exv10w04



 






Exhibit 10.04




GENELABS TECHNOLOGIES, INC.




2001 EMPLOYEE STOCK PURCHASE PLAN




Adopted by the Board of Directors on April 23, 2001

As amended December 19, 2005




1. ESTABLISHMENT OF PLAN




     The purpose of the Genelabs Technologies, Inc. 2001 Employee Stock Purchase Plan (the “Plan”)
is to grant options for purchase of common stock, no par value (the “Common Stock”) of Genelabs
Technologies, Inc. (the “Company”) to eligible employees of the Company and its Subsidiaries (as
hereinafter defined). For purposes of this Plan, “Parent Corporation” and “Subsidiary”
(collectively, “Subsidiaries”) shall have the same meanings as “parent corporation” and “subsidiary
corporation” in Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as
amended (the “Code”). The Company intends the Plan to qualify as an “employee stock purchase plan”
under Section 423 of the Code (including any amendments to or replacements of such Section), and
the Plan shall be so construed. Any term not expressly defined in the Plan but defined for purposes
of Section 423 of the Code shall have the same definition herein. A total of 800,000 shares (after
giving effect to the one-for-five stock split) of the Company’s Common Stock are reserved for
issuance under the Plan subject to certain adjustments as provided under Section 14 of the Plan.



2. PURPOSE




     The purpose of the Plan is to provide employees of the Company and Subsidiaries designated by
the Board of Directors of the Company (the “Board”) as eligible to participate in the Plan with a
convenient means of acquiring an equity interest in the Company through payroll deductions, to
enhance such employees’ sense of participation in the affairs of the Company and Subsidiaries, and
to provide an incentive for continued employment.



3. ADMINISTRATION




     This Plan shall be administered by the Administrator. For purposes of this plan, the
"Administrator” shall mean the Board, or if and to the extent the Board does not administer the
Plan, a committee appointed by the Board (the “Committee”). If the Committee is not comprised of
“disinterested persons” (“Disinterested Persons”) as defined in Rule 16b-3(d) promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), at the time the Company is
registered under the Exchange Act, unless otherwise determined by the Administrator, the
Administrator shall appoint a Committee consisting of not less than three (3) persons (who need not
be members of the Board), each of whom is a Disinterested Person. After registration of the Company
under the Exchange Act, unless otherwise determined by the Administrator or the Board, Committee
members who are not Disinterested Persons may not vote on any matters affecting the administration
of this Plan, but any such member may be counted for determining the existence of a quorum at any
meeting of the Committee. Subject to the provisions of the Plan and the limitations of Section 423
of the Code or any successor provision in the Code, all questions of interpretation or application
of the Plan shall be determined by the Administrator and its decisions shall be final and binding
upon all participants. Members of the Board shall receive no compensation for their services in
connection with the administration of the Plan, other than standard fees as established from time
to time by the Board for services rendered by Board members serving on Board committees. All
expenses incurred in connection with the administration of the Plan shall be paid by the Company.



4. ELIGIBILITY




     Any employee of the Company or the Subsidiaries is eligible to participate in the Plan except
the following:




      (a) employees who are not employed by the Company or Subsidiaries on the day before the
Offering Date (as hereinafter defined);




      (b) employees who are customarily employed for less than twenty (20) hours per week;



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      (c) employees who are customarily employed for less than five (5) months in a calendar year;
or




      (d) employees who, together with any other person whose stock would be attributed to
such employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase
stock or who, as a result of being granted an option under the Plan with respect to such
Offering Period, would own stock or hold options to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock of the
Company or any of its Subsidiaries.



