2011
 

 
  
 Vesting Schedule: 
  
 This Option is exercisable immediately, in whole or in part; provided, however, that exercise of any unvested optioned Stock is
conditioned upon the Optionee signing a Restricted Stock Purchase Agreement. 
  
 The Shares subject to this Option
shall vest or be released from the Company’s repurchase option, as set forth in the Restricted Stock Purchase Agreement, according to the following schedule: 
  
 1/36 of the original number of Shares subject to the Option shall vest each month after the Vesting Commencement Date, subject to the Optionee’s continuing to be a
Service Provider on such dates. 
  
 Termination Period 
  

The vested portion of this Option shall be exercisable for three months after Optionee ceases to be a Service Provider. The unvested portion of this Option shall not
be exercisable at any time after Optionee ceases to be a Service Provider. Upon Optionee’s death or Disability, the vested portion of this Option may be exercised for one year after Optionee ceases to be a Service Provider. In no case may the
Optionee exercise this Option after the Term/Expiration Date as provided above. 
 

 1 

  
 II.    AGREEMENT 
  
 1.  Definitions. As used herein, the following definitions shall apply: 
  

(a)  “Applicable Laws” means the requirements relating to the administration of stock options under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction that may apply to this Option. 
  
 (b)  “Board” means the Board of Directors of the Company or any committee of the Board that has
been designated by the Board to administer this Agreement. 
  
 (c)  “Code”
means the Internal Revenue Code of 1986, as amended. 
  
 (d)  “Common
Stock” means the common stock of the Company. 
  
 (e)  “Company”
means NetFlix.com, Inc., a Delaware corporation. 
  
 (f)  “Consultant”
means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity. 
  
 (g)  “Director” means a member of the Board. 
  
 (h)  “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. 
  
 (i)  “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.

  
 (j)  “Exchange Act” means the Securities Exchange Act of 1934, as
amended. 
  
 (k)  “Fair Market Value” means, as of any date, the value of
Common Stock determined as follows: 
  
 (i)  If the Common Stock is listed on any
established stock exchange or a national market system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; 
  
 (ii)  If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or 
  
 (iii)  In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board. 
  
 (l)  “Nonstatutory Stock Option” means an Option not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
 

 2 

  
 (m)  “Notice of Grant” means the
written notice, in Part I of this Agreement, evidencing certain of the terms and conditions of this Option. The Notice of Grant is part of the Agreement. 
  
 (n)  “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder. 
  
 (o)  “Option” means this stock
option. 
  
 (p)  “Optioned Stock” means the Common Stock subject to this
Option. 
  
 (q)  “Optionee” means Reed Hastings, or his successor.

  
 (r)  “Parent” means a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code. 
  
 (s)  “Service
Provider” means an individual that serves as either an Employee, Director or Consultant (as requested by the Company) for at least twenty-five (25) percent of such individual’s time (as reasonably determined by the Company).

  
 (t)  “Subsidiary” means a “subsidiary corporation”, whether
now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 2.  Grant of
Option.    The Board hereby grants to the Optionee, the Option to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise
Price”), subject to the terms and conditions hereof. 
  
 3.  Exercise of Option.

  
 (a)  Right to Exercise. 
  

(i)  Subject to subsections 3(a)(ii) and 3(a)(iii) below, this Option shall be exercisable cumulatively according to the Vesting Schedule set
forth in the Notice of Grant. Alternatively, at the election of the Optionee, this Option may be exercised in whole or in part at any time as to Shares that have not yet vested. For purposes of this Agreement, Shares subject to the Option shall vest
based on Optionee continuing to be a Service Provider with the Company. Vested Shares shall not be subject to the Company’s repurchase right (as set forth in the Restricted Stock Purchase Agreement, attached hereto as Exhibit C–1).

  
 (ii)  As a condition to exercising this Option for unvested Shares, the Optionee shall
execute the Restricted Stock Purchase Agreement. 
  
 (iii)  This Option may not be
exercised for a fraction of a Share. 
  
