exv10w7



 





Exhibit 10.7




ONYX PHARMACEUTICALS, INC.




EMPLOYEE STOCK PURCHASE PLAN




Adopted March 26, 1996

Approved by the Stockholders on April 30, 1996

Amended February 4, 1998

Approved by the Stockholders on May 28, 1998

Amended February 9, 2000

Approved by the Stockholders on June 8, 2000

Amended February 12, 2002

Approved by the Stockholders on May 30, 2002

Amended March 1, 2006

Approved by the Stockholders on May 25, 2006

Amended March 6, 2007

Approved by the Stockholders on May 25, 2007

Amended May 25, 2007



1. Purpose.




     (a) The purpose of the Employee Stock Purchase Plan (the “Plan”) is to provide a means by
which employees of Onyx Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and its
Affiliates, as defined in subparagraph 1(b), which are designated as provided in subparagraph 2(b),
may be given an opportunity to purchase stock of the Company.



     (b) The word “Affiliate” as used in the Plan means any “parent corporation” or “subsidiary
corporation” of the Company, as those terms are defined in Sections 424(e) and (f), respectively,
of the Internal Revenue Code of 1986, as amended (the “Code”).



     (c) The Company, by means of the Plan, seeks to retain the services of its employees, to
secure and retain the services of new employees, and to provide incentives for such persons to
exert maximum efforts for the success of the Company.



     (d) The Company intends that the rights to purchase stock of the Company granted under the
Plan be considered options issued under an “employee stock purchase plan” as that term is defined
in Section 423(b) of the Code.



2. Administration.




     (a) The Plan shall be administered by the Board of Directors (the “Board”) of the Company
unless and until the Board delegates administration to a Committee, as provided in subparagraph
2(c). Whether or not the Board has delegated administration, the Board shall have the final power
to determine all questions of policy and expediency that may arise in the administration of the
Plan.



     (b) The Board shall have the power, subject to, and within the limitations of, the express
provisions of the Plan:



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          (i) To determine when and how rights to purchase stock of the Company shall be granted and the
provisions of each offering of such rights (which need not be identical).




          (ii) To designate from time to time which Affiliates of the Company shall be eligible to
participate in the Plan.




          (iii) To construe and interpret the Plan and rights granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.




          (iv) To amend the Plan as provided in paragraph 13.




          (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and its Affiliates and to carry out the
intent that the Plan be treated as an “employee stock purchase plan” within the meaning of Section
423 of the Code.




     (c) The Board may delegate administration of the Plan to a Committee composed of not fewer
than two (2) members of the Board (the “Committee”). If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with
the provisions of the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of the Plan.



3. Shares Subject to the Plan.




     (a) Subject to the provisions of paragraph 12 relating to adjustments upon changes in stock,
the stock that may be sold pursuant to rights granted under the Plan shall not exceed in the
aggregate nine hundred thousand (900,000) shares of the Company’s common stock (the “Common
Stock”). Such number of shares reserved for issuance consists of (i) the number of shares
previously authorized for issuance under the Plan and approved by the stockholders, (ii) an
additional 75,000 shares approved by the stockholders at the 2006 Annual Meeting, plus (iii) an
additional 500,000 shares approved by the stockholders at the 2007 Annual Meeting. If any right
granted under the Plan shall for any reason terminate without having been exercised, the Common
Stock not purchased under such right shall again become available for the Plan.



     (b) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the
market or otherwise.



4. Grant of Rights; Offering.




     (a) The Board or the Committee may from time to time grant or provide for the grant of rights
to purchase Common Stock of the Company under the Plan to eligible employees (an
“Offering”) on a date or dates (the “Offering Date(s)”) selected by the Board or the
Committee. Each Offering shall be in such form and shall contain such terms and conditions as the
Board or the Committee shall deem appropriate, which shall comply with the requirements of Section



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423(b)(5) of the Code that all employees granted rights to purchase stock under the Plan shall have
the same rights and privileges. The terms and conditions of an Offering shall be incorporated by
reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need
not be identical, but each Offering shall include (through incorporation of the provisions of this
Plan by reference in the document comprising the Offering or otherwise) the period during which the
Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with
the Offering Date, and the substance of the provisions contained in paragraphs 5 through 8,
inclusive.



