Document:

Exhibit 10.7  

AFFYMAX, INC.

2006 EMPLOYEE STOCK PURCHASE PLAN  

ADOPTED BY THE BOARD OF DIRECTORS: JULY 7, 2006

APPROVED BY THE STOCKHOLDERS:    , 2006  

1.    GENERAL.  

	(a)
	The purpose of the Plan is to provide a means by which Employees of the Company and certain designated Related Corporations may be
given an opportunity to purchase shares of the Common Stock of the Company.

	(b)
	The Company, by means of the Plan, seeks to retain the services of such 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 and its Related Corporations.

	(c)
	The Company intends that the Purchase Rights be considered options issued under an Employee Stock Purchase Plan. 

2.    ADMINISTRATION.  

	(a)
	The Board shall administer the Plan unless and until the Board delegates administration of the Plan to a Committee, as provided in
Section 2(c).

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

 
	(i)
	To determine when and how Purchase Rights to purchase shares of Common Stock shall be granted and the provisions of each Offering of such
Purchase Rights (which need not be identical).  

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

 
	(iii)
	To construe and interpret the Plan and Purchase Rights, 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 adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees who are
foreign nationals or employed outside the United States.  

 
	(v)
	To amend the Plan as provided in Section 13.  

	(vi)
	Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and
its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan.

 

	(c)
	The Board may delegate some or all of the administration of the Plan to a Committee or Committees. 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 that have been delegated to the Committee, including the power to
delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and 

1

 

references
in this Plan to the Board shall thereafter be to the Committee or subcommittee), 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 retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously
delegated. 

	(d)
	All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and
shall be final, binding and conclusive on all persons. 

3.    SHARES OF COMMON STOCK SUBJECT TO THE PLAN.  

	(a)
	Subject to the provisions of Section 12(a) relating to Capitalization Adjustments, the shares of Common Stock that may be sold
pursuant to Purchase Rights shall not exceed in the aggregate four hundred thousand (400,000) (pre-split) shares of Common Stock. In addition, the number of shares of Common Stock
available for issuance under the Plan shall automatically increase on January 1st of each year, commencing in 2007 and ending on (and including) January 1, 2016, in an amount equal to
the lesser of (i) one-half percent (0.5%) of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year, or (ii) seven
hundred thousand (700,000) (pre-split) shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year, to provide that there shall be
no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year shall be a lesser number of shares of Common Stock than would otherwise occur
pursuant to the preceding sentence.

	(b)
	If any Purchase Right granted under the Plan shall for any reason terminate without having been exercised, the shares of Common Stock
not purchased under such Purchase Right shall again become available for issuance under the Plan.

	(c)
	The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares
repurchased by the Company on the open market. 

4.    GRANT OF PURCHASE RIGHTS; OFFERING.  

	(a)
	The Board may from time to time grant or provide for the grant of Purchase Rights to purchase shares of Common Stock under the Plan to
Eligible Employees in an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate, which shall comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights 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 Sections 5 through 8, inclusive.

	(b)
	If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in agreements or
notices delivered hereunder: (i) each agreement or notice delivered by that Participant shall be deemed to apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase
Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) shall be exercised to the fullest possible extent before a
Purchase Right with a higher exercise price (or 

2

 

a
later-granted Purchase Right if different Purchase Rights have identical exercise prices) shall be exercised. 

	(c)
	The Board shall have the discretion to structure an Offering so that if the Fair Market Value of the shares of Common Stock on the
first day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of the shares of Common Stock on the Offering Date, then (i) that Offering shall terminate
immediately, and (ii) the Participants in such terminated Offering shall be automatically enrolled in a new Offering beginning on the first day of such new Purchase Period. 

5.    ELIGIBILITY.  

	(a)
	Purchase Rights may be granted only to Employees of the Company or, as the Board may designate as provided in Section 2(b), to
Employees of a Related Corporation. Except as provided in Section 5(b), an Employee shall not be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such
Employee has been in the employ of the Company or the Related Corporation, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event shall
the required period of continuous employment be greater than two (2) years. In addition, the Board may provide that no Employee shall be eligible to be granted Purchase Rights under the Plan
unless, on the Offering Date, such Employee's customary employment with the Company or the Related Corporation is more than twenty (20) hours per week and more than five (5) months per
calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code.