 (b)  Method of
Exercise.    This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company. The Exercise Notice shall be completed by the Optionee and
delivered to the Secretary of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price. 
 

 3 

  
 (c)  Legal Compliance.    No
Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on
the date the Option is exercised with respect to such Exercised Shares. 
  
 (d)  Buyout
Provisions.    The Board may at any time offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the Board shall establish and communicate to the Optionee at the
time that such offer is made. 
  
 4.  Optionee’s Representations.    In the
event the Shares have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option,
deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B. 
  
 5.  Lock–Up Period.    Optionee hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with
any registration of the offering of any securities of the Company under the Securities Act, Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180–day period (or such other period as may be
requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “MarketStandoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act. Such
restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the
Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period. 
  
 6.  Method of Payment.    Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the
election of the Optionee: 
  
 (a)  cash or check; 
  
 (b)  consideration received by the Company under a cashless exercise program implemented by the Company; or

  
 (c)  surrender of other Shares which (i) in the case of Shares acquired upon exercise
of an option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. 
  
 7.  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 Optionee only by the Optionee. The terms of this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the
Optionee. 
  
 8.  Restrictions on Exercise.    This Option may not be exercised
if the issuance of Shares upon exercise or the method of payment of consideration for such Shares would constitute a violation of any Applicable Law. 
  
 9.  Term of Option.    This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance
with the terms of this Agreement. 
  
 10.  Termination of Relationship as a Service
Provider.    If the Optionee ceases to be a Service Provider (other than for death or Disability), this Option may be exercised for a period of three (3) months 
 

 4 

  
 after the date of such termination (but in no event later than the expiration date of this Option as set
forth in the Notice of Grant) to the extent that the Option is vested on the date of such termination. To the extent that the Optionee does not exercise this Option within the time specified herein, the Option shall terminate. 

 
 11.  Disability of Optionee.    If the Optionee ceases to be a Service Provider as a
result of the Optionee’s Disability, this Option may be exercised for a period of twelve (12) months after the date of such termination (but in no event later than the expiration date of this Option as set forth in the Notice of Grant) to the
extent that the Option is vested on the date of such termination. To the extent that Optionee does not exercise this Option within the time specified herein, the Option shall terminate. 
  
 12.  Death of Optionee.    If the Optionee dies while a Service Provider, the Option may be exercised at any time within twelve (12)
months following the date of death (but in no event later than the expiration date of this Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. If, after death, the Optionee’s estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within
the time specified herein, the Option shall terminate. 
  
 13.  Adjustments Upon Changes in
Capitalization, Dissolution, Merger or Asset Sale. 
  
 (a)  Changes in
Capitalization.    Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by this Option, as well as the price per share of Common Stock covered by this Option, shall
be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without
receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to this Option. 
  
 (b)  Dissolution or Liquidation.    In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify Optionee as soon as practicable prior to the effective date of such proposed transaction. The Board in its discretion may provide for the Optionee to have the right to exercise his or her Option
until fifteen (15) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Board may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of the Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised, the Option will terminate immediately prior to the consummation of such proposed action. 
  
 (c)  Merger or Asset Sale.    In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company (a “Merger”),
the Option shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation (the “Successor Corporation”). 
  
 Following such assumption or substitution in connection with a Merger, if the Optionee’s status as an Employee of the Successor
Corporation, is terminated by the Successor Corporation as a result of an 
 

 5 

 Involuntary Termination (as defined below) other than for Cause (as defined below) within twelve months following a Merger, the Optionee shall
vest in and have the right to exercise that portion of the Option, if any, that would have vested within one year after the date of Optionee’s termination. Thereafter, the Option shall remain exercisable in accordance with Sections 10 through
12 above. 
  
