CYLINK CORPORATION

                     Year 2000 EMPLOYEE STOCK PURCHASE PLAN

         The following constitute the provisions of the Year 2000 Employee Stock
Purchase Plan of Cylink Corporation.

1. Purpose.  The purpose of the Plan is to provide  employees of the Company and
its Designated  Subsidiaries with an opportunity to purchase Common Stock of the
Company  through  accumulated  payroll  deductions.  It is the  intention of the
Company to have the Plan  qualify as an  "Employee  Stock  Purchase  Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended.  The provisions of
the  Plan,   accordingly,   shall  be  construed  so  as  to  extend  and  limit
participation  in a manner  consistent with the  requirements of that section of
the Code.

2. Definitions.

(a) "Board" shall mean the Board of Directors of the Company.

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(c) "Common Stock" shall mean the common stock of the Company.

(d) "Company" shall mean Cylink Corporation and any Designated Subsidiary of the
Company.

(e)  "Compensation"  shall  mean all  base  straight  time  gross  earnings  and
commissions,  but exclusive of payments for overtime,  shift premium,  incentive
compensation, incentive payments, bonuses and other compensation.

(f) "Designated  Subsidiary" shall mean any Subsidiary which has been designated
by the Board from time to time in its sole discretion as eligible to participate
in the Plan.

(g)  "Employee"  shall mean any individual who is an Employee of the Company for
tax purposes whose customary employment with the Company is at least twenty (20)
hours per week and more than five (5) months in any calendar  year. For purposes
of the Plan, the employment  relationship  shall be treated as continuing intact
while the individual is on sick leave or other leave of absence  approved by the
Company. Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract,  the employment
relationship shall be deemed to have terminated on the 91st day of such leave.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


(h) "Enrollment Date" shall mean the first Trading Day of each Offering Period.

(i) "Exercise Date" shall mean the last Trading Day of each Purchase Period.

(j) "Fair Market  Value" shall mean,  as of any date,  the value of Common Stock
determined as follows:

(1) If the  Common  Stock is  listed  on any  established  stock  exchange  or a
national market system,  including without limitation the Nasdaq National Market
or The Nasdaq Small Cap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were  reported) as quoted on such exchange or system for the last market trading
day on the date of such determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

(2) If the Common Stock is regularly  quoted by a recognized  securities  dealer
but selling prices are not reported,  its Fair Market Value shall be the mean of
the  closing  bid and  asked  prices  for the  Common  Stock on the date of such
determination,  as reported in The Wall Street  Journal or such other  source as
the Board deems reliable;

(3) In the  absence of an  established  market for the  Common  Stock,  the Fair
Market Value thereof shall be determined in good faith by the Board; or

(k) "Offering  Periods" shall mean the periods of  approximately  six months (6)
months  during which an option  granted  pursuant to the Plan may be  exercised,
commencing on the first Trading Day on or after January 1 and July 1of each year
and  terminating on the last Trading Day in the periods ending six months later.
The duration and timing of Offering Periods may be changed pursuant to Section 4
of this Plan.

(l) "Plan" shall mean this 2000 Employee Stock Purchase Plan.

(m) "Purchase  Period" shall mean the  approximately six month period commencing
after one Exercise Date and ending with the next Exercise Date,  except that the
first  Purchase  Period of any Offering  Period shall commence on the Enrollment
Date and end with the next Exercise Date.

(n)  "Purchase  Price"  shall  mean 85% of the Fair  Market  Value of a share of
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower;
provided, however, that the Purchase Price may be adjusted by the Board pursuant
to Section 20.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


(o)  "Reserves"  shall mean the number of shares of Common Stock covered by each
option under the Plan which have not yet been exercised and the number of shares
of Common Stock which have been  authorized  for issuance under the Plan but not
yet placed under option.

(p)  "Subsidiary"  shall mean a corporation,  domestic or foreign,  of which not
less than 50% of the  voting  shares are held by the  Company  or a  Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.

(q) "Trading  Day" shall mean a day on which  national  stock  exchanges and the
Nasdaq System are open for trading.

3. Eligibility.

(a) Any Employee who shall be employed by the Company on a given Enrollment Date
shall be eligible to participate in the Plan.

