Document:

EXHIBIT 10.1  

INDEMNITY AGREEMENT  

        THIS AGREEMENT is made and entered into this            day
of            , 200    by and
between AFFYMAX, INC., a Delaware corporation (the "Corporation"), and            ("Agent"). 

RECITALS  

        WHEREAS, Agent performs a valuable service to the Corporation in his capacity as an officer or member of the Board
of Directors of the Corporation; 

        WHEREAS, the stockholders of the Corporation have adopted bylaws (the "Bylaws") providing for the indemnification of the directors,
officers, employees and other agents of the Corporation, including persons serving at the request of the Corporation in such capacities with other corporations or enterprises, as authorized by the
Delaware General Corporation Law, as amended (the "Code"); 

        WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts between the Corporation and its directors,
officers, employees and other agents with respect to indemnification of such persons; and 

        WHEREAS, in order to induce Agent to continue to serve as an officer or a member of the Board of Directors of the Corporation, the
Corporation has determined and agreed to enter into this Agreement with Agent; 

        NOW, THEREFORE, in consideration of Agent's continued service as an officer or member of the Board of Directors of the Corporation after
the date hereof, the parties hereto agree as follows: 

AGREEMENT  

        1.    Services to the Corporation.    Agent will serve, at the will of the Corporation or under separate contract, if
any such contract exists, as an officer or a member of the Board of Directors of the Corporation or as a director, officer or other fiduciary of an affiliate of the Corporation (including any employee
benefit plan of the Corporation) faithfully and to the best of his ability so long as he is duly elected and qualified in accordance with the provisions of the Bylaws or other applicable charter
documents of the Corporation or such affiliate; provided, however, that Agent may at any time and for any reason resign from such position (subject to
any contractual obligation that Agent may have assumed apart from this Agreement) and that the Corporation or any affiliate shall have no obligation under this Agreement to continue Agent in any such
position. 

        2.    Indemnity of Agent.    The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent
authorized or permitted by the provisions of the Bylaws and the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than the Bylaws or the Code permitted prior to adoption of such amendment). 

        3.    Additional Indemnity.    In addition to and not in limitation of the indemnification otherwise provided for
herein, and subject only to the exclusions set forth in Section 4 hereof, the Corporation hereby further agrees to hold harmless and indemnify Agent: 

        (a)   against any and all expenses (including attorneys' fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts that Agent becomes legally obligated to pay because of any claim or claims made against or by him in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, arbitrational, administrative or investigative (including an action by or in the right of the Corporation) to which 

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Agent
is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other agent of the
Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise; and 

        (b)   otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity
provisions of the Code and the Bylaws of the Company. 

        4.    Limitations on Additional Indemnity.    No indemnity pursuant to Section 3 hereof shall be paid by the
Corporation: 

        (a)   on account of any claim against Agent solely for an accounting of profits made from the purchase or sale by Agent of
securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local
statutory law; 

        (b)   on account of Agent's conduct that is established by a final judgment as knowingly fraudulent or deliberately dishonest
or that constituted willful misconduct; 

        (c)   on account of Agent's conduct that is established by a final judgment as constituting a breach of Agent's duty of loyalty
to the Corporation or resulting in any personal profit or advantage to which Agent was not legally entitled; 

        (d)   for which payment is actually made to Agent under a valid and collectible insurance policy or under a valid and
enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement; 

        (e)   if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the
Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication); or 

        (f)    in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the
Corporation or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the
Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Code, or
(iv) the proceeding is initiated pursuant to Section 9 hereof. 

        5.    Continuation of Indemnity.    All agreements and obligations of the Corporation contained herein shall continue
during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or other agent of
another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible claim or threatened,
pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative, by reason of the fact that Agent was serving in the capacity referred to
herein. 

        6.    Partial Indemnification.    Agent shall be entitled under this Agreement to indemnification by the Corporation
for a portion of the expenses (including attorneys' fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay in
connection with any action, suit or proceeding referred to in Section 3 hereof even if not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall
indemnify Agent for the portion thereof to which Agent is entitled. 

