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Exhibit 10.4

ALTIGEN COMMUNICATIONS, INC.

1999 STOCK PLAN

(AS AMENDED ON JUNE 2, 1999 AND AUGUST 15, 2002)

        1.    Purposes of the Plan.    The purposes of this 1999 Stock Plan are:

•to attract and retain the best available personnel for positions of substantial
responsibility,

•to provide additional incentive to Employees, Directors and Consultants, and

•to promote the success of the Company's business.

        Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

        2.    Definitions.    As used herein, the following definitions shall
apply:

        (a)   "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

        (b)   "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

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

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

        (e)   "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

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

        (g)   "Company" means AltiGen Communications, Inc., a Delaware
corporation.

        (h)   "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

        (i)    "Director" means a member of the Board.

        (j)    "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

        (k)   "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

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

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

        (i)    If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

        (ii)   If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or

        (iii)  In the absence of an established market for the Common Stock, the
Fair Market Value shall be determined in good faith by the Administrator.

        (n)   "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

        (o)   "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

        (p)   "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

        (q)   "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.

        (r)   "Option" means a stock option granted pursuant to the Plan.

        (s)   "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

        (t)    "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.

        (u)   "Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.

        (v)   "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

        (w)  "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

        (x)   "Plan" means this Amended and Restated 1999 Stock Plan.

        (y)   "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 of the Plan.

        (z)   "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased

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under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject
to the terms and conditions of the Plan and the Notice of Grant.

        (aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.

        (bb) "Section 16(b)" means Section 16(b) of the Exchange Act.

        (cc) "Service Provider" means an Employee, Director or Consultant.

        (dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

        (ee) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

        (ff) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

        3.    Stock Subject to the Plan.    Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 2,096,247 Shares (post one-for-1.66965 stock
split), plus an annual increase to be added on the first day of the Company's
fiscal year (beginning in 2000) equal to the lesser of (i) 1,796,783 Shares
(post one-for-1.66965 stock split), or (ii) five percent (5%) of the outstanding
Shares on such date, or (iii) such lesser amount as determined by the Board of
Directors. The Shares may be authorized, but unissued, or reacquired Common
Stock.

        If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

        4.    Administration of the Plan.    

        (a)    Procedure.    

        (i)    Multiple Administrative Bodies.    The Plan may be administered
by different Committees with respect to different groups of Service Providers.

        (ii)   Section 162(m).    To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

        (iii)  Rule 16b-3.    To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.

        (iv)  Other Administration.    Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.

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        (b)    Powers of the Administrator.    Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

        (i)    to determine the Fair Market Value;

        (ii)   to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;

        (iii)  to determine the number of shares of Common Stock to be covered
by each Option and Stock Purchase Right granted hereunder;

        (iv)  to approve forms of agreement for use under the Plan;

        (v)   to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option or Stock Purchase Right granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;

        (vi)  to reduce the exercise price of any Option or Stock Purchase Right
to the then current Fair Market Value if the Fair Market Value of the Common
Stock covered by such Option or Stock Purchase Right shall have declined since
the date the Option or Stock Purchase Right was granted;

        (vii) to institute an Option Exchange Program;

        (viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

        (ix)  to prescribe, amend and rescind rules and regulations relating to
the Plan, including rules and regulations relating to sub-plans established for
the purpose of qualifying for preferred tax treatment under foreign tax laws;

        (x)   to modify or amend each Option or Stock Purchase Right (subject to
Section 15(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

        (xi)  to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;

        (xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;

        (xiii) to make all other determinations deemed necessary or advisable
for administering the Plan.

        (c)    Effect of Administrator's Decision.    The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

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        5.    Eligibility.    Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

        6.    Limitations.    

        (a)   Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

        (b)   Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

        (c)   The following limitations shall apply to grants of Options:

        (i)    No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 1,000,000 Shares.

        (ii)   In connection with his or her initial service, a Service Provider
may be granted Options to purchase up to an additional 1,000,000 Shares which
shall not count against the limit set forth in subsection (i) above.