(b) Any  provisions  of the Plan to the  contrary  notwithstanding,  no Employee
shall be granted an option  under the Plan (i) to the extent  that,  immediately
after the  grant,  such  Employee  (or any other  person  whose  stock  would be
attributed  to such Employee  pursuant to Section  424(d) of the Code) would own
capital stock of the Company  and/or hold  outstanding  options to purchase such
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital  stock of the Company or of any  Subsidiary,
or (ii) to the  extent  that his or her  rights  to  purchase  stock  under  all
employee stock purchase plans of the Company and its  subsidiaries  accrues at a
rate  which  exceeds  Twenty-Five  Thousand  Dollars  ($25,000)  worth  of stock
(determined  at the fair  market  value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

4. Offering  Periods.  The Plan shall be  implemented  by  consecutive  Offering
Periods with a new Offering  Period  commencing  on the first  Trading Day on or
after  January 1 and July 1 of each  year,  or on such  other  date as the Board
shall determine,  and continuing  thereafter until terminated in accordance with
Section 20 hereof.  The  Compensation  Committee of the Board (the  "Committee")
shall have the power to change the duration of Offering  Periods  (including the
commencement dates thereof) with respect to future offerings without shareholder
approval  if such  change  is  announced  at least  five  (5) days  prior to the
scheduled beginning of the first Offering Period to be affected thereafter.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


5. Participation.

(a) An eligible  Employee may become a  participant  in the Plan by completing a
subscription  agreement  authorizing payroll deductions in the form of Exhibit A
to this  Plan and  filing  it with the  Company's  payroll  office  prior to the
applicable Enrollment Date.

(b) Payroll  deductions  for a participant  shall  commence on the first payroll
following the Enrollment  Date and shall end on the last payroll in the Offering
Period to which such  authorization is applicable,  unless sooner  terminated by
the participant as provided in Section 10 hereof.

6. Payroll Deductions.

(a) At the time a participant files his or her subscription agreement, he or she
shall elect to have payroll  deductions made on each pay day during the Offering
Period in an amount not exceeding ten percent (10%) of the Compensation which he
or she receives on each pay day during the Offering Period (except for the first
Offering  Period from  February 1 through  June 30, 2000 which  amount shall not
twelve (12%) of the Compensation).

(b) All payroll  deductions  made for a participant  shall be credited to his or
her account  under the Plan and shall be withheld in whole  percentages  only. A
participant may not make any additional payments into such account.

(c) A  participant  may  discontinue  his or her  participation  in the  Plan as
provided in Section 10 hereof,  or may  increase or decrease  the rate of his or
her payroll  deductions  during the Offering Period by completing or filing with
the  Company  a new  subscription  agreement  authorizing  a change  in  payroll
deduction rate. The  Compensation  Committee may, in its  discretion,  limit the
number of participation  rate changes during any Offering Period.  The change in
rate shall be effective  with the first full payroll  period  following five (5)
business  days after the  Company's  receipt of the new  subscription  agreement
unless  the  Company  elects to  process a given  change in  participation  more
quickly.  A  participant's  subscription  agreement  shall  remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


(d)  Notwithstanding  the  foregoing,  to the extent  necessary  to comply  with
Section  423(b)(8) of the Code and Section 3(b) hereof, a participant's  payroll
deductions  may be  decreased to zero percent (0%) at any time during a Purchase
Period.  Payroll  deductions  shall  recommence  at the  rate  provided  in such
participant's  subscription  agreement at the  beginning  of the first  Purchase
Period  which  is  scheduled  to end  in the  following  calendar  year,  unless
terminated by the participant as provided in Section 10 hereof.

(e) At the time the  option is  exercised,  in whole or in part,  or at the time
some or all of the Company's  Common Stock issued under the Plan is disposed of,
the participant must make adequate provision for the Company's  federal,  state,
or other tax withholding  obligations,  if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At any time, the Company may,
but shall not be obligated to, withhold from the participant's  compensation the
amount  necessary for the Company to meet  applicable  withholding  obligations,
including  any  withholding  required to make  available  to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock
by the Employee.

7.  Grant of  Option.  On the  Enrollment  Date of each  Offering  Period,  each
eligible  Employee  participating  in such  Offering  Period shall be granted an
option to purchase on each  Exercise  Date during such  Offering  Period (at the
applicable  Purchase  Price) up to a number of  shares of the  Company's  Common
Stock  determined by dividing such  Employee's  payroll  deductions  accumulated
prior to such Exercise Date and retained in the Participant's  account as of the
Exercise Date by the applicable Purchase Price;  provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than 2,000
shares of the  Company's  Common Stock  (subject to any  adjustment  pursuant to
Section  19), and provided  further that such  purchase  shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. The Compensation Committee
may,  for  future  Offering  Periods,  increase  or  decrease,  in its  absolute
discretion,  the  maximum  number  of shares of the  Company's  Common  Stock an
Employee may  purchase  during each  Purchase  Period of such  Offering  Period.
Exercise of the option  shall occur as provided in Section 8 hereof,  unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall expire
on the last day of the Offering Period.

