ALTIGEN
      COMMUNICATIONS, INC.

     

    1999
      EMPLOYEE STOCK PURCHASE PLAN

     

    (AS
      AMENDED NOVEMBER 13, 2007)

     

    The
      following constitute the provisions of the 1999 Employee Stock Purchase Plan
      of
      AltiGen Communications, Inc.

     

    1. Purpose.
      The
      purpose of the Plan is to provide employees of the Company and its Designated
      Subsidiaries with an opportunity to purchase Common Stock of the Company through
      accumulated payroll deductions. It is the intention of the Company to have
      the
      Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the
      Code. The provisions of the Plan, accordingly, shall be construed so as to
      extend and limit participation in a manner consistent with the requirements
      of
      that section of the Code.

     

    2. Definitions.

     

    (a) “Board”
shall
      mean the Board of Directors of the Company.

     

    (b) “Code”
shall
      mean the Internal Revenue Code of 1986, as amended.

     

    (c) “Common
      Stock”
shall
      mean the common stock of the Company.

     

    (d) “Company”
shall
      mean AltiGen Communications, Inc. and any Designated Subsidiary of the
      Company.

     

    (e) “Compensation”
shall
      mean all base straight time gross earnings and commissions, but exclusive of
      payments for overtime, shift premium, incentive compensation, incentive
      payments, bonuses and other compensation.

     

    (f) “Designated
      Subsidiary”
shall
      mean any Subsidi-ary that has been designated by the Board from time to time
      in
      its sole discretion as eligible to participate in the Plan.

     

    (g) “Employee”
shall
      mean any individual who is an Employee of the Company for tax purposes whose
      customary employment with the Company is at least twenty (20) hours per week
      and
      more than five (5) months in any calendar year. For purposes of the Plan, the
      employment relationship shall be treated as continuing intact while the
      individual is on sick leave or other leave of absence approved by the Company.
      Where the period of leave exceeds ninety (90) days and the individual’s right to
      reemployment is not guaranteed either by statute or by contract, the employment
      relationship shall be deemed to have terminated on the 91st day of such leave.
      

     

    (h) “Enrollment
      Date”
shall
      mean the first Trading Day of each Offering Period.

     

    (i) “Exercise
      Date”
shall
      mean the last Trading Day of each Purchase Period (or, beginning on or after
      May
      1, 2006, Offering Period).


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (j) “Fair
      Market Value”
shall
      mean, 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 Global Select Market, the Nasdaq
      Global Market or the Nasdaq Capital 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 date of determination, as reported in
      The
      Wall Street Journal
      or such
      other source as the Board deems reliable; 

     

    (ii) If
      the
      Common Stock is regularly quoted by a recognized securities dealer but selling
      prices are not reported, its Fair Market Value shall be the mean of the closing
      bid and asked prices for the Common Stock prior to the date of determination,
      as
      reported in The
      Wall Street Journal
      or such
      other source as the Board deems reliable;

     

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

     

    (iv) For
      purposes of the Enrollment Date of the first Offering Period under the Plan,
      the
      Fair Market Value shall be the initial price to the public as set forth in
      the
      final prospectus included within the registration statement in Form S-1 filed
      with the Securities and Exchange Commission for the initial public offering
      of
      the Company’s Common Stock (the “Registration Statement”).

     

    (k) “Offering
      Periods”
shall
      mean (i) for all periods commencing prior to May 1, 2006, the periods of
      approximately twenty-four (24) months during which an option granted pursuant
      to
      the Plan may be exercised, commencing on the first Trading Day on or after
      May 1
      and November 1 of each year and terminating on the last Trading Day in the
      periods ending twenty-four (24) months later; provided, however, that the first
      Offering Period under the Plan shall commence with the first Trading Day on
      or
      after the date on which the Securities and Exchange Commission declares the
      Company’s Registration Statement effective and ending on the last Trading Day on
      or before July 31, 2001, or (ii) for all periods commencing on the first Trading
      Day on or after May 1, 2006, the periods of approximately six (6) months during
      which an option granted pursuant to the Plan may be exercised, (A) commencing
      on
      the first Trading Day on or after May 1 of each year and terminating on the
      last
      Trading Day in the period ending six (6) months later, and (B) commencing on
      the
      first Trading Day on or after November 1 of each year and terminating on
      the last Trading Day in the period ending six (6) months later. The duration
      and
      timing of Offering Periods may be changed pursuant to Section 4 of this
      Plan.

