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                                                                   EXHIBIT 10.9



                           ACCELERATED NETWORKS, INC.
                      1997 STOCK OPTION/STOCK ISSUANCE PLAN


                                  ARTICLE ONE

                               GENERAL PROVISIONS


        I. PURPOSE OF THE PLAN

           This 1997 Stock Option/Stock Issuance Plan is intended to promote the
interests of Accelerated Networks, Inc., a California 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 herein 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 (2) separate equity programs:

                (i) the 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 both 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 Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee. Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.

           B. 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 Plan and any
outstanding options or stock issuances thereunder as it may


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deem necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or any option or
stock issuance thereunder.

        IV. ELIGIBILITY

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

                (i) Employees,

                (ii) non-employee members of the Board or the non-employee
        members of the board of directors of any Parent or Subsidiary, and

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

           B. The Plan Administrator shall have full authority to determine, (i)
with respect to the option grants under the 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
status of the granted option as either an Incentive Option or a Non-Statutory
Option, the time or times at which 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 such stock issuances, the time or times when those 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 by the Participant for such shares.

           C. The Plan Administrator shall have the absolute discretion either
to grant options in accordance with the 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. The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall not exceed
10,650,000(1) shares.

           B. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the option exercise 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




-----------------------

        (1) This number reflects the reverse 1-for-0.544 split of the Common
Stock effected by the Corporation on May 27, 1997.



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available for reissuance through one or more subsequent option grants or direct
stock issuances under the Plan.

           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. In no event shall
any such adjustments be made in connection with the conversion of one or more
outstanding shares of the Corporation's preferred stock into shares of Common
Stock.







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                                   ARTICLE TWO

                              OPTION GRANT PROGRAM



        I. OPTION TERMS

           Each option 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. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

           A. EXERCISE PRICE.

               1. The exercise price per share shall be fixed by the Plan
Administrator in accordance with the following provisions:

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

                (ii) If the person to whom the option is granted is a 10%
        Shareholder, then the exercise price per share shall not be less than
        one hundred ten percent (110%) 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 cash or check made
payable to the Corporation. Should the Common Stock be registered under Section
12(g) of the 1934 Act at the time the option is exercised, then the exercise
price may also be paid as follows:

                (i) in 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

                (ii) 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 (A)
        to 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) to
        the Corporation to deliver the certificates for the purchased shares
        directly to such brokerage firm in order to complete the sale.

        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.



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           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 the Plan Administrator and set forth in the documents evidencing
the option grant. 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) Should the Optionee cease to remain in Service for any
        reason other than Disability or death, then the Optionee shall have a
        period of three (3) months following the date of such cessation of
        Service during which to exercise each outstanding option held by such
        Optionee.

                (ii) Should Optionee's Service terminate by reason of
        Disability, then the Optionee shall have a period of twelve (12) months
        following the date of such cessation of Service during which to exercise
        each outstanding option held by such Optionee.

                (iii) If the Optionee dies while holding an outstanding option,
        then the personal representative of his or her estate or the person or
        persons to whom the option is transferred pursuant to the Optionee's
        will or the laws of inheritance shall have a twelve (12)-month period
        following the date of the Optionee's death to exercise such option.

                (iv) Under no circumstances, however, shall any such option be
        exercisable after the specified expiration of the option term.

                (v) 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 with respect to any and all option shares
        for which the option is not otherwise at the time exercisable or in
        which the Optionee is not otherwise at that time vested.

               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:

                (i) extend the period of time for which the option is to remain
        exercisable following Optionee's cessation of Service or death from the
        limited 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




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        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. SHAREHOLDER RIGHTS. The holder of an option shall have no
shareholder 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. UNVESTED SHARES. 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, all or (at the discretion of the Corporation and with the consent of the
Optionee) any 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. The Plan Administrator may not impose a vesting schedule upon
any option grant or any shares of Common Stock subject to the option which is
more restrictive than twenty percent (20%) per year vesting, with the initial
vesting to occur not later than one (1) year after the option grant date.

           F. FIRST REFUSAL RIGHTS. Until such time as the Common Stock is first
registered under Section 12(g) of the 1934 Act, the Corporation shall have the
right of first refusal with respect to any proposed disposition by the Optionee
(or any successor in interest) of any shares of Common Stock issued under the
Plan. Such right of first refusal shall be exercisable in accordance with the
terms established by the Plan Administrator and set forth in the document
evidencing such right.

