Document:

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                                                                     EXHIBIT 4.6

                               REALNETWORKS, INC.

                       DECLARATION OF REGISTRATION RIGHTS

        This Declaration of Registration Rights ("Declaration") is made as of
January 25, 2000, by RealNetworks, Inc., a Washington corporation ("Parent"),
for the benefit of shareholders of NetZip, Inc, a Georgia corporation (the
"Company"), acquiring shares of Parent Common Stock pursuant to that Agreement
and Plan of Merger and Reorganization dated as of January 25, 2000 (the
"Reorganization Agreement"), among the Company, Parent and Varsity Acquisition
Corp., a Georgia corporation and wholly-owned subsidiary of Parent ("Merger
Sub"), and pursuant to the related Agreement of Merger (the "Agreement of
Merger") between the Company and Merger Sub and in consideration of such
shareholders' approving the principal terms of the Reorganization Agreement and
the transactions contemplated thereby.

        1. Definitions.  As used in this Declaration:

               (a) "Effective Time" means the time of acceptance by the Georgia
Secretary of State of the Certificate of Merger referred to in Section 12.2 of
the Reorganization Agreement.

               (b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               (c) "Form S-3" means such form under the Securities Act as is in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which similarly permits inclusion or
incorporation of substantial information by reference to other documents filed
by Parent with the SEC.

               (d) "Holder" means a shareholder of the Company to whom shares of
Common Stock of Parent are issued pursuant to the Reorganization Agreement and
the Agreement of Merger or a transferee to whom registration rights granted
under this Declaration are assigned pursuant to Section 6 of this Declaration.

               (e) "Registrable Securities" means for each Holder the number of
shares of Parent Common Stock issued to such Holder pursuant to the
Reorganization Agreement, and for all Holders the sum of the Registrable
Securities held by them; provided, however, that such shares of Parent Common
Stock held by a particular Holder shall cease to be Registrable Securities (i)
after a registration statement on Form S-3 with respect to the sale of such
securities shall have been declared effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement and with Section 2 hereof or (ii) at such time as such Holder is able
to sell such shares (including all Registrable Securities held by Affiliates of
such Holder, as defined pursuant to Rule 144 of the Securities Act) in their
entirety within a single 90 day period under Rule 144 of the Securities Act.

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               (f) "Securities Act" means the Securities Act of 1933, as
amended.

               (g) "SEC" means the United States Securities and Exchange
Commission.

        Terms not otherwise defined herein have the meanings given to them in
the Reorganization Agreement.

        2. Registration on Form S-3.

               (a) Parent shall use its best efforts to cause the Registrable
Securities then held by each Holder to be registered under the Securities Act so
as to permit the sale thereof, and in connection therewith shall prepare and
file with the SEC within 30 days of the Effective Time, a registration statement
on Form S-3 (or any successor form to Form S-3, or if Form S-3 is not available,
another appropriate form) covering all Registrable Securities; provided, that
each Holder shall provide all such information and materials regarding such
Holder and take all such action as may be required by a Holder under applicable
laws and regulations in order to permit Parent to comply with all applicable
requirements of the Securities Act and the Exchange Act and to obtain any
desired acceleration of the effective date of such registration statement, such
provision of information and materials to be a condition precedent to the
obligations of Parent pursuant to this Declaration to register the Registrable
Securities held by each such Holder. The offerings made pursuant to such
registration shall not be underwritten.

               (b) Parent shall (i) prepare and file with the SEC the
registration statement in accordance with Section 2 hereof with respect to the
Registrable Securities and shall use commercially reasonable efforts to cause
such registration statement to become effective as promptly as practicable after
filing and to keep such registration statement effective until the sooner to
occur of (A) the date on which all Registrable Securities included within such
registration statement have been sold or (B) the expiration of twelve (12)
months after such registration statement has been declared effective (the
"Termination Date"); (ii) prepare and file with the SEC such amendments to such
registration statement and amendments or supplements to the prospectus used in
connection therewith as may be necessary to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities
registered by such registration statement; (iii) furnish to each Holder such
number of copies of any prospectus (including any preliminary prospectus and any
amended or supplemented prospectus) in conformity with the requirements of the
Securities Act, and such other documents, as each Holder may reasonably request
in order to effect the offering and sale of the Registrable Securities to be
offered and sold, but only while Parent shall be required under the provisions
hereof to cause the registration statement to remain effective; (iv) use
commercially reasonable efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such jurisdictions as each Holder shall reasonably request (provided
that Parent shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdiction where it has not been qualified or is not
otherwise subject to a general consent for service of process), and do any and
all other acts or things which may be necessary or advisable to enable each
Holder to consummate the public sale or other disposition of such Registrable
Securities in such jurisdictions; and (v) notify each Holder, promptly after it
shall receive notice thereof, of the date and

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time the registration statement and each post-effective amendment thereto has
become effective or a supplement to any prospectus forming a part of such
registration statement has been filed.