8. Exercise of Option.

(a)  Unless a  participant  withdraws  from the Plan as  provided  in Section 10
hereof,  his or her  option  for the  purchase  of  shares  shall  be  exercised
automatically  on the  Exercise  Date,  and the  maximum  number of full  shares
subject to option  shall be

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


purchased  for  such  participant  at the  applicable  Purchase  Price  with the
accumulated payroll deductions in his or her account. No fractional shares shall
be purchased;  any payroll  deductions  accumulated in a  participant's  account
which are not  sufficient  to  purchase a full share  shall be  retained  in the
participant's  account for the subsequent  Purchase  Period or Offering  Period,
subject to earlier  withdrawal  by the  participant  as  provided  in Section 10
hereof. Any other monies left over in a participant's account after the Exercise
Date shall be returned to the participant.  During a participant's  lifetime,  a
participant's  option to purchase shares hereunder is exercisable only by him or
her.

(b) If the Compensation Committee determines that, on a given Exercise Date, the
number of shares with respect to which  options are to be  exercised  may exceed
(i) the number of shares of Common Stock that were  available for sale under the
Plan on the  Enrollment  Date of the  applicable  Offering  Period,  or (ii) the
number of shares  available for sale under the Plan on such Exercise  Date,  the
Committee may in its sole  discretion  (x) provide that the Company shall make a
pro rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable  and as it shall determine in its sole discretion to be equitable
among all  participants  exercising  options to  purchase  Common  Stock on such
Exercise Date, and continue all Offering Periods then in effect,  or (y) provide
that the Company shall make a pro rata  allocation  of the shares  available for
purchase on such Enrollment Date or Exercise Date, as applicable,  in an uniform
a  manner  as  shall  be  practicable  and as it  shall  determine  in its  sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise  Date,  and terminate any or all Offering  Periods
then in effect  pursuant  to Section 20 hereof.  The  Company  may make pro rata
allocation  of the shares  available on the  Enrollment  Date of any  applicable
Offering  Period  pursuant  to  the  preceding  sentence,   notwithstanding  any
authorization of additional  shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date.

9.  Delivery.  As promptly as  practicable  after each  Exercise Date on which a
purchase of shares  occurs,  the  Company  shall  arrange  the  delivery to each
participant,  as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


10. Withdrawal.

(a) A participant may withdraw all but not less than all the payroll  deductions
credited to his or her  account  and not yet used to exercise  his or her option
under the Plan at any time by giving  written  notice to the Company in the form
of Exhibit B to this Plan. All of the participant's  payroll deductions credited
to his or her account shall be paid to such  participant  promptly after receipt
of notice of withdrawal and such  participant's  option for the Offering  Period
shall be  automatically  terminated,  and no further payroll  deductions for the
purchase of shares  shall be made for such  Offering  Period.  If a  participant
withdraws from an Offering  Period,  payroll  deductions shall not resume at the
beginning of the succeeding  Offering Period unless the participant  delivers to
the Company a new subscription agreement.

(b) A participant's withdrawal from an Offering Period shall not have any effect
upon his or her  eligibility  to  participate  in any  similar  plan  which  may
hereafter  be adopted by the Company or in  succeeding  Offering  Periods  which
commence after the termination of the Offering Period from which the participant
withdraws.

11. Termination of Employment.

(a) Upon a participant's  ceasing to be an Employee,  for any reason,  he or she
shall be  deemed  to have  elected  to  withdraw  from the Plan and the  payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death,  to the person or persons  entitled  thereto under
Section  15  hereof,  and  such  participant's  option  shall  be  automatically
terminated.  The preceding sentence notwithstanding,  a participant who receives
payment  in lieu of notice of  termination  of  employment  shall be  treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


12.  Interest.  No  interest  shall  accrue  on  the  payroll  deductions  of  a
participant in the Plan.

13. Stock.

(a)  Subject to  adjustment  upon  changes in  capitalization  of the Company as
provided  in Section 19 hereof,  the maximum  number of shares of the  Company's
Common Stock that shall be made  available  for sale under the Plan shall be two
hundred thousand  (200,000)  shares,  plus an annual increase to be added on the
first day of each fiscal year of the  Company  beginning  in 2001 equal to 1% of
the  outstanding  shares on such date, or such lesser  amount  determined by the
Compensation Committee.

