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                             HYBRID NETWORKS, INC.

                             1999 STOCK OPTION PLAN

       AS ADOPTED AS OF MAY 5, 1999 AND AMENDED AS OF AUGUST 10, 1999 AND
                                 OCTOBER 7, 1999

         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 by offering them an
opportunity to participate in the Company's future performance through awards
of Options.  CAPITALIZED TERMS NOT DEFINED IN THE TEXT ARE DEFINED IN SECTION
20 HEREOF.

         2. SHARES SUBJECT TO THE PLAN.

                  2.1  NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2
and 15 hereof, the total number of Shares reserved and available for grant
and issuance pursuant to this Plan will be 4,000,000 Shares. Subject to
Sections 2.2 and 15 hereof, Shares will again be available for grant and
issuance in connection with future Awards under this Plan to the extent such
Shares: (a) cease to be subject to issuance upon exercise of an Option, other
than due to exercise of such Option; or (b) are subject to an 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 and (b) the Exercise Prices of and number of Shares
subject to outstanding Options will be proportionately adjusted, subject to
any required action by the Board or the stockholders 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. Awards may be granted only to employees (including
officers and directors who are also employees) or consultants of the Company
or of a Parent or Subsidiary of the Company who meet the suitability
standards set forth below in this Section 3. A person may be granted more
than one Award under this Plan. To be eligible to receive options under this
Plan, a person must meet the following suitability standards: Such person
must either (a) be an officer or director of the Company, (b) have a
pre-existing personal or business relationship with the Company or any of its
officers, directors or controlling persons or (c) by reason of such person's
business or financial experience or the business or financial experience of
such person's professional advisor who is unaffiliated with and who is not
compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly, could be reasonably assumed to protect such person's
own interests in connection with the Options. The foregoing suitability
standards are intended to comply, and shall be interpreted in a manner
consistent with, the excemption from qualification under the California
securities laws provided by Section 25102(f) of the California Corporations
Code and the regulations thereunder.

         4. ADMINISTRATION.

                  4.1  COMMITTEE AUTHORITY. This Plan will be administered
by the Committee or by 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:
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                  (a)      construe and interpret this Plan, any Stock Option
                           Agreement and any other agreement or document
                           executed pursuant to this Plan;

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

                  (c)      select persons to receive Awards;

                  (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 Stock
                           Option Agreement or any Exercise Agreement; and

                  (j)      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 5.8 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 a Stock Option Agreement which will expressly
identify the Option as an ISO or an NQSO 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 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 years from the date the Option is
granted and provided further that no ISO granted to a person who directly or by
attribution owns
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more than 10% of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary of the Company ("TEN PERCENT
STOCKHOLDER") will be exercisable after the expiration of five 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.
Notwithstanding the foregoing, Options to Participants who are not officers,
directors or consultants of the Company, or of any Parent or Subsidiary of
the Company, must become exercisable at a rate of at least 20% per year over
five years from the date the Option is granted, subject to earlier
termination of the Option pursuant to Sections 5.6 and 15.

                  5.4 EXERCISE PRICE. The Exercise Price of an Option will be
determined by the Committee when the Option is granted, provided that: (i)
the Exercise Price of an ISO will not be less than 100% of the Fair Market
Value of the Shares on the date of grant; and (ii) the Exercise Price of any
Option granted to a Ten Percent Stockholder will not be less than 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 6 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
Section 15 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 months after the
                           Termination Date (or within such shorter time period,
                           not less than 30 days, or within such longer time
                           period, not exceeding five years, as may be
                           determined by the Committee, with any exercise beyond
                           three months after the Termination Date deemed to be
                           an ISO), but in any event no 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 months after a Termination other
                           than because of Participant's death or Disability),
                           then Participant's Options may be exercised only to
                           the extent that such Options would have been
                           exercisable by Participant on the Termination Date
                           and must be exercised by Participant (or
                           Participant's legal representative or authorized
                           assignee), no later than 12 months after the
                           Termination Date (or within such shorter time period,
                           not less than six months, or within such longer time
                           period, not exceeding five years, as may be
                           determined by the Committee, with any such exercise
                           beyond (i) three months after the Termination Date
                           when the Termination is for any reason other than the
                           Participant's death or Disability or (ii) 12 months
                           after the Termination Date when the Termination is
                           for the Participant's death or Disability, deemed to
                           be an NQSO), but in any event no later than the
                           expiration date of the Options.

                  (c)      Notwithstanding the provisions in paragraph 5.6(a)
                           above, if a Participant is terminated for Cause,
                           neither the Participant, the Participant's estate nor
                           such
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                           other person who may then hold the Option shall
                           be entitled to exercise any Option with respect to
                           any Shares whatsoever, after termination of service,
                           whether or not after termination of service the
                           Participant may receive payment from the Company or
                           Subsidiary for vacation pay, for services rendered
                           prior to termination, for services rendered for the
                           day on which termination occurs, for salary in lieu
                           of notice, or for any other benefits. In making such
                           determination, the Board shall give the Participant
                           an opportunity to present to the Board evidence on
                           his behalf. For the purpose of this paragraph,
                           termination of service shall be deemed to occur on
                           the date when the Company dispatches notice or advice
                           to the Participant that his service is terminated.

                  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.

