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                                                                    EXHIBIT 10.1
[CHAPARRAL NETWORK STORAGE, INC. LOGO]

                             1998 STOCK OPTION PLAN
                            (Effective June 1, 1999)

         1. Purpose.

            (a) The purpose of the CHAPARRAL NETWORK STORAGE, INC. [formerly
         Chaparral Technologies, Inc.] 1998 Stock Option Plan (the "Plan") is to
         provide a means whereby selected eligible employees and officers and
         directors of, and consultants to, CHAPARRAL NETWORK STORAGE, INC., a
         Delaware Corporation (the "Company"), and its Affiliates, if any, as
         defined below, may be given a favorable opportunity to acquire common
         stock of the Company (the "Common Stock"), thereby encouraging such
         persons to accept or continue a qualifying relationship with the
         Company, increasing the interest of such persons in the Company's
         welfare through participation in the growth and the value of the Common
         Stock; and furnishing such persons with an incentive to improve
         operations and increase profits of the Company. The terms "Affiliate"
         or "Affiliates" as used in the Plan shall mean any parent corporation
         or subsidiary corporation of the Company, as those terms are defined in
         Sections 424(e) and (f) of the Internal Revenue Code of 1986, as
         amended (the "Code).

            (b) To accomplish the foregoing objectives, this Plan provides a
         means whereby employees, directors, and consultants may receive options
         to purchase Common Stock.

         2. Stock Options. Stock options granted pursuant to the Plan may, at
the discretion of the Board of Directors of the Company, be granted either as an
Incentive Stock Option ("ISO") or a Non-statutory Stock Option ("NSO").

         3. Administration. The Board of Directors (the "Board") whose authority
shall be plenary, shall administer the Plan, unless and until such time as the
Board delegates administration of the Plan pursuant to subsection 3(b) below.

            (a) The Board, whose determinations shall be conclusive, shall have
         the power, subject to and within the limits of the express provisions
         of the Plan:

                (i) To grant options pursuant to the Plan.

                (ii) To determine from time to time which of the eligible
            persons described in Section 5 below shall be granted options under
            the Plan, the number of shares for which each option shall be
            granted, the term of each granted option and the time or times
            during the term of each option within which all or portions of each
            option may be accelerated, if allowed under applicable law.

                (iii) To construe and interpret the Plan and options granted
            under it and to establish, amend, and revoke rules and regulations
            for its administration. The Board, in the exercise of this power,
            shall generally determine all questions of policy and expediency
            that may arise and may correct any defect, omission of inconsistency
            in the Plan or in any option agreement with respect to the Plan in a
            manner to the extent it shall deem necessary or expedient to make
            the Plan fully effective.

                (iv) To grant options in exchange for cancellation of options
            granted earlier at different exercise prices; provided, however,
            nothing contained herein shall empower the Board to grant an ISO
            under conditions or pursuant to terms that are inconsistent with the
            requirements of subsection 4(b), below, or Section 422 of the Code.

                (v) To prescribe the terms and provisions of each option granted
            which need not be identical and the form of written instrument that
            shall constitute the option agreement.

                (vi) To amend the Plan as provided in Section 11, below.

                (vii) Generally, to exercise such powers and to perform such
            acts as are deemed necessary or expedient to promote the best
            interests of the Company.

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                (viii) To take appropriate action to cause any option granted
            hereunder to cease to be an ISO, provided, however, no such action
            may be taken by the Board without the written consent of the
            affected optionee.

            (b) The Board may, however, by resolution, delegate administration
         of the Plan (including, without limitation, the Board's powers under
         subsection 3(a) above) to a committee acting under the authority of the
         Board. The Board shall have complete discretion to determine the
         composition, structure, form, term and operation of any committee
         established to administer the Plan. The Board at any time may revest in
         the Board the administration of the Plan.