(b) The participant  shall have no interest or voting right in shares covered by
his option until such option has been exercised.

(c) Shares to be delivered to a  participant  under the Plan shall be registered
in the name of the  participant or in the name of the participant and his or her
spouse.

14. Administration. The Plan shall be administered by the Committee and officers
of the Company  authorized  by the  Committee to assist them.  The Committee and
Officers  authorized  to act on their  behalf  shall  have  full  and  exclusive
discretionary authority to construe,  interpret and apply the terms of the Plan,
to determine  eligibility  and to adjudicate all disputed claims filed under the
Plan. Every finding,  decision and determination made by the Committee shall, to
the full extent permitted by law, be final and binding upon all parties.

15. Designation of Beneficiary.

(a) A participant  may file a written  designation  of a  beneficiary  who is to
receive any shares and cash,  if any, from the  participant's  account under the
Plan in the event of such participant's  death subsequent to an Exercise Date on
which the option is exercised but prior to delivery to such  participant of such
shares and cash. In addition,  a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's  account under the
Plan in the event of such  participant's  death prior to exercise of the option.
If a participant  is married and the  designated  beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


(b) Such  designation  of beneficiary  may be changed by the  participant at any
time by written  notice.  In the event of the death of a participant  and in the
absence of a beneficiary  validly designated under the Plan who is living at the
time of such  participant's  death, the Company shall deliver such shares and/or
cash to the executor or administrator of the estate of the participant, or if no
such  executor or  administrator  has been  appointed  (to the  knowledge of the
Company), the Company, in its discretion, may deliver such shares and/or cash to
the spouse or to any one or more dependents or relatives of the participant,  or
if no spouse,  dependent or relative is known to the Company, then to such other
person as the Company may designate.

16.  Transferability.  Neither  payroll  deductions  credited to a participant's
account nor any rights  with  regard to the  exercise of an option or to receive
shares  under  the Plan  may be  assigned,  transferred,  pledged  or  otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided  in Section 15 hereof) by the  participant.  Any such  attempt at
assignment,  transfer,  pledge or other  disposition  shall be  without  effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 10 hereof.

17. Use of Funds. All payroll  deductions  received or held by the Company under
the Plan may be used by the Company for any corporate  purpose,  and the Company
shall not be obligated to segregate such payroll deductions.

18. Reports. Individual accounts shall be maintained for each participant in the
Plan.  Statements of account shall be given to participating  Employees at least
annually,  which statements  shall set forth the amounts of payroll  deductions,
the  Purchase  Price,  the number of shares  purchased  and the  remaining  cash
balance, if any.

19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger
or Asset Sale.

(a)  Changes  in   Capitalization.   Subject  to  any  required  action  by  the
shareholders  of the Company,  the Reserves,  the maximum  number of shares each
participant may purchase each Purchase  Period  (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock  covered by each
option under the Plan which has not yet been exercised shall be  proportionately
adjusted for any  increase or decrease in the number of issued  shares of Common
Stock  resulting  from a stock  split,  reverse  stock  split,  stock  dividend,
combination or  reclassification  of the Common

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


Stock, or any other increase or decrease in the number of shares of Common Stock
effected  without receipt of consideration  by the Company;  provided,  however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration".  Such adjustment shall
be made by the Compensation Committee, whose determination in that respect shall
be final,  binding and  conclusive.  Except as  expressly  provided  herein,  no
issuance  by the  Company  of  shares  of  stock  of any  class,  or  securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason  thereof  shall be made with respect to, the number or price of shares
of Common Stock subject to an option.

(b)  Dissolution  or  Liquidation.  In the event of the proposed  dissolution or
liquidation  of the  Company,  the  Offering  Period then in  progress  shall be
shortened by setting a new Exercise  Date (the "New Exercise  Date"),  and shall
terminate  immediately prior to the consummation of such proposed dissolution or
liquidation,  unless provided otherwise by the Compensation  Committee.  The New
Exercise Date shall be before the date of the Company's proposed  dissolution or
liquidation.  The Committee shall notify each  participant in writing,  at least
ten (10)  business days prior to the New Exercise  Date,  that the Exercise Date
for the participant's  option has been changed to the New Exercise Date and that
the  participant's  option shall be exercised  automatically on the New Exercise
Date,  unless prior to such date the participant has withdrawn from the Offering
Period as provided in Section 10 hereof.

