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                                                                     EXHIBIT 4.1


                             GADZOOX NETWORKS, INC.

                           1998 EQUITY INCENTIVE PLAN

                           AS ADOPTED ON JUNE 1, 1998
                          AS AMENDED ON AUGUST 10, 1998

      1.    PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent and
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options and Restricted Stock. Capitalized
terms not defined in the text are defined in Section 22 hereof. This Plan is
intended to be a written compensatory benefit plan within the meaning of Rule
701 promulgated under the Securities Act.

      2.    SHARES SUBJECT TO THE PLAN.

            2.1   Number of Shares Available. Subject to Sections 2.2 and 17
hereof, the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be Five Million Six Hundred Thousand (5,600,000)
Shares or such lesser number of Shares as permitted under Section 260.140.45 of
Title 10 of the California Code of Regulations. Subject to Sections 2.2 and 17
hereof, Shares will again be available for grant and issuance in connection with
future Awards under this Plan that: (a) are subject to issuance upon exercise of
an Option but cease to be subject to such Option for any reason other than
exercise of such Option or (b) are subject to a Restricted Stock Award that
otherwise terminates without Shares being issued. At all times the Company will
reserve and keep available a sufficient number of Shares as will be required to
satisfy the requirements of all Awards granted under this Plan.

            2.2   Adjustment of Shares. In the event that the number of
outstanding shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance under
this Plan, (b) the Exercise Prices of and number of Shares subject to
outstanding Options and (c) the Purchase Prices of and number of Shares subject
to other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the shareholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be paid in cash at Fair Market Value of such
fraction of a Share or will be rounded down to the nearest whole Share, as
determined by the Committee.

      3.    ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted
only to employees (including officers and directors who are also employees) of
the Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in
Section 5 hereto) and Restricted Stock Awards may be granted to employees,
officers, directors and consultants of the Company or any Parent or Subsidiary
of the Company; provided such consultants render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under this Plan.

      4.    ADMINISTRATION.

            4.1   Committee Authority. This Plan will be administered by the
Committee or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:

            (a)   construe and interpret this Plan, any Award Agreement and any
                  other agreement or document executed pursuant to this Plan;

            (b)   prescribe, amend and rescind rules and regulations relating to
                  this Plan;

            (c)   select persons to receive Awards;


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            (d)   determine the form and terms of Awards;

            (e)   determine the number of Shares or other consideration subject
                  to Awards;

            (f)   determine whether Awards will be granted singly, in
                  combination with, in tandem with, in replacement of, or as
                  alternatives to, other Awards under this Plan or awards under
                  any other incentive or compensation plan of the Company or any
                  Parent or Subsidiary of the Company;

            (g)   grant waivers of Plan or Award conditions;

            (h)   determine the vesting, exercisability and payment of Awards;

            (i)   correct any defect, supply any omission, or reconcile any
                  inconsistency in this Plan, any Award, any Award Agreement,
                  any Exercise Agreement or any Restricted Stock Purchase
                  Agreement;

            (j)   determine whether an Award has been earned; and

            (k)   make all other determinations necessary or advisable for the
                  administration of this Plan.

            4.2   Committee Discretion. Any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, and subject to Section 5.9 hereof, at any later time, and such
determination will be final and binding on the Company and on all persons having
an interest in any Award under this Plan. The Committee may delegate to one or
more officers of the Company the authority to grant an Award under this Plan.

      5.    OPTIONS. The Committee may grant Options to eligible persons and
will determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOS") or Nonqualified Stock Options ("NQSOS"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:

            5.1   Form of Option Grant. Each Option granted under this Plan will
be evidenced by an Award Agreement which will expressly identify the Option as
an ISO or an NQSO ("STOCK OPTION AGREEMENT"), and will be in such form and
contain such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.

            5.2   Date of Grant. The date of grant of an Option will be the date
on which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

            5.3   Exercise Period. Options may be exercisable immediately
(subject to repurchase pursuant to Section 11 hereof) or may be exercisable
within the times or upon the events determined by the Committee as set forth in
the Stock Option Agreement governing such Option; provided, however, that no
Option will be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that no ISO granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or
Subsidiary of the Company ("TEN PERCENT SHAREHOLDER") will be exercisable after
the expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines. Subject to earlier termination of the Option
as provided herein, each Participant who is not an officer, director or
consultant of the Company or of a Parent or Subsidiary of the Company shall have
the right to exercise an Option granted hereunder at the rate of at least twenty
percent (20%) per year over five (5) years from the date such Option is granted.



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            5.4   Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may not be less than
eighty-five percent (85%) of the Fair Market Value of the Shares on the date of
grant; provided that (a) the Exercise Price of an ISO will not be less than one
hundred percent (100%) of the Fair Market Value of the Shares on the date of
grant and (b) the Exercise Price of any Option granted to a Ten Percent
Shareholder will not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the date of grant. Payment for the Shares
purchased must be made in accordance with Section 7 hereof.

            5.5   Method of Exercise. Options may be exercised only by delivery
to the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price, and any applicable taxes, for the
number of Shares being purchased.

            5.6   Termination. Subject to earlier termination pursuant to
Sections 17 and 18 hereof and notwithstanding the exercise periods set forth in
the Stock Option Agreement, exercise of an Option will always be subject to the
following:

            (a)   If the Participant is Terminated for any reason except death,
                  Disability or for Cause, then the Participant may exercise
                  such Participant's Options only to the extent that such
                  Options are exercisable upon the Termination Date and such
                  Options must be exercised by the Participant, if at all, as to
                  all or some of the Vested Shares calculated as of the
                  Termination Date, within three (3) months after the
                  Termination Date (or within such shorter time period, not less
                  than thirty (30) days, or within such longer time period, not
                  exceeding five (5) years, after the Termination Date as may be
                  determined by the Committee, with any exercise beyond three
                  (3) months after the Termination Date deemed to be an NQSO)
                  but in any event, non later than the expiration date of the
                  Options.

            (b)   If the Participant is Terminated because of Participant's
                  death or Disability (or the Participant dies within three (3)
                  months after a Termination other than for Cause), then
                  Participant's Options may be exercised only to the extent that
                  such Options are exercisable by Participant on the Termination
                  Date and must be exercised by Participant (or Participant's
                  legal representative or authorized assignee), if at all, as to
                  all or some of the Vested Shares calculated as of the
                  Termination Date, within twelve (12) months after the
                  Termination Date (or within such shorter time period, not less
                  than six (6) months, or within such longer time period, not
                  exceeding five (5) years, after the Termination Date as may be
                  determined by the Committee, with any exercise beyond (i)
                  three (3) months after the Termination Date when the
                  Termination is for any reason other than the Participant's
                  death or disability, within the meaning of Section 22(e)(3) of
                  the Code, or (ii) twelve (12) months after the Termination
                  Date when the Termination is for Participant's disability,
                  within the meaning of Section 22(e)(3) of the Code, deemed to
                  be an NQSO) but in any event no later than the expiration date
                  of the Options.

            (c)   If the Participant is terminated for Cause, then Participant's
                  Options shall expire on such Participant's Termination Date,
                  or at such later time and on such conditions as are determined
                  by the Committee.

            5.7   Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.



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            5.8   Limitations on ISOs. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair
Market Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
$100,000, then the Options for the first $100,000 worth of Shares to become
exercisable in such calendar year will be ISOs and the Options for the amount in
excess of $100,000 that become exercisable in that calendar year will be NQSOs.
In the event that the Code or the regulations promulgated thereunder are amended
after the Effective Date (as defined in Section 18 hereof) to provide for a
different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, then such different limit will be automatically incorporated herein and
will apply to any Options granted after the effective date of such amendment.

            5.9   Modification, Extension or Removal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. Subject to Section 5.10 hereof, the Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.4 hereof for Options granted on the date the action is taken to
reduce the Exercise Price.

            5.10  No Disqualification. Notwithstanding any other provision in
this Plan, no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

      6.    RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the Purchase Price, the restrictions to which the
Shares will be subject, and all other terms and conditions of the Restricted
Stock Award, subject to the following:

            6.1   Form of Restricted Stock Award. All purchases under a
Restricted Stock Award made pursuant to this Plan will be evidenced by an Award
Agreement ("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form
(which need not be the same for each Participant) as the Committee will from
time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The Restricted Stock Award will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within such thirty (30)
days , then the offer will terminate, unless otherwise determined by the
Committee.

            6.2   Purchase Price. The Purchase Price of Shares sold pursuant to
a Restricted Stock Award will be determined by the Committee and will be at
least eighty-five percent (85%) of the Fair Market Value of the Shares on the
date the Restricted Stock Award is granted or at the time the purchase is
consummated, except in the case of a sale to a Ten Percent Shareholder, in which
case the Purchase Price will be one hundred percent (100%) of the Fair Market
Value on the date the Restricted Stock Award is granted or at the time the
purchase is consummated. Payment of the Purchase Price must be made in
accordance with Section 7 hereof.

            6.3   Restrictions. Restricted Stock Awards may be subject tot he
restrictions set forth in Section 11 hereof or such other restrictions not
inconsistent with Section 25102(o) of the California Corporations Code.

      7.    PAYMENT FOR SHARE PURCHASES.

            7.1   Payment. Payment for Shares purchased pursuant to this Plan
may be made in cash (by check) or, where expressly approved for the Participant
by the Committee and where permitted by law:



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            (a)   by cancellation of indebtedness of the Company to the
                  Participant;

            (b)   by surrender of shares that: (i) either (A) have been owned by
                  Participant for more than six (6) months and have been paid
                  for within the meaning of SEC Rule 144 (and, if such shares
                  were purchased from the Company by use of a promissory note,
                  such note has been fully paid with respect to such shares) or
                  (B) were obtained by Participant in the public market and (ii)
                  are clear of all liens, claims, encumbrances or security
                  interests.