	(b)
	The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee shall, on a date or
dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase
Right shall thereafter be deemed to be a part of that Offering. Such Purchase Right shall have the same characteristics as any Purchase Rights originally granted under that Offering, as described
herein, except that:

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

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

	(iii)
	the
Board 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 shall not
receive any Purchase Right under that Offering.

 

	(c)
	No Employee shall be eligible for the grant of any Purchase Rights under the Plan if, immediately after any such Purchase 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 Related Corporation. For purposes of
this Section 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 Purchase Rights and options shall be treated as stock owned by such Employee.

	(d)
	As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the Plan only if such
Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do 

3

 

not
permit such Eligible Employee's rights to purchase stock of the Company or any Related Corporation 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, and which, with respect to the Plan, shall be determined as of their respective Offering Dates) for each calendar year in which such rights
are outstanding at any time. 

	(e)
	Officers of the Company and any designated Related Corporation, if they are otherwise Eligible Employees, shall be eligible to
participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may provide in an Offering that 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.    PURCHASE RIGHTS; PURCHASE PRICE.  

	(a)
	On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted a Purchase Right to
purchase up to that number of shares of Common Stock purchasable either with a percentage or with a maximum dollar amount, as designated by the Board, but in either case not exceeding fifteen percent
(15%) of such Employee's earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board 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.

	(b)
	The Board shall establish one (1) or more Purchase Dates during an Offering as of which Purchase Rights granted pursuant to that
Offering shall be exercised and purchases of shares of Common Stock shall be carried out in accordance with such Offering.

	(c)
	In connection with each Offering made under the Plan, the Board may specify a maximum number of shares of Common Stock that may be
purchased by any Participant on any Purchase Date during such Offering. In connection with each Offering made under the Plan, the Board may specify a maximum aggregate number of shares of Common Stock
that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board may specify a maximum aggregate
number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of
Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata allocation of the shares of Common Stock
available shall be made in as nearly a uniform manner as shall be practicable and equitable.

	(d)
	The purchase price of shares of Common Stock acquired pursuant to Purchase Rights shall be not less than the lesser
of: 

 
	(i)
	an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock on the Offering Date; or   

 
	(ii)
	an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date.
 

7.    PARTICIPATION; WITHDRAWAL; TERMINATION.  

	(a)
	A Participant may elect to authorize payroll deductions pursuant to an Offering under the Plan by completing and delivering to the
Company, within the time specified in the Offering, an enrollment form (in such form as the Company may provide). Each such enrollment form shall authorize an amount of Contributions expressed as a
percentage of the submitting Participant's earnings (as defined in each Offering) during the Offering (not to exceed the 

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maximum
percentage specified by the Board). Each Participant's Contributions shall be credited to a bookkeeping account for such Participant under the Plan and shall be deposited with the general
funds of the Company except where applicable law requires that Contributions be deposited with a third party. To the extent provided in the Offering, a Participant may begin such Contributions after
the beginning of the Offering. To the extent provided in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. To the extent specifically provided
in the Offering, in addition to making Contributions by payroll deductions, a Participant may make Contributions through the payment by cash or check prior to each Purchase Date of the Offering. 

	(b)
	During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a notice
of withdrawal in such form as the Company may provide. Such withdrawal may be elected at any time prior to the end of the Offering, except as provided otherwise 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 Contributions (reduced to the extent, if any, such Contributions have been used to
acquire shares of Common Stock for the Participant) under the Offering, and such Participant's Purchase Right in that Offering shall thereupon terminate. A Participant's withdrawal from an Offering
shall have no effect upon such Participant's eligibility to participate in any other Offerings under the Plan, but such Participant shall be required to deliver a new enrollment form in order to
participate in subsequent Offerings.

	(c)
	Purchase Rights granted pursuant to any Offering under the Plan shall terminate immediately upon a Participant ceasing to be an
Employee for any reason or for no reason (subject to any post-employment participation period required by law) or other lack of eligibility. The Company shall distribute to such terminated
or otherwise ineligible Employee all of his or her accumulated Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the terminated or
otherwise ineligible Employee) under the Offering.

	(d)
	Purchase Rights shall not be transferable by a Participant except by will, the laws of descent and distribution, or by a beneficiary
designation as provided in Section 10. During a Participant's lifetime, Purchase Rights shall be exercisable only by such Participant.

	(e)
	Unless otherwise specified in an Offering, the Company shall have no obligation to pay interest on Contributions. 

