Document:

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                                                                EXHIBIT 4.4

                              ELASTIC NETWORKS INC.

                            l999 Stock Incentive Plan

1.     Purpose

       The purpose of this 1999 Stock Incentive Plan (the Plan") of Elastic
Networks Inc., a Delaware corporation (the "Company"), is to advance the
interests of the Company's stockholders by enhancing the Company's ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except where the context otherwise requires, the term "Company" shall include
any present or future subsidiary corporations of Elastic Networks Inc. as
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder the "Code").

2.     Eligibility

       All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, restricted stock or other
stock-based awards (each, an "Award") under the Plan. Any person who has been
granted an Award under the Plan shall be deemed a "Participant."

3.     Administration, Delegation

       a. Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the role and final judge
of such expediency. All decisions by the Board shall be made in the Board's sole
discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to
the authoring delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.

       b. Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to  one or more executive officers of
the Company the power to make Awards and exercise such other powers under the
Plan as the Board may determine, provided that the Board shall fix the maximum
number of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

       c. Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees

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of the Board (a "Committee"). If and when the common stock, $.01 par value per
share, of the Company (the "Common Stock") is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the Board shall appoint one such
Committee of not less than two members, each member of which shall be an
"outside director" within the meaning of Section 162(m) of the Code and a
"non-employee director" as defined in Rule 16b-3 promulgated under the Exchange
Act. All references in the Plan to the "Board" shall mean the Board or a
Committee of the Board or the executive officer referred to in Section 3(b) to
the extent that the Board's powers or authority under the Plan have been
delegated to such Committee or executive officer.

4.     Stock Available for Awards

       a. Number of Shares. Subject to adjustment under Section 4(c), Awards may
be made under the Plan for up to 5,136,766 shares of Common Stock. If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part or results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock 0ptions is hereinafter defined), to any limitation required
under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.

       b. Per-Participant Limit. Subject to adjustment under Section 4(c), for
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares with respect to which an Award may be granted to any
Participant under the Plan shall be 2,000,000 per calendar year. The
per-participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code.

       c. Adjustment of Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar changes in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding Option, (iii) the repurchase price per
security subject to each outstanding Restricted Stock Award and (iv) the terms
of each other outstanding stock-based Award shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate. If this Section 4(c) applies and Section 8(e)(i)
also applies to any event, Section 8(e)(i) shall be applicable to such event and
this Section 4(c) shall not be applicable.

5.     Stock Options

       a. General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each

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Option, including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable. An option which is not intended to
be an Incentive Stock Option (as hereinafter defined) shall be designated a
"Nonstatutory Stock Option."

       b. Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

       c. Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement.

       d. Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

       e. Exercise of Options. Options may be exercised only by delivery to the
Company of a written notice of exercised by the proper person together with
payment in full as specified in Section 5(f) for the number of shares for which
the Option is exercised.

       f. Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:

          i. in cash or by check, payable to the order of the Company;

          ii. except as the Board may, in its sole discretion, otherwise
provide in an option agreement, by (A) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price or (B) delivery by the
Participant to the Company or a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash
or a check sufficient to pay the exercise price;

          iii. when the Common Stock is registered under the Exchange Act, by
delivery of shares of Common Stock owned by the Participant valued at their fair
market value as determined by (or in a manner approved by) the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery;

          iv. to the extent permitted by the Board, in its sole discretion by
(A) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (B) payment of such other lawful consideration as
the Board may determine; or

          v. by any combination of the above permitted forms of payment.

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6.     Restricted Stock

       a. Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").

       b. Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

7.     Other Stock-Based Awards.

       The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.

