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                                                               Exhibit 10.28

                               ACT NETWORKS, INC.
           1997 NON-EXECUTIVE OFFICER STOCK OPTION/STOCK ISSUANCE PLAN


                                   ARTICLE ONE

                               GENERAL PROVISIONS


        I.        PURPOSE OF THE PLAN

                  This 1997 Non-Executive Officer Stock Option/Stock Issuance
Plan is intended to promote the interests of ACT Networks, Inc., a Delaware
corporation, by providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation.

                  Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.

       II.        STRUCTURE OF THE PLAN

                  A.       The Plan shall be divided into two separate equity 
programs:

                           (i)  the Discretionary Option Grant Program under
                  which eligible persons may, at the discretion of the Plan
                  Administrator, be granted options to purchase shares of Common
                  Stock, and

                           (ii) the Stock Issuance Program under which eligible
                  persons may, at the discretion of the Plan Administrator, be
                  issued shares of Common Stock directly, either through the
                  immediate purchase of such shares or as a bonus for services
                  rendered the Corporation (or any Parent or Subsidiary).

                  B.       The provisions of Articles One and Four shall apply 
to all equity programs under the Plan and shall accordingly govern the interests
of all persons under the Plan.

      III.        ADMINISTRATION OF THE PLAN

                  A.       The Plan shall be administered by the Committee or 
the Board may retain the power to administer the Plan.
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                  B.       Members of the Committee shall serve for such period 
of time as the Board may determine and may be removed by the Board at any time.
The Board may also at any time terminate the functions of any Committee and
reassume all powers and authority previously delegated to such committee.

                  C.       The Plan Administrator shall have full power and 
authority (subject to the provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for proper administration of the Plan and
to make such determinations under, and issue such interpretations of, the
provisions of such programs and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan
shall be final and binding on all parties who have an interest in the Plan under
its jurisdiction or any option or stock issuance thereunder.

                  D.       Service on the Committee shall constitute service as 
a Board member, and members of such committee shall accordingly be entitled to
full indemnification and reimbursement as Board members for their service on
such committee. No member of the Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any option grants or
stock issuances under the Plan.

       IV.        ELIGIBILITY

                  A.       The persons eligible to participate in the Plan are 
as follows:

                           (i)  Employees (other than officers of the
                  Corporation), and

                           (ii) consultants and other independent advisors who
                  provide services to the Corporation (or any Parent or
                  Subsidiary).

                  B.       The Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority (subject to the
provisions of the Plan) to determine, (i) with respect to the option grants
under the Discretionary Option Grant Program, which eligible persons are to
receive option grants, the time or times when such option grants are to be made,
the number of shares to be covered by each such grant, the time or times when
each option is to become exercisable, the vesting schedule (if any) applicable
to the option shares and the maximum term for which the option is to remain
outstanding and (ii) with respect to stock issuances under the Stock Issuance
Program, which eligible persons are to receive stock issuances, the time or
times when such issuances are to be made, the number of shares to be issued to
each Participant, the vesting schedule (if any) applicable to the issued shares
and the consideration to be paid for such shares.


                                       2.
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                  C.       The Plan Administrator shall have the absolute 
discretion either to grant options in accordance with the Discretionary Option
Grant Program or to effect stock issuances in accordance with the Stock Issuance
Program.

        V.        STOCK SUBJECT TO THE PLAN

                  A.       The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Corporation on the open market. The maximum number of shares of Common
Stock reserved for issuance over the term of the Plan shall not exceed 250,000
shares.

                  B.       Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the extent those
options expire or terminate for any reason prior to exercise in full. Unvested
shares issued under the Plan and subsequently cancelled or repurchased by the
Corporation, at the original issue price paid per share, pursuant to the
Corporation's repurchase rights under the Plan, shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants or direct stock issuances under the Plan. However, should the exercise
price of an option under the Plan be paid with shares of Common Stock or should
shares of Common Stock otherwise issuable under the Plan be withheld by the
Corporation in satisfaction of the withholding taxes incurred in connection with
the exercise of an option or the vesting of a stock issuance under the Plan,
then the number of shares of Common Stock available for issuance under the Plan
shall be reduced by the gross number of shares for which the option is exercised
or which vest under the stock issuance, and not by the net number of shares of
Common Stock issued to the holder of such option or stock issuance.