8.    EXERCISE OF PURCHASE RIGHTS.  

	(a)
	On each Purchase Date during an Offering, each Participant's accumulated Contributions shall be applied to the purchase of shares of
Common Stock up to the maximum number of shares of Common Stock 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 Purchase Rights unless specifically provided for in the Offering.

	(b)
	If any amount of accumulated Contributions remains in a Participant's account after the purchase of shares of Common Stock and such
remaining amount is less than the amount required to purchase one share of Common Stock on the final Purchase Date of an Offering, then such remaining amount shall be held in such Participant's
account for the purchase of shares of Common Stock under the next Offering under the Plan, unless such Participant withdraws from such next Offering, as provided in Section 7(b), or is not
eligible to participate in such Offering, as provided in Section 5, in which case such amount shall be distributed to such Participant after the final Purchase Date, without interest. If the
amount of Contributions remaining in a Participant's account after the purchase of shares of Common Stock is at least 

5

 

equal
to the amount required to purchase one (1) whole share of Common Stock on the final Purchase Date of the Offering, then such remaining amount shall be distributed in full to such
Participant at the end of the Offering without interest. 

	(c)
	No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are
covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable federal, state, foreign and other securities and other laws
applicable to the Plan. If on a Purchase Date during any Offering hereunder the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights or any Offering
shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in 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 under any Offering hereunder, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in such
compliance, no Purchase Rights or any Offering shall be exercised and all Contributions accumulated during the Offering (reduced to the extent, if any, such Contributions have been used to acquire
shares of Common Stock) shall be distributed to the Participants without interest. 

9.    COVENANTS OF THE COMPANY.  

        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 Common Stock upon exercise of the Purchase Rights. If, after commercially reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell Common Stock upon exercise of such Purchase Rights unless and until such authority is obtained. 

10.    DESIGNATION OF BENEFICIARY.  

	(a)
	A Participant may file a written designation of a beneficiary who is to receive any shares of Common Stock and/or 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 of Common Stock or
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. Any such designation shall be on a form provided by or otherwise acceptable to the Company.

	(b)
	The Participant may change such designation of beneficiary at any time by written notice to the Company. 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 of Common Stock 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 of Common Stock 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. 

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11.    MISCELLANEOUS PROVISIONS.  

	(a)
	The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering shall in any way alter the at
will nature of a Participant's employment or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation,
or on the part of the Company or a Related Corporation to continue the employment of a Participant.

	(b)
	The provisions of the Plan shall be governed by the laws of the State of Delaware without resort to that state's conflicts of laws
rules.

	(c)
	Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights shall constitute general funds of the Company.

	(d)
	A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock
subject to Purchase Rights unless and until the Participant's shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent). 

12.    ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.  

	(a)
	In the event of a Capitalization Adjustment, the Board shall equitably adjust (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to
Section 3(a), (iii) the class(es) and number of securities subject to outstanding Purchase Rights, and (iv) 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.

	(b)
	In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or
acquiring corporation's parent company) may assume or continue Purchase Rights outstanding under the Plan or may substitute similar rights (including a right to acquire the same consideration paid to
the stockholders in the Corporate Transaction) for those outstanding under the Plan, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such
Purchase Rights or does not substitute similar rights for Purchase Rights outstanding under the Plan, then the Participants' accumulated Contributions shall be used to purchase shares of Common Stock
within ten (10) business days prior to the Corporate Transaction under any ongoing Offerings, and the Participants' Purchase Rights under the ongoing Offerings shall terminate immediately after
such purchase. 

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 Section 12(a) relating to
Capitalization Adjustments and except as to amendments solely to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favorable tax, exchange
control or regulatory treatment for Participants or the Company or any Related Corporation, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder
approval is necessary for the Plan to satisfy the requirements of Section 423 of the Code or other applicable laws or regulations.

	(b)
	It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide
Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder 

7

 

relating
to Employee Stock Purchase Plans and/or to bring the Plan and/or Purchase Rights into compliance therewith. 

	(c)
	The rights and obligations under any Purchase Rights granted before amendment of the Plan shall not be impaired by any amendment of the
Plan except: (i) with the consent of the person to whom such Purchase Rights were granted, or (ii) as necessary to comply with any laws or governmental regulations (including, without
limitation, the provisions of the Code and the regulations promulgated thereunder relating to Employee Stock Purchase Plans). 