     (b) If an employee has more than one right outstanding under the Plan, unless he or she
otherwise indicates in agreements or notices delivered hereunder: (1) each agreement or notice
delivered by that employee will be deemed to apply to all of his or her rights under the Plan, and
(2) a right with a lower exercise price (or an earlier-granted right, if two rights have identical
exercise prices), will be exercised to the fullest possible extent before a right with a higher
exercise price (or a later-granted right, if two rights have identical exercise prices) will be
exercised.



5. Eligibility.




     (a) Rights may be granted only to employees of the Company or, as the Board or the Committee
may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company.
Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate shall not be
eligible to be granted rights under the Plan, unless, on the Offering Date, such employee has been
in the employ of the Company or any Affiliate for such continuous period preceding such grant as
the Board or the Committee may require, but in no event shall the required period of continuous
employment be equal to or greater than two (2) years. In addition, unless otherwise determined by
the Board or the Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the Plan, unless, on the
Offering Date, such employee’s customary employment with the Company or such Affiliate is for at
least twenty (20) hours per week and at least five (5) months per calendar year.



     (b) The Board or the Committee may provide that each person who, during the course of an
Offering, first becomes an eligible employee of the Company or designated Affiliate will, on a date
or dates specified in the Offering which coincides with the day on which such person becomes an
eligible employee or occurs thereafter, receive a right under that Offering, which right shall
thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics
as any rights originally granted under that Offering, as described herein, except that:



          (i) the date on which such right is granted shall be the “Offering Date” of such right for all
purposes, including determination of the exercise price of such right;




          (ii) the period of the Offering with respect to such right shall begin on its Offering Date
and end coincident with the end of such Offering; and





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          (iii) the Board or the Committee may provide that if such person first becomes an eligible
employee within a specified period of time before the end of the Offering, he or she will not
receive any right under that Offering.




     (c) No employee shall be eligible for the grant of any rights under the Plan if, immediately
after any such rights are granted, such employee owns stock possessing five percent (5%) or more of
the total combined voting power or value of all classes of stock of the Company or of any
Affiliate. For purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code shall
apply in determining the stock ownership of any employee, and stock which such employee may
purchase under all outstanding rights and options shall be treated as stock owned by such employee.



     (d) An eligible employee may be granted rights under the Plan only if such rights, together
with any other rights granted under “employee stock purchase plans” of the Company and any
Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such employee’s rights to
purchase stock of the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at the time such rights
are granted) for each calendar year in which such rights are outstanding at any time.



     (e) Officers of the Company and any designated Affiliate shall be eligible to participate in
Offerings under the Plan, provided, however, that the Board may provide in an Offering that certain
employees who are highly compensated employees within the meaning of Section 423(b)(4)(D) of the
Code shall not be eligible to participate.



6. Rights; Purchase Price.




     (a) On each Offering Date, each eligible employee, pursuant to an Offering made under the
Plan, shall be granted the right to purchase up to the number of shares of Common Stock of the
Company purchasable with a percentage designated by the Board or the Committee not exceeding
fifteen percent (15%) of such employee’s Earnings (as defined in subparagraph 7(a)) during the
period which begins on the Offering Date (or such later date as the Board or the Committee
determines for a particular Offering) and ends on the date stated in the Offering, which date shall
be no later than the end of the Offering. The Board or the Committee shall establish one or more
dates during an Offering (the “Purchase Date(s)”) on which rights granted under the Plan shall be
exercised and purchases of Common Stock carried out in accordance with such Offering.



     (b) In connection with each Offering made under the Plan, the Board or the Committee may
specify a maximum number of shares that may be purchased by any employee as well as a maximum
aggregate number of shares that may be purchased by all eligible employees pursuant to such
Offering. In addition, in connection with each Offering that contains more than one Purchase Date,
the Board or the Committee may specify a maximum aggregate number of shares which may be purchased
by all eligible employees on any given Purchase Date under the Offering. If the aggregate purchase
of shares upon exercise of rights granted under the
Offering would exceed any such maximum aggregate number, the Board or the Committee shall make
a pro rata allocation of the shares available in as nearly a uniform manner as shall be practicable
and as it shall deem to be equitable.



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     (c) The purchase price of stock acquired pursuant to rights granted under the Plan shall be
not less than the lesser of:



          (i) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the
Offering Date; or




          (ii) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the
Purchase Date.




