CLARENT CORP/CA
1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>2
<FILENAME>dex103.txt
<DESCRIPTION>1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
<TEXT>

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                                                                    Exhibit 10.3

                              Clarent Corporation

                1999 Non-Employee Directors' Stock Option Plan

                Adopted by the Board of Directors April 8, 1999
                    Approved By Stockholders June 22, 1999
                Amended by the Board of Directors April 7, 2000
                     Approved By Stockholders June 7, 2000
             Amended by the Board of Directors on October 31, 2000
              Amended by the Board of Directors on April 12, 2001

                         Effective Date: June 30, 1999

1.   Purposes.

     (a)  Eligible Option Recipients. The persons eligible to receive Options
          are the Non-Employee Directors of the Company.

     (b)  Available Options. The purpose of the Plan is to provide a means by
          which Non-Employee Directors may be given an opportunity to benefit
          from increases in value of the Common Stock through the granting of
          Nonstatutory Stock Options.

     (c)  General Purpose. The Company, by means of the Plan, seeks to retain
          the services of its Non-Employee Directors, to secure and retain the
          services of new Non-Employee Directors and to provide incentives for
          such persons to exert maximum efforts for the success of the Company
          and its Affiliates.

2.   Definitions.

     (a)  "Affiliate" means any parent corporation or subsidiary corporation of
          the Company, whether now or hereafter existing, as those terms are
          defined in Sections 424(e) and (f), respectively, of the Code.

     (b)  "Annual Grant" means an Option granted annually to all Non-Employee
          Directors who meet the specified criteria specified in subsection 6(b)
          of the Plan.

     (c)  "Annual Meeting" means the annual meeting of the stockholders of the
          Company.

     (d)  "Board" means the Board of Directors of the Company.

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

     (f)  "Common Stock" means the common stock of the Company.

                                       1.
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     (g)  "Company" means Clarent Corporation, a Delaware corporation.

     (h)  "Consultant" means any person, including an advisor, (i) engaged by
          the Company or an Affiliate to render consulting or advisory services
          and who is compensated for such services or (ii) who is a member of
          the Board of Directors of an Affiliate. However, the term "Consultant"
          shall not include either Directors of the Company who are not
          compensated by the Company for their services as Directors or
          Directors of the Company who are merely paid a director's fee by the
          Company for their services as Directors.

     (i)  "Continuous Service" means that the Optionholder's service with the
          Company or an Affiliate, whether as an Employee, Director or
          Consultant, is not interrupted or terminated. The Optionholder's
          Continuous Service shall not be deemed to have terminated merely
          because of a change in the capacity in which the Optionholder renders
          service to the Company or an Affiliate as an Employee, Consultant or
          Director or a change in the entity for which the Optionholder renders
          such service, provided that there is no interruption or termination of
          the Optionholder's Continuous Service. For example, a change in status
          from a Non-Employee Director of the Company to a Consultant of an
          Affiliate or an Employee of the Company will not constitute an
          interruption of Continuous Service. The Board or the chief executive
          officer of the Company, in that party's sole discretion, may determine
          whether Continuous Service shall be considered interrupted in the case
          of any leave of absence approved by that party, including sick leave,
          military leave or any other personal leave.

     (j)  "Director" means a member of the Board of Directors of the Company.

     (k)  "Disability" means the inability of a person, in the opinion of a
          qualified physician acceptable to the Company, to perform the major
          duties of that person's position with the Company or an Affiliate of
          the Company because of the sickness or injury of the person.

     (l)  "Employee" means any person employed by the Company or an Affiliate.
          Mere service as a Director or payment of a director's fee by the
          Company or an Affiliate shall not be sufficient to constitute
          "employment" by the Company or an Affiliate.

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

     (n)  "Fair Market Value" means, as of any date, the value of the Common
          Stock determined as follows:

          (i)  If the Common Stock is listed on any established stock exchange
               or traded on the NASDAQ National Market System or the NASDAQ
               SmallCap Market, the Fair Market Value of a share of Common Stock
               shall be the closing sales price for such stock (or the closing
               bid, if no sales were reported) as quoted on such exchange or
               market (or the exchange or

                                       2.
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               market with the greatest volume of trading in the Common Stock)
               on the date of determination, or if such date is not a trading
               day, the last trading day prior to the date of determination, as
               reported in The Wall Street Journal or such other source as the
               Board deems reliable.