8.     General Provisions Applicable to Awards

       a. Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award. Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

       b. Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to  those set forth in the Plan.

       c. Board Discretion. Except as otherwise provided by the Plan, each type
of Award may be made alone or in addition in relation to any other type of
Award. The terms of each type of

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Award need not be identical and the Board need not treat Participants uniformly.

       d. Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

       e. Acquisition Events

          i. Consequences of Acquisition Events. Upon the occurrence of an
Acquisition Event (as defined below), each outstanding Option or Award shall be
assumed or an equivalent option or award substituted by the successor
corporation or a parent or subsidiary of the successor corporation, provided
that any such Options substituted for Incentive Stock Options shall satisfy, in
the determination of the Board the requirements of Section 424(a) of the Code,
unless the successor corporation refuses to assume, or substitute for the Option
or Award, in which case (i) the Participant shall have the right to exercise the
Option in full, including with respect to shares of Common Stock as to which it
would not otherwise be exercisable, (ii) all Restricted Stock Awards then
outstanding shall become free of all restrictions prior to the consummation of
the Acquisition Event and (iii) any other stock-based Awards outstanding shall
become exercisable, realizable or vested in full, or shall be free of all
conditions or restrictions, as applicable to each such Award, prior to the
consummation of the Acquisition Event. If an Option or Award is exercisable in
lieu of assumption or substitution in the event of an Acquisition Event, the
Board shall notify the Participant in writing or electronically that the Option
or Award shall be fully exercisable for a period of not less than 45 days from
the date of such notice, and the Option or Award shall terminate upon the
expiration of such period.

             Each Option or other Award assumed or substituted pursuant to the
immediately preceding paragraph shall include a provision to the effect that
such Option or Award shall become immediately exercisable (or vested) in full
if, on or prior to the first anniversary of the Acquisition Event, the
Participant terminates his or her employment for Good Reason or is terminated
without Cause by the surviving or acquiring corporation. "Good Reason" shall
mean a reduction of 20% or more in the annual Total Target Cash Compensation for
which the Participant is eligible or, with respect to the Participants who are
employed in the position of Vice President or higher, assignment to
responsibilities which are not substantially equivalent in the aggregate to
those responsibilities to which they were assigned prior to the Acquisition
Event. "Total Target Cash Compensation" shall mean annual base salary plus
target short term incentive compensation payable at 100% Participant
performance, whether sales incentive, bonus or otherwise. "Cause" shall mean any
act or omission by the Participant which is or is likely to be injurious to the
Company or the business reputation of the Company, failure by the Participant to
perform his or her material responsibilities to the Company (including, without
limitation, breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Participant and the Company), violation by the Participant of the
Company's

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rules, policies or procedures, or refusal by the Participant to obey the lawful
direction (consistent with the Participant's responsibilities) of the Board or
any person to whom the Participant reports. The Participant shall be considered
to have been discharged for "Cause" if the Company determines, within 30 days
after the Participant's resignation, that discharge for Cause was warranted. as
determined by the Company, which determination shall be conclusive.

             An "Acquisition Event" shall mean: (a) any merger or consolidation
which results in the voting securities of the Company outstanding immediately
prior thereto representing immediately thereafter (either by remaining
outstanding or by being converted into voting securities of the surviving or
acquiring entity) less than 50% of the combined voting power of the voting
securities of the Company or such surviving or acquiring entity outstanding
immediately after such merger or consolidation; (b) any safe of all or
substantially all of the assets of the Company; or (c) the complete liquidation
of the Company.

             Notwithstanding the foregoing, the election of any Purchaser (as
defined in the Right of First Offer and Co-Sale Agreement, dated as of May 1999
and as amended from time to time, by and among the Company, Nortel Networks Inc.
("Nortel Networks") and the persons and entities listed on Exhibit A thereto
(the "Right of First Offer Agreement")) to sell its Shares (as defined in the
Right of First Offer Agreement) to Nortel Networks pursuant to Section 6 of the
Right of First Offer Agreement, and the purchase of any such Shares by Nortel
Networks, shall not be deemed to be an Acquisition Event.

          ii. Assumption of Options Upon Certain Events. The Board may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing
corporation. The Substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.

       (f) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may satisfy such tax obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

       (g) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to substituting therefor another
Award of the same or a different type, changing the date exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not

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materially and adversely affect the Participant.

       (h) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until all
conditions of the Award have been met or removed to the satisfaction of the
Company, in the opinion of the Company's counsel, all other legal matters in
connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed
and delivered to the Company such representations or agreements as the
Company may consider appropriate to satisfy the requirements of any
applicable laws, rules or regulations.