            (c)   by tender of a full recourse promissory note having such terms
                  as may be approved by the Committee and bearing interest at a
                  rate sufficient to avoid imputation of income under Sections
                  483 and 1274 of the Code; provided, however, that Participants
                  who are not employees or directors of the Company will not be
                  entitled to purchase Shares with a promissory note unless the
                  note is adequately secured by collateral other than the
                  Shares.

            (d)   by waiver of compensation due or accrued to the Participant
                  for services rendered;

            (e)   with respect only to purchases upon exercise of an Option, and
                  provided that a public market for the Company's stock exists:

                  (1)   through a "same day sale" commitment from the
                        Participant and a broker-dealer that is a member of the
                        National Association of Securities Dealers (an "NASD
                        DEALER") whereby the Participant irrevocably elects to
                        exercise the Option and to sell a portion of the Shares
                        so purchased to pay for the Exercise Price, and whereby
                        the NASD Dealer irrevocably commits upon receipt of such
                        Shares to forward the Exercise Price directly to the
                        Company; or

                  (2)   through a "margin" commitment from the Participant and
                        an NASD Dealer whereby the Participant irrevocably
                        elects to exercise the Option and to pledge the Shares
                        so purchased to the NASD Dealer in a margin account as
                        security for a loan from the NASD Dealer in the amount
                        of the Exercise Price, and whereby the NASD Dealer
                        irrevocably commits upon receipt of such Shares to
                        forward the Exercise Price directly to the Company; or

            (f)   by any combination of the foregoing.

            7.2   Loan Guarantees. The Committee may help the Participant pay
for Shares purchased under this Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.

      8.    WITHHOLDING TAXES.

            8.1   Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

            8.2   Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee for such elections and be in writing in a form
acceptable to the Committee.

      9.    PRIVILEGES OF STOCK OWNERSHIP.



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            9.1   Voting and Dividends. No Participant will have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a shareholder and have all the rights of a shareholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Unvested
Shares that are repurchased pursuant to Section 11 hereof. The Company will
comply with Section 260.140.1 of Title 10 of the California Code of Regulations
with respect to the voting rights of Common Stock.

            9.2   Financial Statements. The company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding, or as otherwise required under Section
260.140.46 of Title 10 of the California Code of Regulations. Notwithstanding
the foregoing, the Company will not be required to provide such financial
statements to Participants when issuance is limited to key employees whose
services in connection with the Company assure them access to equivalent
information.

      10.   TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution. During the lifetime of the
Participant an Award will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Award,
may be made only by the Participant or Participant's legal representative.

      11.   RESTRICTIONS OF SHARES.

            11.1  Right of First Refusal. At the discretion of the Committee,
the Company may reserve to itself and/or its assignee(s) in the Award Agreement
a right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party, unless
otherwise not permitted by Section 25102(o) of the California Corporations Code,
provided, that such right of first refusal terminates upon the Company's initial
public offering of Common Stock pursuant to an effective registration statement
filed under the Securities Act.

            11.2  Right of Repurchase. At the discretion of the Committee, the
Company reserve to itself and/or its assignee(s) in the Award Agreement a right
to repurchase Unvested Shares held by a Participant for cash and/or cancellation
of purchase money indebtedness following such Participant's Termination at any
time within the later of ninety (90) days after the Participant's Termination
Date and the date the Participant purchases Shares under the Plan at the
Participant's Exercise Price or Purchase Price, as the case may be, provided,
that unless the Participant is an officer, director or consultant of the Company
or of a Parent or Subsidiary of the Company, such right of repurchase lapses at
the rate of at least twenty percent (20%) per year over five (5) years from: (a)
the date of grant of the Option or (b) in the case of Restricted Stock, the date
the Participant purchases the Shares.

      12.   CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules,, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.

      13.   ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as



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collateral to secure the payment of Participant's obligation to the Company
under the promissory note; provided, however, that the Committee may require or
accept other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company will have full recourse against the
Participant under the promissory note notwithstanding any pledge of the
Participant's Shares or other collateral. In connection with any pledge of the
Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.

      14.   EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, shares of Common
Stock of the Company (including Restricted Stock) or other consideration, based
on such terms and conditions as the Committee and the Participant may agree.

      15.   SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan is
intended to comply with Section 25102(o) of the California Corporations Code.
Any provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Award will not be effective
unless such Award is in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) compliance with any exemption, completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the exemption, registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.

      16.   NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
Cause.

      17.   CORPORATE TRANSACTIONS.

            17.1  Assumption or Replacement of Awards by Successor or Acquiring
CORPORATION. In the event of (a) a dissolution or liquidation of the Company,
(b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company or their relative stock holdings and the Awards granted under this
Plan are assumed, converted or replaced by the successor or acquiring
corporation, which assumption, conversion or replacement will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company immediately prior to such merger
(other than any shareholder which merges with the Company in such merger, or
which owns or controls another corporation which merges, with the Company in
such merger) cease to own their shares or other equity interests in the Company,
or (d) the sale of all or substantially all of the assets of the Company, any or
all outstanding Awards may be assumed, converted or replaced by the successor or
acquiring corporation (if any), which assumption, conversion or replacement will
be binding on all Participants. In the alternative, the successor or acquiring
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to shareholders (after taking into
account the existing provisions of the Awards). The successor or acquiring
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the



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Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 17.1. In the event such
successor or acquiring corporation (if any) does not assume or substitute
Awards, as provided above, pursuant to a transaction described in this Section
17.1, then notwithstanding any other provision in this Plan to the contrary, the
vesting of such Awards will accelerate and the Options will become exercisable
in full prior to the consummation of such event at such times and on such
conditions as the Committee determines, and if such Options are not exercised
prior to the consummation of the corporate transaction, they shall terminate in
accordance with the provisions of this Plan.

            17.2  Other Treatment of Awards. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 17, in
the event of the occurrence of any transaction described in Section 17.1 hereof,
any outstanding Awards will be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation or sale of assets.

            17.3  Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Award under this Plan in substitution of
such other company's award or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

      18.   ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become effective
on the date that it is adopted by the Board (the "EFFECTIVE DATE"). This Plan
will be approved by the shareholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve (12)
months before or after the Effective Date. Upon the effective Date, the Board
may grant Awards pursuant to this Plan; provided, however, that: (a) no Option
may be exercised prior to initial shareholder approval of this Plan; (b) no
Option granted pursuant to an increase in the number of Shares approved by the
Board shall be exercised prior to the time such increase has been approved by
the shareholders of the Company; (c) in the event that initial shareholder
approval is not obtained within the time period provided herein, all Awards
granted hereunder shall be canceled, any Shares issued pursuant to any Award
shall be canceled and any purchase of Shares issued hereunder shall be
rescinded; and (d) Awards granted pursuant to an increase in the number of
Shares approved by the Board which increase is not timely approved by
shareholders shall be canceled, any Shares issued pursuant to any such Awards
shall be canceled, and any purchase of Shares subject to any such Award shall be
rescinded. In the event that initial shareholder approval is not obtained within
twelve (12) months before or after the date this Plan is adopted by the Board,
all Awards granted hereunder will be canceled, any Shares issued pursuant to any
Award will be canceled and any purchase of Shares hereunder will be rescinded.

      19.   TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the Effective Date or, if
earlier, the date of shareholder approval. This Plan and all agreements
hereunder shall be governed by and construed in accordance with the laws of the
State of California.

      20.   AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the
Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval pursuant to Section 25102(o) of
the California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.

      21.   NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be



                                       8
<PAGE>   9

construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and other equity awards
otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

      22.   DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

            "AWARD" means any award under this Plan, including any Option or
Restricted Stock Award.

            "AWARD AGREEMENT" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.

            "BOARD" means the Board of Directors of the Company.

            "CAUSE" means Termination because of (i) any willful material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent or Subsidiary of the Company, the Participant's
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, any willful perpetration by the Participant of a common law fraud,
(ii) the Participant's commission of an act of personal dishonesty which
involves personal profit in connection with the Company or any other entity
having a business relationship with the Company, (iii) any material breach by
the Participant of any provision of any agreement or understanding between the
Company or any Parent or Subsidiary of the Company and the Participant regarding
the terms of the Participant's service as an employee, director or consultant to
the Company or a Parent or Subsidiary of the Company, including without
limitation, the willful and continued failure or refusal of the Participant to
perform the material duties required of such Participant as an employee,
director or consultant of the Company or a Parent or Subsidiary of the Company,
other than as a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar agreement between
the Company and the Participant, (iv) Participant's disregard of the policies of
the Company or any Parent or Subsidiary of the Company so as to cause loss,
damage or injury to the property, reputation or employees of the Company or a
Parent or Subsidiary of the Company, or (v) any other misconduct by the
Participant which is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or a Parent
or Subsidiary of the Company.

            "CODE" means the Internal Revenue Code of 1986, as amended.

            "COMMITTEE" means the committee appointed by the Board to administer
this Plan, or if no committee is appointed, the Board.

            "COMPANY" means SMARTSAN SYSTEMS, INC., or any successor
corporation.

            "DISABILITY" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.

            "EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

            "FAIR MARKET VALUE" means, as of any date, the value of a share of
the Company's Common Stock determined as follows:

            (a)   if such Common Stock is then quoted on the Nasdaq National
                  Market, its closing price on the Nasdaq National Market on the
                  date of determination as reported in The Wall Street Journal;

            (b)   if such Common Stock is publicly traded and is then listed on
                  a national securities exchange, its closing price on the date
                  of determination on the principal national securities exchange
                  on which the Common Stock is listed or admitted to trading as
                  reported in The Wall Street Journal;



                                       9
<PAGE>   10

            (c)   if such Common Stock is publicly traded but is not quoted on
                  the Nasdaq National Market nor listed or admitted to trading
                  on a national securities exchange, the average of the closing
                  bid and asked prices on the date of determination as reported
                  by The Wall Street Journal (or, if not so reported, as
                  otherwise reported by any newspaper or other source as the
                  Board may determine); or

            (d)   if none of the foregoing is applicable, by the Committee in
                  good faith.

