1999 Employee Stock Purchase Plan - Liberate Technologies


                              LIBERATE TECHNOLOGIES


                        1999 EMPLOYEE STOCK PURCHASE PLAN


                            (AS ADOPTED MAY 17, 1999)




                                TABLE OF CONTENTS


                                                                        Page
                                                                        ----
                                                                     
SECTION 1.  PURPOSE OF THE PLAN...........................................1

SECTION 2.  ADMINISTRATION OF THE PLAN....................................1
         (a)  Committee Composition.......................................1
         (b)  Committee Responsibilities..................................1

SECTION 3.  ENROLLMENT AND PARTICIPATION..................................1
         (a)  Offering Periods............................................1
         (b)  Enrollment..................................................1
         (c)  Duration of Participation...................................1

SECTION 4.  EMPLOYEE CONTRIBUTIONS........................................2
         (a)  Frequency of Payroll Deductions.............................2
         (b)  Amount of Payroll Deductions................................2
         (c)  Changing Withholding Rate...................................2
         (d)  Discontinuing Payroll Deductions............................2
         (e)  Limit on Number of Elections................................2

SECTION 5.  WITHDRAWAL FROM THE PLAN......................................2
         (a)  Withdrawal..................................................2
         (b)  Re-Enrollment After Withdrawal..............................2

SECTION 6.  CHANGE IN EMPLOYMENT STATUS...................................3
         (a)  Termination of Employment...................................3
         (b)  Leave of Absence............................................3
         (c)  Death.......................................................3

SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES..........................3
         (a)  Plan Accounts...............................................3
         (b)  Purchase Price..............................................3
         (c)  Number of Shares Purchased..................................3
         (d)  Available Shares Insufficient...............................4
         (e)  Issuance of Stock...........................................4
         (f)  Unused Cash Balances........................................4
         (g)  Stockholder Approval........................................4

SECTION 8.  LIMITATIONS ON STOCK OWNERSHIP................................4
         (a)  Five Percent Limit..........................................4
         (b)  Dollar Limit................................................5


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SECTION 9.  RIGHTS NOT TRANSFERABLE.......................................5

SECTION 10.  NO RIGHTS AS AN EMPLOYEE.....................................5

SECTION 11.  NO RIGHTS AS A STOCKHOLDER...................................6

SECTION 12.  SECURITIES LAW REQUIREMENTS..................................6

SECTION 13.  STOCK OFFERED UNDER THE PLAN.................................6
         (a)  Authorized Shares...........................................6
         (b)  Anti-Dilution Adjustments...................................6
         (c)  Reorganizations.............................................6

SECTION 14.  AMENDMENT OR DISCONTINUANCE..................................6

SECTION 15.  INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN...................7

SECTION 16.  DEFINITIONS..................................................7
         (a)   'Board'....................................................7
         (b)   'Code'.....................................................8
         (c)   'Committee'................................................8
         (d)   'Company'..................................................8
         (e)   'Compensation'.............................................8
         (f)   'Corporate Reorganization'.................................8
         (g)   'Eligible Employee'........................................8
         (h)   'Exchange Act'.............................................8
         (i)   'Fair Market Value'........................................8
         (j)   'IPO'......................................................9
         (k)   'Offering Period'..........................................9
         (l)   'Participant'..............................................9
         (m)   'Participating Company'....................................9
         (n)   'Plan'.....................................................9
         (o)   'Plan Account'.............................................9
         (p)   'Purchase Price'...........................................9
         (q)   'Stock'....................................................9
         (r)   'Subsidiary'...............................................9


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                              LIBERATE TECHNOLOGIES
                        1999 EMPLOYEE STOCK PURCHASE PLAN


SECTION 1.  PURPOSE OF THE PLAN.

     The Plan was adopted by the Board to be effective as of the date of the 
IPO. The purpose of the Plan is to provide Eligible Employees with an 
opportunity to increase their proprietary interest in the success of the 
Company by purchasing Stock from the Company on favorable terms and to pay 
for such purchases through payroll deductions. The Plan is intended to 
qualify under section 423 of the Code.

SECTION 2.  ADMINISTRATION OF THE PLAN.

     (a)  COMMITTEE COMPOSITION.  The Plan shall be administered by the 
Committee.

     (b)  COMMITTEE RESPONSIBILITIES. The Committee shall interpret the Plan 
and make all other policy decisions relating to the operation of the Plan. 
The Committee may adopt such rules, guidelines and forms as it deems 
appropriate to implement the Plan. The Committee's determinations under the 
Plan shall be final and binding on all persons.