       (i) Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

9.     Miscellaneous

       a. No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company or affecting the ability of the Company or the
Participant to terminate the employment relationship, if any, for any reason,
including, but not limited to, without Cause or without Good Reason, as
applicable. The Company expressly reserves the right at any time to dismiss or
otherwise terminate its relationship with a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Award.

       b. No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.

       c. Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award granted to a
Participant designated by the Board as subject to Section 162(m) of the Code by
the Board shall become exercisable, vested or realizable. as applicable to such
Award, unless and until the Plan has been approved by the Company's stockholders
to the extent stockholder approval is required by Section 162(m) in the manner
required under Section 162(m) (including the vote required under Section
162(m)). No Awards shall be granted under the Plan after the completion of ten
years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Company's stockholders, but
Awards previously granted may extend beyond that date.

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       d. Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that to the extent required by
Section 162(m) of the Code, no Award granted to a Participant designated as
subject to Section 162(m) by the Board after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award (to the
extent that such amendment to the Plan was required to grant such Award to a
particular Participant), unless and until such amendment shall have been
approved by the Company's stockholders as required by Section 162(m) (including
the vote required under Section 162(m)).

       e. Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                                          Adopted by the Board of Directors
                                          on May 12, 1999

                                          Approved by the Stockholders
                                          on May 12, 1999

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                                                                  EXHIBIT 4.5

                              ELASTIC NETWORKS INC.
                          EMPLOYEE STOCK PURCHASE PLAN

1.   PURPOSE.

     The purpose of the Elastic Networks Inc. Employee Stock Purchase Plan is to
provide employees of the Company and selected subsidiary corporations within the
meaning of Code Section 424(f) with an opportunity to become owners of the
Company through the purchase of shares of Common Stock of the Company. The
Company intends the Plan to qualify as an employee stock purchase plan under
Code Section 423. Accordingly, the provisions of the Plan shall be construed in
a manner consistent with the requirements of Code Section 423.

2.   DEFINITIONS.

     (a) "Code" means the Internal Revenue Code of 1986, as amended.

     (b) "Company" means Elastic Networks Inc.

     (c) "Common Stock" means the common stock, $.01 par value per share, of the
Company.

     (d) "Compensation" means the regular compensation, including overtime,
bonuses and commissions that the Company or a Designated Subsidiary pays to an
Employee during an Offering Period.

     (e) "Committee" means the committee described in Paragraph 12.

     (f) "Designated Subsidiary" means a Subsidiary that has adopted the Plan
pursuant to Paragraph 12.

     (g) "Employee" means any person who customarily works as a common law
employee for the Company or a Designated Subsidiary for more than 20 hours per
week and for more than five months during any calendar year.

     (h) "Offering Periods" means each successive six month period beginning on
January 1 and July 1, with the first such period commencing on January 1, 2001.

     (i) "Participant" means an Employee who has completed an authorization form
under Paragraph 5 and elected to contribute to the Plan through payroll
deductions.

     (j) "Plan" means the Elastic Networks Inc. Employee Stock Purchase Plan.

     (k) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time an
option is granted to a Participant under the Plan, each of the corporations
other than the last corporation in the unbroken chain owns

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stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

3.   ELIGIBILITY.

     An Employee whom the Company or a Designated Subsidiary has employed
continuously for one year as of the first day of an Offering Period shall be
eligible to participate in the Plan for that Offering Period.

4.   OFFERING PERIOD.

     The Committee will send to each Employee upon fulfilling the eligibility
requirements of Paragraph 3 a notice advising the Employee of his or her right
to participate in the Plan for the ensuing Offering Period.

5.   PARTICIPATION.

     An Employee who meets the eligibility requirements of Paragraph 3 may
become a Participant for an Offering Period by completing an authorization
notice and delivering it to the Committee within a reasonable period of time
prior to the first day of such Offering Period. All Participants receiving
options under the Plan shall have the same rights and privileges.

6.   METHOD OF PAYMENT.

     A Participant may contribute to the Plan through payroll deductions, as
follows:

     (a) The Participant shall elect on an authorization notice to have
deductions made from his or her Compensation for each payroll period during the
Offering Period at a rate which shall be at least 1% but not in excess of 15% of
his or her Compensation.