            "OPTION" means an award of an option to purchase Shares pursuant to
Section 5 hereof.

            "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain

            "PARTICIPANT" means a person who receives an Award under this Plan

            "PLAN" means this SMARTSAN SYSTEMS, INC. 1998 Equity Incentive Plan,
as amended from time to time.

            "PURCHASE PRICE" means the price at which a Participant may purchase
Restricted Stock

            "RESTRICTED STOCK" means Shares purchased pursuant to a Restricted
Stock Award.

            "RESTRICTED STOCK AWARD" means an award of Shares pursuant to
Section 6 hereof.

            "SEC" means the Securities and Exchange Commission.

            "SECURITIES ACT" means the Securities Ac t of 1933, as amended.

            "SHARES" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 17 hereof, and
any successor security.

            "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 fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

            "TERMINATION" or "TERMINATED" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company. A Participant will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided
that such leave is for a period of not more than ninety (90) days unless
reinstatement (or, in the case of an employee with an ISO, reemployment) upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the Award
while on leave from the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Option be exercised after
the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "TERMINATION DATE").

            "UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.

            "VESTED SHARES" means "Vested Shares" as defined in the Award
Agreement.



                                       10
<PAGE>   11

                                                               No. _____________

                             GADZOOX NETWORKS, INC.

                           1998 EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT


      This Stock Option Agreement ("AGREEMENT") is made and entered into as of
the date of grant set forth below (the "DATE OF GRANT") by and between Gadzoox
Networks, Inc., a Delaware corporation (the "COMPANY"), and the participant
named below ("PARTICIPANT"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 1998 Equity Incentive Plan (the
"PLAN").

PARTICIPANT:                       __________________________________

SOCIAL SECURITY NUMBER:            __________________________________

ADDRESS:                           __________________________________

                                   __________________________________

TOTAL OPTION SHARES:               __________________________________

EXERCISE PRICE PER SHARE:          __________________________________

DATE OF GRANT:                     __________________________________

FIRST VESTING DATE:                __________________________________

EXPIRATION DATE:                   __________________________________
                                   (unless earlier terminated under
                                   Section 3 below)

TYPE OF STOCK OPTION
(CHECK ONE):                       [ ] INCENTIVE STOCK OPTION
                                   [ ] NONQUALIFIED STOCK OPTION


      1.    GRANT OF OPTION. The Company hereby grants to Participant an option
(this "OPTION") to purchase the total number of shares of Common Stock of the
Company set forth above as Total Option Shares (the "SHARES") at the Exercise
Price Per Share set forth above (the "EXERCISE PRICE"), subject to all of the
terms and conditions of this Agreement and the Plan. If designated as an
Incentive Stock Option above, the Option is intended to qualify as an "incentive
stock option" ("ISO") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "CODE").

      2.    EXERCISE PERIOD.

            2.1   Exercise Period of Option. Provided Participant continues to
provide services to the Company or any Subsidiary or Parent of the Company, the
Option will become vested and exercisable as to portions of the Shares as
follows: (a) This Option shall not vest nor be exercisable with respect to any
of the Shares until , 199 (the "FIRST VESTING DATE"); (b) on the First Vesting
Date the Option will become vested and exercisable as to twenty-five percent
(25%) of the Shares; and (c) thereafter at the end of each full succeeding
quarter the Option will become vested and exercisable as to 6.25% of the Shares.
If application of the vesting percentage causes a fractional share, such share
shall be rounded down to the nearest whole share.


<PAGE>   12

            2.2   Vesting of Options. Shares that are vested pursuant to the
schedule set forth in Section 2.1 are "VESTED SHARES." Shares that are not
vested pursuant to the schedule set forth in Section 2.1 are "UNVESTED SHARES."
Unvested Shares may not be sold or otherwise transferred by Participant without
the Company's prior written consent.

            2.3   Expiration. The Option shall expire on the Expiration Date set
forth above or earlier as provided in Section 3 below.

      3.    TERMINATION.

            3.1   Termination for Any Reason Except Death, Disability or Cause.
If Participant is Terminated for any reason, except death, Disability or for
Cause, the Option, to the extent (and only to the extent) that it would have
been exercisable by Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the Termination Date, but in
any event no later than the Expiration Date.

            3.2   Termination Because of Death or Disability. If Participant is
Terminated because of death or Disability of Participant (or Participant dies
within three (3) months of Termination other than because of Participant's
Disability or for Cause), the Option, to the extent that it is exercisable by
Participant on the Termination Date, may be exercised by Participant (or
Participant's legal representative) no later than twelve (12) months after the
Termination Date, but in any event no later than the Expiration Date. Any
exercise beyond (a) three (3) months after the Termination Date when the
Termination is for any reason other than the Participant's death or disability,
within the meaning of Section 22(e)(3) of the Code; or (b) twelve (12) months
after the Termination Date when the termination is for Participant's disability,
within the meaning of Section 22(e)(3) of the Code, is deemed to be an NQSO.

            3.3   Termination for Cause. If Participant is Terminated for Cause,
then the Option will expire on Participant's Termination Date, or at such later
time and on such conditions as are determined by the Committee.

            3.4   No Obligation to Employ. Nothing in the Plan or this Agreement
shall confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any time,
with or without Cause.

      4.    MANNER OF EXERCISE.

            4.1   Stock Option Exercise Agreement. To exercise this Option,
Participant (or in the case of exercise after Participant's death or incapacity,
Participant's executor, administrator, heir or legatee, as the case may be) must
deliver to the Company an executed stock option exercise agreement in the form
attached hereto as Exhibit A, or in such other form as may be approved by the
Company from time to time (the "EXERCISE AGREEMENT"), which shall set forth,
inter alia, Participant's election to exercise the Option, the number of Shares
being purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Participant's investment intent and access
to information as may be required by the Company to comply with applicable
securities laws. If someone other than Participant exercises the Option, then
such person must submit documentation reasonably acceptable to the Company that
such person has the right to exercise the Option.

            4.2   Limitations on Exercise. The Option may not be exercised
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. The Option may
not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.

            4.3   Payment. The Exercise Agreement shall be accompanied by full
payment of the Exercise Price for the shares being purchased in cash (by check),
or where permitted by law:

                                       2
<PAGE>   13

      (a)   by cancellation of indebtedness of the Company to the Participant;

      (b)   by surrender of shares of the Company's Common Stock that (1) either
            (A) have been owned by Participant for more than six (6) months and
            have been paid for within the meaning of SEC Rule 144 (and, if such
            shares were purchased from the Company by use of a promissory note,
            such note has been fully paid with respect to such shares); or (B)
            were obtained by Participant in the open public market; and (2) are
            clear of all liens, claims, encumbrances or security interests;

      (c)   by tender of a full recourse promissory note having such terms as
            may be approved by the Committee and bearing interest at a rate
            sufficient to avoid imputation of income under Sections 483 and 1274
            of the Code; provided, however, that Participants who are not
            employees or directors of the Company shall not be entitled to
            purchase Shares with a promissory note unless the note is adequately
            secured by collateral other than the Shares;

      (d)   by waiver of compensation due or accrued to Participant for services
            rendered;

      (e)   provided that a public market for the Company's stock exists, (1)
            through a "same day sale" commitment from Participant and a
            broker-dealer that is a member of the National Association of
            Securities Dealers (an "NASD DEALER") whereby Participant
            irrevocably elects to exercise the Option and to sell a portion of
            the Shares so purchased to pay for the Exercise Price and whereby
            the NASD Dealer irrevocably commits upon receipt of such Shares to
            forward the Exercise Price directly to the Company, or (2) through a
            "margin" commitment -- from Participant and an NASD Dealer whereby
            Participant irrevocably elects to exercise the Option and to pledge
            the Shares so purchased to the NASD Dealer in a margin account as
            security for a loan from the NASD Dealer in the amount of the
            Exercise Price, and whereby the NASD Dealer irrevocably commits upon
            receipt of such Shares to forward the Exercise Price directly to the
            Company; or

      (f)   by any combination of the foregoing.

            4.4   Tax Withholding. Prior to the issuance of the Shares upon
exercise of the Option, Participant must pay or provide for any applicable
federal, state and local withholding obligations of the Company. If the
Committee permits, Participant may provide for payment of withholding taxes upon
exercise of the Option by requesting that the Company retain Shares with a Fair
Market Value equal to the minimum amount of taxes required to be withheld. In
such case, the Company shall issue the net number of Shares to the Participant
by deducting the Shares retained from the Shares issuable upon exercise.

            4.5   Issuance of Shares. Provided that the Exercise Agreement and
payment are in form and substance satisfactory to counsel for the Company, the
Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.

      5.    NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option is
an ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (a) the date two (2)
years after the Date of Grant, and (b) the date one (1) year after transfer of
such Shares to Participant upon exercise of the Option, Participant shall
immediately notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.



                                       3
<PAGE>   14

      6.    COMPLIANCE WITH LAWS AND REGULATIONS. The Plan and this Agreement
are intended to comply with Section 25102(o) of the California Corporations
Code. Any provision of this Agreement which is inconsistent with Section
25102(o) shall, without further act or amendment by the Company or the Board, be
reformed to comply with the requirements of Section 25102(o). The exercise of
the Option and the issuance and transfer of Shares shall be subject to
compliance by the Company and Participant with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange on which the Company's Common Stock may be listed at the time of
such issuance or transfer. Participant understands that the Company is under no
obligation to register or qualify the Shares with the SEC, any state securities
commission or any stock exchange to effect such compliance.

