CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT (the "Agreement") is entered into as of June
13, 2000, by and between Network Equipment Technologies, Inc. (the "Company"),
and Hans Kramer (the "Executive").

1.    Definitions.

      (a)   Change in Control and Corporate Transaction. For all purposes under
            this Agreement, "Change in Control" and "Corporate Transaction" will
            have the same meaning as the defined term in the Company's 1993
            Stock Option Plan.

      (b)   Good Reason. For all purposes under this Agreement, "Good Reason"
            means that the Executive: (i) has incurred a material reduction or
            alteration in his or her authority, status or responsibility; (ii)
            has incurred a material reduction in his or her "base compensation";
            or (iii) has been notified that his or her principal place of work
            will be relocated by a distance of 50 miles or more.

      (c)   Base Compensation. For purposes of this Agreement, "base
            compensation" means annualized base salary as reflected in the
            Company's payroll records as of the effective date of this Agreement
            and as may be subsequently adjusted upward for increases.

      (d)   Cause. For all purposes under this Agreement, "Cause" means: (i) a
            willful act by the Executive which constitutes misconduct or fraud
            and which has a material adverse effect on the Company; or (ii)
            Conviction of a felony crime. No act, or failure to act, by the
            Executive will be considered "willful" unless committed without good
            faith and without a reasonable belief that the act or omission was
            in the Company's best interest.

      (e)   Disability. For all purposes under this Agreement, "disability" will
            have the same meaning as under the Company's Long-Term Disability
            Plan.

2.    Incentive Programs. If a Change in Control or Corporate Transaction occurs
      with respect to the Company, and within the first twelve (12) month period
      after such occurance, the Executive either voluntarily resigns his or her
      employment for Good Reason, or his or her employment is terminated by the
      Company for any reason other than Cause or Disability, then the Executive
      shall become fully vested in all awards heretofore or hereafter granted to
      him or her under all stock option, stock appreciation rights, restricted
      stock, phantom stock or similar plans or agreements of the Company
      regardless of any provisions in such plans or agreements that do not
      provide for full vesting. (To the extent that such plans or agreements
      provide for full vesting on the same or an earlier date than this
      Agreement, such plans or agreements shall prevail.) In addition, all
      vested awards will be exercisable for the full duration of their terms.

3.    Successors.

      (a)   Company's Successors. The Company will require any successor
            (whether direct or indirect and whether by purchase, lease, merger,
            consolidation, liquidation or otherwise) to all or substantially all
            of the Company's business and/or assets, by an agreement in
            substance and form satisfactory to the Executive, to assume this
            Agreement and to agree expressly to perform this Agreement in the
            same manner and to the same extent as the Company would be required
            to perform it in the absence of a succession. The Company's failure
            to obtain such agreement prior to the effectiveness of a succession
            will constitute Good Reason under Section 1(b) for the Executive to
            terminate his or her employment. For all purposes under this
            Agreement, the term "Company" will include any successor to the
            Company's business and/or assets which executes and delivers the
            assumption agreement described in this Subsection (a) or which
            becomes bound by this Agreement by operation of law.

      (b)   Executive's Successors. This Agreement and all rights of the
            Executive under this Agreement will inure to the benefit of, and be
            enforceable by, the Executive's personal or legal representatives,
            executors, administrators, successors, heirs, distributees, devisees
            and legatees.


                                    Page 57
<PAGE>

4.    Miscellaneous Provisions.

      (a)   Notice. Notices and all other communications contemplated by this
            Agreement will be in writing and will be deemed to have been duly
            given when personally delivered or when mailed by U.S. registered or
            certified mail, return receipt requested and postage prepaid. In the
            case of the Executive, mailed notices will be addressed to him or
            her at the home address which he or she most recently communicated
            to the Company in writing. In the case of the Company, mailed
            notices shall be addressed to its corporate headquarters, and all
            notices shall be directed to the attention of its Secretary.

