NETWORK PERIPHERALS INC.

                                 1997 STOCK PLAN
                       (As Amended Through March 24, 1998)

     1.  ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

         1.1  Establishment.  The Network  Peripherals Inc. 1997 Stock Plan (the
"Plan") is hereby established  effective as of February 18, 1997 (the "Effective
Date").

         1.2 Purpose. The purpose of the Plan is to advance the interests of the
Participating  Company Group and its  stockholders  by providing an incentive to
attract,  retain and reward persons  performing  services for the  Participating
Company  Group and by  motivating  such persons to  contribute to the growth and
profitability of the Participating Company Group.

         1.3 Term of Plan.  The Plan shall  continue in effect until the earlier
of its  termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all  restrictions  on
such shares  under the terms of the Plan and the  agreements  evidencing  Awards
granted under the Plan have lapsed.  However,  all Incentive Stock Options shall
be  granted,  if at all,  within ten (10) years from the earlier of the date the
Plan is  adopted  by the  Board or the date  the  Plan is duly  approved  by the
stockholders of the Company.

     2.  DEFINITIONS AND CONSTRUCTION.

         2.1 Definitions.  Whenever used herein,  the following terms shall have
their respective meanings set forth below:

                  (a) "Award" means an Option or Restricted Stock.

                  (b) "Board"  means the Board of Directors  of the Company.  If
one or more  Committees have been appointed by the Board to administer the Plan,
"Board" also means such Committee(s).

                  (c)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended, and any applicable regulations promulgated thereunder.

                  (d)  "Committee"  means the  Compensation  Committee  or other
committee  of the Board duly  appointed to  administer  the Plan and having such
powers as shall be  specified by the Board.  Unless the powers of the  Committee
have been  specifically  limited,  the Committee shall have all of the powers of
the Board granted herein, including,  without limitation,  the power to amend or
terminate  the  Plan at any  time,  subject  to the  terms  of the  Plan and any
applicable limitations imposed by law.

                  (e)  "Company"  means  Network  Peripherals  Inc.,  a Delaware
corporation, or any successor corporation thereto.



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                  (f)  "Consultant"  means any  person,  including  an  advisor,
engaged by a Participating  Company to render services other than as an Employee
or a Director.

                  (g) "Director"  means a member of the Board or of the board of
directors of any other Participating Company.

                  (h)  "Disability"  means the permanent and total disability of
the Participant within the meaning of Section 22(e)(3) of the Code.

                  (i)  "Employee"  means  any  person  treated  as  an  employee
(including  an officer or a Director  who is also treated as an employee) in the
records of a Participating Company; provided, however, that neither service as a
Director  nor payment of a  director's  fee shall be  sufficient  to  constitute
employment for purposes of the Plan.

                  (j) "Exchange Act" means the Securities  Exchange Act of 1934,
as amended.

                  (k) "Fair Market Value" means,  as of any date, the value of a
share of Stock  or  other  property  as  determined  by the  Board,  in its sole
discretion,  or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                           (i) If, on such  date,  there is a public  market for
the Stock,  the Fair Market  Value of a share of Stock shall be the closing sale
price of a share of Stock (or the mean of the closing bid and asked  prices of a
share of Stock if the  Stock is so  quoted  instead)  as  quoted  on the  Nasdaq
National Market,  the Nasdaq Small-Cap Market or such other national or regional
securities  exchange or market system  constituting  the primary  market for the
Stock,  as  reported  in the Wall  Street  Journal or such  other  source as the
Company deems reliable. If the relevant date does not fall on a day on which the
Stock has traded on such securities exchange or market system, the date on which
the Fair Market  Value shall be  established  shall be the last day on which the
Stock was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion.

                           (ii) If, on such date,  there is no public market for
the Stock,  the Fair Market Value of a share of Stock shall be as  determined by
the Board without regard to any restriction  other than a restriction  which, by
its terms, will never lapse.

                  (l)  "Incentive  Stock Option" means an Option  intended to be
(as set forth in the Option Agreement) and which qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.

                  (m) "Insider" means an officer or a Director of the Company or
any other  person whose  transactions  in Stock are subject to Section 16 of the
Exchange Act.

                  (n)  "Nonstatutory  Stock Option" means an Option not intended
to be (as set forth in the Option  Agreement)  or which  does not  qualify as an
Incentive Stock Option.

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                  (o) "Option" means a right granted under Section 6 to purchase
Stock  (subject to  adjustment as provided in Section 4.2) pursuant to the terms
and conditions of the Plan. An Option may be either an Incentive Stock Option or
a Nonstatutory Stock Option.

                  (p) "Option  Agreement" means a written  agreement between the
Company and an Optionee setting forth the terms,  conditions and restrictions of
the Option  granted to the  Optionee and any shares  acquired  upon the exercise
thereof.

                  (q) "Optionee" means a person who has been granted one or more
Options.

                  (r) "Parent  Corporation"  means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (s)  "Participant"  means a person who has been granted one or
more Awards.

                  (t)  "Participating  Company"  means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (u) "Participating Company Group" means, at any point in time,
all corporations collectively which are then Participating Companies.

                  (v)  "Restricted  Stock" means Stock (subject to adjustment as
provided in Section 4.2) granted or sold to a Participant  pursuant to Section 7
and the terms and conditions of the Plan.

                  (w) "Restricted  Stock  Agreement"  means a written  agreement
between the Company and a Participant  setting forth the terms,  conditions  and
restrictions applying to the Restricted Stock acquired by the Participant.

                  (x) "Rule 16b-3"  means Rule 16b 3 under the Exchange  Act, as
amended from time to time, or any successor rule or regulation.

                  (y) "Section  162(m)"  means  Section  162(m) of the Code,  as
amended  by the  Revenue  Reconciliation  Act of  1993  (P.L.  103-66),  and any
regulations promulgated thereunder.