     (b) All payroll deductions shall be credited to the Participant's account
under the Plan. No interest or earnings shall accrue on any payroll deductions
credited to such accounts.

     (c) Payroll deductions shall commence on the first payday coinciding with
or following the first day of each Offering Period and shall end with the last
payday preceding or coinciding with the end of that Offering Period, unless the
Participant sooner withdraws as authorized under Paragraph 10 below.

     (d) A Participant may not alter the rate of payroll deductions during the
Offering Period.

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7.   GRANTING OF OPTION.

     (a) On the first day of each Offering Period, a Participant shall receive
options to purchase a number of shares of Common Stock with funds withheld from
his or her Compensation, subject to the adjustments provided for in Paragraph 16
below. Such number or shares shall be determined at the end of the Offering
Period according to the following procedure:

Step 1 -- Determine the amount the Company withheld from Compensation since the
          beginning of the Offering Period;

Step 2 -- Determine the amount which represents 85% of the lower of fair market
          value of a share of Common Stock on the (I) first day of the Offering
          Period, or (II) the last day of the Offering Period; and

Step 3 -- Divide the amount determined in Step 1 by the amount determined in
          Step 2 and round down the quotient to the nearest whole number.

     (b) For purposes of the immediately preceding Subparagraph (a), the fair
market value of a share of Common Stock as of each date described in Step 2
shall be determined as follows: (i) if the Common Stock is traded on a national
securities exchange, the closing sale price on that date; (ii) if the Common
Stock is not traded on any such exchange, the closing sale price as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") for such date; (iii) if no such closing sale price information is
available, the average of the closing bid and asked prices as reported by Nasdaq
for such date; or (iv) if there are no such closing bid and asked prices, the
average of the closing bid and asked prices as reported by any other commercial
service for such date. If any date described in Step 2 is not a trading day, the
fair market value of a share of Common Stock for such date shall be determined
by using the closing sale price or the average of the closing bid and asked
prices, as appropriate, for the immediately preceding trading day.

     (c) No Participant shall receive options:

          (i) if, immediately after the grant, that Participant would own
     shares, or hold outstanding options to purchase shares, or both, possessing
     five percent or more of the total combined voting power or value of all
     classes of shares of the Company or any Subsidiaries; or

          (ii) which permits the Participant to purchase shares under all
     employee stock purchase plans of the Company and any Subsidiary with a fair
     market value (determined at the time the options are granted) that exceeds
     $25,000 in any calendar year.

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8.   EXERCISE OF OPTION.

     (a) Unless a Participant effects a timely withdrawal pursuant to Paragraph
10 below, his or her option for the purchase of shares of Common Stock during an
Offering Period will be automatically exercised on the day following the last
day of that Offering Period for the purchase of the maximum number of full
shares which the sum of the payroll deductions credited to the Participant's
account during such Offering Period can purchase pursuant to the formula
specified in Paragraph 7(a) hereof.

     (b) The disposition of any payroll deductions credited to a Participant's
account during the Offering Period which are not used for the purchase of shares
shall be as follows:

          (i) If the Participant has elected to withdraw from the Plan as of the
          end of the Offering Period, the Company shall deliver the amount of
          the payroll deductions to the Participant.

          (ii) The amount of any excess payroll deductions shall be applied to
          the purchase of shares in the immediately succeeding Offering Period.

9.   DELIVERY OF COMMON STOCK.

     As soon as administratively feasible after the end of each Offering Period,
the Company shall deliver to each Participant or, in the alternative, to a
custodian that the Committee designates, the shares of Common Stock the
Participant purchased upon the exercise of the option. In the event of the
delivery of the shares to a custodian, the Participant may elect at any time
thereafter to take possession of the shares or to have the Committee deliver the
shares to any brokerage firm.

10.  WITHDRAWAL FROM THE PLAN.

     (a) A Participant will be deemed to have elected to participate in each
subsequent Offering Period following his or her initial election to participate
in the Plan, unless the Participant files a written withdrawal notice with the
Committee at least ten days prior to the beginning of the Offering Period as of
which the Participant desires to withdraw from the Plan.