7. Participation; Withdrawal; Termination.




     (a) An eligible employee may become a participant in the Plan pursuant to an Offering by
delivering a participation agreement to the Company within the time specified in the Offering, in
such form as the Company provides. Each such agreement shall authorize payroll deductions of up to
the maximum percentage specified by the Board or the Committee of such employee’s Earnings during
the Offering. “Earnings” is defined as an employee’s regular salary or wages (including amounts
thereof elected to be deferred by the employee, that would otherwise have been paid, under any
arrangement established by the Company intended to comply with Section 401(k), Section 402(e)(3),
Section 125, Section 402(h), or Section 403(b) of the Code, and also including any deferrals under
a non-qualified deferred compensation plan or arrangement established by the Company), which shall
include or exclude (as provided for each Offering) the following items of compensation: bonuses,
commissions, overtime pay, incentive pay, profit sharing, other remuneration paid directly to the
employee, the cost of employee benefits paid for by the Company or an Affiliate, education or
tuition reimbursements, imputed income arising under any group insurance or benefit program,
traveling expenses, business and moving expense reimbursements, income received in connection with
stock options, contributions made by the Company or an Affiliate under any employee benefit plan,
and similar items of compensation, as determined by the Board or Committee. The payroll
deductions made for each participant shall be credited to an account for such participant under the
Plan and shall be deposited with the general funds of the Company. A participant may reduce
(including to zero) or increase such payroll deductions, and an eligible employee may begin such
payroll deductions, after the beginning of any Offering only as provided for in the Offering. A
participant may make additional payments into his or her account only if specifically provided for
in the Offering and only if the participant has not had the maximum amount withheld during the
Offering.



     (b) At any time during an Offering, a participant may terminate his or her payroll deductions
under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal
in such form as the Company provides. Such withdrawal may be elected at any time prior to the end
of the Offering except as provided by the Board or the Committee in the Offering. Upon such
withdrawal from the Offering by a participant, the Company shall distribute to such participant all
of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have
been used to acquire stock for the participant) under the
Offering, without interest, and such participant’s interest in that Offering shall be
automatically terminated. A participant’s withdrawal from an Offering will have no effect upon
such participant’s eligibility to participate in any other Offerings under the Plan but such
participant



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will be required to deliver a new participation agreement in order to participate in
subsequent Offerings under the Plan.



     (c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon
cessation of any participating employee’s employment with the Company and any designated Affiliate,
for any reason, and the Company shall distribute to such terminated employee all of his or her
accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), under the Offering, without interest.



     (d) Rights granted under the Plan shall not be transferable by a participant otherwise than by
will or the laws of descent and distribution, or by a beneficiary designation as provided in
paragraph 14 and, otherwise during his or her lifetime, shall be exercisable only by the person to
whom such rights are granted.



8. Exercise.




     (a) On each Purchase Date specified therefor in the relevant Offering, each participant’s
accumulated payroll deductions and other additional payments specifically provided for in the
Offering (without any increase for interest) will be applied to the purchase of whole shares of
stock of the Company, up to the maximum number of shares permitted pursuant to the terms of the
Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional
shares shall be issued upon the exercise of rights granted under the Plan. The amount, if any, of
accumulated payroll deductions remaining in each participant’s account after the purchase of shares
which is less than the amount required to purchase one share of stock on the final Purchase Date of
an Offering shall be held in each such participant’s account for the purchase of shares under the
next Offering under the Plan, unless such participant withdraws from such next Offering, as
provided in subparagraph 7(b), or is no longer eligible to be granted rights under the Plan, as
provided in paragraph 5, in which case such amount shall be distributed to the participant after
such final Purchase Date, without interest. The amount, if any, of accumulated payroll deductions
remaining in any participant’s account after the purchase of shares which is equal to the amount
required to purchase whole shares of stock on the final Purchase Date of an Offering shall be
distributed in full to the participant after such Purchase Date, without interest.



     (b) No rights granted under the Plan may be exercised to any extent unless the shares to be
issued upon such exercise under the Plan (including rights granted thereunder) are covered by an
effective registration statement pursuant to the Securities Act of 1933, as amended (the
“Securities Act”) and the Plan is in material compliance with all applicable state, foreign and
other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering
hereunder the Plan is not so registered or in such compliance, no rights granted under the Plan or
any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until
the Plan is subject to such an effective registration statement and such compliance, except that
the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date
shall in no event be more than twenty-seven (27) months from the Offering Date. If on the
Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is
not registered and in such compliance, no rights granted under the Plan or any Offering



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shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if
any, such deductions have been used to acquire stock) shall be distributed to the participants,
without interest.