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        7.    Notification and Defense of Claim.    Not later than thirty (30) days after receipt by Agent of notice of
the commencement of any action, suit or proceeding, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from any liability which it may have to Agent otherwise than under this Agreement. With respect to any such action, suit or
proceeding as to which Agent notifies the Corporation of the commencement thereof: 

        (a)   the Corporation will be entitled to participate therein at its own expense; 

        (b)   except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party
similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume
the defense thereof, the Corporation will not be liable to Agent under this Agreement for any legal or other expenses subsequently incurred by Agent in connection with the defense thereof except for
reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by Agent has been authorized by the
Corporation, (ii) Agent shall have reasonably concluded, and so notified the Corporation, that there is an actual conflict of interest between the Corporation and Agent in the conduct of the
defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of Agent's separate
counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to
which Agent shall have made the conclusion provided for in clause (ii) above; and 

        (c)   the Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any
action or claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any action except that it shall not settle any action or
claim in any manner which would impose any penalty or limitation on Agent without Agent's written consent, which may be given or withheld in Agent's sole discretion. 

        8.    Expenses.    The Corporation shall advance, whether prior to or after the final disposition of any proceeding,
promptly following the request therefor (but not later than ten (10) days after such request), all expenses incurred by Agent in connection with such proceeding upon receipt of an undertaking
by or on behalf of Agent to repay said amounts if it shall be determined ultimately that Agent is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, the Code or
otherwise. 

        9.    Enforcement.    Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable
by or on behalf of Agent in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is
made within ninety (90) days of request therefor. Agent, in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim.
It shall be a defense to any action for which a claim for indemnification is made under Section 3 hereof (other than an action brought to enforce a claim for expenses pursuant to
Section 8 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification
because of the limitations set forth in Section 4 hereof. Neither the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the
commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its 

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stockholders)
that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement or otherwise. 

        10.    Subrogation.    In the event of payment under this Agreement, the Corporation shall be subrogated to the extent
of such payment to all of the rights of recovery of Agent, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation
effectively to bring suit to enforce such rights. 

        11.    Non-Exclusivity of Rights.    The rights conferred on Agent by this Agreement shall not be
exclusive of any other right which Agent may have or hereafter acquire under any statute, provision of the Corporation's Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. 

        12.    Survival of Rights.    

        (a)   The rights conferred on Agent by this Agreement shall continue after Agent has ceased to be a director, officer, employee
or other agent of the Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise and shall inure to the benefit of Agent's heirs, executors and administrators. 

        (b)   The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would
be required to perform if no such succession had taken place. 

        13.    Separability.    Each of the provisions of this Agreement is a separate and distinct agreement and independent
of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions
hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the fullest extent provided by the Bylaws, the
Code or any other applicable law. 

        14.    Governing Law.    This Agreement shall be interpreted and enforced in accordance with the laws of the State of
Delaware. 

        15.    Amendment and Termination.    No amendment, modification, termination or cancellation of this Agreement shall
be effective unless in writing signed by both parties hereto. 

        16.    Identical Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this
Agreement. 

        17.    Headings.    The headings of the sections of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction hereof. 

        18.    Notices.    All notices, requests, demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom
such communication was directed or (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid: 

        (a)   If to Agent, at the address indicated on the signature page hereof. 

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        (b)   If to the Corporation, to: 

AFFYMAX, INC.

4001 Miranda Avenue

Palo Alto, CA 94304 

or
to such other address as may have been furnished to Agent by the Corporation. 

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written. 

	 	 	AFFYMAX, INC.
	

 	
 	

By:	

    

	

 	
 	

Print Name:	

    

	

 	
 	

Title:	

    

	

 	
 	
AGENT
	

 	
 	

    
[NAME]
	

 	
 	

Address:	

    

AFFYMAX, INC.

INDEMNITY AGREEMENT SIGNATURE PAGE 

5EXHIBIT 10.2  

AFFYMAX, INC.  

 2001 STOCK OPTION/STOCK ISSUANCE PLAN  

ARTICLE ONE  

GENERAL PROVISIONS  

        I.    PURPOSE OF THE PLAN    

        This
2001 Stock Option/Stock Issuance Plan is intended to promote the interests of Affymax, Inc., a Delaware corporation, by providing eligible persons in the Corporation's employ
or service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to continue in such employ or service. 

        Capitalized
terms herein shall have the meanings assigned to such terms in the attached Appendix. 