          (ii) In the absence of such markets for the Common Stock, the Fair
               Market Value shall be determined in good faith by the Board.

     (o)  "Initial Grant" means an Option granted to a Non-Employee Director who
          meets the specified criteria pursuant to subsection 6(a) of the Plan.

     (p)  "IPO Date" means the effective date of the initial public offering of
          the Common Stock.

     (q)  "Non-Employee Director" means a Director who is neither employed by
          the Company or an Affiliate nor a representative of a five percent
          (5%) or greater stockholder.

     (r)  "Nonstatutory Stock Option" means an Option not intended to qualify as
          an incentive stock option within the meaning of Section 422 of the
          Code and the regulations promulgated thereunder.

     (s)  "Officer" means a person who is an officer of the Company within the
          meaning of Section 16 of the Exchange Act and the rules and
          regulations promulgated thereunder.

     (t)  "Option" means a Nonstatutory Stock Option granted pursuant to the
          Plan.

     (u)  "Option Agreement" means a written agreement between the Company and
          an Optionholder evidencing the terms and conditions of an individual
          Option grant. Each Option Agreement shall be subject to the terms and
          conditions of the Plan.

     (v)  "Optionholder" means a person to whom an Option is granted pursuant to
          the Plan or, if applicable, such other person who holds an outstanding
          Option.

     (w)  "Plan" means this Clarent Corporation 1999 Non-Employee Directors'
          Stock Option Plan.

     (x)  "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
          any successor to Rule 16b-3, as in effect from time to time.

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

3.   Administration.

     (a)  Administration by Board. The Board shall administer the Plan unless
          and until the Board delegates administration to a committee.

                                       3.
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     (b)  Powers of Board. The Board shall have the power, subject to, and
          within the limitations of, the express provisions of the Plan:

          (i)    To determine the provisions of each Option to the extent not
                 specified in the Plan.

          (ii)   To construe and interpret the Plan and Options granted under
                 it, and to establish, amend and revoke rules and regulations
                 for its administration. The Board, in the exercise of this
                 power, may correct any defect, omission or inconsistency in the
                 Plan or in any Option Agreement, in a manner and to the extent
                 it shall deem necessary or expedient to make the Plan fully
                 effective.

          (iii)  To amend the Plan or an Option as provided in Section 12.

          (iv)   Generally, to exercise such powers and to perform such acts as
                 the Board deems necessary or expedient to promote the best
                 interests of the Company which are not in conflict with the
                 provisions of the Plan.

4.   Shares Subject to the Plan.

     (a)  Share Reserve. Subject to the provisions of Section 11 relating to
          adjustments upon changes in stock, the stock that may be issued
          pursuant to Options shall not exceed in the aggregate Five Hundred
          Thousand (500,000) shares of Common Stock.

     (b)  Reversion of Shares to the Share Reserve. If any Option shall for any
          reason expire or otherwise terminate, in whole or in part, without
          having been exercised in full, the stock not acquired under such
          Option shall revert to and again become available for issuance under
          the Plan.

     (c)  Source of Shares. The stock subject to the Plan may be unissued shares
          or reacquired shares, bought on the market or otherwise.

5.   Eligibility.

     Nondiscretionary Options as set forth in section 6 shall be granted under
     the Plan to all Non-Employee Directors.

6.   Non-Discretionary Grants.

     (a)  Initial Grants. Without any further action of the Board, each Non-
          Employee Director shall be granted the following Options:

          (i)    After March 31, 2000, each person who is elected or appointed
                 for the first time to be a Non-Employee Director automatically
                 shall, upon the date of his or her initial election or
                 appointment to be a Non-Employee Director

                                       4.
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               by the Board or stockholders of the Company, be granted an
               Initial Grant to purchase Thirty Five Thousand (35,000) shares of
               Common stock on the terms and conditions set forth herein.

          (ii) On the day following the first Annual Meeting after the IPO Date,
               each person who is then a Non-Employee Director and who served as
               a Non-Employee Director prior to March 31, 2000, automatically
               shall be granted an Option to purchase that number of shares of
               Common Stock equal to Thirty Five Thousand (35,000) shares of
               Common Stock less the number of shares of Common Stock subject to
               Options granted to such Non-Employee Director since the IPO Date.

