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EXHIBIT 4.05  

 
 

POET HOLDINGS, INC.
  1995 STOCK PLAN
  (Amended and Restated)    
    

        1.    Purposes of the Plan.    The purposes of this 1995 Stock Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants of the Company and its Parent or Subsidiaries and to promote the success
of the Company's business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an Option and subject
to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder. Stock Purchase rights may also be granted under the Plan. 

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

        (a)   "Administrator" means the Board or any of its Committees appointed pursuant to Section 4 of the Plan. 

        (b)   "Applicable Laws" means the legal requirements relating to the administration of stock option plans under United States
state corporate laws, federal and state securities laws, the Code any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or
jurisdiction where Options or Stock Purchase Rights 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 appointed by the Board of Directors 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 who is engaged by the Company or any Parent or Subsidiary to render services to such
entity. 

        (i)    "Continuous Status as an Employee or Consultant" means that the employment or consulting relationship with the Company,
any Parent or Subsidiary is not interrupted or terminated. Continuous Status as an Employee or Consultant shall not be considered interrupted 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. A leave of absence approved by the Company shall include
sick leave, military leave, or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no such leave may exceed ninety
(90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract, including Company policies. If reemployment upon expiration of a leave of absence approved by
the Company is not so guaranteed, on the ninety-first (91st) day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. 

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

        (k)   "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a Director's fee by the Company shall not 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 of the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, 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 and reported in The Wall Street
Journal or such other source as the Administrator deems reliable; 

         (ii)  If
the Common Stock is quoted on the NASDAQ System (but not on the Nasdaq National Market thereof) or regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value 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 and
reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 

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

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

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

        (p)   "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. 

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

        (r)   "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. 

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

        (t)    "Optionee" means the holder of an outstanding Option or Stock Purchase Right 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 1995 Stock Plan. 

        (w)  "Restricted Stock" means shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under
Section 11 below. 

        (x)   "Restricted Stock Purchase Agreement" means a written agreement between the Company and the Optionee evidencing the terms
and restrictions applying to stock purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. 

        (y)   "Section 16(b)" means Section 16(b) of the Securities Exchange Act of 1934, as amended. 

        (z)   "Share" means a share of the Company's Common Stock, as adjusted in accordance with Section 12 below. 

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        (aa) "Stock Purchase Right" means a right to purchase Common Stock pursuant to Section 11 below. 

        (bb) "Sub-Plan" means a Sub-Plan created under and subject to the terms of this Plan, pursuant to
which Options and/or Stock Purchase Rights which qualify for preferred tax treatment under foreign tax laws may be granted to Employees and Consultants of the Company or any Parent or Subsidiary of
the Company. 

        (cc) "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 subject to option and sold under the Plan is one million two hundred thousand (1,200,000) Shares, plus an annual increase will be added on the first day of the fiscal
year beginning in 2000, equal to (i) 230,889 shares, (ii) 2% of the outstanding shares on that date, (ii) or a lesser amount determined by the Board. The Shares may be authorized
but unissued, or reacquired Common Stock. 

        If
an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an option exchange program, the unpurchased
Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, and the original purchaser of such Shares did not receive any benefits of ownership of such Shares, such Shares shall become available
for future grant under the Plan. For purposes of the preceding sentence, voting rights shall not be considered a benefit of Share ownership. 

        4.    Administration of the Plan.    

        (a)    Multiple Administrative Bodies.    If permitted by Rule 16b-3, the Plan may be administered
by different bodies with respect to Directors, Officers and Employees who are neither Directors nor Officers. 

        (b)    Administration With Respect to Directors and Officers.    With respect to grants of Options and Stock Purchase
Rights to Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board if the Board may administer the Plan in compliance with the rules under
Rule 16b-3 promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities are to be made and any other Applicable Laws, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted to comply with the rules under Rule 16b-3 relating to the disinterested administration of employee benefit plans under which
Section 16(b) exempt discretionary grants and awards of equity securities are to be made and any other Applicable Laws. Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the
rules under
Rule 16b-3 relating to the disinterested administration of employee benefit plans under which Section 16(b) exempt discretionary grants and awards of equity securities are to
be made. 

        (c)    Administration With Respect to Other Employees and Consultants.    With respect to grants of Options and Stock
Purchase Rights to Employees or Consultants who are neither Directors nor 

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Officers
of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which committee shall be constituted in such a manner as to satisfy
the Applicable Laws, and the requirements of any stock exchange upon which the Company's Common Stock is listed. Once appointed, such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable
Laws. 

