Document:

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                                                                    Exhibit 10.3

                                 diaDexus, Inc.

                           2001 EQUITY INCENTIVE PLAN

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                                TABLE OF CONTENTS

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1.      PURPOSES OF THE PLAN................................................................1
2.      DEFINITIONS.........................................................................1
3.      STOCK SUBJECT TO THE PLAN...........................................................4
4.      ADMINISTRATION OF THE PLAN..........................................................5
5.      ELIGIBILITY.........................................................................6
6.      LIMITATIONS.........................................................................6
7.      TERM OF PLAN........................................................................7
8.      TERM OF OPTION......................................................................7
9.      OPTION EXERCISE PRICE AND CONSIDERATION.............................................8
10.     EXERCISE OF OPTION..................................................................9
11.     NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS...........................12
12.     GRANTING OF OPTIONS TO INDEPENDENT DIRECTORS.......................................12
13.     TERMS OF OPTIONS GRANTED TO INDEPENDENT DIRECTORS..................................12
14.     STOCK PURCHASE RIGHTS..............................................................12
15.     ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE...................13
16.     TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS.................................15
17.     AMENDMENT AND TERMINATION OF THE PLAN..............................................16
18.     STOCKHOLDER APPROVAL...............................................................16
19.     INABILITY TO OBTAIN AUTHORITY......................................................16
20.     RESERVATION OF SHARES..............................................................16
21.     INFORMATION TO HOLDERS AND PURCHASERS..............................................16
22.     REPURCHASE PROVISIONS..............................................................17
23.     INVESTMENT INTENT..................................................................17
24.     GOVERNING LAW......................................................................18
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                                 DIADEXUS, INC.

                           2001 EQUITY INCENTIVE PLAN

     1.   Purposes of the Plan. The purposes of the diaDexus, Inc. 2001 Equity
Incentive Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options or
Non-Qualified Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

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

          (a) "Acquisition" means (i) any consolidation or merger of the Company
with or into any other corporation or other entity or person in which the
stockholders of the Company prior to such consolidation or merger own less than
fifty percent (50%) of the Company's voting power immediately after such
consolidation or merger, excluding any consolidation or merger effected
exclusively to change the domicile of the Company; or (ii) a sale of all or
substantially all of the assets of the Company.

          (b) "Administrator" means the Board or the Committee responsible for
conducting the general administration of the Plan, as applicable, in accordance
with Section 4 hereof.

          (c) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.

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

          (e) "Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute or statutes thereto. Reference to any particular Code section
shall include any successor section.

          (f) "Committee" means a committee appointed by the Board in accordance
with Section 4 hereof.

          (g) "Common Stock" means the Common Stock of the Company, par value
$0.01 per share.

          (h) "Company" means diaDexus, Inc., a Delaware corporation.

          (i) "Consultant" means any consultant or adviser if: (i) the
consultant or adviser renders bona fide services to the Company or any Parent or
Subsidiary of the Company;

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(ii) the services rendered by the consultant or adviser are not in connection
with the offer or sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the Company's
securities; and (iii) the consultant or adviser is a natural person who has
contracted directly with the Company or any Parent or Subsidiary of the Company
to render such services.

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

          (k) "Employee" means any person, including an Officer or Director, who
is an employee (as defined in accordance with Section 3401(c) of the Code) of
the Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient, by itself, to constitute "employment" by the Company.

          (l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto. Reference to any
particular Exchange Act section shall include any successor section.

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

              (i) If the Common Stock is listed on any established stock
exchange or a national market system, including, without limitation, the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for a share of such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable;

              (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for a share of the
Common Stock on the last market trading day prior to the day of determination;
or

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

          (n) "Holder" means a person who has been granted or awarded an Option
or Stock Purchase Right or who holds Shares acquired pursuant to the exercise of
an Option or Stock Purchase Right.

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          (o) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and which
is designated as an Incentive Stock Option by the Administrator.

          (p) "Independent Director" means a Director who is not an Employee of
the Company.

          (q) "Non-Qualified Stock Option" means an Option (or portion thereof)
that is not designated as an Incentive Stock Option by the Administrator, or
which is designated as an Incentive Stock Option by the Administrator but fails
to qualify as an incentive stock option within the meaning of Section 422 of the
Code.

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

          (t) "Option Agreement" means a written agreement between the Company
and a Holder evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.

          (u) "Parent" means any corporation, whether now or hereafter existing
(other than the Company), in an unbroken chain of corporations ending with the
Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing more than fifty percent of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

          (v) "Plan" means the diaDexus, Inc. 2001 Equity Incentive Plan.

          (w) "Public Trading Date" means the first date upon which Common Stock
of the Company is listed (or approved for listing) upon notice of issuance on
any securities exchange or designated (or approved for designation) upon notice
of issuance as a national market security on an interdealer quotation system.

          (x) "Restricted Stock" means Shares acquired pursuant to the exercise
of an unvested Option in accordance with Section 10(h) below or pursuant to a
Stock Purchase Right granted under Section 14 below.

          (y) "Rule 16b-3" means that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended from time to time.

          (z) "Section 16(b)" means Section 16(b) of the Exchange Act, as such
Section may be amended from time to time.