                  (z)  "Securities  Act" means the  Securities  Act of 1933,  as
amended.

                  (aa)  "Service"  means a  Participant's  employment or service
with the Participating  Company Group, whether in the capacity of an Employee, a
Director or a Consultant.  The Participant's Service shall not be deemed to have
terminated  merely because of a change in the capacity in which the  Participant
renders  Service  to  the  Participating  Company  Group  or  a  change  in  the
Participating  Company for which the Participant renders such Service,  provided
that there is no  interruption  or  termination  of the  Participant's  Service.
Furthermore,  a Participant's Service with the Participating Company Group shall
not be deemed to have

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terminated if the  Participant  takes any military  leave,  sick leave, or other
bona fide leave of absence approved by the Company;  provided,  however, that if
any such leave exceeds ninety (90) days, on the ninety-first  (91st) day of such
leave the  Participant's  Service shall be deemed to have terminated  unless the
Participant's right to return to Service with the Participating Company Group is
guaranteed  by  statute  or  contract.  Notwithstanding  the  foregoing,  unless
otherwise designated by the Company or required by law, a leave of absence shall
not be  treated  as  Service  for  purposes  of  determining  vesting  under the
Participant's Option Agreement or Restricted Stock Agreement.  The Participant's
Service shall be deemed to have terminated either upon an actual  termination of
Service  or upon the  corporation  for which the  Participant  performs  Service
ceasing to be a Participating Company. Subject to the foregoing, the Company, in
its sole  discretion,  shall  determine  whether the  Participant's  Service has
terminated and the effective date of such termination.

                  (bb)  "Stock"  means  the  common  stock  of the  Company,  as
adjusted from time to time in accordance with Section 4.2.

                  (cc)  "Subsidiary  Corporation"  means any  present  or future
"subsidiary  corporation"  of the Company,  as defined in Section  424(f) of the
Code.

                  (dd) "Ten Percent Stockholder" means a Participant who, at the
time an Award is granted to the Participant, owns stock possessing more than ten
percent  (10%) of the total  combined  voting power of all classes of stock of a
Participating Company within the meaning of Section 422(b)(6) of the Code.

         2.2  Construction.   Captions  and  titles  contained  herein  are  for
convenience  only and shall not affect  the  meaning  or  interpretation  of any
provision of the Plan.  Except when  otherwise  indicated  by the  context,  the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not  intended to be  exclusive,  unless the context  clearly
requires otherwise.

     3.  ADMINISTRATION.

         3.1  Administration by the Board. The Plan shall be administered by the
Board.  All  questions  of  interpretation  of the Plan or of any Award shall be
determined by the Board, and such determinations shall be final and binding upon
all  persons  having an  interest  in the Plan or such  Award.  Any officer of a
Participating  Company  shall have the authority to act on behalf of the Company
with respect to any matter, right,  obligation,  determination or election which
is the  responsibility of or which is allocated to the Company herein,  provided
the  officer  has  apparent  authority  with  respect  to  such  matter,  right,
obligation, determination or election.

         3.2   Administration   with  Respect  to  Insiders.   With  respect  to
participation  by  Insiders  in the  Plan,  at any time that any class of equity
security of the  Company is  registered  pursuant to Section 12 of the  Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b 3.

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         3.3 Powers of the Board.  In addition to any other  powers set forth in
the Plan and  subject to the  provisions  of the Plan,  the Board shall have the
full and final power and authority, in its sole discretion:

                  (a) to determine the persons to whom, and the time or times at
which,  Awards  shall be granted and the number of shares of Stock to be subject
to each Award;

                  (b) to determine  whether an Award will be an Incentive  Stock
Option, a Nonstatutory Stock Option, or Restricted Stock;

                  (c) to  determine  the Fair Market Value of shares of Stock or
other property;

                  (d)  to  determine  the  terms,  conditions  and  restrictions
applicable to each Award (which need not be identical)  and any shares  acquired
pursuant  to the  Plan,  including,  without  limitation,  (i) the  exercise  or
purchase price, if any, applicable to each Award, (ii) the method of payment for
shares  purchased under the Plan,  (iii) the method for  satisfaction of any tax
withholding  obligation  arising in  connection  with the Award or such  shares,
including by the  withholding  or delivery of shares of stock,  (iv) the timing,
terms and conditions of the  exercisability of each Option or the vesting of any
shares  acquired  pursuant to the Plan,  (v) the time of the  expiration  of the
Award,  (vi) the effect of the  Participant's  termination  of Service  with the
Participating Company Group on any of the foregoing,  and (vii) all other terms,
conditions  and  restrictions  applicable  to  the  Award  or  such  shares  not
inconsistent with the terms of the Plan;

                  (e) to  approve  one or more  forms of  Option  Agreement  and
Restricted Stock Agreement;

                  (f) to amend,  modify,  extend, or renew, or grant a new Award
in  substitution  for,  any Award or to waive  any  restrictions  or  conditions
applicable to any Award or any shares acquired under the Plan;

                  (g)   to   accelerate,   continue,   extend   or   defer   the
exercisability  of any Option or the  vesting of any shares  acquired  under the
Plan, including with respect to the period following a Participant's termination
of Service with the  Participating  Company Group;

                  (h) to  delegate  to any  proper  officer of the  Company  the
authority to grant one or more Awards, without further approval of the Board, to
any person eligible  pursuant to Section 5, other than a person who, at the time
of such grant, is an Insider; provided,  however, that (i) such Awards shall not
be granted to any one person within any fiscal year of the Company for more than
50,000 shares in the aggregate, (ii) the exercise or purchase price per share of
Stock  shall be equal to the Fair  Market  Value  per  share of the Stock on the
effective date of grant, and (iii) each such Award shall be subject to the terms
and  conditions  of  the  appropriate  standard  form  of  Option  Agreement  or
Restricted  Stock  Agreement  approved  by the Board and  shall  conform  to the
provisions of the Plan and such other  guidelines as shall be  established  from
time to time by the Board;