14.    TERMINATION OR SUSPENSION OF THE PLAN.  

	(a)
	The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate at the time that all of the
shares of Common Stock reserved for issuance under the Plan, as increased and/or adjusted from time to time, have been issued under the terms of the Plan. No Purchase Rights may be granted under the
Plan while the Plan is suspended or after it is terminated.

	(b)
	Any benefits, privileges, entitlements and obligations under any Purchase Rights while the Plan is in effect shall not be impaired by
suspension or termination of the Plan except (i) as expressly provided in the Plan or with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to
comply with any laws, regulations or listing requirements, or (iii) as necessary to ensure that the Plan and/or Purchase Rights comply with the requirements of Section 423 of the Code. 

15.    EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective on the IPO Date, but no Purchase Rights shall be exercised unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 

16.    DEFINITIONS.  

        As used in the Plan, the following definitions shall apply to the capitalized terms indicated below: 

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

	(b)
	"Capitalization Adjustment" means any change that is made in, or other events that
occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the Effective Date without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, 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). Notwithstanding the foregoing, the conversion of any convertible securities of the
Company shall not be treated as a transaction "without receipt of consideration" by the Company.

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

	(d)
	"Committee" means a committee of one (1) or more members of the Board to whom
authority has been delegated by the Board in accordance with Section 2(c).

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

	(f)
	"Company" means Affymax, Inc., a Delaware corporation.

	(g)
	"Contributions" means the payroll deductions and other additional payments specifically
provided for in the Offering, that a Participant contributes to fund the exercise of a Purchase 

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Right.
A Participant may make additional payments into his or her account, if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted
amount withheld during the Offering through payroll deductions. 

	(h)
	"Corporate Transaction" means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events: 

 
	(i)
	a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the
Company and its Subsidiaries;  

 
	(ii)
	a sale or other disposition of at least ninety percent (90%) of the
outstanding securities of
the Company;  

 
	(iii)
	the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation;
or   

 
	(iv)
	the consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares
of
Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other
property, whether in the form of securities, cash or otherwise.

 

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

	(j)
	"Eligible Employee" means an Employee who meets the requirements set forth in the
Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.

	(k)
	"Employee" means any person, including Officers and Directors, who is employed for
purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an "Employee" for purposes of the Plan.

	(l)
	"Employee Stock Purchase Plan" means a plan that grants Purchase Rights intended to be
options issued under an "employee stock purchase plan," as that term is defined in Section 423(b) of the Code.

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

	(n)
	"Fair Market Value" means, as of any date, the value of the Common Stock determined as
follows: 

 
	(i)
	If the Common Stock is listed on any established stock exchange or traded on the Nasdaq Global Select Market or the Nasdaq Global Market
(formerly the Nasdaq National Market), the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in The Wall Street Journal or such other source as the Board
deems reliable.  

 
	(ii)
	If the Common Stock is listed or traded on the Nasdaq Capital Market (formerly the Nasdaq Small Cap Market), the Fair Market
Value of a share of
Common Stock shall be the mean between the bid and asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Board deems
reliable. Unless otherwise provided by the Board, if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date of 

9

 

determination,
then the Fair Market Value shall be the mean between the bid and asked prices for the Common Stock on the last preceding date for which such quotation exists. 

	(iii)
	In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good faith.

 

	(o)
	"IPO Date" means the date of the underwriting agreement between the Company and the
underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering.

	(p)
	"Offering" means the grant of Purchase Rights to purchase shares of Common Stock under
the Plan to Eligible Employees.

	(q)
	"Offering Date" means a date selected by the Board for an Offering to commence.

	(r)
	"Officer" means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

	(s)
	"Participant" means an Eligible Employee who holds an outstanding Purchase Right
granted pursuant to the Plan.

	(t)
	"Plan" means this Affymax, Inc. 2006 Employee Stock Purchase Plan.

	(u)
	"Purchase Date" means one or more dates during an Offering established by the Board on
which Purchase Rights shall be exercised and as of which purchases of shares of Common Stock shall be carried out in accordance with such Offering.

	(v)
	"Purchase Period" means a period of time specified within an Offering beginning on the
Offering Date or on the next day following a Purchase Date within an Offering and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.

	(w)
	"Purchase Right" means an option to purchase shares of Common Stock granted pursuant to
the Plan.