                  C.       Should any change be made to the Common Stock by 
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan and (ii) the number and/or class of securities and the
exercise price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.


                                       3.
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                                   ARTICLE TWO

                       DISCRETIONARY OPTION GRANT PROGRAM


        I.        OPTION TERMS

                  Each option shall be a Non-Statutory Option and shall be
evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the
terms specified below.

                  A.       Exercise Price.

                           1.       The exercise price per share shall be fixed 
by the Plan Administrator but shall not be less than eighty-five percent (85%)
of the Fair Market Value per share of Common Stock on the option grant date.

                           2.       The exercise price shall become immediately 
due upon exercise of the option and shall, subject to the provisions of Section
I of Article Four and the documents evidencing the option, be payable in one or
more of the forms specified below:

                                    (i)   cash or check made payable to the
                           Corporation,

                                    (ii)  shares of Common Stock held for the
                           requisite period necessary to avoid a charge to the
                           Corporation's earnings for financial reporting
                           purposes and valued at Fair Market Value on the
                           Exercise Date, or

                                    (iii) to the extent the option is exercised
                           for vested shares, through a special sale and
                           remittance procedure pursuant to which the Optionee
                           shall concurrently provide irrevocable written
                           instructions to (a) a Corporation-designated
                           brokerage firm to effect the immediate sale of the
                           purchased shares and remit to the Corporation, out of
                           the sale proceeds available on the settlement date,
                           sufficient funds to cover the aggregate exercise
                           price payable for the purchased shares plus all
                           applicable Federal, state and local income and
                           employment taxes required to be withheld by the
                           Corporation by reason of such exercise and (b) the
                           Corporation to deliver the certificates for the
                           purchased shares directly to such brokerage firm in
                           order to complete the sale transaction.

                  Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.

                  B.       Exercise and Term of Options.  Each option shall be 
exercisable at such time or times, during such period and for such number of
shares as shall be determined by


                                       4.
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the Plan Administrator and set forth in the documents evidencing the option.
However, no option shall have a term in excess of ten (10) years measured from
the option grant date.

                  C.       Effect of Termination of Service.

                           1. The following provisions shall govern the exercise
of any options held by the Optionee at the time of cessation of Service or
death:

                                    (i)   Any option outstanding at the time of
                           the Optionee's cessation of Service for any reason
                           shall remain exercisable for such period of time
                           thereafter as shall be determined by the Plan
                           Administrator and set forth in the documents
                           evidencing the option, but no such option shall be
                           exercisable after the expiration of the option term.

                                    (ii)  Any option exercisable in whole or in
                           part by the Optionee at the time of death may be
                           subsequently exercised by the personal representative
                           of the Optionee's estate or by the person or persons
                           to whom the option is transferred pursuant to the
                           Optionee's will or in accordance with the laws of
                           descent and distribution.

                                    (iii) During the applicable post-Service
                           exercise period, the option may not be exercised in
                           the aggregate for more than the number of vested
                           shares for which the option is exercisable on the
                           date of the Optionee's cessation of Service. Upon the
                           expiration of the applicable exercise period or (if
                           earlier) upon the expiration of the option term, the
                           option shall terminate and cease to be outstanding
                           for any vested shares for which the option has not
                           been exercised. However, the option shall,
                           immediately upon the Optionee's cessation of Service,
                           terminate and cease to be outstanding to the extent
                           it is not exercisable for vested shares on the date
                           of such cessation of Service.

                                    (iv)  Should the Optionee's Service be
                           terminated for Misconduct, then all outstanding
                           options held by the Optionee shall terminate
                           immediately and cease to be outstanding.

                                    (v)   In the event of an Involuntary
                           Termination following a Corporate Transaction, the
                           provisions of Section III of this Article Two shall
                           govern the period for which the outstanding options
                           are to remain exercisable following the Optionee's
                           cessation of Service and shall supersede any
                           provisions to the contrary in this section.

