TABLE OF CONTENTS     **Page**ARTICLE 1.    INTRODUCTION  1ARTICLE 2.    ADMINISTRATION  12.1  Committee Composition  12.2  Committee Responsibilities  12.3  Committee for Non-Officer Grants  1ARTICLE 3.    SHARES AVAILABLE FOR GRANTS  23.1  Basic Limitation  23.2  Annual Increase in Shares  23.3  Additional Shares  23.4  Dividend Equivalents  2ARTICLE 4.    ELIGIBILITY  24.1  Incentive Stock Options  24.2  Other Grants  3ARTICLE 5.    OPTIONS  35.1  Stock Option Agreement  35.2  Number of Shares  35.3  Exercise Price  35.4  Exercisability and Term  35.5  Modification or Assumption of Options  35.6  Buyout Provisions  4ARTICLE 6.    PAYMENT FOR OPTION SHARES  46.1  General Rule  46.2  Surrender of Stock  46.3  Exercise/Sale  46.4  Exercise/Pledge  46.5  Promissory Note  46.6  Other Forms of Payment  5ARTICLE 7.    STOCK APPRECIATION RIGHTS  57.1  SAR Agreement  57.2  Number of Shares  57.3  Exercise Price  57.4  Exercisability and Term  57.5  Exercise of SARs  57.6  Modification or Assumption of SARs  6i 
ARTICLE 8.    RESTRICTED SHARES  68.1  Restricted Stock Agreement  68.2  Payment for Awards  68.3  Vesting Conditions  68.4  Voting and Dividend Rights  6ARTICLE 9.    STOCK UNITS  69.1  Stock Unit Agreement  69.2  Payment for Awards  79.3  Vesting Conditions  79.4  Voting and Dividend Rights  79.5  Form and Time of Settlement of Stock Units  79.6  Death of Recipient  79.7  Creditors’ Rights  7ARTICLE 10.    CORPORATE TRANSACTION  810.1  Corporate Transaction  810.2  Award Termination  8ARTICLE 11.    AUTOMATIC OPTION GRANT PROGRAM  811.1  Option Terms  811.2  Corporate Transaction  911.3  Remaining Terms  10ARTICLE 12.    PROTECTION AGAINST DILUTION  1012.1  Adjustments  1012.2  Dissolution or Liquidation  1012.3  Reorganizations  10ARTICLE 13.    DEFERRAL OF AWARDS  11ARTICLE 14.    AWARDS UNDER OTHER PLANS.  11ARTICLE 15.    PAYMENT OF DIRECTOR’S FEES IN SECURITIES  1215.1  Effective Date  1215.2  Elections to Receive Nonstatutory Options, Restricted Shares or Stock Units  1215.3  Number and Terms of Nonstatutory Options, Restricted Shares or Stock Units  12ARTICLE 16.    LIMITATION ON RIGHTS  1216.1  Retention Rights  1216.2  Stockholders’ Rights  1216.3  Regulatory Requirements  12ARTICLE 17.    WITHHOLDING TAXES  1217.1  General  1217.2  Share Withholding  13ii 
ARTICLE 18.    FUTURE OF THE PLAN  1318.1 Term of the Plan  1318.2 Amendment or Termination  13ARTICLE 19.    LIMITATION ON PAYMENTS  1319.1 Scope of Limitation  1319.2 Basic Rule  1319.3 Reduction of Payments  1419.4 Overpayments and Underpayments  1419.5 Related Corporations  14ARTICLE 20.    DEFINITIONS  15iii 
 **NETOPIA, INC.** **2002 EQUITY INCENTIVE PLAN** **ARTICLE 1.    INTRODUCTION.** The Board adopted the Plan effective January 30, 2002. The purpose of the Plan is to promote the long-term success of the Company and thecreation of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptionalqualifications and (c) linking Employees, Outside Directors and Consultants directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares, StockUnits, Options (which may constitute incentive stock options or nonstatutory stock options) or stock appreciation rights.  ThePlan shall be governed by, and construed in accordance with, the laws of the State of Delaware (except their choice-of-law provisions).  **ARTICLE 2.    ADMINISTRATION.** **2.1    ****CommitteeComposition.**    The Committee shall administer the Plan. The Committee shall consist exclusively of two or more directors of the Company, who shall be appointed by the Board. In addition, the composition of the Committeeshall satisfy:  (a)    Such requirements as the Securities and Exchange Commission mayestablish for administrators acting under plans intended to qualify for exemption under Rule 16b–3 (or its successor) under the Exchange Act; and  (b)    Such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemptionunder section 162(m)(4)(C) of the Code.  **2.2    ****CommitteeResponsibilities.**    The Committee shall (a) select the Employees, Outside Directors and Consultants who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features andconditions of such Awards, (c) interpret the Plan and (d) make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee’sdeterminations under the Plan shall be final and binding on all persons.  **2.3    ****Committee forNon-Officer Grants.**    The Board may also appoint a secondary committee of the Board, which shall be composed of one or more directors of the Company who need not satisfy the requirements of Section 2.1. Such secondarycommittee may administer the Plan with respect to Employees and Consultants who are not considered officers 1 
or directors of the Company under section 16 of the Exchange Act, may grant Awards under the Plan to such Employees and Consultants and may determine all features and conditions of such Awards.Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee.  **ARTICLE3.    SHARES AVAILABLE FOR GRANTS.** **3.1    BasicLimitation.**    Shares of Common Stock issued pursuant to the Plan may be authorized but unissued shares or treasury shares. The aggregate number of Options, SARs, Stock Units and Restricted Shares awarded under the Plan shallnot exceed (a) 750,000 plus (b) the additional shares of Common Stock described in Sections 3.2 and 3.3. The limitations of this Section 3.1 and Section 3.2 shall be subject to adjustment pursuant to Article 12.  **3.2    Annual Increase in Shares.**    As of the first trading day of each year, commencing with the year2003, the aggregate number of Options, SARs, Stock Units and Restricted Shares that may be awarded under the Plan shall automatically increase by a number equal to 4.75% of the total number of shares of Common Stock outstanding on December 31 of thepreceding year, provided, however, that such increase shall in no event exceed 1,000,000 shares of Common Stock per year.  **3.3    Additional Shares.**    If Restricted Shares or shares of Common Stock issued upon the exercise of Options are forfeited, then such shares of Common Stock shall again become available forAwards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any other reason before being exercised, then the corresponding shares of Common Stock shall again become available for Awards under the Plan. If Stock Units aresettled, then only the number of shares of Common Stock (if any) actually issued in settlement of such Stock Units shall reduce the number available under Section 3.1 and the balance shall again become available for Awards under the Plan. If SARsare exercised, then only the number of shares of Common Stock (if any) actually issued in settlement of such SARs shall reduce the number available under Section 3.1 and the balance shall again become available for Awards under the Plan. Theforegoing notwithstanding, the aggregate number of shares of Common Stock that may be issued under the Plan upon the exercise of Incentive Options shall not be increased when Restricted Shares or other shares of Common Stock are forfeited.**** **3.4    Dividend Equivalents.    **Any dividend equivalents paid or credited underthe Plan shall not be applied against the number of Restricted Shares, Stock Units, Options or SARs available for Awards, whether or not such dividend equivalents are converted into Stock Units.  **ARTICLE 4.    ELIGIBILITY.** **4.1    Incentive Stock Options.**    Only Employees who are common–law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of Incentive Options. In addition,an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries 2 
shall not be eligible for the grant of an Incentive Option unless the requirements set forth in section 422(c)(6) of the Code are satisfied.  **4.2    Other Grants.**    Only Employees, Outside Directors and Consultants shall be eligible for the grant of Restricted Shares, StockUnits, Nonstatutory Options or SARs.  **ARTICLE 5.    OPTIONS.** **5.1    Stock Option Agreement.**    Each grant of an Option under the Plan shall be evidenced by a StockOption Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The Stock Option Agreement shall specify whetherthe Option is an Incentive Option or a Nonstatutory Option. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee’s othercompensation. A Stock Option Agreement may provide that a new Option will be granted automatically to the Optionee when he or she exercises a prior Option and pays the Exercise Price in the form described in Section 6.2.  **5.2    Number of Shares.**    Each Stock Option Agreement shall specify the number of shares of CommonStock subject to the Option and shall provide for the adjustment of such number in accordance with Article 12. Options granted to any Optionee in any two calendar year period beginning with the two-year period commencing January 1, 2002 shall notcover more than 750,000 shares of Common Stock. The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.  **5.3    Exercise Price.**    Each Stock Option Agreement shall specify the Exercise Price; provided that the Exercise Price under an IncentiveOption shall in no event be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant and the Exercise Price under a Nonstatutory Option shall in no event be less than 85% of the Fair Market Value of a share of CommonStock on the date of grant.  **5.4    Exercisability and Term.**    Each Stock OptionAgreement shall specify the date or event when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an Incentive Option shall in no eventexceed 10 years from the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of itsterm in the event of the termination of the Optionee’s Service. Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited.  **5.5    Modification or Assumption of Options.**    Within the limitations of the Plan, theCommittee may modify, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new options for the same or a different number ofshares and at the same or a different exercise price. The foregoing notwithstanding, no modification of an Option shall, 3 