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              (aa) "Securities Act" means the Securities Act of 1933, as
amended, or any successor statute or statutes thereto. Reference to any
particular Securities Act section shall include any successor section.

              (bb) "Service Provider" means an Employee, Director or Consultant.

              (cc) "Share" means a share of Common Stock, as adjusted in
accordance with Section 15 below.

              (dd) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 14 below.

              (ee) "Subsidiary" means any corporation, whether now or hereafter
existing (other than the Company), in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing more than fifty percent
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

     3. Stock Subject to the Plan. Subject to the provisions of Section 15 of
the Plan, the shares of stock subject to Options or Stock Purchase Rights shall
be Common Stock, initially shares of the Company's Common Stock, par value $0.01
per share. Subject to the provisions of Section 15 of the Plan, the maximum
aggregate number of Shares which may be issued upon exercise of such Options or
Stock Purchase Rights is the sum of (i) 2,500,000 Shares, (ii) the number of
Shares that remain reserved for issuance under the Company's 2000 Equity
Incentive Plan (the "2000 Plan") as of the Public Trading Date and (iii) the
number of Shares that, after the Public Trading Date, again become available for
issuance pursuant to Section 3 of the 2000 Plan as a result of stock options or
stock purchase rights issued thereunder expiring or become unexercisable for any
reason before being exercised in full or as otherwise provided in Section 3 of
the 2000 Plan; provided, however, that in no event shall the total number of
Shares reserved for issuance under this Plan, together with the total number of
Shares reserved for issuance under the 2000 Plan, exceed 7,200,00 Shares. Shares
issued upon exercise of Options or Stock Purchase Rights may be authorized but
unissued, or reacquired Common Stock. If an Option or Stock Purchase Right
expires or becomes unexercisable without having been exercised in full, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated). Shares which are
delivered by the Holder or withheld by the Company upon the exercise of an
Option or Stock Purchase Right under the Plan, in payment of the exercise price
thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of this Section 3. If Shares of Restricted
Stock are repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan. Notwithstanding
the provisions of this Section 3, no Shares may again be optioned, granted or
awarded if such action would cause an Incentive Stock Option to fail to qualify
as an Incentive Stock Option under Code Section 422.

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     4. Administration of the Plan.

          (a) Administrator. Unless and until the Board delegates administration
to a Committee as set forth below, the Plan shall be administered by the Board.
The Board may delegate administration of the Plan to a Committee or Committees
of one or more members of the Board, and the term "Committee" shall apply to any
person or persons to whom such authority has been delegated. 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,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and 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. Notwithstanding the foregoing,
however, from and after the Public Trading Date, a Committee of the Board shall
administer the Plan and the Committee shall consist solely of two or more
Independent Directors each of whom is both an "outside director," within the
meaning of Section 162(m) of the Code, and a "non-employee director" within the
meaning of Rule 16b-3. Within the scope of such authority, the Board or the
Committee may (i) delegate to a committee of one or more members of the Board
who are not Independent Directors the authority to grant awards under the Plan
to eligible persons who are either (1) not then "covered employees," within the
meaning of Section 162(m) of the Code and are not expected to be "covered
employees" at the time of recognition of income resulting from such award or (2)
not persons with respect to whom the Company wishes to comply with Section
162(m) of the Code and/or (ii) delegate to a committee of one or more members of
the Board who are not "non-employee directors," within the meaning of Rule
16b-3, the authority to grant awards under the Plan to eligible persons who are
not then subject to Section 16 of the Exchange Act. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may only be filled by the Board.

          (b) Powers of the Administrator. Subject to the provisions of the Plan
and the specific duties delegated by the Board to such Committee, and subject to
the approval of any relevant authorities, the Administrator shall have the
authority in its sole discretion:

              (i) to determine the Fair Market Value;

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

              (iii) to determine the number of Shares to be covered by each such
award granted hereunder;

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

              (v) to determine the terms and conditions of any Option or Stock
Purchase Right granted hereunder (such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options or Stock Purchase
Rights may vest or be

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exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine);

              (vi) to determine whether to offer to buyout a previously granted
Option as provided in subsection 10(i) and to determine the terms and conditions
of such offer and buyout (including whether payment is to be made in cash or
Shares);

              (vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

              (viii) to allow Holders to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld based on the statutory
withholding rates for federal and state tax purposes that apply to supplemental
taxable income. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined. All elections by Holders to have Shares withheld for this purpose
shall be made in such form and under such conditions as the Administrator may
deem necessary or advisable;

              (ix) to amend the Plan or any Option or Stock Purchase Right
granted under the Plan as provided in Section 17; and

              (x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan and to exercise such powers and perform such acts
as the Administrator deems necessary or desirable to promote the best interests
of the Company which are not in conflict with the provisions of the Plan.

          (c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Holders.

     5.   Eligibility. Non-Qualified Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Stock Purchase Right may be granted additional Options or Stock
Purchase Rights. Each Independent Director shall be eligible to be granted
Options at the times and in the manner set forth in Section 12.

     6.   Limitations.

          (a) Each Option shall be designated by the Administrator in the Option
Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of Shares subject to a Holder's Incentive Stock Options and
other incentive stock options granted by the

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Company, any Parent or Subsidiary, which become exercisable for the first time
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options or other options shall be
treated as Non-Qualified Stock Options.