      7.    NONTRANSFERABILITY OF OPTION. The Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Participant only by Participant or in the
event of Participant's incapacity, by Participant's legal representative. The
terms of the Option shall be binding upon the executors, administrators,
successors and assigns of Participant.

      8.    COMPANY'S REPURCHASE OPTION FOR UNVESTED SHARES. The Company, or its
assignee, shall have the option to repurchase Participant's Unvested Shares (as
defined in Section 2.2 of this Agreement) on the terms and conditions set forth
in the Exercise Agreement (the "Repurchase Option") if Participant is Terminated
(as defined in the Plan) for any reason, or no reason, including without
limitation Participant's death, Disability (as defined in the Plan), voluntary
resignation or termination by the Company with or without Cause. Notwithstanding
the foregoing, the Company shall retain the Repurchase Option for Unvested
Shares only as to that number of Unvested Shares (whether or not exercised) that
exceeds the number of shares which remain exercisable.

            8.1   Termination and Termination Date. In case of any dispute as to
whether Participant is Terminated, the Committee shall have discretion to
determine whether Participant has been Terminated and the effective date of such
Termination (the "Termination Date").

            8.2   Exercise of Repurchase Option. At any time within ninety (90)
days after the Participant's Termination Date (or, in the case of securities
issued upon exercise of an Option after the Participant's Termination Date,
within 90 days after the date of such exercise), the Company, or its assignee,
may elect to repurchase the Participant's Unvested Shares by giving Participant
written notice of exercise of the Repurchase Option.

            8.3   Calculation of Repurchase Price for Unvested Shares. The
Company or its assignee shall have the option to repurchase from Participant (or
from Participant's personal representative as the case may be) the Unvested
Shares at the Participant's Exercise Price, proportionately adjusted for any
stock split or similar change in the capital structure of the Company as set
forth in Section 2.2 of the Plan.

            8.4   Payment of Repurchase Price. The repurchase price shall be
payable, at the option of the Company or its assignee, by check or by
cancellation of all or a portion of any outstanding indebtedness of Participant
to the Company or such assignee, or by any combination thereof. The repurchase
price shall be paid without interest within sixty (60) days after exercise of
the Repurchase Option.

            8.5   Right of Termination Unaffected. Nothing in this Agreement
shall be construed to limit or otherwise affect in any manner whatsoever the
right or power of the Company (or any Parent or Subsidiary of the Company) to
terminate Participant's employment or other relationship with Company (or the
Parent or Subsidiary of the Company) at any time, for any reason or no reason,
with or without cause.

      9.    COMPANY'S RIGHT OF FIRST REFUSAL. Unvested Shares may not be sold or
otherwise transferred by Participant without the Company's prior written
consent. Before any Vested Shares held by Participant or any transferee of such
Vested Shares (either being sometimes referred to herein as the "Holder") may be
sold or otherwise transferred (including without limitation a transfer by gift
or operation of law), the Company



                                       4
<PAGE>   15

and/or its assignee(s) shall have an assignable right of first refusal to
purchase the Vested Shares to be sold or transferred (the "Offered Shares") on
the terms and conditions set forth in this Section (the "Right of First
Refusal").

            9.1   Notice of Proposed Transfer. The Holder of the Offered Shares
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered Shares;
(ii) the name of each proposed bona fide purchaser or other transferee
("Proposed Transferee"); (iii) the number of Offered Shares to be transferred to
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Holder proposes to transfer the Offered Shares (the "Offered
Price"); and (v) that the Holder will offer to sell the Offered Shares to the
Company and/or its assignee(s) at the Offered Price as provided in this Section.

            9.2   Exercise of Right of First Refusal. At any time within thirty
(30) days after the date of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase the Offered Shares
proposed to be transferred to any one or more of the Proposed Transferees named
in the Notice, at the purchase price determined as specified below.

            9.3   Purchase Price. The purchase price for the Offered Shares
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the cash equivalent value of the
non-cash consideration shall conclusively be deemed to be the value of such
non-cash consideration as determined in good faith by the Company's Board of
Directors.

            9.4   Payment. Payment of the purchase price for Offered Shares will
be payable, at the option of the Company and/or its assignee(s) (as applicable),
by check or by cancellation of all or a portion of any outstanding indebtedness
of the Holder to the Company (or to such assignee, in the case of a purchase of
Offered Shares by such assignee) or by any combination thereof. The purchase
price will be paid without interest within sixty (60) days after the Company's
receipt of the Notice, or, at the option of the Company and/or its assignee(s),
in the manner and at the time(s) set forth in the Notice.

            9.5   Holder's Right to Transfer. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section,
then the Holder may sell or otherwise transfer such Offered Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 120 days after the date of the
Notice, and provided further, that (i) any such sale or other transfer is
effected in compliance with all applicable securities laws and (ii) the Proposed
Transferee agrees in writing that the provisions of this Section will continue
to apply to the Offered Shares in the hands of such Proposed Transferee. If the
Offered Shares described in the Notice are not transferred to the Proposed
Transferee within such 120 day period, then a new Notice must be given to the
Company, and the Company will again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.

            9.6   Exempt Transfers. Notwithstanding anything to the contrary in
this Section, the following transfers of Vested Shares will be exempt from the
Right of First Refusal: (i) the transfer of any or all of the Vested Shares
during Participant's lifetime by gift or on Participant's death by will or
intestacy to Participant's "immediate family" (as defined below) or to a trust
for the benefit of Participant or Participant's immediate family, provided that
each transferee or other recipient agrees in a writing satisfactory to the
Company that the provisions of this Section will continue to apply to the
transferred Vested Shares in the hands of such transferee or other recipient;
(ii) any transfer of Vested Shares made pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation or
corporations (except that the Right of First Refusal and Repurchase Option will
continue to apply thereafter to such Vested Shares, in which case the surviving
corporation of such merger or consolidation shall succeed to the rights of the
Company under this Section unless the agreement of merger or consolidation
expressly otherwise provides); or (iii) any transfer of Vested Shares pursuant
to the winding up and dissolution of the Company. As used herein, the term
"immediate family" will mean Participant's spouse, the lineal descendant or
antecedent, father, mother, brother or sister, adopted child or



                                       5
<PAGE>   16

grandchild of the Participant or the Participant's spouse, or the spouse of any
child, adopted child, grandchild or adopted grandchild of Participant or the
Participant's spouse.

            9.7   Termination of Right of First Refusal. The Company's Right of
First Refusal will terminate when the Company's securities become publicly
traded.

      10.   TAX CONSEQUENCES. Set forth below is a brief summary as of the
Effective Date of the Plan of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.

            10.1  Exercise of ISO. If the Option qualifies as an ISO, there will
be no regular federal or California income tax liability upon the exercise of
the Option, although the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price will be treated as a tax
preference item for federal alternative minimum tax purposes and may subject the
Participant to the alternative minimum tax in the year of exercise.

            10.2  Exercise of Nonqualified Stock Option. If the Option does not
qualify as an ISO, there may be a regular federal and California income tax
liability upon the exercise of the Option. Participant will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Participant is a current or former employee of the
Company, the Company may be required to withhold from Participant's compensation
or collect from Participant and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of
exercise.

            10.3  Disposition of Shares. If the Shares are held for more than
one (1) year after the date of the transfer of the Shares pursuant to the
exercise of the Option for Vested Shares or for more than one (1) year after the
date of transfer of the Shares pursuant to the exercise of an Option for
Unvested Shares for which a Section 83(b) election has been made, and, in the
case of an ISO, are disposed of more than two (2) years after the Date of Grant,
any gain realized on disposition of the Shares will be treated as long term
capital gain for federal and California income tax purposes. If Shares purchased
under an ISO are disposed of within the applicable one (1) year or two (2) year
period, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the excess, if any,
of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price. The Company may be required to withhold from Participant's compensation
or collect from Participant and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of
exercise.

            10.4. Section 83(b) Election for Unvested Shares. With respect to
Unvested Shares, which are subject to the Repurchase Option, unless an election
is filed by the Participant with the Internal Revenue Service (and, if
necessary, the proper state taxing authorities), within 30 days of the purchase
of the Unvested Shares, electing pursuant to Section 83(b) of the Internal
Revenue Code (and similar state tax provisions, if applicable) to be taxed
currently on any difference between the Exercise Price of the Unvested Shares
and their Fair Market Value on the date of purchase, there may be a recognition
of taxable income (including, where applicable, alternative minimum taxable
income) to the Participant, measured by the excess, if any, of the Fair Market
Value of the Unvested Shares at the time they cease to be Unvested Shares, over
the Exercise Price of the Unvested Shares.

      11.   PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to Participant.



                                       6
<PAGE>   17

      12.   INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.

      13.   ENTIRE AGREEMENT. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

      14.   NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by facsimile, rapifax or telecopier.

      15.   SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement including its rights to repurchase Shares under the
Repurchase Option and the Right of First Refusal. This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant's heirs, executors,
administrators, legal representatives, successors and assigns.

      16.   GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.

      17.   ACCEPTANCE. Participant hereby acknowledges receipt of a copy of the
Plan and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in triplicate by its duly authorized representative and Participant has executed
this Agreement in triplicate as of the Date of Grant.

GADZOOX NETWORKS, INC.                    PARTICIPANT

By:__________________________________     _____________________________________
                                          (Signature)

_____________________________________     _____________________________________
(Please print name)                       (Please print name)

_____________________________________
(Please print title)



                                       7
<PAGE>   18



                                    EXHIBIT A


                         STOCK OPTION EXERCISE AGREEMENT



                                       8
<PAGE>   19

                             GADZOOX NETWORKS, INC.