     (b)  Annual Grants. Without any further action of the Board, on the day
          following each Annual Meeting commencing with the first Annual Meeting
          following the IPO Date, each person who is then a Non-Employee
          Director automatically shall be granted an Annual Grant to purchase
          Fifteen Thousand (15,000) shares of Common Stock on the terms and
          conditions set forth herein; provided, however, that if the person has
          not been serving as a Non-Employee Director for the entire period
          since the preceding Annual Meeting, then the number of shares subject
          to the Annual Grant shall be reduced pro rata for each full quarter
          prior to the date of grant during which such person did not serve as a
          Non-Employee Director.

7.   Option Provisions.

     Each Option shall be in such form and shall contain such terms and
conditions as required by the Plan.  Each Option shall contain such additional
terms and conditions, not inconsistent with the Plan, as the Board shall deem
appropriate.  Each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

     (a)  Term.  No Option shall be exercisable after the expiration of ten (10)
          years from the date it was granted.

     (b)  Exercise Price. The exercise price of each Option shall be one hundred
          percent (100%) of the Fair Market Value of the stock subject to the
          Option on the date the Option is granted. Notwithstanding the
          foregoing, an Option may be granted with an exercise price lower than
          that set forth in the preceding sentence if such Option is granted
          pursuant to an assumption or substitution for another option in a
          manner satisfying the provisions of Section 424(a) of the Code.

     (c)  Consideration. The purchase price of stock acquired pursuant to an
          Option may be paid, to the extent permitted by applicable statutes and
          regulations, in any combination of (i) cash or check, (ii) delivery to
          the Company of other Common Stock, (iii) deferred payment, (iv)
          pursuant to a Regulation T Program if the Shares are publicly traded
          or (v) any other form of legal consideration that may be acceptable to
          the Board and provided in the Option Agreement; provided,

                                       5.
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          however, that at any time that the Company is incorporated in
          Delaware, payment of the Common Stock's "par value," as defined in the
          Delaware General Corporation Law, shall not be made by deferred
          payment.

     In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

     (d)  Transferability. An Option shall not be transferable other than to
          "family members" as defined by Rule 701 of the Securities Act of 1933,
          as amended, and by will or by the laws of descent and distribution,
          and shall be exercisable during the lifetime of the Optionholder only
          by the Optionholder or such "family members" who are also transferees.
          Notwithstanding the foregoing, the Optionholder may, by delivering
          written notice to the Company, in a form satisfactory to the Company,
          designate a third party who, in the event of the death of the
          Optionholder, shall thereafter be entitled to exercise the Option.

     (e)  Exercise Schedule. The Option shall be exercisable as the shares of
          Common Stock subject to the Option vest.

     (f)  Vesting Schedule. Options shall vest as follows: (i) one twenty-fourth
          (1/24th) of the shares of Common Stock subject to the Option shall
          vest each month after the date of the grant of the Option over a
          period of two (2) years.

     (g)  Termination of Continuous Service. In the event an Optionholder's
          Continuous Service terminates (other than upon the Optionholder's
          death or Disability), the Optionholder may exercise his or her Option
          (to the extent that the Optionholder was entitled to exercise it as of
          the date of termination) but only within such period of time ending on
          the earlier of (i) the date twelve (12) months following the
          termination of the Optionholder's Continuous Service, or (ii) the
          expiration of the term of the Option as set forth in the Option
          Agreement. If, after termination, the Optionholder does not exercise
          his or her Option within the time specified in the Option Agreement,
          the Option shall terminate. For purposes of this Section 7(f), the
          limitations upon exercise discussed herein shall also apply to
          permitted transferees under Section 7(d).

     (h)  Extension of Termination Date. If the exercise of the Option following
          the termination of the Optionholder's Continuous Service (other than
          upon the Optionholder's death) would be prohibited at any time solely
          because the issuance of shares would violate the registration
          requirements under the Securities Act, then the Option shall terminate
          on the earlier of (i) the expiration of the term of the Option set
          forth in subsection 7(a) or (ii) the expiration of a period of three
          (3) months after the termination of the Optionholder's Continuous
          Service during which the exercise of the Option would not be in
          violation of such registration requirements.