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                  (i) to  prescribe,  amend or  rescind  rules,  guidelines  and
policies  relating  to the Plan,  or to adopt  supplements  to,  or  alternative
versions  of,  the Plan,  including,  without  limitation,  as the  Board  deems
necessary  or desirable  to comply with the laws of, or to  accommodate  the tax
policy or custom of, foreign jurisdictions whose citizens may be granted Awards;
and

                  (j) to correct any defect,  supply any  omission or  reconcile
any  inconsistency  in the Plan or any  Option  Agreement  or  Restricted  Stock
Agreement and to make all other  determinations and take such other actions with
respect to the Plan or any Award as the Board may deem  advisable  to the extent
consistent with the Plan and applicable law.

         3.4 Committee Complying with Section 162(m). If a Participating Company
is a "publicly held corporation" within the meaning of Section 162(m), the Board
may establish a Committee of "outside  directors"  within the meaning of Section
162(m) (a "Section  162(m)  Committee")  to approve the grant of any Award which
might   reasonably  be   anticipated  to  result  in  the  payment  of  employee
remuneration  that would  otherwise  exceed the limit on  employee  remuneration
deductible for income tax purposes pursuant to Section 162(m).

     4.  SHARES SUBJECT TO PLAN.

         4.1  Maximum  Number of  Shares  Issuable.  Subject  to  adjustment  as
provided in Section  4.2, the maximum  aggregate  number of shares of Stock that
may be  issued  under  the  Plan  shall be two  million  five  hundred  thousand
(2,500,000) and shall consist of authorized but unissued or reacquired shares of
Stock or any combination thereof. If an outstanding Award for any reason expires
or is terminated or canceled or shares of Stock acquired,  subject to repurchase
or forfeiture, pursuant to an Award are repurchased by the Company or forfeited,
the shares of Stock allocable to the unexercised  portion of such Award, or such
repurchased or forfeited shares of Stock,  shall again be available for issuance
under the Plan.

         4.2 Adjustments for Changes in Capital  Structure.  In the event of any
stock dividend, stock split, reverse stock split, recapitalization, combination,
reclassification  or similar  change in the capital  structure  of the  Company,
appropriate  adjustments shall be made in the number and class of shares subject
to the Plan and to any outstanding Awards, in the Section 162(m) Grant Limit set
forth in Section  4.3,  and in the  exercise or purchase  price per share of any
outstanding but unexercised Awards. If a majority of the shares which are of the
same class as the shares that are subject to  outstanding  Awards are  exchanged
for,  converted  into,  or  otherwise  become  (whether  or not  pursuant  to an
Ownership Change Event, as defined in Section 8.1) shares of another corporation
(the "New Shares"),  the Board may unilaterally  amend the outstanding Awards to
provide that such Awards are for New Shares. In the event of any such amendment,
the number of shares subject to outstanding  Awards and the exercise or purchase
price per share of  outstanding  but  unexercised  Awards shall be adjusted in a
fair and equitable  manner as determined by the Board,  in its sole  discretion.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this  Section  4.2 shall be rounded up or down to the nearest  whole
number, as determined by the Board, and in no event may the exercise

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or  purchase  price of any Award be  decreased  to an  amount  less than the par
value, if any, of the stock subject to the Award. The adjustments  determined by
the Board pursuant to this Section 4.2 shall be final, binding and conclusive.

     4.3  Section  162(m)  Grant  Limit.  Subject to  adjustment  as provided in
Section  4.2, at any such time as a  Participating  Company is a "publicly  held
corporation"  within the meaning of Section 162(m), no Employee shall be granted
one or more Awards  within any fiscal year of the Company which in the aggregate
are for more than five hundred thousand  (500,000)  shares;  provided,  however,
that  the  Company  may make an  additional  one-time  grant to any  newly-hired
Employee of an Award for up to two hundred fifty thousand  (250,000) shares (the
"Section  162(m) Grant  Limit").  An Option which is canceled in the same fiscal
year of the Company in which it was granted shall continue to be counted against
the Section 162(m) Grant Limit for such period.

     5. ELIGIBILITY.  Awards may be granted only to Employees,  Consultants, and
Directors.  For purposes of the foregoing sentence,  "Employees,"  "Consultants"
and "Directors" shall include prospective Employees, prospective Consultants and
prospective  Directors to whom Awards,  other than a Restricted  Stock Bonus (as
defined in Section 7 below), may be granted in connection with written offers of
a Service  relationship with the Participating  Company Group.  Eligible persons
may be granted more than one (1) Award.

     6. TERMS AND CONDITIONS OF OPTIONS.

         Options shall be evidenced by Option  Agreements  specifying the number
of shares of Stock covered thereby, in such form as the Board shall from time to
time establish. Option Agreements may incorporate all or any of the terms of the
Plan by reference  and shall comply with and be subject to the  following  terms
and conditions:

         6.1 Limitations on Options.

                  (a)  Option  Grant  Restrictions.  Any  person  who  is not an
Employee on the  effective  date of the grant of an Option to such person may be
granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a
prospective  Employee  upon the  condition  that such person  become an Employee
shall be deemed granted  effective on the date such person commences  Service as
an Employee with a Participating  Company,  with an exercise price determined as
of such date in accordance with Section 6.2.