5. OFFERING DATES




     The offering periods of the Plan (each, an “Offering Period”) shall be of twenty-four (24)
months duration commencing on January 1 and July 1 of each year and ending on June 30 and December
31 of each year. Each Offering Period shall consist of four (4) six-month purchase periods
(individually, a “Purchase Period”) during which payroll deductions of the participants are
accumulated under the Plan. The first business day of each Offering Period is referred to as the
"Offering Date.” The last business day of each Purchase Period is referred to as the “Purchase
Date.” Notwithstanding the foregoing, if the fair market value of the Company’s Common Stock on any
Purchase Date is equal to or is less than such fair market value on an Offering Date, then the
Offering Period(s) for such Offering Date(s) shall immediately terminate and a new Offering Period
shall commence for those employees participating in such terminated Offering Period(s) (See also
Section 11(c) hereof). The Administrator shall have the power to change the duration of Offering
Periods or Purchase Periods with respect to offerings without shareholder approval if such change
is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering
Period or Purchase Period to be affected.



6. PARTICIPATION IN THE PLAN




     Eligible employees may become participants in an Offering Period under the Plan upon the
commencement of the next Purchase Period after satisfying the eligibility requirements by
delivering a subscription agreement to the Company’s or Subsidiary’s (whichever employs such
employee) Treasury Department (the “Treasury Department”) not later than the business day before
such Offering Period begins unless an earlier time for filing the subscription agreement
authorizing payroll deductions is set by the Administrator for all eligible employees with respect
to a given Offering Period. An eligible employee who does not deliver a subscription agreement to
the Treasury Department by such date after becoming eligible to participate in such Offering Period
shall not participate in that Offering Period or any subsequent Offering Period unless such
employee enrolls in the Plan by filing a subscription agreement with the Treasury Department not
later than the business day preceding the beginning of a subsequent Offering Period. Once an
employee becomes a participant in an Offering Period, such employee will automatically participate
in the next Offering Period unless the employee withdraws from the Plan or terminates further
participation in a Purchase Period as set forth in Section 11 hereof. Such participant is not
required to file any additional subscription agreement in order to continue participation in the
Plan.



7. GRANT OF OPTION ON ENROLLMENT




     Enrollment by an eligible employee in the Plan with respect to an Offering Period will
constitute the grant (as of the Offering Date) by the Company to such employee of an option to
purchase on the Purchase Date up to that number of shares of Common Stock of the Company determined
by dividing the amount accumulated in such employee’s payroll deduction account during such
Purchase Period by the lesser of (i) eighty-five percent (85%) of the fair market value of a share
of the Company’s Common Stock on the Offering Date or (ii) eighty-five percent (85%) of the fair
market value of a share of the Company’s Common Stock on the Purchase Date; provided, however, that
the number of shares of the Company’s Common Stock subject to any option granted pursuant to this
Plan shall not exceed the limitations provided under Sections 10(a) and 10(b) below. Fair market
value of a share of the Company’s Common Stock shall be determined as provided in Section 8 hereof.



     8. PURCHASE PRICE



     The purchase price per share at which a share of Common Stock will be sold during any Offering
Period shall be eighty-five percent (85%) of the lesser of:



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	 	(a)	 	The fair market value on the Offering Date; or
	 
	 	(b)	 	The fair market value on the Purchase Date.





     For purposes of the Plan, the term “fair market value” on a given date shall mean the closing
price from the previous day’s trading of a share of the Company’s Common Stock as reported on the
National Association of Securities Dealers Automated Quotation (“Nasdaq”) System or such other
system or exchange to which the shares of the Company’s Common Stock are admitted to trading or
quotation, as determined by the Administrator.



9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF SHARES




     (a) The purchase price of the shares is accumulated by regular payroll deductions made during
each Purchase Period. The deductions are made as a percentage of the participant’s compensation in
one percent (1%) increments not less than one percent (1%) nor greater than fifteen percent (15%),
not to exceed $25,000 per year or such other limit set by the Administrator. Compensation shall
mean all cash compensation including, but not limited to, base salary, wages, commissions,
overtime, shift premiums and bonuses, plus draws against commissions; provided, however, that for
purposes of determining a participant’s compensation, any election by such participant to reduce
his or her regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as
if the participant did not make such election. Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Purchase Period unless
sooner altered or terminated as provided in the Plan.