               (c) Notwithstanding the foregoing obligation of Parent under this
Section 2, if Parent shall furnish to the Shareholder Representative (as defined
in the Reorganization Agreement) a certificate signed by the President of Parent
stating that in the good faith judgment of Parent, it would be detrimental to
Parent and its stockholders for such registration statement to be filed at such
time and it is therefore essential to defer the filing of such registration
statement, Parent shall have the right to defer such filing for a period of not
more than 30 days beyond the date specified under Section 2(a) above. As of the
date hereof, Parent is not aware of any facts which would cause it to exercise
its rights under this subsection if Parent were otherwise obligated to file such
registration statement on the date hereof.

        3. Notice of Sale.

               (a) If a Holder of Registrable Securities proposes to dispose of
Registrable Securities, such Holder shall cause to be delivered to Parent notice
of such proposed disposition at least five (5) days prior to effecting such
disposition (the "Disposal Notice"). The Disposal Notice shall identify the
Holder, the number of shares proposed to be transferred and the date on which
such disposition is proposed to be effected. The Disposal Notice must be
delivered to the person(s) designated on Exhibit A hereto (or such additional or
alternative persons designated in Parent by delivery of such designation in
writing to the Shareholders' Representative), which exhibit shall contain the
name and other contact information of such designated person(s); provided the
information on Exhibit A may be amended by Parent by providing written notice of
such change to the Shareholder Representative. Unless Parent agrees otherwise
(with such agreement confirmed by e-mail or in writing), in order for a Disposal
Notice to be valid, it must be received between the hours of 9:00 a.m. and 5:00
p.m. Seattle, Washington time. The Disposal Notice shall be delivered
telephonically, by the Holder or his/her representative talking directly with
the employee of Parent designated as the appropriate recipient of Disposal
Notices (the time of day of Parent's receipt of such telephonic delivery, the
"Receipt Time"). Parent shall exercise good faith efforts to respond to the
Holder by the Receipt Time on the business day next following the day the
Disposal Notice was received by Parent, but not later than at the Receipt Time
on the second business day after the day of Parent's receipt of the Disposal
Notice. Such response shall indicate whether Parent approves of the proposed
disposition of Registrable Securities described in the Disposal Notice (such
response, a "Response Notice"). For purposes of this Declaration, a "business
day" shall mean a day on which banks are generally open for business in Seattle,
Washington. The Response Notice may be preliminarily delivered telephonically,
provided that such Response Notice is validly delivered only in writing;
provided that e-mail delivery shall be considered a "writing" for this purpose.
The Response Notice shall indicate whether the disposition is approved or
disapproved. Parent may disapprove of a proposed disposition of Registrable
Securities, and a Holder will not be able to dispose of such Registrable
Securities, if (a) Parent shall have determined that a delay in the disposition
of such Registrable Securities is necessary because Parent, in its reasonable
judgment, has determined in good faith that such sales would require public
disclosure by Parent of material nonpublic information that is not included in
such registration statement and that immediate disclosure of such information
would be detrimental to the Company or (b) such proposed

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disposition of Registrable Securities is proposed to be effected during the
periods during which Parent restricts transactions in its securities by its
officers pursuant to a written policy setting forth such restrictions. As of the
date hereof, Parent is not aware of any facts that would cause it to exercise
its right to restrict disposition if a request to dispose were received on the
date hereof. If Parent responds to a Disposal Notice by timely causing to be
delivered to the Holder a Response Notice approving of the proposed disposition
or if Parent fails to timely cause to be delivered to the Holder a Response
Notice satisfying the delivery requirements described above with respect to a
Disposal Notice, the Holder identified in the Disposal Notice may dispose of
Registrable Securities during the five (5) business day period (or such shorter
period as is specified in the Response Notice) (the "Trading Period" for such
proposed disposition) immediately following the Trading Period Start Date (as
defined below) with respect to the Disposal Notice. "Trading Period Start Date"
with respect to a Disposal Notice shall mean (i) in the case of a proposed
disposition for which a Response Notice approving of the disposition is timely
delivered, the date on which the Parent causes the Response Notice approving the
disposition described in the Disposal Notice to be delivered to the Holder or
(ii) in the case of a proposed disposition for which a Response Notice is not
timely delivered, the last day on which such Response Notice could have been
timely delivered. If a Holder does not dispose of Registrable Securities during
the Trading Period for such proposed disposition, a new Disposal Notice for such
disposition must be delivered.