        (d)    Powers of the Administrator.    Subject to the provisions of the Plan and, in the case of a Committee, the
specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority in its discretion: 

          (i)  to
determine the Fair Market Value of the Common Stock, in accordance with Section 2(m) of the Plan; 

         (ii)  to
select the Consultants and Employees to whom Options and Stock Purchase Rights may from time to time be granted hereunder; 

        (iii)  to
determine whether and to what extent Options and Stock Purchase Rights or any combination thereof are granted hereunder; 

        (iv)  to
determine the number of Shares to be covered by each such Option or Stock Purchase Right granted hereunder; 

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

        (vi)  to
determine the terms and conditions of any Option or Stock Purchase Right granted hereunder; 

       (vii)  to
determine whether and under what circumstances an Option may be settled in cash under subsection 9(f) instead of Common Stock; 

      (viii)  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 has declined
since the date the Option was granted; 

        (ix)  to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to Sub-Plans established for the
purpose of qualifying Options or Stock Purchase Rights for preferred tax treatment under foreign tax laws; 

         (x)  to
provide for early exercise of Options for the purchase of unvested Shares, subject to such terms and conditions as the Administrator may determine; and 

        (xi)  to
construe and interpret the terms of the Plan and Options or Stock Purchase Rights granted pursuant to the Plan. 

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

        5.    Eligibility and Limitations.    

        (a)   Nonstatutory
Stock Options and Stock Purchase Rights may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Employee
or 

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Consultant
who has been granted an Option or Stock Purchase Right may, if otherwise eligible, be granted additional Options or Stock Purchase Rights. 

        (b)   Each
Option shall be designated in the written option agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designations, to the extent that the aggregate Fair Market Value of Shares subject to an Optionee's Incentive Stock Options granted by the Company, any Parent or Subsidiary, which become exercisable
for the first time during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 5(b), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted. 

        (c)   Neither
the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee any right with respect to continuation of his or her employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her right or the Company's right to terminate his or her employment or consulting relationship at any time, with or without
cause. Options under the Plan are granted in a discretionary fashion, and the grant of one or more Options and/or Stock Purchase Rights under the Plan shall not give rise to a right in any Employee or
Consultant to receive additional Option and/or Stock Purchase Right grants in the future. Further, the Board retains the right, in its sole discretion, to terminate the Plan for any reason, or no
reason, at any time. 

        (d)   The
following limitations shall apply to grants of Options and Stock Purchase Rights: 

          (i)  No
Employee or Consultant shall be granted, in any fiscal year of the Company, Options and Stock Purchase Rights to purchase more than 200,000 Shares. 

         (ii)  The
foregoing limitation shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 12. 

        (iii)  If
an Option or Stock Purchase Right is canceled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described
in Section 12), the canceled Option or Stock Purchase Right shall be counted against the limit set forth in Section 5(d)(i). For this purpose, if the exercise price of an Option or Stock
Purchase Right is reduced, such reduction will be treated as a cancellation of the Option or Stock Purchase Right and the grant of a new Option or Stock Purchase Right. 

        6.    Term of Plan.    The Plan shall become effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company, as described in Section 18 of the Plan. The Plan shall continue in effect for a term of ten (10) years unless sooner terminated pursuant to
Section 14 thereof. 

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

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        8.    Option Exercise Price and Consideration.    

        (a)   The
per Share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to
the following: 

          (i)  In
the case of an Incentive Stock Option 

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

        (2)   granted
to any other Employee, the per Share exercise price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 

         (ii)  In
the case of a Nonstatutory Stock Option 

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

        (2)   granted
to any other person, the per Share exercise price shall be no less than eighty-five percent (85%) of the Fair Market Value per Share on the date of
grant. 

        (b)   The
consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in
the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of (1) cash, (2) check, (3) wire transfer, (4) promissory
note, (5) other Shares which (x) 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
(y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (6) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and a broker, if applicable, shall require to effect a "cashless' exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price, or (7) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company. 

        9.    Exercise of Option.    

        (a)    Procedure for Exercise; Rights as a Stockholder.    Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the
Plan, but in no case at a rate of less than twenty percent (20%) per year over five (5) years from the date the Option is granted. An Option may not be exercised for a fraction of a Share. 

        An
Option shall be deemed to be exercised when written notice of such exercise (in such form as the Board approves, including the form attached hereto as Exhibit A) has been given
to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received
by the Company. Full payment may, as authorized by the Administrator, consist of any consideration 

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and
method of payment allowable under Section 8(b) hereof. 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 stock certificate evidencing such Shares, no right to vote, receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Option. No adjustment shall be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as provided in Section 12 hereof. 

        Exercise
of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and the Option, by the number of
Shares as to which the Option is exercised. 

        (b)    Termination of Employment or Consulting Relationship.    In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant (but not in the event of an Optionee's change of status from Employee to Consultant (in which case an Employee's Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the date three (3) months and one (1) day following such change of status) or from Consultant to Employee), such Optionee may, but
only within such period of time as is determined by the Administrator, of at least thirty (30) days, with such determination in the case of an Incentive Stock Option not exceeding three
(3) months after the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the
extent that the Optionee was entitled to exercise it at the date of such termination. To the extent that the Optionee was not entitled to exercise the Option at the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate and the Shares converted by such Option shall revert to the Plan. 