     (b) A Participant may withdraw all, but not less than all, payroll
deductions credited to his account for an Offering Period at any time during
such Offering Period by delivering a written notice to the Committee at least
ten days prior to the end of such Offering Period. A Participant who for any
reason, including retirement, termination of employment or death, ceases to be
an Employee prior to the last day of any Offering Period will be deemed to have
withdrawn from the Plan as of the date of such cessation.

     (c) Upon the withdrawal of a Participant from the Plan under the terms of
Subparagraph

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(b) above, his or her outstanding options under this Plan shall immediately
terminate.

     (d) In the event a Participant withdraws from the Plan for any reason, the
Company will pay to the Participant all payroll deductions credited to his or
her account or, in the event of death, to the persons entitled thereto under the
terms of Paragraph 14, as soon as administratively feasible after the date of
such withdrawal and no further deductions will be made from the Participant's
Compensation.

     (e) A Participant who has elected to withdraw from the Plan may resume
participation in the same manner and pursuant to the same rules as any Employee
making an initial election to participate in the Plan; provided, however, that
any Participant who is an officer or director of the Company or any Subsidiary
and who withdraws from the Plan for any reason shall not be permitted to resume
participation any earlier than the first day of an Offering Period which is more
than six months after the effective date of the withdrawal or any earlier date
that will permit transactions under the Plan to continue to be exempt within the
meaning of Rule 16b-3, as promulgated under the Securities Exchange Act of 1934,
as amended.

11.  STOCK.

     (a) The shares of Common Stock that the Company shall sell to Participants
under the Plan may, at the election of the Company, be either treasury shares or
shares originally issued for such purpose. The maximum number of shares made
available for sale under the Plan shall be 500,000 subject to adjustment upon
changes in capitalization of the Company as provided in Paragraph 16 below. If
the total number of shares for which options are to be exercised in accordance
with Paragraph 8 exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares available in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable.

     (b) A Participant will have no interest in shares covered by his or her
option until the Participant exercises the option.

     (c) Shares that a Participant purchases under the Plan will be registered
in the name of the Participant, or if the Participant so directs by written
notice to the Committee prior to the last day of the Offering Period, in the
names of the Participant and one other person the Participant designates, as
joint tenants with rights of survivorship.

     (d) A Participant may not sell or transfer shares he or she acquired
pursuant to the exercise of options granted during an Offering Period prior to
the expiration of one year from the last day of such Offering Period, except in
the event of disability or death.

                                       5
<PAGE>

12.  ADOPTION OF PLAN BY SUBSIDIARIES.

     Any Subsidiary, if authorized to do so by the Company, may adopt the Plan
by action of its board of directors. Such action shall state the effective date
of the adoption of the Plan.

13.  ADMINISTRATION.

     The compensation committee of the Board of Directors of the Company shall
administer the Plan. The Board of Directors of the Company shall determine the
composition of the Committee and may at any time remove members from, or add
members to, or fill vacancies therein. The Committee shall be vested with full
authority to make, administer and interpret such rules and regulations as it
deems necessary to administer the Plan, and any determination or action of the
Committee in connection with the administration or interpretation of the Plan
shall be final and binding upon each Employee, Participant and all persons
claiming under or through any Employee or Participant.

14.  DESIGNATION OF BENEFICIARY.

     (a) A Participant may file with the Committee a written designation of a
beneficiary who is to receive any payroll deductions credited to the
Participant's account under the Plan or any shares of Common Stock owed to the
Participant under the Plan in the event of the Participant's death. A
Participant may change a beneficiary at any time by filing a notice in writing
with the Committee.

     (b) Upon the death of a Participant and upon receipt by the Committee of
proof of the identity and existence of the Participant's designated beneficiary,
the Committee shall deliver such cash or shares, or both, to the beneficiary. In
the event a Participant dies and is not survived by a beneficiary that the
Participant designated in accordance with the immediately preceding Subparagraph
(a), the Committee shall deliver such cash or shares, or both, to the personal
representative of the estate of the deceased Participant. If to the knowledge of
the Committee no personal representative has been appointed within 90 days
following the date of the Participant's death, the Committee, in its discretion,
may deliver such cash or shares, or both, to the surviving spouse of the
deceased Participant, or to any one or more dependents or relatives of the
deceased Participant, or if no spouse, dependent or relative is known to the
Committee, then to such other person as the Committee may designate.