          For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time of grant.

          (b) Neither the Plan, any Option nor any Stock Purchase Right shall
confer upon a Holder any right with respect to continuing the Holder's
employment or consulting relationship with the Company, nor shall they interfere
in any way with the Holder's right or the Company's right to terminate such
employment or consulting relationship at any time, with or without cause.

          (c) No Service Provider shall be granted, in any calendar year,
Options or Stock Purchase Rights to purchase more than 2,000,000 Shares;
provided, however, that the foregoing limitation shall not apply prior to the
Public Trading Date and, following the Public Trading Date, the foregoing
limitation shall not apply until the earliest of: (i) the first material
modification of the Plan (including any increase in the number of shares
reserved for issuance under the Plan in accordance with Section 3); (ii) the
issuance of all of the shares of Common Stock reserved for issuance under the
Plan; (iii) the expiration of the Plan; (iv) the first meeting of stockholders
at which Directors of the Company are to be elected that occurs after the close
of the third calendar year following the calendar year in which occurred the
first registration of an equity security of the Company under Section 12 of the
Exchange Act; or (v) such other date required by Section 162(m) of the Code and
the rules and regulations promulgated thereunder. The foregoing limitation shall
be adjusted proportionately in connection with any change in the Company's
capitalization as described in Section 15. For purposes of this Section 6(c), if
an Option is canceled in the same calendar year it was granted (other than in
connection with a transaction described in Section 15), the canceled Option will
be counted against the limit set forth in this Section 6(c). For this purpose,
if the exercise price of an Option is reduced, the transaction shall be treated
as a cancellation of the Option and the grant of a new Option.

     7.   Term of Plan. The Plan shall become effective upon its initial
adoption by the Board and shall continue in effect until it is terminated under
Section 17 of the Plan. No Options or Stock Purchase Rights may be issued under
the Plan after the tenth (10th) anniversary of the earlier of (i) the date upon
which the Plan is adopted by the Board or (ii) the date the Plan is approved by
the stockholders.

     8.   Term of Option. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option granted
to a Holder who, at the time the Option is granted, owns (or is treated as
owning under Code Section 424) stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

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     9.   Option Exercise Price and Consideration.

          (a)  Except as provided in Section 13, the per share exercise price
for the Shares to be issued upon exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:

               (i)  In the case of an Incentive Stock Option

                    (A) granted to an Employee who, at the time of grant of such
Option, owns (or is treated as owning under Code Section 424) stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no
less than one hundred ten percent (110%) of the Fair Market Value per Share on
the date of grant.

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

               (ii) In the case of a Non-Qualified Stock Option

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

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

               (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.

          (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) with the consent of the Administrator, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Administrator, (4) with the consent of the Administrator,
other Shares which (x) in the case of Shares acquired from the Company, have
been owned by the Holder for more than six (6) months on the date of surrender,
and (y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which such Option shall be exercised, (5)
with the consent of the Administrator, surrendered Shares then issuable upon
exercise of the Option having a Fair Market Value on the date of exercise equal
to the aggregate exercise price of the Option or exercised portion thereof, (6)
property of any kind which constitutes good and valuable

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consideration, (7) with the consent of the Administrator, delivery of a notice
that the Holder has placed a market sell order with a broker with respect to
Shares then issuable upon exercise of the Options and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Option exercise price, provided, that payment of
such proceeds is then made to the Company upon settlement of such sale, or (8)
with the consent of the Administrator, any combination of the foregoing methods
of payment.

     10.  Exercise of Option.

          (a)  Vesting; Fractional Exercises. Except as provided in Section 13,
Options granted hereunder shall be vested and exercisable according to the terms
hereof at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement; provided, however, that,
except with regard to Options granted to Officers, Directors or Consultants, in
no event shall an Option granted hereunder become vested and exercisable at a
rate of less than twenty percent (20%) per year over five (5) years from the
date the Option is granted, subject to reasonable conditions, such as continuing
to be a Service Provider. An Option may not be exercised for a fraction of a
Share.

          (b)  Deliveries upon Exercise. All or a portion of an exercisable
Option shall be deemed exercised upon delivery of all of the following to the
Secretary of the Company or his or her office:

               (i) A written or electronic notice complying with the applicable
rules established by the Administrator stating that the Option, or a portion
thereof, is exercised. The notice shall be signed by the Holder or other person
then entitled to exercise the Option or such portion of the Option;

               (ii) Such representations and documents as the Administrator, in
its sole discretion, deems necessary or advisable to effect compliance with
Applicable Laws. The Administrator may, in its sole discretion, also take
whatever additional actions it deems appropriate to effect such compliance,
including, without limitation, placing legends on share certificates and issuing
stop transfer notices to agents and registrars;

               (iii) Upon the exercise of all or a portion of an unvested Option
pursuant to Section 10(h), a Restricted Stock purchase agreement in a form
determined by the Administrator and signed by the Holder or other person then
entitled to exercise the Option or such portion of the Option; and

               (iv) In the event that the Option shall be exercised pursuant to
Section 10(f) by any person or persons other than the Holder, appropriate proof
of the right of such person or persons to exercise the Option.