        (c)    Disability of Optionee.    In the event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her disability, the Optionee may, but only within twelve (12) months from the date of such termination (and in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination. If such disability is not a "disability"
as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option on the day three (3) months and one (1) day following such termination. To the extent that the Optionee was
not entitled to exercise the Option at the date of termination, or if the Optionee does not exercise such Option to the extent so entitled 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.    In the event of the death of an Optionee, the Option may be exercised at any time within
twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant) by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but only to the extent that the Optionee was entitled to exercise the Option on the date of death. If, at the time of death,
the Optionee was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall immediately revert to the Plan. If, after the Optionee's death,
the Optionee's estate or a person who acquires the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan. 

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        (e)    Rule 16b-3.    Options granted to persons subject to Section 16(b) of the Exchange
Act must comply with Rule 16b-3 and shall contain such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions. 

        (f)    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. 

        10.    Non-Transferability of Stockholder Rights.    Options and Stock Purchase Rights 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. 

        11.    Stock Purchase Rights.    

        (a)    Rights to Purchase.    Stock Purchase Rights may be issued either alone, in addition to, or in tandem with
other Options or Stock Purchase Rights granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan,
it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be
paid, and the time within which such person must accept such offer, which shall in no event exceed ninety (90) days from the date upon which the Administrator makes the determination to grant
the Stock Purchase Right. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 

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

        (c)    Other Provisions.    The Restricted Stock Purchase Agreement shall contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same
with respect to each purchaser. 

        (d)    Rights as a Stockholder.    Once the Stock Purchase Right is exercised, the purchaser shall have rights
equivalent to those of a stockholder and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall be made
for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 12 of the Plan. 

        12.    Adjustments upon Changes in Capitalization or Merger.    

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

8

 

outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration
by the Company. The 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
Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right. 

        (b)    Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify the Optionee at least fifteen (15) days prior to such proposed action. In addition, the Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action. To the extent it has
not been previously exercised, the Option or Stock Purchase Right shall terminate immediately prior to the consummation of such proposed action. 

        (c)    Merger.    In the event of a merger of the Company with or into another corporation, each outstanding Option or
Stock Purchase Right may be assumed or an equivalent option or right may be substituted by such successor corporation or a parent or subsidiary of such successor corporation. If, in such event, an
Option or Stock Purchase Right is not assumed or substituted, the Option or Stock Purchase Right shall terminate as of the date of the closing of the merger. For the purposes of this paragraph, the
Option or Stock Purchase Right shall be considered assumed if, following the merger, the Option or Stock Purchase Right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger, the consideration (whether stock, cash, or other securities or property) received in the merger by holders of Common
Stock for each Share held on the effective date of the transaction (and if the holders are offered a choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding Shares). If such consideration received in the merger is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be
solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger. 

        (d)    Shares Subject to Repurchase Option.    Any Shares subject to a repurchase option of the Company shall be
exchanged for the consideration (whether stock, cash, or other securities or property) received in the merger or asset sale by the holders of Common Stock for each Share held on the effective date of
the transaction, as described in the preceding paragraph. If the Optionee receives shares of stock of the successor corporation or a parent or subsidiary of such successor corporation in exchange for
Shares subject to a repurchase option, and exchanged shares shall continue to be subject to the repurchase option as provided in the Restricted Stock Purchase Agreement. 

        13.    Time of Granting Options and Stock Purchase Rights.    The date of grant of an Option or Stock Purchase Right
shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by 

9

 

the
Administrator. Notice of the determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted 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 discontinue the Plan, but no
amendment, alteration, suspension or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. Such consent must be in
writing and signed by the Optionee. In addition, to the extent necessary and desirable to comply with Rule 16b-3 under the Exchange Act or with Section 422 of the Code (or
any other applicable law or regulation, including the requirements of the NASD or an established stock exchange), the Company shall obtain stockholder approval of any Plan amendment in such a manner
and to such a degree as required. 

        (b)    Effect of Amendment or Termination.    Any such amendment or termination of the Plan shall not affect Options
or Stock Purchase Rights already granted, and such Options and Stock Purchase Rights shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed
otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. 

        15.    Conditions Upon Issuance of Shares.    Shares shall not be issued pursuant to the exercise of an Option or
Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, 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 or Stock Purchase Right, the Company may require the person exercising such Option or Stock Purchase Right to represent and warrant at the
time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant provisions of law. 

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

        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.    Agreements.    Options and Stock Purchase Rights shall be evidenced by written agreements in such form as the
Administrator shall approve from time to time. 

        18.    Stockholder Approval.    Continuance of the Plan shall be subject to approval by the stockholders of the
company within twelve (12) months before or after the date the plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under federal and state securities
laws and the rules of any stock exchange upon which the Company's Common Stock is listed. 

10

 
 

POET HOLDINGS, INC.
  
