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Exhibit 4.07  

 
  POET HOLDINGS, INC.    
    
    2001 NONSTATUTORY STOCK OPTION PLAN    
    

        1.    Purposes of the Plan.    The Purposes of this Nonstatutory Stock Option 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 will be Nonstatutory Stock Options. 

        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 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 POET Holdings, 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, 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. 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. 

        (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; 

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

        (o)   "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. 

        (p)   "Option" means a nonstatutory stock option granted pursuant to the Plan, that is not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

        (q)   "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. 

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

        (s)   "Optioned Stock" means the Common Stock subject to an Option. 

        (t)    "Optionee" means the holder of an outstanding Option granted under the Plan. 

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

        (v)   "Plan" means this 2001 Nonstatutory Stock Option Plan. 

        (w)  "Service Provider" means an Employee including an Officer, Consultant or Director. 

        (x)   "Share" means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan. 

        (y)   "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 12 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under the Plan is 250,000 Shares. The Shares may be authorized, but unissued, or reacquired Common
Stock. 

        If
an Option 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). 

        4.    Administration of the Plan.    

        (a)    Administration.    The Plan shall be administered by (i) the Board or (ii) 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 of the Common Stock; 

        (ii)   to
select the Service Providers to whom Options may be granted hereunder; 

        (iii)  to
determine whether and to what extent Options are granted hereunder; 

        (iv)  to
determine the number of shares of Common Stock to be covered by each Option granted hereunder; 

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

        (vi)  to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options 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 the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 

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

        (viii) to
institute an Option Exchange Program; 

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

        (x)   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; 

        (xi)  to
modify or amend each Option (subject to Section 14(b) 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; 

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

        (xiii) to
determine the terms and restrictions applicable to Options; 

        (xiv) 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 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; and 

        (xv) 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. 

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        5.    Eligibility.    Options may be granted to Service Providers. 

        6.    Limitation.    Neither the Plan nor any Option 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. 

        7.    Term of Plan.    The Plan shall become effective upon its adoption by the Board. It shall continue in effect for
ten (10) years, unless sooner terminated under Section 14 of the Plan. 

        8.    Term of Option.    The term of each Option shall be stated in the Option Agreement. 

        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. 

        (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. 

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

        (i)    cash;

        (ii)   check;

        (iii)  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; 

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

        (v)   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; 

        (vi)  such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or 

        (vii) any
combination of the foregoing methods of payment. 

        10.    Exercise of Option.    

        (a)    Procedure for Exercise; Rights as a Shareholder.    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. 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 

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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 shareholder 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 12 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. 

        (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, but only within such period of time as is specified in the Option Agreement, and only 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 such period of time as is 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 such
period of time as is specified in the Option Agreement (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 estate or by a
person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. 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. The Option may be exercised by the executor or administrator of the Optionee's estate or, if none, by the
person(s) entitled to exercise the Option under the Optionee's will or the laws of descent or distribution. 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. 

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        11.    Non-Transferability of Options.    Unless determined otherwise by the Administrator, an Option may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option transferable, such Option shall contain such additional terms and conditions as the Administrator deems appropriate. 

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

        (a)    Changes in Capitalization.    Subject to any required action by the shareholders of the Company, the number of
shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, 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. 

        (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 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 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 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 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, the Optionee shall fully vest in and have the right to exercise the Option as to all
of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option 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 shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option 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, 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 

6

 

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, for each Share of Optioned Stock 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. 

        13.    Date of Grant.    The date of grant of an Option shall be, for all purposes, the date on which the
Administrator makes the determination granting such Option, 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. 

        14.    Amendment and Termination of the Plan.    

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

        (b)    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. 

        15.    Conditions Upon Issuance of Shares.    

        (a)    Legal Compliance.    Shares shall not be issued pursuant to the exercise of an Option unless the exercise of
such Option 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 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. 

        16.    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. 

        17.    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. 

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POET HOLDINGS, INC.    
    
    2001 NONSTATUTORY STOCK OPTION 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  

 [Optionee's Name and Address]  

        You have 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	 	 	 
	Date of Grant	 	 	 
	Vesting Commencement Date	 	 	 
	Exercise Price per Share	 	$	 
	Total Number of Shares Granted	 	 	 
	Total Exercise Price	 	$	 
	Type of Option:	 	 	Nonstatutory Stock Option
	Term/Expiration Date:	 	 	 

 Vesting Schedule:  

        This Option may be exercised, in whole or in part, in accordance with the following schedule: 

        Twelve
thirty-sixths (12/36) of the Shares subject to the Option shall vest on the last day of the twelfth month after the Vesting Commencement Date, and one thirty-sixth (1/36) of the
Shares subject to the Option shall vest on the last day of each month thereafter, so that all of the shares subject to the Option will be fully vested on the last day of the thirty sixth month after
the Vesting Commencement Date provided, however, in each case that the Optionee's Continuous Status as an Employee or Consultant has not terminated prior to such date of vesting. 

 Termination Period: 

        This
Option may be exercised for three months after Optionee ceases to be a Service Provider. Upon the death or Disability of the Optionee, this Option may be exercised for such longer
period as provided in the Plan. In no event shall this Option be exercised later than 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 attached as Part I of this Agreement (the "Optionee") an option (the "Option") to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 14(b) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. 

        2.    Exercise of Option.    

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

 

        (b)    Method of Exercise.    This Option is 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 in respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to the
Controller of 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 such aggregate Exercise Price. 

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

        (b)   check;

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

        (d)   surrender
of other Shares which (i) in the case of Shares acquired upon exercise of an option, 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.    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 the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee. 

        5.    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 Agreement. 

        6.    Tax Consequences.    Some of the United States federal tax consequences relating to this Option, as of the date
of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES. 