 For purposes of this section, any of the following events shall constitute an “Involuntary
Termination”: (i) a significant reduction of the Employee’s duties, authority or responsibilities, relative to the Employee’s duties, authority or responsibilities as in effect immediately prior to the Merger, or the assignment to
Employee of such reduced duties, authority or responsibilities; (ii) a substantial reduction of the facilities and perquisites (including office space and location) available to the Employee immediately prior to the Merger; (iii) a reduction in the
base salary of the Employee as in effect immediately prior to the Merger; (iv) a material reduction in the kind or level of employee benefits, including bonuses, to which the Employee was entitled immediately prior to the Merger with the result that
the Employee’s overall benefits package is significantly reduced; (v) the relocation of the Employee to a facility or a location more than fifty (50) miles from the Employee’s then present location, without the Employee’s express
written consent; (vi) any purported termination of the Employee by the Successor Corporation which is not effected for Disability or for Cause, or any purported termination for which the grounds relied upon are not valid; (vii) or any act or set of
facts or circumstances which would, under California case law or statute constitute a constructive termination of the Employee. 
  
 For purposes of this section, “Cause” shall mean (i) any act of personal dishonesty taken by the Employee in connection with his responsibilities as an employee and intended to result in substantial personal
enrichment of the Employee, (ii) the conviction of a felony, (iii) a willful act by the Employee which constitutes gross misconduct and which is injurious to the Successor Corporation, and (iv) following delivery to the Employee of a written demand
for performance from the Successor Corporation which describes the basis for the Successor Corporation’s belief that the Employee has not substantially performed his duties, continued violations by the Employee of the Employee’s
obligations to the Successor which are demonstrably willful and deliberate on the Employee’s part. 
  
 In the
event that the Successor Corporation refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which Optionee would not
otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in connection with a Merger, the Board shall notify the Optionee in writing that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the Merger, the
option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the Merger, the consideration (whether stock, cash, or other securities or property) received in the Merger by
holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received in the Merger is not solely common stock of the Successor Corporation or its Parent, the Board may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the Successor Corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Merger.

  
 14.  Notices.    Any notice to be given to the Company hereunder shall be in
writing and shall be addressed to the Company at its then current principal executive office or to such other address as the Company may hereafter designate to the Optionee by notice as provided in this Section. Any notice to be given to the
Optionee hereunder shall be addressed to the Optionee at the address set forth beneath his signature hereto, or at such other address as the Optionee may hereafter designate to the Company by notice 
 

 6 

 as provided herein. A notice shall be deemed to have been duly given when personally delivered or mailed by registered or certified mail to the
party entitled to receive it. 
  
 15.  Tax Consequences.    Some of the federal
tax consequences relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES. 
  
 (a)  Exercising the
Option.    The Optionee may incur regular federal income tax liability upon exercise of a Nonstatutory Stock Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her
compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise. 
  
 (b)  Disposition of
Shares.    If the Optionee holds Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 
  
 (c)  Section 83(b) Election for Unvested Shares Purchased Pursuant to
Options.    With respect to the exercise of this Option for unvested Shares, an election may be filed by the Optionee with the Internal Revenue Service, within 30 days of the purchase of the Shares, electing pursuant
to Section 83(b) of the Code to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase. This will result in a recognition of taxable income to the Optionee on the date of
exercise, measured by the excess, if any, of the Fair Market Value of the Shares, at the time the Option is exercised over the purchase price for the Shares. Absent such an election, taxable income will be measured and recognized by Optionee at the
time or times on which the Company’s repurchase option lapses. Optionee is strongly encouraged to seek the advice of his or her own tax consultants in connection with the purchase of the Shares and the advisability of filing of the Election
under Section 83(b) of the Code. A form of Election under Section 83(b) is attached hereto as Exhibit C–5 for reference. 
  
 16.  Entire Agreement; Governing Law.    This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes in its entirety all prior
undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of California 
  
 17.  NO
GUARANTEE OF CONTINUED SERVICE.    OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
 

 7 

  
 By your signature and the signature of the Company’s representative below,
you and the Company agree that this Option is granted under and governed by the terms and conditions of this Agreement. Optionee has reviewed this Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing
this Agreement and fully understands all provisions of this Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions relating to this Agreement. Optionee further
agrees to notify the Company upon any change in the residence address indicated below. 
  