         4. Shares Subject to Plan and to Option.

            (a) Subject to the provisions of Section 10 below (relating to
         adjustments upon changes in stock), the stock which may be sold
         pursuant to options granted under the Plan shall not exceed in the
         aggregate of twenty-eight million (28,000,000) shares of the Company's
         authorized Common Stock and may be unissued shares, reacquired shares,
         or shares bought on the market for the purpose of issuance under the
         Plan. If any options granted under the Plan shall for any reason
         terminate or expire without having been exercised in full, the stock
         not purchased under such options shall be available again for the
         purpose of the Plan.

            (b) If the aggregate fair market value of stock with respect to
         which ISOs are exercisable for the first time by an individual during
         any calendar year exceeds the amount of the annual limitation provided
         in Section 422(d) of the Code, the excess shall be deemed to be a grant
         of an NSO to the extent of such excess.

         5. Eligibility

            (a) All employees of the Company and its Affiliates are eligible to
         receive ISOs and only employees of the Company and its Affiliates may
         be granted ISOs. Employees, directors and independent contractors shall
         also be eligible for NSOs.

            (b) No option issued under the Plan may be granted to a person who,
         at the time such option would be granted, owns stock possessing more
         than ten percent (10%) of the total combined voting power of all
         classes of outstanding capital stock of the Company or its Affiliate
         unless the option price is at least one hundred percent (100%) in the
         case of an NSO, one hundred ten percent (110%) in the case of an ISO,
         of the fair market value of the stock subject to the option and the ISO
         option by its terms is not exercisable after five (5) years from the
         date such option is granted. Any employee may hold more than one (1)
         option at any time. For purposes of this subsection 5(b), in
         determining stock ownership, an optionee shall be considered as owning
         the voting capital stock owned, directly or indirectly, by or for his
         brothers and sisters, spouse, ancestors and lineal descendants. Voting
         capital stock owned, directly or indirectly, by or for a corporation,
         partnership, estate or trust shall be considered as being owned
         proportionately by or for its shareholders, partners or beneficiaries,
         as applicable. Common Stock with respect to which any such optionee
         holds an option shall not be counted. Additionally, for purposes of
         this subsection 5(b), outstanding capital stock shall include all
         capital stock actually issued and outstanding immediately after the
         grant of the option to the optionee. Outstanding capital stock shall
         not include capital stock authorized for issue under outstanding
         options held by the optionee or by any other person.

         6. Terms of Options. Options granted pursuant to the Plan need not be
identical, but each option shall be granted within ten (10) years from the date
the Plan is adopted by the Board or approved by the shareholders, whichever is
earlier, shall specify the number of shares to which it pertains and shall be
subject to the following terms and conditions:

            (a) The purchase price of each option shall be determined by the
         administrator of the Plan at the time the option is granted, but shall
         in no event, except as otherwise set forth in Section 5 above, be less
         than eighty-five percent (85%) in the case of an NSO, or one hundred
         percent (100%) in the case of an ISO, of the fair market value of the
         stock subject to the option on the date the option is granted. For all
         purposes of the Plan, the fair market value of the Common Stock shall
         be, if the Stock is publicly traded, its closing bid price on NASDAQ or
         the over-the-counter market, or if it is traded on another stock
         exchange, the last price at which it is traded on the exchange. If the
         stock is not publicly traded, the fair market value shall be such value
         as is determined in good faith by the Board of Directors by taking into

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         consideration the following factors: The Company's net worth,
         prospective earning power and dividend-paying capacity, and other
         relevant factors. The term "other relevant factors" includes the value
         of any recent private placement; the goodwill of the business; the
         economic outlook in the particular industry; the Company's position in
         the industry and its management; the degree of control of the business
         represented by the block of stock to be valued; and the values of
         securities of corporations engaged in the same or similar lines of
         business which are listed on a stock exchange. In addition to the
         relevant factors described above, consideration shall also be given to
         non-operating assets including proceeds of life insurance policies
         payable to or for the benefit of the Company, to the extent such
         non-operating assets have not been taken into account in the
         determination of net worth, prospective earning power, and
         dividend-earning capacity.

            (b) Except as otherwise set forth in Section 5 above, the term of
         any option shall not be greater than ten (10) years from the date it
         was granted.