                           1998 EQUITY INCENTIVE PLAN

                         STOCK OPTION EXERCISE AGREEMENT


      This Exercise Agreement is made and entered into as of ______________,
_____ (the "EFFECTIVE DATE") by and between Gadzoox Networks, Inc., a Delaware
corporation (the "COMPANY"), and the purchaser named below (the "PURCHASER").
Capitalized terms not defined herein shall have the meaning ascribed to them in
the Company's 1998 Equity Incentive Plan (the "PLAN").


PURCHASER:                         __________________________________

SOCIAL SECURITY NUMBER:            __________________________________

ADDRESS:                           __________________________________

                                   __________________________________

TOTAL NUMBER OF SHARES:            __________________________________

EXERCISE PRICE PER SHARE:          __________________________________

TOTAL EXERCISE PRICE:              __________________________________

DATE OF GRANT:                     __________________________________

TYPE OF OPTION:                    [ ] INCENTIVE STOCK OPTION
                                   [ ] NONQUALIFIED STOCK OPTION


      1.    EXERCISE OF OPTION.

            1.1   EXERCISE. Pursuant to exercise of that certain option
("Option") granted to Purchaser under the Plan and subject to the terms and
conditions of this Agreement, Purchaser hereby purchases from the Company, and
the Company hereby sells to Purchaser, the Total Number of Shares set forth
above ("Shares") of the Company's Common Stock at the Exercise Price Per Share
set forth above ("Exercise Price"). As used in this Agreement, the term "Shares"
refers to the Shares purchased under this Exercise Agreement and includes all
securities received (a) in replacement of the Shares, (b) as a result of stock
dividends or stock splits with respect to the Shares, and (c) all securities
received in replacement of the Shares in a merger, recapitalization,
reorganization or similar corporate transaction.

            1.2   TITLE TO SHARES. The exact spelling of the name(s) under which
Purchaser will take title to the Shares is:

     ____________________________________________________________________

     ____________________________________________________________________


<PAGE>   20

Purchaser desires to take title to the Shares as follows:

      [ ]   Individual, as separate property

      [ ]   Husband and wife, as community property

      [ ]   Joint Tenants

      [ ]   Alone or with spouse as trustee(s) of the following trust (including
            date):

            _____________________________________________________________

            _____________________________________________________________

      [ ]   Other; please specify:_______________________________________

            _____________________________________________________________

            1.3   PAYMENT. Purchaser hereby delivers payment of the Exercise
Price in the manner permitted in the Stock Option Agreement as follows (check
and complete as appropriate):

      [ ]   in cash in the amount of $____________, receipt of which is
            acknowledged by the Company;

      [ ]   by cancellation of indebtedness of the Company to Purchaser in the
            amount of $__________;

      [ ]   by the waiver hereby of compensation due or accrued for services
            rendered in the amount of $_________.

      2.    DELIVERY.

            2.1   DELIVERIES BY PURCHASER. Purchaser hereby delivers to the
Company (i) this Exercise Agreement, (ii) two (2) copies of a blank Stock Power
and Assignment Separate from Stock Certificate in the form of Exhibit 1 attached
hereto (the "Stock Powers"), both executed by Purchaser (and Purchaser's spouse,
if any), (iii) if Purchaser is married, a Consent of Spouse in the form of
Exhibit 2 attached hereto (the "Spouse Consent") executed by Purchaser's spouse,
and (iv) the Exercise Price.

            2.2   DELIVERIES BY THE COMPANY. Upon its receipt of the Exercise
Price and all the documents to be executed and delivered by Purchaser to the
Company under Section 2.1, the Company will issue a duly executed stock
certificate evidencing the Shares in the name of Purchaser, to be placed in
escrow as provided in Section 11 until expiration or termination of the
Company's Right of First Refusal described in Section 8.

      3.    REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to the Company that:

            3.1   AGREES TO TERMS OF THE PLAN. Purchaser has received a copy of
the Plan and the Stock Option Agreement, has read and understands the terms of
the Plan, the Stock Option Agreement and this Exercise Agreement, and agrees to
be bound by their terms and conditions. Purchaser acknowledges that there may be
adverse tax consequences upon exercise of the Option or disposition of the
Shares, and that Purchaser should consult a tax adviser prior to such exercise
or disposition.

            3.2   PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. Purchaser is
purchasing the Shares for Purchaser's own account for investment purposes only
and not with a view to, or for sale in



                                       2
<PAGE>   21

connection with, a distribution of the Shares within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). Purchaser has no
present intention of selling or otherwise disposing of all or any portion of the
Shares and no one other than Purchaser has any beneficial ownership of any of
the Shares.

            3.3   ACCESS TO INFORMATION. Purchaser has had access to all
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.

            3.4   UNDERSTANDING OF RISKS. Purchaser is fully aware of: (i) the
highly speculative nature of the investment in the Shares; (ii) the financial
hazards involved; (iii) the lack of liquidity of the Shares and the restrictions
on transferability of the Shares (e.g., that Purchaser may not be able to sell
or dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser's own
interests in this transaction and is financially capable of bearing a total loss
of this investment.

            3.5   NO GENERAL SOLICITATION. At no time was Purchaser presented
with or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.

      4.    COMPLIANCE WITH SECURITIES LAWS.

            4.1   COMPLIANCE WITH FEDERAL SECURITIES LAWS. Purchaser understands
and acknowledges that the Shares have not been registered with the Securities
and Exchange Commission ("SEC") under the Securities Act and that,
notwithstanding any other provision of the Stock Option Agreement to the
contrary, the exercise of any rights to purchase any Shares is expressly
conditioned upon compliance with the Securities Act and all applicable state
securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws. The Shares are being issued under the Securities Act
pursuant to the exemption provided by SEC Rule 701.

            4.2   COMPLIANCE WITH CALIFORNIA SECURITIES LAWS. THE PLAN, THE
STOCK OPTION AGREEMENT, AND THIS AGREEMENT ARE INTENDED TO COMPLY WITH SECTION
25102(o) OF THE CALIFORNIA CORPORATIONS CODE. ANY PROVISION OF THIS AGREEMENT
WHICH IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT FURTHER ACT OR
AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH THE
REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.

      5.    RESTRICTED SECURITIES.



                                       3
<PAGE>   22

            5.1   NO TRANSFER UNLESS REGISTERED OR EXEMPT. Purchaser understands
that Purchaser may not transfer any Shares unless such Shares are registered
under the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.

            5.2   SEC RULE 144. In addition, Purchaser has been advised that SEC
Rule 144 promulgated under the Securities Act, which permits certain limited
sales of unregistered securities, is not presently available with respect to the
Shares and, in any event, requires that the Shares be held for a minimum of one
year, and in certain cases two years, after they have been purchased and paid
for (within the meaning of Rule 144). Purchaser understands that Rule 144 may
indefinitely restrict transfer of the Shares so long as Purchaser remains an
"affiliate" of the Company or if "current public information" about the Company
(as defined in Rule 144) is not publicly available.

            5.3   SEC RULE 701. The Shares are issued pursuant to SEC Rule 701
promulgated under the Securities Act and may become freely tradeable by
non-affiliates (under limited conditions regarding the method of sale) 90 days
after the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
SEC, subject to the lengthier market standoff agreement contained in Section 7
of this Exercise Agreement or any other agreement entered into by Purchaser.
Affiliates must comply with the provisions (other than the holding period
requirements) of Rule 144.

      6.    RESTRICTIONS ON TRANSFERS.

            6.1   DISPOSITION OF SHARES. Purchaser hereby agrees that Purchaser
shall make no disposition of the Shares (other than as permitted by this
Agreement) unless and until:

                  (a)   Purchaser shall have notified the Company of the
proposed disposition and provided a written summary of the terms and conditions
of the proposed disposition;

                  (b)   Purchaser shall have complied with all requirements of
this Exercise Agreement applicable to the disposition of the Shares;

                  (c)   Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to counsel for the Company, that
(i) the proposed disposition does not require registration of the Shares under
the Securities Act or (ii) all appropriate action necessary for compliance with
the registration requirements of the Securities Act or of any exemption from
registration available under the Securities Act (including Rule 144) has been
taken; and

                  (d)   Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the Company, that the proposed
disposition will not result in the contravention of any transfer restrictions
applicable to the Shares pursuant to the provisions of the Commissioner Rules
identified in Section 4.2.

            6.2   RESTRICTION ON TRANSFER. Purchaser shall not transfer, assign,
grant a lien or security interest in, pledge, hypothecate, encumber or otherwise
dispose of any of the Shares which are subject to the Company's Right of First
Refusal, except as permitted by this Agreement.



                                       4
<PAGE>   23

            6.3   TRANSFEREE OBLIGATIONS. Each person (other than the Company)
to whom the Shares are transferred by means of one of the permitted transfers
specified in this Agreement must, as a condition precedent to the validity of
such transfer, acknowledge in writing to the Company that such person is bound
by the provisions of this Exercise Agreement and that the transferred Shares are
subject to: (i) the Company's Right of First Refusal granted hereunder and (ii)
the market stand-off provisions of Section 7, to the same extent such Shares
would be so subject if retained by the Purchaser.

      7.    MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) after the effective date of such
registration requested by such managing underwriters and subject to all
restrictions as the Company or the underwriters may specify.

      8.    COMPANY'S RIGHT OF FIRST REFUSAL. Before any Vested Shares held by
Purchaser or any transferee of such Vested Shares (either being sometimes
referred to herein as the "Holder") may be sold or otherwise transferred
(including without limitation a transfer by gift or operation of law), the
Company and/or its assignee(s) shall have an assignable right of first refusal
to purchase the Vested Shares to be sold or transferred (the "Offered Shares")
on the terms and conditions set forth in this Section (the "Right of First
Refusal").

            8.1   NOTICE OF PROPOSED TRANSFER. The Holder of the Offered Shares
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered Shares;
(ii) the name of each proposed bona fide purchaser or other transferee
("Proposed Transferee"); (iii) the number of Offered Shares to be transferred to
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Holder proposes to transfer the Offered Shares (the "Offered
Price"); and (v) that the Holder will offer to sell the Offered Shares to the
Company and/or its assignee(s) at the Offered Price as provided in this Section.

