Exhibit 99.6
MATRIX PHARMACEUTICAL, INC.
STOCK ISSUANCE AGREEMENT
AGREEMENT made this _____ day of June 1997, by and between Matrix
Pharmaceutical, Inc., a Delaware corporation, and _____________________, a
Participant in the Corporation's 1988 Restricted Stock Plan.
All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
1. Purchase. Participant hereby purchases __________ shares of Common
Stock (the "Purchased Shares") pursuant to the provisions of the Shared
Investment Program of the Plan at the purchase price of $_______________________
per share (the "Purchase Price").
2. Payment. Concurrently with the delivery of this Agreement to the
Corporation, Participant shall pay the Purchase Price for the Purchased Shares
by delivering (i) a full-recourse Promissory Note (the "Note") payable to the
Corporation (in the form attached hereto as Exhibit I) and (ii) a Stock Pledge
Agreement (in the form attached hereto as Exhibit II) pursuant to which the
Purchased Shares shall serve as collateral for the payment of the Note.
3. Stockholder Rights. Participant shall have all the rights of a
stockholder (including voting, dividend and liquidation rights) with respect to
the Purchased Shares, subject, however, to the transfer restrictions of this
Agreement. The certificates for the Purchased Shares shall be held by the
Corporation under the Stock Pledge Agreement, and the Participant shall
accordingly deliver to the Corporation a duly-executed Assignment Separate from
Certificate for each certificate representing the Purchased Shares pledged with
the Corporation.
B. TRANSFER RESTRICTIONS
1. Restrictions on Sale. The Participant shall be permitted to sell all
or any portion of Purchased Shares, subject to the following restrictions:
a. The Participant may not sell any portion of the Purchased
Shares before the first anniversary of Purchase Date, except in the event
of the Participant's death, Permanent Disability or other cessation of
Service or the occurrence of a Change in Control. Such restriction shall be
applicable whether or not there is an outstanding balance under the
Participant's Note.
b. The Participant may not sell any portion of the Purchased
Shares while there is any outstanding unpaid balance (principal and accrued
interest) under his or her Note, unless the proceeds realized from the sale
of the Purchased Shares are simultaneously applied first to the payment of
the principal portion of the Note attributable to those shares plus the
accrued and unpaid interest on that principal portion.
c. The Participant shall notify the Corporation's Finance
Department prior to any sale of the Purchased Shares while there is an
unpaid balance outstanding on his or her Note.
2. Restrictive Legend. The stock certificate for the Purchased Shares
shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are
subject to certain transfer restrictions imposed pursuant to that certain
Stock Issuance Agreement between the Corporation and the registered holder
of the shares (or the predecessor in interest to the shares) dated June ,
1997 and may not be sold, assigned, transferred, encumbered or made the
subject of any disposition except in conformity with the terms of that
Stock Issuance Agreement. A copy of such agreement is maintained at the
Corporation's principal corporate offices."
C. SHARED INVESTMENT
To the extent the Purchased Shares are sold by the Participant and the sale
proceeds are to be applied to the payment of his or her Note pursuant to the
requirements of Subsection B.1.b, the following provisions shall apply:
1. Loss on Sale. If the Participant remains in Service until the first
anniversary of the Purchase Date, then the Corporation shall share the Loss (if
any) which the Participant may incur upon the subsequent sale of the Purchased
Shares. The risk of the Loss on the Purchased Shares shall be allocated as
follows:
a. To the extent any portion of the Purchased Shares is sold
before the third anniversary of the Purchase Date, the Participant shall be
responsible for one hundred percent (100%) of the Loss incurred on that
portion of the Purchased Shares.
b. To the extent any portion of the Purchased Shares is sold on
or after the third anniversary of the Purchase Date, the Participant shall
be responsible for only fifty percent (50%) of the Loss on that portion of
the Purchased Shares.