               (b) The provisions of Section 2(b) shall apply only with respect
to a Holder's disposition of shares of Parent Common Stock which are, at the
time of such disposition, Registrable Securities as defined in this Declaration.

        4. Expenses. All of the out-of-pocket expenses incurred in connection
with any registration of Registrable Securities pursuant to this Declaration,
including, without limitation, all SEC, Nasdaq National Market and blue sky
registration and filing fees, printing expenses, transfer agents' and
registrars' fees and the reasonable fees and disbursements of Parent's outside
counsel and independent accountants shall be paid by Parent. Parent shall not be
responsible to pay any legal fees for any Holder or any selling expenses of any
Holder (including, without limitation, any broker's fees or commissions).

        5. Indemnification. In the event of any offering registered pursuant to
this Declaration:

               (a) Parent will indemnify each Holder, each of its officers,
directors and partners and such Holder's legal counsel, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act
(each, a "Seller Indemnified Party"), with respect to which registration,
qualification or compliance has been effected pursuant to this Declaration,
against all expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by Parent of any rule or regulation promulgated
under the Securities Act, or state securities

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laws, or common law, applicable to Parent in connection with any such
registration, qualification or compliance, and will reimburse each Seller
Indemnified Party for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action; provided, however, that Parent will not be liable
to any Seller Indemnified Party to the extent that any such claim, loss, damage,
liability or expense arises out of or is based in any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished by any Seller Indemnified Party to
Parent in an instrument duly executed by such Seller Indemnified Party and
stated to be specifically for use therein.

               (b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify Parent, each of its
directors and officers and its legal counsel and independent accountants, and
each other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities Act
(each a "Parent Indemnified Party"), against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Parent Indemnified Party for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to Parent by an instrument duly
executed by such Holder and stated to be specifically for use therein; provided,
however, that the obligations of such Holders hereunder shall be limited to an
amount equal to the gross proceeds (after deducting reasonable commissions)
received by each such Holder of Registrable Securities sold as contemplated
herein.

               (c) Each party entitled to indemnification under this Section 5
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has written notice of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Declaration, except to the extent, but only to the
extent, that the Indemnifying Party's ability to defend against such claim or
litigation is compared as a result of such failure to give notice. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the Indemnified Party of a
release from all liability in respect to such claim or litigation.

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               (d) The obligations of Parent and each Holder under this Section
5 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Declaration and otherwise.

               (e) Notwithstanding the foregoing, to the extent the provisions
of this Section 5 are inconsistent with or conflict with the terms of any
indemnification, selling or similar agreement entered into by a Holder in
connection with the offer and sale of Registrable Securities pursuant to a
registration effected pursuant to this Declaration, the terms of such agreement
shall govern and shall supersede the provisions of this Declaration.

        6. Limitation on Assignment of Registration Rights. The rights to cause
Parent to register Registrable Securities pursuant to this Declaration may not
be assigned by a Holder unless such a transfer is to shareholders, partners or
retired partners, or members or retired members of a Holder (including spouses
and ancestors, lineal descendants, and siblings of such shareholders, partners,
members or spouses who acquire Registrable Securities by right, will or
intestate succession). Prior to a permitted transfer of registration rights
under this Declaration, Holder must furnish Parent with written notice of the
name and address of such transferee and the Registrable Securities with respect
to which such registration rights are being assigned and a copy of a duly
executed written instrument in form reasonably satisfactory to Parent by which
such transferee assumes all of the obligations and liabilities of its transferor
hereunder and agrees itself to be bound hereby. No transfer of registration
rights under this Declaration shall be permitted if immediately following such
transfer the disposition of such Registrable Securities by the transferee is not
restricted under the Securities Act.

        7. Reports Under Exchange Act.  Parent agrees to:

               (a) use commercially reasonable efforts to file with the SEC in a
timely manner all reports and other documents required of Parent under the
Securities Act and the Exchange Act; and

               (b) furnish to each Holder, forthwith upon request (i) a written
statement by Parent that it has complied with the reporting requirements of the
Securities Act and the Exchange Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), and (ii) a copy of the most recent annual or quarterly report of
Parent.