                  (b) Fair Market Value  Limitation.  To the extent that options
designated as Incentive  Stock Options  (granted under all stock option plans of
the Participating  Company Group,  including the Plan) become  exercisable by an
Optionee  for the first time during any  calendar  year for stock  having a Fair
Market Value greater than One Hundred Thousand Dollars  ($100,000),  the portion
of such options which exceeds such amount shall be treated as Nonstatutory Stock
Options.  For purposes of this Section 6.1(b),  options  designated as Incentive
Stock  Options  shall be taken  into  account  in the  order in which  they were
granted,  and the Fair Market Value of stock shall be  determined as of the time
the option  with  respect to such  stock is  granted.  If the Code is amended to
provide for a different  limitation  from that set forth in this

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Section 6.1(b),  such different  limitation shall be deemed  incorporated herein
effective  as of the  date and with  respect  to such  Options  as  required  or
permitted by such amendment to the Code. If an Option is treated as an Incentive
Stock Option in part and as a Nonstatutory Stock Option in part by reason of the
limitation set forth in this Section  6.1(b),  the Optionee may designate  which
portion of such  Option  the  Optionee  is  exercising.  In the  absence of such
designation,  the Optionee shall be deemed to have exercised the Incentive Stock
Option portion of the Option first. Separate certificates representing each such
portion shall be issued upon the exercise of the Option.

         6.2  Exercise  Price.  The  exercise  price  for each  Option  shall be
established in the sole discretion of the Board; provided, however, that (a) the
exercise  price per share for an  Incentive  Stock Option shall be not less than
the Fair Market Value of a share of Stock on the effective  date of grant of the
Option,  (b) the exercise price per share for a Nonstatutory  Stock Option shall
be not less than eighty five  percent  (85%) of the Fair Market Value of a share
of Stock on the  effective  date of grant of the  Option,  and (c) no  Incentive
Stock Option granted to a Ten Percent  Stockholder  shall have an exercise price
per share less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the effective date of grant of the Option. Notwithstanding the
foregoing,  an Option (whether an Incentive Stock Option or a Nonstatutory Stock
Option) may be granted  with an exercise  price lower than the minimum  exercise
price set forth above if such Option is granted  pursuant  to an  assumption  or
substitution  for another option in a manner  qualifying under the provisions of
Section 424(a) of the Code.

         6.3  Exercise  Period.  Options  shall be  exercisable  at such time or
times,  or upon such event or events,  and  subject to such  terms,  conditions,
performance  criteria,  and restrictions as shall be determined by the Board and
set forth in the Option  Agreement  evidencing such Option;  provided,  however,
that (a) no Incentive Stock Option shall be exercisable  after the expiration of
ten  (10)  years  after  the  effective  date of grant  of such  Option,  (b) no
Incentive Stock Option granted to a Ten Percent Stockholder shall be exercisable
after the expiration of five (5) years after the effective date of grant of such
Option,  and  (c) no  Option  granted  to a  prospective  Employee,  prospective
Consultant or prospective  Director may become  exercisable prior to the date on
which such person  commences  Service with a  Participating  Company.  Except as
otherwise  provided  in this  Section or by the Board in the grant of an Option,
any  Option  granted  hereunder  shall  have a term of ten (10)  years  from the
effective date of grant of the Option.

         6.4 Payment of Exercise Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below,  payment of the exercise price for the number of shares of Stock
being  purchased  pursuant to any Option shall be made (i) in cash, by check, or
cash  equivalent,  (ii) by tender to the Company of shares of Stock owned by the
Optionee having a Fair Market Value (as determined by the Company without regard
to any  restrictions  on  transferability  applicable to such stock by reason of
federal or state  securities  laws or  agreements  with an  underwriter  for the
Company)  not less  than the  exercise  price,  (iii) by the  assignment  of the
proceeds  of a sale or loan  with  respect  to some or all of the  shares  being
acquired upon the exercise of the Option

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(including,   without  limitation,   through  an  exercise  complying  with  the
provisions  of  Regulation  T as  promulgated  from time to time by the Board of
Governors of the Federal  Reserve System) (a "Cashless  Exercise"),  (iv) by the
Optionee's  promissory note in a form approved by the Company, (v) by such other
consideration  as may be  approved  by the Board from time to time to the extent
permitted by applicable law, or (vi) by any combination  thereof.  The Board may
at any time or from time to time, by adoption of or by amendment to the standard
forms of Option  Agreement  described in Section  6.7, or by other means,  grant
Options which do not permit all of the foregoing  forms of  consideration  to be
used in payment of the exercise  price or which  otherwise  restrict one or more
forms of consideration.

                  (b) Tender of Stock.  Notwithstanding the foregoing, an Option
may not be  exercised  by tender to the Company of shares of Stock to the extent
such tender of Stock would  constitute a violation of the provisions of any law,
regulation or agreement  restricting  the  redemption  of the  Company's  stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender
to the Company of shares of Stock  unless such shares  either have been owned by
the  Optionee  for more than six (6) months or were not  acquired,  directly  or
indirectly, from the Company.

                  (c) Cashless  Exercise.  The Company reserves,  at any and all
times, the right, in the Company's sole and absolute  discretion,  to establish,
decline to approve or terminate  any program or  procedures  for the exercise of
Options by means of a Cashless Exercise.

                  (d) Payment by Promissory  Note.  No promissory  note shall be
permitted  if the  exercise  of an Option  using a  promissory  note  would be a
violation of any law. Any  permitted  promissory  note shall be on such terms as
the Board shall  determine  at the time the Option is  granted.  The Board shall
have the  authority to permit or require the  Optionee to secure any  promissory
note used to  exercise  an Option  with the  shares of Stock  acquired  upon the
exercise  of the  Option or with other  collateral  acceptable  to the  Company.
Unless otherwise provided by the Board, if the Company at any time is subject to
the  regulations  promulgated  by the Board of Governors of the Federal  Reserve
System or any other  governmental  entity  affecting  the extension of credit in
connection with the Company's securities,  any promissory note shall comply with
such applicable regulations, and the Optionee shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations.