            8.2   EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within thirty
(30) days after the date of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase the Offered Shares
proposed to be transferred to any one or more of the Proposed Transferees named
in the Notice, at the purchase price determined as specified below.

            8.3   PURCHASE PRICE. The purchase price for the Offered Shares
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the cash equivalent value of the
non-cash consideration shall conclusively be deemed to be the value of such
non-cash consideration as determined in good faith by the Company's Board of
Directors.

            8.4   PAYMENT. Payment of the purchase price for Offered Shares will
be payable, at the option of the Company and/or its assignee(s) (as applicable),
by check or by cancellation of all or a portion of any outstanding indebtedness
of the Holder to the Company (or to such assignee, in the case of a purchase of
Offered Shares by such assignee) or by any combination thereof. The purchase
price will be paid without interest within sixty (60) days after the Company's
receipt of the Notice, or, at the option of the Company and/or its assignee(s),
in the manner and at the time(s) set forth in the Notice.

            8.5   HOLDER'S RIGHT TO TRANSFER. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section,
then the Holder may sell or otherwise transfer such Offered Shares



                                       5
<PAGE>   24

to that Proposed Transferee at the Offered Price or at a higher price, provided
that such sale or other transfer is consummated within 120 days after the date
of the Notice, and provided further, that (i) any such sale or other transfer is
effected in compliance with all applicable securities laws and (ii) the Proposed
Transferee agrees in writing that the provisions of this Section will continue
to apply to the Offered Shares in the hands of such Proposed Transferee. If the
Offered Shares described in the Notice are not transferred to the Proposed
Transferee within such 120 day period, then a new Notice must be given to the
Company, and the Company will again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.

            8.6   EXEMPT TRANSFERS. Notwithstanding anything to the contrary in
this Section, the following transfers of Vested Shares will be exempt from the
Right of First Refusal: (i) the transfer of any or all of the Vested Shares
during Purchaser's lifetime by gift or on Purchaser's death by will or intestacy
to Purchaser's "immediate family" (as defined below) or to a trust for the
benefit of Purchaser or Purchaser's immediate family, provided that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Vested Shares in the hands of such transferee or other recipient; (ii) any
transfer of Vested Shares made pursuant to a statutory merger or statutory
consolidation of the Company with or into another corporation or corporations
(except that the Right of First Refusal will continue to apply thereafter to
such Vested Shares, in which case the surviving corporation of such merger or
consolidation shall succeed to the rights of the Company under this Section
unless the agreement of merger or consolidation expressly otherwise provides);
or (iii) any transfer of Vested Shares pursuant to the winding up and
dissolution of the Company. As used herein, the term "immediate family" will
mean Purchaser's spouse, the lineal descendant or antecedent, father, mother,
brother or sister, adopted child or grandchild of the Purchaser or the
Purchaser's spouse, or the spouse of any child, adopted child, grandchild or
adopted grandchild of Purchaser or the Purchaser's spouse.

            8.7   TERMINATION OF RIGHT OF FIRST REFUSAL. The Company's Right of
First Refusal will terminate when the Company's securities become publicly
traded.

      9.    RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of this
Exercise Agreement, Purchaser will have all of the rights of a stockholder of
the Company with respect to the Shares from and after the date that Shares are
issued to Purchaser until such time as Purchaser disposes of the Shares or the
Company and/or its assignee(s) exercise(s) the Right of First Refusal. Upon an
exercise of the Right of First Refusal, Purchaser will have no further rights as
a holder of the Shares so purchased upon such exercise, except the right to
receive payment for the Shares so purchased in accordance with the provisions of
this Exercise Agreement, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company for transfer or
cancellation.

      10.   ESCROW. As security for Purchaser's faithful performance of this
Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser's spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company ("Escrow Holder"), who is hereby appointed to
hold such certificate(s) and Stock Powers in escrow and to take all such actions
and to effectuate all such transfers and/or releases of such Shares as are in
accordance with the terms of this Agreement. Purchaser and the Company agree
that Escrow Holder will not be liable to any party to this Exercise Agreement
(or to any other party) for any actions or omissions unless Escrow Holder is
grossly negligent or intentionally fraudulent in carrying out the duties of
Escrow Holder under this Exercise Agreement. Escrow Holder may rely upon any
letter, notice or other document executed by any signature purported to be
genuine and may rely on the advice of counsel and



                                       6
<PAGE>   25

obey any order of any court with respect to the transactions contemplated by
this Agreement. The Shares will be released from escrow upon termination of the
Right of First Refusal.

      11.   RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

            11.1  LEGENDS. Purchaser understands and agrees that the Company
will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that may
be required by state or federal securities laws, the Company's Articles of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party:

      THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
      SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
      RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
      RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
      INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
      RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF
      THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
      SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
      RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
      SECURITIES

      LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
      RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, RIGHT OF FIRST REFUSAL OPTION
      HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A STOCK OPTION
      EXERCISE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
      SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
      ISSUER. SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS AND THE RIGHT OF FIRST
      REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

            11.2  STOP-TRANSFER INSTRUCTIONS. Purchaser agrees that, to ensure
compliance with the restrictions imposed by this Agreement, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

            11.3  REFUSAL TO TRANSFER. The Company will not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares, or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares have been so transferred.

      12.   TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR DISPOSITION OF
THE SHARES. PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION
OF THE SHARES



                                       7
<PAGE>   26

AND THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Set forth
below is a brief summary as of the date the Plan was adopted by the Board of
some of the federal and California tax consequences of exercise of the Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT A TAX
ADVISER BEFORE EXECUTING THIS OPTION OR DISPOSING OF THE SHARES.

            12.1  EXERCISE OF INCENTIVE STOCK OPTION. If the Option qualifies as
an incentive stock option, there will be no regular federal income tax liability
or California income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price will be treated as a tax preference item for federal
income tax purposes and may subject Purchaser to the alternative minimum tax in
the year of exercise.

            12.2  EXERCISE OF NONQUALIFIED STOCK OPTION. If the Option does not
qualify as an incentive stock option, there may be a regular federal income tax
liability and a California income tax liability upon the exercise of the Option.
Purchaser will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If Purchaser is
or was an employee of the Company, the Company will be required to withhold from
Purchaser's compensation or collect from Purchaser and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

            12.3  Disposition of Shares. The following tax consequences may
apply upon disposition of the Shares.

                  (a)   Incentive Stock Options. If the Shares are held for more
than twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of an ISO and are disposed of more than two (2) years after the
Date of Grant, any gain realized on disposition of the Shares will be treated as
long term capital gain for federal and California income tax purposes. If Shares
purchased under an ISO are disposed of within the applicable one (1) year or two
(2) year period, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price.

                  (b)   Nonqualified Stock Options. If the Shares are held for
more than twelve (12) months after the date of the transfer of the Shares
pursuant to the exercise of an NQSO, any gain realized on disposition of the
Shares will be treated as long term gain.

                  (c)   Withholding. The Company may be required to withhold
from the Purchaser's compensation or collect from the Purchaser and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income.

      13.   COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
the Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and federal laws and regulations and with
all applicable requirements of any stock exchange or automated quotation system
on which the Company's Common Stock may be listed or quoted at the time of such
issuance or transfer.

      14.   SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement, including its rights to repurchase Shares under the Right
of First Refusal. This



                                       8
<PAGE>   27

Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Agreement will be binding upon Purchaser and Purchaser's heirs,
executors, administrators, legal representatives, successors and assigns.

      15.   GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California as
such laws are applied to agreements between California residents entered into
and to be performed entirely within California. If any provision of this
Agreement is determined by a court of law to be illegal or unenforceable, then
such provision will be enforced to the maximum extent possible and the other
provisions will remain fully effective and enforceable.

      16.   NOTICES. Any notice required to be given or delivered to the Company
shall be in writing and addressed to the Corporate Secretary of the Company at
its principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, three (3) days after deposit in the United States mail
by certified or registered mail (return receipt requested), one (1) business day
after its deposit with any return receipt express courier (prepaid), or one (1)
business day after transmission by rapifax or telecopier.

      17.   FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

      18.   HEADINGS. The captions and headings of this Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Agreement. All references herein to Sections will refer to Sections of this
Agreement.

      19.   ENTIRE AGREEMENT. The Plan, the Stock Option Agreement and this
Exercise Agreement, together with all its Exhibits, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement, and supersede all prior understandings and agreements, whether
oral or written, between the parties hereto with respect to the specific subject
matter hereof.



                                       9
<PAGE>   28

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in duplicate by its duly authorized representative and Purchaser has executed
this Agreement in duplicate as of the Effective Date.


GADZOOX NETWORKS, INC.                    PURCHASER



By:__________________________________     _____________________________________
                                          (Signature)

_____________________________________     _____________________________________
(Please print Name)                       (Please print name)

_____________________________________
(Please print title)





   [SIGNATURE PAGE TO GADZOOX NETWORKS, INC. STOCK OPTION EXERCISE AGREEMENT]



                                       10
<PAGE>   29

                                LIST OF EXHIBITS


Exhibit 1: Stock Power and Assignment Separate from Stock Certificate

Exhibit 2: Spouse Consent

Exhibit 3: Copy of Purchaser's Check


<PAGE>   30

                                    EXHIBIT 1

                           STOCK POWER AND ASSIGNMENT
                         SEPARATE FROM STOCK CERTIFICATE


      FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise
Agreement No. ___ dated as of _______________, _____, (the "Agreement"), the
undersigned hereby sells, assigns and transfers unto __________________________,
shares of the Common Stock of Gadzoox Networks, Inc., a Delaware corporation
(the "Company"), standing in the undersigned's name on the books of the Company
represented by Certificate No(s). ______ delivered herewith, and does hereby
irrevocably constitute and appoint the Secretary of the Company as the
undersigned's attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.