        8. Amendment of Registration Rights. Holders of a majority of the
Registrable Securities from time to time outstanding may, with the consent of
Parent, amend the registration rights granted hereunder.

        9. Governing Law. This Declaration shall be governed in all respects by
and construed in accordance with the laws of the State of Washington.

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        IN WITNESS WHEREOF, this Declaration of Registration Rights is executed
as of the date first above written.

                                               REALNETWORKS, INC.

                                               By:   /s/ Robert Glaser
                                                  ------------------------------
                                                     Robert Glaser
                                               Its:  Chief Executive Officer

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                                    EXHIBIT A

                      DESIGNATED DISPOSAL NOTICE RECIPIENTS

<TABLE>
<CAPTION>

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                      CONTACT NAME                             PHONE NUMBER
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        <S>                                        <C>
        Kelly Jo MacArthur                         206-674-2700
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        Paul Bialek                                206-674-2700
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</TABLE><PAGE>   1
                                                                    EXHIBIT 10.5

                               REALNETWORKS, INC.

                       1998 EMPLOYEE STOCK PURCHASE PLAN,
                             AS AMENDED AND RESTATED

      REALNETWORKS, INC., a Washington corporation (the "Company"), hereby
establishes this 1998 Employee Stock Purchase Plan (the "Plan").

      1. PURPOSE OF PLAN. The purpose of the Plan is to enable Eligible
Employees (as defined in Section 3) who wish to become shareholders of the
Company a convenient and favorable method of doing so. The Plan is intended to
constitute an "employee stock purchase plan," as defined in Section 423(b) of
the Internal Revenue Code of 1986, as amended (the "Code"), and shall be
interpreted and administered to further that intent.

      2. ADMINISTRATION OF THE PLAN. The Plan will be administered by the
Compensation Committee (the "Committee") of the Board of Directors of the
Company (the "Board"). Subject to the provisions of the Plan, the Committee will
have the complete authority to interpret the Plan, to adopt, amend and rescind
rules and procedures relating to the Plan, and to make all of the determinations
necessary or advisable for the administration of the Plan. All such
interpretations, rules, procedures and determinations will, in the absent of
fraud or patent mistake, be conclusive and binding on all persons with any
interest in the Plan.

      3. ELIGIBLE EMPLOYEES. The term "Eligible Employees" means all common law
employees of the Company and its current majority-owned subsidiaries (and each
other corporation designated by the Committee that hereafter becomes a
majority-owned subsidiary of the Company), except the following: (a) employees
who have been employed for less than 30 days; (b) employees whose customary
employment is 20 hours or less per week; and (c) employees whose customary
employment is for not more than five months in any calendar year. Except as
otherwise expressly provided in the Plan and permitted by Section 423 of the
Code, all Eligible Employees shall have the same rights and obligations under
the Plan.

      4. STOCK SUBJECT TO THE PLAN. The stock subject to the Plan shall be
shares of the Company's authorized but unissued voting Common Stock, $.001 par
value per share (the "Common Stock"). The aggregate number of shares of Common
Stock that may be purchased by Eligible Employees pursuant to the Plan is
1,000,000, subject to adjustment as provided in Section 13.

      5. OFFERING PERIODS. The Common Stock shall be offered under the Plan
during ten consecutive six-month periods (the "Offering Periods"). The first
Offering Period shall begin on January 1, 1998 and end on June 30, 1998.
Thereafter, the Offering Periods will begin on the first day and end on the last
day of each subsequent six-month period.

      6. PARTICIPANTS; PAYROLL DEDUCTIONS

            6.1 A person who is an Eligible Employee at the beginning of an
Offering Period may elect to have the Company make deductions from the person's
Compensation (as defined in Section 6.4), at a specified percentage rate, to be
used to purchase of shares of

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Common Stock pursuant to the Plan. Such election shall be made prior to the
beginning of the Offering Period in accordance with such procedures as the
Committee may adopt (each Eligible Employee who so elects to have such
deductions made will be referred to as a "Participant").

            6.2 The maximum rate of deduction that a Participant may elect for
any Offering Period is 10%. An amount equal to the elected percentage shall be
deducted from the Participant's pay each time during the Offering Period that
any Compensation is paid to the Participant. The Committee may set such minimum
level of payroll deductions as the Committee determines to be appropriate. Any
minimum level of deductions set by the Committee shall apply equally to all
Eligible Employees. A Participant's accumulated payroll deductions shall remain
the property of the Participant until applied toward the purchase of shares of
Common Stock under the Plan, but may be commingled with the general funds of the
Company. No interest will be paid on payroll deductions accumulated under the
Plan.