      (b)   Waiver. No provision of this Agreement will be modified, waived or
            discharged unless the modification, waiver or discharge is agreed to
            in writing and signed by the Executive and by an authorized officer
            of the Company (other than the Executive). No waiver by either party
            of any breach of, or of compliance with, any condition or provision
            of this Agreement by the other party will be considered a waiver of
            any other condition or provision or of the same condition or
            provision at another time.

      (c)   Whole Agreement. No agreements, representations or understandings
            (whether oral or written and whether express or implied) which are
            not expressly set forth in this Agreement have been made or entered
            into by either party with respect to the subject matter hereof.

      (d)   No Setoff; Withholding Taxes. There will be no right of setoff or
            counterclaim, with respect to any claim, debt or obligation, against
            payments to the Executive under this Agreement. All payments made
            under this Agreement will be subject to reduction to reflect taxes
            required to be withheld by law.

      (e)   Choice of Law. The validity, interpretation, construction and
            performance of this Agreement will be governed by the laws of the
            State of California.

      (f)   Severability. The invalidity or unenforceability of any provision or
            provisions of this Agreement will not affect the validity or
            enforceability of any other provision hereof, which will remain in
            full force and effect.

      (g)   Arbitration. Any controversy or claim arising out of or relating to
            this Agreement, or the breach thereof, will be settled by
            arbitration in San Francisco in accordance with the Commercial
            Arbitration Rules of the American Arbitration Association. Discovery
            will be permitted to the same extent as in a proceeding under the
            Federal Rules of Civil Procedure, including (without limitation)
            such discovery as is specifically authorized by section 1283.05 of
            the California Code of Civil Procedure, without need of prior leave
            of the arbitrator under section 1283.05(e) of such Code. Judgment on
            the award rendered by the arbitrator may be entered in any court
            having jurisdiction thereof. All fees and expenses of the arbitrator
            and such Association and attorney fees will be paid as determined by
            the arbitrator.

      (h)   No Assignment. The rights of any person to payments or benefits
            under this Agreement will not be made subject to option or
            assignment, either by voluntary or involuntary assignment or by
            operation of law, including (without limitation) bankruptcy,
            garnishment, attachment or other creditor's process, and any action
            in violation of this Subsection (h) will be void.

5.    Effective Date and Term of Agreement. This Agreement is effective on the
      date written above and will continue in effect until the Company gives one
      (1) years' written notice of cancellation; provided, that, notwithstanding
      the delivery of any such notice, this Agreement will continue in effect
      for a period of one (1) year after a Change in Control or Corporate
      Transaction, if such transaction(s) occurres during the term of this
      Agreement. Except as provided in the next paragraph, this Agreement will
      terminate if Executive or the Company terminates Executive's employment
      prior to a Change in Control or Corporate Transaction.

      This Agreement will also become effective in the event that the Company
terminates the Executive's employment for any reason other than Cause or
Disability or the Executive voluntarily resigns for Good Reason in connection
with an impending Change in Control or Corporate Transaction. The Company's
Board shall determine in good faith whether such a termination or resignation is
occurring in connection with an impending Change in Control or Corporate
Transaction. However, such a termination or resignation will in any event be
deemed to be in connection with an impending Change in Control or Corporate
Transaction if the termination or resignation (i) is required by the merger
agreement or other instrument relating to such Change in Control or Corporate
Transaction or (ii) is made at the express request of the other party to the
transaction constituting such Change in Control or


                                    Page 58
<PAGE>

Corporate Transaction. If this paragraph applies, then this Agreement will
become effective immediately prior to the effective time of the Executive's
termination or resignation.

      IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.

                                    EXECUTIVE:

                                    /s/ Hans Kramer
                                    --------------------------------------------
                                    Hans Kramer


                                    NETWORK EQUIPMENT TECHNOLOGIES, INC.

                                    By: /s/ Hubert A.J. Whyte
                                        ----------------------------------------

                                    Print Name: Hubert A.J. Whyte
                                                --------------------------------

                                    Title: President and Chief Executive Officer
                                           -------------------------------------


                                    Page 59