     

    (l) “Plan”
shall
      mean this 1999 Employee Stock Purchase Plan, as amended.

     

    (m) “Purchase
      Period”
shall
      mean the approximately six (6) month period commencing after one Exercise Date
      and ending with the next Exercise Date, except that the first Purchase Period
      of
      any Offering Period shall commence on the Enrollment Date and end with the
      next
      Exercise Date.


    
      
        
        

      

      
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    (n) “Purchase
      Price”
      shall
      mean eight-five percent (85%) of the Fair Market Value of a share of Common
      Stock on the Enrollment Date or the Exercise Date, whichever is lower;
      provided, however, that the Purchase Price may be adjusted by the Board pursuant
      to Section 20.

     

    (o) “Reserves”
shall
      mean the number of shares of Common Stock covered by each option under the
      Plan
      which have not yet been exercised and the number of shares of Common Stock
      which
      have been authorized for issuance under the Plan but not yet placed under
      option.

     

    (p) “Subsidiary”
shall
      mean a corporation, domestic or foreign, of which not less than fifty percent
      (50%) of the voting shares are held by the Company or a Subsidiary, whether
      or
      not such corporation now exists or is hereafter organized or acquired by the
      Company or a Subsidiary.

     

    (q) “Trading
      Day”
shall
      mean a day on which national stock exchanges and the Nasdaq System are open
      for
      trading.

     

    3. Eligibility.

     

    (a) Any
      Employee who shall be employed by the Company on a given Enrollment Date shall
      be eligible to participate in the Plan.

     

    (b) Any
      provisions of the Plan to the contrary notwithstanding, no Employee shall be
      granted an option under the Plan (i) to the extent that, immediately after
      the grant, such Employee (or any other person whose stock would be attributed
      to
      such Employee pursuant to Section 424(d) of the Code) would own capital stock
      of
      the Company and/or hold outstanding options to purchase such stock possessing
      five percent (5%) or more of the total combined voting power or value of all
      classes of the capital stock of the Company or of any Subsidiary, or
      (ii) to the extent that his or her rights to purchase stock under all
      employee stock purchase plans of the Company and its subsidiaries accrues at
      a
      rate which exceeds $25,000 worth of stock (determined at the fair market value
      of the shares at the time such option is granted) for each calendar year in
      which such option is outstanding at any time.

     

    4. Offering
      Periods.
      The
      Plan shall be implemented by consecutive, overlapping Offering Periods with
      a
      new Offering Period commencing on the first Trading Day on or after May 1 and
      November 1 each year, or on such other date as the Board shall determine, and
      continuing thereafter until terminated in accordance with Section 20 hereof;
      provided, however, that the first Offering Period under the Plan shall commence
      with the first Trading Day on or after the date on which the Securities and
      Exchange Commission declares the Company’s Registration Statement effective and
      ending on the last Trading Day on or before July 31, 2001. The Board shall
      have
      the power to change the duration of Offering Periods (includ-ing the
      commencement dates thereof) with respect to future offerings without shareholder
      approval if such change is announced at least five (5) days prior to the
      scheduled begin-ning of the first Offering Period to be affected
      thereafter.

     

    5. Participation.

     

    (a) An
      eligible Employee may become a participant in the Plan by completing a
      subscription agreement authorizing payroll deductions in the form of
Exhibit A
      to this
      Plan and filing it with the Company’s payroll office prior to the applicable
      Enrollment Date.