            6.3 A Participant in the Plan on the last day of an Offering Period
shall automatically continue to participate in the Plan during the next Offering
Period unless he or she withdraws in the manner described in Section 11.

            6.4 The term "Compensation" means all cash salary, wages, bonuses,
commissions and other amounts paid to or on behalf of a Participant for services
performed or on account of holidays, vacation, sick leave or other similar
events, including any amounts by which such amounts are reduced, at the election
of a Participant, pursuant to a cafeteria plan described in Section 125 of the
Code, a dependent care assistance program described in Section 129 of the Code,
a cash or deferred arrangement described in Section 401(k) of the Code, or any
similar plan, program or arrangement, but excluding the value of any noncash
benefits under any employee benefit plans and any special amounts paid to the
Participant that are specifically excluded by the Committee.

      7.    PURCHASE OF SHARES

            7.1 At the end of an Offering Period, a Participant's accumulated
payroll deductions for the Offering Period will, subject to the limitations in
Section 9 and the termination provisions of Section 16, be applied toward the
purchase of shares of Common Stock at a purchase price (the "Purchase Price")
equal to the lesser of --

            (a) 85% of the Market Price (as defined in Section 8.1) of the
      Common Stock on the first Business Day (as defined in Section 8.2) of the
      Offering Period; or

            (b) 85% of the Market Price for the Common Stock on the last
      Business Day of the Offering Period;

in either event rounded to the nearest whole cent.

            7.2 Shares of Common Stock may be purchased under the Plan only with
a Participant's accumulated payroll deductions. Fractional shares cannot be
purchased. Any portion of a Participant's accumulated payroll deductions for an
Offering Period not used for the purchase of Common Stock shall be applied to
the purchase of Common Stock in the next Offering Period, if the Participant is
participating in the Plan during that Offering Period, or returned to the
Participant.

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            7.3 Each Participant who purchases shares of Common Stock under the
Plan shall thereby be deemed to have agreed that the Company or the subsidiary
of the Company that employs the Participant shall be entitled to withhold, from
any other amounts that may be payable to the Participant at or around the time
of the purchase, such federal, state, local and foreign income, employment and
other taxes may be required to be withheld under applicable laws. In lieu of
such withholding, the Company or such subsidiary may require the Participant to
remit such taxes to the Company or such subsidiary as a condition of the
purchase.

      8. MARKET PRICE

            8.1 For purposes of the Plan, the term "Market Price" on any day
means, if the Common Stock is publicly traded, the last sales price (or, if no
last sales price is reported, the average of the high bid and low asked prices)
for a share of Common Stock on that day as reported by the principal exchange on
which the Common Stock is listed, or, if the Common Stock is publicly traded but
not listed on an exchange, as reported by The Nasdaq Stock Market, or, if such
prices or quotations are not reported by The Nasdaq Stock Market, as reported by
any other available source of prices or quotations selected by the Committee.

            8.2 For purposes of the Plan, the term "Business Day" means a day on
which prices or quotations for the Common Stock are reported by a national
securities exchange, the Nasdaq Stock Market, or any other available source of
prices or quotations selected by the Committee, whichever is applicable pursuant
to the preceding paragraph.

            8.3 If the Market Price of the Common Stock must be determined for
purposes of the Plan at a time when the Common Stock is not publicly traded,
then the term "Market Price" shall mean the fair market value of the Common
Stock as determined by the Committee, after taking into consideration all the
factors it deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated at arm's
length.

      9. LIMITATIONS ON SHARE PURCHASES

            9.1 Notwithstanding Section 3, an employee will not be an Eligible
Employee for purposes of the Plan if the employee owns stock possessing 5% or
more of the total combined voting power or value of all classes of stock of the
Company. For purposes of this 5% limitation, an employee shall be treated as
owning any stock the ownership of which is attributed to him or her under the
rules of Section 424(d) of the Code, as well as any stock that, in the absence
of this paragraph, the employee could purchase under the Plan with his or her
payroll deductions held pursuant to Section 6 but not yet applied to the
purchase of shares of Common Stock under the Plan.

            9.2 During any calendar year, the maximum value of the Common Stock
that may be purchased by a Participant under the Plan is $10,000, said value to
be determined on the basis of the Market Price of the Common Stock on the first
Business Day of each Offering Period that ends in the calendar year.

            9.3 The limitations in Section 9.1 and Section 9.2 are intended to
and shall be interpreted in such a manner as will comply with Section 423(b)(3)
and Section 423(b)(8) of the Code, respectively.