        (a)    Exercising the Option.    The Optionee may incur regular federal income tax liability upon exercise of an NSO.
The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of
exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares
if such withholding amounts are not delivered at the time of exercise. 

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        (b)    Disposition of Shares.    If the Optionee holds NSO Shares for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 

        7.    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 Delaware. 

        8.    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 (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING 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 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. 

        By
your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the
Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator
upon any questions relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 

	OPTIONEE	 	POET Holdings, Inc.
	

    
 Signature	
 	

    
 By
	

    
 Print Name	
 	

    
 Title
	

    
 Residence Address	
 	

 

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EXHIBIT A    
    
    POET Holdings, Inc.    
    
    2001 NONSTATUTORY STOCK OPTION PLAN    
    
    EXERCISE NOTICE    
    

POET Holdings, Inc.

999 Baker Way, Suite 200

San Mateo, CA 94404  

Attention: Controller 

        1.    Exercise of Option.    Effective as of today,
                        ,            , the undersigned ("Purchaser")
hereby elects to purchase                        shares (the "Shares") of the Common Stock of POET Holdings,
 Inc. (the "Company") under and pursuant to the 2001 Nonstatutory
Stock Option Plan (the "Plan") and the Stock Option Agreement dated                        ,    (the "Option
Agreement"). The purchase price for the Shares shall be $            , as required
by the Option Agreement.  

        2.    Delivery of Payment.    Purchaser herewith delivers to the Company the full purchase
price for the Shares. 

        3.    Representations of Purchaser.    Purchaser acknowledges that Purchaser has received, read and understood the
Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

        4.    Rights as Shareholder.    Until the issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in
Section 12 of the Plan. 

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

        6.    Entire Agreement; Governing Law.    The Plan and Option Agreement are incorporated herein by reference. This
Agreement, the Plan and the 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 Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's interest except by means of a writing signed by 

the
Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of Delaware. 

	Submitted by:	 	Accepted by:
	
PURCHASER	
 	

POET Holdings, Inc.
	

    
 Signature	
 	

    
 By
	

    
 Print Name	
 	

    
 Title
	

 	
 	

    
 Date Received
	

Address:	
 	

    
	
 	

Address:	
 	

    

	

 	
 	

    
	
 	

 	
 	

    

	

 	
 	

    
	
 	

 	
 	

    

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POET HOLDINGS, INC. 2001 NONSTATUTORY STOCK OPTION PLAN

POET HOLDINGS, INC. 2001 NONSTATUTORY STOCK OPTION PLAN STOCK OPTION AGREEMENT

EXHIBIT A POET Holdings, Inc. 2001 NONSTATUTORY STOCK OPTION PLAN EXERCISE NOTICEQuickLinks
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Exhibit 10.1  

 
  EMPLOYMENT AGREEMENT    
    

        AGREEMENT, made and entered into as of the 19th day of March, 2004, by and between ImClone Systems Incorporated, a Delaware corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and Daniel S. Lynch (the "Executive"). 

W I T N E S S E T H  

        WHEREAS, the Executive is currently serving as the Chief Executive Officer of the Company; 

        WHEREAS,
the Company desires to continue the employment of the Executive as its Chief Executive Officer and to enter into an employment agreement embodying the terms of such employment
(this "Agreement"); and 

        WHEREAS,
Executive desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement; and 

        WHEREAS,
the Company and the Executive have entered into an employment agreement dated September 19, 2001 (the "Existing Employment Agreement") and desire to have this Agreement
replace the Existing Employment Agreement in its entirety; 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the
Company and the Executive (individually a "Party" and together the "Parties") agree as follows: 

        1.    Definitions.    

	(a)
	"Base
Salary" shall mean the Executive's base salary as determined in accordance with Section 4 below.

	(b)
	"Board"
shall mean the board of directors of the Company.

	(c)
	"Bonus
Opportunity" shall mean Executive's annual target bonus and annual maximum bonus award levels as described in Section 5 below.

	(d)
	"Cause"
shall mean:

	(1)
	a
conviction of the Executive, or a plea of nolo contendere, to a felony or a misdemeanor involving moral turpitude; or

	(2)
	an
indictment of the Executive under federal securities laws; or

	(3)
	willful
misconduct or gross negligence by the Executive resulting, in either case, in material harm to the Company or any Subsidiary; or

	(4)
	a
willful failure by the Executive to carry out the reasonable and lawful directions of the Board; or

	(5)
	fraud,
embezzlement, theft or dishonesty by the Executive against the Company or any Subsidiary or a willful material violation by the Executive of a policy or procedure of the
Company, resulting, in any case, in material harm to the Company or any Subsidiary; or

	(6)
	a
willful material breach by the Executive of Section 3, 11, 12, 13 or 16 below.

	(e)
	"Code"
shall mean the Internal Revenue Code of 1986, as amended from time to time. 

        (f)    "Competitive
Activity" shall mean the Executive's engaging in an activity—whether as an employee, consultant, principal, member, agent, officer, director,
partner or shareholder (except as a less than 1% shareholder of a publicly traded company)—that is competitive with any business of the Company or any Subsidiary conducted by the Company
or such Subsidiary at any time during the Noncompetition/Nonsolicitation Period; provided, however, that the Executive may be employed by or otherwise
associated with (i) a business of which a subsidiary, division, segment, unit, etc. is in 

 

competition
with the Company or any Subsidiary but as to which such subsidiary, division, segment, unit, etc. the Executive has absolutely no direct or indirect responsibilities or involvement or
(ii) a company where the Competitive Activity is (A) from the perspective of such company, de minimis with respect to the business of such company and its affiliates and (B) from
the perspective of the Company or any Subsidiary, not in material competition with the Company or any Subsidiary. 