     (b) A participant may decrease (but not increase) the rate of payroll deductions during a
Purchase Period by filing with the Treasury Department a new authorization for payroll deductions,
in which case the new rate shall become effective for the next payroll period commencing more than
fifteen (15) days after the Treasury Department’s receipt of the authorization and shall continue
for the remainder of the Purchase Period unless changed as described below. Such change in the rate
of payroll deductions may be made at any time during a Purchase Period, but not more than one
change may be made effective during any Purchase Period. A participant may increase or decrease the
rate of payroll deductions for any subsequent Purchase Period by filing with the Treasury
Department a new authorization for payroll deductions not later than the business day before the
beginning of such Purchase Period. An increase or decrease in a participant’s payroll deduction
does not start a new Offering Period.



     (c) All payroll deductions made for a participant are credited to his or her account under the
Plan and are deposited with the general funds of the Company. No interest accrues on the payroll
deductions. All payroll deductions received or held by the Company or a Subsidiary, respectively,
may be used by the Company or a Subsidiary, respectively, for any corporate purposes, and neither
the Company nor a Subsidiary shall be obligated to segregate such payroll deductions.



     (d) On each Purchase Date, so long as the Plan remains in effect and provided that the
participant has not submitted a signed and completed withdrawal form before that date which
notifies the Company or a Subsidiary, respectively, that the participant wishes to withdraw from
that Purchase Period under the Plan and have all payroll deductions accumulated in the account
maintained on behalf of the participant as of that date returned to the participant, the Company
shall apply the funds then in the participant’s account to the purchase of whole shares of Common
Stock reserved under the option granted to such participant with respect to the Purchase Period to
the extent that such option is exercisable on the Purchase Date. The purchase price per share shall
be as specified in Section 8 of the Plan. Any cash remaining in a participant’s account after such
purchase of shares shall be refunded to such participant in cash, without interest; provided,
however, that any amount remaining in such participant’s account on a Purchase Date which is less
than the amount necessary to purchase a full share of Common Stock of the Company shall be carried
forward, without interest, into the next Purchase Period. In the event that the Plan has been
oversubscribed, all funds not used to purchase shares on the Purchase Date shall be returned to the
participant, without interest. No Common Stock shall be purchased on a Purchase Date on behalf of
any employee whose participation in the Plan has terminated prior to such Purchase Date.



     (e) As promptly as practicable after the Purchase Date, the Company shall arrange the delivery
to each participant of a certificate representing the shares purchased upon exercise of his or her
option; provided, however, that the Administrator may deliver certificates to a broker or brokers
that hold such certificate in a street name for the benefit of each such participant.



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     (f) During a participant’s lifetime, such participant’s option to purchase shares hereunder is
exercisable only by him or her. The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised. Shares to be delivered to a
participant under the Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse.



10. LIMITATIONS ON SHARES TO BE PURCHASED




     (a) No employee shall be entitled to purchase stock under the Plan at a rate which, when
aggregated with his or her rights to purchase stock under all other employee stock purchase plans
of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the
Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in the Plan.



     (b) No employee shall be entitled to purchase more than the Maximum Share Amount (as defined
below) on any single Purchase Date. Not less than thirty (30) days prior to the commencement of any
Purchase Period, the Administrator may, in its sole discretion, set a maximum number of shares
which may be purchased by any employee at any single Purchase Date (hereinafter the “Maximum Share
Amount”). If a new Maximum Share Amount is set, then all participants must be notified of such
Maximum Share Amount not less than fifteen (15) days prior to the commencement of the next Purchase
Period. Once the Maximum Share Amount is set, it shall continue to apply with respect to all
succeeding Purchase Dates and Purchase Periods unless revised by the Administrator as set forth
above.



     (c) If the number of shares to be purchased on a Purchase Date by all employees participating
in the Plan exceeds the number of shares then available for issuance under the Plan, the Company
will make a pro rata allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Administrator shall determine to be equitable. In such event, the Company
shall give written notice of such reduction of the number of shares to be purchased under a
participant’s option to each participant affected thereby.



     (d) Subject to the provisions of Section 9(d) hereof, any payroll deductions accumulated in a
participant’s account which are not used to purchase stock due to the limitations in this Section
10 shall be returned to the participant as soon as practicable after the end of the Purchase
Period, without interest.