         6.5 Tax  Withholding.  The  Company  shall have the right,  but not the
obligation,  to deduct from the shares of Stock issuable upon the exercise of an
Option,  or to accept from the  Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company,  equal to all
or any part of the federal,  state, local and foreign taxes, if any, required by
law to be  withheld  by the  Participating  Company  Group with  respect to such
Option or the shares  acquired upon the exercise  thereof.  Alternatively  or in
addition,  in its sole  discretion,  the Company shall have the right to require
the Optionee, through payroll withholding, cash payment or otherwise,  including
by means of a Cashless  Exercise,  to make  adequate  provision for any such tax
withholding obligations of the Participating Company

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Group  arising in  connection  with the Option or the shares  acquired  upon the
exercise  thereof.  The Company shall have no  obligation  to deliver  shares of
Stock or to release shares of Stock from an escrow  established  pursuant to the
Option  Agreement  until  the  Participating  Company  Group's  tax  withholding
obligations have been satisfied by the Optionee.

         6.6 Effect of Termination of Service.

                  (a) Option  Exercisability.  Subject to earlier termination of
the Option as otherwise provided herein, an Option shall be exercisable after an
Optionee's termination of Service as follows:

                           (i)  Disability.  If the Optionee's  Service with the
Participating  Company  Group is  terminated  because of the  Disability  of the
Optionee,  the Option, to the extent  unexercised and exercisable on the date on
which the Optionee's  Service  terminated,  may be exercised by the Optionee (or
the  Optionee's  guardian  or legal  representative)  at any  time  prior to the
expiration of six (6) months (or such longer period of time as determined by the
Board, in its sole  discretion)  after the date on which the Optionee's  Service
terminated,  but in any  event no  later  than  the  date of  expiration  of the
Option's term as set forth in the Option  Agreement  evidencing such Option (the
"Option Expiration Date").

                           (ii)  Death.  If  the  Optionee's  Service  with  the
Participating  Company Group is terminated because of the death of the Optionee,
the Option,  to the extent  unexercised and exercisable on the date on which the
Optionee's  Service  terminated,  may  be  exercised  by  the  Optionee's  legal
representative  or other person who acquired the right to exercise the Option by
reason of the  Optionee's  death at any time prior to the  expiration of six (6)
months (or such longer period of time as  determined  by the Board,  in its sole
discretion) after the date on which the Optionee's  Service  terminated,  but in
any event no later than the Option Expiration Date. The Optionee's Service shall
be deemed to have  terminated  on account of death if the  Optionee  dies within
three (3) months after the Optionee's termination of Service.

                           (iii) Other Termination of Service. If the Optionee's
Service with the Participating  Company Group terminates for any reason,  except
Disability or death,  the Option,  to the extent  unexercised and exercisable by
the  Optionee on the date on which the  Optionee's  Service  terminated,  may be
exercised by the Optionee within thirty (30) days (or such longer period of time
as determined by the Board, in its sole discretion)  after the date on which the
Optionee's  Service  terminated,  but in any  event  no later  than  the  Option
Expiration Date.

                  (b)  Extension if Exercise  Prevented by Law.  Notwithstanding
the foregoing,  if the exercise of an Option within the applicable  time periods
set forth in Section  6.6(a) is prevented by the provisions of Section 10 below,
the Option  shall remain  exercisable  until three (3) months after the date the
Optionee is notified by the Company that the Option is  exercisable,  but in any
event no later than the Option Expiration Date.

                  (c)   Extension   if  Optionee   Subject  to  Section   16(b).
Notwithstanding the foregoing,  if a sale within the applicable time periods set
forth in Section 6.6(a) of shares acquired upon the exercise of the Option would
subject the Optionee to suit under Section 16(b)

                                                                              10

<PAGE>


of the Exchange Act, the Option shall remain  exercisable  until the earliest to
occur of (i) the tenth  (10th)  day  following  the date on which a sale of such
shares by the  Optionee  would no longer be subject  to such suit,  (ii) the one
hundred and ninetieth  (190th) day after the Optionee's  termination of Service,
or (iii) the Option Expiration Date.

         6.7 Standard Forms of Option  Agreement.  Unless otherwise  provided by
the  Board at the  time the  Option  is  granted,  an  Option  designated  as an
"Incentive Stock Option" or a "Nonstatutory  Stock Option" shall comply with and
be subject to the terms and conditions set forth in the form of Incentive  Stock
Option Agreement or Nonstatutory Stock Option Agreement,  respectively,  adopted
by the Board concurrently with its adoption of the Plan and as amended from time
to time.  The Board shall have the authority from time to time to vary the terms
of any of the  standard  forms of Option  Agreement  described  in this  Section
either in connection  with the grant or amendment of an individual  Option or in
connection  with the  authorization  of a new standard form or forms;  provided,
however,  that the terms and  conditions  of any such new,  revised  or  amended
standard form or forms of Option Agreement are not  inconsistent  with the terms
of the Plan.  Such authority  shall include,  but not by way of limitation,  the
authority to grant  Options  which are  immediately  exercisable  subject to the
Company's  right to  repurchase  any  unvested  shares of Stock  acquired  by an
Optionee upon the exercise of an Option in the event such Optionee's  employment
or service with the  Participating  Company Group is terminated  for any reason,
with or without cause.

         6.8 Nontransferability of Incentive Stock Options.  During the lifetime
of the  Optionee,  an Option  shall be  exercisable  only by the Optionee or the
Optionee's  guardian or legal  representative.  No Option shall be assignable or
transferable  by the  Optionee,  except  by will or by the laws of  descent  and
distribution.  Notwithstanding the foregoing,  a Nonstatutory Stock Option shall
be assignable or transferable to the extent permitted by the Board and set forth
in the Option Agreement evidencing such Option.