(c)  Merger  or  Asset  Sale.  In  the  event  of a  proposed  sale  of  all  or
substantially  all of the assets of the  Company,  or the merger of the  Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent  option  substituted  by the  successor  corporation  or a Parent  or
Subsidiary  of the  successor  corporation.  In the  event  that  the  successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress  shall be shortened  by setting a new  Exercise  Date (the "New
Exercise  Date") and any Offering  Periods then in progress shall end on the New
Exercise  Date.  The New Exercise Date shall be before the date of the Company's
proposed  sale  or  merger.   The  Compensation   Committee  shall  notify  each
participant  in  writing,  at least  ten  (10)  business  days  prior to the New
Exercise  Date,  that the Exercise  Date for the  participant's  option has been
changed to the New  Exercise  Date and that the  participant's  option  shall be
exercised  automatically on the New Exercise Date, unless prior to such date the
participant  has  withdrawn  from the Offering  Period as provided in Section 10
hereof.

20. Amendment or Termination.

(a) The Board of  Directors  of the  Company  may at any time and for any reason
terminate  or amend the Plan.  Except as provided in Section 19 hereof,  no such

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


termination  can affect options  previously  granted,  provided that an Offering
Period may be  terminated  by the Board of Directors on any Exercise Date if the
Board  determines  that the termination of the Offering Period or the Plan is in
the best  interests of the Company and its  shareholders.  Except as provided in
Section 19 and this Section 20 hereof,  no amendment  may make any change in any
option theretofore granted that adversely affects the rights of any participant.
To the extent necessary to comply with Section 423 of the Code (or any successor
rule or provision or any other  applicable  law,  regulation  or stock  exchange
rule),  the Company  shall obtain  shareholder  approval in such a manner and to
such a degree as required.

(b) Without  shareholder  consent and without regard to whether any  participant
rights may be considered to have been "adversely  affected," the Committee shall
be entitled to change the Offering Periods, limit the frequency and/or number of
changes in the amount withheld during an Offering Period, establish the exchange
ratio  applicable  to amounts  withheld in a currency  other than U.S.  dollars,
permit payroll  withholding in excess of the amount  designated by a participant
in order to adjust  for  delays  or  mistakes  in the  Company's  processing  of
properly  completed  withholding  elections,  establish  reasonable  waiting and
adjustment  periods and/or  accounting  and crediting  procedures to ensure that
amounts  applied  toward  the  purchase  of Common  Stock  for each  participant
properly  correspond with amounts withheld from the participant's  Compensation,
and  establish  such  other  limitations  or  procedures  as the  Board  (or its
committee) determines in its sole discretion advisable which are consistent with
the Plan.

(c) In the event the Board determines that the ongoing operation of the Plan may
result  in  unfavorable  financial  accounting  consequences,  the Board (or its
committee)  may, in its  discretion  and, to the extent  necessary or desirable,
modify  or amend the Plan to reduce or  eliminate  such  accounting  consequence
including, but not limited to:

(1) altering the Purchase  Price for any Offering  Period  including an Offering
Period underway at the time of the change in Purchase Price;

(2)  shortening  any Offering  Period so that the Offering  Period ends on a new
Exercise Date,  including an Offering  Period  underway at the time of the Board
action; and

(3) allocating shares.

         Such modifications or amendments shall not require stockholder approval
or the consent of any Plan participants.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


21. Notices. All notices or other communications by a participant to the Company
under or in  connection  with the Plan  shall be deemed to have been duly  given
when received in the form  specified by the Company at the  location,  or by the
person, designated by the Company for the receipt thereof.

22. Conditions Upon Issuance of Shares.  Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
such shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including,  without limitation, the Securities Act of 1933,
as amended,  the  Securities  Exchange  Act of 1934,  as amended,  the rules and
regulations promulgated  thereunder,  and the requirements of any stock exchange
upon which the shares  may then be listed,  and shall be further  subject to the
approval of counsel for the Company with respect to such compliance.

     As a condition  to the  exercise of an option,  the Company may require the
person  exercising  such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  shares  if, in the  opinion of
counsel  for  the  Company,  such a  representation  is  required  by any of the
aforementioned applicable provisions of law.

23. Term of Plan.  The Plan shall become  effective upon the earlier to occur of
its adoption by the Board of Directors  or its approval by the  shareholders  of
the  Company.  It shall  continue in effect for a term of ten (10) years  unless
sooner terminated under Section 20 hereof.