without the consent of the Optionee, alter or impair his or her rights or obligations under such Option.  **5.6    Buyout Provisions.**    The Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize anOptionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish.  **ARTICLE 6.    PAYMENT FOR OPTION SHARES.** **6.1    General Rule.**    The entire Exercise Price of shares of Common Stock issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such shares of CommonStock are purchased, except as follows:  (a)    In the case of an Incentive Option grantedunder the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 6.  (b)    In the case of a Nonstatutory Option, the Committee may at any time accept payment in anyform(s) described in this Article 6.  **6.2    Surrender of Stock.**    To the extentthat this Section 6.2 is applicable, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, shares of Common Stock that are already owned by the Optionee. Such shares of Common Stock shall be valued attheir Fair Market Value on the date when the new shares of Common Stock are purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of, shares of Common Stock in payment of the Exercise Price if such action would causethe Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes.  **6.3    Exercise/Sale.**    To the extent that this Section 6.3 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (ona form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the shares of Common Stock being purchased under the Plan and to deliver all or part of the sales proceeds to theCompany.  **6.4    Exercise/Pledge.**    To the extent that this Section 6.4 isapplicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to pledge all or part of the shares of Common Stock being purchased under the Planto a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company.  **6.5    Promissory Note.**    To the extent that this Section 6.5 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering(on a form prescribed by the Company) a full-recourse promissory note. However, the par value of the shares of Common Stock being purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents. 4 
 **6.6    Other Forms of Payment.**    To the extentthat this Section 6.6 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid in any other form that is consistent with applicable laws, regulations and rules.  **ARTICLE 7.    STOCK APPRECIATION RIGHTS.** **7.1    SAR Agreement.**    Each grant of an SAR under the Plan shall be evidenced by an SAR Agreement between the Optionee and the Company. Such SAR shall be subject to all applicable terms ofthe Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in theOptionee’s other compensation.  **7.2    Number of Shares.**    Each SARAgreement shall specify the number of shares of Common Stock to which the SAR pertains and shall provide for the adjustment of such number in accordance with Article 12. SARs granted to any Optionee in any two calendar year period beginning fromJanuary 1, 2002 shall in no event pertain to more than 750,000 shares of Common Stock. The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.  **7.3    Exercise Price.**    Each SAR Agreement shall specify the Exercise Price. An SAR Agreement mayspecify an Exercise Price that varies in accordance with a predetermined formula while the SAR is outstanding.  **7.4    Exercisability and Term.**    Each SAR Agreement shall specify when all or any installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR. AnSAR Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of theOptionee’s Service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. An SAR may be included in an Incentive Option only at the time ofgrant but may be included in a Nonstatutory Option at the time of grant or thereafter. An SAR granted under the Plan may provide that it will be exercisable only in the event of a Corporate Transaction.  **7.5    Exercise of SARs.**    Upon exercise of an SAR, the Optionee (or any person having the right toexercise the SAR after his or her death) shall receive from the Company (a) shares of Common Stock, (b) cash or (c) a combination of shares of Common Stock and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Valueof shares of Common Stock received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the shares of Common Stock subject to the SARs exceeds the Exercise Price. If, onthe date when an SAR expires, the Exercise Price under such SAR is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of suchdate with respect to such portion. 5 
 **7.6    Modification or Assumption ofSARs.**    Within the limitations of the Plan, the Committee may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return forthe grant of new SARs for the same or a different number of shares and at the same or a different exercise price. The foregoing notwithstanding, no modification of an SAR shall, without the consent of the Optionee, alter or impair his or her rightsor obligations under such SAR.  **ARTICLE 8.    RESTRICTED SHARES.** **8.1    Restricted Stock Agreement.**    Each grant of Restricted Shares under the Plan shall be evidencedby a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of thevarious Restricted Stock Agreements entered into under the Plan need not be identical.  **8.2    Paymentfor Awards.**    Subject to the following sentence, Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents,full-recourse promissory notes, past services and future services. To the extent that an Award consists of newly issued Restricted Shares, the consideration shall consist exclusively of cash, cash equivalents or past services rendered to the Company(or a Parent or Subsidiary) or, for the amount in excess of the par value of such newly issued Restricted Shares, full-recourse promissory notes, as the Committee may determine.  **8.3    Vesting Conditions.**    Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or ininstallments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events. **8.4    Voting and Dividend Rights.