                           2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:


                                       5.
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                                    (i)  extend the period of time for which the
                           option is to remain exercisable following the
                           Optionee's cessation of Service from the period
                           otherwise in effect for that option to such greater
                           period of time as the Plan Administrator shall deem
                           appropriate, but in no event beyond the expiration of
                           the option term, and/or

                                    (ii) permit the option to be exercised,
                           during the applicable post-Service exercise period,
                           not only with respect to the number of vested shares
                           of Common Stock for which such option is exercisable
                           at the time of the Optionee's cessation of Service
                           but also with respect to one or more additional
                           installments in which the Optionee would have vested
                           under the option had the Optionee continued in
                           Service.

                  D.       Stockholder Rights.  The holder of an option shall 
have no stockholder rights with respect to the shares subject to the option
until such person shall have exercised the option, paid the exercise price and
become a holder of record of the purchased shares.

                  E.       Repurchase Rights. The Plan Administrator shall have 
the discretion to grant options which are exercisable for unvested shares of
Common Stock. Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The terms upon which
such repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the document
evidencing such repurchase right.

                  F.       Limited Transferability of Options. During the 
lifetime of the Optionee, Options shall be exercisable only by the Optionee and
shall not be assignable or transferable other than (i) by will or by the laws of
descent and distribution following the Optionee's death or (ii) to one or more
members of the Optionee's immediate family or to a trust established exclusively
for one or more such family members in connection with the Optionee's estate
plan. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.

       II.        CORPORATE TRANSACTION/CHANGE IN CONTROL

                  A.       In the event of any Corporate Transaction, each 
outstanding option shall automatically accelerate so that each such option
shall, immediately prior to the effective date of the Corporate Transaction,
become fully exercisable for all of the shares of Common Stock at the time
subject to such option and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. However, an outstanding option shall


                                       6.
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NOT so accelerate if and to the extent: (i) such option is, in connection with
the Corporate Transaction, either to be assumed by the successor corporation (or
parent thereof) or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation (or parent thereof), (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such option or (iii) the
acceleration of such option is subject to other limitations imposed by the Plan
Administrator at the time of the option grant. The determination of option
comparability under clause (i) above shall be made by the Plan Administrator,
and its determination shall be final, binding and conclusive.

                  B.       All outstanding repurchase rights shall also 
terminate automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of any Corporate
Transaction, except to the extent: (i) those repurchase rights are to be
assigned to the successor corporation (or parent thereof) in connection with
such Corporate Transaction or (ii) such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase
right is issued.

                  C.       Immediately following the consummation of the 
Corporate Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).

                  D.       Each option which is assumed in connection with a 
Corporate Transaction shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the number and
class of securities available for issuance under the Plan on both an aggregate
and per Optionee basis following the consummation of such Corporate Transaction
and (ii) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
the same.

                  E.       Any options which are assumed or replaced in the 
Corporate Transaction and do not otherwise accelerate at that time shall
automatically accelerate (and any of the Corporation's outstanding repurchase
rights which do not otherwise terminate at the time of the Corporate Transaction
shall automatically terminate and the shares of Common Stock subject to those
terminated rights shall immediately vest in full) in the event the Optionee's
Service should subsequently terminate by reason of an Involuntary Termination
within eighteen (18) months following the effective date of such Corporate
Transaction. Any options so accelerated shall remain exercisable for
fully-vested shares until the earlier of (i) the expiration of the option term
or (ii) the expiration of the one (1)-year period measured from the effective
date of the Involuntary Termination.


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                  F.       The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to (i) provide for the automatic acceleration of one
or more outstanding options (and the automatic termination of one or more
outstanding repurchase rights with the immediate vesting of the shares of Common
Stock subject to those rights) in connection with a Change in Control or (ii) to
condition such acceleration upon the Involuntary Termination of the Optionee's
Service within a specified period (not to exceed eighteen (18) months) following
the effective date of a Change in Control. Any options so accelerated shall
remain fully exercisable until the expiration or sooner termination of the
option term.