     (c) No designated beneficiary shall acquire any interest in such cash or
shares prior to the death of the Participant.

15.  TRANSFERABILITY.

     A Participant may not assign, pledge or otherwise dispose of payroll
deductions credited to the Participant's account nor any rights to exercise an
option or to receive shares of Common Stock

                                       6
<PAGE>

under the Plan other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined in the Employee
Retirement Income Security Act. Any other attempted assignment, pledge or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw in accordance with Paragraph 10 above.

16.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

     In the event that, by reason of a recapitalization, reclassification,
stock split, combination of shares or dividend payable in shares of Common
Stock, the outstanding shares of Common Stock of the Company are hereafter
increased or decreased or changed into or exchanged for a different number or
kind of securities of the Company, the Committee shall make an appropriate
adjustment to the number and kind of shares available for the granting of
options, and as to which outstanding options shall be exercisable, and to the
option price.

     Subject to any required action by the shareholders, if the Company shall be
a party to any reorganization involving a merger, consolidation or acquisition
of the stock or the assets of the Company, the Committee in its discretion (a)
may declare the Plan's termination in the same manner as if the Board of
Directors had terminated the Plan pursuant to Paragraph 17 below, or (b) may
declare that any option shall apply to the securities of the resulting
corporation and each option to purchase one share of the Common Stock shall
entitle the Participant to purchase the same number of securities of the
resulting corporation as a holder of a share of common Stock would be entitled
to receive for such share.

     Any issue by the Company of any class of preferred stock, or securities
convertible into shares of common or preferred stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Common Stock subject to any option or the option price
except as this Paragraph 16 specifically provides. The grant of an option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, or to merge or to consolidate, or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.

17.  AMENDMENT OR TERMINATION.

     The Board of Directors of the Company may at any time terminate or amend
the Plan. Any amendment of the Plan that (i) materially increases the benefits
to Participants, (ii) materially increases the number of securities that may be
issued under the Plan, or (iii) materially modifies the eligibility requirements
for participation in the Plan shall be subject to approval of the shareholders
of the Company. The Company shall refund to each Participant the amount of
payroll deductions credited to his or her account as of the date of termination
as soon as administratively feasible following the effective date of the
termination.

                                       7
<PAGE>

18.  NOTICES.

     All notices or other communications by a Participant to the Committee or
the Company shall be deemed to have been duly given when the Secretary of the
Company receives them or when any other person the Company designates receives
the notice or other communication in the form the Company specifies.

19.  NO CONTRACT.

     This Plan shall not be deemed to constitute a contract between the Company
or any Subsidiary and any Employee or to be a consideration or an inducement for
the employment of any Employee. Nothing contained in this Plan shall be deemed
to give any Employee the right to be retained in the service of the Company or
any Subsidiary or to interfere with the right of the Company or any Subsidiary
to discharge any Employee at any time regardless of the effect which such
discharge shall have upon him or her or any options granted hereunder.

20.  APPROVAL OF SHAREHOLDERS.

     The Plan shall be submitted to the shareholders of the Company for their
approval within 12 months after the Board of Directors of the Company adopts the
Plan. The adoption of the Plan is conditioned upon the approval of the
shareholders of the Company, and failure to receive their approval shall render
the Plan and all outstanding options thereunder void and of no effect.

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of
this _____ day of August, 2000.

                                         ELASTIC NETWORKS INC.

                                         By:___________________________________

                                         Title:________________________________

                                                 [CORPORATE SEAL]

                                       8

<PAGE>

                              ELASTIC NETWORKS INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                PARTICIPATION AGREEMENT AND AUTHORIZATION NOTICE

Name:  ____________________________________________

Address:  _________________________________________

Telephone Number:  ________________________________

Social Security Number:  __________________________

Date of Employment:  ______________________________

Elastic Networks Inc. (the "Company") is pleased to inform you that you are now
eligible to participate in the Company's Employee Stock Purchase Plan (the
"Plan"). This means that you may authorize the Company to deduct money from you
paycheck each pay period and to use that money to purchase shares of stock in
the Company.