 
	 OPTIONEE
 	 	 NETFLIX.COM, INC.
 
	 
	                                      
                                        
      
 	 	 By:                                     
                                        
                      
 
	 Signature
 	 	 Name:
 
	  	 	 Title:
 
	 Reed Hastings                                  
                           
 
	 Print Name
 	 	  
	 
	 Residence Address:
 	 	  
	 
	         604 Lighthouse
Avenue                                       
 
 	 	  
	 
	         Santa Cruz, CA 95060                       
                                        
           
 

 
 

 8 

  
 CONSENT OF SPOUSE 
  
 The undersigned spouse of Optionee has read and hereby approves the terms and conditions of this Agreement. In consideration of the Company’s granting his or her
spouse the right to purchase Shares as set forth in this Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of this Agreement and further agrees that any community property interest shall be similarly bound.
The undersigned hereby appoints the undersigned’s spouse as attorney–in-fact for the undersigned with respect to any amendment or exercise of rights under this Agreement. 
  
  
                                      
                                        
                           
 Patty Quillin 
  
 

 9 

  
 EXHIBIT A 
  
 NETFLIX.COM, INC. 
  
 EXERCISE NOTICE

  
 NetFlix.com, Inc. 
 970 University Avenue 
 Los Gatos, CA 95032 
 Attention: Stock Administrator 
  
 1.  Exercise of Option.    Effective as of today,                , the undersigned (“Purchaser”)
hereby elects to purchase                shares (the “Shares”) of the Common Stock of NetFlix.com, Inc. (the “Company”) under and pursuant to
the Stand-Alone Stock Option Agreement dated July 18, 2001 (the “Option Agreement”). The purchase price for the Shares shall be $1.00, as required by the Option Agreement. 
  
 2.  Delivery of Payment.    Purchaser herewith delivers to the Company the full purchase price for the Shares. 
  
 3.  Representations of Purchaser.    Purchaser acknowledges that Purchaser has received, read and
understood the Option Agreement and agrees to abide by and be bound by its terms and conditions. 
  
 4.  Rights as Shareholder.    Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after
exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 11 of the Option Agreement. 
  
 5.  Company’s Right of First Refusal.    Before any Shares held by Purchaser or any transferee
(either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on
the terms and conditions set forth in this Section (the “Right of First Refusal”). 
  
 (a)  Notice of Proposed Transfer.    The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or
otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s). 
  

(b)  Exercise of Right of First Refusal.    At any time within thirty (30) days after receipt of the Notice, the
Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in
accordance with subsection (c) below. 
 

 10 

 (c)  Purchase Price.    The purchase price (“Purchase
Price”) for the Shares purchases by the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith. 
  
 (d)  Payment.    Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

  
 (e)  Holder’s Right to Transfer.    If all of the
Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that Proposed
Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section
shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company
and/or its assignees shall be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred. 
  
 (f)  Exception for Certain Family Transfers.    Anything to the contrary contained in this Section notwithstanding, the transfer of any or all of the Shares during
the Purchaser’s lifetime or on the Purchaser’s death by will or intestacy to the Purchaser’s immediate family or a trust for the benefit of the Purchaser’s immediate family shall be exempt from the provisions of this Section.
“Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section. 
  
 (g)  Termination of Right of First Refusal.    The Right of First Refusal shall terminate as to any Shares upon the first sale of Common Stock of the Company to the
general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended. 
  
 6.  Tax Consultation.    Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s
purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company
for any tax advice. 
  
 7.  Restrictive Legends and Stop-Transfer Orders. 
  
 (a)  Legends.    Optionee understands and agrees that the Company shall cause the
legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:

  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”)
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY 
 

 11 

 COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH. 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S), AS SET FORTH IN THE EXERCISE NOTICE AND THE STAND-ALONE STOCK OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES. 
  
 (b)  Stop-Transfer Notices.    Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 
  
 (c)  Refusal to Transfer.    The Company shall not be required (i) to transfer on its books any Shares that have been
sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have
been so transferred. 
  