            (c) An option by its terms shall not be transferable otherwise than
         by will or the laws of descent and distribution and may be exercisable,
         during the lifetime of the option holder, only by the individual to
         whom the option is granted. Notwithstanding the above, if an employee
         is determined to be incompetent by a court of proper jurisdiction, his
         legal representative may exercise the option on his behalf.

            (d) Options under the Plan may be exercised by a participant
         regardless of whether he is employed by the Company or an Affiliate at
         the time of the exercise.

            (e) Upon termination of a participant's employment (defined as the
         date the participant is no longer employed by either the Company or any
         of its Affiliates), or upon termination of a directorship or of a
         consulting agreement for a non-employee, his rights to exercise an
         option then held by him shall be only as follows:

                (i) If a participant's employment is terminated for any reason
            other than death of the participant, he may, within not less than
            three (3) months following such termination, or within such longer
            period as the Board may fix, exercise the option to the extent such
            option was exercisable by the participant on the date of termination
            of his employment, or to the extent otherwise specified by the
            Board, which may so specify at a time that is subsequent to the date
            of the termination of his employment, provided, the date of exercise
            is in no event after the expiration of the term of the option.
            However, if the participant's employment is terminated due to
            Disability (within the meaning of Section 22(e) of the Code) of the
            participant, then paragraph 6(e) (ii) shall apply to such
            participant by substituting twelve (12) months for three (3) months.

                (ii) If a participant's employment is terminated by death, his
            estate shall have the right for a period of not more than twelve
            (12) months following the date of death, or for such longer period
            as the Board may fix to exercise such option on the date of death,
            or to the extent otherwise specified by the Board, which may so
            specify, at a time that is subsequent to the date of death, provided
            the actual date of exercise is in no event after the expiration of
            the term of the option. A participant's estate shall mean his legal
            representative or any person who acquires the right to exercise an
            option by reason of the participant's death.

            (f) Options may also contain such other provisions, which shall not
         be inconsistent with any of the foregoing terms, as the Board shall
         deem appropriate. No option, however, nor anything contained in the
         Plan, shall confer upon any employee any right to continue in the
         employ of the Company (or Affiliate) nor limit in any way the right of
         the Company (or Affiliate) to terminate his employment at any time.

            (g) In the event of a dissolution or liquidation of the Company, a
         merger in which the Company is not the surviving corporation, a
         transaction in which 100% of the then outstanding voting stock is sold
         or otherwise transferred, or the sale of substantially all of the
         assets of the Company, any or all outstanding options, shall,
         notwithstanding any contrary terms of the grant, accelerate and become
         exercisable in full at least ten days prior to (and shall expire on)
         the consummation of such dissolution, liquidation, merger, sale of
         stock or sale of assets on such conditions as the Board of Directors
         shall determine unless the successor corporation assumes the
         outstanding options or substitutes substantially equivalent options. In
         the event the successor corporation assumes the outstanding options or
         substitutes substantially equivalent options, the options of an
         optionee who is terminated (other than for

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         cause) or who resigns for good reason within twelve (12) months after a
         change in control, shall, notwithstanding any contrary terms of the
         grant, accelerate and become exercisable in full. The aggregate fair
         market value (determined at the time an option is granted) of stock
         with respect to ISOs which first become exercisable in the year of such
         dissolution, liquidation, merger, sale of stock or sale of assets
         cannot exceed $100,000. Any remaining accelerated ISOs shall be NSOs.

         7. Payments and Loans Upon Exercise.

            (a) The purchase price of stock sold pursuant to an option shall be
         paid either in full in cash or by check at the time the option is
         exercised or, to the extent permitted under the applicable provisions
         of Delaware General Corporation Law, pursuant to any deferred payment
         arrangement that the Board in its discretion may approve; provided,
         however, that any interest to be paid by an optionee in connection with
         any such deferred payment arrangement shall be charged interest at a
         rate of six percent (6%).

            (b) The Company may make loans or guarantee loans made by an
         appropriate financial institution to individual optionees, including
         officers, on such terms as may be approved by the Board for the purpose
         of financing the exercise of options granted under the Plan and the
         payment of any taxes that may be due by reason of such exercise.