    
      
        
        

      

      
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    (b) Payroll
      deductions for a participant shall commence on the first payroll following
      the
      Enrollment Date and shall end on the last payroll in the Offering Period to
      which such authorization is applicable, unless sooner terminated by the
      participant as provided in Section 10 hereof.

     

    6. Payroll
      Deductions.

     

    (a) At
      the
      time a participant files his or her subscription agreement, he or she shall
      elect to have payroll deductions made on each pay day during the Offering Period
      in an amount not exceeding fifteen percent (15%) of the Compensation which
      he or
      she receives on each pay day during the Offering Period. 

     

    (b) All
      payroll deductions made for a participant shall be credited to his or her
      account under the Plan and shall be withheld in whole percentages only. A
      participant may not make any additional payments into such account.

     

    (c) A
      participant may discontinue his or her participation in the Plan as provided
      in
      Section 10 hereof, or may increase or decrease the rate of his or her payroll
      deductions during the Offering Period by completing or filing with the Company
      a
      new subscription agreement authorizing a change in payroll deduction rate.
      The
      Board may, in its discretion, limit the number of participation rate changes
      during any Offering Period. The change in rate shall be effective with the
      first
      full payroll period following five (5) business days after the Company’s receipt
      of the new subscription agreement unless the Company elects to process a given
      change in participation more quickly. A participant’s subscription agreement
      shall remain in effect for successive Offering Periods unless terminated as
      provided in Section 10 hereof.

     

    (d) Notwithstanding
      the foregoing, to the extent necessary to comply with Section 423(b)(8) of
      the
      Code and Section 3(b) hereof, a participant’s payroll deductions may be
      decreased to zero percent (0%) at any time during a Purchase Period (or,
      beginning on or after May 1, 2006, Offering Period). Payroll deductions shall
      recom-mence at the rate provided in such participant’s subscription agreement at
      the beginning of the first Purchase Period (or, beginning on or after May 1,
      2006, Offering Period) which is scheduled to end in the following calendar
      year,
      unless terminated by the participant as provided in Section 10
      hereof.

     

    (e) At
      the
      time the option is exercised, in whole or in part, or at the time some or all
      of
      the Company’s Common Stock issued under the Plan is disposed of, the participant
      must make adequate provision for the Company’s federal, state, or other tax
      withholding obligations, if any, which arise upon the exercise of the option
      or
      the disposition of the Common Stock. At any time, the Company may, but shall
      not
      be obligated to, withhold from the participant’s compensation the amount
      necessary for the Company to meet applicable withholding obligations, including
      any withholding required to make available to the Company any tax deductions
      or
      benefits attributable to sale or early disposition of Common Stock by the
      Employee. 

     

    7. Grant
      of Option.
      On the
      Enrollment Date of each Offering Period, each eligible Employee participating
      in
      such Offering Period shall be granted an option to purchase on each Exercise
      Date during such Offering Period (at the applicable Purchase Price) up to a
      number of shares of the Company’s Common Stock determined by dividing such
      Employee’s payroll deductions accumulated prior to such Exercise Date and
      retained in the Participant’s account as of the Exercise Date by the applicable
      Purchase Price; provided that in no event shall an Employee be permitted to
      purchase during each Purchase Period (or, beginning on or after May 1, 2006,
      Offering Period) more than 5,989 shares of the Company’s Common Stock (subject
      to any adjustment pursuant to Section 19), and provided further that such
      purchase shall be subject to the limitations set forth in Sections 3(b) and
      12 hereof. The Board may, for future Offering Periods, increase or decrease,
      in
      its absolute discretion, the maximum number of shares of the Company’s Common
      Stock an Employee may purchase during each Purchase Period of such Offering
      Period (or, beginning on or after May 1, 2006, Offering Period). Exercise of
      the
      option shall occur as provided in Section 8 hereof, unless the participant
      has withdrawn pursuant to Section 10 hereof. The option shall expire on the
      last day of the Offering Period. 


    
      
        
        

      

      
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    8. Exercise
      of Option.
      