        (g)   "Disability"
shall mean the Executive's inability to substantially perform his duties and responsibilities under this Agreement for a period of (i) 6 consecutive
months or (ii)180 days in any 12-month period, as determined by a licensed physician reasonably selected by the Executive in the case of a termination by the Executive or, in the
case of a termination by the Company, by a licensed physician mutually selected by the Company and the Executive. If the Parties cannot so agree on a licensed physician, each Party shall select a
licensed physician and the two licensed physicians shall select a third licensed physician who shall make such determination for this purpose. 

        (h)   "Effective
Date" shall mean February 12, 2004. 

        (i)    "Existing
Employment Agreement" shall mean the employment agreement by and between the Company and the Executive dated September 19, 2001, as amended by a letter
from the Company to the Executive dated December 4, 2003. 

        (j)    "Good
Reason" shall mean, without the Executive's prior written consent, the occurrence of any of the following events or actions within the 60-day period
preceding a termination of employment by the Executive: 

	(1)
	a
reduction of the Executive's Base Salary or Bonus Opportunity (i.e.—not a reduction of any actual bonus amount (if any) paid from year to year); or

	(2)
	an
actual relocation of the Executive's principal office that is more than 75 miles from Manhattan; or

	(3)
	a
material diminution of the Executive's title, authority, duties or responsibilities, or the assignment to the Executive of titles, authority, duties or responsibilities that are
materially inconsistent with his titles, authority, duties and/or responsibilities under Section 3 below in a manner adverse to the Executive; or

	(4)
	a
failure of the Company to obtain the assumption in writing of its obligation under this Agreement by any successor to all or substantially all of the assets of the Company within
45 days after a merger, consolidation, sale or similar transaction; or

	(5)
	a
material breach by the Company of any provision of this Agreement. 

        (k)   "Noncompetition/Nonsolicitation
Period" shall mean the period commencing on the Effective Date and ending on (i) the third anniversary of the date of the
termination of the Executive's employment if his employment is terminated in accordance with Section 11(d) or 11(e) below or (ii) the first anniversary of the termination of the
Executive's employment if his employment is terminated in accordance with Section 11(b), 11(c), 11(f), 11(g), 11(h) or 11(i) below. 

        (l)    "Subsidiary"
shall mean a corporation of which the Company owns more than 50% of the Voting Stock or any other business entity in which the Company directly or
indirectly has an ownership interest of more than 50%. 

        (m)  "Term
of Employment" shall mean the period specified in Section 2 below. 

        (n)   "Voting
Stock" shall mean capital stock of any class or classes having general voting power under ordinary circumstances, in the absence of contingencies, to elect the
directors of a corporation. 

2

 

        2.    Term of Employment.    

        The
Company hereby employs the Executive, and the Executive hereby accepts such employment, for the period commencing on the Effective Date and ending on the third anniversary of the
Effective Date, subject to earlier termination of the Term of Employment in accordance with the terms of this Agreement. The Term of Employment shall be automatically renewed for a
one-year period on the third anniversary of the Effective Date and on each anniversary of the Effective Date thereafter, unless (i) the Company has notified the Executive in writing
in accordance with Section 26 below at least 90 days prior to the expiration of the then Term of Employment that it does not want the Term of Employment to so renew, or (ii) the
Executive has notified the Company in writing in accordance with Section 26 below at least 90 days prior to the expiration of the then Term of Employment that he does not want the Term
of Employment to so renew. 

        3.    Position, Duties and Responsibilities; Reporting.    

        (a)   As
of the Effective Date and continuing for the remainder of the Term of Employment, the Executive shall be employed as the Chief Executive Officer of the Company and
shall be responsible for the general management of the affairs of the Company. The Executive shall serve the Company faithfully, conscientiously and to the best of the Executive's ability and shall
promote the interests and reputation of the Company. Unless prevented by sickness or Disability, the Executive shall devote substantially all of the Executive's time, attention, knowledge, energy and
skills, during normal working hours, and at such other times as the Executive's duties may reasonably require, to the duties of the Executive's employment. The Executive, in carrying out his duties
under this Agreement, shall report solely to the Board. Provided that the following activities do not materially interfere with the Executive's duties and responsibilities as the Chief Executive
Officer of the Company, the Executive may (i) engage in charitable and community affairs, so long as such activities are consistent with his duties and responsibilities under this Agreement,
(ii) manage his personal investments, and (iii) serve on the boards of directors of other companies with the prior written consent of the Board. 

        (b)   It
is the intention of the Parties that the Executive shall serve as a member of the Board at all times during the Term of Employment. 

        4.    Base Salary.    

        The
Executive shall be paid an annualized Base Salary of $500,000, payable in accordance with the regular payroll practices of the Company. The Base Salary shall be reviewed no less
frequently than annually for purposes of increase in the discretion of the Board; provided, however, that the Base Salary, if increased, shall never be
decreased from such increased amount unless the executive provides his prior written consent to such decrease. 

        5.    Annual Incentive Compensation Programs.    

        During
the Term of Employment, the Executive shall participate in the Company's annual incentive compensation plan, program and/or arrangements applicable to senior-level executives as
established and modified from time to time by the Board in its sole discretion; provided, however, that if the existing annual incentive compensation
plan as of the effective date is substantially modified by the Board after the Effective Date, such modifications shall be discussed with the Executive before such modifications become effective. The
Executive shall have an annual Bonus Opportunity under such plan or program with an annual target award level equal to 100% of the Base Salary and with a maximum award level equal to 200% of the Base
Salary. Payment of annual incentive compensation awards shall be made in the same manner and at the same time that other senior-level executives receive their annual incentive compensation awards. 