        II.    STRUCTURE OF THE PLAN    

        A.    The
Plan shall be divided into two (2) separate equity programs: 

        (i)    the
Option Grant Program under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock, and 

        (ii)   the
Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly, either through the
immediate purchase of such shares or as a bonus for services rendered the Corporation (or any Parent or Subsidiary). 

        B.    The
provisions of Articles One and Four shall apply to both equity programs under the Plan and shall accordingly govern the interests of all persons under the Plan. 

        III.    ADMINISTRATION OF THE PLAN    

        A.    The
Plan shall be administered by the Board. However, any or all administrative functions otherwise exercisable by the Board may be delegated to the Committee. Members of
the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously delegated to the Committee. 

        B.    The
Plan Administrator shall have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for
proper administration of the Plan and to make such determinations under, and issue such interpretations of, the Plan and any outstanding options or stock issuances thereunder as it may deem necessary
or advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any option grant or stock issuance thereunder. 

        IV.    ELIGIBILITY    

        A.    The
persons eligible to participate in the Plan are as follows: 

        (i)    Employees,

        (ii)   non-employee
members of the Board or the non-employee members of the board of directors of any Parent or Subsidiary, and 

        (iii)  consultants
and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary). 

        B.    The
Plan Administrator shall have full authority to determine, (i) with respect to the grants made under the Option Grant Program, which eligible persons are to
receive such grants, the time or 

 

times
when those grants are to be made, the number of shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option, the
time or times when each option is to become exercisable, the vesting schedule (if any) applicable to the option shares and the maximum term for which the option is to remain outstanding, and
(ii) with respect to stock issuances made under the Stock Issuance Program, which eligible persons are to receive such issuances, the time or times when those issuances are to be made, the
number of shares to be issued to each Participant, the vesting schedule (if any) applicable to the issued shares and the consideration to be paid by the Participant for such shares. 

        C.    The
Plan Administrator shall have the absolute discretion either to grant options in accordance with the Option Grant Program or to effect stock issuances in accordance
with the Stock Issuance Program. 

        V.    STOCK SUBJECT TO THE PLAN    

        A.    The
stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock. The maximum number of shares of Common Stock which may be issued
over the term of the Plan shall not exceed one million seven hundred thousand (1,700,000) shares. 

        B.    Shares
of Common Stock subject to outstanding options shall be available for subsequent issuance under the Plan to the extent (i) the options expire or terminate
for any reason prior to exercise in full or (ii) the options are cancelled in accordance with the cancellation-regrant provisions of Article Two. Unvested shares issued under the Plan and
subsequently repurchased by the Corporation, at the option exercise or direct issue price paid per share, pursuant to the Corporation's repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent option grants or direct stock issuances under the
Plan. 

        C.    Should
any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan and (ii) the number and/or class of securities and the exercise price per share in effect under each outstanding option in order to prevent the dilution or enlargement
of benefits thereunder. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. In no event shall any such adjustments be made in connection with the conversion of
one or more outstanding shares of the Corporation's preferred stock into shares of Common Stock. 

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ARTICLE TWO  

OPTION GRANT PROGRAM  

        I.    OPTION TERMS    

        Each
option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options. 

        A.    Exercise Price.    

        1.     The
exercise price per share shall be fixed by the Plan Administrator in accordance with the following provisions: 

        (i)    The
exercise price per share shall not be less than eighty-five percent (85%) of the Fair Market Value per share of Common Stock on the option grant date. 

        (ii)   If
the person to whom the option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair
Market Value per share of Common Stock on the option grant date. 

        2.     The
exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section I of Article Four and the documents
evidencing the option, be payable in cash or check made payable to the Corporation. Should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised,
then the exercise price may also be paid as follows: 

        (i)    in
shares of Common Stock held for the requisite period necessary to avoid a charge to the Corporation's earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date, or 

        (ii)   to
the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions (A) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (B) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the
sale. 

        Except
to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 

        B.    Exercise and Term of Options.    Each option shall be exercisable at such time or times,
during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option grant. However, no option shall have a term in
excess of ten (10) years measured from the option grant date. 

        C.    Effect of Termination of Service.    

        1.     The
following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: 

        (i)    Should
the Optionee cease to remain in Service for any reason other than death, Disability or Misconduct, then the Optionee shall have a period of three
(3) months 

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following
the date of such cessation of Service during which to exercise each outstanding option held by such Optionee. 