     

    (a) Unless
      a
      participant withdraws from the Plan as provided in Section 10 hereof, his or
      her
      option for the purchase of shares shall be exercised automatically on the
      Exercise Date, and the maximum number of full shares subject to option shall
      be
      purchased for such participant at the applicable Purchase Price with the
      accumulated payroll deductions in his or her account. No fractional shares
      shall
      be purchased; any payroll deductions accumulated in a participant’s account
      which are not sufficient to purchase a full share shall be retained in the
      participant’s account for the subsequent Purchase Period or Offering Period,
      subject to earlier withdrawal by the participant as provided in Section 10
      hereof. Any other monies left over in a participant’s account after the Exercise
      Date shall be returned to the participant. During a participant’s lifetime, a
      participant’s option to purchase shares hereunder is exercisable only by him or
      her.

     

    (b) If
      the
      Board determines that, on a given Exercise Date, the number of shares with
      respect to which options are to be exercised may exceed (i) the number of shares
      of Common Stock that were available for sale under the Plan on the Enrollment
      Date of the applicable Offering Period, or (ii) the number of shares available
      for sale under the Plan on such Exercise Date, the Board may in its sole
      discretion (x) provide that the Company shall make a pro rata allocation of
      the
      shares of Common Stock available for purchase on such Enrollment Date or
      Exercise Date, as applicable, in as uniform a manner as shall be practicable
      and
      as it shall determine in its sole discretion to be equitable among all
      participants exercising options to purchase Common Stock on such Exercise Date,
      and continue all Offering Periods then in effect, or (y) provide that the
      Company shall make a pro rata allocation of the shares available for purchase
      on
      such Enrollment Date or Exercise Date, as applicable, in as uniform a manner
      as
      shall be practicable and as it shall determine in its sole discretion to be
      equitable among all participants exercising options to purchase Common Stock
      on
      such Exercise Date, and terminate any or all Offering Periods then in effect
      pursuant to Section 20 hereof. The Company may make pro rata allocation of
      the
      shares available on the Enrollment Date of any applicable Offering Period
      pursuant to the preceding sentence, notwithstanding any authorization of
      additional shares for issuance under the Plan by the Company’s shareholders
      subsequent to such Enrollment Date.

     

    9. Delivery.
      As
      promptly as practicable after each Exercise Date on which a purchase of shares
      occurs, the Company shall arrange the delivery to each participant, as
      appropriate, of a certificate representing the shares purchased upon exercise
      of
      his or her option.


    
      
        
        

      

      
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    10. Withdrawal.

     

    (a) A
      participant may withdraw all but not less than all the payroll deductions
      credited to his or her account and not yet used to exercise his or her option
      under the Plan at any time by giving written notice to the Company in the form
      of Exhibit B
      to this
      Plan. All of the participant’s payroll deductions credited to his or her account
      shall be paid to such participant promptly after receipt of notice of withdrawal
      and such participant’s option for the Offering Period shall be automatically
      terminated, and no further payroll deductions for the purchase of shares shall
      be made for such Offering Period. If a participant withdraws from an Offering
      Period, payroll deductions shall not resume at the beginning of the succeeding
      Offering Period unless the participant delivers to the Company a new
      subscription agreement.

     

    (b) A
      participant’s withdrawal from an Offering Period shall not have any effect upon
      his or her eligibility to participate in any similar plan which may hereafter
      be
      adopted by the Company or in succeeding Offering Periods which commence after
      the termination of the Offering Period from which the participant
      withdraws.

     

    11. Termination
      of Employment.

     

    Upon
      a
      participant’s ceasing to be an Employee, for any reason, he or she shall be
      deemed to have elected to withdraw from the Plan and the payroll deductions
      credited to such participant’s account during the Offering Period but not yet
      used to exercise the option shall be returned to such participant or, in the
      case of his or her death, to the person or persons entitled thereto under
      Section 15 hereof, and such participant’s option shall be automatically
      terminated. The preceding sentence notwithstanding, a participant who receives
      payment in lieu of notice of termination of employment shall be treated as
      continuing to be an Employee for the participant’s customary number of hours per
      week of employment during the period in which the participant is subject to
      such
      payment in lieu of notice.