3

 

        6.    Long-Term Incentive Compensation Programs.    

        (a)   During
the Term of Employment, the Executive shall be eligible to participate in the Company's applicable long-term incentive compensation plan as may be
established and modified from time to time by the Board in its sole discretion. 

        (b)   Notwithstanding
anything contained in this Agreement to the contrary, the Executive shall receive as soon as practicable an option to purchase 250,000 shares of the
Company's common stock (the "Option"). The exercise price of the Option will be the closing price of the Company's stock on the date of grant. The Option will vest 331/3% on each of the
first three anniversaries of the date of grant. The Option shall expire on the 10th anniversary of the date of grant, or sooner if there is a termination of the Executive's employment.
Other standard or customary terms and conditions relating to the Option shall be contained in the agreement between the Company and the Executive granting the Option to the Executive. 

        7.    Employee Benefit Programs.    

        During
the Term of Employment, the Executive shall be entitled to participate in various employee welfare and pension benefit plans, programs and/or arrangements applicable to the
senior-level executives. 

        8.    Reimbursement of Business Expenses.    

        During
the Term of Employment, the Executive is authorized to incur reasonable business expenses in carrying out his duties and responsibilities under this Agreement, and the Company
shall reimburse him for all such reasonable business expenses reasonably incurred in connection with carrying out the business of the Company, subject to documentation in accordance with the Company's
policy. The Company shall pay directly or reimburse the Executive for all reasonable attorney's fees, disbursements and costs incurred by the Executive in connection with the negotiation, preparation
and execution of this Agreement, subject to proper documentation. 

        9.    Perquisites.    

        During
the Term of Employment, the Executive shall be entitled to participate in the Company's executive fringe benefits applicable to the Company's senior-level executives (if any) in
accordance with the terms and conditions of such arrangements as are in effect from time to time. The Executive shall be entitled to commercial first-class or business-class air travel as reasonable
and appropriate under the circumstances. 

        10.    Vacation.    

        The
Executive shall be entitled to at least 20 paid vacation days per calendar year in accordance with the Company's vacation policy. 

        11.    Termination of Employment.    

        (a)    Termination of Employment Due to Death.    In the event of the Executive's death during the Term of Employment,
the Term of Employment shall end as of the date of the Executive's death and his estate and/or beneficiaries, as the case may be, shall be entitled to the following: 

	(1)
	Base
Salary earned but not paid prior to the date of the Executive's death, payable within 15 days of the date of his death;

	(2)
	all
annual incentive compensation awards with respect to any year prior to the year of his death which have been earned but not paid, payable when such awards are paid to other senior
executives;

	(3)
	a
pro rata annual incentive award with respect to the year of the Executive's death, but only if such award would otherwise have been paid if the Executive had not died, payable 

4

 

when
such awards are paid to other senior executives (and taking into account the bases used to determine the actual awards paid to other senior executives for such year); 

	(4)
	all
stock options held by the Executive as of the date of his death shall immediately become exercisable as of the date of his death and each such stock option shall remain
exercisable until the earlier of:

	(A)
	the
stock option's originally scheduled expiration date or

	(B)
	the
end of the one-year period immediately following the date of the Executive's death;

	(5)
	any
amounts earned, accrued or owing to the Executive but not yet paid under Section 7, 8, 9 or 10 above; and

	(6)
	such
other or additional benefits, if any, as may be provided under applicable plans, programs and/or arrangements of the Company. 

        (b)    Termination of Employment Due to Disability.    If the Executive's employment is terminated due to Disability
during the Term of Employment, either by the Company or by the Executive, the Term of
Employment shall end as of the date of the termination of the Executive's employment and the Executive shall be entitled to the following: 

	(1)
	Base
Salary earned but not paid prior to the date of the termination of the Executive's employment, payable within 15 days of the date of the termination of the Executive's
employment;

	(2)
	all
annual incentive compensation awards with respect to any year prior to the year of the termination of the Executive's employment which have been earned but not paid, payable when
such awards are paid to other senior executives;

	(3)
	a
pro rata annual incentive award with respect to the year of the termination of the Executive's employment, but only if such award would otherwise have been paid had the Executive's
employment not been terminated, payable when such awards are paid to other senior executives (and taking into account the bases used to determine the actual awards paid to other senior executives for
such year);

	(4)
	all
stock options held by the Executive as of the date of the termination of his employment shall immediately become exercisable as of the date of the termination of the Executive's
employment and each such stock option shall remain exercisable until the earlier of:

	(A)
	the
stock option's originally scheduled expiration date or

	(B)
	the
end of the one-year period immediately following the date of the termination of the Executive's employment;

	(5)
	any
amounts earned, accrued or owing to the Executive but not yet paid under Section 7, 8, 9 or 10 above; and

	(6)
	such
other or additional benefits, if any, as may be provided under applicable plans, programs and/or arrangements of the Company. 

In
no event shall a termination of the Executive's employment for Disability occur unless the Party terminating the Executive's employment gives written notice to the other Party in accordance with
Section 26 below. 

        (c)    Termination of Employment by the Company for Cause.    If the Company terminates the Executive's employment for
Cause during the Term of Employment, the Term of Employment shall end 

5

 

as
of the date of the termination of the Executive's employment for Cause and the Executive shall be entitled to the following: 

	(1)
	Base
Salary earned but not paid prior to the date of the termination of the Executive's employment;

	(2)
	any
amounts earned, accrued or owing to the Executive but not yet paid under Section 7, 8, 9 or 10 above; and

	(3)
	such
other or additional benefits, if any, as are provided under applicable plans, programs and/or arrangements of the Company. 