          (c) Conditions to Delivery of Share Certificates. The Company shall
not be required to issue or deliver any certificate or certificates for Shares
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

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               (i) The admission of such Shares to listing on all stock
exchanges on which such class of stock is then listed;

               (ii) The completion of any registration or other qualification of
such Shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body which the Administrator shall, in its sole discretion, deem necessary or
advisable;

               (iii) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Administrator shall, in its sole
discretion, determine to be necessary or advisable;

               (iv) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may establish from time to time for
reasons of administrative convenience; and

               (v) The receipt by the Company of full payment for such Shares,
including payment of any applicable withholding tax, which in the sole
discretion of the Administrator may be in the form of consideration used by the
Holder to pay for such Shares under Section 9(b).

          (d)  Termination of Relationship as a Service Provider. If a Holder
ceases to be a Service Provider other than by reason of the Holder's disability
or death, such Holder may exercise his or her Option within such period of time
as is specified in the Option Agreement to the extent that the Option is vested
on the date of termination; provided, however, that prior to the Public Trading
Date, such period of time shall not be less than thirty (30) days (but in no
event later than the expiration of the term of the Option as set forth in the
Option Agreement). In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for three (3) months following the Holder's
termination. If, on the date of termination, the Holder is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
immediately cease to be issuable under the Option and shall again become
available for issuance under the Plan. If, after termination, the Holder does
not exercise his or her Option within the time period specified herein, the
Option shall terminate, and the Shares covered by such Option shall again become
available for issuance under the Plan.

          (e)  Disability of Holder. If a Holder ceases to be a Service Provider
as a result of the Holder's disability, the Holder may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination; provided, however, that
prior to the Public Trading Date, such period of time shall not be less than six
(6) months (but in no event later than the expiration of the term of such Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Holder's termination. If such disability is not a "disability" as
such term is defined in Section 22(e)(3) of the Code, in the case of an
Incentive Stock Option such Incentive Stock Option shall automatically cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes as
a Non-Qualified Stock Option from and after the day which is three (3) months
and

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one (1) day following such termination. If, on the date of termination, the
Holder is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall immediately cease to be issuable under the
Option and shall again become available for issuance under the Plan. If, after
termination, the Holder does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall again become available for issuance under the Plan.

          (f) Death of Holder. If a Holder dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement provided, however, that prior to the Public Trading Date, such period
of time shall not be less than six (6) months (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant), by
the Holder's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance, but only to the extent that the Option is vested on
the date of death. In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for twelve (12) months following the
Holder's termination. If, at the time of death, the Holder is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall immediately cease to be issuable under the Option and shall again
become available for issuance under the Plan. The Option may be exercised by the
executor or administrator of the Holder's estate or, if none, by the person(s)
entitled to exercise the Option under the Holder's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
again become available for issuance under the Plan.

          (g) Regulatory Extension. A Holder's Option Agreement may provide that
if the exercise of the Option following the termination of the Holder's status
as a Service Provider (other than upon the Holder's death or Disability) would
be prohibited at any time solely because the issuance of shares would violate
the registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in Section 8 or (ii) the expiration of a period of three (3) months after
the termination of the Holder's status as a Service Provider during which the
exercise of the Option would not be in violation of such registration
requirements.

          (h) Early Exercisability. The Administrator may provide in the terms
of a Holder's Option Agreement that the Holder may, at any time before the
Holder's status as a Service Provider terminates, exercise the Option in whole
or in part prior to the full vesting of the Option; provided, however, that
subject to Section 22, Shares acquired upon exercise of an Option which has not
fully vested may be subject to any forfeiture, transfer or other restrictions as
the Administrator may determine in its sole discretion.

          (i) Buyout Provisions. The Administrator may at any time offer to
buyout for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Holder at the time that such offer is made.

                                       11
<PAGE>   14

     11. Non-Transferability of Options and Stock Purchase Rights. Options and
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Holder,
only by the Holder.

     12. Granting of Options to Independent Directors. During the term of the
Plan, a person who is an Independent Director automatically shall be granted an
Option to purchase ten thousand (10,000) shares of Common Stock (subject to
adjustment as provided in Section 15) on the date of each annual meeting of
stockholders after the date of the Board's adoption of the Plan (a "Director
Option"); provided, however such person is an Independent Director immediately
following such date. All the foregoing Option grants authorized by this Section
12 are subject to stockholder approval of the Plan.

     13. Terms of Options Granted to Independent Directors. The per Share price
of each Director Option granted to an Independent Director shall equal 100% of
the Fair Market Value of a share of Common Stock on the date the Option is
granted. Director Options granted to Independent Directors shall become
exercisable in cumulative monthly installments of 1/12 of the Shares subject to
such option on each of the monthly anniversaries of the date of Option grant,
commencing with the first such monthly anniversary, such that each Initial
Option shall be one hundred percent (100%) vested on the first anniversary of
its date of grant. No portion of an Option which is unexercisable at the time of
an Independent Director's termination of membership on the Board shall
thereafter become exercisable.

     14.  Stock Purchase Rights.

          (a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with Options granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer; provided, however, that to the extent required to comply with applicable
securities laws, the purchase price of such Shares shall not be less than the
purchase price requirements set forth in Section 260.140.42 of Title 10 of the
California Code of Regulations. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.