    1995 STOCK PLAN
  
    STOCK OPTION AGREEMENT    
    

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

I. NOTICE OF STOCK OPTION GRANT  

[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:	
 	

—	

Incentive Stock 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
forty-eighths (12/48) of the Shares subject to the Option shall vest on the last day of the twelfth month after the Vesting Commencement Date, and one forty-eighth (1/48) 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 date four (4) years from the date
of grant; provided, however, in each case that the Optionee's Continuous Status as an Employee or Consultant has not terminated prior such date of vesting. 

 Termination Period:  

        This Option may be exercised for three (3) months after termination of your employment or consulting relationship, or such longer period as may be
applicable upon death or disability of Optionee as provided in the Plan. In the event of the Optionee's change in status from Employee to Consultant 

 

or
Consultant to Employee, this Option Agreement shall remain in effect. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. 

II. AGREEMENT  

        1.    Grant of Option.    POET Holdings, Inc., a Delaware corporation (the "Company"), hereby grants to the
Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option") to purchase the total number of shares of Common Stock (the "Shares") 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, definitions and provisions of the 1995 Stock Plan as amended and restated from time to time (the "Plan")
adopted by the Company, which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 

        If
designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option ("NSO"). 

        2.    Exercise of Option.    

        (a)    Right to Exercise.    This Option shall be exercisable during its term in accordance with the Vesting Schedule
set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement. In the event of Optionee's death, disability or other termination of the employment or
consulting relationship, this Option shall be exercisable in accordance with the applicable provisions of the Plan and this Option Agreement. 

        (b)    Method of Exercise.    This Option shall be exercisable by written notice (in such form as the Board approves,
including the form attached hereto as Exhibit A) which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price.
This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price. 

        No
Shares will be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock
exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares. 

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

        (a)   cash;

        (b)   check;

        (c)   wire
transfer; 

        (d)   promissory
note; 

        (e)   surrender
of other shares of Common Stock of the Company which (A) in the case of Shares acquired pursuant to the exercise of a Company option, have been owned by
the Optionee 

2

 

for
more than six (6) months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being
exercised; or 

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

        4.    Restrictions on Exercise.    This Option may not be exercised until such time as the Plan has been approved by
the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of any applicable federal
or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. 

        5.    Termination of Relationship.    In the event an Optionee's Continuous Status as an Employee or Consultant
terminates, Optionee may, to the extent otherwise so entitled at the date of such termination (the "Termination Date"), exercise this Option during the Termination Period set out in the Notice of
Grant. To the extent that Optionee was not entitled to exercise this Option at the date of such termination, or if Optionee does not exercise this Option within the time specified herein, the Option
shall terminate. 

        6.    Disability of Optionee.    Notwithstanding the provisions of Section 6 above, in the event of termination
of an Optionee's consulting relationship or Continuous Status as an Employee as a result of his or her disability, Optionee may, but only within twelve (12) months from the date of such
termination (and in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the
date of such termination; provided, however, that if such disability is not a "disability" as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option on the day three (3) months and one
(1) day following such termination. To the extent that Optionee was not entitled to exercise the Option at the date of termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the Shares covered by such option shall revert to the Plan. 

        7.    Death of Optionee.    In the event of termination of Optionee's Continuous Status as an Employee or Consultant
as a result of the death of Optionee, the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the date of expiration of the
term of this Option as set forth in Section 10 below), by Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to the extent the Optionee could exercise the Option at the date of death. 

        8.    Repurchase Option.    Unless the Administrator deter-mines other-wise, the Restricted Stock Purchase
Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Administrator. 

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

3

 

        10.    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. The limitations set out in Section 7 of the Plan regarding Options designated as Incentive Stock
Options and Options granted to stockholders who hold greater than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary shall apply to this Option. 

        11.    Tax Consequences.    Set forth below is a brief summary as of the date of this Option of some of the federal
and state tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 

        (a)    Exercise of ISO.    If this Option qualifies as an ISO, there will be no regular federal income tax liability
or state income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an
adjustment to the alternative minimum tax for federal tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise. 

        (b)    Exercise of ISO Following Disability.    If the Optionee's Continuous Status as an Employee or Consultant
terminates as a result of disability that is not total and permanent disability as defined in
Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the Optionee must exercise an ISO within ninety (90) days of such termination for the ISO to be
qualified as an ISO. 

        In
the event that the Optionee ceases to be an Employee but remains a Consultant, any Incentive Stock Option of the Optionee that remains unexercised shall cease to qualify as an
Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1) day following such change of status. 

        (c)    Exercise of Nonstatutory Stock Option.    There may be a regular federal and state income tax liability upon
the exercise of a Nonstatutory Stock Option. 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 Shares on the date of exercise over the Exercise Price. If Optionee is an Employee or a former Employee, the Company will be required to withhold from Optionee's 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. 