                                      -3-
<PAGE>   4

      10. CHANGES IN PAYROLL DEDUCTIONS. The rate of payroll deductions for an
Offering Period may not be increased or decreased by a Participant during the
Offering Period. However, the Participant may change the rate of payroll
deduction for a subsequent Offering Period. In addition, a Participant may
withdraw in full from the Plan in the manner described in Section 11.

      11. WITHDRAWAL FROM THE PLAN

            11.1 A Participant may elect to withdraw from the Plan, effective
for the Offering Period in progress, by delivering to the Committee written
notice thereof prior to the end of the Offering Period. If a Participant so
withdraws, all of the Participant's payroll deductions for that Offering Period
will be promptly returned to the Participant. If a Participant's payroll
deductions are interrupted by any legal process, the Participant will be deemed
to have elected to withdraw from the Plan for the Offering Period in which the
interruption occurs.

            11.2 A Participant may elect to withdraw from the Plan, effective
for an Offering Period that has not yet commenced, by delivering to the
Committee written notice thereof prior to the first day of the Offering Period.

            11.3 Following withdrawal from the Plan, in order to participate in
the Plan for any subsequent Offering Period, the Participant must again elect to
participate in the manner described in Section 6.1.

      12. ISSUANCE OF COMMON STOCK.

            12.1 Certificates for the shares of Common Stock purchased by
Participants will be delivered by the Company's transfer agent as soon as
practicable after each Offering Period. In lieu of issuing certificates for such
shares directly to Participants, the Company shall be entitled to issue such
shares to a bank, broker-dealer or similar custodian (the "Custodian") that has
agreed to hold such shares for the accounts of the respective Participants. Fees
and expenses of the Custodian shall be paid by the Company or allocated among
the respective Participants in such manner as the Committee determines.

            12.2 A Participant may direct, in accordance with such procedures as
the Committee may adopt, that shares purchased by the Participant shall be
issued (or, if such shares are issued to the Custodian, that the account for
such shares be held) in the names of the Participant and one other person
designated by the Participant, as joint tenants with right of survivorship,
tenants in common, or community property, to the extent and in the manner
permitted by applicable law.

            12.3 A Participant may at any time, in the manner described in
Section 18, undertake a disposition (as that term is defined in Section 424(c)
of the Code), whether by sale, exchange, gift or other transfer of legal title,
of any or all of the shares held for the Participant by the Custodian. In the
absence of such a disposition of the shares, the shares shall continue to be
held by the Custodian until the holding period set forth in Section 423(a) of
the Code has been satisfied. If a Participant so requests, shares for which such
holding period has been satisfied will be transferred to another brokerage
account specified by the Participant, or a stock certificate for such shares
will be issued and delivered to the Participant or his or her designee.

                                      -4-
<PAGE>   5

      13. CHANGES IN CAPITALIZATION

            13.1 Upon the happening of any of the following described events, a
Participant's right to purchase shares of Common Stock under the Plan shall be
adjusted as hereinafter provided:

            (a) If the shares of Common Stock are subdivided or combined into a
      greater or smaller number of shares of Common Stock or if, upon a
      recapitalization, split-up or other reorganization of the Company, the
      shares of Common Stock are exchanged for other securities of the Company,
      the rights of each Participant shall be modified so that the Participant
      is entitled to purchase, in lieu of the shares of Common Stock that the
      Participant would otherwise have been entitled to purchase for the
      Offering Period in progress at the time of such subdivision, combination
      or exchange (the "Offering Period Shares"), such number of shares of
      Common Stock or such number and type of other securities as the
      Participant would have received if such Offering, Period Shares had been
      issued and outstanding at the time of such subdivision, combination or
      exchange (unless in the case of an exchange the Committee determines that
      the nature of the exchange is such that it is not feasible or advisable
      that the rights of Participants be so modified, in which event the
      exchange shall be deemed a Terminating Event under Section 14); and

            (b) If the Company issues any of its shares as a stock dividend upon
      or with respect to the Common Stock, each Participant who purchases shares
      of Common Stock under the Plan at the end of the Offering Period in
      progress on the record date for the stock dividend shall be entitled to
      receive the shares so purchased (the "Purchased Shares") and shall also be
      entitled to receive at no additional cost, but only if the Purchase Price
      for the Purchased Shares was determined with reference to the Market Price
      of the Common Stock on the first Business Day of the Offering Period, the
      number of shares of the class of stock issued as a stock dividend, and the
      amount of cash in lieu of fractional shares, that the Participant would
      have received if he or she had been the holder of the Purchased Shares on
      the record date for the stock dividend.