SECTION 3.  ENROLLMENT AND PARTICIPATION.

     (a)  OFFERING PERIODS. While the Plan is in effect, two Offering Periods 
shall commence in each calendar year. The Offering Periods shall consist of 
the six-month periods commencing on each April 1 and October 1, except that 
the first Offering Period shall commence on the date of the IPO and end on 
March 31, 2000.

     (b)  ENROLLMENT. Any individual who, on the day preceding the first day 
of an Offering Period, qualifies as an Eligible Employee may elect to become 
a Participant in the Plan for such Offering Period by executing the 
enrollment form prescribed for this purpose by the Committee. The enrollment 
form shall be filed with the Company at the prescribed location not later 
than 10 days prior to the commencement of such Offering Period.

     (c)  DURATION OF PARTICIPATION. Once enrolled in the Plan, a Participant 
shall continue to participate in the Plan until he or she ceases to be an 
Eligible Employee, withdraws from the Plan under Section 5(a) or reaches the 
end of the Offering Period in which his or her employee contributions were 
discontinued under Section 4(d) or 8(b). A Participant who discontinued 
employee contributions under Section 4(d) or withdrew from the Plan under 
Section 5(a) may again become a Participant, if he or she then is an Eligible 
Employee, by following the procedure described in Subsection (b) above. A 
Participant whose employee contributions were discontinued automatically 
under Section 8(b) shall automatically resume participation at the beginning 
of the earliest Offering Period ending in the next calendar year, if he or 
she then is an Eligible Employee.




SECTION 4.  EMPLOYEE CONTRIBUTIONS.

     (a)  FREQUENCY OF PAYROLL DEDUCTIONS. A Participant may purchase shares 
of Stock under the Plan solely by means of payroll deductions. Payroll 
deductions, as designated by the Participant pursuant to Subsection (b) 
below, shall occur on each payday during participation in the Plan.

     (b)  AMOUNT OF PAYROLL DEDUCTIONS. An Eligible Employee shall designate 
on the enrollment form the portion of his or her Compensation that he or she 
elects to have withheld for the purchase of Stock. Such portion shall be a 
whole percentage of the Eligible Employee's Compensation, but not less than 
1% nor more than 15%.

     (c)  CHANGING WITHHOLDING RATE. If a Participant wishes to change the 
rate of payroll withholding, he or she may do so by filing a new enrollment 
form with the Company at the prescribed location at any time. The new 
withholding rate shall be effective as soon as reasonably practicable after 
such form has been received by the Company. The new withholding rate shall be 
a whole percentage of the Eligible Employee's Compensation, but not less than 
1% nor more than 15%.

     (d)  DISCONTINUING PAYROLL DEDUCTIONS. If a Participant wishes to 
discontinue employee contributions entirely, he or she may do so by filing a 
new enrollment form with the Company at the prescribed location at any time. 
Payroll withholding shall cease as soon as reasonably practicable after such 
form has been received by the Company. In addition, employee contributions 
may be discontinued automatically pursuant to Section 8(b). A Participant who 
has discontinued employee contributions may resume such contributions by 
filing a new enrollment form with the Company at the prescribed location. 
Payroll withholding shall resume as soon as reasonably practicable after such 
form has been received by the Company.

     (e)  LIMIT ON NUMBER OF ELECTIONS. No Participant shall make more than 
two elections under Subsection (c) or (d) above during any Offering Period.

SECTION 5.  WITHDRAWAL FROM THE PLAN.

     (a)  WITHDRAWAL. A Participant may elect to withdraw from the Plan by 
filing the prescribed form with the Company at the prescribed location at any 
time before the last day of an Offering Period. As soon as reasonably 
practicable thereafter, payroll deductions shall cease and the entire amount 
credited to the Participant's Plan Account shall be refunded to him or her in 
cash, without interest. No partial withdrawals shall be permitted.

     (b)  RE-ENROLLMENT AFTER WITHDRAWAL. A former Participant who has 
withdrawn from the Plan shall not be a Participant until he or she re-enrolls 
in the Plan under Section 3(c). Re-enrollment may be effective only at the 
commencement of an Offering Period.


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SECTION 6.  CHANGE IN EMPLOYMENT STATUS.