**    The holders of Restricted Shares awardedunder the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Stock Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in additionalRestricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid.  **ARTICLE 9.    STOCK UNITS.** **9.1    Stock UnitAgreement.**    Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the recipient and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may besubject to any other terms that are not inconsistent with the Plan. The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical. Stock Units may be granted in consideration of a reduction in therecipient’s other compensation. 6 
 **9.2    Payment for Awards.**    To the extent thatan Award is granted in the form of Stock Units, no cash consideration shall be required of the Award recipients.  **9.3    Vesting Conditions.**    Each Award of Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified inthe Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events.  **9.4    Voting and Dividend Rights.**    The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any StockUnit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one share of Common Stock while theStock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of shares of Common Stock, or in a combination of both. Prior todistribution, any dividend equivalents that are not paid shall be subject to the same conditions and restrictions as the Stock Units to which they attach.  **9.5    Form and Time of Settlement of Stock Units.**    Settlement of vested Stock Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) anycombination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors. Methods of convertingStock Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Stock Units may be settled in a lump sum or in installments. The distribution mayoccur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date. The amount of a deferred distribution may be increased by an interest factor or by dividendequivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Article 12.  **9.6    Death of Recipient.**    Any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s beneficiary orbeneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed formwith the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after the recipient’s deathshall be distributed to the recipient’s estate.  **9.7    Creditors’Rights.**    A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions ofthe applicable Stock Unit Agreement. 7 
 **ARTICLE 10.    CORPORATE TRANSACTION.** **10.1    Corporate Transaction.**    The Committee may determine, at the time of granting an Option, SAR,Restricted Share, or Stock Unit or thereafter, that any such Award shall become exercisable as to all or part of the shares of Common Stock subject to such Award in the event that a Corporate Transaction occurs with respect to the Company or in theevent that the holder of such Award is no longer in Service after a Corporate Transaction. However, in the case of an Incentive Option, the acceleration of exercisability shall not occur without the Optionee’s written consent, unlessacceleration is provided for in the original Option Agreement. In addition, acceleration of exercisability may be required under Section 12.3.  **10.2    Award Termination.**    Any outstanding Award **not** (i) accelerated in connection with a Corporate Transaction, (ii) assumed by the successor corporation (orparent thereof) or (iii) replaced with a comparable Award for shares of the capital stock of the successor corporation (or parent thereof) shall vest in full immediately prior to the Corporate Transaction. Immediately following the consummation ofthe Corporate Transaction, all outstanding options, stock appreciation rights, and stock units shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof). The determination of Awardcomparability shall be made by the Committee, and its determination shall be final, binding and conclusive.**** **ARTICLE11.    AUTOMATIC OPTION GRANT PROGRAM.** **11.1    Option Terms** (a)    *Grant Dates*.    Each Outside Director who is first elected orappointed as a non-employee Board member on or after the Automatic Option Grant Program Effective Date shall automatically be granted, on the date of such initial election or appointment, a Nonstatutory Option to purchase 25,000 shares of CommonStock. Each Outside Director who is serving as a non–employee Board member on the date of each Annual Stockholders Meeting beginning with the first meeting occurring on or after the Automatic Option Grant Program Effective Date shall be grantedon the date of such meeting a Nonstatutory Option to purchase 6,000 shares of Common Stock. A non-employee Board member who has previously been in the employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to receive aninitial option grant under the Automatic Option Grant Program, but shall be eligible for annual option grants at each Annual Meeting of Stockholders following the Board member’s cessation of employment. A non-employee Board member shall not begranted an annual option if he or she received an initial option in that same calendar year.  (b)    *Exercise Price*.  (i)    The exercise price pershare shall be equal to one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date.  (ii)    The exercise price shall be payable in one or more of the alternative forms authorized under the Plan. Except to the extent the sale and remittance procedure specified thereunder isutilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 8 
 (c)    Option Term. Each option shall have a term of ten(10) years measured from the option grant date.  (d)    Exercise and Vesting of Options.Each initial option granted shall become exercisable in a series of four (4) annual installments over the Optionee’s period of continued service as a Board member, with the first such installment to become exercisable upon the Optionee’scompletion of one (1) year of Board service measured from the option grant date. Each annual option shall become exercisable in full upon the Optionee’s completion of one (1) year of Board service measured from the option grant date. (e)    Effect of Termination of Board Service. The following provisions shall govern theexercise of any options held by the Optionee at the time the Optionee ceases to serve as a Board member:  (i)    The Optionee (or, in the event of Optionee’s death, the Optionee’s designated beneficiary) shall have a twelve (12)-month period following the date of such cessation of Board service in which to exerciseeach such option.  (ii)    During the twelve (12)-month exercise period, the option maynot be exercised in the aggregate for more than the number of vested shares of Common Stock for which the option is exercisable at the time of the Optionee’s cessation of Board service.  (iii)    Should the Optionee cease to serve as a Board member by reason of death or Permanent Disability, then all shares at the time subject to theoption shall immediately vest and become exercisable so that such option may, during the twelve (12)-month exercise period following such cessation of Board service, be exercised for all or any portion of such shares as fully-vested shares of CommonStock.  (iv)    In no event shall the option remain exercisable after the expiration ofthe option term. Upon the expiration of the twelve (12)-month 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 beenexercised. However, the option shall, immediately upon the Optionee’s cessation of Board service, terminate and cease to be outstanding to the extent it is not exercisable for vested shares on the date of such cessation of Board service. **11.2    Corporate Transaction** (a)    In the event of any Corporate Transaction, each outstanding Automatic Option Grant shall automatically become exercisable in full so thateach such automatic 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 all or any portion ofsuch shares as fully-vested shares. Immediately following the consummation of the Corporate Transaction, each automatic option grant shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parentthereof). 9 
 (b)    The grant of options under the Automatic OptionGrant Program shall in no way affect the right of the Company 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 businessor assets.  **11.3    Remaining Terms** The remaining terms of each option granted under the Automatic Option Grant Program shall be the same as the terms in effect for option grants made under the Plan.  **ARTICLE 12.    PROTECTION AGAINST DILUTION.** **12.1    Adjustments.    **In the event of a subdivision of the outstanding shares of Common Stock, a declaration of a dividend payable inshares of Common Stock or a combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a lesser number of shares of Common Stock, corresponding adjustments shall automatically be made in each ofthe following:  (a)    The number of Options, SARs, Restricted Shares and Stock Unitsavailable for future Awards under Article 3;  (b)    The limitations set forth in Sections5.2 and 7.2;  (c)    The number of shares of Common Stock covered by each outstandingOption and SAR and the number of shares of Common Stock to be covered by each automatic Option to be granted under Article 11;  (d)    The Exercise Price under each outstanding Option and SAR; or  (e)    The number of Stock Units included in any prior Award that has not yet been settled.  In the event of a declaration of an extraordinary dividend payable in a form other than shares of Common Stock in an amount that has a material effect on the price of shares of Common Stock, a recapitalization, aspin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of the foregoing. Except as provided in this Article 12, a Participant shall have no rights by reason of anyissuance by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number ofshares of stock of any class.  **12.2****    Dissolution or Liquidation.**    Tothe extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.  **12.3    Reorganizations.    **In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall besubject to the agreement of merger or reorganization. Such agreement shall provide for (a) the continuation of the outstanding Awards 10 