9. Covenants of the Company.




     (a) During the terms of the rights granted under the Plan, the Company shall keep available at
all times the number of shares of stock required to satisfy such rights.



     (b) The Company shall seek to obtain from each federal, state, foreign or other regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to issue
and sell shares of stock upon exercise of the rights granted under the Plan. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance and sale of stock
under the Plan, the Company shall be relieved from any liability for failure to issue and sell
stock upon exercise of such rights unless and until such authority is obtained.



10. Use of Proceeds from Stock.




     Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute
general funds of the Company.



11. Rights as a Stockholder.




     A participant shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares subject to rights granted under the Plan unless and until the
participant’s shareholdings acquired upon exercise of rights hereunder are recorded in the books of
the Company.



12. Adjustments upon Changes in Stock.




     (a) If any change is made in the stock subject to the Plan, or subject to any rights granted
under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend,
dividend in property other than cash, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Board shall appropriately and proportionately adjust: (i) the
class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the
class(es) and number of securities subject to outstanding rights granted under the Plan, and (iii)
the class(es) and number of securities imposed by purchase limits under each ongoing Offering. The
Board shall make such adjustments, and its determination shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be treated as a “transaction
not involving the receipt of consideration by the Company.”)



     (b) In the event of: (1) a dissolution or liquidation of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; (3) a reverse merger in which
the Company is the surviving corporation but the shares of the Company’s Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into other



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property, whether in the form of securities, cash or otherwise; or (4) the acquisition by any person, entity or group
within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) or any comparable successor provisions (excluding any employee benefit plan,
or related trust, sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or
comparable successor rule) of securities of the Company representing at least fifty percent (50%)
of the combined voting power entitled to vote in the election of directors, then, as determined by
the Board in its sole discretion (i) any surviving or acquiring corporation may assume outstanding
rights or substitute similar rights for those under the Plan, (ii) such rights may continue in full
force and effect, or (iii) participants’ accumulated payroll deductions may be used to purchase
Common Stock immediately prior to the transaction described above and the participants’ rights
under the ongoing Offering terminated.



13. Amendment of the Plan.




     (a) The Board at any time, and from time to time, may amend the Plan. However, except as
provided in paragraph 12 relating to adjustments upon changes in stock, no amendment shall be
effective unless approved by the stockholders of the Company within twelve (12) months before or
after the adoption of the amendment, where the amendment will:



          (i) Increase the number of shares reserved for rights under the Plan;




          (ii) Modify the provisions as to eligibility for participation in the Plan (to the extent such
modification requires stockholder approval in order for the Plan to obtain employee stock purchase
plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (“Rule 16b-3”)); or




          (iii) Modify the Plan in any other way if such modification requires stockholder approval in
order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code
or to comply with the requirements of Rule 16b-3.



It is expressly contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated thereunder relating to
employee stock purchase plans and/or to bring the Plan and/or rights granted under it into
compliance therewith.




     (b) Rights and obligations under any rights granted before amendment of the Plan shall not be
altered or impaired by any amendment of the Plan, except with the consent of the person to whom
such rights were granted, or except as necessary to comply with any laws or
governmental regulations, or except as necessary to ensure that the Plan and/or rights granted
under the Plan comply with the requirements of Section 423 of the Code.



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14. 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 an Offering but prior to delivery to the participant of such shares
and cash. In addition, a participant may file a written designation of a beneficiary who is to
receive any cash from the participant’s account under the Plan in the event of such participant’s
death during an Offering.



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



15. Termination or Suspension of the Plan.




     (a) The Board in its discretion, may suspend or terminate the Plan at any time. No rights may
be granted under the Plan while the Plan is suspended or after it is terminated.



     (b) Rights and obligations under any rights granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan, except as expressly provided in the
Plan or with the consent of the person to whom such rights were granted, or except as necessary to
comply with any laws or governmental regulation, or except as necessary to ensure that the Plan
and/or rights granted under the Plan comply with the requirements of Section 423 of the Code.



16. Effective Date of Plan.




     The Plan shall become effective on the same day that the Company’s initial public offering of
shares of common stock becomes effective (the “Effective Date”), but no rights granted under the
Plan shall be exercised unless and until the Plan has been approved by the stockholders of the
Company within twelve (12) months before or after the date the Plan is adopted by the Board or the
Committee, which date may be prior to the Effective Date.




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