     (a)  TERMINATION OF EMPLOYMENT. Termination of employment as an Eligible 
Employee for any reason, including death, shall be treated as an automatic 
withdrawal from the Plan under Section 5(a). A transfer from one 
Participating Company to another shall not be treated as a termination of 
employment.

     (b)  LEAVE OF ABSENCE. For purposes of the Plan, employment shall not be 
deemed to terminate when the Participant goes on a military leave, a sick 
leave or another BONA FIDE leave of absence, if the leave was approved by the 
Company in writing. Employment, however, shall be deemed to terminate 90 days 
after the Participant goes on a leave, unless a contract or statute 
guarantees his or her right to return to work. Employment shall be deemed to 
terminate in any event when the approved leave ends, unless the Participant 
immediately returns to work.

     (c)  DEATH. In the event of the Participant's death, the amount credited 
to his or her Plan Account shall be paid to a beneficiary designated by him 
or her for this purpose on the prescribed form or, if none, to the 
Participant's estate. Such form shall be valid only if it was filed with the 
Company at the prescribed location before the Participant's death.

SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.

     (a)  PLAN ACCOUNTS. The Company shall maintain a Plan Account on its 
books in the name of each Participant. Whenever an amount is deducted from 
the Participant's Compensation under the Plan, such amount shall be credited 
to the Participant's Plan Account. Amounts credited to Plan Accounts shall 
not be trust funds and may be commingled with the Company's general assets 
and applied to general corporate purposes. No interest shall be credited to 
Plan Accounts.

     (b)  PURCHASE PRICE. The Purchase Price for each share of Stock 
purchased at the close of an Offering Period shall be the lower of:

          (i)   85% of the Fair Market Value of such share on the last trading 
     day in such Offering Period; or

          (ii)  85% of the Fair Market Value of such share on the last trading 
     day before the commencement of such Offering Period or, in the case of 
     the first Offering Period under the Plan, 85% of the price at which one 
     share of Stock is offered to the public in the IPO.

     (c)  NUMBER OF SHARES PURCHASED. As of the last day of each Offering 
Period, each Participant shall be deemed to have elected to purchase the 
number of shares of Stock calculated in accordance with this Subsection (c), 
unless the Participant has previously elected to withdraw from the Plan in 
accordance with Section 5(a). The amount then in the Participant's Plan 
Account shall be divided by the Purchase Price, and the number of shares that 
results shall be purchased from the Company with the funds in the 
Participant's Plan Account. The foregoing notwithstanding, no Participant 
shall purchase more than 750 shares of Stock with respect to any Offering 
Period nor more than the amounts of Stock set forth in Sections 8(b) and 
13(a). The 


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Committee may determine with respect to all Participants that any fractional 
share, as calculated under this Subsection (c), shall be (i) rounded down to 
the next lower whole share or (ii) credited as a fractional share.

     (d)  AVAILABLE SHARES INSUFFICIENT. In the event that the aggregate 
number of shares that all Participants elect to purchase during an Offering 
Period exceeds the maximum number of shares remaining available for issuance 
under Section 13(a), then the number of shares to which each Participant is 
entitled shall be determined by multiplying the number of shares available 
for issuance by a fraction, the numerator of which is the number of shares 
that such Participant has elected to purchase and the denominator of which is 
the number of shares that all Participants have elected to purchase.

     (e)  ISSUANCE OF STOCK. Certificates representing the shares of Stock 
purchased by a Participant under the Plan shall be issued to him or her as 
soon as reasonably practicable after the close of the applicable Offering 
Period, except that the Committee may determine that such shares shall be 
held for each Participant's benefit by a broker designated by the Committee 
(unless the Participant has elected that certificates be issued to him or 
her). Shares may be registered in the name of the Participant or jointly in 
the name of the Participant and his or her spouse as joint tenants with right 
of survivorship or as community property.

     (f)  UNUSED CASH BALANCES. Any amount remaining in the Participant's 
Plan Account that represents the Purchase Price for a fractional share shall 
be carried over in the Participant's Plan Account to the next Offering 
Period. Any amount remaining in the Participant's Plan Account that 
represents the Purchase Price for whole shares that could not be purchased by 
reason of Subsection (c) or (d) above, Section 8(b) or Section 13(a) shall be 
refunded to the Participant in cash, without interest.

     (g)  STOCKHOLDER APPROVAL. Any other provision of the Plan 
notwithstanding, no shares of Stock shall be purchased under the Plan unless 
and until the Company's stockholders have approved the adoption of the Plan.