by the Company, if the Company is a surviving corporation, (b) the assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary, (c) the substitution by thesurviving corporation or its parent or subsidiary of its own awards for the outstanding Awards, (d) full exercisability or vesting and accelerated expiration of the outstanding Awards or (e) settlement of the full value of the outstanding Awards incash or cash equivalents followed by cancellation of such Awards.  **ARTICLE 13.    DEFERRAL OF AWARDS.** The Committee (in its sole discretion) may permit or require a Participant to:  (a)    Have cash that otherwise would be paid to such Participant as a result of the exercise of an SAR or thesettlement of Stock Units credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books;  (b)    Have shares of Common Stock that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR convertedinto an equal number of Stock Units; or  (c)    Have shares of Common Stock that otherwisewould be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Stock Units converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entryon the Company’s books. Such amounts shall be determined by reference to the Fair Market Value of such shares of Common Stock as of the date when they otherwise would have been delivered to such Participant.  A deferred compensation account established under this Article 13 may be credited with interest or other forms of investment return, as determined bythe Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subjectto the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and formspertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Article 13.  **ARTICLE 14.    AWARDS UNDER OTHER PLANS.** The Company may grant awards under other plans orprograms. Such awards may be settled in the form of shares of Common Stock issued under this Plan. Such shares of Common Stock shall be treated for all purposes under the Plan like shares of Common Stock issued in settlement of Stock Units andshall, when issued, reduce the number of shares of Common Stock available under Article 3. 11 
 **ARTICLE 15.    PAYMENT OF DIRECTOR’S FEES IN SECURITIES.** **15.1    Effective Date.**    No provision of this Article 15 shall be effective unless and untilthe Board has determined to implement such provision.  **15.2    Elections to Receive Nonstatutory Options,Restricted Shares or Stock Units.    **An Outside Director may elect to receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, Nonstatutory Options, Restricted Shares or StockUnits, or a combination thereof, as determined by the Board. Such Nonstatutory Options, Restricted Shares and Stock Units shall be issued under the Plan. An election under this Article 15 shall be filed with the Company on the prescribed form. **15.3    Number and Terms of Nonstatutory Options, Restricted Shares or StockUnits.    **The number of Nonstatutory Options, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in amanner determined by the Board. The terms of such Nonstatutory Options, Restricted Shares or Stock Units shall also be determined by the Board.  **ARTICLE 16.    LIMITATION ON RIGHTS.** **16.1    RetentionRights.    **Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee, Outside Director or Consultant. The Company and its Parents, Subsidiaries and Affiliatesreserve the right to terminate the Service of any Employee, Outside Director or Consultant at any time, with or without cause, subject to applicable laws, the Company’s certificate of incorporation and by-laws and a written employment agreement(if any).  **16.2    Stockholders’ Rights.    **A Participant shall have nodividend rights, voting rights or other rights as a stockholder with respect to any shares of Common Stock covered by his or her Award prior to the time when a stock certificate for such shares of Common Stock is issued or, if applicable, the timewhen he or she becomes entitled to receive such shares of Common Stock by filing any required notice of exercise and paying any required Exercise Price. No adjustment shall be made for cash dividends or other rights for which the record date isprior to such time, except as expressly provided in the Plan.  **16.3    RegulatoryRequirements.    **Any other provision of the Plan notwithstanding, the obligation of the Company to issue shares of Common Stock under the Plan shall be subject to all applicable laws, rules and regulations and such approvalby any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of shares of Common Stock pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance ofsuch shares of Common Stock, to their registration, qualification or listing or to an exemption from registration, qualification or listing.  **ARTICLE 17.    WITHHOLDING TAXES.** **17.1    General.    **To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for thesatisfaction of any withholding tax obligations that arise in connection with the 12 
Plan. The Company shall not be required to issue any shares of Common Stock or make any cash payment under the Plan until such obligations are satisfied. **17.2    ****Share Withholding.**    To the extent that applicable law subjectsa Participant to tax withholding obligations, the Committee may permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any shares of Common Stock that otherwise would be issued to him orher or by surrendering all or a portion of any shares of Common Stock that he or she previously acquired. Such shares of Common Stock shall be valued at their Fair Market Value on the date when they are withheld or surrendered.  **ARTICLE 18.    FUTURE OF THE PLAN.** **18.1    ****Term of the Plan.