By signing this Participation Agreement and Authorization Notice, you agree that
you have read and understand the Elastic Networks Inc. Employee Stock Purchase
Plan.

1.   PAYROLL DEDUCTION

When do you want your enrollment in the Plan to become effective? [check one]

     _____  Beginning with the January 1, 20__, offering period.

     _____  Beginning with the July 1, 20__, offering period.

What percentage of your pay do you want the Company to deduct each pay period
for deposit into your Plan account?

     _____ Percent [1% to 15% in whole number percentages]

Before any six-month period beginning on any January 1 or July 1, you may change
the percentage that is deducted from your pay. If you choose to change the
percentage deducted, you must contact the Company and complete a Notice to
Change Payroll Deductions prior to the beginning of the six-month period.

<PAGE>

2.   BENEFICIARY DESIGNATION

Your beneficiary is the person you want to receive any payroll deductions
credited to your account under the Plan or any shares of stock you are owed
under the Plan in the event of your death. You may change the person you
designate as your beneficiary at any time by giving the Company written notice.

To designate someone to be your beneficiary, please provide the following
information:

     Name of Beneficiary: ____________________________________

     Beneficiary's Address: __________________________________

                            __________________________________

     Beneficiary's Telephone Number: _________________________

     Beneficiary's Relationship to Me:  ______________________

3.   REGISTRATION OF SHARES

You may have your shares of stock registered in your name only or in the names
of you and your beneficiary jointly. If you elect to register your stock jointly
with your beneficiary, this means that, upon your death, that person
automatically will be the sole owner of the shares of stock.

How do you want to have your shares of stock registered? [check one]

     _____  In my name only

     _____  Jointly in my name and in the name of my beneficiary designated in
            paragraph 2 above

You understand that you will be enrolled in subsequent six-month offering
periods automatically, unless you submit to the Company a Participation
Withdrawal Notice at least ten days prior to the beginning of the next six-month
offering period.

----------------------------                ----------------------------
Signature                                   Date

                                       2
<PAGE>

                              ELASTIC NETWORKS INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                         PARTICIPATION WITHDRAWAL NOTICE

Name:  __________________________________________

Address:  _______________________________________

Telephone Number:  ______________________________

Social Security Number:  ________________________

Date of Employment:  ____________________________

     I withdraw from participation in the Elastic Networks Inc. Employee Stock
Purchase Plan (the "Plan") effective on the ____ day of _________ [January or
July], 20__. I understand that Elastic Networks Inc. (the "Company") will return
to me, as soon as possible, all payroll deductions credited to my account, and
that no further deductions will be made from my pay under the Plan. I also
understand that any outstanding options I may have to purchase stock under the
Plan will terminate immediately upon my withdrawal from the Plan.

     I also understand that I may resume participation in the Plan, beginning
with the next six-month offering period, by completing a new Participation
Agreement and Authorization Notice prior to the next period; except that, if I
am an officer or director of the Company or its subsidiary, generally I may not
resume participation in the Plan for at least six months after the effective
date of my withdrawal unless the federal securities laws permit the resumption
of participation at an earlier date.

----------------------------                ----------------------------
Signature                                   Date

<PAGE>

                              ELASTIC NETWORKS INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                       NOTICE TO CHANGE PAYROLL DEDUCTIONS

Name:  __________________________________________

Address:  _______________________________________

Telephone Number:  ______________________________

Social Security Number:  ________________________

Date of Employment:  ____________________________

     I request that Elastic Networks Inc. (the "Company") change the percentage
that the Company deducts from my pay each pay period, under the Company's
Employee Stock Purchase Plan, from ___% to ___%. I understand that this change
will become effective at the beginning of the next six-month offering period
after the date of this notice.

----------------------------                ----------------------------
Signature                                   Date

                                       5

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