SECTION 8.  LIMITATIONS ON STOCK OWNERSHIP.

     (a)  FIVE PERCENT LIMIT. Any other provision of the Plan 
notwithstanding, no Participant shall be granted a right to purchase Stock 
under the Plan if such Participant, immediately after his or her election to 
purchase such Stock, would own stock possessing more than 5% of the total 
combined voting power or value of all classes of stock of the Company or any 
parent or Subsidiary of the Company. For purposes of this Subsection (a), the 
following rules shall apply:

          (i)   Ownership of stock shall be determined after applying the 
     attribution rules of section 424(d) of the Code;

          (ii)  Each Participant shall be deemed to own any stock that he or 
     she has a right or option to purchase under this or any other plan; and


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          (iii) Each Participant shall be deemed to have the right to 
     purchase 750 shares of Stock under this Plan with respect to each 
     Offering Period.

     (b)  DOLLAR LIMIT. Any other provision of the Plan notwithstanding, no 
Participant shall purchase Stock with a Fair Market Value in excess of the 
following limit:

          (i)   In the case of Stock purchased during an Offering Period that 
     commenced in the current calendar year, the limit shall be equal to (A) 
     $25,000 minus (B) the Fair Market Value of the Stock that the 
     Participant previously purchased in the current calendar year (under 
     this Plan and all other employee stock purchase plans of the Company or 
     any parent or Subsidiary of the Company).

          (ii)  In the case of Stock purchased during an Offering Period that 
     commenced in the immediately preceding calendar year, the limit shall be 
     equal to (A) $50,000 minus (B) the Fair Market Value of the Stock that 
     the Participant previously purchased (under this Plan and all other 
     employee stock purchase plans of the Company or any parent or Subsidiary 
     of the Company) in the current calendar year and in the immediately 
     preceding calendar year.

For purposes of this Subsection (b), the Fair Market Value of Stock shall be 
determined in each case as of the beginning of the Offering Period in which 
such Stock is purchased. Employee stock purchase plans not described in 
section 423 of the Code shall be disregarded. If a Participant is precluded 
by this Subsection (b) from purchasing additional Stock under the Plan, then 
his or her employee contributions shall automatically be discontinued and 
shall resume at the beginning of the earliest Offering Period ending in the 
next calendar year (if he or she then is an Eligible Employee).

SECTION 9.  RIGHTS NOT TRANSFERABLE.

     The rights of any Participant under the Plan, or any Participant's 
interest in any Stock or moneys to which he or she may be entitled under the 
Plan, shall not be transferable by voluntary or involuntary assignment or by 
operation of law, or in any other manner other than by beneficiary 
designation or the laws of descent and distribution. If a Participant in any 
manner attempts to transfer, assign or otherwise encumber his or her rights 
or interest under the Plan, other than by beneficiary designation or the laws 
of descent and distribution, then such act shall be treated as an election by 
the Participant to withdraw from the Plan under Section 5(a).

SECTION 10.  NO RIGHTS AS AN EMPLOYEE.

     Nothing in the Plan or in any right granted under the Plan shall confer 
upon the Participant any right to continue in the employ of a Participating 
Company for any period of specific duration or interfere with or otherwise 
restrict in any way the rights of the Participating Companies or of the 
Participant, which rights are hereby expressly reserved by each, to terminate 
his or her employment at any time and for any reason, with or without cause. 


                                       5



SECTION 11.  NO RIGHTS AS A STOCKHOLDER.

         A Participant shall have no rights as a stockholder with respect to any
shares of Stock that he or she may have a right to purchase under the Plan until
such shares have been purchased on the last day of the applicable Offering
Period.

SECTION 12.  SECURITIES LAW REQUIREMENTS.

     Shares of Stock shall not be issued under the Plan unless the issuance 
and delivery of such shares comply with (or are exempt from) all applicable 
requirements of law, including (without limitation) the Securities Act of 
1933, as amended, the rules and regulations promulgated thereunder, state 
securities laws and regulations, and the regulations of any stock exchange or 
other securities market on which the Company's securities may then be traded.

SECTION 13.  STOCK OFFERED UNDER THE PLAN.

