RealNetworks®, Inc. (Nasdaq: RNWK), the global leader in media delivery on the Internet, today announced that its Board of Directors has approved a voluntary stock option exchange program for its employees.

“At the core of this Company’s achievements over the last seven years are the talents and efforts of our team. Retaining and motivating our employees is absolutely critical to our continued success and our ability to build long-term shareholder value – and that’s why we’ve taken this leadership step today,” said Rob Glaser, chairman and CEO, RealNetworks, Inc. “This program balances our need to address the impact of the current market environment on our employees and our obligation to be responsible to all our shareholders.”

Under the program, RealNetworks employees will be given the opportunity, if they so choose, to cancel outstanding stock options previously granted to them in exchange for an equal number of new options to be granted at a future date. The exercise price of these new options will be equal to the fair market value of the Company’s common stock at the end of August 2001. The vesting schedule of the new options will be unchanged from that of the cancelled options.

The exchange program has been structured to comply with FASB Interpretation No. 44 and accordingly, there will be no financial statement charges associated with the exchange. The Company currently has approximately 24 million options held by employees with an exercise price in excess of $10 per share. Members of the Company’s Board of Directors, including chairman and CEO Rob Glaser, as well as the Company’s CFO, Paul Bialek, will not participate in this program, and participation by other named executive officers of the Company will be limited.

About RealNetworks
RealNetworks, Inc., based in Seattle, is the global leader in media delivery on the Internet. It develops and markets software products and services designed to enable users of personal computers and other consumer electronic devices to send and receive audio, video and other multimedia services using the Web. Consumers can access and experience audio/video programming and download RealNetworks' consumer software on the Internet at http://www.real.com. RealNetworks' systems and corporate information is located on the Internet at http://www.realnetworks.com.

Real Networks, Inc.

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