2. Gain on Sale. The Corporation shall be entitled under certain
circumstances to share in the Gain (if any) which the Participant may realize
upon the subsequent sale of the Purchased Shares. The sharing of such Gain on
the Purchased Shares shall be allocated a follows:
a. To the extent any portion of the Purchased Shares is sold
before the second anniversary of the Purchase Date, the Participant shall
only be entitled to receive fifty percent (50%) of the Gain on that portion
of the Purchased Shares, and the remaining fifty percent (50%) of the Gain
shall immediately be paid over to the Corporation.
b. To the extent any portion of the Purchased Shares is sold on
or after the second anniversary of the Purchase Date but before the third
anniversary of such Purchase Date, the Participant shall only be entitled
to receive seventy-five percent (75%) of the Gain on that portion of the
Purchased Shares, and the remaining twenty-five percent (25%) of the Gain
shall immediately be paid over to the Corporation.
c. To the extent any portion of the Purchased Shares is sold on
or after the third anniversary of the Purchase Date, the Participant shall
be entitled to receive one hundred percent (100%) of the Gain on that
portion of the Purchased Shares.
2.
3. Death or Permanent Disability. Should the Participant cease Service
by reason of his or her death or Permanent Disability at any time while there is
an outstanding unpaid balance under his or her Note, then the Participant (or
the representative of his or her estate) may sell all or any portion of the
Purchased Shares, subject only to the restrictions specified in Subsections
B.1.b and B.1.c. Upon the Participant's death, her or his Note shall become
immediately due and payable.
With respect to any Purchased Shares sold after the Participant's
death or Permanent Disability while there is an unpaid balance outstanding under
his or her Note, the Participant shall be not responsible for any Loss incurred
on the sale of those Purchased Shares and shall be entitled to receive one
hundred percent (100%) of any Gain realized on the sale of the Purchased Shares.
This Section 3 shall not be applicable to any sale of the Purchased
Shares effected (i) before the Participant's death or Permanent Disability or
(ii) after the payment of the entire balance owed under his or her Note.
4. Other Cessation of Service. Should the Participant cease Service for
any reason other than death or Permanent Disability, then the following
provisions shall apply:
a. Should such cessation of Service occur before the first
anniversary of the Purchase Date, then (i) all sales of the Purchased
Shares shall remain subject to the restrictions specified in Subsections
B.1.b. and B.1.c. of this Agreement, (ii) the Participant shall be
responsible for one hundred percent (100%) of any Loss incurred on the sale
of the Purchased Shares, whether the sale is effected before or after his
or her Note is paid, and (iii) the Participant shall be entitled to receive
only fifty percent (50%) of any Gain realized on any sale of the Purchased
Shares, and the remaining fifty percent (50%) of that Gain shall be paid to
the Corporation simultaneously with the sale.
b. Should such cessation of Service occur on or after the first
anniversary of the Purchase Date, all terms and conditions of this
Agreement shall apply to the sale of the Purchased Shares, including the
transfer restrictions of Subsections B.1.b and B.1.c and the Gain/Loss
sharing provisions of Subsections C.1. and C.2. of this Agreement.
5. Change in Control
Immediately prior to the consummation of a Change in Control, the
restriction on the sale of the Purchased Shares specified in Subsections B.1.a
of this Agreement shall lapse. In addition, if the Participant remains in
Service through the effective date of such Change in Control, then the following
special provisions shall be in effect:
a. The Participant shall be deemed to have continued in Service
until the first anniversary of the Purchase Date (should the Change in
Control occur before the first anniversary of the Purchase Date).
b. The Participant shall be deemed to have sold the Purchased
Shares after the third anniversary of the Purchase Date for purposes of
Subsections C.1. and C.2. of this Agreement (should the sale of the
Purchased Shares occur before the third anniversary of the Purchase Date).
6. Risk Sharing Payment. Should the Participant sell any portion of the
Purchased Shares at a Loss while the balance of his or her Note attributable to
those shares remains unpaid and
3.