        (ii)   Should
Optionee's Service terminate by reason of Disability, then the Optionee shall have a period of twelve (12) months following the date of such cessation of
Service during which to exercise each outstanding option held by such Optionee. 

        (iii)  If
the Optionee dies while holding an outstanding option, then the personal representative of his or her estate or the person or persons to whom the option is
transferred pursuant to the Optionee's will or the laws of inheritance or the Optionee's designated beneficiary or beneficiaries of that option shall have a twelve (12)-month period following the date
of the Optionee's death to exercise such option. 

        (iv)  Under
no circumstances, however, shall any such option be exercisable after the specified expiration of the option term. 

        (v)   During
the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares for which the
option is exercisable on the date of the Optionee's cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee's cessation of Service, terminate and
cease to be outstanding with respect to any and all option shares for which the option is not otherwise at the time exercisable or in which the Optionee is not otherwise at that time vested. 

        (vi)  Should
Optionee's Service be terminated for Misconduct or should Optionee otherwise engage in Misconduct while holding one or more outstanding options under the Plan,
then all those options shall terminate immediately and cease to remain outstanding. 

        2.     The
Plan Administrator shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to: 

        (i)    extend
the period of time for which the option is to remain exercisable following Optionee's cessation of Service or death from the limited period otherwise in effect
for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or 

        (ii)   permit
the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested shares of Common Stock
for which such option is exercisable at the time of the Optionee's cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested under the
option had the Optionee continued in Service. 

        D.    Stockholder Rights.    The holder of an option shall have no stockholder rights with
respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become the recordholder of the purchased shares. 

        E.    Unvested Shares.    The Plan Administrator shall have the discretion to grant options
which are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right. The Plan Administrator may not impose a vesting
schedule upon any option grant or the shares of Common Stock subject to that option 

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which
is more restrictive than twenty percent (20%) per year vesting, with the initial vesting to occur not later than one (1) year after the option grant date. However, such limitation shall
not be applicable to any option grants made to individuals who are officers of the Corporation, non-employee Board members or independent consultants. 

        F.    First Refusal Rights.    Until such time as the Common Stock is first registered under
Section 12 of the 1934 Act, the Corporation shall have the right of first refusal with respect to any proposed disposition by the Optionee (or any successor in interest) of any shares of Common
Stock issued under the Plan. Such right of first refusal shall be exercisable in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right. 

        G.    Limited Transferability of Options.    An Incentive Stock Option shall be exercisable
only by the Optionee during his or her lifetime and shall not be assignable or transferable other than by will or by the laws of inheritance following the Optionee's death. A Non-Statutory
Option may be assigned in whole or in part during the Optionee's lifetime to one or more members of the Optionee's family or to a trust established exclusively for one or more such family members or
to Optionee's former spouse, to the extent such assignment is in connection with the Optionee's estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the Non-Statutory Option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in
effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. Notwithstanding the
foregoing, the Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under the Plan, and those options shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee's death while holding those options. Such beneficiary or beneficiaries shall take the transferred
options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may
be exercised following the Optionee's death. 

        II.    INCENTIVE OPTIONS    

        The
terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Four
shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options shall not be subject to the terms of this Section II. 

        A.    Eligibility.    Incentive Options may only be granted to Employees. 

        B.    Exercise Price.    The exercise price per share shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option grant date. 

        C.    Dollar Limitation.    The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary)
may for the first time become exercisable as Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such options are granted. 

        D.    10% Stockholder.    If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the option term shall not exceed five (5) years measured from the option grant date. 

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        III.    CORPORATE TRANSACTION    

        A.    The
shares subject to each option outstanding under the Plan at the time of a Corporate Transaction shall automatically vest in full so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become exercisable for all of the shares of Common Stock at the time subject to that option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. However, the shares subject to an outstanding option shall not vest on such an accelerated basis if
and to the extent: (i) such option is assumed by the successor corporation (or parent thereof) in the Corporate Transaction and any repurchase rights of the Corporation with respect to the
unvested option shares are concurrently assigned to such successor corporation (or parent thereof) or (ii) such option is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing on the unvested option shares at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule
applicable to those unvested option shares or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant. 