     

    12. Interest.
      No
      interest shall accrue on the payroll deductions of a participant in the
      Plan.

     

    13. Stock.

     

    (a) Subject
      to adjustment upon changes in capitalization of the Company as provided in
      Section 19 hereof, the maximum number of shares of the Company’s Common Stock
      which shall be made available for sale under the Plan shall be 299,464 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) 598,928 shares (post one-for-1.66965 stock split), (ii) two percent (2%)
      of
      the outstanding shares on such date or (iii) a lesser amount determined by
      the
      Board. 

     

    (b) The
      participant shall have no interest or voting right in shares covered by his
      option until such option has been exercised.

     

    (c) Shares
      to
      be delivered to a participant under the Plan shall be registered in the name
      of
      the participant or in the name of the participant and his or her
      spouse.


    
      
        
        

      

      
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    14. Administration.
      The
      Plan shall be administered by the Board or a committee of members of the Board
      appointed by the Board. The Board or its committee shall have full and exclusive
      discretionary authority to construe, interpret and apply the terms of the Plan,
      to determine eligibility and to adjudicate all disputed claims filed under
      the
      Plan. Every finding, decision and determination made by the Board or its
      committee shall, to the full extent permitted by law, be final and binding
      upon
      all parties.

     

    15. Designation
      of Beneficiary.

     

    (a) A
      participant may file a written designation of a beneficiary who is to receive
      any shares and cash, if any, from the participant’s account under the Plan in
      the event of such participant’s death subsequent to an Exercise Date on which
      the option is exercised but prior to delivery to such participant of such shares
      and cash. In addition, a participant may file a written designation of a
      beneficiary who is to receive any cash from the participant’s account under the
      Plan in the event of such participant’s death prior to exercise of the option.
      If a participant is married and the designated beneficiary is not the spouse,
      spousal consent shall be required for such designation to be
      effective.

     

    (b) Such
      designation of beneficiary may be changed by the participant at any time by
      written notice. In the event of the death of a participant and in the absence
      of
      a beneficiary validly designated under the Plan who is living at the time of
      such participant’s death, the Company shall deliver such shares and/or cash to
      the executor or administrator of the estate of the participant, or if no such
      executor or administrator has been appointed (to the knowledge of the Company),
      the Company, in its discretion, may deliver such shares and/or cash to the
      spouse or to any one or more dependents or relatives of the participant, or
      if
      no spouse, dependent or relative is known to the Company, then to such other
      person as the Company may designate.

     

    16. Transferability.
      Neither
      payroll deductions credited to a participant’s account nor any rights with
      regard to the exercise of an option or to receive shares under the Plan may
      be
      assigned, transferred, pledged or otherwise disposed of in any way (other than
      by will, the laws of descent and distribution or as provided in Section 15
      hereof) by the participant. Any such attempt at assignment, transfer, pledge
      or
      other disposition shall be without effect, except that the Company may treat
      such act as an election to withdraw funds from an Offering Period in accordance
      with Section 10 hereof.

     

    17. Use
      of
      Funds.
      All
      payroll deductions received or held by the Company under the Plan may be used
      by
      the Company for any corporate purpose, and the Company shall not be obligated
      to
      segregate such payroll deductions.

     

    18. Reports.
      Individual accounts shall be maintained for each participant in the Plan.
      Statements of account shall be given to participating Employees at least
      annually, which statements shall set forth the amounts of payroll deductions,
      the Purchase Price, the number of shares purchased and the remaining cash
      balance, if any.

     

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

     

    (a) Changes
      in Capitalization.
      Subject
      to any required action by the shareholders of the Company, the Reserves, the
      maximum number of shares each participant may purchase each Purchase Period
      (or,
      beginning on or after May 1, 2006, Offering Period) (pursuant to
      Section 7), as well as the price per share and the number of shares of
      Common Stock covered by each option under the Plan which has not yet been
      exercised 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 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.