 8.  Successors and Assigns.    The Company may assign
any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise
Notice shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns. 
  
 9.  Interpretation.    Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Optionee or by the Company forthwith to the Administrator which shall review such
dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties. 
  
 10.  Entire Agreement; Governing Law.    The Option Agreement is incorporated herein by reference. This Agreement, and the Option Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s
interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California. 
 

 12 

  
 
	 Submitted by:
 	 	 Accepted by:
 
	 
	 OPTIONEE
 	 	 NETFLIX.COM, INC.
 
	 
	                                      
                                        
     
 	 	 By:                                     
                                        
                    
 
	 Signature
 	 	 Name:
 
	  	 	 Title:
 
	 Reed
Hastings                                       
                   
 	 	  
	 Print Name
 	 	  
	 
	 Residence Address:
 	 	  
	 
	         604 Lighthouse
Avenue                                   
 	 	  
	 
	         Santa Cruz, CA
95060                                     
 
 	 	 Date Received:
                                        
                                 
 

 
 

 13 

 EXHIBIT B 
  
 INVESTMENT REPRESENTATION STATEMENT 
  
 OPTIONEE:     Reed Hastings 
 COMPANY:    NetFlix.com, Inc. 

SECURITY:     Common Stock 
 AMOUNT:                                    
                
 DATE:            
                                        
      
  
 In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following: 
  
 (a)  Optionee is aware of the
Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Optionee is acquiring these Securities for investment for
Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 
  
 (b)  Optionee acknowledges and understands that the Securities constitute “restricted securities”
under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee’s investment intent as expressed
herein. In this connection, Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee’s representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the
future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands
that the Company is under no obligation to register the Securities. Optionee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to the Company, and any other legend required under applicable state securities laws. 
  
 (c)  Optionee is familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permit limited public resale
of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. 
  
 The Securities may be resold only in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than
one year after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or
by a non-affiliate who subsequently holds the Securities less than two years, the satisfaction of certain of the conditions 
 

 14 

 
specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as said term
is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information about the Company, (3) the amount of Securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if applicable. 
  
 (d)  Optionee further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption
will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event. 
  
 Signature of Optionee: 
  
                                      
                                        
                           
  
 Date:
                                        
                                        
            
 

 15 

 EXHIBIT C–1 
  
 NETFLIX.COM, INC. 
  
 RESTRICTED STOCK PURCHASE AGREEMENT

  
 THIS AGREEMENT is made between Reed Hastings (the “Purchaser”) and NetFlix.com, Inc. (the
“Company”) as of                     . 
  
 RECITALS 
  
 A.  Pursuant to the exercise of the
stock option granted to Purchaser under the Stand-Alone Stock Option Agreement (the “Option Agreement”) dated July 18, 2001 by and between the Company and Purchaser, which such Option Agreement is hereby incorporated by reference,
Purchaser has elected to purchase                      of those shares which have not become vested under the vesting schedule set forth in the
Option Agreement (“Unvested Shares”). The Unvested Shares and the shares subject to the Option Agreement which have become vested are sometimes collectively referred to herein as the “Shares.” 
  
 B.  As required by the Option Agreement, as a condition to Purchaser’s election to exercise the Option, Purchaser must
execute this Restricted Stock Purchase Agreement, which sets forth the rights and obligations of the parties with respect to Shares acquired upon exercise of the Option. 
  
 1.  Repurchase Option. 
  
 (a)  If Purchaser’s status as a Service Provider is terminated for any reason, including for cause, death, and disability, the Company shall have the right and option to purchase from Purchaser, or
Purchaser’s personal representative, as the case may be, all of the Purchaser’s Unvested Shares as of the date of such termination at the price paid by the Purchaser for such Shares (the “Repurchase Option”). 