            13.2 Upon the happening of an event specified in clause (a) or (b)
above, the class and aggregate number of shares available under the Plan, as set
forth in Section 4, shall be appropriately adjusted to reflect the event.
Notwithstanding the foregoing, such adjustments shall be made only to the extent
that the Committee, based on advice of counsel for the Company, determines that
such adjustments will not constitute a change requiring shareholder approval
under Section 423(b)(2) of the Code.

      14. TERMINATING EVENTS

            14.1 Upon (a) the dissolution or liquidation of the Company, (b) a
merger or other reorganization of the Company with one or more corporations as a
result of which the Company will not be a surviving corporation, (c) the sale of
all or substantially all of the assets of the Company or a material division of
the Company, (d) a sale or other transfer, pursuant to a tender offer or
otherwise, of more than fifty percent (50%) of the then outstanding shares of
Common Stock of the Company, (e) an acquisition by the Company resulting in an
extraordinary expansion of the Company's business or the addition of a material
new line of business, or (f) any exchange that is subject to this Section 14 in
accordance with the provisions of Section 13 (any of such events is herein
referred to as a "Terminating Event"), the Committee may but shall not be
required to --

                                      -5-
<PAGE>   6

            (a) make provision for the continuation of the Participants' rights
      under the Plan on such terms and conditions as the Committee determines to
      be appropriate and equitable, including where applicable, but not limited
      to, an arrangement for the substitution on an equitable basis, for each
      share of Common Stock that could otherwise be purchased at the end of the
      Offering Period in progress at the time of the Terminating Event, of any
      consideration payable with respect to each then outstanding share of
      Common Stock in connection with the Terminating Event; or

            (b) terminate all rights of Participants under the Plan for such
      Offering Period and --

                      (i) return to the Participants all of their payroll
            deductions for such Offering Period; and

                      (ii) for each share of Common Stock, if any, that
            otherwise could have been purchased under the Plan by a Participant
            at the end of such Offering Period (determined by assuming that
            payroll deductions at the rate elected by the Participant were
            continued to the end of the Payroll Period and used to purchase
            shares based on the Market Price of the Common Stock on the first
            Business Day of the Offering Period) and with respect to which (A)
            the Purchase Price at which such share could be purchased
            (determined with reference only to the Market Price of the Common
            Stock on the first Business Day of the Offering Period) is exceeded
            by (B) the Market Price on the date of the Terminating Event of a
            share of Common Stock, as determined by the Committee, pay to the
            Participant an amount equal to such excess.

            14.2 The Committee shall make all determinations necessary or
advisable in connection with Terminating Events, and its determinations shall,
in the absent of fraud or patent mistake, be conclusive and binding on all
persons with any interest in the Plan.

      15. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS. An Eligible Employee's
rights under the Plan are the Eligible Employee's alone and may not be
voluntarily or involuntarily transferred or assigned to, or availed of by, any
other person other than by will or the laws of descent and distribution. An
Eligible Employee's rights under the Plan are exercisable during his or her
lifetime by the Eligible Employee alone.

      16. TERMINATION OF EMPLOYEE'S RIGHTS

            16.1 Subject to Section 16.2, a Participant's rights under the Plan
will terminate if he or she for any reason (including death, disability or
voluntary or involuntary termination of employment) ceases to be an employee of
the Company or one of its subsidiaries.

            16.2 Notwithstanding the foregoing, effective for Offering Periods
beginning on or before July 15, 1999, if a Participant ceases to be an employee
of the Company or one of its subsidiaries, the termination of the Participant's
rights under the preceding paragraph shall not apply to any right the
Participant may have to purchase shares of Common Stock at the end of the
Offering Period in progress when the Participant ceases to be an employee. Such
purchases of shares of Common Stock shall, to the extent of payroll deductions
accumulated for the purchases

                                      -6-
<PAGE>   7

of shares of Common Stock shall, to the extent payroll deductions accumulated
for the Offering Period, occur automatically at the end of the Offering Period,
unless the Participant or his or her personal representative withdraws from the
Plan for the Offering Period in the manner described in Section 11. To the
extent that the rights of a Participant terminate in accordance with this
Section 16, any of the Participant's payroll deductions not used to purchase
shares of Common Stock will be promptly returned (without interest thereon) to
the Participant or his or her personal representative.