        (d)    Disposition of Shares.    In the case of an NSO, if Shares are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal and state income tax purposes. In the case of an ISO, if Shares transferred pursuant to the Option are held
for at least one year after exercise and are disposed of at least two years after the Date of Grant, any gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal and state income tax purposes. If Shares purchased under an ISO are disposed of within such one-year period or within two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (1) the Fair
Market Value of the Shares on the date of exercise, or (2) the sale price of the Shares. 

        (e)    Notice of Disqualifying Disposition of ISO Shares.    If the Option granted to Optionee herein is an ISO, and
if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or 

4

 

(2) the
date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the Optionee. 

        12.    Entire Agreement; Governing Law.    The Plan is incorporated herein by reference. The Plan, this Option
Agreement, the Exercise Notice and, if applicable, the Restricted Stock Purchase 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 Delaware law except for that body of law pertaining to conflict of laws. 

	 	 	POET HOLDINGS, INC.

a Delaware corporation
	

 	
 	

By:	

        OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF
THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S
STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN
ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE. OPTIONS UNDER THE PLAN ARE GRANTED IN A DISCRETIONARY
FASHION, AND THE GRANT OF ONE OR MORE OPTIONS UNDER THE PLAN SHALL NOT GIVE RISE TO A RIGHT IN ANY EMPLOYEE OR CONSULTANT TO RECEIVE ADDITIONAL OPTION GRANTS IN THE FUTURE. FURTHER, THE BOARD RETAINS
THE RIGHT, IN ITS SOLE DISCRETION, TO TERMINATE THE PLAN FOR ANY REASON, OR NO REASON, AT ANY TIME. 

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

	

Dated:	
 	

	
 	

	 	 	 	 	Optionee
	

 	
 	

 	
 	

Residence Address:
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	

 	
 	

 	
 	

5

 
 

EXHIBIT A
  
    1995 STOCK PLAN
  
    EXERCISE NOTICE    
    

POET
Holdings, Inc.

999 Baker Way

Suite 100

San Mateo, CA 94404 

Attention:
Secretary 

        1.    Exercise of Option.    Effective as of today,
                        , the undersigned ("Optionee") hereby elects to
exercise Optionee's option to purchase                        shares of Common Stock (the "Shares") of POET Holdings, Inc.
(the "Company") under and pursuant to the 1995 Stock Plan, as amended (the
"Plan") and the [    ] Incentive [    ] Nonstatutory Stock Option
Agreement dated                        (the "Option Agreement"). Optionee herewith delivers to the Company the full purchase price
for the Shares. 

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

        3.    Rights as Stockholder.    Until the stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate 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 stock certificate is issued, except as provided in Section 12 of the Plan. 

        Optionee
shall enjoy rights as a stockholder until such time as Optionee disposes of the Shares or the Company and/or its assignee(s) exercises the Right of First Refusal or Repurchase
Option contained in this Exercise Notice. Upon such exercise, Optionee shall have no further rights as a holder of the Shares so purchased except the right to receive payment for the Shares so
purchased in accordance with the provisions of the Stock Purchase Agreement, and Optionee shall forthwith cause the certificate(s) evidencing the Shares so purchased to be surrendered to the Company
for transfer or cancellation. 

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

        5.    Entire Agreement.    The Plan, Notice of Grant/Option Agreement and Stock Purchase Agreement are incorporated
herein by reference. This Agreement, the Plan, the Option Agreement, and, if applicable, the Restricted Stock Purchase 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. 

	

Submitted by:	
 	

Accepted by:
	

OPTIONEE:	
 	

POET HOLDINGS, INC.
	

 	
 	

By:	

	

 	
 	

Its:	

	

	
 	

 	

 
	(Signature)	 	 	 
	Address:	 	Address:
	

	
 	

999 Baker Way

Suite 100
	
	 	San Mateo, CA 94404

 
 
 

CONSENT OF SPOUSE    
    

        I,                        , spouse
of                        , have read and approve the foregoing Agreement. In consideration of granting of the right to my spouse
to purchase
shares of POET Holdings, Inc., as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the
Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. 

	Dated:	 	
	 	 
	

 	
 	

 	
 	

2

QuickLinks

POET HOLDINGS, INC. 1995 STOCK PLAN (Amended and Restated)

POET HOLDINGS, INC. 1995 STOCK PLAN STOCK OPTION AGREEMENT

EXHIBIT A 1995 STOCK PLAN EXERCISE NOTICE

CONSENT OF SPOUSEQuickLinks
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EXHIBIT 4.06  

 
 

POET HOLDINGS, INC.    
    
    1999 DIRECTOR OPTION PLAN    
    

        1.     Purposes
of the Plan. The purposes of this 1999 Director Option Plan are to attract and retain the best available personnel for service as Outside Directors (as defined
herein) of the Company, to provide additional incentive to the Outside Directors of the Company to serve as Directors, and to encourage their continued service on the Board. 

        All
options granted hereunder shall be nonstatutory stock options. 

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

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

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

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

        (d)   "Company"
means POET Holdings, Inc., a Delaware corporation. 