 
 (b)  Upon the occurrence of a termination, the Company may exercise its Repurchase Option by
delivering personally or by registered mail, to Purchaser (or his transferee or legal representative, as the case may be), within ninety (90) days of the termination, a notice in writing indicating the Company’s intention to exercise the
Repurchase Option and setting forth a date for closing not later than thirty (30) days from the mailing of such notice. The closing shall take place at the Company’s office. At the closing, the holder of the certificates for the Unvested Shares
being transferred shall deliver the stock certificate or certificates evidencing the Unvested Shares, and the Company shall deliver the purchase price therefor. 
  
 (c)  At its option, the Company may elect to make payment for the Unvested Shares to a bank selected by the Company. The Company shall avail
itself of this option by a notice in writing to Purchaser stating the name and address of the bank, date of closing, and waiving the closing at the Company’s office. 
  
 (d)  If the Company does not elect to exercise the Repurchase Option conferred above by giving the requisite notice within ninety (90) days
following the termination, the Repurchase Option shall terminate. 
  
 (e)  The Repurchase
Option shall terminate in accordance with the vesting schedule in Optionee’s Option Agreement. 
 

 16 

 2.  Transferability of the Shares; Escrow. 
  
 (a)  Purchaser hereby authorizes and directs the Secretary of the Company, or such other person designated by the Company, to transfer the
Unvested Shares as to which the Repurchase Option has been exercised from Purchaser to the Company. 
  
 (b)  To insure the availability for delivery of Purchaser’s Unvested Shares upon repurchase by the Company pursuant to the Repurchase Option under Section 1, Purchaser hereby appoints the Secretary, or any other person
designated by the Company as escrow agent, as its attorney–in-fact to sell, assign and transfer unto the Company, such Unvested Shares, if any, repurchased by the Company pursuant to the Repurchase Option and shall, upon execution of this
Agreement, deliver and deposit with the Secretary of the Company, or such other person designated by the Company, the share certificates representing the Unvested Shares, together with the stock assignment duly endorsed in blank, attached hereto as
Exhibit C–2. The Unvested Shares and stock assignment shall be held by the Secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and Purchaser attached as Exhibit C–3 hereto, until the Company
exercises its purchase right as provided in Section 1, until such Unvested Shares are vested, or until such time as this Agreement no longer is in effect. As a further condition to the Company’s obligations under this Agreement, the spouse of
the Purchaser, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit C–4. Upon vesting of the Unvested Shares, the escrow agent shall promptly deliver to the Purchaser the certificate or
certificates representing such Shares in the escrow agent’s possession belonging to the Purchaser, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain
such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement. 
  
 (c)  The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of
its judgment. 
  
 (d)  Transfer or sale of the Shares is subject to restrictions on
transfer imposed by any applicable state and federal securities laws. Any transferee shall hold such Shares subject to all the provisions hereof and the Exercise Notice executed by the Purchaser with respect to any Unvested Shares purchased by
Purchaser and shall acknowledge the same by signing a copy of this Agreement. 
  
 3.  Ownership, Voting
Rights, Duties.    This Agreement shall not affect in any way the ownership, voting rights or other rights or duties of Purchaser, except as specifically provided herein. 
  

4.  Legends.    The share certificate evidencing the Shares issued hereunder shall be endorsed with the following legend (in
addition to any legend required under applicable state securities laws): 
  
 THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. 
  
 5.  Adjustment for Stock Split.    All references to the number of Shares and the purchase price of
the Shares in this Agreement shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made by the Company after the date of this Agreement. 
  
 6.  Notices.    Notices required hereunder shall be given in person or by registered mail to the
address of Purchaser shown on the records of the Company, and to the Company at their respective principal executive offices. 
 

 17 

 7.  Survival of Terms.    This Agreement shall apply to and bind Purchaser and the
Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors. 
  