           16.3 Effective for Offering Periods commencing after July 15, 1999,
if a Participant ceases to be an employee of the Company or one of its
subsidiaries, then as soon as practicable after such cessation, the
Participant's payroll deductions shall cease and any of the Participant's
accumulated payroll deductions shall be promptly returned (without interest
thereon) to the Participant or his or her personal representative.

      17.   TERMINATION AND AMENDMENT OF PLAN

            17.1 The Plan shall terminate on December 31, 2002. The Plan may be
terminated at any earlier time by the Board, but, except as provided in Section
14, such termination shall not affect the rights of Participants under the Plan
for the Offering Period in progress at the time of termination. The Plan will
also terminate in any case when all or substantially all of the unissued shares
of Common Stock reserved for the purposes of the Plan have been purchased. If at
any time shares of Common Stock reserved for the purpose of the Plan remain
available for purchase but not in sufficient number to satisfy all then unfilled
purchase requirements, the available shares shall be apportioned among
Participants in proportion to the respective amounts of their accumulated
payroll deductions, and the Plan shall terminate. Upon such termination or any
other termination of the Plan, all payroll deductions not used to purchase
shares of Common Stock will be refunded to the Participants entitled thereto.

            17.2 The Committee or the Board may from time to time adopt
amendments to the Plan; PROVIDED, HOWEVER, that, without the approval of the
shareholders of the Company, no amendment may increase the number of shares that
may be issued under the Plan or make any other change for which shareholder
approval is required by Section 423 of the Code or the regulations thereunder.

      18. DISPOSITION OF SHARES. Subject to compliance with any applicable
federal and state securities and other laws and any policy of the Company in
effect from time to time with respect to trading in its shares, a Participant
may effect a disposition (as that term is defined in Section 424(c) of the Code)
of Common Stock purchased under the Plan at any time the Participant chooses;
PROVIDED, HOWEVER, each Participant agrees, by purchasing shares of Common Stock
under the Plan, that (a) the Company shall be entitled to withhold, from any
other amounts that may be payable to the Participant by the Company at or around
the time of such disposition, such federal, state, local and foreign income,
employment and other taxes as the Company may be required to withhold under
applicable law; and (b) in lieu of such withholding, the Participant will, upon
request of the Company, promptly remit such taxes to the Company. EACH EMPLOYEE
PURCHASING SHARES OF COMMON STOCK UNDER THE PLAN ASSUMES THE RISK OF ANY MARKET
FLUCTUATIONS IN THE PRICE THEREOF.

                                      -7-
<PAGE>   8

      19. NO SHAREHOLDER RIGHTS; INFORMATION TO PARTICIPANTS. A Participant
shall not have any rights as a shareholder of the Company (other than the right
potentially to receive stock dividends under Section 13) on account of shares of
Common Stock that may be purchased under the Plan prior to the time such shares
are actually purchased by and issued to the Participant. Notwithstanding the
foregoing, the Company shall deliver to each Participant under the Plan who does
not otherwise receive such materials (a) a copy of the Company's annual
financial statements (which shall be delivered annually as promptly as practical
following each fiscal year of the Company and review or audit of such statements
by the Company's auditors), together with management's discussion and analysis
of financial condition and results of operations for the fiscal year, and (b) a
copy of all reports, proxy statements and other communications distributed to
the Company's security holders generally.

      20. USE OF PROCEEDS. The proceeds received by the Company from the sale of
shares of Common Stock under the Plan will be used for general corporate
purposes.

      21. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
shares of the Common Stock under the Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares, including the Securities and Exchange Commission, the
securities administrators of the states in which Participants reside, and the
Internal Revenue Service.

      22. MISCELLANEOUS PROVISIONS

            22.1 Nothing contained in the Plan shall obligate the Company or any
of its subsidiaries to employ a Participant for any period, nor shall the Plan
interfere in any way with the right of the Company or any of its subsidiaries to
reduce a Participant's compensation.

            22.2 The provisions of the Plan shall be binding upon each
Participant and, subject to the provisions of Section 15, the heirs, successors
and assigns of each Participant.

            22.3 Where the context so requires, references in the Plan to the
singular shall include the plural, and vice versa, and references to a
particular gender shall include either or both additional genders.

            22.4 The Plan shall be construed, administered and enforced in
accordance with the laws of the United States, to the extent applicable thereto,
as well as the laws of the State of Washington.

      23. APPROVAL OF SHAREHOLDERS. The Plan shall be effective January 1, 1998,
subject to approval by the shareholders of the Company in a manner that complies
with Section 423(b)(2) of the Code. If such approval does not occur prior to
January 1, 1998, the Plan shall be void and of no effect.

                                      -8-

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