        (iii)  The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 13.

        (iv)  If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction described
in Section 13), the cancelled Option will be counted against the limits set
forth in subsections (i) and (ii) above. For this purpose, if the exercise price
of an Option is reduced, the transaction will be treated as a cancellation of
the Option and the grant of a new Option.

        7.    Term of Plan.    Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.

        8.    Term of Option.    The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Option Agreement. Moreover, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the
Option Agreement.

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        9.    Option Exercise Price and Consideration.    

        (a)    Exercise Price.    The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

        (i)    In the case of an Incentive Stock Option

        (A)  granted to an Employee who, at the time the Incentive Stock Option
is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.

        (B)  granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.

        (ii)   In the case of a Nonstatutory Stock Option

        (A)  granted to a Service Provider who, at the time the Nonstatutory
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

        (B)  intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Code, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.

        (C)  Granted to any other Service Provider, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.

        (iii)  Notwithstanding the foregoing, Options may be granted with a per
Share exercise price of less than 100% of the Fair Market Value per Share on the
date of grant pursuant to a merger or other corporate transaction.

        (b)    Waiting Period and Exercise Dates.    At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

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        (c)    Form of Consideration.    The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

        (i)    cash;

        (ii)   check;

        (iii)  promissory note;

        (iv)  other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

        (v)   consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;

        (vi)  a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

        (vii) any combination of the foregoing methods of payment; or

        (viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.

        10.    Exercise of Option.    

        (a)    Procedure for Exercise; Rights as a Stockholder.    Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Except in the cases of Options granted to
Officers, Directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are
granted. Unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be tolled during any unpaid leave of absence. An Option may not
be exercised for a fraction of a Share.

        An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.

        Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

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        (b)    Termination of Relationship as a Service Provider.    If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within thirty
(30) days of termination, or such longer period of time as specified in the
Option Agreement, to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for three
(3) months following the Optionee's termination. If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

        (c)    Disability of Optionee.    If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within six (6) months of termination, or such longer period of
time as may be specified in the Option Agreement, to the extent the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

        (d)    Death of Optionee.    If an Optionee dies while a Service
Provider, the Option may be exercised within six (6) months following Optionee's
death, or such longer period of time as may be specified in the Option
Agreement, to the extent that the Option is vested on the date of death (but in
no event later than the expiration of the term of such Option as set forth in
the Notice of Grant), by the Optionee's designated beneficiary, provided such
beneficiary has been designated prior to Optionee's death in a form acceptable
to the Administrator. If no such beneficiary has been designated by the
Optionee, then such Option may be exercised by the personal representative of
the Optionee's estate or by the person(s) to whom the Option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

        (e)    Buyout Provisions.    The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

        11.    Stock Purchase Rights.    

        (a)    Rights to Purchase.    Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The terms of the offer
shall comply in all respects with Section 260.140.42 of

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Title 10 of the California Code of Regulations. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.

        (b)    Repurchase Option.    Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator, but in no case at a rate of less than 20% per year over five
years from the date of purchase.

        (c)    Other Provisions.    The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

        (d)    Rights as a Stockholder.    Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

        12.    Limited Transferability of Options and Stock Purchase
Rights.    Unless determined otherwise by the Administrator, Options and Stock
Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or the laws of descent and
distribution, and may be exercised during the lifetime of the Optionee, only by
the Optionee. If the Administrator in its sole discretion makes an Option
transferable, such Option or Stock Purchase Right may only be transferred (i) by
will, (ii) by the laws of descent and distribution, or (iii) as permitted by
Rule 701 of the Securities Act of 1933, as amended.

        13.    Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Asset Sale.    

        (a)    Changes in Capitalization.    Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

        (b)    Dissolution or Liquidation.    In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such

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transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

        (c)    Merger or Asset Sale.    In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.

        14.    Date of Grant.    The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.

        15.    Amendment and Termination of the Plan.    

        (a)    Amendment and Termination.    The Board may at any time amend,
alter, suspend or terminate the Plan.