 8.  Section 83(b) Election.    Purchaser hereby acknowledges that he or she has been informed that, with respect to the exercise of an option for Unvested Shares, an election may be filed
by the Purchaser with the Internal Revenue Service, within 30 days of the purchase of the Shares, electing pursuant to Section 83(b) of the Code to be taxed currently on any difference between the purchase price of the Shares and their Fair Market
Value on the date of purchase. This will result in a recognition of taxable income to the Purchaser on the date of exercise, measured by the excess, if any, of the fair market value of the Shares, at the time the option is exercised over the
purchase price for the Shares. Absent such an election, taxable income will be measured and recognized by Purchaser at the time or times on which the Company’s Repurchase Option lapses. Purchaser is strongly encouraged to seek the advice of his
or her own tax consultants in connection with the purchase of the Shares and the advisability of filing of the Election under Section 83(b) of the Code. A form of Election under Section 83(b) is attached hereto as Exhibit C–5 for reference.

  
 PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY
THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER’S BEHALF. 
  
 9.  Representations.    Purchaser has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Purchaser is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Purchaser understands that he or she (and not the Company) shall be
responsible for his or her own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 
  
 10.  Governing Law.    This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of California. 
  
 Purchaser represents that he or she has read this Agreement and is familiar with its terms and provisions. Purchaser hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Agreement. 
 

 18 

 IN WITNESS WHEREOF, this Agreement is deemed made as of the date first set forth above. 
  
 NETFLIX.COM, INC. 
  
 By:
                                        
                                        
                
 Name: 
 Title: 
  
 PURCHASER 
  
                                      
                                        
                           
 Signature 
  
 Reed
Hastings                                       
                      
 Printed Name 
  
 Address: 
  

        604 Lighthouse
Avenue                                     

 
         Santa Cruz, CA
95060                                      

 

 19 

 EXHIBIT C–2 
  
 ASSIGNMENT SEPARATE FROM CERTIFICATE 
  
 FOR VALUE RECEIVED
I,                         , hereby sell, assign and transfer unto NetFlix.com, Inc.
(                ) shares of the Common Stock of NetFlix.com, Inc. standing in my name of the books of said corporation represented by Certificate No.
        herewith and do hereby irrevocably constitute and appoint
                            to transfer the said stock on the books of the within named corporation
with full power of substitution in the premises. 
  
 This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between NetFlix.com, Inc. and the undersigned dated                     ,     .

  
 Dated:
                ,           
  
 Signature:
                                        
                                        
   
  
 INSTRUCTIONS:    Please do not fill in any blanks other than the
signature line. The purpose of this assignment is to enable the Company to exercise its “repurchase option,” as set forth in the Agreement, without requiring additional signatures on the part of the Purchaser. 
 

 20 

 EXHIBIT C–3 
  
 JOINT ESCROW INSTRUCTIONS 
  
 Date:                                   

  
 Corporate Secretary 
 NetFlix.com, Inc. 
 970 University Avenue 
 Los Gatos, CA 95032 
 Attention: Secretary

  
 Dear Sir or Madam: 
  
 As Escrow Agent for both NetFlix.com, Inc. (the “Company”), and the undersigned purchaser of stock of the Company (the “Purchaser”), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Purchase Agreement (“Agreement”) between the Company and the undersigned, in accordance with the following instructions:

  
 1.  In the event the Company and/or any assignee of the Company (referred to collectively for
convenience herein as the “Company”) exercises the Company’s repurchase option set forth in the Agreement, the Company shall give to Purchaser and you a written notice specifying the number of shares of stock to be purchased, the
purchase price, and the time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of
said notice. 
  
 2.  At the closing, you are directed (a) to date the stock assignments necessary for the
transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee, against the simultaneous delivery
to you of the purchase price (by cash, a check, or some combination thereof) for the number of shares of stock being purchased pursuant to the exercise of the Company’s repurchase option. 
  

3.  Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser’s attorney–in-fact and agent for the term of this escrow to execute with respect to such
securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required
applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, Purchaser shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you. 

 
 4.  Upon written request of the Purchaser, but no more than once per calendar year, unless the Company’s
repurchase option has been exercised, you will deliver to Purchaser a certificate or certificates representing so many shares of stock as are not then subject to the Company’s repurchase option. Within 120 days after cessation of
Purchaser’s continuous employment by or services to the Company, or any parent or subsidiary of the Company, you will deliver to Purchaser a certificate or certificates representing the aggregate number of shares held or issued pursuant to the
Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company’s repurchase option. 
 