     A)   AUTHORIZED SHARES. The number of shares of Stock available for 
purchase under the Plan (which includes the International Employee Stock 
Purchase Plan if and to the extent implemented) shall be 833,333 (subject to 
adjustment pursuant to this Section 13). On June 1 of each year, commencing 
with June 1,2000, the aggregate number of shares of Stock available for 
purchase during the life of the Plan (which includes the International 
Employee Stock Purchase Plan if and to the extent implemented) shall 
automatically be increased by a number equal to the lesser of (a) 2% of the 
total number of shares of Stock then outstanding or (b) 833,333 (subject to 
adjustment pursuant to this Section 13).

     (b)  ANTI-DILUTION ADJUSTMENTS. The aggregate number of shares of Stock 
offered under the Plan, the 750-share limitation described in Section 7(c) 
and the price of shares that any Participant has elected to purchase shall be 
adjusted proportionately by the Committee for any increase or decrease in the 
number of outstanding shares of Stock resulting from a subdivision or 
consolidation of shares or the payment of a stock dividend, any other 
increase or decrease in such shares effected without receipt or payment of 
consideration by the Company, the distribution of the shares of a Subsidiary 
to the Company's stockholders or a similar event.

     (c)  REORGANIZATIONS. Any other provision of the Plan notwithstanding, 
immediately prior to the effective time of a Corporate Reorganization, the 
Offering Period then in progress shall terminate and shares shall be 
purchased pursuant to Section 7, unless the Plan is continued or assumed by 
the surviving corporation or its parent corporation. The Plan shall in no 
event be construed to restrict in any way the Company's right to undertake a 
dissolution, liquidation, merger, consolidation or other reorganization.

SECTION 14.  AMENDMENT OR DISCONTINUANCE.

     The Board shall have the right to amend, suspend or terminate the Plan 
at any time and without notice. Except as provided in Section 13, any 
increase in the aggregate number of shares of Stock to be issued under the 
Plan shall be subject to approval by a vote of the stockholders of the 
Company. In addition, any other amendment of the Plan shall be subject to 
approval by a 

                                       6



vote of the stockholders of the Company to the extent required by an 
applicable law or regulation.

SECTION 15.  INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN.

     Adoption of the Plan by the Board and approval of the Plan by the 
stockholders of the Company shall constitute adoption by the Board and 
approval by the stockholders of the Company of the International Employee 
Stock Purchase Plan described herein. If the laws of a foreign jurisdiction 
require an amendment to the Plan that (a) would disqualify the Plan as a plan 
that satisfies the requirements of Code Section 423 or (b) would not be 
required under any law of the United States including Code Section 423, then 
a separate but identical employee stock purchase plan may be implemented for 
Foreign Participants (as defined below). The plan for Participants who are 
not Foreign Participants will continue to be called the Plan, and the plan 
for Foreign Participants will be called the International Employee Stock 
Purchase Plan. A separate plan document will be created to evidence the 
International Employee Stock Purchase Plan when it is implemented. Except as 
otherwise amended to comply with applicable laws of a foreign jurisdiction, 
the terms of the International Employee Stock Purchase Plan will be identical 
to the Plan.

     Each Participant who (a) is not a U.S. citizen or (b) is a U.S. citizen 
working abroad who is not paid in U.S. currency ('Foreign Participant') will 
be automatically deemed to participate in this International Employee Stock 
Purchase Plan, instead of the Plan. With respect to each such Foreign 
Participant, the initial offering period for this International Employee 
Stock Purchase Plan shall be deemed to have commenced at the same time as the 
offering period that is in progress under the Plan when the International 
Employee Stock Purchase Plan is initially implemented.

      The Plan and the International Employee Stock Purchase Plan (if and to 
the extent implemented) will have the same share reserve. Thus, the number of 
shares of Stock available for purchase in the aggregate over the term of the 
Plan (which includes the International Employee Stock Purchase Plan if and to 
the extent implemented) shall be 833,333 (subject to adjustment pursuant to 
Section 13). As of June 1 of each year, commencing with the year 2000, the 
aggregate number of shares of Stock available for purchase during the life of 
the Plan (which includes the International Employee Stock Purchase Plan if 
and to the extent implemented) shall automatically increase by a number equal 
to the lesser of (a) 2% of the total number of shares of Stock then 
outstanding or (b) 833,333 (subject to adjustment pursuant to Section 13). If 
the International Employee Stock Purchase Plan is implemented, the share 
issuances under the Plan shall reduce on a share-for-share basis the number 
of shares available for issuance under the International Employee Stock 
Purchase Plan, and share issuances under the International Employee Stock 
Purchase Plan shall reduce on a share-for-share basis the number of shares 
available for issuance under the Plan.