        B.    All
outstanding repurchase rights under the Option Grant Program shall also terminate automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Corporate Transaction, except to the extent: (i) those repurchase rights are assigned to the successor corporation (or parent thereof) in
connection with such Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued. 

        C.    Immediately
following the consummation of the Corporate Transaction, all outstanding options shall terminate and cease to be outstanding, except to the extent assumed by
the successor corporation (or parent thereof). 

        D.    Each
option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the
number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction, had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the number and class of securities available for issuance under the Plan following the consummation of such Corporate Transaction
and (ii) the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities
shall remain the same. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Corporate Transaction,
the successor corporation may, in connection with the assumption of the outstanding options under this Plan, substitute one or more shares of its own common stock with a fair market value equivalent
to the cash consideration paid per share of Common Stock in such Corporate Transaction. 

        E.    The
Plan Administrator shall have the discretion, exercisable either at the time the option is granted or at any time while the option remains outstanding, to structure
one or more options so that those options shall automatically accelerate and vest in full (and any repurchase rights of the Corporation with respect to the unvested shares subject to those options
shall immediately terminate) upon the occurrence of a Corporate Transaction, whether or not those options are to be assumed in the Corporate Transaction. 

        F.     The
Plan Administrator shall also have full power and authority, exercisable either at the time the option is granted or at any time while the option remains outstanding,
to structure such option so that the shares subject to that option will automatically vest on an accelerated basis should the Optionee's Service terminate by reason of an Involuntary Termination
within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which the option is assumed and the repurchase rights applicable to
those shares do not otherwise terminate. Any 

6

 

option
so accelerated shall remain exercisable for the fully-vested option shares until the expiration or sooner termination of the option term. In addition, the Plan Administrator may provide that
one or more of the Corporation's outstanding repurchase rights with respect to shares held by the Optionee at the time of such Involuntary Termination shall immediately terminate on an accelerated
basis, and the shares subject to those terminated rights shall accordingly vest at that time. 

        G.    The
portion of any Incentive Option accelerated in connection with a Corporate Transaction shall remain exercisable as an Incentive Option only to the extent the
applicable One Hundred Thousand Dollar limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws. 

        H.    The
grant of options under the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

        IV.    CANCELLATION AND REGRANT OF OPTIONS    

        The
Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding
options under the Plan and to grant in substitution therefor new options covering the same or different number of shares of Common Stock but with an exercise price per share based on the Fair Market
Value per share of Common Stock on the new option grant date. 

7

 
ARTICLE THREE  

STOCK ISSUANCE PROGRAM  

        I.    STOCK ISSUANCE TERMS    

        Shares
of Common Stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants. Each such stock issuance shall be
evidenced by a Stock Issuance Agreement which complies with the terms specified below. 

        A.    Purchase Price.    

        1.     The
purchase price per share shall be fixed by the Plan Administrator but shall not be less than eighty-five percent (85%) of the Fair Market Value per share
of Common Stock on the issue date. However, the purchase price per share of Common Stock issued to a 10% Stockholder shall not be less than one hundred and ten percent (110%) of such Fair Market
Value. 

        2.     Subject
to the provisions of Section I of Article Four, shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of
consideration which the Plan Administrator may deem appropriate in each individual instance: 

        (i)    cash
or check made payable to the Corporation, or 

        (ii)   past
services rendered to the Corporation (or any Parent or Subsidiary). 

        B.    Vesting Provisions.    

        1.     Shares
of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest
in one or more installments over the Participant's period of Service or upon attainment of specified performance objectives. However, the Plan Administrator may not impose a vesting schedule upon any
stock issuance effected under the Stock Issuance Program which is more restrictive than twenty percent (20%) per year vesting, with initial vesting to occur not later than one (1) year after
the issuance date. Such limitation shall not apply to any Common Stock issuances made to the officers of the Corporation, non-employee Board members or independent consultants. 

        2.     Any
new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to
receive with respect to the Participant's unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration shall be issued subject to (i) the same vesting requirements applicable to the Participant's
unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate. 

        3.     The
Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under the Stock Issuance Program, whether or not
the Participant's interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares. 

        4.     Should
the Participant cease to remain in Service while holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the
performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for consideration paid in cash or cash
equivalent (including the Participant's purchase-money indebtedness), the Corporation shall repay 

8

 

to
the Participant the cash consideration paid for the surrendered shares and shall cancel the unpaid principal balance of any outstanding purchase-money note of the Participant attributable to such
surrendered shares. 