outstanding, then the Corporation shall assume the portion (if any) of that Loss
for which the Participant is not responsible pursuant to the loss sharing
provisions of Subsection C.1. or C.3. The Corporation shall satisfy such
obligation by delivering a check payable to the Participant in an amount equal
to that portion ("Risk Sharing Payment") simultaneously with the Participant's
payment of the portion of the unpaid balance of his or her Note attributable to
the Purchased Shares which are the subject of that sale. The Corporation
anticipates that the Risk Sharing Payment will constitute compensation income to
the Participant, subject to the Corporation's collection of all applicable
income and employment withholding taxes. The Corporation also anticipates that
the Risk Sharing Payment will be deductible for federal income tax purposes as
compensation in the taxable year in which such payment is made. However, should
the Corporation determine that it will be not entitled to a current income tax
deduction for the Risk Sharing Payment by reason of the limitations imposed
under Code Section 162(m) and the related Treasury Regulations, then the
Corporation shall not make the Risk Sharing Payment to the Participant in
connection with the repayment of his or her Note. Instead the Participant shall
be entitled to receive deferred compensation equal to the Risk Sharing Payment
at a time and in a form which will allow the Corporation to obtain an income tax
deduction for that payment. The Plan Administrator shall have the sole
discretion to set the terms and conditions on which such a deferred compensation
arrangement is to be implemented.
D. GENERAL PROVISIONS
1. No Employment or Service Contract. Nothing in this Agreement or in
the Plan shall confer upon Participant any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Participant) or of Participant, which rights are hereby expressly
reserved by each, to terminate Participant's Service at any time for any reason,
with or without cause.
2. Notices. Any notice required to be given under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.
3. No Waiver. A waiver of any breach or condition of this Agreement
shall not be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.
4. Participant Undertaking. Participant hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Participant or the Purchased
Shares pursuant to the provisions of this Agreement.
5. Agreement is Entire Contract. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the terms of the Plan. This Agreement
may be executed in counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules.
7. Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Corporation and its successors and
assigns and upon Participant, Participant's assigns and the legal
representatives, heirs and legatees of Participant's estate, whether or not
4.
any such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first indicated above.
MATRIX PHARMACEUTICAL, INC.
By:____________________________________
Title:_________________________________
Address:_______________________________
_______________________________________
_______________________________________
PARTICIPANT
Address:_______________________________
_______________________________________
5.
APPENDIX
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Issuance Agreement.
B. Board shall mean the Corporation's Board of Directors.
C. Change in Control shall be deemed to occur upon a change in ownership or
control of the Corporation effected through any of the following transactions:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction,
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation,
(iii) the acquisition, directly or indirectly, by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of
the 0000 Xxx) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation's
stockholders, or
(iv) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time such election or nomination was approved
by the Board.
D. Code shall mean the Internal Revenue Code of 1986, as amended.
E. Common Stock shall mean the Corporation's common stock.
F. Corporation shall mean Matrix Pharmaceutical, Inc., a Delaware
corporation.
G. Gain shall mean the excess of (i) the aggregate pre-tax sale proceeds
realized upon the sale of one or more Purchased Shares over (ii) the aggregate
Purchase Price paid for those Purchased Shares.
H. Loss shall mean the excess of (i) the aggregate Purchase Price paid for
one or more Purchased Shares which are subsequently sold by the Participant over
(ii) the aggregate pre-tax sale proceeds realized upon the sale of those
Purchased Shares.
I. Note shall mean the purchase-money promissory note of the Participant
payable to Corporation in connection with the acquisition of the Purchased
Shares.
J. Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
K. Participant shall mean the person to whom the Purchased Shares are
issued under the Shared Investment Program.
L. Permanent Disability shall mean the inability of the Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to
have a continuous duration of twelve (12) consecutive months or more.
M. Plan shall mean the Corporation's 1988 Restricted Stock Plan.
N. Plan Administrator shall mean the Compensation Committee of the Board
acting in its capacity as administrator of the Plan.
O. Purchase Date shall mean the date on which the Participant purchases the
Purchased Shares.
P. Purchase Price shall have the meaning assigned to such term in Paragraph
A.1.
Q. Purchased Shares shall have the meaning assigned to such term in
Paragraph A.1.
R. Service shall mean the Participant's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an employee,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance, a non-employee member
of the board of directors or a consultant.
S. Shared Investment Program shall mean the Shared Investment Program in
effect under the Plan.
T. Stock Pledge Agreement shall mean the agreement between the Corporation
and the Participant pursuant to which the Purchased Shares have been pledged as
security for the Note.
U. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
2.
