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                                                                    EXHIBIT 10.7

                               REALNETWORKS, INC.

                       1998 EMPLOYEE STOCK PURCHASE PLAN,
               AS AMENDED AND RESTATED EFFECTIVE DECEMBER 19, 2000

        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%, provided, however, that no Participant may
apply payroll deductions in excess of $10,000 toward the purchase of Common
Stock under the Plan during any calendar year. 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

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Offering Period, if the Participant is participating in the Plan during that
Offering Period, or returned to the Participant.

                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 $25,000,
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.

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                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.

        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

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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.

        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

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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 --

                (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

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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 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

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PLAN ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE THEREOF.

        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-<PAGE>   1
                                                                    EXHIBIT 10.8

Paul Bialek                                                      May 14, 1998

Dear Paul:

As you know, I am extremely pleased to offer you employment at RealNetworks (RN)
as Senior Vice President, Finance and Operations and Chief Financial Officer.

This offer is for a full-time, exempt, regular position with RN. Your
responsibilities will be as directed by RN. Your salary will be $150,000
annually, payable semi-monthly. You will receive RN's standard benefits
including coverage by a medical, dental, prescription and long and short term
disability insurance plan selected by RN and as may be amended or terminated,
and those benefits required by law.

You will also earn equity in RN under the terms of RN's employee stock option
plan. Upon the start of your employment, you will be eligible for options on
150,000 shares. Your stock options will be granted on the Friday following the
first day of your employment. The exercise price of the stock options granted to
you shall be equal to the fair market value of the Company's Common Stock on the
date of the option grant. Fair market value shall equal the last sales price for
shares of the Company's Common Stock on the date the option is granted as
reported by the NASDAQ National Market, subject to the vesting rules and all
other provisions contained in the plan. As agreed, we will modify the standard
RN vesting schedule to include additional provisions in the event of a Corporate
Transaction.

You will also receive 10 paid holidays per year on a schedule to be determined
by RN. You will also receive 10 paid vacation days per year, earned at the rate
of .83 days for each month worked. After January 1st of each year, you are
eligible to take the full annual vacation benefit to be earned in that year,
provided it is scheduled in advance with your manager. You are allowed to accrue
up to twenty days of vacation time. At that point you will stop accruing
vacation time until you have begun to utilize your earned time.

You will also earn .83 days of sick days for each month worked. You are also
eligible, as of January 1st, should your ill health require it, to take the full
sick day benefit to be earned in that year. Sick days earned but not taken
cannot be carried over into a new calendar year. Should your employment with
RealNetworks end, your final paycheck will be adjusted to account for any
positive or negative vacation day balance and for any sick days taken but not
earned.

If you are currently employed by or providing services to any other entity,
whether as a full-time, part-time or temporary employee or consultant, you agree
to advise us prior to your employment with RN.

<PAGE>   2

Our employment relationship will be terminable at will, which means that either
you or RN may terminate your employment at any time and for any reason or no
reason.

This offer is contingent on your providing evidence of employability as required
by federal law and signing RN's Employee Development and Confidentiality
Agreement and the Non-Compete Agreement, both attached hereto. Please call us if
you have questions about these agreements.

We are excited about the prospect of you joining RealNetworks and look forward
to working with you.

This offer is valid until May 20, 1998 and your start date will be determined at
a later date.

Sincerely,

/s/ Rob Glaser

Rob Glaser
Chairman & CEO
RealNetworks, Inc.

I have read and agree to the above terms of employment, which represent a full,
complete and fair statement of the offer of employment made to me by
RealNetworks, Inc.

Paul Bialek:

/s/ Paul Bialek

Date: May 14, 1998
      ------------

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