                                       6.
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     (i)  Disability of Optionholder. In the event an Optionholder's Continuous
          Service terminates as a result of the Optionholder's Disability, the
          Optionholder may exercise his or her Option (to the extent that the
          Optionholder was entitled to exercise it as of the date of
          termination), but only within such period of time ending on the
          earlier of (i) the date twelve (12) months following such termination
          or (ii) the expiration of the term of the Option as set forth in the
          Option Agreement. If, after termination, the Optionholder does not
          exercise his or her Option within the time specified herein, the
          Option shall terminate. For purposes of this Section 7(h), the
          limitations upon exercise discussed herein shall also apply to
          permitted transferees under Section 7(d).

     (j)  Death of Optionholder. In the event (i) an Optionholder's Continuous
          Service terminates as a result of the Optionholder's death or (ii) the
          Optionholder dies within the three-month period after the termination
          of the Optionholder's Continuous Service for a reason other than
          death, then the Option may be exercised (to the extent the
          Optionholder was entitled to exercise the Option as of the date of
          death) by the Optionholder's estate, by a person who acquired the
          right to exercise the Option by bequest or inheritance or by a person
          designated to exercise the Option upon the Optionholder's death, but
          only within the period ending on the earlier of (1) the date eighteen
          (18) months following the date of death or (2) the expiration of the
          term of such Option as set forth in the Option Agreement. If, after
          death, the Option is not exercised within the time specified herein,
          the Option shall terminate.

8.   Covenants of the Company.

     (a)  Availability of Shares. During the terms of the Options, the Company
          shall keep available at all times the number of shares of Common Stock
          required to satisfy such Options.

     (b)  Securities Law Compliance. The Company shall seek to obtain from each
          regulatory commission or agency having jurisdiction over the Plan such
          authority as may be required to grant Options and to issue and sell
          shares of Common Stock upon exercise of the Options; provided,
          however, that this undertaking shall not require the Company to
          register under the Securities Act the Plan, any Option or any stock
          issued or issuable pursuant to any such Option. If, after reasonable
          efforts, the Company is unable to obtain from any such regulatory
          commission or agency the authority which counsel for the Company deems
          necessary for the lawful issuance and sale of stock under the Plan,
          the Company shall be relieved from any liability for failure to issue
          and sell stock upon exercise of such Options unless and until such
          authority is obtained.

9.   Use of Proceeds from Stock.

     Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.

                                       7.
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10.  Miscellaneous.

     (a)  Stockholder Rights. No Optionholder shall be deemed to be the holder
          of, or to have any of the rights of a holder with respect to, any
          shares subject to such Option unless and until such Optionholder has
          satisfied all requirements for exercise of the Option pursuant to its
          terms.

     (b)  No Service Rights. Nothing in the Plan or any instrument executed or
          Option granted pursuant thereto shall confer upon any Optionholder any
          right to continue to serve the Company as a Non-Employee Director or
          shall affect the right of the Company or an Affiliate to terminate (i)
          the employment of an Employee with or without notice and with or
          without cause, (ii) the service of a Consultant pursuant to the terms
          of such Consultant's agreement with the Company or an Affiliate or
          (iii) the service of a Director pursuant to the Bylaws of the Company
          or an Affiliate, and any applicable provisions of the corporate law of
          the state in which the Company or the Affiliate is incorporated, as
          the case may be.

     (c)  Investment Assurances. The Company may require an Optionholder, as a
          condition of exercising or acquiring stock under any Option, (i) to
          give written assurances satisfactory to the Company as to the
          Optionholder's knowledge and experience in financial and business
          matters and/or to employ a purchaser representative reasonably
          satisfactory to the Company who is knowledgeable and experienced in
          financial and business matters and that he or she is capable of
          evaluating, alone or together with the purchaser representative, the
          merits and risks of exercising the Option; and (ii) to give written
          assurances satisfactory to the Company stating that the Optionholder
          is acquiring the stock subject to the Option for the Optionholder's
          own account and not with any present intention of selling or otherwise
          distributing the stock. The foregoing requirements, and any assurances
          given pursuant to such requirements, shall be inoperative if (iii) the
          issuance of the shares upon the exercise or acquisition of stock under
          the Option has been registered under a then currently effective
          registration statement under the Securities Act or (iv) as to any
          particular requirement, a determination is made by counsel for the
          Company that such requirement need not be met in the circumstances
          under the then applicable securities laws. The Company may, upon
          advice of counsel to the Company, place legends on stock certificates
          issued under the Plan as such counsel deems necessary or appropriate
          in order to comply with applicable securities laws, including, but not
          limited to, legends restricting the transfer of the stock.