                  G.       The grant of options under the Discretionary Option 
Grant Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

      III.        CANCELLATION AND REGRANT OF OPTIONS

                  The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected option holders,
the cancellation of any or all outstanding options under the Discretionary
Option Grant Program and to grant in substitution new options covering the same
or different number of shares of Common Stock but with an exercise price per
share based on the Fair Market Value per share of Common Stock on the new option
grant date.

       IV.        STOCK APPRECIATION RIGHTS

                  A.       The Plan Administrator shall have full power and 
authority to grant to selected Optionees tandem stock appreciation rights.

                  B.       The following terms shall govern the grant and 
exercise of tandem stock appreciation rights:

                                    (i) One or more Optionees may be granted the
                           right, exercisable upon such terms as the Plan
                           Administrator may establish, to elect between the
                           exercise of the underlying option for shares of
                           Common Stock and the surrender of that option in
                           exchange for a distribution from the Corporation in
                           an amount equal to the excess of (a) the Fair Market
                           Value (on the option surrender date) of the number of
                           shares in which the Optionee is at the time vested
                           under the surrendered option (or surrendered portion
                           thereof) over (b) the aggregate exercise price
                           payable for such shares.

                                    (ii) No such option surrender shall be
                           effective unless it is approved by the Plan
                           Administrator, either at the time of the option
                           surrender or at any earlier time. If the surrender is
                           so approved, then the


                                       8.
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                           distribution to which the Optionee shall be entitled
                           may be made in shares of Common Stock valued at Fair 
                           Market Value on the option surrender date, in cash, 
                           or partly in shares and partly in cash, as the Plan 
                           Administrator shall in its sole discretion deem 
                           appropriate.

                                    (iii) If the surrender of an option is
                           rejected by the Plan Administrator, then the Optionee
                           shall retain whatever rights the Optionee had under
                           the surrendered option (or surrendered portion
                           thereof) on the option surrender date and may
                           exercise such rights at any time prior to the later
                           of (a) five (5) business days after the receipt of
                           the rejection notice or (b) the last day on which the
                           option is otherwise exercisable in accordance with
                           the terms of the documents evidencing such option,
                           but in no event may such rights be exercised more
                           than ten (10) years after the option grant date.


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                                  ARTICLE THREE

                             STOCK ISSUANCE PROGRAM


        I.        STOCK ISSUANCE TERMS

                  Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.

                  A.       Purchase Price.

                           1.       The purchase price per share shall be fixed 
by the Plan Administrator, but shall not be less than one hundred percent (100%)
of the Fair Market Value per share of Common Stock on the issuance date.

                           2.       Subject to the provisions of Section I of 
Article Four, shares of Common Stock may be issued under the Stock Issuance
Program for any of the following items of consideration which the Plan
Administrator may deem appropriate in each individual instance:

                                    (i)  cash or check made payable to the
                           Corporation, or

                                    (ii) past services rendered to the
                           Corporation (or any Parent or Subsidiary).

                  B.       Vesting Provisions.

                           1.       Shares of Common Stock issued under the 
Stock Issuance Program may, in the discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or more
installments over the Participant's period of Service or upon attainment of
specified performance objectives. The elements of the vesting schedule
applicable to any unvested shares of Common Stock issued under the Stock
Issuance Program, namely:

                                    (i)  the Service period to be completed by
                           the Participant or the performance objectives to be
                           attained,

                                    (ii) the number of installments in which the
                           shares are to vest,


                                       10.
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                                    (iii) the interval or intervals (if any)
                           which are to lapse between installments, and

                                    (iv)  the effect which death, Permanent
                           Disability or other event designated by the Plan
                           Administrator is to have upon the vesting schedule,

shall be determined by the Plan Administrator and incorporated into the Stock 
Issuance Agreement.

                           2.       Any new, substituted or additional 
securities or other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
the Participant's unvested shares of Common Stock by reason of any stock
dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration shall be issued subject to (i) the
same vesting requirements applicable to the Participant's unvested shares of
Common Stock and (ii) such escrow arrangements as the Plan Administrator shall
deem appropriate.