	(x)
	"Related Corporation" means any "parent corporation" or "subsidiary corporation" of the
Company whether now or subsequently established, as those terms are defined in Sections 424(e) and 424(f), respectively, of the Code.

	(y)
	"Securities Act" means the Securities Act of 1933, as amended.

	(z)
	"Trading Day" means any day on which the exchange(s) or market(s) on which shares of
Common Stock are listed, whether it be an established stock exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (formerly the Nasdaq National Market), the Nasdaq Capital Market
(formerly the Nasdaq Small Cap Market), or otherwise, is open for trading. 

10Exhibit 10.8  

AFFYMAX, INC.  

2006 EMPLOYEE STOCK PURCHASE PLAN

OFFERING DOCUMENT  

Adopted by the Board of Directors:                        , 2006  

        In this document, capitalized terms not otherwise defined shall have the same definitions of such terms as in the Affymax, Inc. 2006 Employee Stock
Purchase Plan. 

1.    GRANT; OFFERING DATE.  

	(a)
	The Board hereby authorizes a series of Offerings pursuant to the terms of this Offering document.

	(b)
	The first Offering hereunder (the "Initial Offering") shall begin on the date the
Common Stock is first offered to the public under a registration statement declared effective under the Securities Act and shall end on [October 31, 2008], unless
terminated earlier as provided below. The Initial Offering shall consist of [four] ([4]) Purchase Periods, with the first Purchase Period ending on
[April 30, 2007], the second Purchase Period ending on [October 31, 2007], the third Purchase Period ending on
[April 30, 2008], and the fourth Purchase Period ending on [October 31, 2008].

	(c)
	After the Initial Offering commences, a concurrent Offering shall begin on [May 1] and
[November 1] each year after [2006] over the term of the Plan and shall be approximately [twenty-four]
([24]) [months] in duration. Each Offering shall consist of [four] ([4]) Purchase Periods each of which
shall be approximately six (6) months in length ending on or about [April 30] and [October 31] each year. Except as provided below,
a Purchase Date is the last day of a Purchase Period or of an Offering, as the case may be.

	(d)
	Notwithstanding the foregoing: (i) if any Offering Date falls on a day that is not a Trading Day, then such Offering Date shall
instead fall on the next subsequent Trading Day, and (ii) if any Purchase Date falls on a day that is not a Trading Day, then such Purchase Date shall instead fall on the immediately preceding
Trading Day.

	(e)
	Prior to the commencement of any Offering, the Board may change any or all terms of such Offering and any subsequent Offerings. The
granting of Purchase Rights pursuant to each Offering hereunder shall occur on each respective Offering Date unless prior to such date (i) the Board determines that such Offering shall not
occur, or (ii) no shares of Common Stock remain available for issuance under the Plan in connection with the Offering.  

 
	(f)
	Notwithstanding
anything in this Section 1 to the contrary, if on the first day of a new Purchase Period during the Offering the Fair Market Value of a
share of Common Stock is less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date for that Offering, then that Offering shall immediately terminate. Participants in
the terminated Offering shall automatically be enrolled in the new Offering that starts on or about such day. 

2.    ELIGIBLE EMPLOYEES.  

	(a)
	Each Eligible Employee, who has been an Employee for a continuous period of at least [three]
([3]) [months] ending on the Offering Date of an Offering hereunder and is either (i) an employee of the Company; (ii) an employee of a
Related Corporation incorporated in 

1

 

the
United States; or (iii) an employee of a Related Corporation that is not incorporated in the United States, provided that the Board has designated the employees of such Related Corporation
as eligible to participate in the Offering, shall be granted a Purchase Right on the Offering Date of such Offering. 

	(b)
	Each person who first becomes an Eligible Employee during an Offering shall not be able to participate in such Offering.

	(c)
	Notwithstanding the foregoing, the following Employees shall not be Eligible Employees
or be granted Purchase Rights under an Offering: 

 
	(i)
	Employees whose customary employment is twenty (20) hours per week or less or five (5) months per calendar year or less;   

 
	(ii)
	five percent (5%) stockholders (including ownership through unexercised and/or unvested stock options) as described in Section 5(c) of
the Plan; or  

 
	(iii)
	Employees in jurisdictions outside of the United States if, as of the Offering Date of the Offering, the grant of such Purchase
Rights would
not be in compliance with the applicable laws of any jurisdiction in which the Employee resides or is employed. 