            (c) In addition, to the extent authorized by the Board, optionees
         may make all or any portion of any payment due to the Company upon
         exercise of an option by delivery of any property (including securities
         of the Company) other than cash, so long as such property constitutes
         valid consideration for the stock under applicable law.

            (d) Where the Company has or will have a legal obligation to
         withhold taxes relating to the exercise of any stock option, such
         option may not be exercised, in whole or in part, unless such tax
         obligation is first satisfied in a manner satisfactory to the Company.

         8. Use of Proceeds from Stock. Proceeds from the sale of stock pursuant
to options granted under the Plan shall be used for general corporate purposes.

         9. Stock Transfer Restrictions; Repurchase Provisions. Stock issued
pursuant to the exercise of options granted under the Plan shall be subject to
those stock transfer restrictions and/or repurchase provisions which shall be
set forth in a Restricted Stock Agreement in the form approved by the Board.
Each individual shall be required to execute such agreement prior to receiving
his shares.

         10. Adjustments of the Changes in the Stock. Subject to the provisions
set forth in subsection 6(g) above, in the event the shares of Common Stock of
the Company, as presently constituted shall be changed into a different number
or kind of shares of stock or other securities of the Company or of another
corporation (whether by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares, or otherwise) or if the
number of shares of Common Stock of the Company shall be increased through the
payment of a stock dividend, then there shall be substituted for or added to
each share of Common Stock of the Company, theretofore appropriated or
thereafter subject or which may become subject to an option under the Plan, the
number and kind of shares of stock or other securities into which each
outstanding share of Common Stock of the Company shall be so changed, or to
which each such share shall be entitled, as the case may be. Outstanding options
shall also be amended as to the price and other terms if necessary to reflect
the foregoing events. In the event there shall be any other change in the number
or kind of the outstanding shares of Common Stock of the Company, or of any
stock or other securities into which such Common Stock shall have been changed,
then if the Board of Directors shall, in its sole discretion, determine that
such change equitably requires an adjustment in any option theretofore granted
or which may be granted under the Plan, such adjustment shall be made in
accordance with such determination. No right to purchase fractional shares shall
result from any adjustment in options pursuant to this Section 10. In case of
any such adjustment, the shares subject to the option shall be rounded down to
the nearest whole share. Notice of the any adjustment shall be given by the
Company to each holder of an option which shall have been so adjusted and such
adjustment (whether or not such notice is given) shall be effective and binding
for all purposes of the Plan.

         11. Amendment of the Plan. The Board at any time and from time to time,
may amend the Plan, subject to the limitation, however that except as provided
in Section 10 (relating to adjustments upon changes in stock), no amendment
shall be effective, unless approved, within twelve (12) months before or after
the date of such amendment's adoption, by the vote or written consent of a
majority of the outstanding shares of the Company entitled to vote, where such
amendment will:

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            (a) increase the share reserve;

            (b) expand the class of persons who can receive ISOs; or

            (c) comply with any applicable law, regulation, or rule.

            It is expressly contemplated that the Board may amend the Plan in
any respect necessary to provide the Company's employees with the maximum
benefits provided or to be provided under Section 422 of the Code and the
regulations promulgated thereunder relating to employee incentive stock options,
and/or bring the plan or options granted under it into compliance therewith.

            Rights and obligations under any option granted before any amendment
of the Plan shall not be altered or impaired by amendment of the Plan, except
with the consent, which may be obtained in any manner deemed by the Board to be
appropriate of the person to whom the option is granted.

         12. Termination or Suspension of the Plan. The Board at any time may
suspend or terminate the Plan. The Plan, unless sooner terminated, shall
terminate at the end of ten (10) years from the date the Plan is adopted by the
Board or approved by the shareholders of the Company, whichever is earlier. An
option may not be granted under the Plan while the Plan is suspended or after it
is terminated.

             Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
plan, except with the consent of the person to whom the option was granted,
which may be obtained in any manner that the Board deems appropriate.