     (d)  Withholding Obligations. The Optionholder may satisfy any federal,
          state or local tax withholding obligation relating to the exercise or
          acquisition of stock under an Option by any of the following means (in
          addition to the Company's right to withhold from any compensation paid
          to the Optionholder by the Company) or by a combination of such means:
          (i) tendering a cash payment; (ii) authorizing the Company to withhold
          shares from the shares of the Common Stock otherwise issuable to the
          Optionholder as a result of the exercise or

                                       8.
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          acquisition of stock under the Option; or (iii) delivering to the
          Company owned and unencumbered shares of the Common Stock.

11.  Adjustments upon Changes in Stock.

     (a)  Capitalization Adjustments. If any change is made in the stock subject
          to the Plan, or subject to any Option, without the receipt of
          consideration by the Company (through merger, consolidation,
          reorganization, recapitalization, reincorporation, stock dividend,
          dividend in property other than cash, stock split, liquidating
          dividend, combination of shares, exchange of shares, change in
          corporate structure or other transaction not involving the receipt of
          consideration by the Company), the Plan will be appropriately adjusted
          in the class(es) and maximum number of securities subject both to the
          Plan pursuant to subsection 4(a) and to the nondiscretionary Options
          specified in Section 6, and the outstanding Options will be
          appropriately adjusted in the class(es) and number of securities and
          price per share of stock subject to such outstanding Options. The
          Board shall make such adjustments, and its determination shall be
          final, binding and conclusive. (The conversion of any convertible
          securities of the Company shall not be treated as a transaction
          "without receipt of consideration" by the Company.)

     (b)  Change in Control--Dissolution or Liquidation. In the event of a
          dissolution or liquidation of the Company, then all outstanding
          Options shall terminate immediately prior to such event.

     (c)  Change in Control--Asset Sale, Merger, Consolidation or Reverse
          Merger. In the event of (i) a sale of all or substantially all of the
          assets of the Company, (ii) a merger or consolidation in which the
          Company is not the surviving corporation or (iii) a reverse merger in
          which the Company is the surviving corporation but the shares of
          Common Stock outstanding immediately preceding the merger are
          converted by virtue of the merger into other property, whether in the
          form of securities, cash or otherwise, then any surviving corporation
          or acquiring corporation shall assume or continue any Options
          outstanding under the Plan or shall substitute similar Options
          (including an option to acquire the same consideration paid to the
          stockholders in the transaction described in this subsection 11(c))
          for those outstanding under the Plan. In the event any surviving
          corporation or acquiring corporation refuses to assume or continue
          such Options or to substitute similar Options for those outstanding
          under the Plan, then with respect to Options held by Optionees whose
          Continuous Service has not terminated, the vesting of such Options
          (and, if applicable, the time during which such Options may be
          exercised) shall be accelerated in full prior to such event, and the
          Options shall terminate if not exercised (if applicable) on or prior
          to such event. Notwithstanding the foregoing, in the event of (i) the
          sale of all or substantially all of the assets of the Company to a
          single purchaser or group of related purchasers, (ii) the sale,
          exchange or other disposition, in a single transaction, of more than
          50% of the Company's outstanding capital stock or (iii)

                                       9.
<PAGE>

          the merger or consolidation of the Company in a transaction following
          which the Company's stockholders receive less than 50% of the
          outstanding voting shares of the surviving entity, then with respect
          to Options held by Optionees whose Continuous Service has not
          terminated immediately prior to such transaction, the vesting of such
          Options (and, if applicable, the time during which such Options may be
          exercised) shall be accelerated in full immediately prior to the
          transaction.

     (d)  Change in Control--Securities Acquisition. In the event of an
          acquisition by any person, entity or group within the meaning of
          Section 13(d) or 14(d) of the Exchange Act, or any comparable
          successor provisions (excluding any employee benefit plan, or related
          trust, sponsored or maintained by the Company or an Affiliate) of the
          beneficial ownership (within the meaning of Rule 13d-3 promulgated
          under the Exchange Act, or comparable successor rule) of securities of
          the Company representing at least fifty percent (50%) of the combined
          voting power entitled to vote in the election of Directors, then with
          respect to Options held by Optionholders whose Continuous Service has
          not terminated immediately prior to such acquisition, the vesting and
          exerciseability of such Options shall be accelerated in full
          immediately prior to the transaction.