3.    PURCHASE RIGHTS.  

	(a)
	Subject to the limitations herein and in the Plan, a Participant's Purchase Right shall permit the purchase of the number of shares of
Common Stock purchasable with up to [fifteen] percent ([15]%) of such Participant's Earnings paid during the period of such Offering beginning
immediately after such Participant first commences participation; provided, however, that no Participant may have more than
[fifteen] percent ([15]%) of such Participant's Earnings applied to purchase shares of Common Stock under all ongoing Offerings under the Plan and all
other plans of the Company and Related Corporations that are intended to qualify as Employee Stock Purchase Plans.

	(b)
	For Offerings hereunder, "Earnings" means the base compensation paid to a Participant,
including all salary, wages (including amounts elected to be deferred by such Participant, that would otherwise have been paid, under any cash or deferred arrangement or other deferred compensation
program established by the Company or a Related Corporation), but excluding all overtime pay, commissions, bonuses, and other remuneration paid directly to such Participant, profit sharing, the cost
of employee benefits paid for by the Company or a Related Corporation, education or tuition reimbursements, imputed income arising under any Company or Related Corporation 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 a Related Corporation under any employee
benefit plan, and similar items of compensation.

	(c)
	Notwithstanding the foregoing, the maximum number of shares of Common Stock that a Participant may purchase on any Purchase Date in an
Offering shall be such number of shares as has a Fair Market Value (determined as of the Offering Date for such Offering) equal to (x) $25,000 multiplied by the number of calendar years in
which the Purchase Right under such Offering has been outstanding at any time, minus (y) the Fair Market Value of any other shares of Common Stock (determined as of the relevant Offering Date
with respect to such shares) that, for purposes of the limitation of Section 423(b)(8) of the Code, are attributed to any of such calendar years in which the Purchase Right is outstanding. The
amount in clause (y) of the previous sentence shall be determined in accordance with regulations applicable under Section 423(b)(8) of the Code based on (i) the number of shares
previously purchased with respect to such calendar years pursuant to such Offering or any other Offering 

2

 

under
the Plan, or pursuant to any other Company or Related Corporation plans intended to qualify as Employee Stock Purchase Plans, and (ii) the number of shares subject to other Purchase
Rights outstanding on the Offering Date for such Offering pursuant to the Plan or any other such Company or Related Corporation Employee Stock Purchase Plan. 

	(d)
	The maximum aggregate number of shares of Common Stock available to be purchased by all Participants under an Offering shall be the
number of shares of Common Stock remaining available under the Plan on the Offering Date. If the aggregate purchase of shares of Common Stock upon exercise of Purchase Rights granted under all
concurrent Offerings would exceed the maximum aggregate number of shares available, the Board shall make a uniform and equitable allocation of the shares available. Any Contributions not applied to
the purchase of available shares of Common Stock shall be refunded to the Participants without interest.

	(e)
	Notwithstanding the foregoing, the maximum number of shares of Common Stock that may be purchased on any single Purchase Date by all
Eligible Employees under all ongoing Offerings shall not exceed [one hundred thousand] ([100,000]) (pre-split) shares. If the aggregate
number of shares of Common Stock to be purchased upon the exercise of all outstanding Purchase Rights on a single Purchase Date would exceed such limit, the Board shall make a uniform and equitable
allocation of the shares available. Any Contributions not applied to the purchase of available shares of Common Stock shall be refunded to the Participants without interest. 

4.    PURCHASE PRICE.  

        The purchase price of shares of Common Stock under the Offering shall be the lesser of: (i) eighty-five percent (85%) of the Fair Market Value
of such shares of Common Stock
on the Offering Date, or (ii) eighty-five percent (85%) of the Fair Market Value of such shares of Common Stock on the applicable Purchase Date. For the Initial Offering, the Fair
Market Value of the shares of Common Stock at the time when the Offering commences shall be the price per share at which shares are first sold to the public in the Company's initial public offering as
specified in the final prospectus for that initial public offering. 

5.    PARTICIPATION.  

	(a)
	An Eligible Employee may elect to participate in an Offering on the Offering Date. An Eligible Employee may enroll in only one Offering
at a time. An Eligible Employee shall elect his or her payroll deduction percentage on such enrollment form as the Company provides. The completed enrollment form must be delivered to the Company
prior to the date participation is to be effective, unless a later time for filing the enrollment form is set by the Company for all Eligible Employees with respect to a given Offering. Payroll
deduction percentages must be expressed in whole percentages of Earnings, with a minimum percentage of one percent (1%) and a maximum percentage of [fifteen] percent
([15]%). Except as provided in Section 5(e), a Participant may participate only by way of payroll deductions.