          (b) Repurchase Right. Unless the Administrator determines otherwise,
the Restricted Stock purchase agreement shall grant the Company the right to
repurchase Shares acquired upon exercise of a Stock Purchase Right upon the
termination of the purchaser's status as a Service Provider for any reason.
Subject to Section 22, the purchase price for Shares repurchased by the Company
pursuant to such repurchase right and the rate at which such repurchase right
shall lapse shall be determined by the Administrator in its sole discretion, and
shall be set forth in the Restricted Stock purchase agreement.

                                       12
<PAGE>   15

          (c) Other Provisions. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

          (d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 15 of
the Plan.

     15.  Adjustments upon Changes in Capitalization, Merger or Asset Sale.

          (a)  In the event that the Administrator determines that any dividend
or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company,
or exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended by the Company to be
made available under the Plan or with respect to any Option, Stock Purchase
Right or Restricted Stock, then the Administrator shall, in such manner as it
may deem equitable, adjust any or all of:

               (i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options or Stock Purchase Rights
may be granted or awarded (including, but not limited to, adjustments of the
limitations in Section 3 on the maximum number and kind of shares which may be
issued and adjustments of the maximum number of Shares that may be purchased by
any Holder in any calendar year pursuant to Section 6(c));

               (ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, Stock Purchase Rights or
Restricted Stock; and

               (iii) the grant or exercise price with respect to any Option or
Stock Purchase Right.

          (b)  In the event of any transaction or event described in Section
15(a), the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Option, Stock
Purchase Right or Restricted Stock or by action taken prior to the occurrence of
such transaction or event and either automatically or upon the Holder's request,
is hereby authorized to take any one or more of the following actions whenever
the Administrator determines that such action is appropriate in order to prevent
dilution or

                                       13
<PAGE>   16

enlargement of the benefits or potential benefits intended by the Company to be
made available under the Plan or with respect to any Option, Stock Purchase
Right or Restricted Stock granted or issued under the Plan or to facilitate such
transaction or event:

               (i) To provide for either the purchase of any such Option, Stock
Purchase Right or Restricted Stock for an amount of cash equal to the amount
that could have been obtained upon the exercise of such Option or Stock Purchase
Right or realization of the Holder's rights had such Option, Stock Purchase
Right or Restricted Stock been currently exercisable or payable or fully vested
or the replacement of such Option, Stock Purchase Right or Restricted Stock with
other rights or property selected by the Administrator in its sole discretion;

               (ii) To provide that such Option or Stock Purchase Right shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in the Plan or the provisions of such Option or Stock Purchase Right;

               (iii) To provide that such Option, Stock Purchase Right or
Restricted Stock be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices;

               (iv) To make adjustments in the number and type of shares of
Common Stock (or other securities or property) subject to outstanding Options
and Stock Purchase Rights, and/or in the terms and conditions of (including the
grant or exercise price), and the criteria included in, outstanding Options,
Stock Purchase Rights or Restricted Stock or Options, Stock Purchase Rights or
Restricted Stock which may be granted in the future; and

               (v) To provide that immediately upon the consummation of such
event, such Option or Stock Purchase Right shall not be exercisable and shall
terminate; provided, that for a specified period of time prior to such event,
such Option or Stock Purchase Right shall be exercisable as to all Shares
covered thereby, and the restrictions imposed under an Option Agreement or
Restricted Stock purchase agreement upon some or all Shares may be terminated
and, in the case of Restricted Stock, some or all shares of such Restricted
Stock may cease to be subject to repurchase, notwithstanding anything to the
contrary in the Plan or the provisions of such Option, Stock Purchase Right or
Restricted Stock purchase agreement.

          (c)  Subject to Section 3, the Administrator may, in its sole
discretion, include such further provisions and limitations in any Option, Stock
Purchase Right, Restricted Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.

          (d)  If the Company undergoes an Acquisition, then any surviving
corporation or entity or acquiring corporation or entity, or affiliate of such
corporation or entity, may assume any Options, Stock Purchase Rights or
Restricted Stock outstanding under the Plan or may substitute similar stock
awards (including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 15(d)) for those
outstanding under the Plan. In the event any surviving corporation or entity or
acquiring corporation or entity in an

                                       14
<PAGE>   17

Acquisition, or affiliate of such corporation or entity, does not assume such
Options, Stock Purchase Rights or Restricted Stock or does not substitute
similar stock awards for those outstanding under the Plan, then with respect to
(i) Options, Stock Purchase Rights or Restricted Stock held by participants in
the Plan whose status as a Service Provider has not terminated prior to such
event, the vesting of such Options, Stock Purchase Rights or Restricted Stock
(and, if applicable, the time during which such awards may be exercised) shall
be accelerated and made fully exercisable and all restrictions thereon shall
lapse at least ten (10) days prior to the closing of the Acquisition (and the
Options or Stock Purchase Rights terminated if not exercised prior to the
closing of such Acquisition), and (ii) any other Options or Stock Purchase
Rights outstanding under the Plan, such Options or Stock Purchase rights shall
be terminated if not exercised prior to the closing of the Acquisition.