Dated:_______________________________
                                          PURCHASER


                                          _____________________________________
                                          (Signature)

                                          _____________________________________
                                          (Please Print Name)

                                          _____________________________________
                                          (Spouse's Signature, if any)

                                          _____________________________________
                                          (Please Print Spouse's Name)


INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this Stock Power and Assignment is to enable the Company to
acquire the shares upon exercise of its "Right of First Refusal" set forth in
the Agreement without requiring additional signatures on the part of the
Purchaser or Purchaser's Spouse.


<PAGE>   31

                                    EXHIBIT 2

                                 SPOUSE CONSENT


      The undersigned spouse of Purchaser has read, understands, and hereby
approves the Stock Option Exercise Agreement between Purchaser and the Company
(the "Agreement"). In consideration of the Company's granting my spouse the
right to purchase the Shares as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall similarly be bound by the Agreement. The
undersigned hereby appoints Purchaser as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.


Date:________________________________     _____________________________________
                                          Signature of Purchaser's Spouse

                                Address:  _____________________________________

                                          _____________________________________



                                          [ ] Check this box if you do not have
                                              a spouse.



<PAGE>   32

                                    EXHIBIT 3

                            COPY OF PURCHASER'S CHECK


<PAGE>   33

                       RESTRICTED STOCK PURCHASE AGREEMENT


      This Agreement is made and entered into as of _____________________ (the
"Effective Date") between Gadzoox Networks, Inc. (the "Company"), a California
corporation, and ____________ ("Purchaser").

      1.    PURCHASE OF SHARES. On the Effective Date and subject to the terms
and conditions of this Agreement, Purchaser hereby purchases from the Company,
and Company hereby sells to Purchaser, an aggregate of ___________ shares of the
Company's common stock (the "Shares") at an aggregate purchase price of $______
(the "Purchase Price") or $___ per Share (the "Purchase Price Per Share"). As
used in Agreement, the term "Shares" refers to the Shares purchased under this
Agreement and includes all securities received (a) in replacement of the Shares,
(b) as a result of stock dividends or stock splits in respect of the Shares, and
(c) in replacement of the Shares in a recapitalization, merger, reorganization
or the like.

      2.    PAYMENT OF PURCHASE PRICE; CLOSING.

            (a)   DELIVERIES BY PURCHASER. Purchaser hereby delivers to the
Company the full Purchase Price by rendering past services to the Company as a
consultant of the Company. The Board of Directors of the Company has determined
in good faith that the Purchaser's past services rendered has a fair market
value of _________________ ($________) dollars. Purchaser also hereby delivers
to the Company: (i) two (2) copies of a blank Stock Power and Assignment
Separate from Stock Certificate in the form of Exhibit 1 attached hereto (the
"Stock Powers"), both executed by Purchaser (and Purchaser's spouse, if any) and
(ii) if Purchaser is married, a Consent of Spouse in the form of Exhibit 2
attached hereto (the "Spouse Consent") duly executed by Purchaser's spouse.

            (b)   DELIVERIES BY THE COMPANY. Upon its receipt of the entire
Purchase Price and all the documents to be executed and delivered by Purchaser
to the Company under Section 2(a), the Company will issue a duly executed stock
certificate evidencing the Shares in the name of Purchaser registered in
Purchaser's name in accordance with Section 17, with such certificate to be
placed in escrow as provided in Section 8 until expiration or termination of the
Company's Right of First Refusal described in Section 6.

      3.    REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to the Company that:

            (a)   PURCHASE FOR OWN ACCOUNT FOR INVESTMENT. Purchaser is
purchasing the Shares for Purchaser's own account for investment purposes only
and not with a view to, or for sale in connection with, a distribution of the
Shares within the meaning of the Securities Act of 1933, as amended (the "1933
Act"). Purchaser has no present intention of selling or otherwise disposing of
all or any portion of the Shares and no one other than Purchaser has any
beneficial ownership of any of the Shares.



<PAGE>   34

            (b)   ACCESS TO INFORMATION. Purchaser has had access to all
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.

            (c)   UNDERSTANDING OF RISKS. Purchaser is fully aware of: (i) the
highly speculative nature of the investment in the Shares; (ii) the financial
hazards involved; (iii) the lack of liquidity of the Shares and the restrictions
on transferability of the Shares (e.g., that Purchaser may not be able to sell
or dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares.

            (d)   PURCHASER'S QUALIFICATIONS. Purchaser has a preexisting
personal or business relationship with the Company and/or certain of its
officers and/or directors of a nature and duration sufficient to make Purchaser
aware of the character, business acumen and general business and financial
circumstances of the Company and/or such officers and directors. By reason of
Purchaser's business or financial experience, Purchaser is capable of evaluating
the merits and risks of this investment, has the ability to protect Purchaser's
own interests in this transaction and is financially capable of bearing a total
loss of this investment.

            (e)   NO GENERAL SOLICITATION. At no time was Purchaser presented
with or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.

            (f)   COMPLIANCE WITH SECURITIES LAWS. Purchaser understands and
acknowledges that, in reliance upon the representations and warranties made by
Purchaser herein, the Shares are not being registered with the Securities and
Exchange Commission ("SEC") under the 1933 Act or being qualified under the
California Corporate Securities Law of 1968, as amended (the "Law"), but instead
are being issued under an exemption or exemptions from the registration and
qualification requirements of the 1933 Act and the Law which impose certain
restrictions on Purchaser's ability to transfer the Shares.

            (g)   RESTRICTIONS ON TRANSFER. Purchaser understands that Purchaser
may not transfer any Shares unless such Shares are registered under the 1933 Act
or qualified under the Law or unless, in the opinion of counsel to the Company,
exemptions from such registration and qualification requirements are available.
Purchaser understands that only the Company may file a registration statement
with the SEC or the California Commissioner of Corporations and that the Company
is under no obligation to do so with respect to the Shares. Purchaser has also
been advised that exemptions from registration and qualification may not be
available or may not permit Purchaser to transfer all or any of the Shares in
the amounts or at the times proposed by Purchaser.

            (h)   RULE 144. In addition, Purchaser has been advised that SEC
Rule 144 promulgated under the 1933 Act, which permits certain limited sales of
unregistered securities, is not presently available with respect to the Shares
and, in any event, requires that the Shares be



                                       2
<PAGE>   35

held for a minimum of one year, and in certain cases two years, after they have
been purchased and paid for (within the meaning of Rule 144), before they may be
resold under Rule 144.

      4.    COMPLIANCE WITH CALIFORNIA SECURITIES LAWS. THE SALE OF THE
SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT, IF NOT YET QUALIFIED WITH THE
CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION,
IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.

      5.    RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser or any
transferee of such Shares (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including without limitation a
transfer by gift or operation of law), the Company and/or its assignee(s) will
have a right of first refusal to purchase the Shares to be sold or transferred
(the "Offered Shares") on the terms and conditions set forth in this Section
(the "Right of First Refusal").

            (a)   NOTICE OF PROPOSED TRANSFER. The Holder of the Shares will
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer the Offered Shares; (ii) the
name of each proposed purchaser or other transferee ("Proposed Transferee");
(iii) the number of Offered Shares to be transferred to each Proposed
Transferee; (iv) the bona fide cash price or other consideration for which the
Holder proposes to transfer the Offered Shares (the "Offered Price"); and (v)
that the Holder will offer to sell the Offered Shares to the Company and/or its
assignee(s) at the Offered Price as provided in this Section.

            (b)   EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within thirty
(30) days after the date of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all (but not less than
all) of the Offered Shares proposed to be transferred to any one or more of the
Proposed Transferees named in the Notice, at the purchase price determined in
accordance with subsection (c) below.

            (c)   PURCHASE PRICE. The purchase price for the Offered Shares
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the value of the non-cash
consideration as determined in good faith by the Company's Board of Directors
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.

            (d)   PAYMENT. Payment of the purchase price for Offered Shares will
be payable, at the option of the Company and/or its assignee(s) (as applicable),
by check or by cancellation of all or a portion of any outstanding indebtedness
of the Holder to the Company (or to such assignee, in the case of a purchase of
Offered Shares by such assignee) or by any combination thereof. The purchase
price will be paid without interest within sixty (60) days after



                                       3
<PAGE>   36

the Company's receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.

            (e)   HOLDER'S RIGHT TO TRANSFER. If all of the Offered Shares
proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section,
then the Holder may sell or otherwise transfer such Offered Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 120 days after the date of the
Notice, and provided further, that: (i) any such sale or other transfer is
effected in compliance with all applicable securities laws; and (ii) the
Proposed Transferee agrees in writing that the provisions of this Section will
continue to apply to the Offered Shares in the hands of such Proposed
Transferee. If the Offered Shares described in the Notice are not transferred to
the Proposed Transferee within such 120 day period, then a new Notice must be
given to the Company, and the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

            (f)   EXEMPT TRANSFERS. Notwithstanding anything to the contrary in
this Section, the following transfers of Shares will be exempt from the Right of
First Refusal: (i) the transfer of any or all of the Shares during Purchaser's
lifetime by gift or on Purchaser's death by will or intestacy to Purchaser's
"immediate family" (as defined below) or to a trust for the benefit of Purchaser
or Purchaser's immediate family, provided that each transferee or other
recipient agrees in a writing satisfactory to the Company that the provisions of
this Section will continue to apply to the transferred Shares in the hands of
such transferee or other recipient; (ii) any transfer of Shares made pursuant to
a statutory merger or statutory consolidation of the Company with or into
another corporation or corporations (except that the Right of First Refusal will
continue to apply thereafter to such Shares, in which case the surviving
corporation of such merger or consolidation shall succeed to the rights or the
Company under this Section unless the agreement of merger or consolidation
expressly otherwise provides); or (iii) any transfer of Shares pursuant to the
winding up and dissolution of the Company. As used herein, the term "immediate
family" will mean Purchaser's spouse, lineal descendant or antecedent, father,
mother, brother or sister, adopted child or grandchild, or the spouse of any
child, adopted child, grandchild or adopted grandchild of Purchaser.