                           3.       The Participant shall have full stockholder 
rights with respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the Participant's interest in
those shares is vested. Accordingly, the Participant shall have the right to
vote such shares and to receive any regular cash dividends paid on such shares.

                           4.       Should the Participant cease to remain in 
Service while holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives not be attained
with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.

                           5.       The Plan Administrator may in its discretion
waive the surrender and cancellation of one or more unvested shares of Common
Stock (or other assets attributable thereto) which would otherwise occur upon
the cessation of the Participant's Service or the non-completion of the vesting
schedule applicable to such shares. Such waiver shall result in the immediate
vesting of the Participant's interest in the shares of Common Stock as to which
the waiver applies. Such waiver may be effected at any time,


                                       11.
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whether before or after the Participant's cessation of Service or the attainment
or non-attainment of the applicable performance objectives.

       II.        CORPORATE TRANSACTION/CHANGE IN CONTROL

                  A.       All of the outstanding repurchase rights under the 
Stock Issuance Program shall terminate automatically, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent (i) those
repurchase rights are assigned to the successor corporation (or parent thereof)
in connection with such Corporate Transaction or (ii) such accelerated vesting
is precluded by other limitations imposed in the Stock Issuance Agreement.

                  B.       Any repurchase rights that are assigned in the 
Corporate Transaction shall automatically terminate, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event the Participant's Service should subsequently terminate by reason
of an Involuntary Termination within eighteen (18) months following the
effective date of such Corporate Transaction.

                  C.       The Plan Administrator shall have the discretion,
exercisable either at the time the unvested shares are issued or at any time
while the Corporation's repurchase right remains outstanding, to provide for the
automatic termination of one or more outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those rights upon a
Change in Control or upon the Involuntary Termination of the Participant's
Service within a specified period (not to exceed eighteen (18) months) following
the effective date of any Change in Control.

      III.        SHARE ESCROW/LEGENDS

                  Unvested shares may, in the Plan Administrator's discretion,
be held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.


                                       12.
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                                  ARTICLE FOUR

                                  MISCELLANEOUS


        I.        FINANCING

                  A.       The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the Discretionary Option
Grant Program or the purchase price for shares issued under the Stock Issuance
Program by delivering a promissory note payable in one or more installments. The
terms of any such promissory note (including the interest rate and the terms of
repayment) shall be established by the Plan Administrator in its sole
discretion. Promissory notes may be authorized with or without security or
collateral. In all events, the maximum credit available to the Optionee or
Participant may not exceed the sum of (i) the aggregate option exercise price or
purchase price payable for the purchased shares plus (ii) any Federal, state and
local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.

                  B.       The Plan Administrator may, in its discretion, 
determine that one or more such promissory notes shall be subject to forgiveness
by the Corporation in whole or in part upon such terms as the Plan Administrator
may deem appropriate.

       II.        TAX WITHHOLDING

                  A.       The Corporation's obligation to deliver shares of 
Common Stock upon the exercise of options or stock appreciation rights or upon
the issuance or vesting of such shares under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income and employment
tax withholding requirements.

                  B.       The Plan Administrator may, in its discretion, 
provide any or all holders of options or unvested shares of Common Stock under
the Plan with the right to use shares of Common Stock in satisfaction of all or
part of the Taxes incurred by such holders in connection with the exercise of
their options or the vesting of their shares. Such right may be provided to any
such holder in either or both of the following formats:

                           (i)  Stock Withholding: The election to have the
                  Corporation withhold, from the shares of Common Stock
                  otherwise issuable upon the exercise of such option or the
                  vesting of such shares, a portion of those shares with an
                  aggregate Fair Market Value equal to the percentage of the
                  Taxes (not to exceed one hundred percent (100%)) designated by
                  the holder.


                                       13.
<PAGE>   14
                           (ii) Stock Delivery: The election to deliver to the
                  Corporation, at the time the option is exercised or the shares
                  vest, one or more shares of Common Stock previously acquired
                  by such holder (other than in connection with the option
                  exercise or share vesting triggering the Taxes) with an
                  aggregate Fair Market Value equal to the percentage of the
                  Taxes (not to exceed one hundred percent (100%)) designated by
                  the holder.