          (e) Notwithstanding the foregoing, in the event that the Company
becomes a party to a transaction that is intended to qualify for "pooling of
interests" accounting treatment and, but for one or more of the provisions of
this Plan or any Option Agreement or any Restricted Stock purchase agreement
would so qualify, then this Plan and any such agreement shall be interpreted so
as to preserve such accounting treatment, and to the extent that any provision
of the Plan or any such agreement would disqualify the transaction from pooling
of interests accounting treatment (including, if applicable, an entire Option
Agreement or Restricted Stock purchase agreement), then such provision shall be
null and void. All determinations to be made in connection with the preceding
sentence shall be made by the independent accounting firm whose opinion with
respect to "pooling of interests" treatment is required as a condition to the
Company's consummation of such transaction.

          (f) The existence of the Plan, any Option Agreement or Restricted
Stock purchase agreement and the Options or Stock Purchase Rights granted
hereunder shall not affect or restrict in any way the right or power of the
Company or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

     16.  Time of Granting Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.

                                       15
<PAGE>   18

     17.  Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time wholly or
partially amend, alter, suspend or terminate the Plan. However, without approval
of the Company's stockholders given within twelve (12) months before or after
the action by the Board, no action of the Board may, except as provided in
Section 15, increase the limits imposed in Section 3 on the maximum number of
Shares which may be issued under the Plan or extend the term of the Plan under
Section 7.

          (b) Stockholder Approval. The Board shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Holder,
unless mutually agreed otherwise between the Holder and the Administrator, which
agreement must be in writing and signed by the Holder and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options, Stock Purchase
Rights or Restricted Stock granted or awarded under the Plan prior to the date
of such termination.

     18.  Stockholder Approval. The Plan will be submitted for the approval of
the Company's stockholders within twelve (12) months after the date of the
Board's initial adoption of the Plan. Options, Stock Purchase Rights or
Restricted Stock may be granted or awarded prior to such stockholder approval,
provided that such Options, Stock Purchase Rights and Restricted Stock shall not
be exercisable, shall not vest and the restrictions thereon shall not lapse
prior to the time when the Plan is approved by the stockholders, and provided
further that if such approval has not been obtained at the end of said
twelve-month period, all Options, Stock Purchase Rights and Restricted Stock
previously granted or awarded under the Plan shall thereupon be canceled and
become null and void.

     19.  Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

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

     21.  Information to Holders and Purchasers. Prior to the Public Trading
Date and to the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall provide to each Holder and to
each individual who acquires Shares pursuant to the Plan, not less frequently
than annually during the period such Holder or purchaser has one or more Options
or Stock Purchase Rights outstanding, and, in the case of an individual who
acquires Shares pursuant to the Plan, during the period such individual owns
such Shares, copies

                                       16
<PAGE>   19

of annual financial statements. Notwithstanding the preceding sentence, the
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.

     22.  Repurchase Provisions. The Administrator in its sole discretion may
provide that the Company may repurchase Shares acquired upon exercise of an
Option or Stock Purchase Right upon the occurrence of certain specified events,
including, without limitation, a Holder's termination as a Service Provider,
divorce, bankruptcy or insolvency; provided, however, that any such repurchase
right shall be set forth in the applicable Option Agreement or Restricted Stock
purchase agreement or in another agreement referred to in such agreement and,
provided further, that to the extent required by Section 260.140.41 and Section
260.140.42 of Title 10 of the California Code of Regulations, any such
repurchase right set forth in an Option or Stock Purchase Right granted prior to
the Public Trading Date to a person who is not an Officer, Director or
Consultant shall be upon the following terms: (i) if the repurchase option gives
the Company the right to repurchase the shares upon termination as a Service
Provider at not less than the Fair Market Value of the shares to be purchased on
the date of termination of status as a Service Provider, then (A) the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within ninety (90) days of termination of status as
a Service Provider (or in the case of shares issued upon exercise of Options or
Stock Purchase Rights after such date of termination, within ninety (90) days
after the date of the exercise) or such longer period as may be agreed to by the
Administrator and the Plan participant and (B) the right terminates when the
shares become publicly traded; and (ii) if the repurchase option gives the
Company the right to repurchase the Shares upon termination as a Service
Provider at the original purchase price for such Shares, then (A) the right to
repurchase at the original purchase price shall lapse at the rate of at least
twenty percent (20%) of the shares per year over five (5) years from the date
the Option or Stock Purchase Right is granted (without respect to the date the
Option or Stock Purchase Right was exercised or became exercisable) and (B) the
right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares within ninety (90) days of termination of
status as a Service Provider (or, in the case of shares issued upon exercise of
Options or Stock Purchase Rights, after such date of termination, within ninety
(90) days after the date of the exercise) or such longer period as may be agreed
to by the Company and the Plan participant.

     23.  Investment Intent. The Company may require a Plan participant, as a
condition of exercising or acquiring stock under any Option or Stock Purchase
Right, (i) to give written assurances satisfactory to the Company as to the
participant's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option or Stock Purchase
Right; and (ii) to give written assurances satisfactory to the Company stating
that the participant is acquiring the stock subject to the Option or Stock
Purchase Right for the participant's own account and not with any present
intention of selling or otherwise distributing the stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (A) the issuance of the shares upon the exercise or acquisition
of stock under the applicable Option or

                                       17
<PAGE>   20

Stock Purchase Right has been registered under a then currently effective
registration statement under the Securities Act or (B) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

     24.  Governing Law. The validity and enforceability of this Plan shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to otherwise governing principles of conflicts of law.

