October 17, 2000


Mr. Ron Rutherford
44315 View Point Circle
Fremont, CA 94539


Dear Ron:

On behalf of Network Peripherals Inc. I am pleased to offer you the position of
Vice President, Worldwide Sales reporting to me, President and Chief Executive
Officer.

You will receive a starting base salary of $12,916.67 per month, which is
equivalent to $155,000.00 per year, subject to federal, state and other
applicable taxes and payable bi-monthly. In addition, you will participate in
our commission plan targeted at $100,000.00 per year. Details of the commission
plan will be explained under separate cover.

Upon your acceptance of employment with the Company, management will recommend
to the Board of Directors that you be granted the option to purchase 160,000
shares of NPI common stock at a price-per-share to be determined by the Board of
Directors. The options, in accordance with terms of the Stock Option Plan, vest
over a four year schedule with 25% becoming vested twelve months from the start
date of your employment, and 1/48th of the total shares vesting each month
following.

If there is a Change of Control of the Company, during your first twelve months
of employment, 50% of your stock options will immediately vest. If there is a
Change of Control after your twelfth month of employment, all your options will
immediately vest. Change of Control means a transaction in which stock
constituting more than 50% of the Company and voting power are transferred to
then non-existing stockholders or a sale of all or substantially all of the
assets of the Company.

You will be entitled to participate in all of the Company's employee benefit
plans, beginning on your date of hire. Details will be sent to you under
separate cover.

Under the terms of this employment agreement if you employment is terminated
without "Cause", you will receive six months severance at your then current base
salary and will continue to receive standard Company benefits. For the purposes
of this contract, "Cause" shall mean conviction of a felony, fraud, theft or any
other willful act of misconduct.




Offer Letter                                                              Page 2
Ron Rutherford


When you report to work, you will be expected to execute the Company's standard
agreement relative to patents, confidential information and non-compete
obligations.

This is an offer for "at will" employment and does not constitute an offer or
guarantee of employment for any period of time. Other than as specifically set
forth herein, you will not be entitled to any other amounts from the Company.
This letter constitutes the full offer of employment and supersedes any prior
discussions. This offer is effective pending completion of reference checking
and will expire if not accepted in writing by October 26, 2000.

Ron, we look forward to your acceptance of this offer and are confident that
with the addition of your leadership, NPI will become a highly valued public
company.

Sincerely,


/s/ James Regel
-------------------------------------
James Regel
President and Chief Executive Officer


Accepted by: /s/  Ron Rutherford      Date: October 19, 2000
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            (Name)