        5.     The
Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock (or other assets attributable thereto)
which would otherwise occur upon the non-completion of the vesting schedule applicable to those shares. Such waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant's cessation of Service or the attainment or
non-attainment of the applicable performance objectives. 

        C.    First Refusal Rights.    Until such time as the Common Stock is first registered under
Section 12 of the 1934 Act, the Corporation shall have the right of first refusal with respect to any proposed disposition by the Participant (or any successor in interest) of any shares of
Common Stock issued under the Stock Issuance Program. Such right of first refusal shall be exercisable in accordance with the terms established by the Plan Administrator and set forth in the document
evidencing such right. 

        II.    CORPORATE TRANSACTION    

        A.    Upon
the occurrence of a Corporate Transaction, all outstanding repurchase rights under the Stock Issuance Program shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest in full, except to the extent: (i) those repurchase rights are assigned to the successor corporation (or parent thereof) in
connection with such Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued. 

        B.    The
Plan Administrator shall have the discretionary authority, exercisable either at the time the unvested shares are issued or any time while the Corporation's
repurchase rights with respect to those shares remain outstanding, to provide that those rights shall automatically terminate on an accelerated basis, and the shares of Common Stock subject to those
terminated rights shall immediately vest, in the event the Participant's Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed
eighteen (18) months) following the effective date of any Corporate Transaction in which those repurchase rights are assigned to the successor corporation (or parent thereof). 

        III.    SHARE ESCROW/LEGENDS    

        Unvested
shares may, in the Plan Administrator's discretion, be held in escrow by the Corporation until the Participant's interest in such shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing those unvested shares. 

9

 
ARTICLE FOUR  

MISCELLANEOUS  

        I.    FINANCING    

        The
Plan Administrator may permit any Optionee or Participant to pay the option exercise price under the Option Grant Program or the purchase price for shares issued under the Stock
Issuance Program by delivering a full-recourse, interest bearing promissory note payable in one or more installments and secured by the purchased shares. In no event, however, may the
maximum credit available to the Optionee or Participant exceed the sum of (i) the aggregate option exercise price or purchase price payable for the purchased shares (less the par value of those
shares) plus (ii) any Federal, state and local income and employment tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase. 

        II.    EFFECTIVE DATE AND TERM OF PLAN    

        A.    The
Plan shall become effective when adopted by the Board, but no option granted under the Plan may be exercised, and no shares shall be issued under the Plan, until the
Plan is approved by the Corporation's stockholders. If such stockholder approval is not obtained within twelve (12) months after the date of the Board's adoption of the Plan, then all options
previously granted under the Plan shall terminate and cease to be outstanding, and no further options shall be granted and no shares shall be issued under the Plan. Subject to such limitation, the
Plan Administrator may grant options and issue shares under the Plan at any time after the effective date of the Plan and before the date fixed herein for termination of the Plan. 

        B.    The
Plan shall terminate upon the earliest of (i) the expiration of the ten (10)-year period measured
from the date the Plan is adopted by the Board, (ii) the date on which all shares available for issuance under the Plan shall have been issued as vested shares or (iii) the termination
of all outstanding options in connection with a Corporate Transaction. All options and unvested stock issuances outstanding at the time of a clause (i) termination event shall continue to have
full force and effect in accordance with the provisions of the documents evidencing those options or issuances. 

        III.    AMENDMENT OF THE PLAN    

        A.    The
Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall
adversely affect the rights and obligations with respect to options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment
or modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws and regulations. 

        B.    Options
may be granted under the Option Grant Program and shares may be issued under the Stock Issuance Program which are in each instance in excess of the number of
shares of Common Stock then available for issuance under the Plan, provided any excess shares actually issued under those programs shall be held in escrow until there is obtained stockholder approval
of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is not obtained within twelve (12) months after
the date the first such excess grants or issuances are made, then (i) any unexercised options granted on the basis of such excess shares shall terminate and cease to be outstanding and
(ii) the Corporation shall promptly refund to the Optionees and the Participants the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together
with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled and cease to be outstanding. 

10

 

        IV.    USE OF PROCEEDS    

        Any
cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate purposes. 

