EXHIBIT 99.5
FORM OF ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Issuance Agreement dated ________
(the "Issuance Agreement") by and between Advanced Tissue Sciences, Inc. (the
"Corporation") and ___________________ ("Participant") evidencing the stock
issuance on such date to Participant under the terms of the Corporation's
1997 Stock Incentive Plan, and such provisions shall be effective
immediately. All capitalized terms in this Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to such terms in
the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Repurchase Right is assigned to the
successor entity (or parent company) in connection with a Corporate
Transaction, no accelerated vesting of the Purchased Shares shall occur upon
such Corporate Transaction, and the Repurchase Right shall continue to remain
in full force and effect in accordance with the provisions of the Issuance
Agreement. Accordingly, the Participant shall, over Participant's period of
Service following the Corporate Transaction, continue to vest in the Purchased
Shares in one or more installments in accordance with the provisions of the
Issuance Agreement.
2. No accelerated vesting of the Purchased Shares shall occur
upon a Change in Control, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. Accordingly, the Participant shall, over Participant's period of
Service following the Change in Control, continue to vest in the Purchased
Shares in one or more installments in accordance with the provisions of the
Issuance Agreement.
3. Immediately upon an Involuntary Termination of Participant's
Service within eighteen (18) months following the Corporate Transaction or
Change in Control, the Repurchase Right shall terminate automatically, and all
the Purchased Shares shall vest in full.
4. For purposes of this Addendum, the following definitions
shall be in effect:
An INVOLUNTARY TERMINATION shall mean the termination of
Participant's Service by reason of:
(i) Participant's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation following (A)
a change in Participant's position with the Corporation (or Parent or
Subsidiary employing Participant) which materially reduces Participant's
level of responsibility, (B) a reduction in Participant's level of
compensation (including base salary, fringe benefits and target bonus
under any corporate-performance based bonus or incentive programs) by
more than fifteen percent (15%) or (C) a relocation of Participant's
place of employment by more than fifty (50) miles, provided and only
if such change, reduction or relocation is effected by the Corporation
without Participant's consent.
A CHANGE IN CONTROL shall be deemed to occur in the event of a
change in ownership or control of the Corporation effected through either of
the following transactions:
(i) 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 Securities Exchange Act of
1934, as amended) 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 which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a
period of twenty-four (24) 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.
MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by the Participant of confidential information or trade secrets of
the Corporation (or any Parent or Subsidiary), or any other intentional
misconduct by the Participant adversely affecting the business or affairs of
the Corporation (or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of the Participant or other person in
the Service of the Corporation (or any Parent or Subsidiary).
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IN WITNESS WHEREOF, Advanced Tissue Sciences, Inc. has caused this
Addendum to be executed by its duly-authorized officer as of the Effective
Date specified below.
ADVANCED TISSUE SCIENCES, INC.
By:_____________________________
Title:__________________________
EFFECTIVE DATE:________________, 199_
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