In
no event shall a termination of the Executive's employment for Cause occur unless the Company gives written notice to the Executive in accordance with Section 26 below stating with
specificity the events or actions that constitute Cause and providing the Executive with an opportunity to cure (if curable) within a reasonable period of time. No termination of the Executive's
employment for Cause shall be permitted unless the actual date of termination occurs during the 60-day period immediately following the date that the events or actions constituting Cause
first become known to the Board. Cause shall in no event be deemed to exist except upon a finding reflected in a resolution of the Board, whose finding shall not be binding upon or entitled to any
deference by any decision-maker ruling on this Agreement, at a meeting to which the Executive (and the Executive's counsel) shall be invited upon proper notice. If the Executive's employment is
terminated in accordance with Section 1(d)(2) above and the Executive is not convicted (including, for these purposes, not pleading nolo contendere),
then the Executive's employment shall be deemed to have been terminated by the Company without Cause in accordance with Section 11(d) below. 

        (d)    Termination of Employment by the Company Without Cause.    If the Executive's employment is terminated by the
Company without Cause, other than due to death or Disability, the Executive shall be entitled to the following: 

	(1)
	Base
Salary earned but not paid prior to the date of the termination of the Executive's employment, payable within 15 days of the date of the termination of the Executive's
employment;

	(2)
	all
annual incentive compensation awards with respect to any year prior to the year of the termination of the Executive's employment which have been earned but not paid, payable when
such awards are paid to other senior executives;

	(3)
	a
pro rata annual incentive award with respect to the year of the termination of the Executive's employment, but only if such award would otherwise have been paid had the Executive's
employment not been terminated, payable when such awards are paid to other senior executives (and taking into account the bases used to determine the actual awards paid to other senior executives for
such year);

	(4)
	an
amount equal to 300% of the sum of (i) the greater of (x) the Base Salary in effect on the date of the termination of the Executive's employment or (y) the
Base Salary immediately prior to any reduction that would constitute Good Reason, plus (ii) the three-year average of the actual bonuses paid with respect to the three years
immediately preceding the year of termination of the Executive's employment; payable as follows: (A) 331/3% payable in equal installments over the 1-year period
immediately following the date of the termination of the Executive's employment in accordance with the Company's regular payroll practice and (B) 662/3% payable in a lump sum on
the first anniversary of the date of the termination of the Executive's employment;

	(5)
	all
stock options held by the Executive as of the date of the termination of his employment shall immediately become exercisable as of the date of the termination of 

6

 

the
Executive's employment and each such stock option shall remain exercisable until the earlier of: 

	(A)
	the
stock option's originally scheduled expiration date or

	(B)
	if
the stock option was granted (x) prior to the Effective Date, then at the end of the one-year period immediately following the date of the termination of the
Executive's employment, or (y) on or after the Effective Date, then at the end of the 90-day period immediately following the date of the termination of the Executive's employment;

	(6)
	continued
heath benefit coverage during the 18-month period immediately following the date of the termination of the Executive's employment;

	(7)
	any
amounts earned, accrued or owing to the Executive but not yet paid under Section 7, 8, 9 or 10 above; and

	(8)
	such
other or additional benefits, if any, as are provided under applicable plans, programs and/or arrangements of the Company. 

In
no event shall a termination of the Executive's employment without Cause occur unless the Company gives written notice to the Executive in accordance with Section 26 below. 

        (e)    Termination of Employment by the Executive for Good Reason.    The Executive may terminate his employment for
Good Reason, provided that the actual date of the termination of the Executive's employment occurs during the 60-day period immediately following the date that the events or actions
constituting Good Reason first become known to the Executive. Upon a termination by the Executive of his employment for Good Reason, the Executive shall be entitled to the same payments and benefits
as provided in Section 11(d) above. In no event shall a termination of the Executive's employment for Good Reason occur unless the Executive gives written notice to the Company in accordance
with Section 26 below stating with specificity the events or actions that constitute Good Reason and providing the Company with an opportunity to cure (if curable) within a reasonable period of
time. 

        (f)    Voluntary Termination of Employment by the Executive Without Good Reason, Etc.    If the Executive voluntarily
terminates his employment without Good Reason, other than a termination of employment due to death or Disability, the Executive shall be entitled to the same payments and benefits as provided in
Section 11(c) above, provided that the Executive shall be entitled to all annual incentive compensation awards with respect to any year prior to the year of the termination of the Executive's
employment which have been earned but not paid, payable when such awards are paid to other senior executives. In no event shall a voluntary termination of the Executive's employment without Good
Reason occur unless the Executive gives written notice to the Company in accordance with Section 26
below at least 90 days prior to the date of the actual date of the termination of the Executive's employment. A termination of the Executive's employment under this Section 11(f) shall
not be a breach of this Agreement. 

        (g)    Termination of Employment Due to a Change in Control; Etc.    If the Executive's employment is terminated by
the Company without Cause or by the Executive for Good Reason in connection with a change in control of the Company, the Executive shall be entitled to the same payments and benefits as provided in
Section 11(d) above, except that the amount payable under Section 11(d)(4) shall be paid in a lump sum within the 30-day period immediately following the date of the
termination of the Executive's employment. In addition, if during or after the Term of Employment, the Executive becomes subject to the excise tax imposed by Code Section 4999 (the "Parachute
Excise Tax"), the Company and the Executive agree that: 

	(1)
	if
the "excess parachute payment" (as such term is used under Code Section 280G) exceeds 300% of the "base amount" (as such term is used under Code Section 280G) by 

7

 

less
than 10% of the "parachute payment" (as such term is used under Code Section 280G), then the parachute payment shall be reduced to 299.99% of the base amount, or 

	(2)
	if
the excess parachute payment exceeds 300% of the base amount by 10% or more of the parachute payment, then the Company shall pay to the Executive a tax gross-up payment
so that after payment by the Executive of all federal, state, and local excise, income, employment, Medicare and any other taxes (including any related penalties and interest) resulting from the
payment of the parachute payments and the tax gross-up payments to the Executive by the Company, the Executive retains on an after-tax basis an amount equal to the amount that
the Executive would have retained if he had not been subject to the Parachute Excise Tax. 