	(b)
	A Participant may increase his or her participation level once during a Purchase Period. A Participant may increase his or her
participation level effective in a subsequent Purchase Period. In addition, a Participant may decrease (including a decrease to zero percent (0%)) his or her participation level no more than twice
during a Purchase Period (and the second decrease in participation level must be to zero percent (0%)). Any such change in participation level shall be made by delivering a notice to the Company or a
designated Related Corporation in such form as the Company provides prior to the ten (10) day period 

3

 

(or
such shorter period of time as determined by the Company and communicated to Participants) immediately preceding the payroll date for which it is to be effective. 

	(c)
	A Participant may withdraw from an Offering and receive a refund of his or her Contributions (reduced to the extent, if any, such
Contributions have been used to acquire shares of Common Stock for the Participant on any prior Purchase Date) without interest, at any time prior to the end of the Offering, excluding only each ten
(10) day period immediately preceding a Purchase Date (or such shorter period of time determined by the Company and communicated to Participants), by delivering a withdrawal notice to the
Company or a designated Related Corporation in such form as the Company provides. A Participant who has withdrawn from an Offering shall not again participate in such Offering, but may participate in
subsequent Offerings under the Plan in accordance with the terms of the Plan and the terms of such subsequent Offerings.

	(d)
	Notwithstanding the foregoing or any other provision of this Offering document or of the Plan to the contrary, neither the enrollment
of any Eligible Employee in the Plan nor any forms relating to participation in the Plan shall be given effect until such time as a registration statement covering the shares reserved under the Plan
that are subject to the Offering has been filed by the Company and has become effective.

	(e)
	If the provisions of Section 5(d) are applicable, the Company shall establish such procedures as will enable the purposes of the
Plan to be satisfied while complying with applicable securities laws. Such procedures may include, for example, allowing Participants to participate other than by means of payroll deduction and/or
allowing Participants to increase their level of participation during a Purchase Period. Except as otherwise provided by the Company pursuant to the preceding sentence, for the initial Purchase Period
ending [April 30, 2007], no payroll deductions shall be required from the Eligible Employee until such time as the Eligible Employee affirmatively elects to commence
such payroll deductions following the Eligible Employee's receipt of the Securities Act prospectus for the Plan. Each Eligible Employee shall automatically be enrolled in such initial Purchase Period
with a contribution rate equal to [fifteen] percent ([15]%) of Earnings and will have a limited opportunity to make all or part of the contributions in
a lump sum payment prior to the end of the initial Purchase Period rather than through payroll deductions. To the extent that the Eligible Employee's payroll deductions for such initial Purchase
Period are less than [fifteen] percent ([15]%) of Earnings paid to the Eligible Employee during such initial Purchase Period, the Eligible Employee may
make an additional cash payment at any time on or prior to [April 20, 2007] in order to fund the purchase of shares of Common Stock purchased on behalf of the Eligible
Employee on such initial Purchase Date. 

6.    PURCHASES.  

        Subject to the limitations contained herein, on each Purchase Date, each Participant's Contributions (without any increase for interest) shall be applied to the
purchase of whole shares, up to the maximum number of shares permitted under the Plan and the Offering. 

7.    NOTICES AND AGREEMENTS.  

        Any notices or agreements provided for in an Offering or the Plan shall be given in writing, in a form provided by the Company (including documents delivered in
electronic form, if authorized by the Committee), and unless specifically provided for in the Plan or this Offering, shall be deemed effectively given upon receipt or, in the case of notices and
agreements delivered by the Company, five (5) days after deposit in the United States mail, postage prepaid. 

4

 

8.    EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.  

        The Purchase Rights granted under an Offering are subject to the approval of the Plan by the stockholders of the Company as required for the Plan to obtain
treatment as an Employee Stock Purchase Plan. 

9.    OFFERING SUBJECT TO PLAN.  

        Each Offering is subject to all the provisions of the Plan, and the provisions of the Plan are hereby made a part of the Offering. The Offering is further subject
to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of an
Offering and those of the Plan (including interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan), the provisions of the Plan
shall control. 

*
* * * 

5

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