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

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

        (g)   "Employee"
means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. The payment of a Director's fee by the
Company shall not be sufficient in and of itself to constitute "employment" by the Company. 

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

        (i)    "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
on the day 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 day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or 

        (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. 

        (j)    "Inside
Director" means a Director who is an Employee. 

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

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

        (m)  "Optionee"
means a Director who holds an Option. 

        (n)   "Outside
Director" means a Director who is not an Employee and who is not the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act)
directly or indirectly, of 

securities
of the Company representing more than one percent (1%) of the total voting power represented by the Company's outstanding voting securities on the date of any grant hereunder. 

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

        (p)   "Plan"
means this 1999 Director Option Plan. 

        (q)   "Share"
means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan. 

        (r)   "Subsidiary"
means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Internal Revenue Code of 1986. 

        3.     Stock
Subject to the Plan. Subject to the provisions of Section 10 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the
Plan is 250,000 Shares (the "Pool"). The Shares may be authorized, but unissued, or reacquired Common Stock. 

        If
an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the
Plan. 

        4.     Administration
and Grants of Options under the Plan. 

        (a)   Procedure
for Grants. All grants of Options to Outside Director under this Plan shall be automatic in accordance with the following provisions: 

          (i)  Each
Outside Director shall be automatically granted an Option to purchase 40,000 Shares (the "First Option") on the later of the effective date of the Plan or on the
date on which such person first becomes an Outside Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that an
Inside Director who ceases to be an Inside Director but who remains a Director shall not receive a First Option. 

         (ii)  Each
Outside Director shall be automatically granted an Option to purchase 10,000 Shares (a "Subsequent Option") on the date of each of annual meeting of the
stockholders held after the effective date of this Plan, provided he or she is then an Outside Director and if as of such date, he or she shall have served on the Board for at least the preceding six
(6) months. 

        (iii)  Notwithstanding
the provisions of subsections (i) and (ii) hereof, any exercise of an Option granted before the Company has obtained stockholder approval
of the Plan in accordance with Section 16 hereof shall be conditioned upon obtaining such stockholder approval of the Plan in accordance with Section 16 hereof. 

        (iv)  The
terms of each First Option granted under this Section 4 shall be as follows: 

        (A)  the
term of the First Option shall be ten (10) years. 

        (B)  the
First Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof. 

        (C)  the
exercise price per Share shall be 100% of the initial public offering price per Share of Common Stock in the offering. 

        (D)  subject
to Section 10 hereof, the First Option shall become exercisable as to twenty five percent (25%) of the Shares subject to the First Option on each monthly
anniversary of its date of grant, provided that the Optionee continues to serve as a Director on such dates. 

        (E)  the
First Option shall be a nonstatutory stock option. 

         (v)  The
terms of a Subsequent Option granted hereunder shall be as follows: 

        (A)  the
term of the Subsequent Option shall be ten (10) years. 

        (B)  the
Subsequent Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof. 

        (C)  the
exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Subsequent Option. 

        (D)  subject
to Section 10 hereof, the Subsequent Option shall become exercisable as to 100% of the Shares subject to the Subsequent Option on the fourth
(4) anniversary of its date of grant, provided that the Optionee continues to serve as a Director on such date, 

        (E)  the
Subsequent Option shall be a nonstatutory stock option. 

        (vi)  In
the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the number of Shares previously purchased under
Options to exceed the Pool, then the remaining Shares available for Option grant shall be granted under Options to the Outside Directors on a pro rata basis. No further grants shall be made until such
time, if any, as additional Shares become available for grant under the Plan through action of the Board or the stockholders to increase the number of Shares which may be issued under the Plan or
through cancellation or expiration of Options previously granted hereunder. 

        5.     Eligibility.
Options may be granted only to Outside Directors. All Options shall be automatically granted in accordance with the terms set forth in Section 4
hereof. 

        The
Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way with
any rights which the Director or the Company may have to terminate the Director's relationship with the Company at any time. 

        6.     Term
of Plan. The Plan was adopted by the Board in August 1999, and is subject to stockholder approval as described in Section 16 of the Plan. The Plan
shall become effective immediately upon the effective date of the initial public offering of the Company's common stock pursuant to a registration statement filed under Section 12 of the
Exchange Act. The Plan shall continue in effect for a term of ten (10) years unless sooner terminated under Section 11 of the Plan. 

        7.     Form
of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall consist of
(i) cash, (ii) check, (iii) other shares which (x) 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 (y) 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, or (v) any combination of the foregoing
methods of payment. 

        8.     Exercise
of Option. 

        (a)   Procedure
for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable at such times as are set forth in Section 4 hereof; provided,
however, that no Options shall be exercisable until stockholder approval of the Plan in accordance with Section 16 hereof has been obtained. 

        An
Option may not be exercised for a fraction of a Share. 