     7. TERMS AND CONDITIONS OF RESTRICTED STOCK.

                  The Board may from time to time grant  Restricted Stock Awards
which may be in the form of a stock  bonus (a  "Restricted  Stock  Bonus")  or a
stock purchase right (a "Restricted  Stock Purchase  Right").  Restricted  Stock
Awards shall be evidenced by Restricted Stock Agreements,  specifying the number
of shares of Stock covered  there,  in such form as the Board shall from time to
time establish.  Restricted  Stock  Agreements may incorporate all or any of the
terms of the Plan by  reference  and shall  comply  with and be  subject  to the
following terms and conditions:

         7.1  Performance-Based   Restricted  Stock  Awards.  A  Section  162(m)
Committee may, but need not,  condition the grant of any Restricted  Stock Award
(a  "Performance  Award")  on  the  attainment,   during  a  performance  period
established  by such  Committee,  of one or more  performance  goals pursuant to
procedures  intended to qualify such Award as  "performance-based  compensation"
for  purposes  of  Section  162(m).   Any  such   performance   goals  shall  be
preestablished  in writing by the  Section  162(m)  Committee  within the period
required  by Section  162(m) and shall be based on one or more of the  following
business

                                                                              11

<PAGE>


criteria with respect to the  Participating  Company Group:  revenue,  operating
income, pre-tax profit, net income, gross margin, operating margin, earnings per
share, return on stockholder equity, return on capital, return on assets, or the
initial  shipment of a new product.  Such business  criteria shall have the same
meaning as used in the Company's  financial  statements,  or, if not used in the
Company's  financial  statements,  the meaning  pursuant to  generally  accepted
accounting  principles  or as used  generally in the  Company's  industry.  Each
performance  goal  shall  be  objectively  determinable  and may be an  absolute
measure or a relative  measure  determined  with  reference to an index or other
standard  selected by the Section  162(m)  Committee.  Prior to the  issuance of
Stock  pursuant to a  Performance  Award,  the Section  162(m)  Committee  shall
certify in writing the attainment of the relevant performance goals. Neither the
Board  nor any  Committee  thereof  shall  have  the  discretion  to  waive  the
attainment of any performance  goal or to increase the number of shares issuable
pursuant to a Performance Award in excess of the amount determined in accordance
with the objective formula established by the Section 62(m) Committee.  However,
if provided in a Participant's  Restricted  Stock  Agreement,  the Section 62(m)
Committee  shall have the  authority  to reduce the number of shares  that would
otherwise become issuable to the Participant upon the attainment of the relevant
performance  goals if, in the Section 162(m)  Committee's  sole  judgment,  such
reduction is  appropriate;  provided,  however,  that such  reduction  shall not
increase the number of shares issuable to another Participant.

         7.2 Purchase  Price.  The purchase  price under each  Restricted  Stock
Purchase  Right shall be established  by the Board.  No monetary  payment (other
than applicable tax withholding) shall be required as a condition of receiving a
Restricted Stock Bonus, the  consideration  for which shall be services actually
rendered to the Participating Company Group or for its benefit.

         7.3  Purchase  Period.  A  Restricted  Stock  Purchase  Right  shall be
exercisable  within a period  established by the Board,  which shall in no event
exceed thirty (30) days from the effective  date of the grant of the  Restricted
Stock Purchase Right; provided, however, that no Restricted Stock Purchase Right
granted  to  a  prospective  Employee,  prospective  Consultant  or  prospective
Director may become exercisable prior to the date on which such person commences
Service with a Participating Company.

         7.4 Payment of Purchase Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below,  payment of the purchase price for the number of shares of Stock
being  purchased  pursuant to any Restricted  Stock Purchase Right shall be made
(i) in cash, by check, or cash equivalent,  (ii) by the Participant's promissory
note in a form approved by the Company, (iii) by such other consideration as may
be approved by the Board from time to time to the extent permitted by applicable
law, or (iv) by any combination  thereof. The Board may at any time or from time
to time, by adoption of or by amendment to the standard form of Restricted Stock
Agreement  described in Section 7.9, or by other means,  grant  Restricted Stock
Purchase Rights which do not permit all of the foregoing forms of  consideration
to be used in payment of the purchase price or which  otherwise  restrict one or
more  forms of  consideration.  Restricted  Stock

                                                                              12

<PAGE>


Bonuses shall be issued in consideration  for services  actually rendered to the
Participating Company Group or for its benefit.

                  (b) Payment by Promissory  Note.  No promissory  note shall be
permitted if the purchase of Restricted Stock using a promissory note would be a
violation of any law. Any  permitted  promissory  note shall be on such terms as
the Board shall  determine at the time the  Restricted  Stock  Purchase Right is
granted. The Board shall have the authority to permit or require the Participant
to secure any promissory note used to purchase Restricted Stock with such shares
or with other collateral acceptable to the Company. Unless otherwise provided by
the Board, if the Company at any time is subject to the regulations  promulgated
by  the  Board  of  Governors  of  the  Federal  Reserve  System  or  any  other
governmental  entity  affecting the  extension of credit in connection  with the
Company's  securities,  any  promissory  note shall comply with such  applicable
regulations,  and the  Participant  shall pay the unpaid  principal  and accrued
interest,  if any,  to the  extent  necessary  to comply  with  such  applicable
regulations.

         7.5 Tax  Withholding.  The Company  shall have the right to require the
Participant,  through payroll  withholding,  cash payment or otherwise,  to make
adequate  provision for the federal,  state,  local and foreign  taxes,  if any,
required by law to be withheld by the Participating  Company Group in connection
with a  Restricted  Stock Award or the shares  acquired  pursuant  thereto.  The
Company shall have no obligation to deliver shares of Stock or to release shares
of Stock from an escrow  established  pursuant to the Restricted Stock Agreement
until the  Participating  Company Group's tax withholding  obligations have been
satisfied by the Participant.