24. Automatic  Transfer to Low Price Offering Period. To the extent permitted by
any  applicable  laws,  regulations,  or stock exchange rules if the Fair Market
Value of the Common  Stock on any Exercise  Date in an Offering  Period is lower
than the Fair Market  Value of the Common Stock on the  Enrollment  Date of such
Offering  Period,  then  all  participants  in such  Offering  Period  shall  be
automatically withdrawn from such Offering Period immediately after the exercise
of their  option on such  Exercise  Date and  automatically  re-enrolled  in the
immediately following Offering Period as of the first day thereof.

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EXHIBIT A

                               CYLINK CORPORATION

                     YEAR 2000 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

Check Applicable Items:

_____ Original Application (Enrollment Date: ___________)
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)


1.       I,  ____________________  hereby  elect to  participate  in the  Cylink
         Corporation Year 2000 Employee Stock Purchase Plan (the "Employee Stock
         Purchase  Plan") and  subscribe  to  purchase  shares of the  Company's
         Common Stock in  accordance  with this  Subscription  Agreement and the
         Employee Stock Purchase Plan.

2.       I hereby authorize payroll  deductions from each paycheck in the amount
         of  ____%  for  the  first  Offering  Period  [please  specify  in full
         percentage points from 1% to 12%], and ___% for all subsequent Offering
         Periods [please  specify in full percentage  points from 1% to 10%], of
         my  Compensation  (as  defined in the Plan) on each  payday  during the
         Offering  Period in accordance  with the Employee  Stock Purchase Plan.
         (Please note that no fractional percentages are permitted.)

3.       I  understand  that prior to the  Purchase  Date I may  discontinue  my
         participation in the Plan as provided in Section 10 of the Plan. I also
         understand that I can increase or decrease the rate of my Contributions
         to not less than 1% and to not more than 12% of my Compensation  during
         the initial Offering  Period,  and not more than 10% of my Compensation
         during all subsequent Offering Periods,  but no more frequently than on
         one occasion during any Offering Period, by completing and filing a new
         Subscription  Agreement with such increase or decrease taking effect as
         of the  beginning  of the next  calendar  month  following  the date of
         filing of the new Subscription Agreement (provided it is filed at least
         five (5) business  days prior to the  beginning  of such month).  I may
         change the rate of deductions for future  Offering  Periods by filing a
         new Subscription Agreement, and any such change will be effective as of
         the beginning of the next Offering Period. I acknowledge that, unless I
         discontinue my  participation  in the Plan as provided in Section 10 of
         the Plan, my election will continue to be

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


         effective for each successive Offering Period.

4.       I understand that said payroll  deductions shall be accumulated for the
         purchase of shares of Common  Stock at the  applicable  Purchase  Price
         determined  in  accordance  with the Employee  Stock  Purchase  Plan. I
         understand  that if I do not withdraw from an Offering Period by giving
         written notice (see Exhibit B), any accumulated payroll deductions will
         be used to automatically exercise my option.

5.       I have received a copy of the complete  Employee Stock Purchase Plan. I
         understand that my participation in the Employee Stock Purchase Plan is
         in all respects  subject to the terms of the Plan. I understand that my
         ability to exercise  the option  under this  Subscription  Agreement is
         subject to shareholder approval of the Employee Stock Purchase Plan.

6.       Shares  purchased for me under the Employee  Stock Purchase Plan should
         be issued in the name(s) of  (Employee  or Employee  and Spouse  only):
         __________________________________________

7.       I understand that if I dispose of any shares received by me pursuant to
         the Plan within 2 years after the Enrollment Date (the first day of the
         Offering Period during which I purchased such shares) or one year after
         the Exercise Date, I will be treated for federal income tax purposes as
         having received  ordinary income at the time of such  disposition in an
         amount  equal to the excess of the fair  market  value of the shares at
         the time such shares were  purchased  by me over the price which I paid
         for the shares.  I hereby agree to notify the Company in writing within
         30 days after the date of any  disposition of my shares and I will make
         adequate  provision  for  Federal,   state  or  other  tax  withholding
         obligations,  if any,  which arise upon the  disposition  of the Common
         Stock.  The Company may, but will not be obligated to, withhold from my
         compensation  the amount  necessary to meet any applicable  withholding
         obligation including any withholding necessary to make available to the
         Company any tax  deductions or benefits  attributable  to sale or early
         disposition  of Common  Stock by me. If I dispose of such shares at any
         time after the expiration of the 2-year and 1-year holding  periods,  I
         understand  that I will be treated for federal  income tax  purposes as
         having received income only at the time of such  disposition,  and that
         such income  will be taxed as ordinary  income only to the extent of an
         amount  equal to the lesser of (1) the excess of the fair market  value
         of the shares at the time of such  disposition  over the purchase price
         which I paid for the shares, or (2) 15% of the fair market value of the
         shares on the first day of the Offering  Period.  The  remainder of the
         gain, if any,  recognized on such  disposition will be taxed as capital
         gain.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