SECTION 16.  DEFINITIONS.

     (a)  'BOARD' means the Board of Directors of the Company, as constituted 
from time to time. 

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     (b)  'CODE' means the Internal Revenue Code of 1986, as amended.

     (c)  'COMMITTEE' means the Compensation Committee of the Board. 

     (d)  'COMPANY' means Liberate Technologies, a Delaware corporation. 

     (e)  'COMPENSATION' means (i) the total compensation paid in cash to a 
Participant by a Participating Company, including salaries, wages, bonuses, 
incentive compensation, commissions, overtime pay and shift premiums, plus 
(ii) any pre-tax contributions made by the Participant under section 401(k) 
or 125 of the Code. 'Compensation' shall exclude all non-cash items, moving 
or relocation allowances, cost-of-living equalization payments, car 
allowances, tuition reimbursements, imputed income attributable to cars or 
life insurance, severance pay, fringe benefits, contributions or benefits 
received under employee benefit plans, income attributable to the exercise of 
stock options, and similar items. The Committee shall determine whether a 
particular item is included in Compensation. 

     (f)  'CORPORATE REORGANIZATION' means: 

          (i)   The consummation of a merger or consolidation of the Company 
     with or into any other entity or any other corporate reorganization; or

          (ii)  The sale, transfer of other disposition of all or 
     substantially all of the Company's assets or the complete liquidation or 
     dissolution of the Company.

     (g)  'ELIGIBLE EMPLOYEE' means any employee of a Participating Company 
who meets the following requirements: his or her customary employment is for 
more than five months per calendar year and for more than 20 hours per week. 
The foregoing notwithstanding, an individual shall not be considered an 
Eligible Employee if his or her participation in the Plan is prohibited by 
the law of any country which has jurisdiction over him or her or if he or she 
is subject to a collective bargaining agreement that does not provide for 
participation in the Plan.

     (h)  'EXCHANGE ACT' means the Securities Exchange Act of 1934, as 
amended.

     (i)  'FAIR MARKET VALUE' means the market price of Stock, determined by 
the Committee as follows:

          (i)   If the Stock was traded on The Nasdaq National Market on the 
     date in question, then the Fair Market Value shall be equal to the 
     last-transaction price quoted for such date by The Nasdaq National 
     Market;

          (ii)  If the Stock was traded on a stock exchange on the date in 
     question, then the Fair Market Value shall be equal to the closing price 
     reported by the applicable composite transactions report for such date; 
     or

          (iii) If none of the foregoing provisions is applicable, then the 
     Fair Market Value shall be determined by the Committee in good faith on 
     such basis as it deems appropriate.


                                       8



Whenever possible, the determination of Fair Market Value by the Committee 
shall be based on the prices reported in THE WALL STREET JOURNAL or as 
reported directly to the Company by Nasdaq or a stock exchange. Such 
determination shall be conclusive and binding on all persons.

     (j)  'IPO' means the initial offering of Stock to the public pursuant to 
a registration statement filed by the Company with the Securities and 
Exchange Commission.

     (k)  'OFFERING PERIOD' means a six-month period with respect to which 
the right to purchase Stock may be granted under the Plan, as determined 
pursuant to Section 3(a).

     (l)  'PARTICIPANT' means an Eligible Employee who elects to participate 
in the Plan, as provided in Section 3(b).

     (m)  'PARTICIPATING COMPANY' means (i) the Company and (ii) each present 
or future Subsidiary designated by the Committee as a Participating Company, 
as indicated on Exhibit A.

     (n)  'PLAN' means this Liberate Technologies 1999 Employee Stock 
Purchase Plan, as it may be amended from time to time.

     (o)  'PLAN ACCOUNT' means the account established for each Participant 
pursuant to Section 7(a).

     (p)  'PURCHASE PRICE' means the price at which Participants may purchase 
Stock under the Plan, as determined pursuant to Section 7(b).

     (q)  'STOCK' means the Common Stock of the Company.

     (r)  'SUBSIDIARY' means any corporation (other than the Company) in an 
unbroken chain of corporations beginning with the Company, if each of the 
corporations other than the last corporation in the unbroken chain owns stock 
possessing 50% or more of the total combined voting power of all classes of 
stock in one of the other corporations in such chain.


                                       9



                                    EXHIBIT A

                             PARTICIPATING COMPANIES

Liberate Technologies

Network Computer Incorporated Nederland B.V.








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