    
      
        
        

      

      
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    (b) Dissolution
      or Liquidation.
      In the
      event of the proposed dissolution or liquidation of the Company, the Offering
      Period then in progress shall be shortened by setting a new Exercise Date (the
      “New Exercise Date”), and shall terminate immediately prior to the consummation
      of such proposed dissolution or liquidation, unless provided otherwise by the
      Board. The New Exercise Date shall be before the date of the Company’s proposed
      dissolution or liquidation. The Board shall notify each participant in writing,
      at least ten (10) business days prior to the New Exercise Date, that the
      Exercise Date for the participant’s option has been changed to the New Exercise
      Date and that the participant’s option shall be exercised automatically on the
      New Exercise Date, unless prior to such date the participant has withdrawn
      from
      the Offering Period as provided in Section 10 hereof. 

     

    (c) Merger
      or Asset Sale.
      In the
      event of a proposed sale of all or substantially all of the assets of the
      Company, or the merger of the Company with or into another corporation, each
      outstanding option shall be assumed or an equivalent option 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, any Purchase Periods (or, beginning on or after May 1, 2006, Offering
      Periods) then in progress shall be shortened by setting a new Exercise Date
      (the
“New Exercise Date”) and any Offering Periods then in progress shall end on the
      New Exercise Date. The New Exercise Date shall be before the date of the
      Company’s proposed sale or merger. The Board shall notify each participant in
      writing, at least ten (10) business days prior to the New Exercise Date, that
      the Exercise Date for the participant’s option has been changed to the New
      Exercise Date and that the participant’s option shall be exercised automatically
      on the New Exercise Date, unless prior to such date the participant has
      withdrawn from the Offering Period as provided in Section 10
      hereof.

     

    20. Amendment
      or Termination.

     

    (a) The
      Board
      may at any time and for any reason terminate or amend the Plan. Except as
      provided in Section 19 hereof, no such termination can affect options previously
      granted, provided that an Offering Period may be terminated by the Board on
      any
      Exercise Date if the Board determines that the termination of the Offering
      Period or the Plan is in the best interests of the Company and its shareholders.
      Except as pro-vided in Section 19 and this Section 20 hereof, no amendment
      may
      make any change in any option theretofore granted which adversely affects the
      rights of any participant. To the extent necessary to comply with Section 423
      of
      the Code (or any successor rule or provision or any other applicable law,
      regulation or stock exchange rule), the Company shall obtain shareholder
      approval in such a manner and to such a degree as required.


    
      
        
        

      

      
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    (b) Without
      shareholder consent and without regard to whether any participant rights may
      be
      considered to have been “adversely affected,” the Board (or its committee) shall
      be entitled to change the Offering Periods, limit the frequency and/or number
      of
      changes in the amount withheld during an Offering Period, establish the exchange
      ratio applicable to amounts withheld in a currency other than U.S. dollars,
      permit payroll withholding in excess of the amount designated by a participant
      in order to adjust for delays or mistakes in the Company’s processing of
      properly completed withholding elections, establish reasonable waiting and
      adjustment periods and/or accounting and crediting procedures to ensure that
      amounts applied toward the purchase of Common Stock for each participant
      properly correspond with amounts withheld from the participant’s Compensation,
      and establish such other limitations or procedures as the Board (or its
      committee) determines in its sole discretion advisable which are consistent
      with
      the Plan.

     

    (c) In
      the
      event the Board determines that the ongoing operation of the Plan may result
      in
      unfavorable financial accounting consequences, the Board may, in its discretion
      and, to the extent necessary or desirable, modify or amend the Plan to reduce
      or
      eliminate such accounting consequence including, but not limited
      to:

     

    (i) altering
      the Purchase Price for any Offering Period including an Offering Period underway
      at the time of the change in Purchase Price;

     

    (ii) shortening
      any Offering Period so that Offering Period ends on a new Exercise Date,
      including an Offering Period underway at the time of the Board action;
      and

     

    (iii) allocating
      shares.