        V.    WITHHOLDING    

        The
Corporation's obligation to deliver shares of Common Stock upon the exercise of any options granted under the Plan or upon the issuance or vesting of any shares issued under the Plan
shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements. 

        VI.    REGULATORY APPROVALS    

        The
implementation of the Plan, the granting of any options under the Plan and the issuance of any shares of Common Stock (i) upon the exercise of any option or (ii) under
the Stock Issuance Program shall be subject to the Corporation's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options granted
under it and the shares of Common Stock issued pursuant to it. 

        VII.    NO EMPLOYMENT OR SERVICE RIGHTS    

        Nothing
in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to
terminate such person's Service at any time for any reason, with or without cause. 

        VIII.    FINANCIAL REPORTS    

        The
Corporation shall deliver a balance sheet and an income statement at least annually to each individual holding an outstanding option under the Plan, unless such individual is a key
Employee whose duties in connection with the Corporation (or any Parent or Subsidiary) assure such individual access to equivalent information. 

11

   APPENDIX  

        The following definitions shall be in effect under the Plan: 

        A.    Board shall mean the Corporation's Board of Directors. 

        B.    Code shall mean the Internal Revenue Code of 1986, as amended. 

        C.    Committee shall mean a committee of one (1) or more Board members appointed by the Board to exercise one or more
administrative functions under the Plan. 

        D.    Common Stock shall mean the Corporation's common stock. 

        E.    Corporate Transaction shall mean either of the following stockholder-approved transactions to which the Corporation is a
party: 

        (i)    a
merger, consolidation or other reorganization approved by the Corporation's stockholders, unless securities
representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation's outstanding voting securities immediately prior to such transaction, or 

        (ii)   the
sale, transfer or other disposition of all or substantially all of the Corporation's assets in complete liquidation or dissolution of the Corporation. 

        F.     Corporation shall mean Affymax, Inc., a Delaware corporation, and any successor corporation to all or substantially
all of the assets or voting stock of Affymax, Inc. which shall by appropriate action adopt the Plan. 

        G.    Disability shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment and shall be determined by the Plan Administrator on the basis of such medical evidence as the Plan Administrator deems warranted
under the circumstances. 

        H.    Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be performed and the manner and method of performance. 

        I.     Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise. 

        J.     Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following
provisions: 

        (i)    If
the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the
date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding
date for which such quotation exists. 

        (ii)   If
the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in
question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such
exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on 

A-1

 

the
date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 

        (iii)  If
the Common Stock is at the time neither listed on any Stock Exchange nor traded on the Nasdaq National Market, then the Fair Market Value shall be determined by the
Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate. 

        K.    Incentive Option shall mean an option which satisfies the requirements of Code Section 422. 

        L.    Involuntary Termination shall mean the termination of the Service of any individual which occurs by reason of: 

        (i)    such
individual's involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or 

        (ii)   such
individual's voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and target bonus under any
corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual's place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected without the individual's consent. 

        M.   Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not in any way preclude or restrict the right of the
Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee, Participant or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or
omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct. 

        N.    1934 Act shall mean the Securities Exchange Act of 1934, as amended. 

        O.    Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code Section 422. 

        P.     Option Grant Program shall mean the option grant program in effect under the Plan. 

        Q.    Optionee shall mean any person to whom an option is granted under the Plan. 

        R.    Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain. 

        S.     Participant shall mean any person who is issued shares of Common Stock under the Stock Issuance Program. 

        T.     Plan shall mean the Corporation's 2001 Stock Option/Stock Issuance Plan, as set forth in this document. 

        U.    Plan Administrator shall mean either the Board or the Committee acting in its capacity as administrator of the Plan. 

A-2

 

        V.     Service shall mean the provision of services to the Corporation (or any Parent or Subsidiary) by a person in the capacity
of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the
option grant. 

        W.    Stock Exchange shall mean either the American Stock Exchange or the New York Stock Exchange. 

        X.    Stock Issuance Agreement shall mean the agreement entered into by the Corporation and the Participant at the time of
issuance of shares of Common Stock under the Stock Issuance Program. 

        Y.    Stock Issuance Program shall mean the stock issuance program in effect under the Plan. 

        Z.    Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain. 

        AA. 10% Stockholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary). 

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