Mike Sando - aka one of ESPN's best writers -- just wrote an insider article about what Niners should do with Kap.
It is very interesting, full of insights from various negotiators and gives a window into what Niners are likely thinking.
Can't post the whole thing here, but the gist is a compromise deal for 3 years and $45 million with as much as $30-35M guaranteed. He also raises the possibility of Niners drafting a QB in 2014 draft and possibly moving away from Kaepernick by 2016.
check it out if you have ESPN Insider. If not, then may be Fooch can do a front-page article with more details.