**    The Plan, as set forth herein, shall become effective on January 30, 2002. The Plan shall remain in effect until it is terminatedunder Section 18.2, except that no Incentive Options shall be granted on or after the 10th anniversary of the later of(a) the date the Board adopted the Plan or (b) the date the Board adopted the most recent increase in the number of shares of Common Stock available under Article 3 that was approved by the Company’s stockholders.  **18.2    ****Amendment or Termination.**    The Board may, at any time and for any reason, amend orterminate the Plan. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. No Awards shall be granted under the Plan after the terminationthereof. The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan.  **ARTICLE19.    LIMITATION ON PAYMENTS.** **19.1    ****Scope ofLimitation.**    This Article 19 shall apply to an Award only if:  (a)    The independent auditors most recently selected by the Board (the “Auditors”) determine that the after-tax value of such Award to the Participant, taking into account the effect of all federal, state andlocal income taxes, employment taxes and excise taxes applicable to the Participant (including the excise tax under section 4999 of the Code), will be greater after the application of this Article 19 than it was before the application of thisArticle 19; or  (b)    The Committee, at the time of making an Award under the Plan or atany time thereafter, specifies in writing that such Award shall be subject to this Article 19 (regardless of the after-tax value of such Award to the Participant).  If this Article 19 applies to an Award, it shall supersede any contrary provision of the Plan or of any Award granted under the Plan.  **19.2    ****Basic Rule.**    In the event that the Auditors determine that any payment or transfer by the Company under the Plan to or forthe benefit of a Participant (a “Payment”) would be nondeductible by the Company for federal income tax purposes because of the 13 
provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments shall be reduced (butnot below zero) to the Reduced Amount. For purposes of this Article 19, the “Reduced Amount” shall be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to benondeductible by the Company because of section 280G of the Code.  **19.3    ****Reduction ofPayments.**    If the Auditors determine that any Payment would be nondeductible by the Company because of section 280G of the Code, then the Company shall promptly give the Participant notice to that effect and a copy of thedetailed calculation thereof and of the Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present valueof the Payments equals the Reduced Amount) and shall advise the Company in writing of his or her election within 10 days of receipt of notice. If no such election is made by the Participant within such 10–day period, then the Company may electwhich and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify the Participant promptly of such election. For purposes of thisArticle 19, present value shall be determined in accordance with section 280G(d)(4) of the Code. All determinations made by the Auditors under this Article 19 shall be binding upon the Company and the Participant and shall be made within 60 days ofthe date when a Payment becomes payable or transferable. As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due tohim or her under the Plan and shall promptly pay or transfer to or for the benefit of the Participant in the future such amounts as become due to him or her under the Plan.  **19.4    ****Overpayments and Underpayments.**    As a result of uncertainty in the application of section 280G of the Code at the time ofan initial determination by the Auditors hereunder, it is possible that Payments will have been made by the Company which should not have been made (an “Overpayment”) or that additional Payments which will not have been made by the Companycould have been made (an “Underpayment”), consistent in each case with the calculation of the Reduced Amount hereunder. In the event that the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against theCompany or the Participant that the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Participant that he or she shall repay to theCompany, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reducethe amount that is subject to taxation under section 4999 of the Code. In the event that the Auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of theParticipant, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.  **19.5    ****Related Corporations.**    For purposes of this Article 19, the term “Company” shall include affiliated corporations to the extent determined by the Auditors inaccordance with section 280G(d)(5) of the Code. 14 