11. WITHDRAWAL




     (a) Each participant may withdraw from a Purchase Period under the Plan by signing and
delivering to the Treasury Department notice on a form provided for such purpose. Such withdrawal
may be elected at any time at least fifteen (15) days prior to the end of a Purchase Period.



     (b) Upon withdrawal from the Plan, the accumulated payroll deductions shall be returned to the
withdrawn participant, without interest, and his or her interest in the Plan shall terminate. In
the event a participant voluntarily elects to withdraw from the Plan, he or she may not resume his
or her participation in the Plan during the same Purchase Period, but he or she may participate in
any Purchase Period under the Plan which commences on a date subsequent to such withdrawal by
filing a new authorization for payroll deductions in the same manner as set forth above for initial
participation in the Plan.



     (c) For an Offering Period in which a participant is enrolled, if the fair market value of the
Company’s Common Stock on the Purchase Date is less than it was on the Offering Date, the Company
will automatically enroll such participant in the subsequent Offering Period. A participant does
not need to file any forms with the Company to automatically be enrolled in the subsequent Offering
Period.



12. TERMINATION OF EMPLOYMENT



     Termination of a participant’s employment for any reason, including retirement, death or the
failure of a participant to remain an eligible employee, immediately terminates his or her
participation in the Plan. In such event, the payroll deductions credited to the participant’s
account will be returned to him or her or, in the case of his or her death, to his or her legal
representative, without interest. For purposes of this Section 12, an employee will not be deemed
to have terminated employment or failed to remain in the continuous employ of the Company in the
case of sick leave, military leave, or any other leave of



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absence approved by the Administrator;
provided, however, that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or statute.




13. RETURN OF PAYROLL DEDUCTIONS




     In the event a participant’s interest in the Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event the Plan is terminated by the Administrator, the Company
shall promptly deliver to the participant all payroll deductions credited to his or her account. No
interest shall accrue on the payroll deductions of a participant in the Plan.



14. CAPITAL CHANGES; CHANGE IN CONTROL




     Subject to any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each option under the Plan which has not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan but have not yet
been placed under option (collectively, the “Reserves”), as well as the price per share of Common
Stock covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or the payment of a stock dividend (but only on the Common
Stock) or any other increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Administrator, whose determination shall be
final, binding and conclusive. Except as expressly provided herein, no issue 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.



     In the event of a Change in Control of the Company, the Offering Periods shall terminate on
such date as determined by the Administrator and all payroll deductions on such date shall be used
to purchase such number of applicable shares of Common Stock unless otherwise provided by the
Administrator. For purposes of this Plan, “Change in Control” means a change in the ownership or
control of the Company, effected through any of the following events:




      (a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company; any trustee or other fiduciary holding securities under an employee
benefit plan of the Company; or any company owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their ownership of
Common Stock of the Company) is or becomes, after the Effective Date (as defined in Section
25 hereof), the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly from the Company or its
affiliates) representing twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities;




      (b) during any period of two consecutive years (not including any period prior to the
Effective Date), individuals who at the beginning of such period constitute the Board, and
any new director (other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause (a), (c) or (d) of
this definition) whose election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute at
least a majority thereof;




      (c) the shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (A) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of the Company,
at least sixty percent (60%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation
or (B) a merger or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities; or



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      (d) the shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets.



     The Administrator may, if it so determines in the exercise of its sole discretion, also make
provision for adjusting the Reserves, as well as the price per share of Common Stock covered by
each outstanding option, in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares of its outstanding
Common Stock, or in the event of the Company being consolidated with or merged into any other
corporation.



15. NONASSIGNABILITY




     Neither payroll deductions credited to a participant’s account nor any rights with regard to
the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as
provided in Section 22 hereof) by the participant. Any such attempt at assignment, transfer, pledge
or other disposition shall be without effect.



16. REPORTS




     Individual accounts will be maintained for each participant in the Plan. Each participant
shall receive promptly after the end of each Purchase Period a report of his or her account setting
forth the total payroll deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next Purchase Period.