8.       I hereby agree to be bound by the terms of the Employee  Stock Purchase
         Plan. The  effectiveness  of this  Subscription  Agreement is dependent
         upon my eligibility to participate in the Employee Stock Purchase Plan.

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


9.       In the  event of my  death,  I hereby  designate  the  following  as my
         beneficiary(ies)  to receive all  payments  and shares due me under the
         Employee Stock Purchase Plan:

NAME: (Please print) ___________________________________________________________
                        (First)             (Middle)            (Last)

______________________________       ___________________________________________
Relationship To Employee
                                     ___________________________________________
                                     (Address Of Beneficiary)


Employee's Social Security Number:   ___________________________________________

Employee's Address:                  ___________________________________________

                                     ___________________________________________

                                     ___________________________________________


I UNDERSTAND THAT THIS SUBSCRIPTION  AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated: ___________________           ___________________________________________
                                     Signature of Employee

                                     ___________________________________________
                                     Spouse's Signature (If beneficiary other
                                     than spouse)

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


                                    EXHIBIT B

                               CYLINK CORPORATION

                     Year 2000 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         The  undersigned  participant  in the  Offering  Period  of the  Cylink
Corporation 2000 Employee Stock Purchase Plan which began on ____________,  20__
(the  "Enrollment  Date")  hereby  notifies  the  Company  that he or she hereby
withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the  undersigned  as  promptly  as  practicable  all the  payroll  deductions
credited  to his or her  account  with  respect  to such  Offering  Period.  The
undersigned  understands  and agrees  that his or her  option for such  Offering
Period will be automatically  terminated.  The undersigned  understands  further
that no further  payroll  deductions  will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in  succeeding  Offering  Periods  only  by  delivering  to  the  Company  a new
Subscription Agreement.


                                      Name and Address of Participant:

                                      __________________________________________

                                      __________________________________________

                                      __________________________________________


                                      Signature:

                                      __________________________________________


                                      Date: ____________________________________

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


                                    EXHIBIT A

                               CYLINK CORPORATION

                     YEAR 2000 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

Check Applicable Items:

_____ Original Application (Enrollment Date: ___________)
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)


1.       I,  ___________________________  hereby  elect  to  participate  in the
         Cylink   Corporation  Year  2000  Employee  Stock  Purchase  Plan  (the
         "Employee Stock Purchase Plan") and subscribe to purchase shares of the
         Company's Common Stock in accordance with this  Subscription  Agreement
         and the Employee Stock Purchase Plan.

2.       I hereby authorize payroll  deductions from each paycheck in the amount
         of  ____%  for  the  first  Offering  Period  [please  specify  in full
         percentage points from 1% to 12%], and ___% for all subsequent Offering
         Periods [please  specify in full percentage  points from 1% to 10%], of
         my  Compensation  (as  defined in the Plan) on each  payday  during the
         Offering  Period in accordance  with the Employee  Stock Purchase Plan.
         (Please note that no fractional percentages are permitted.)

3.       I  understand  that prior to the  Purchase  Date I may  discontinue  my
         participation in the Plan as provided in Section 10 of the Plan. I also
         understand that I can increase or decrease the rate of my Contributions
         to not less than 1% and to not more than 12% of my Compensation  during
         the initial Offering  Period,  and not more than 10% of my Compensation
         during all subsequent Offering Periods,  but no more frequently than on
         one occasion during any Offering Period, by completing and filing a new
         Subscription  Agreement with such increase or decrease taking effect as
         of the  beginning  of the next  calendar  month  following  the date of
         filing of the new Subscription Agreement (provided it is filed at least
         five (5) business  days prior to the  beginning  of such month).  I may
         change the rate of deductions for future  Offering  Periods by filing a
         new Subscription

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


         Agreement, and any such change will be effective as of the beginning of
         the next Offering Period. I acknowledge  that,  unless I discontinue my
         participation  in the Plan as  provided  in Section 10 of the Plan,  my
         election  will continue to be effective  for each  successive  Offering
         Period.