         7.6 Vesting and Restrictions on Transfer. Shares issued pursuant to any
Restricted  Stock  Award may be made  subject  to vesting  conditioned  upon the
satisfaction  of such Service  requirements,  performance  goals (which may, but
need not, be  established  and  certified in accordance  with the  provisions of
Section 7.1), or other  restrictions  (the "Vesting  Restrictions")  as shall be
determined by the Board (or a Section 162(m) Committee,  as the case may be) and
set forth in the Restricted Stock Agreement  evidencing such Award.  During such
period (the  "Restriction  Period") as shares acquired  pursuant to a Restricted
Stock Award remain subject to Vesting Restrictions, such shares may not be sold,
exchanged,  transferred,  pledged,  assigned or otherwise disposed of other than
pursuant to an  Ownership  Change  Event or as provided  in Section  7.10.  Upon
request by the Company,  each Participant shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder and
shall  promptly  present to the  Company any and all  certificates  representing
shares of Stock  acquired  hereunder for the placement on such  certificates  of
appropriate legends evidencing any such transfer restrictions.

         7.7 Voting  Rights;  Dividends.  Except as provided in this Section and
Section 7.6,  during the Restriction  Period  applicable to shares of Restricted
Stock held by a Participant,  the Participant  shall have all of the rights of a
stockholder of the Company holding shares of Stock,  including the right to vote
the  shares  of  Restricted  Stock  and  to  receive  all  dividends  and  other
distributions paid with respect to such shares;  provided,  however, that if any

                                                                              13

<PAGE>


such dividends or distributions  are paid in shares of Stock,  such shares shall
be subject to the same Vesting  Restrictions  as the shares of Restricted  Stock
with respect to which they were paid.

         7.8 Effect of Termination of Service.  If a Participant's  Service with
the Participating Company Group terminates for any reason,  whether voluntary or
involuntary  (including the Participant's death or disability),  (a) the Company
shall have the option to repurchase at the original  purchase  price paid by the
Participant shares of Restricted Stock acquired by the Participant pursuant to a
Restricted  Stock  Purchase Right and (b) the  Participant  shall forfeit to the
Company  shares of Restricted  Stock acquired by the  Participant  pursuant to a
Restricted  Stock  Bonus  which,  in either  case,  remain  subject  to  Vesting
Restrictions  as of the date of the  Participant's  termination of Service.  The
Company shall have the right to assign at any time any  repurchase  right it may
have,  whether or not such right is then exercisable,  to one or more persons as
may be selected by the Company.

         7.9 Standard Forms of Restricted Stock Agreement.  The Board shall have
the  authority  from  time to time to  approve  one or more  standard  forms  of
Restricted  Stock  Agreement  and to vary the terms of any such  standard  forms
either in  connection  with the grant or amendment of an  individual  Restricted
Stock Award or in connection  with the  authorization  of a new standard form or
forms; provided, however, that the terms and conditions of any such new, revised
or  amended  standard  form or  forms  of  Restricted  Stock  Agreement  are not
inconsistent with the terms of the Plan.

         7.10  Nontransferability  of Restricted  Stock Award Rights.  Rights to
acquire shares of Stock pursuant to a Restricted Stock Award may not be assigned
or  transferred  in any  manner  except  by will  or the  laws  of  descent  and
distribution,  and, during the lifetime of the Participant, shall be exercisable
only by the Participant.

     8. TRANSFER OF CONTROL.

         8.1 Definitions.

                  (a) An  "Ownership  Change  Event"  shall  be  deemed  to have
occurred if any of the following occurs with respect to the Company:

                           (i) the  direct or  indirect  sale or  exchange  in a
single or series of related  transactions by the  stockholders of the Company of
more than fifty percent (50%) of the voting stock of the Company;

                           (ii) a merger or  consolidation  in which the Company
is a party;

                           (iii)  the  sale,  exchange,  or  transfer  of all or
substantially all of the assets of the Company; or

                           (iv) a liquidation or dissolution of the Company.

                                                                              14

<PAGE>


                  (b) A "Transfer  of Control"  shall mean an  Ownership  Change
Event  or a  series  of  related  Ownership  Change  Events  (collectively,  the
"Transaction")  wherein the stockholders of the Company  immediately  before the
Transaction do not retain  immediately  after the Transaction,  in substantially
the same  proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction,  direct or indirect beneficial  ownership of
more  than  fifty  percent  (50%)  of the  total  combined  voting  power of the
outstanding  voting stock of the Company or the  corporation or  corporations to
which  the   assets  of  the   Company   were   transferred   (the   "Transferee
Corporation(s)"),  as the case may be. For purposes of the  preceding  sentence,
indirect beneficial  ownership shall include,  without  limitation,  an interest
resulting from ownership of the voting stock of one or more corporations  which,
as  a  result  of  the   Transaction,   own  the   Company  or  the   Transferee
Corporation(s),  as the case may be,  either  directly  or  through  one or more
subsidiary  corporations.  The Board shall have the right to  determine  whether
multiple  sales or  exchanges  of the voting  stock of the  Company or  multiple
Ownership  Change  Events are  related,  and its  determination  shall be final,
binding and conclusive.