        An
Option shall be deemed to be exercised when notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is exercised has been 

received
by the Company. Full payment may consist of any consideration and method of payment allowable under Section 7 of the Plan. 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 stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. A share certificate for the number of Shares so acquired shall be issued to the Optionee as soon
as practicable after exercise of the Option. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as
provided in Section 10 of the Plan. 

        Exercise
of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be 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 Continuous Status as a Director. Subject to Section 10 hereof, in the event an Optionee's status as a Director terminates (other than upon the
Optionee's death or Disability), the Optionee may exercise his or her Option, but only within three (3) months following the date of such termination, and only to the extent that the Optionee
was entitled to exercise it on the date of such termination (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise
an Option on the date of such termination and to the extent that the Optionee does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall
terminate. 

        (c)   Disability
of Optionee. In the event Optionee's status as a Director terminates as a result of Disability, the Optionee may exercise his or her Option, but only within
twelve (12) months following the date of such termination, and only to the extent that the Optionee was entitled to exercise it on the date of such termination (but in no event later than the
expiration of its ten (10)-year term). To the extent that the Optionee was not entitled to exercise an Option on the date of termination, or if he or she does not exercise such Option (to
the extent otherwise so entitled) within the time specified herein, the Option shall terminate. 

        (d)   Death
of Optionee. In the event of an Optionee's death, the Optionee's estate or a person who acquired the right to exercise the Option by bequest or inheritance may
exercise the Option, but only within twelve (12) months following the date of death, and only to the extent that the Optionee was entitled to exercise it on the date of death (but in no event
later than the expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise an Option on the date of death, and to the extent that the Optionee's estate
or a person who acquired the right to exercise such Option does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate. 

        9.     Non-Transferability
of Options. The 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. 

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

        (a)   Changes
in Capitalization. Subject to any required action by the stockholders of the Company, the number of Shares covered by each outstanding Option, the number of
Shares 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 covered by each such outstanding Option, and the number of Shares issuable pursuant to the automatic grant provisions of Section 4 hereof shall be proportionately
adjusted for any increase or decrease in the number of issued Shares 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 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." 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 subject to an Option. 

        (b)   Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of the Company, to the extent that an Option has not been previously exercised, it
shall 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, outstanding
Options may be assumed or equivalent options may be substituted by the successor corporation or a Parent or Subsidiary thereof (the "Successor Corporation"). If an Option is assumed or substituted
for, the Option or equivalent option shall continue to be exercisable as provided in Section 4 hereof for so long as the Optionee serves as a Director or a director of the Successor
Corporation. Following such assumption or substitution, if the Optionee's status as a Director or director of the Successor Corporation, as applicable, is terminated other than upon a voluntary
resignation by the Optionee, the Option shall become fully exercisable, including as to Shares for which it would not otherwise be exercisable. Thereafter, the Option or option shall remain
exercisable in accordance with Sections 8(b) through (d) above. 

        If
the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option, the Option shall become fully vested and exercisable, including as to Shares
for which it would not otherwise be exercisable. In such event the Board shall notify the Optionee that the Option shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and upon the expiration of such period the Option shall terminate. 

        For
the purposes of this Section 10(c), an Option shall be considered assumed if, following the merger or sale of assets, the Option confers the right to purchase or receive, for
each Share of Optioned Stock subject to the Option 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). If such consideration received in the merger or sale of assets is not solely common stock of the Successor Corporation or its Parent, the Administrator may, with the consent of
the Successor Corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, 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. 

        11.   Amendment
and Termination of the Plan. 

        (a)   Amendment
and Termination. The Board may at any time amend, alter, suspend, or discontinue the Plan, but no amendment, alteration, suspension, or discontinuation shall
be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to the extent necessary and desirable to comply with any applicable
law, regulation or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required. 

        (b)   Effect
of Amendment or Termination. Any such amendment or termination of the Plan shall not affect Options already granted and such Options shall remain in full force
and effect as if this Plan had not been amended or terminated. 

        12.   Time
of Granting Options. The date of grant of an Option shall, for all purposes, be the date determined in accordance with Section 4 hereof. 

        13.   Conditions
Upon Issuance of Shares. 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 pursuant 

thereto
shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, 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 relevant provisions of law. 

        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. 

        14.   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. 

        15.   Option
Agreement. Options shall be evidenced by written option agreements in such form as the Board shall approve. 

        16.   Stockholder
Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such
stockholder approval shall be obtained in the degree and manner required under applicable state and federal law and any stock exchange rules. 

POET HOLDINGS, INC.  

 DIRECTOR OPTION AGREEMENT  

        POET Holdings, Inc., a Delaware corporation (the "Company") has granted
to                        (the
"Optionee"), an option to purchase a total of            shares of the Company's Common Stock (the "Optioned
Stock"), at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Company's 1999 Director Option Plan (the
"Plan") adopted by the Company which is incorporated herein by reference. The terms defined in the Plan shall have the same defined meanings herein. 

        1.    Nature of the Option.    This Option is a nonstatutory option and is not intended to qualify for any special tax
benefits to the Optionee. 