                  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, 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 of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to
be subject to ISOs, 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 RENEWAL. 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. 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 an ISO 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. PAYMENT FOR SHARE PURCHASES.

                  6.1 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, by any of the means
set forth below:

                  (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 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
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                           (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 the portion of the
                           Exercise Price equal to the par value of the Shares
                           must be paid in cash or other legal consideration
                           permitted by Delaware General Corporation Law
                           (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.

                  6.2 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.

         7. WITHHOLDING TAXES.

                  7.1 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.

                  7.2 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

<PAGE>

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.

         8. PRIVILEGES OF STOCK OWNERSHIP.

                  8.1 VOTING AND DIVIDENDS. No Participant will have any of
the rights of a stockholder 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 stockholder and have all the rights of a stockholder
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.
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.

                  8.2 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 Options 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
Participants whose services in connection with the Company assure them access
to equivalent information.

         9. TRANSFERABILITY. Options 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 or as
determined by the Committee and set forth in the Stock Option Agreement with
respect to Options that are not ISOs. During the lifetime of the Participant
an Option will be exercisable only by the Participant or Participant's legal
representative, and any elections with respect to an Option may be made only
by the Participant or Participant's legal representative unless otherwise
determined by the Committee and set forth in the Stock Option Agreement with
respect to Options that are not ISOs.

         10. 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.

         11. 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 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.

         12. 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
<PAGE>

may at any time buy from a Participant an Award previously granted with
payment in cash, shares of Common Stock of the Company or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree.

         13. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. 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.

         14. 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.

         15. CORPORATE TRANSACTIONS.

                  15.1 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 stockholders 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 stockholders of the
Company immediately prior to such merger (other than any stockholder 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, (d) the sale of all or
substantially all of the assets of the Company or (e) the acquisition, sale
or transfer of more than 50% of the outstanding shares of the Company by
tender offer or similar transaction, 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 stockholders (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 Participant than those which applied to such outstanding Shares
immediately prior to such transaction described in this Section 15.1. In the
event such successor or acquiring corporation (if any) refuses to assume or
substitute Awards, as provided above, pursuant to a transaction described in
this Section 15.1, then notwithstanding any other provision in this Plan to
the contrary, such Awards will expire on such transaction at such time and on
such conditions as the Board will determine; provided, however, that the
Committee may, in its sole discretion, provide that the vesting of any or all
Awards granted pursuant to this Plan will accelerate. If the Committee
exercises such discretion with respect to Options, such Options will become
exercisable in full prior to the consummation of such event at such time and
on such conditions as the Committee determines, and if such Options are not
<PAGE>

exercised prior to the consummation of the corporate transaction, they shall
terminate at such time as determined by the Committee.

                  15.2 OTHER TREATMENT OF AWARDS. Subject to any greater
rights granted to Participants under the foregoing provisions of this Section
15, in the event of the occurrence of any transaction described in Section
15.1 hereof, any outstanding Awards will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution,
liquidation or sale of assets.

                  15.3 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.

         16. ADOPTION OF PLAN. This Plan will become effective on the date
that it is adopted by the Board (the "EFFECTIVE DATE"). If any Options are
ISOs, this Plan will be approved by the stockholders of the Company
(excluding Shares issued pursuant to this Plan), consistent with applicable
laws, within 12 months after the Plan is adopted by the Board (if such
approval is not obtained, the Options will be NQSOs). Upon the Effective
Date, the Committee may grant Options pursuant to this Plan; provided,
however, that the following requirements will be met for any Option that is
an ISO (otherwise the Option will be an NQSO): (a) the Option may not be
exercised prior to initial stockholder approval of this Plan, and (b) any
Option granted pursuant to an increase in the number of Shares subject to
this Plan approved by the Board may not be exercised prior to approval of
such increase by the stockholders of the Company.

         17. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as
provided herein, this Plan will terminate ten years from the Effective Date
or, if earlier, the date of stockholder approval. This Plan and all
agreements hereunder shall be governed by and construed in accordance with
the laws of the State of California excluding that body of law pertaining to
conflict of laws.

         18. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Stock Option Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without
the approval of the stockholders of the Company, amend this Plan in any
manner that requires such stockholder approval.

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

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

                  "AWARD" means any award of Options under this Plan.
<PAGE>

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

                  "CAUSE" means Termination because of (a) 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, (b) 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, (c) 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, (d)
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 (e) 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 Hybrid Networks, Inc., or any successor
corporation.

                  "DISABILITY" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section 22(e)(3) of the
Code, 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;

                  (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, and if current information about the
                           Company is publicly available so as to comply with
                           SEC Rule 144(c), 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
<PAGE>

                  (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 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 Hybrid Networks, Inc. 1999 Stock Option
Plan, as amended from time to time.

                  "SEC" means the Securities and Exchange Commission.

                  "SECURITIES ACT" means the Securities Act 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
15 hereof, and any successor security.

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

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

                  "TERMINATION" or "TERMINATED" means, for purposes of this
Plan with respect to a Participant, that the Participant has for any reason
ceased to provide substantial services as (a) an employee, officer, director,
consultant or independent contractor to the Company or a Parent or Subsidiary
or affiliate of the Company, or (b) as a consultant, independent contractor
or advisor to the Board of Directors 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 90 days
unless reinstatement 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").