        (h)    Nonrenewal of Agreement by the Company.    If (i) the Company does not renew the Term of Employment in
accordance with Section 2 above and (ii) the Executive remains employed by the Company on a continuous basis until the end of the Term of Employment, the Executive shall be entitled to
the same payments and benefits as provided in Section 11(d) above as if the Company had terminated the Executive's employment without Cause as of the last day of the Term of Employment;  provided however, that "100%" shall be substituted for "300%" in Section 11(d)(4) above and 100% of such amount payable under
Section 11(d)(4) above shall be paid in equal installments over the 1-year period immediately following the date of the termination of the Executive's employment in accordance with
the Company's regular payroll practice. 

        (i)    Nonrenewal of Agreement by the Executive.    If the Executive does not renew the Term of Employment in
accordance with Section 2 above, the Executive shall be entitled to the same payments and benefits as provided in Section 11(f) above, as if the Executive had terminated his employment
without Good Reason as of the last day of the Term of Employment; provided, however, that the Executive shall be entitled to all annual incentive
compensation awards with respect to any year prior to the year of the termination of the Executive's employment which have been earned but not paid. 

        (j)    No Mitigation; No Offset.    In the event of any termination of the Executive's employment under this
Section 11, the Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due the Executive under this Agreement on account of any
compensation attributable to any subsequent employment that he may obtain except as specifically provided in this Section 11. Notwithstanding anything contained in this Agreement to the
contrary, all compensation and benefits payable under this Section 11 shall be reduced by any other compensation and benefits payable under any severance or
change-in-control plan, program, policy or arrangement of the Company in which the Executive is a participant. 

        (k)    Return of Company Property.    Immediately following the date of any termination of the Executive's employment,
the Executive or his personal representative shall immediately return all Company property in his possession, including but not limited to all computer equipment (hardware and software), telephones,
facsimile machines, palm pilots and other communication devices, credit cards, office keys, security access cards, badges, identification cards and all copies (including drafts) of any documentation
or information (however stored) relating to the business of the Company, its customers and clients or its prospective customers and clients (provided that the Executive may retain a copy of his
Rolodex). 

        (l)    Resignation as an Officer and Director.    On or before the date of any termination of the Executive's
employment, the Executive shall submit to the Company in writing his resignation as (i) an officer of the Company and of all Subsidiaries and (ii) a member of the Board and of the board
of directors of all Subsidiaries. 

8

 

        (m)    Nature of Payments.    Any amounts due under this Section 11 are in the nature of severance payments
considered to be reasonable by the Company and are not in the nature of a penalty. 

        (n)    Waiver and Release.    As a condition precedent to receiving the compensation and benefits provided under
Sections 11(d), 11(e), 11(g) and 11(h), the Executive shall execute a waiver and release substantially in the form attached to this Agreement as Schedule A. 

        (o)    Cooperation.    Following the Term of Employment, the Executive shall give his assistance and cooperation
willingly, upon reasonable advance notice with due consideration for his other business or personal commitments, in any matter relating to his position with the Company, or his expertise or experience
as the Company may reasonably request, including his attendance and truthful testimony where deemed appropriate by the Company, with respect to any investigation or the Company's defense or
prosecution of any existing or future claims or litigations or other proceeding relating to matters in which he was involved or potentially had knowledge by virtue of his employment with the Company.
In no event shall his cooperation materially interfere with his services for a subsequent employer or other similar service recipient. The Company agrees that (i) it will promptly reimburse the
Executive for his reasonable and documented expenses in connection with his rendering assistance and/or cooperation under this Section 11(o), upon his presentation of documentation for such
expenses and (ii) the Executive will be reasonably compensated for any continued material services as required under this Section 11(o). 

        12.    Confidentiality: Assignment of Rights.    

        (a)   During
the Term of Employment and thereafter, the Executive shall not disclose to anyone or make use of any trade secret or proprietary or confidential information of
the Company, including such trade secret or proprietary or confidential information of any customer or other entity to which the Company owes an obligation not to disclose such information, which he
acquires during the Term of Employment, including but not limited to records kept in the ordinary course of business, except (i) as such disclosure or use may be required or appropriate in
connection with his work as an employee of the Company, (ii) when required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company
or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order him to divulge, disclose or make accessible such information, (iii) as to such
confidential information that becomes generally known to the public or trade without his violation of this Section 12(a), or (iv) to the Executive's spouse and/or his personal tax and
financial advisors as reasonably necessary or appropriate to advance the Executive's tax, financial and other personal planning (each an "Exempt Person"), provided,
however, that any disclosure or use of any trade secret or proprietary or confidential information of the Company by an Exempt Person shall be deemed to be a breach of this
Section 12(a) by the Executive. 

        (b)   The
Executive hereby sells, assigns and transfers to the Company all of his right, title and interest in and to all inventions, discoveries, improvements and
copyrightable subject matter (the "rights") which during the Term of Employment are made or conceived by him, alone or with others, and which are within or arise out of any general field of the
Company's business or arise out of any work he performs or information he receives regarding the business of the Company while employed by the Company. The Executive shall fully disclose to the
Company as promptly as available all information known or possessed by him concerning the rights referred to in the preceding sentence, and upon request by the Company and without any further
compensation in any form to him by the Company, but at the expense of the Company, execute all applications for patents and for copyright registration, assignments thereof and other instruments and do
all things which the Company may deem necessary to vest and maintain in it the entire right, title and interest in and to all such rights. 