                                       18
<PAGE>   21

                                  * * * * * * *

               I hereby certify that the Plan was duly adopted by the Board of
Directors of diaDexus, Inc. on __________ ___, 2001.

               Executed at __________, _____________ on this ____ day of
__________, 2001.

                                      Name:___________________________________

                                      Title:__________________________________

                                  * * * * * * *

               I hereby certify that the foregoing Plan was approved by the
stockholders of diaDexus, Inc. on _____________.

               Executed at __________, ____________ on this ____ day of
___________, 2001.

                                    __________________________________________
                                    Secretary<PAGE>   1
                                                                    Exhibit 10.4

                                 DIADEXUS, INC.

                        2001 EMPLOYEE STOCK PURCHASE PLAN

     1.   Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

     2.   Definitions.

          (a) "Board" shall mean the Board of Directors of the Company.

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

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

          (d) "Company" shall mean diaDexus, Inc., a Delaware corporation, and
any successor by merger, consolidation or otherwise.

          (e) "Compensation" shall mean all base straight time gross earnings
and commissions, exclusive of payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses and other compensation.

          (f) "Designated Subsidiary" shall mean any Subsidiary which has been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan. The Board may designate, or terminate the designation
of, a subsidiary as a Designated Subsidiary without the approval of the
stockholders of the Company.

          (g) "Employee" shall mean any individual who is an Employee of the
Company or a Designated Subsidiary for tax purposes whose customary employment
with the Company or Designated Subsidiary is at least twenty (20) hours per
week. For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company or Designated Subsidiary. Where the period of
leave exceeds 90 days and the individual's right to reemployment is not
guaranteed either by statute or by contract, the employment relationship shall
be deemed to have terminated on the 91st day of such leave.

          (h) "Enrollment Date" shall mean the first Trading Day of each
Offering Period.

          (i) "Exercise Date" shall mean the last Trading Day of each Purchase
Period.

<PAGE>   2

          (j)  "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:

               (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the purchase, as reported in The Wall
Street Journal or such other source as the Board deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date prior to the purchase as reported in The Wall Street Journal or such
other source as the Board deems reliable;

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

               (iv) For purposes of the first Offering Period under the Plan,
the Fair Market Value shall be the initial price to the public as set forth in
the final prospectus included within the registration statement in Form S-1
filed with the Securities and Exchange Commission for the initial public
offering of the Company's Common Stock (the "Registration Statement").

          (k)  "Offering Periods" shall mean the periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after September 1 and
March 1 of each year and terminating on the last Trading Day in the periods
ending twenty-four (24) months later; provided, however, that the first Offering
Period under the Plan shall commence with the day prior to the first Trading Day
on or after the Securities and Exchange Commission declares the Company's
Registration Statement effective (the "IPO Effective Date") and shall end on the
last Trading Day on or before March 1, 2003. The duration and timing of Offering
Periods may be changed pursuant to Section 4 of this Plan.

          (l) "Plan" shall mean this 2001 Employee Stock Purchase Plan.

          (m) "Purchase Period" shall mean the approximately six month period
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date. Notwithstanding the
foregoing, the first Purchase Period with respect to the initial Offering Period
under the Plan shall end on the last Trading Day on or before September 1, 2001.

                                       2
<PAGE>   3

          (n) "Purchase Price" shall mean 85% of the Fair Market Value of a
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be adjusted by the Board
pursuant to Section 20.

          (o) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which have not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.

          (p) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

          (q) "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.

     3.   Eligibility.

          (a) Any Employee who shall be employed by the Company on a given
Enrollment Date for an Offering Period shall be eligible to participate in the
Plan during such Offering Period, subject to the requirements of Section 5 and
the limitations imposed by Section 423(b) of the Code.

          (b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.

     4.   Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after March 1 and September 1 each year, or on such other
dates as the Board shall determine, and continuing thereafter until terminated
in accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the day prior to the first Trading Day
on or after the date on which the Securities and Exchange Commission declares
the Company's Registration Statement effective and shall end on the last Trading
Day on or before March 1, 2003. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