4.       I understand that said payroll  deductions shall be accumulated for the
         purchase of shares of Common  Stock at the  applicable  Purchase  Price
         determined  in  accordance  with the Employee  Stock  Purchase  Plan. I
         understand  that if I do not withdraw from an Offering Period by giving
         written notice (see Exhibit B), any accumulated payroll deductions will
         be used to automatically exercise my option.

5.       I have received a copy of the complete  Employee Stock Purchase Plan. I
         understand that my participation in the Employee Stock Purchase Plan is
         in all respects  subject to the terms of the Plan. I understand that my
         ability to exercise  the option  under this  Subscription  Agreement is
         subject to shareholder approval of the Employee Stock Purchase Plan.

6.       Shares  purchased for me under the Employee  Stock Purchase Plan should
         be issued in the name(s) of  (Employee  or Employee  and Spouse  only):
         ________________________________

7.       I understand that if I dispose of any shares received by me pursuant to
         the Plan within 2 years after the Enrollment Date (the first day of the
         Offering Period during which I purchased such shares) or one year after
         the Exercise Date, I will be treated for federal income tax purposes as
         having received  ordinary income at the time of such  disposition in an
         amount  equal to the excess of the fair  market  value of the shares at
         the time such shares were  purchased  by me over the price which I paid
         for the shares.  I hereby agree to notify the Company in writing within
         30 days after the date of any  disposition of my shares and I will make
         adequate  provision  for  Federal,   state  or  other  tax  withholding
         obligations,  if any,  which arise upon the  disposition  of the Common
         Stock.  The Company may, but will not be obligated to, withhold from my
         compensation  the amount  necessary to meet any applicable  withholding
         obligation including any withholding necessary to make available to the
         Company any tax  deductions or benefits  attributable  to sale or early
         disposition  of Common  Stock by me. If I dispose of such shares at any
         time after the expiration of the 2-year and 1-year holding  periods,  I
         understand  that I will be treated for federal  income tax  purposes as
         having received income only at the time of such  disposition,  and that
         such income  will be taxed as ordinary  income only to the extent of an
         amount  equal to the lesser of (1) the excess of the fair market  value
         of the shares at the time of such  disposition  over the purchase price
         which I paid for the shares, or (2) 15% of the fair market value of the
         shares on the first day of the Offering  Period.  The

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


         remainder of the gain, if any,  recognized on such  disposition will be
         taxed as capital gain.

8.       I hereby agree to be bound by the terms of the Employee  Stock Purchase
         Plan. The  effectiveness  of this  Subscription  Agreement is dependent
         upon my eligibility to participate in the Employee Stock Purchase Plan.

9.       In the  event of my  death,  I hereby  designate  the  following  as my
         beneficiary(ies)  to receive all  payments  and shares due me under the
         Employee Stock Purchase Plan:


NAME: (Please print) ___________________________________________________________
                        (First)             (Middle)            (Last)

______________________________       ___________________________________________
Relationship To Employee
                                     ___________________________________________
                                     (Address Of Beneficiary)


Employee's Social Security Number:   ___________________________________________

Employee's Address:                  ___________________________________________

                                     ___________________________________________

                                     ___________________________________________


I UNDERSTAND THAT THIS SUBSCRIPTION  AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated: ___________________           ___________________________________________
                                     Signature of Employee

                                     ___________________________________________
                                     Spouse's Signature (If beneficiary other
                                     than spouse)

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Cylink Corporation
Year 2000 Employee Stock Purchase Plan


                                    EXHIBIT B

                               CYLINK CORPORATION

                     Year 2000 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         The  undersigned  participant  in the  Offering  Period  of the  Cylink
Corporation  2000  Employee  Stock  Purchase  Plan which began on  ____________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the  undersigned  as  promptly  as  practicable  all the  payroll  deductions
credited  to his or her  account  with  respect  to such  Offering  Period.  The
undersigned  understands  and agrees  that his or her  option for such  Offering
Period will be automatically  terminated.  The undersigned  understands  further
that no further  payroll  deductions  will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in  succeeding  Offering  Periods  only  by  delivering  to  the  Company  a new
Subscription Agreement.

                                      Name and Address of Participant:

                                      __________________________________________

                                      __________________________________________

                                      __________________________________________


                                      Signature:

                                      __________________________________________


                                      Date: ____________________________________

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