      III.        EFFECTIVE DATE AND TERM OF THE PLAN

                  A.       The Plan shall become effective on the Effective 
Date.

                  B.       The Plan shall terminate upon the earliest of (i) 
April 1, 2007, (ii) the date on which all shares available for issuance under
the Plan shall have been issued pursuant to the exercise of the options or the
issuance of shares (whether vested or unvested) under the Plan or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. Upon such Plan termination, all options and unvested stock
issuances outstanding on such date shall thereafter continue to have force and
effect in accordance with the provisions of the documents evidencing such
options or issuances.

       IV.        AMENDMENT OF THE PLAN

                  The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations with
respect to stock options, stock appreciation rights or unvested stock issuances
at the time outstanding under the Plan unless the Optionee or the Participant
consents to such amendment or modification.

        V.        USE OF PROCEEDS

                  Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general corporate
purposes.

       VI.        REGULATORY APPROVALS

                  A.       The implementation of the Plan, the granting of any 
option or stock appreciation right under the Plan and the issuance of any shares
of Common Stock (i) upon the exercise of any option or stock appreciation right
or (ii) under the Stock Issuance Program shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the options and stock appreciation rights
granted under it and the shares of Common Stock issued pursuant to it.

                  B.       No shares of Common Stock or other assets shall be 
issued or delivered under the Plan unless and until there shall have been
compliance with all applicable requirements of Federal and state securities
laws, including the filing and effectiveness of


                                       14.
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the Form S-8 registration statement for the shares of Common Stock issuable
under the Plan, and all applicable listing requirements of any stock exchange
(or the Nasdaq National Market, if applicable) on which Common Stock is then
listed for trading.

      VII.        NO EMPLOYMENT/SERVICE RIGHTS

                  Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.


                                       15.
<PAGE>   16
                                    APPENDIX

                  The following definitions shall be in effect under the Plan:

         A.       BOARD shall mean the Corporation's Board of Directors.

         B.       CHANGE IN CONTROL shall mean a change in ownership or control 
of the Corporation effected through either of the following transactions:

                           (i)  the acquisition, directly or indirectly, by any
                  person or related group of persons (other than the Corporation
                  or a person that directly or indirectly controls, is
                  controlled by, or is under common control with, the
                  Corporation), of beneficial ownership (within the meaning of
                  Rule 13d-3 of the 1934 Act) of securities possessing more than
                  fifty percent (50%) of the total combined voting power of the
                  Corporation's outstanding securities pursuant to a tender or
                  exchange offer made directly to the Corporation's
                  stockholders, or

                           (ii) a change in the composition of the Board over a
                  period of thirty-six (36) consecutive months or less such that
                  a majority of the Board members ceases, by reason of one or
                  more contested elections for Board membership, to be comprised
                  of individuals who either (A) have been Board members
                  continuously since the beginning of such period or (B) have
                  been elected or nominated for election as Board members during
                  such period by at least a majority of the Board members
                  described in clause (A) who were still in office at the time
                  the Board approved such election or nomination.

         C.       CODE shall mean the Internal Revenue Code of 1986, as amended.

         D.       COMMITTEE shall mean the committee of two (2) or more Board 
members appointed by the Board to administer the Plan.

         E.       COMMON STOCK shall mean the Corporation's common stock.

         F.       CORPORATE TRANSACTION shall mean either of the following 
stockholder-approved transactions to which the Corporation is a party:

                           (i)  a merger or consolidation in which securities
                  possessing more than fifty percent (50%) of the total combined
                  voting power of the Corporation's outstanding securities are
                  transferred to a person or persons different from the persons
                  holding those securities immediately prior to such
                  transaction; or


                                      A-1.
<PAGE>   17
                           (ii) the sale, transfer or other disposition of all
                  or substantially all of the Corporation's assets in complete
                  liquidation or dissolution of the Corporation.