        (b)    Stockholder Approval.    The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

        (c)    Effect of Amendment or Termination.    No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

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        16.    Conditions Upon Issuance of Shares.    

        (a)    Legal Compliance.    Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

        (b)    Investment Representations.    As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.

        17.    Inability to Obtain Authority.    The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's 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.

        18.    Reservation of Shares.    The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

        19.    Stockholder Approval.    The Plan shall be subject to approval by
the stockholders of the Company within twelve (12) months after the date the
Plan is adopted. Such stockholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.

        20.    Information to Optionees.    The Company shall provide to each
Optionee and to each individual who acquires Shares pursuant to the Plan, not
less frequently than annually during the period such participant has one or more
Options outstanding, and, in the case of an individual who acquires Shares
pursuant to the Plan, during the period such individual owns such Shares, copies
of annual financial statements. The Company shall not be required to provide
such statements to key employees whose duties in connection with the Company
assure their access to equivalent information.

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ALTIGEN COMMUNICATIONS, INC.

AMENDED AND RESTATED 1999 STOCK PLAN

STOCK OPTION AGREEMENT

        Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I.    NOTICE OF STOCK OPTION GRANT

        «NAME»

        The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:

Grant Number  

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Date of Grant
 

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Vesting Commencement Date
 

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Exercise Price per Share
 

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Total Number of Shares Granted
 

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Total Exercise Price
 

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Type of Option:
 
____ Incentive Stock Option
 
 
____ Nonstatutory Stock Option
Term/Expiration Date:
 

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Vesting Schedule:

        25% of the Shares subject to the Option shall vest twelve (12) months
after the Vesting Commencement Date set forth above and 1/48 of the Shares
subject to the Option shall vest each month thereafter, subject to Optionee
continuing as a Service Provider on such dates.

Termination Period:

        This Option shall be exercisable for three (3) months after Optionee
ceases to be a Service Provider. Upon Optionee's death or disability, this
Option may be exercised for such longer period as provided in the Plan. In no
event may Optionee exercise this Option after the Term/Expiration Date as
provided above.

II.    AGREEMENT

        1.    Grant of Option.    The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant (the "Optionee"), an option
(the "Option") to purchase the number of Shares set forth in the Notice of
Grant, at the exercise price per Share set forth in the Notice of Grant (the
"Exercise Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 15(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

        If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the

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extent that it exceeds the $100,000 rule of Code Section 422(d), this Option
shall be treated as a Nonstatutory Stock Option ("NSO").

        2.    Exercise of Option.    

        (a)    Right to Exercise.    This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.

        (b)    Method of Exercise.    This Option shall be exercisable by
delivery of an exercise notice in the form attached as Exhibit A (the "Exercise
Notice") which shall state the election to exercise the Option, the number of
Shares with respect to which the Option is being exercised, and such other
representations and agreements as may be required by the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by the aggregate
Exercise Price.

        No Shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.

        3.    Method of Payment.    Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:

        (a)   cash or check;

        (b)   consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan; or

        (c)   surrender of other Shares which, (i) in the case of Shares
acquired from the Company, either directly or indirectly, have been owned by the
Optionee for more than six (6) months on the date of surrender, and (ii) have a
Fair Market Value on the date of surrender equal to the aggregate Exercise Price
of the Exercised Shares.

        4.    Restrictions on Exercise.    This Option may not be exercised
until such time as the Plan has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
Applicable Law.

        5.    Non-Transferability of Option.    This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.

        6.    Term of Option.    This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.

        7.    Tax Obligations.    

        (a)    Withholding Taxes.    Optionee agrees to make appropriate
arrangements with the Company (or the Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state, local and
foreign income and employment tax withholding requirements applicable to the
Option exercise. Optionee acknowledges and agrees that the Company may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise.