            (g)   TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal will terminate as to all Shares on the effective date of the first sale
of common stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the SEC under the 1933 Act (other
than a registration statement relating solely to the issuance of common stock
pursuant to a business combination or an employee incentive or benefit plan).

            (h)   ENCUMBRANCES ON VESTED SHARES. Purchaser may grant a lien or
security interest in, or pledge, hypothecate or encumber Vested Shares only if
each party to whom such lien or security interest is granted, or to whom such
pledge, hypothecation or other encumbrance is made, agrees in a writing
satisfactory to the Company that: (i) such lien, security interest, pledge,
hypothecation or encumbrance will not apply to such Vested Shares after they are
acquired by the Company and/or its assignees) under this Section; and (ii) the
provisions of this Section will continue to apply to such Vested Shares in the
hands of such party and any transferee



                                       4
<PAGE>   37

of such party. Purchaser may not grant a lien or security interest in, or
pledge, hypothecate or encumber, any Unvested Shares.

      6.    RIGHTS AS SHAREHOLDER. Subject to the terms and conditions of this
Agreement, Purchaser will have all of the rights of a shareholder of the Company
with respect to the Shares from and after the date that Purchaser delivers
payment of the Purchase Price until such time as Purchaser disposes of the
Shares or the Company and/or its assignee(s) exercise(s) the Repurchase Option
or Right of First Refusal. Upon an exercise of the Repurchase Option or the
Right of First Refusal, Purchaser will have no further rights as a holder of the
Shares so purchased upon such exercise, except the right to receive payment for
the Shares so purchased in accordance with the provisions of this Agreement, and
Purchaser will promptly surrender the stock certificate(s) evidencing the Shares
so purchased to the Company for transfer or cancellation.

      7.    ESCROW. As security for Purchaser's faithful performance of this
Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser's spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company ("Escrow Holder"), who is hereby appointed to
hold such certificate(s) and Stock Powers in escrow and to take all such actions
and to effectuate all such transfers and/or releases of such Shares as are in
accordance with the terms of this Agreement. Escrow Holder will act solely for
the Company as its agent and not as a fiduciary. Purchaser and the Company agree
that Escrow Holder will not be liable to any party to this Agreement (or to any
other party) for any actions or omissions unless Escrow Holder is grossly
negligent or intentionally fraudulent in carrying out the duties of Escrow
Holder under this Section. Escrow Holder may rely upon any letter, notice or
other document executed by any signature purported to be genuine and may rely on
the advice of counsel and obey any order of any court with respect to the
transactions contemplated by this Agreement. The Shares will be released from
escrow upon termination of both the Repurchase Option and the Right of First
Refusal.

      8.    RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

            (a)   LEGENDS. Purchaser understands and agrees that the Company
will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that may
be required by state or federal securities laws, the Company's Articles of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party:

            THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
            SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
            RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
            TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
            APPLICABLE STATE SECURITIES LAWS,



                                       5
<PAGE>   38

            PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
            AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
            INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
            SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
            SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
            OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
            SECURITIES LAWS.

            THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
            RESTRICTIONS ON PUBLIC RESALE, TRANSFER, RIGHT OF FIRST REFUSAL
            OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A
            RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE
            ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
            THE PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE AND TRANSFER
            RESTRICTIONS AND THE RIGHT OF FIRST REFUSAL ARE BINDING ON
            TRANSFEREES OF THESE SHARES.

            (b)   STOP-TRANSFER INSTRUCTIONS. Purchaser agrees that, in order to
ensure compliance with the restrictions imposed by this Agreement, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

            (c)   REFUSAL TO TRANSFER. The Company will not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares, or to accord the right to vote or pay dividends, to any
purchaser or other transferee to whom such Shares have been so transferred.

      9.    MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with any
registration of the Company's securities under the 1933 Act that, upon the
request of the Company or the underwriters managing any registered public
offering of the Company's securities, Purchaser will not sell or otherwise
dispose of any Shares without the prior written consent of the Company or such
managing underwriters, as the case may be, for a period of time (not to exceed
180 days) after the effective date of such registration requested by such
managing underwriters and subject to all restrictions as the Company or the
managing underwriters may specify for employee-shareholders generally.

      10.   COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
the Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and federal laws and regulations and with
all applicable requirements of any stock exchange or automated quotation system
on which the Company's common stock may be listed or quoted at the time of such
issuance or transfer.



                                       6
<PAGE>   39

      11.   SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement, including its rights to repurchase Shares under the
Repurchase Option and the Right of First Refusal. This Agreement will be binding
upon and inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Agreement will be
binding upon Purchaser and Purchaser's heirs, executors, administrators,
successors and assigns.

      12.   GOVERNING LAW; SEVERABILITY. This Agreement will be governed by and
construed in accordance with the internal laws of the State of California,
excluding that body of laws pertaining to conflict of laws. If any provision of
this Agreement is determined by a court of law to be illegal or unenforceable,
then such provision will be enforced to the maximum extent possible and the
other provisions will remain fully effective and enforceable.

      13.   NOTICES. Any notice required or permitted hereunder will be given in
writing and will be deemed effectively given upon personal delivery, three (3)
days after deposit in the United States mail by certified or registered mail
(return receipt requested), one (1) business day after its deposit with any
return receipt express courier (prepaid), or one (1) business day after
transmission by telecopier, addressed to the other party at its address (or
facsimile number, in the case of transmission by telecopier) as shown below its
signature to this Agreement, or to such other address as such party may
designate in writing from time to time to the other party.

      14.   FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

      15.   HEADINGS. The captions and headings of this Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Agreement. All references herein to Sections will refer to Sections of this
Agreement.

      16.   ENTIRE AGREEMENT. This Agreement, together with all its Exhibits,
constitutes the entire agreement and understanding of the parties with respect
to the subject matter of this Agreement, and supersedes all prior understandings
and agreements, whether oral or written, between the parties hereto with respect
to the specific subject matter hereof.

      17.   TITLE TO SHARES. The exact spelling of the name(s) under which
Purchaser will take title to the Shares is:

            _______________________________________________________

Purchaser desires to take title to the Shares as follows:

      [ ]   Individual, as separate property

      [ ]   Husband and wife, as community property

      [ ]   Joint Tenants

      [ ]   Alone or with spouse as trustee(s) of the



                                       7
<PAGE>   40

            following trust (including date): _________________________________

            ___________________________________________________________________

            ___________________________________________________________________

      [ ]   Other; please specify: ____________________________________________

            ___________________________________________________________________

Purchaser's social security number is: ________________________________________

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in duplicate by its duly authorized representative and Purchaser has executed
this Agreement in duplicate, as of the Effective Date.

COMPANY                                   PURCHASER
Gadzoox Networks, Inc.


By:__________________________________     _____________________________________

Name:________________________________

Title:_______________________________     Name:________________________________

Address:_____________________________     Address:_____________________________

_____________________________________     _____________________________________

Fax:  (____)_________________________     Fax:  (____)_________________________



                                       8
<PAGE>   41

                                LIST OF EXHIBITS



Exhibit 1: Stock Power and Assignment Separate from Stock Certificate

Exhibit 2: Spousal Consent



                                       9
<PAGE>   42

                                                                       EXHIBIT 1

                           STOCK POWER AND ASSIGNMENT

                            SEPARATE FROM CERTIFICATE



      FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement dated as of _____________, 1999, (the "Agreement"), the undersigned
hereby sells, assigns and transfers unto _____________________, __________
shares of the common stock of Gadzoox Networks, Inc., a California corporation
(the "Company"), standing in the undersigned's name on the books of the Company
represented by Certificate No(s). ____ delivered herewith, and does hereby
irrevocably constitute and appoint the Secretary of the Company as the
undersigned's attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.

Dated:___________________, 20___


                                          PURCHASER


                                          _____________________________________
                                          (Signature)

                                          _____________________________________
                                          (Please Print Name)

                                          _____________________________________
                                          (Spouse's Signature, if any)

                                          _____________________________________
                                          (Please Print Spouse's Name)



<PAGE>   43

                                                                       EXHIBIT 2

                                CONSENT OF SPOUSE



      I, the undersigned, am the spouse of ___________________________________
("Purchaser"). I have read and hereby consent to and approve all the terms and
conditions of: the Restricted Stock Purchase Agreement (the "Agreement") dated
__________________ between Purchaser and Gadzoox Networks, Inc., a California
corporation (the "Company"), pursuant to which Purchaser has purchased
___________ shares of the Company's common stock (the "Shares") executed by
Purchaser in connection with the Agreement.

      In consideration of the Company granting my spouse the right to purchase
the Shares under the Agreement, I hereby agree to be irrevocably bound by all
the terms and conditions of the Agreement (including but not limited to the
Company's Repurchase Option, the Right of First Refusal and the market standoff
agreements contained therein) and further agree that any community property
interest I may have in the Shares will be similarly bound by the Agreement.

      I hereby appoint Purchaser as my attorney-in-fact, to act in my name,
place and stead with respect to any amendment of the Agreement and the
Assignment of Agreement and with respect to the making and filing of an election
under Internal Revenue Code Section 83(b) in connection with the purchase of the
Shares.


Dated:  _________________, 1999



                                          _____________________________________
                                          Signature of Spouse [Sign Here]


                                          _____________________________________
                                          Name of Spouse [Please Print]





                [ ] Check this box if you do not have a spouse.