         13. Time of Granting Options. The date of the grant of an option
hereunder shall, for all purposes, be the date on which the Board (or committee
under authority of the Board) makes the determination granting such option.

         14. Listing, Qualification or Approval of Stock; Approval of Options.
All options granted under the Plan are subject to the requirement that if at any
time the Board shall determine in its discretion that the listing or
qualification of the shares of stock subject thereto on any securities exchange
or under any applicable law, or the consent or approval by any governmental
regulatory body or the shareholders of the Company, is necessary or desirable as
a condition of or in connection with the issuance of shares under the option,
the option may not be exercised in whole or in part, unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Board.

         15. Binding Effect of Conditions. The conditions and stipulations
hereinabove contained or in any option granted pursuant to the Plan shall be and
constitute a covenant running with all of the shares of the Company owned by the
participant at any time, directly or indirectly whether the same have been
issued or not, and those shares of the Company owned by the participant shall
not be sold, assigned, or transferred by any person save and except in
accordance with the terms and conditions herein provided, and the participant
shall agree to use his best efforts to cause the officers of the Company to
refuse to record on the books of the Company any assignment or transfer made or
attempted to be made, except as provided in the Plan and to cause said officers
to refuse to cancel old certificates or to issue or deliver new certificates
therefor where the purchaser or assignee has acquired certificates of the stock
represented thereby, except strictly in accordance with the provisions of this
plan.

         16. Effective Date of Plan. The Plan shall become effective as
determined by the Board but no options granted under it shall become exercisable
until the Plan has been approved by the vote or written consent of the holders
of a majority of the outstanding shares of the Company entitled to vote. If such
shareholder approval is not obtained within twelve (12) months before or after
the date of the Board's adoption of the Plan, then all options previously
granted under the Plan shall terminate, and no further options shall be granted
and no shares shall be issued. Subject to such limitation, the Board may grant
options under the Plan at any time after the effective date and before the date
fixed herein for termination of the Plan.

         17. Gender. The use of any gender specific pronoun or similar term is
intended to be without legal significance as to gender.

         18. Financial Reports. The Company shall provide financial and other
information regarding the Company pursuant to the provisions set forth in
Section 220 of the General Corporation Law of the State of Delaware.

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                                    EXHIBIT A



CHAIRMAN & CEO
CHAPARRAL NETWORK STORAGE, INC.
1951 SOUTH FORDHAM STREET
LONGMONT, CO 80503

This will confirm my understanding with respect to the shares to be issued to me
by reason of my exercise this date of certain stock option rights granted to me
by CHAPARRAL NETWORK STORAGE, INC. for the purchase of _______ shares of Common
Stock (the Shares) as follows:

         (a)      I am acquiring the Shares for my own account for investment
                  with no present intention of dividing my interest with others
                  or of reselling or otherwise disposing of any of the Shares.

         (b)      The Shares are being issued without registration under the
                  Securities Act of 1933 (the "Act") in reliance upon the
                  private offering exemption contained in Section 4(2) of the
                  Act, and such reliance is based in part on the above
                  representation.

         (c)      The certificate for the shares of stock to be issued to me
                  will bear the following legend:

                  "The securities represented by this certificate have been
                  acquired pursuant to an investment representation on the part
                  of the holder hereof. They have not been registered under the
                  Securities Act of 1933 or any state securities laws and may
                  not be sold, pledged, hypothecated, donated or otherwise
                  transferred, unless the Corporation has satisfied itself or
                  has received a favorable option from its counsel, or has
                  received such other evidence as may be satisfactory to its
                  counsel that any contemplated transfer will not be in
                  violation of such laws."

         (d)      Since the Shares have not been registered under the Act, they
                  must be held indefinitely until an exemption from the
                  registration requirements of the Act is available or they are
                  subsequently registered, in which event the representation in
                  Paragraph (a) hereof shall terminate.

         (e)      CHAPARRAL NETWORK STORAGE, INC. is not obligated to comply
                  with the registration requirements of the Act or with the
                  requirements for an exemption under Regulation A under the Act
                  for my benefit.


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Name                                                        Date


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