           G. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death.

           H. WITHHOLDING. The Corporation's obligation to deliver shares of
Common Stock upon the exercise of any options granted under the Plan shall be
subject to the satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements.

        II. INCENTIVE OPTIONS

           The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of the Plan shall be applicable to Incentive Options. Options which
are specifically designated as Non-Statutory Options shall not be subject to the
terms of this Section II.

           A. ELIGIBILITY. Incentive Options may only be granted to Employees.

           B. EXERCISE PRICE. The exercise price per share shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.




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           C. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one (1) calendar year
shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

           D. 10% SHAREHOLDER. If any Employee to whom an Incentive Option is
granted is a 10% Shareholder, then the option term shall not exceed five (5)
years measured from the option grant date.

        III. CORPORATE TRANSACTION

           A. The shares subject to each option outstanding under the Plan at
the time of a Corporate Transaction shall automatically vest in full 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 that option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. However, the shares subject to an
outstanding option shall not vest on such an accelerated basis if and to the
extent: (i) such option is assumed by the successor corporation (or parent
thereof) in the Corporate Transaction and the Corporation's repurchase rights
with respect to the unvested option shares are concurrently assigned to such
successor corporation (or parent thereof) or (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 those unvested option shares or (iii) the
acceleration of such option is subject to other limitations imposed by the Plan
Administrator at the time of the option grant.

           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 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



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of securities available for issuance under the Plan 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. 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 provide for the automatic acceleration (in whole or in part) 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 terminated rights) upon the occurrence of a
Corporate Transaction, whether or not those options are to be assumed or
replaced (or those repurchase rights are to be assigned) in the Corporate
Transaction.

           F. The Plan Administrator shall also have full power and authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to structure such option so that the shares subject
to that option will automatically vest on an accelerated basis should the
Optionee's Service terminate by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months) following the effective
date of any Corporate Transaction in which the option is assumed and the
repurchase rights applicable to those shares do not otherwise terminate. Any
such option shall remain exercisable for the fully-vested option 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. In addition, the Plan Administrator may provide that one or more of
the Corporation's outstanding repurchase rights with respect to shares held by
the Optionee at the time of such Involuntary Termination shall immediately
terminate on an accelerated basis, and the shares subject to those terminated
rights shall accordingly vest.

           G. The portion of any Incentive Option accelerated in connection with
a Corporate Transaction shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar limitation is not
exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Non-Statutory Option under the
Federal tax laws.

           H. The grant of options under the Plan 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.

        IV. 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 Plan and to grant in
substitution therefor 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.



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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 eighty-five percent (85%) of the Fair
Market Value per share of Common Stock on the issue date. However, the purchase
price per share of Common Stock issued to a 10% Shareholder shall not be less
than one hundred and ten percent (110%) of such Fair Market Value.

               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. However, the Plan Administrator may not impose a vesting schedule
upon any stock issuance effected under the Stock Issuance Program which is more
restrictive than twenty percent (20%) per year vesting, with initial vesting to
occur not later than one (1) year after the issuance date.

               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.



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               3. The Participant shall have full shareholder 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 shareholder 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
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, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.

           C. FIRST REFUSAL RIGHTS. Until such time as the Common Stock is first
registered under Section 12(g) of the 1934 Act, the Corporation shall have the
right of first refusal with respect to any proposed disposition by the
Participant (or any successor in interest) of any shares of Common Stock issued
under the Stock Issuance Program. Such right of first refusal shall be
exercisable in accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right.

        II. CORPORATE TRANSACTION

           A. Upon the occurrence of a Corporate Transaction, all outstanding
repurchase rights under the Stock Issuance Program shall terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, 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 by the Plan Administrator at the time the
repurchase right is issued.

           B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while
the Corporation's repurchase rights with respect to those shares remain
outstanding, to provide that those rights shall automatically terminate on an
accelerated basis, and the shares of Common Stock subject to those terminated
rights shall immediately vest, in the event the Participant's Service should
subsequently terminate by reason of an Involuntary Termination within a
designated period (not



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to exceed eighteen (18) months) following the effective date of any Corporate
Transaction in which those repurchase rights are assigned to the successor
corporation (or parent thereof).

        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.