         G.       CORPORATION shall mean ACT Networks, Inc., a Delaware 
corporation.

         H.       DISCRETIONARY OPTION GRANT PROGRAM shall mean the 
discretionary option grant program in effect under the Plan.

         I.       EFFECTIVE DATE shall mean April 2, 1997, the date on which the
Plan was adopted by the Board.

         J.       EMPLOYEE shall mean an individual who is in the employ of the 
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

         K.       EXERCISE DATE shall mean the date on which the Corporation 
shall have received written notice of the option exercise.

         L.       FAIR MARKET VALUE per share of Common Stock on any relevant 
date shall be determined in accordance with the following provisions:

                           (i)  If the Common Stock is at the time traded on the
                  Nasdaq National Market, then the Fair Market Value shall be
                  the closing selling price per share of Common Stock on the
                  date in question, as such price is reported by the National
                  Association of Securities Dealers on the Nasdaq National
                  Market or any successor system. If there is no closing selling
                  price for the Common Stock on the date in question, then the
                  Fair Market Value shall be the closing selling price on the
                  last preceding date for which such quotation exists.

                           (ii) If the Common Stock is at the time listed on any
                  Stock Exchange, then the Fair Market Value shall be the
                  closing selling price per share of Common Stock on the date in
                  question on the Stock Exchange determined by the Plan
                  Administrator to be the primary market for the Common Stock,
                  as such price is officially quoted in the composite tape of
                  transactions on such exchange. If there is no closing selling
                  price for the Common Stock on the date in question, then the
                  Fair Market Value shall be the closing selling price on the
                  last preceding date for which such quotation exists.

         M.       INVOLUNTARY TERMINATION shall mean the termination of the 
Service of any individual which occurs by reason of:


                                      A-2.
<PAGE>   18
                           (i)  such individual's involuntary dismissal or
                  discharge by the Corporation for reasons other than
                  Misconduct, or

                           (ii) such individual's voluntary resignation
                  following (A) a change in his or her position with the
                  Corporation which materially reduces his or her level of
                  responsibility, (B) a reduction in his or her level of
                  compensation (including base salary, fringe benefits and
                  target bonuses under any corporate-performance based bonus or
                  incentive programs) by more than fifteen percent (15%) or (C)
                  a relocation of such individual's place of employment by more
                  than fifty (50) miles, provided and only if such change,
                  reduction or relocation is effected by the Corporation without
                  the individual's consent.

         N.       MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).

         O.       1934 ACT shall mean the Securities Exchange Act of 1934, as 
amended.

         P.       NON-STATUTORY OPTION shall mean an option not intended to 
satisfy the requirements of Code Section 422.

         Q.       OPTIONEE shall mean any person to whom an option is granted 
under the Discretionary Option Grant Program.

         R.       PARENT shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

         S.       PARTICIPANT shall mean any person who is issued shares of 
Common Stock under the Stock Issuance Program.

         T.       PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.


                                      A-3.
<PAGE>   19



         U.       PLAN shall mean the Corporation's 1997 Non-Executive Officer 
Stock Option/Stock Issuance Plan, as set forth in this document.

         V.       PLAN ADMINISTRATOR shall mean the particular entity, whether 
the Committee or the Board, which is authorized to administer the Plan to the
extent such entity is carrying out its administrative functions thereunder.

         W.       SERVICE shall mean the performance of services for the 
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.

         X.       STOCK EXCHANGE shall mean either the American Stock Exchange 
or the New York Stock Exchange.

         Y.       STOCK ISSUANCE AGREEMENT shall mean the agreement entered into
by the Corporation and the Participant at the time of issuance of shares of
Common Stock under the Stock Issuance Program.

         Z.       STOCK ISSUANCE PROGRAM shall mean the stock issuance program 
in effect under the Plan.

         AA.      SUBSIDIARY shall mean any corporation, partnership, joint 
venture or other business entity in which the Corporation owns, directly or
indirectly, stock or a capital or profit interest.

         AB.      TAKE-OVER PRICE shall mean the greater of (i) the Fair Market 
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over.

         AC.      TAXES shall mean the Federal, state and local income and 
employment tax liabilities incurred by the holder of options or unvested shares
of Common Stock in connection with the exercise of those options or the vesting
of those shares.


                                      A-4.