         8.2 Effect of Transfer of Control on Awards. In the event of a Transfer
of  Control,   the  Board,  in  its  sole  discretion,   may  provide  that  any
unexercisable or unvested portion of the outstanding Awards shall be immediately
exercisable  and vested in full as of a date  determined by the Board and/or may
arrange with the surviving, continuing,  successor, or purchasing corporation or
parent corporation  thereof,  as the case may be (the "Acquiring  Corporation"),
for the  Acquiring  Corporation  to  either  assume  the  Company's  rights  and
obligations  under  outstanding  Awards or  substitute  for  outstanding  Awards
substantially  equivalent  awards for the  Acquiring  Corporation's  stock.  For
purposes of this Section 8.2, an Award shall be deemed assumed if, following the
Transfer of Control,  the Award confers the right to acquire in accordance  with
its  terms  and  conditions,  for  each  share  of Stock  subject  to the  Award
immediately prior to the Transfer of Control, the consideration  (whether stock,
cash or other  securities  or property) to which a holder of a share of Stock on
the effective date of the Transfer of Control was entitled. Any Awards which are
neither  assumed or substituted  for by the Acquiring  Corporation in connection
with the  Transfer of Control nor  exercised  as of the date of the  Transfer of
Control shall terminate and cease to be outstanding  effective as of the date of
the Transfer of Control.  Notwithstanding  the foregoing,  shares  acquired upon
exercise  of an Award prior to the  Transfer  of Control  and any  consideration
received  pursuant to the  Transfer of Control with respect to such shares shall
continue  to be  subject to all  applicable  provisions  of the Award  Agreement
evidencing such Award except as otherwise provided in such Award Agreement or by
the Board.

     9.  PROVISION OF  INFORMATION.  Each  Participant  shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company's common stockholders.

     10. COMPLIANCE WITH SECURITIES LAW. The grant of Awards and the issuance of
shares of Stock  pursuant  to Awards  shall be  subject to  compliance  with all
applicable  requirements  of federal,  state or foreign law with respect to such
securities.  No shares may be issued  pursuant an Award if such  issuance  would
constitute a violation of any applicable  federal,

                                                                              15

<PAGE>


state or foreign securities laws or other law or regulations or the requirements
of any stock  exchange or market system upon which the Stock may then be listed.
In addition,  no Award may be exercised  or shares  issued  pursuant to an Award
unless (a) a registration  statement  under the Securities Act shall at the time
of such  exercise or issuance be in effect with  respect to the shares  issuable
pursuant to the Award or (b) in the opinion of legal counsel to the Company, the
shares issuable pursuant to the Award may be issued in accordance with the terms
of an applicable exemption from the registration  requirements of the Securities
Act.  The  inability  of the Company to obtain from any  regulatory  body having
jurisdiction the authority,  if any, deemed by the Company's legal counsel to be
necessary to the lawful issuance and sale of any shares  hereunder shall relieve
the  Company of any  liability  in respect of the  failure to issue or sell such
shares as to which such requisite  authority shall not have been obtained.  As a
condition  to the  issuance  of shares  pursuant  to any Award,  the Company may
require the Participant to satisfy any  qualifications  that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any  representation or warranty with respect thereto as may be requested by
the Company.

     11. INDEMNIFICATION. In addition to such other rights of indemnification as
they  may  have  as  members  of the  Board  or  officers  or  employees  of the
Participating  Company Group, members of the Board and any officers or employees
of the Participating Company Group to whom authority to act for the Board or the
Company is delegated  shall be indemnified by the Company against all reasonable
expenses,  including  attorneys'  fees,  actually  and  necessarily  incurred in
connection with the defense of any action, suit or proceeding,  or in connection
with any appeal  therein,  to which they or any of them may be a party by reason
of any action taken or failure to act under or in  connection  with the Plan, or
any right granted hereunder,  and against all amounts paid by them in settlement
thereof  (provided  such  settlement  is approved by  independent  legal counsel
selected by the  Company) or paid by them in  satisfaction  of a judgment in any
such action,  suit or  proceeding,  except in relation to matters as to which it
shall be adjudged in such action,  suit or proceeding that such person is liable
for gross negligence,  bad faith or intentional misconduct in duties;  provided,
however,  that within sixty (60) days after the institution of such action, suit
or  proceeding,  such  person  shall  offer  to the  Company,  in  writing,  the
opportunity at its own expense to handle and defend the same.

     12.  TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the
Plan at any time. However,  subject to changes in applicable law, regulations or
rules that  would  permit  otherwise,  without  the  approval  of the  Company's
stockholders,  there shall be (a) no increase in the maximum aggregate number of
shares of Stock that may be issued  under the Plan  (except by  operation of the
provisions  of Section 4.2),  (b) no change in the class of persons  eligible to
receive  Incentive  Stock Options,  and (c) no other  amendment of the Plan that
would require approval of the Company's  stockholders  under any applicable law,
regulation or rule. In any event,  no  termination  or amendment of the Plan may
adversely affect any then outstanding Award or any unexercised  portion thereof,
without the consent of the Participant,  unless such termination or amendment is
required to enable an Option  designated as an Incentive Stock Option to qualify
as an Incentive  Stock Option or is necessary to comply with any applicable law,
regulation or rule.

                                                                              16

<PAGE>


         IN WITNESS WHEREOF, the undersigned  Secretary of the Company certifies
that the foregoing sets forth the Network  Peripherals  Inc. 1997 Stock Plan, as
amended by the Board through March 24, 1998.


                                                ________________________________
                                                Secretary

                                                                              17

<PAGE>


                                  PLAN HISTORY


February 18, 1997           Board  adopts  Plan,  with  an  initial  reserve  of
                            1,500,000 shares.

April 24, 1997              Stockholders  approve Plan,  with an initial reserve
                            of 1,500,000 shares.

March 24, 1998              Board  approves  1,000,000  share  reserve  increase
                            (from 1,500,000 to 2,500,000).

May 26, 1998                Stockholders   approve   1,000,000   share   reserve
                            increase (approved by Board on March 24, 1998).

                                                                              18