17. NOTICE OF DISPOSITION




     Each participant shall notify the Company if the participant disposes of any of the shares of
Common Stock purchased in any Purchase Period pursuant to this Plan if such disposition occurs
within two years from the Offering Date or within one year from the Purchase Date on which such
shares were purchased (the “Notice Period”). Unless such participant is disposing of any of such
shares during the Notice Period, such participant shall keep the certificates representing such
shares in his or her name (and not in the name of a nominee) during the Notice Period. The Company
may, at any time during the Notice Period, place a legend or legends on any certificate
representing shares acquired pursuant to the Plan requesting the Company’s transfer agent to notify
the Company of any transfer of the shares. The obligation of the participant to provide such notice
shall continue notwithstanding the placement of any such legend on the certificates.



18. NO RIGHTS TO CONTINUED EMPLOYMENT




     Neither this Plan nor the grant of any option hereunder shall confer any right on any employee
to remain in the employ of the Company or any Subsidiary, or restrict the right of the Company or
any Subsidiary to terminate such employee’s employment.



19. EQUAL RIGHTS AND PRIVILEGES




     All eligible employees shall have equal rights and privileges with respect to the Plan so that
the Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of the Plan which is
inconsistent with Section 423 or any successor provision of the Code shall, without further act or
amendment by the Company or the Administrator, be reformed to comply with the requirements of
Section 423. This Section 19 shall take precedence over all other provisions in the Plan.



20. NOTICES



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



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21. SHAREHOLDER APPROVAL OF AMENDMENTS




     Any required approval by the shareholders of the Company shall be solicited substantially in
accordance with Section 14(a) of the Exchange Act, and the rules and regulations promulgated
thereunder. Such approval of an amendment shall be solicited at or prior to the first annual
meeting of shareholders held subsequent to the grant of an option under the Plan to an employee of
the Company. If such shareholder approval is obtained at a duly held shareholders’ meeting, it must
be obtained by a majority of all of the outstanding shares of the Company, or if such shareholder
approval is obtained by written consent, it must be obtained by a majority of all shareholders of
the Company; provided, however, that approval at a meeting or by written consent may be obtained by
a lesser degree of shareholder approval if the Administrator determines, in its discretion after
consultation with the Company’s legal counsel, that such lesser degree of shareholder approval will
comply with all applicable laws and will not adversely affect the qualification of the Plan under
Section 423 of the Code or Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”).



22. DESIGNATION OF BENEFICIARY




     (a) A participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to the end of a Purchase Period but prior to delivery to him or her of such shares
and cash. In addition, a participant may file a written designation of a beneficiary who is to
receive any cash from the participant’s account under the Plan in the event of such participant’s
death prior to a Purchase Date.



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



23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES




     Shares shall not be issued with respect to an option unless the exercise of such option and
the issuance and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the 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.



24. APPLICABLE LAW




     The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of
the State of California.



25. AMENDMENT OR TERMINATION OF THE PLAN




     This Plan shall be effective April 23, 2001 (the “Effective Date”), subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is adopted by the
Board and the Plan shall continue until the earlier to occur of termination by the Administrator,
issuance of all of the shares of Common Stock reserved for issuance under the Plan, or ten (10)
years from the adoption of the Plan by the Board. No purchase of shares of Common Stock pursuant to
the Plan shall occur prior to such shareholder approval.



     The Administrator may at any time amend or terminate the Plan, except that any such
termination cannot affect options previously granted under the Plan, nor may any amendment make any
change in an option previously granted which would adversely affect the right of any participant
without such participant’s consent, nor may any amendment be made without approval of the
shareholders of the Company obtained in accordance with Section 21 hereof within 12 months of the
adoption of such amendment (or earlier if required by Section 21) if such amendment would:



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     (a) increase the number of shares that may be issued under the Plan;




     (b) change the designation of the employees (or class of employees) eligible for
participation in the Plan; or




     (c) constitute an amendment for which shareholder approval is required in order to
comply with Rule 16b-3 (or any successor rule) of the Exchange Act.




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