NCD AGREES TO ACQUIRE E-MAIL DEVELOPER Z-CODE SOFTWARE

MOUNTAIN VIEW, Calif., Jan. 26, 1994 -- Network Computing Devices, Inc.
(NASDAQ-NCDI), the leading supplier of X Window System products, has
signed a definitive merger agreement with Z-Code Software Corp., a leading
developer of electronic mail and messaging software for open-systems,
heterogeneous computing environments.

NCD has agreed to make an initial payment of $3.2 million cash and 1.7
million shares of its common stock, and a contingent payment of up to $3.2
million cash and 1.3 million shares, depending on the achievement of
certain financial performance objectives. The transaction will be
accounted for as a purchase, with a substantial portion of the initial
payment and related transaction costs to be written off in the current
quarter.

"The Z-Code acquisition will give NCD an immediate presence in the
burgeoning e-mail market," said Judy Estrin, NCD president and CEO. "Our
initial point of entry will be the UNIX arena, where Z-Code's Z-Mail is
the only full-function, high-performance mail system available. Already
Z-Mail is the basis of MediaMail, the standard multimedia electronic mail
system for Silicon Graphics workstations. By mid-1994 Z-Mail's advanced,
fully customizable, rule-based messaging system will be available on
Microsoft Windows and Apple Macintosh platforms, providing the most widely
ported cross-platform, open-systems e-mail system on the market today.

"What promises to give NCD a real edge in the long term is Z-Code's
messaging technology -- a unique 'layered' approach that separates the
core from platform- and network-specific attributes such as user interface
'look and feel,' underlying transport mechanisms and corporate-wide
directory services. Unlike Microsoft Mail and Lotus Corp.'s cc:Mail, which
were designed for file-server-based workgroups, Z-Mail is a true
enterprise-oriented solution that scales to large, heterogeneous computing
environments without the need for costly and unreliable software and
hardware gateways. The combined company will be able to significantly
leverage current and future NCD and Z-Code technologies to take immediate
and long-term advantage of the coming Information Superhighway.

"Like our 1992 acquisition of Spectragraphics' GSS Division [now NCD's PC-X
Division, which makes X Window software for PCs], this move augments our
strategy of expanding our business through the addition of key software
offerings, which are characterized by higher profit margins than hardware
products," Estrin added.

On closing of the transaction, expected to take place in mid-February,
Z-Code Software will become a wholly-owned subsidiary of NCD, headed by
Z-Code founder and president Dan Heller and operating as NCD's Z-Code
Division. Heller will be president of the division and executive vice
president of NCD, reporting to Estrin; he also will be nominated for
election to NCD's board of directors at NCD's annual shareholder meeting
in May. The division's 37 employees will remain at Z-Code's Novato,
Calif., location.

Z-Code founder Heller said, "We've bootstrapped ourselves over the last two
years from two to 37 people, and we're still not growing fast enough to
meet market demands. By leveraging NCD's infrastructure and its
proficiency in networking and distributed systems architectures, we will
be better able to achieve the critical mass necessary to establish
ourselves as the premier messaging vendor in the market."

Z-Code Software Corp. is the leading developer of messaging applications
for open systems environments across heterogeneous computer architectures,
operating systems and networks using nonproprietary protocols and
standards. Z-Code is located at 101 Rowland Way, Suite 300, Novato, Calif.
94945.

Network Computing Devices, Inc., formed in February 1988, supplies X Window
System products which provide simultaneous access to networked
multi-vendor computers via workstation-style graphical user interfaces.
NCD is the leading worldwide supplier of X terminals, with a broad family
of color and monochrome X terminals in various screen sizes and
performance levels. The company's PC-X Division makes X server software
products for DOS and Microsoft Windows-based PCs, which integrate PCs into
X Window System environments. NCD had 1993 revenues of $144.3 million.

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