2

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        (b)    Notice of Disqualifying Disposition of ISO Shares.    If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

        8.    Entire Agreement; Governing Law.    The Plan is incorporated
herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal substantive
laws but not the choice of law rules of California.

        9.    No Guarantee of Continued Service.    OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

[Remainder of Page Intentionally Left Blank.]

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        Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.

OPTIONEE:   AltiGen Communications, Inc.

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Signature
 

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By

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Print Name
 

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Name

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Title

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Residence Address
 
 

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EXHIBIT A

EXERCISE NOTICE AND AGREEMENT

AltiGen Communications, Inc.
47427 Fremont Blvd.
Fremont, CA 94538

Attention: Stock Option Plan Administrator

Re:Exercise of Stock Option Pursuant to Amended and Restated 1999 Stock Option
Plan

Name of Optionee:
 

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Optionee's Address:
 

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Optionee's Social Security Number:
 
        -        -            

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Date of Option Agreement:
 

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Exercise Date:
 

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The Shares Purchased are Incentive Stock Options:
(circle one)
 
Yes / No
Number of Shares Purchased Pursuant to this Notice:
 

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Exercise Price per Share:   $

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Aggregate Exercise Price:   $

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Add Withholding:   $

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Amount of Check Enclosed:   $

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        1.    Exercise of Option.    Pursuant to the Amended and Restated 1999
Stock Option Plan (the "Plan") of AltiGen Communications, Inc., a Delaware
corporation (the "Company") and the Stock Option Agreement ("Option Agreement")
entered into as of the date set forth above between the undersigned Optionee and
the Company, Optionee hereby elects, effective as of the date of this notice, to
exercise Optionee's option to purchase the number of shares of common stock (the
"Shares") of the Company indicated above.

        2.    Payment; Taxes.    Enclosed is Optionee's check in the amount
indicated above, which is the full exercise price for the Shares plus any
applicable withholding of taxes. Before the Company issues the Shares, Optionee
shall make appropriate arrangements with the Company for payment of Optionee's
tax obligation as a result of this Option exercise if such withholding is not
included in the above payment.

        3.    Deemed Date of Exercise.    The date of exercise shall be deemed
to be the first date after which this Notice is filed with Company upon which
Shares become eligible for issuance to Optionee under applicable state and
federal laws and regulatory requirements.

        4.    Compliance with Laws.    Optionee understands and acknowledges
that the purchase and sale of the Shares may be subject to approval under the
state and federal securities laws and other laws and, notwithstanding any other
provision of the Option Agreement to the contrary, the exercise of any rights to
purchase Shares is expressly conditioned upon approval (if necessary) and
compliance with all such laws.

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        5.    Representations of Optionee.    Optionee represents and warrants
to the Company, as follows:

(a)Optionee has received, read, and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.

(b)The Options exercised herewith are exercisable only according to the schedule
in the Option Agreement.

(c)Optionee is aware of the business affairs and financial condition of the
Company and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares.

        6.    Refusal to Transfer.    The Company shall not be required (a) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement, the Option Agreement, or
the Plan or (b) to treat as owner of such Shares or to accord the right to vote
or receive dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.

        7.    Tax Consultation.    Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

        8.    Entire Agreement.    The Plan and the Option Agreement are
incorporated herein by reference. This Agreement, the Plan, and the Option
Agreement constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof.

[Remainder of Page Intentionally Left Blank.]

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Submitted by:   Accepted by:
"OPTIONEE":
 
"COMPANY"     AltiGen Communications, Inc.,
a Delaware corporation

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Signature
 

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By

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Print Name
 

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Name
 
 

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Title

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QuickLinks

ALTIGEN COMMUNICATIONS, INC. 1999 STOCK PLAN (AS AMENDED ON JUNE 2, 1999 AND
AUGUST 15, 2002)
ALTIGEN COMMUNICATIONS, INC. AMENDED AND RESTATED 1999 STOCK PLAN STOCK OPTION
AGREEMENT
EXHIBIT A EXERCISE NOTICE AND AGREEMENT