                                       3
<PAGE>   4

     5.   Participation.

          (a) Each eligible Employee who is employed by the Company or a
Designated Subsidiary on the calendar day immediately preceding the IPO
Effective Date shall automatically become a participant in the Plan with respect
to the first Offering Period. Each such participant shall be granted an option
to purchase shares of Common Stock and shall be enrolled in such first Offering
Period to the extent of twenty percent (20%) of his or her Compensation for the
pay days during the Offering Period, commencing as soon as administratively
practicable after the first day of such Offering Period (or, if less, the
maximum amount of contributions permitted to be made by such participant for
such Offering Period by payroll deduction under the terms of this Plan). Such
contributions may be made by a lump sum cash payment not later than ten (10)
calendar days before each Exercise Date of such Offering Period, and each such
payment may be made in an amount not exceeding twenty percent (20%) of such
participant's Compensation for the paydays occurring during such Offering Period
and occurring prior to such lump sum payment, provided, however, that such
participant shall not be required to make such lump sum cash payments, or
exercise all or any portion of such option to purchase shares of Common Stock by
making such lump sum payments. Each such participant may, during the period
designated from time to time by the Board or its delegate for such purpose,
elect to make such contributions (or a lesser amount of contributions) for such
Offering Period by payroll deductions in accordance with Section 6, in lieu of
making contributions in such lump sum cash payments under this subsection (a),
or may elect to make no contributions for such Offering Period; provided,
however, that, to make contributions by payroll deductions, such participant
must complete the form of subscription agreement provided by the Company for the
first Offering Period under this Plan. If (i) during such Offering Period, such
a Participant elects to make contributions by payroll deduction, or elects to
make no contributions for such Offering Period, or (ii) on or prior to the tenth
(10th) calendar day before the last Exercise Date of such Offering Period, such
a participant fails to make any lump sum cash payment, such participant shall be
deemed to have elected not to make contributions by lump sum payment with
respect to such first Offering Period. A participant may not make contributions
by lump sum payment for any Offering Period other that the first Offering
Period. Following the first Offering Period, an eligible Employee may become a
participant in the Plan by completing a subscription agreement authorizing
payroll deductions in the form of Exhibit A to this Plan and filing it with the
Company's payroll office fifteen days (or such shorter or larger period as may
be determined by the Board or its delegate, in its sole discretion) prior to the
applicable Enrollment Date.

          (b) Except as provided in Subsection (a), payroll deductions for a
participant shall commence on the first payroll following the Enrollment Date
and shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the participant as
provided in Section 10 hereof.

     6.   Payroll Deductions.

          (a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount

                                       4
<PAGE>   5

from one percent (1%) to twenty percent (20%) of the Compensation which he or
she receives on each payday during the Offering Period.

          (b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.

          (c) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Offering Period by completing or filing with
the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

          (d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.

          (e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.

     7.   Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than
100,00 shares of the Company's Common Stock (subject to any adjustment pursuant
to Section 19) and during each Purchase Period more than 25,000 shares of the
Company's Common Stock (subject to any adjustment pursuant to Section 19), and
provided further that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 12 hereof. The Board may, for future Offering
Periods, increase or decrease, in its absolute

                                       5
<PAGE>   6

discretion, the maximum number of shares of the Company's Common Stock an
Employee may purchase during each Purchase Period of such Offering Period.
Exercise of the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall expire
on the last day of the Offering Period.

     8.   Exercise of Option.

          (a) Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

          (b) If the Board determines that, on a given Exercise Date, the number
of shares with respect to which options are to be exercised may exceed (i) the
number of shares of Common Stock that were available for sale under the Plan on
the Enrollment Date of the applicable Offering Period, or (ii) the number of
shares available for sale under the Plan on such Exercise Date, the Board may in
its sole discretion (x) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20 hereof. The Company may make pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date.

     9.   Deposit of Shares. As promptly as practicable after each Exercise Date
on which a purchase of shares occurs, the Company may arrange for the deposit,
into each participant's account with any broker designated by the Company to
administer this Plan, of the number of shares purchased upon exercise of his or
her option.

     10.  Withdrawal.

                                       6
<PAGE>   7

          (a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.

          (b) A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

     11.  Termination of Employment.

     Upon a participant's ceasing to be an Employee, for any reason, he or she
shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.

     12.  Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

     13.  Stock.

          (a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 350,000 shares, plus an annual increase to be added on each anniversary
date of the adoption of the Plan during the term of the Plan equal to the least
of (i) 475,000 shares, (ii) 1.5% of the Company's outstanding shares on such
date or (iii) a lesser amount determined by the Board.

          (b) The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.

          (c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.

                                       7
<PAGE>   8

     14.  Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

     15.  Designation of Beneficiary.

          (a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.

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

     16.  Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

     17.  Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

     18.  Reports. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

                                       8
<PAGE>   9

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

          (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the Reserves, the maximum number of shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.

          (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

          (c) Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.

     20.  Amendment or Termination.

                                       9
<PAGE>   10

          (a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its shareholders. Except as provided
in Section 19 and this Section 20 hereof, no amendment may make any change in
any option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain shareholder approval in such a manner
and to such a degree as required.

          (b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.

          (c)  In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the Board
may, in its discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence including, but
not limited to:

               (i) altering the Purchase Price for any Offering Period including
an Offering Period underway at the time of the change in Purchase Price;

               (ii) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action; and

               (iii) allocating shares.

     Such modifications or amendments shall not require stockholder approval or
the consent of any Plan participants.

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

                                       10
<PAGE>   11

     22.  Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

     As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

     23.  Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.

     24.  Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

     25.  Equal Rights and Privileges. All eligible Employees of the Company (or
of any Designated Subsidiary) will have equal rights and privileges under this
Plan so that this Plan qualifies as an "employee stock purchase plan" within the
meaning of Section 423 of the Code or applicable Treasury regulations
thereunder. Any provision of this Plan that is inconsistent with Section 423 or
applicable Treasury regulations will, without further act or amendment by the
Company or the Board, be reformed to comply with the equal rights and privileges
requirement of Section 423 or applicable Treasury regulations.

                                       11

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