 21 

 5.  If at the time of termination of this escrow you should have in your possession any documents, securities,
or other property belonging to Purchaser, you shall deliver all of the same to Purchaser and shall be discharged of all further obligations hereunder. 
  
 6.  Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 
  
 7.  You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent
or as attorney–in-fact for Purchaser while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith. 
  
 8.  You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other
person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or
found to have been entered without jurisdiction. 
  
 9.  You shall not be liable in any respect on account
of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder. 
  
 10.  You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents
deposited with you. 
  
 11.  You shall be entitled to employ such legal counsel and other experts as you
may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 
  
 12.  Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent. 
  
 13.  If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

  
 14.  It is understood and agreed that should any dispute arise with respect to the delivery and/or
ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either
by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to
institute or defend any such proceedings. 
  
 15.  Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled
at the 
 

 22 

 
following addresses or at such other addresses as a party may designate by ten days’ advance written notice to each of the other parties hereto. 
  
 16.  By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow
Instructions; you do not become a party to the Agreement. 
  
 17.  This instrument shall be binding upon
and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. 
  
 18.  These Joint Escrow Instructions shall be governed by the internal substantive laws, but not the choice of law rules, of California. 
  
 NETFLIX.COM, INC. 
  
 By:                                     
                                        
                   
 Name: 

Title: 
  
 PURCHASER 
  
                                      
                                        
                           
 Signature 
  
 Reed
Hastings                                       
                      
 Typed
or Printed Name 
  
 ESCROW AGENT 
  
                                      
                                        
                           
 Corporate Secretary 
 

 23 

  
 EXHIBIT C–4 
  
 CONSENT OF SPOUSE 
  
 I, Patty Quillin,
spouse of Reed Hastings, have read and approve the foregoing Agreement. In consideration of granting of the right to my spouse to purchase shares of Common Stock of NetFlix.com, Inc., as set forth in the Agreement, I hereby appoint my spouse as my
attorney–in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. 
  
 
	 Dated:                                    
          
 	 	                                      
                                        
                           
 Patty
Quillin
 
	  	 	  

 
 

 24 

  
 EXHIBIT C–5 
  
 ELECTION UNDER SECTION 83(b) 
 OF THE INTERNAL REVENUE CODE OF 1986

  
 The undersigned taxpayer hereby elects, pursuant to Sections 55 and 83(b) of the Internal Revenue Code of
1986, as amended, to include in taxpayer’s gross income or alternative minimum taxable income, as the case may be, for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer’s receipt of the
property described below: 
  
 1.  The name, address, taxpayer identification number and taxable year of the
undersigned are as follows: 
  
 
	                NAME:
 	  	 TAXPAYER: Reed Hastings
 	  	 SPOUSE:  Patty Quillin
 

 
  
      ADDRESS:                               
                                        
                                        
                                        
                         
  
      IDENTIFICATION
NO.:                    TAXPAYER:                  
                       SPOUSE:               
                           
  
      TAXABLE YEAR: 
  
 2.  The
property with respect to which the election is made is described as follows:              shares (the “Shares”) of the Common Stock of NetFlix.com, Inc. (the
“Company”). 
  
 3.  The date on which the property was transferred is:
                        . 
  
 4.  The property is subject to the following restrictions: 
  
 The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions lapse upon the satisfaction of certain conditions contained in such
agreement. 
  
 5.  The fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of such property is: $                 . 
  
 6.  The amount (if any) paid for such property is:
$                     . 
  
 The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property. The transferee of such property is
the person performing the services in connection with the transfer of said property. 
  
 The undersigned
understands that the foregoing election may not be revoked except with the consent of the Commissioner. 
  
 Dated:                     ,
                                       
                                        
                                        
                                       

        Taxpayer 
  
 The undersigned spouse of taxpayer joins in this election. 
  
 Dated:                     ,
                                       
                                        
                                        
                                       

        Spouse of Taxpayer 
 

 25

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