 **ARTICLE 20.    DEFINITIONS.** **20.1    **“**Affiliate**” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiariesown not less than 50% of such entity.  **20.2****    “Automatic Option Grant Program”**means the automatic option grant program in effect under the Plan.  **20.3    ****“Automatic OptionGrant Program Effective Date”**means the date the share reserve under the 1996 Stock Option Plan has been exhausted.  **20.4    **“**Award**” means any award of an Option, an SAR, a Restricted Share or a Stock Unit under the Plan.  **20.5    **“**Board**” means the Company’s Board of Directors, as constituted from time to time.  **20.6    **“**Code**” means the Internal Revenue Code of 1986, as amended.  **20.7    **“**Committee**” means a committee of the Board, as described in Article 2.  **20.8    **“**Common Stock**” means the common stock of the Company.  **20.9    **“**Company**” means Netopia, Inc., a Delaware corporation.  **20.10    **“**Consultant**” means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate asan independent contractor. Service as a Consultant shall be considered employment for all purposes of the Plan, except as provided in Section 4.1.  **20.11    **“**Corporate Transaction**” means:  (a)    The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger,consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct orindirect parent corporation of such continuing or surviving entity;  (b)    The sale,transfer or other disposition of all or substantially all of the Company’s assets;  (c)    A change in the composition of the Board, as a result of which fewer than 50% of the incumbent directors are directors who either (i) had been directors of the Company on the date 36 months prior to the date ofthe event that may constitute a Corporate Transaction (the “original directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who15 
were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved; or  (d)    Any transaction as a result of which any person is the “beneficial owner” (as definedin Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Paragraph (d),the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parentor Subsidiary and (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.  A transaction shall not constitute a *Corporate Transaction* if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned insubstantially the same proportions by the persons who held the Company’s securities immediately before such transaction.  **20.12    **“**Employee**” means a common–law employee of the Company, a Parent, a Subsidiary or an Affiliate.  **20.13    **“**Exchange Act**” means the Securities Exchange Act of 1934, as amended.  **20.14    ****“Exercise Date”** means the date on which the Company shall have received written notice of the option exercise.  **20.15    **“**Exercise Price**,” in the case of an Option, means the amount for which one Common Sharemay be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of an SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the FairMarket Value of one Common Share in determining the amount payable upon exercise of such SAR.  **20.16    **“**Fair Market Value**” means the market price of a share of Common Stock, determined by the Committee in good faith on such basis as it deems appropriate. Whenever possible, thedetermination of Fair Market Value by the Committee shall be based on the prices reported in The Wall Street Journal. Such determination shall be conclusive and binding on all persons.  **20.17    **“**Incentive Option**” means an incentive stock option described in section 422(b) of the Code.  **20.18    **“**Nonstatutory Option**” means a stock option not described in sections 422 or 423 of the Code. **20.19    **“**Option**” means an Incentive Option or Nonstatutory Option granted underthe Plan and entitling the holder to purchase shares of Common Stock. 16 
 **20.20    ****“Option Shares”** means the number of sharesof Common Stock subject to the option as specified in the Grant Notice.  **20.21    **“**Optionee**” means an individual or estate who holds an Option or SAR.  **20.22**    “**Outside Director**” means a member of the Board who is not an Employee. Service as an Outside Director shall be considered employment for all purposes of the Plan, except as provided inSection 4.1.  **20.23    **“**Parent**” means any corporation (other than the Company) in anunbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. Acorporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.  **20.24    **“**Participant**” means an individual or estate that holds an Award.  **20.25    ****“Permanent Disability or Permanently Disabled”** means the inability of the Optionee to engage in any substantial gainful activity by reason of any medicallydeterminable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more.  **20.26    **“**Plan**” means this Netopia, Inc. 2002 Equity Incentive Plan, as amended from time to time.  **20.27    **“**Restricted Share**” means a Common Share awarded under the Plan.  **20.28    **“**Restricted Stock Agreement**” means the agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictionspertaining to such Restricted Share.  **20.29    **“**SAR**” means a stock appreciationright granted under the Plan.  **20.30    **“**SAR Agreement**” means the agreement betweenthe Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her SAR.**** **20.31    **“**Service**” means service as an Employee, Outside Director or Consultant.  **20.32    **“**Stock Option Agreement**” means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option.  **20.33    **“**Stock Unit**” means a bookkeeping entry representing the equivalent of one Common Share,as awarded under the Plan. 17 
 **20.34    **“**Stock Unit Agreement**” means the agreementbetween the Company and the recipient of a Stock Unit that contains the terms, conditions and restrictions pertaining to such Stock Unit.  **20.35    **“**Subsidiary**” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other thanthe last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a dateafter the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 18