12.  Amendment of the Plan and Options.

     (a)  Amendment of Plan. The Board at any time, and from time to time, may
          amend the Plan. However, except as provided in Section 11 relating to
          adjustments upon changes in stock, no amendment shall be effective
          unless approved by the stockholders of the Company to the extent
          stockholder approval is necessary to satisfy the requirements of Rule
          16b-3 or any NASDAQ or securities exchange listing requirements.

     (b)  Stockholder Approval. The Board may, in its sole discretion, submit
          any other amendment to the Plan for stockholder approval.

     (c)  No Impairment of Rights. Rights under any Option granted before
          amendment of the Plan shall not be impaired by any amendment of the
          Plan unless (i) the Company requests the consent of the Optionholder
          and (ii) the Optionholder consents in writing.

     (d)  Amendment of Options. The Board at any time, and from time to time,
          may amend the terms of any one or more Options; provided, however,
          that the rights under any Option shall not be impaired by any such
          amendment unless (i) the Company requests the consent of the
          Optionholder and (ii) the Optionholder consents in writing.

                                      10.
<PAGE>

13.  Termination or Suspension of the Plan.

     (a)  Plan Term. The Board may suspend or terminate the Plan at any time. No
          Options may be granted under the Plan while the Plan is suspended or
          after it is terminated.

     (b)  No Impairment of Rights. Suspension or termination of the Plan shall
          not impair rights and obligations under any Option granted while the
          Plan is in effect except with the written consent of the Optionholder.

14.  Effective Date of Plan.

     The Plan shall become effective on the IPO Date, but no Option shall be
exercised unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

15.  Choice of Law.

     All questions concerning the construction, validity and interpretation of
this Plan shall be governed by the law of the State of California, without
regard to such state's conflict of laws rules.

                                      11.
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                              CLARENT CORPORATION

                           NONSTATUTORY STOCK OPTION

               (1999 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN)

[Name] , Optionholder:

     Clarent Corporation (the "Company"), pursuant to its 1999 Non-Employee
Directors' Stock Option Plan (the "Plan") has on _____________, 2000 granted to
you, the optionholder named above, an option to purchase shares of the common
stock of the Company ("Common Stock").  This option is not intended to qualify
and will not be treated as an "incentive stock option" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

     The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's Non-
Employee Directors (as defined in the Plan).

     The details of your option are as follows:

1.   The total number of shares of Common Stock subject to this option is
___________ (_____).  Subject to the limitations contained herein, this option
shall be exercisable in accordance with the Plan.

2.   The exercise price of this option is ______________ Dollars ($______) per
share, being the Fair Market Value (as defined in the Plan) of the Common Stock
on the date of grant of this option.

3.   (a)  This option may be exercised, to the extent specified in the Plan, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to paragraph 6 of
the Plan.  This option may not be exercised for any number of shares which would
require the issuance of anything other than whole shares.

     (b)  By exercising this option you agree that the Company may require you
to enter an arrangement providing for the cash payment by you to the Company of
any tax withholding obligation of the Company arising by reason of the exercise
of this option or the lapse of any substantial risk of forfeiture to which the
shares are subject at the time of exercise.

4.   Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you,

                                      12.
<PAGE>

five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the address specified below or at such other address as you
hereafter designate by written notice to the Company.

5.   This option is subject to all the provisions of the Plan, a copy of which
is attached hereto and its provisions are hereby made a part of this option,
including without limitation the provisions of paragraph 6 of the Plan relating
to option provisions, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and adopted
pursuant to the Plan. In the event of any conflict between the provisions of
this option and those of the Plan, the provisions of the Plan shall control.

     Dated the ___ day of__________, ____.

                                           Very truly yours,

                                           Clarent Corporation

                                           By:__________________________________
                                                    Duly authorized on behalf
                                                    of the Board of Directors

Attachments:

1999 Non-Employee Directors' Stock Option Plan

                                      13.
<PAGE>

The undersigned:

     (a)  Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan;

     (b)  Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionholder and the
Company and its affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock options plans of the Company, and (ii) the following agreements
only:

          None___________________________________________
                         (Initial)

          Other__________________________________________

               __________________________________________

               __________________________________________


                              __________________________________________________
                              Optionholder

                              __________________________________________________
                              Address

                              __________________________________________________

                              __________________________________________________

                                      14.
</TEXT>
</DOCUMENT>