     

    Such
      modifications or amendments shall not require stockholder approval or the
      consent of any Plan participants.

     

    21. Notices.
      All
      notices or other communications by a participant to the Company under or in
      connection with the Plan shall be deemed to have been duly given when received
      in the form specified by the Company at the location, or by the person,
      designated by the Company for the receipt thereof.

     

    22. Conditions
      Upon Issuance of Shares.
      Shares
      shall not be issued with respect to an option unless the exercise of such option
      and the issuance and delivery of such shares pursuant thereto shall comply
      with
      all applicable provisions of law, domestic or foreign, including, without
      limitation, the Securities Act of 1933, as amended, the Securities Exchange
      Act
      of 1934, as amended, the rules and regulations promulgated thereunder, and
      the
      requirements of any stock exchange upon which the shares may then be listed,
      and
      shall be further subject to the approval of counsel for the Company with respect
      to such compliance.

     

    As
      a
      condition to the exercise of an option, the Company may require the person
      exercising such option 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 by any of the aforementioned
      applicable provisions of law.


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    23. Term
      of Plan.
      The
      Plan shall become effective upon the earlier to occur of its adoption by the
      Board or its approval by the shareholders of the Company. It shall continue
      in
      effect for a term of ten (10) years unless sooner terminated under Section
      20
      hereof.

     

    24. Information
      to Plan Participants.
      The
      Company shall provide to each participant in this Plan and to each individual
      who acquires shares of Common Stock pursuant to the Plan, not less frequently
      than annually during the period such participant has one or more options to
      purchase the shares of Common Stock outstanding, and, in the case of an
      individual who acquires shares of Common Stock 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.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


     

    


     

    EXHIBIT
      A

     

    ALTIGEN
      COMMUNICATIONS, INC.

     

    1999
      EMPLOYEE STOCK PURCHASE PLAN

     

    SUBSCRIPTION
      AGREEMENT

     

    


     

    

      
        	
                ____
                  Original Application

              	
                Enrollment
                  Date: ___________

              


      

    

    _____
      Change in Payroll Deduction Rate

    _____
      Change of Beneficiary(ies)

     

    
      	
              1.

            	
              ____________________
                hereby elects to participate in the AltiGen Communications, Inc.
                1999
                Employee Stock Purchase Plan, as amended (the “Employee Stock Purchase
                Plan”) and sub-scribes to purchase shares of the Company’s Common Stock in
                accordance with this Sub-scription Agreement and the Employee Stock
                Purchase Plan.

            


    

     

    
      	
              2.

            	
              I
                hereby authorize payroll deductions from each paycheck in the amount
                of
                ____% of my Compensation on each payday (from 1 to _____) during
                the
                Offering Period in accordance with the Employee Stock Purchase Plan.
                (Please note that no fractional percentages are
                permitted.)

            


    

     

    
      	
              3.

            	
              I
                understand that said payroll deductions shall be accumulated for
                the
                purchase of shares of Common Stock at the applicable Purchase Price
                determined in accordance with the Employee Stock Purchase Plan. I
                understand that if I do not withdraw from an Offering Period, any
                accumulated payroll deductions will be used to automatically exercise
                my
                option.

            


    

     

    
      	
              4.

            	
              I
                have received a copy of the complete Employee Stock Purchase Plan.
                I
                understand that my participation in the Employee Stock Purchase Plan
                is in
                all respects subject to the terms of the Plan. I understand that
                my
                ability to exercise the option under this Subscription Agreement
                is
                subject to share-holder approval of the Employee Stock Purchase
                Plan.

            


    

     

    
      	
              5.

            	
              Shares
                purchased for me under the Employee Stock Purchase Plan should be
                issued
                in the name(s) of (Employee or Employee and Spouse
                only).

            


    

     

    
      	
              6.