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                                  ARTICLE FOUR

                                  MISCELLANEOUS



        I. FINANCING

           The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price or the purchase price for shares issued to such person
under the Plan by delivering a full-recourse, interest-bearing promissory note
payable in one or more installments and secured by the purchased shares.
Promissory notes may be authorized with or without security or collateral.
However, any promissory notes delivered by a consultant must be secured by
property other than the purchased shares of Common Stock. In no event shall the
maximum credit available to the Optionee or Participant 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.

           II. EFFECTIVE DATE AND TERM OF PLAN

               A. The Plan became effective when it was initially adopted by the
Board on April 15, 1997. The Plan was approved by the Company's shareholders on
April 15, 1997. The aggregate number of shares reserved for issuance under the
Plan was originally 3,125,000. On May 27, 1997, the Board approved a reverse
one-for-0.544 split of the Common Stock, as a result of which the number of
shares of Common Stock approved for issuance under the Plan was reduced to
1,700,000 shares. On August 15, 1997, May 15, 1998, November 5, 1998, October 5,
1999, January 10, 2000 and March 1, 2000 the Board approved share increases of
2,3000,000, 500,000, 1,500,000, 2,000,000, 650,000 and 2,000,000 shares,
respectively in the total number of shares of Common Stocks authorized for
issuance under the Plan.

               B. The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for issuance
under the Plan shall have been issued or (iii) the termination of all
outstanding options in connection with a Corporate Transaction. All options and
unvested stock issuances outstanding at that time under the Plan shall continue
to have full force and effect in accordance with the provisions of the documents
evidencing such options or issuances.

           III. AMENDMENT OF THE PLAN

               A. 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 options or unvested stock issuances at the time outstanding under the
Plan unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require shareholder approval
pursuant to applicable laws and regulations.

               B. Options may be granted under the Option Grant Program and
shares may be issued under the Stock Issuance Program which are in each instance
in excess of the number of shares of Common Stock then available for issuance
under the Plan, provided any excess



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shares actually issued under those programs shall be held in escrow until there
is obtained shareholder approval of an amendment sufficiently increasing the
number of shares of Common Stock available for issuance under the Plan. If such
shareholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees and
the Participants the exercise or purchase price paid for any excess shares
issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in
escrow, and such shares shall thereupon be automatically cancelled and cease to
be outstanding.

        IV. 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.

        V. WITHHOLDING

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

        VI. REGULATORY APPROVALS

           The implementation of the Plan, the granting of any options under the
Plan and the issuance of any shares of Common Stock (i) upon the exercise of any
option 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 granted under it and
the shares of Common Stock issued pursuant to it.

        VII. NO EMPLOYMENT OR 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.

        VIII. FINANCIAL REPORTS

           The Corporation shall deliver a balance sheet and an income statement
at least annually to each Optionee and Participant, unless such individual is a
key Employee whose duties in connection with the Corporation (or any Parent or
Subsidiary) assure such individual access to equivalent information.




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                                    APPENDIX



        The following definitions shall be in effect under the Plan:

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

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

        C. COMMITTEE shall mean a committee of two (2) or more Board members
appointed by the Board to exercise one or more administrative functions under
the Plan.

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

        E. CORPORATE TRANSACTION shall mean either of the following
shareholder-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

                (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.

        F. CORPORATION shall mean Accelerated Networks, Inc., a California
corporation.

        G. DISABILITY 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 and shall be determined by
the Plan Administrator on the basis of such medical evidence as the Plan
Administrator deems warranted under the circumstances.

        H. 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.

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

        J. 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,



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<PAGE>   15

        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.

                (iii) If the Common Stock is at the time neither listed on any
        Stock Exchange nor traded on the Nasdaq National Market, then the Fair
        Market Value shall be determined by the Plan Administrator after taking
        into account such factors as the Plan Administrator shall deem
        appropriate.

        K. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

        L. INVOLUNTARY Termination shall mean the termination of the Service of
any individual which occurs by reason of:

                (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 without the
        individual's consent.

        M. 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).

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

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



                                       15
<PAGE>   16

        P. OPTION GRANT PROGRAM shall mean the option grant program in effect
under the Plan.

        Q. OPTIONEE shall mean any person to whom an option is granted under the
Plan.

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

        U. PLAN ADMINISTRATOR shall mean either the Board or the Committee
acting in its capacity as administrator of the Plan.

        V. SERVICE shall mean the provision of services to 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.

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

        X. 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.

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

        Z. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain 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.

        AA. 10% SHAREHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).





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