        2.    Exercise Price.    The exercise price is $            for each share of Common Stock. 

        3.    Exercise of Option.    This Option shall be exercisable during its term in accordance with the provisions of
Section 8 of the Plan as follows: 

        (i)    Right to Exercise.    

        (a)   This
Option shall become exercisable as to 25% of the Shares subject to the Option on each monthly anniversary of its date of grant;  provided, however, that the
Optionee continues to serve as a Director on such dates. 

        (b)   This
Option may not be exercised for a fraction of a share. 

        (c)   In
the event of Optionee's death, disability or other termination of service as a Director, the exercisability of the Option is governed by Section 8 of the Plan. 

        (ii)    Method of Exercise.    This Option shall be exercisable by written notice which shall state the election to
exercise the Option and the number of Shares in respect of which the Option is being exercised. Such written notice, in the form attached hereto as  Exhibit A, shall be signed by the Optionee
and shall be delivered in person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the exercise price. 

        4.    Method of Payment.    Payment of the exercise price shall be by any of the following, or a combination thereof,
at the election of the Optionee: 

          (i)  cash;

         (ii)  check;
or 

        (iii)  surrender
of other shares which (x) 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 (y) 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; or 

        (iv)  delivery
of a properly executed exercise notice together with such other documentation as the Company and the broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price. 

        5.    Restrictions on Exercise.    This Option may not be exercised if the issuance of such Shares upon such exercise
or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulations, or if such issuance would not comply
with the requirements of any stock exchange upon which the Shares may then be listed. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation. 

        6.    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 this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 

        7.    Term of Option.    This Option may not be exercised more than ten years from the date of grant of this Option,
and may be exercised during such period only in accordance with the Plan and the terms of this Option. 

        8.    Taxation Upon Exercise of Option.    Optionee understands that, upon exercise of this Option, he or she will
recognize income for tax purposes in an amount equal to the excess of the then Fair Market Value of the Shares purchased over the exercise price paid for such Shares. Since the Optionee is subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended, under certain limited circumstances the measurement and timing of such income (and the commencement of any capital gain holding
period) may be deferred, and the Optionee is advised to contact a tax advisor concerning the application of Section 83 in general and the availability a Section 83(b) election in
particular in connection with the exercise of the Option. Upon a resale of such Shares by the Optionee, any difference between the sale price and the Fair Market Value of the Shares on the date of
exercise of the Option, to the extent not included in income as described above, will be treated as capital gain or loss. 

        9.    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 Optionee's interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the
laws of the State of California without giving effect to the conflicts of laws principles thereof. 

	DATE OF GRANT:	 	POET HOLDINGS, INC.
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 

        Optionee
acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and represents that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan. 

	Dated:	 	 
	 	 	
 Optionee

EXHIBIT A  

 DIRECTOR OPTION EXERCISE NOTICE  

POET
Holdings, Inc.

999 Baker Way, Suite 100

San Mateo, CA 94404 

Attention:
Chief Financial Officer 

        1.    Exercise of Option.    The undersigned ("Optionee") hereby
elects to exercise Optionee's option to purchase            shares of the Common Stock (the "Shares") of POET Holdings, Inc. (the
"Company") under and pursuant to the Company's 1999 Director Option Plan and the Director Option Agreement
dated                        (the
"Agreement"). 

        2.    Representations of Optionee.    Optionee acknowledges that Optionee has received, read and understood the
Agreement. 

        3.    Federal Restrictions on Transfer.    Optionee understands that the Shares must be held indefinitely unless they
are registered under the Securities Act of 1933, as amended, or unless an exemption from such registration is available, and that the certificate(s) representing the Shares may bear a legend to that
effect. Optionee understands that the Company is under no obligation to register the Shares and that an exemption may not be available or may not permit Optionee to transfer Shares in the amounts or
at the times proposed by Optionee. 

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

        5.    Delivery of Payment.    Optionee herewith delivers to the Company the aggregate purchase price for the Shares
that Optionee has elected to purchase and has made provision for the payment of any federal or state withholding taxes required to be paid or withheld by the Company. 

        6.    Entire Agreement.    The Agreement is incorporated herein by reference. This Exercise Notice and the Agreement
constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof. This
Exercise Notice and the Agreement are governed by California law except for that body of law pertaining to conflict of laws. 

	Submitted by:	 	Accepted by:
	

OPTIONEE:	
 	

POET HOLDINGS, INC.
	

Name:	
 	

 	
 	

By:	
 	

 
	 	 	
	 	 	 	

	 	 	 	 	Its:	 	 
	
 Signature	 	 	 	

	Address:	 	    
	 	Address:	 	999 Baker Way, Suite 100

San Mateo, CA 94404
	Dated:	 	 	 	Dated:	 	 
	 	 	
	 	 	 	

QuickLinks

POET HOLDINGS, INC. 1999 DIRECTOR OPTION PLAN

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