9

 

        13.    Noncompetition; Nonsolicitation.    

        (a)   The
Executive covenants and agrees that during the Noncompetition/ Nonsolicitation Period he shall not at any time, without the prior written consent of the Company,
directly or indirectly, engage in a Competitive Activity. 

        (b)   The
Executive covenants and agrees that during the Noncompetition/ Nonsolicitation Period he shall not at any time, directly or indirectly, solicit (x) any
customer or client of the Company or any Subsidiary with respect to a Competitive Activity or (y) any employee of the Company or any Subsidiary for the purpose of causing such employee to
terminate his or her employment with the Company or such Subsidiary. 

        (c)   The
Parties acknowledge that in the event of a breach or threatened breach of Section 13(a) and/or Section 13(b) above, the Company shall not have an
adequate remedy at law. Accordingly, and notwithstanding anything contained in this Agreement to the contrary, in the event of any breach or threatened breach of Section 13(a) and/or
Section 13(b) above, the Company shall be entitled to such equitable and injunctive relief as may be available to restrain the Executive and any business, firm, partnership, individual,
corporation or entity participating in the breach or threatened breach from the violation of the provisions of Section 13(a) and/or Section 13(b) above. Nothing in this Agreement shall
be construed as prohibiting the Company from pursuing any other remedies available at law or in equity for breach or threatened breach of Section 13(a) and/or Section 13(b) above,
including the recovery of damages. 

        14.    Indemnification.    The Company shall indemnify the Executive, to the maximum extent permitted by applicable
law, and in the same or better manner and to the same or better extent with respect to each aspect of the indemnification as provided to any other executive of the Company, against all costs, charges
and expenses incurred or sustained by the Executive in connection with any action, suit or proceeding to which the Executive may be made a party, brought by any shareholder of the Company directly or
derivatively or by any third party by reason of any act or omission of the Executive as an officer, director or employee of the Company or of any Subsidiary or affiliate of the Company. 

        15.    Assignability; Binding Nature.    This Agreement shall be binding upon and inure to the benefit of the Parties
and their respective successors, heirs (in the case of the Executive) and assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except
that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the company, as contained in this Agreement, either contractually or as a matter of law. 

        16.    Representation.    The Company represents and warrants that it is fully authorized and empowered to enter into
this Agreement and that the performance of its obligations under this Agreement will not violate any agreement between it and any other person, firm or organization. The Executive represents and
warrants that no agreement exists between him and any other person, firm or organization that would be violated by the performance of his obligations under this Agreement. 

        17.    Entire Agreement.    This Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the Parties with respect thereto.
The Parties agree that as of the Effective Date, the Existing Employment Agreement is null and void and shall have no further force nor effect. 

10

 

        18.    Amendment or Waiver.    No provision in this Agreement may be amended unless such amendment is agreed to in
writing and signed by the Executive and an authorized officer of the Company. No waiver by either Party of any breach by the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by the
Executive or an authorized officer of the Company, as the case may be. 

        19.    Withholding.    The Company may withhold from any amounts payable under this Agreement such federal, state and
local taxes as may be required to be withheld pursuant to any applicable law or regulation. 

        20.    Severability.    In the event that any provision or portion of this Agreement shall be determined to be invalid
or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted
by law. 

        21.    Survivorship.    The respective rights and obligations of the Parties hereunder shall survive any termination
of the Executive's employment hereunder to the extent necessary to the intended preservation of such rights and obligations. 

        22.    Controlling Document.    If any provision of any agreement, plan, program, policy, arrangement or other written
document between or relating to the Company and the Executive conflicts with any provision of this Agreement, the provision of this Agreement shall control and prevail. 

        23.    Beneficiaries/References.    The Executive shall be entitled, to the extent permitted under any applicable law,
to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence, reference in this Agreement to the Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. 

        24.    Governing Law/Jurisdiction.    This Agreement shall be governed by and construed and interpreted in accordance
with the laws of the State of New York without reference to principles of conflict of laws unless superseded by federal law. 

        25.    Resolution of Disputes.    Any disputes arising under or in connection with this Agreement shall be resolved by
binding arbitration, to be held in New York City in accordance with the rules and procedures of the American Arbitration Association. The Executive and the Company shall mutually select the
arbitrator. If the Executive and the Company cannot agree on the selection of an arbitrator, each Party shall select an arbitrator and the two arbitrators shall select a third arbitrator who shall
resolve the dispute. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. All arbitration costs and all other costs, including but not limited to
reasonable attorneys' fees incurred by each Party, shall be borne by the Company; provided, however, that if the arbitrator finds that the Executive's
claims are frivolous or without merit, then the arbitration costs shall be shared equally by both parties and all other costs shall be borne by the Party incurring such cost. 

11

 

        26.    Notices.    All notices shall be in writing, shall be sent to the following addresses listed below using a
reputable overnight express delivery service, and shall be deemed to be received when sent. 

	 
	 	 

	If to the Company:	 	ImClone Systems Incorporated

180 Varick Street

New York, New York 10014

Attention: Chairman of the Board
	

 	
 	

with a copy to:
	

 	
 	

Stewart Reifler, Esq.

Vedder, Price, Kaufman & Kammholz, P.C.

805 Third Avenue

New York, New York 10022
	

If to the Executive:	
 	

The Executive's last known address

on file with the Company
	

 	
 	

with a copy to:
	

 	
 	

Andrew Oringer, Esq.

Clifford Chance US LLP

200 Park Avenue

New York, New York 10166

        27.    Headings.    The headings of the sections contained in this Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any provision of this Agreement. 

        28.    Counterparts.    This Agreement may be executed in two or more counterparts, and such counterparts shall
constitute one and the same instrument. Signatures delivered by facsimile shall be deemed effective for all purposes to the extent permitted under applicable law. 

REMAINDER OF PAGE INTENTIONAL LEFT BLANK  

12

 

        IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. 

	 	 	IMCLONE SYSTEMS INCORPORATED
	

 	
 	

By:	

/s/  DAVID M. KIES      
	 	 	 	
 David M. Kies

Chairman of the Board of Directors
	

 	
 	

 	

/s/  DANIEL S. LYNCH      
	 	 	 	
 Daniel S. Lynch

13

SCHEDULE A  

 
 

RELEASE    
    

        This RELEASE ("Release") dated as of
this                        day between ImClone Systems Incorporated, a Delaware corporation (the "Company"), and Daniel S.
Lynch (the "Executive"). 

        WHEREAS,
the Company and the Executive previously entered into an employment agreement dated March     , 2004 under which the Executive was employed to serve as the
Company's Chief Executive Officer (the "Employment Agreement"); and 

        WHEREAS,
the Executive's employment with the Company (has been) (will be) terminated effective                        ; and 

        WHEREAS,
pursuant to Section 11 of the Employment Agreement, the Executive is entitled to certain compensation and benefits upon such termination, contingent upon the execution of
this Release; 

        NOW,
THEREFORE, in consideration of the premises and mutual agreements contained herein and in the Employment Agreement, the Company and the Executive agree as follows: 

        1.     Subject
to Paragraph 3 below, the Executive, on his own behalf and on behalf of his heirs, estate and beneficiaries, does hereby release the Company, and any of
its Subsidiaries or affiliates, and each past or present officer, director, agent, employee, shareholder, and insurer of any such entities, from any and all claims made, to be made, or which might
have been made of whatever nature, whether known or unknown, from the beginning of time, including those that arose as a consequence of his employment with the Company, or arising out of the severance
of such employment relationship, or arising out of any act committed or omitted during or after the existence of such employment relationship, all up through and including the date on which this
Release is executed, including, but not limited to, those which were, could have been or could be the subject of an administrative or judicial proceeding filed by the Executive or on his behalf under
federal, state or local law, whether by statute, regulation, in contract or tort, and including, but not limited to, every claim for front pay, back pay, wages, bonus, fringe benefit, any form of
discrimination (including but not limited to, every claim of race, color, sex, religion, national origin, disability or age discrimination), wrongful termination, emotional distress, pain and
suffering, breach of contract, compensatory or punitive damages, interest, attorney's fees, reinstatement or reemployment. If any court rules that such waiver of rights to file, or have filed on his
behalf, any administrative or judicial charges or complaints is ineffective, the Executive agrees not to seek or accept any money damages or any other relief upon the filing of any such administrative
or judicial charges or complaints. The Executive relinquishes any right to future employment with the Company and the Company shall have the right to refuse to re-employ the Executive
without liability. The Executive acknowledges and agrees that even though claims and facts in addition to those now known or believed by him to exist may subsequently be discovered, it is his
intention to fully settle and release all claims he may have against the Company and the persons and entities described above, whether known, unknown or suspected. 

        2.     Subject
to Paragraph 3 below, the Company releases and forever discharges, and by this instrument releases and forever discharges, the Executive from all debts,
obligations, promises, covenants, agreements, endorsements, bonds, controversies, suits, actions, causes of action, judgments, damages, expenses, claims or demands of any kind whatsoever (whether
known or unknown), in law or in equity, which it ever had, now has, or which may arise in the future regarding any matter arising on or before the execution of this Release regarding the Executive's
employment with or the Executive's leaving the employment of the Company, 

        3.     The
Company and the Executive acknowledge and agree that the release contained in Paragraphs 1 and 2 does not, and shall not be construed to, release or limit the scope
of any existing obligation of the Company (i) to indemnify the Executive for his acts as an officer or director of Company in accordance with the bylaws of Company and the policies and
procedures of Company that 

 

are
presently in effect including Section 14 of the Employment Agreement, or (ii) to the Executive and his eligible, participating dependents or beneficiaries under any existing welfare,
retirement or other fringe-benefit plan or program of the Company in which the Executive and/or such dependents are participants. The Company and the Executive acknowledge and agree that the release
contained in Paragraphs 1 and 2 does not apply to any causes of action arising under or in connection with (x) the Executive's misfeasance, malfeasance, nonfeasance, misconduct or any similar
action or actions not known by the Company as of the date of this Release nor (y) any post-termination of employment obligations by the Company and the Executive under the
Employment Agreement. 

        4.     The
Executive acknowledges that he has been provided at least 21 days to review the Release and has been advised to review it with an attorney of his choice. In
the event the Executive elects to sign this Release prior to this 21 day period, he agrees that it is a knowing and voluntary waiver of his right to wait the full 21 days. The Executive
further understands that he has 7 days after the signing hereof to revoke it by so notifying the Company in writing, such notice to be received
by                        within the 7-day
period. The Executive further acknowledges that he has carefully read this Release, and knows and understands its contents and its binding legal effect. The Executive acknowledges that by signing this
Release, he does so of his own free will and act and that it is his intention that he be legally bound by its terms. 

        IN
WITNESS WHEREOF, the parties have executed this Release on the date first above written. 

	 	 	IMCLONE SYSTEMS INCORPORATED
	

 	
 	
By:	

 Name:

Title:
	 	 	 	 
	

 	
 	

 	

 Daniel S. Lynch

2

QuickLinks

EMPLOYMENT AGREEMENT

RELEASE

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