            	
              I
                understand that if I dispose of any shares received by me pursuant
                to the
                Plan within two (2) years after the Enrollment Date (the first day
                of the
                Offering Period during which I purchased such shares) or one (1)
                year
                after the Exercise Date, I will be treated for federal income tax
                purposes
                as having received ordinary income at the time of such disposition
                in an
                amount equal to the excess of the fair market value of the shares
                at the
                time such shares were purchased by me over the price which I paid
                for the
                shares. I
                hereby agree to notify the Company in writing within thirty (30)
                days
                after the date of any disposition of my shares and I will make adequate
                provision for Federal, state or other tax withholding obligations,
                if any,
                which arise upon the disposition of the Common Stock.
                The Company may, but will not be obligated to, withhold from my
                compensation the amount neces-sary to meet any applicable withholding
                obligation including any withholding necessary to make available
                to the
                Company any tax deductions or benefits attributable to sale or early
                disposition of Common Stock by me. If I dispose of such shares at
                any time
                after the expiration of the 2-year and 1-year holding periods, I
                understand that I will be treated for federal income tax purposes
                as
                having received income only at the time of such disposition, and
                that such
                income will be taxed as ordinary income only to the extent of an
                amount
                equal to the lesser of (1) the excess of the fair market value of
                the
                shares at the time of such disposition over the purchase price which
                I
                paid for the shares, or (2) fifteen percent (15%) of the fair market
                value
                of the shares on the first day of the Offering Period. The remainder
                of
                the gain, if any, recognized on such disposition will be taxed as
                capital
                gain.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              I
                hereby agree to be bound by the terms of the Employee Stock Purchase
                Plan.
                The effectiveness of this Subscription Agreement is dependent upon
                my
                eligibility to participate in the Employee Stock Purchase
                Plan.

            


    

     

    
      	
              8.

            	
              In
                the event of my death, I hereby designate the following as my
                beneficiary(ies) to receive all payments and shares due me under
                the
                Employee Stock Purchase Plan:

            


    

     

    NAME:
      (Please print)_____________________________________________________

    (First)   (Middle)  (Last)

     

    
      	
               

            	 	 
	Relationship	 	
               

               

            
	 	 	
              (Address)

            


    

    



    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	
              Employee’s
                Social

            	 	 	 
	
              Security
                Number:

            	 	 	 
	 	 	 	 
	
              Employee’s
                Address:

            	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 


    

     

     

    I
      UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
      SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

     

    
      	 	 	
            	 
	Dated:	 	
            	 
	 	 	 	Signature
              of Employee
	 	 	
            	 
	 	 	 	      
	 	 	 	
              Spouse’s
                Signature (If beneficiary other than
                spouse)

            


    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    


     

    EXHIBIT
      B

     

    ALTIGEN
      COMMUNICATIONS, INC.

     

    1999
      EMPLOYEE STOCK PURCHASE PLAN

     

    NOTICE
      OF WITHDRAWAL

     

    


     

    The
      undersigned participant in the Offering Period of the AltiGen Communications,
      Inc. 1999 Employee Stock Purchase Plan which began on __________-__, ______
      (the
“Enrollment Date”) hereby notifies the Company that he or she hereby withdraws
      from the Offering Period. He or she hereby directs the Company to pay to the
      undersigned as promptly as practicable all the payroll deductions credited
      to
      his or her account with respect to such Offering Period. The undersigned
      understands and agrees that his or her option for such Offering Period will
      be
      automatically terminated. The undersigned understands further that no further
      payroll deductions will be made for the purchase of shares in the current
      Offering Period and the undersigned shall be eligible to participate in
      succeeding Offering Periods only by delivering to the Company a new Subscription
      Agreement.

    

      
        	 	
                 

                Name
                  and Address of Participant:

              
	 	
                 

                 

              
	 	
                 

                 

              
	 	
                 

                 

              
	 	
                 

                Signature:

              
	 	
                 

                 

              
	 	
                 

                Date: