1988 Restricted Stock Plan

ARTICLE I...................................................................... 1


GENERAL............................................................... 1


1. PURPOSE OF THE PLAN................................. 1
2. STRUCTURE OF THE PLAN............................... 1
3. ADMINISTRATION OF THE PLAN.......................... 2
4. OPTION GRANTS AND SHARE ISSUANCES................... 2
5. STOCK SUBJECT TO THE PLAN........................... 3


ARTICLE II..................................................................... 4


OPTION GRANT PROGRAM.................................................. 4


1. TERMS AND CONDITIONS OF OPTIONS..................... 4
2. INCENTIVE OPTIONS................................... 7
3. STOCK APPRECIATION RIGHTS........................... 7
4. CORPORATE TRANSACTION............................... 8
5. CANCELLATION AND NEW GRANT OF OPTIONS............... 9
6. EXTENSION OF EXERCISE PERIOD........................ 9


ARTICLE III.................................................................... 10


STOCK ISSUANCE PROGRAM................................................ 10


1. TERMS AND CONDITIONS OF STOCK ISSUANCES............. 10
2. CORPORATE TRANSACTION............................... 12


ARTICLE IV..................................................................... 13


MISCELLANEOUS......................................................... 13


1. LOANS OR INSTALLMENT PAYMENTS ...................... 13
2. AMENDMENT OF THE PLAN AND AWARDS.................... 13
3. EFFECTIVE DATE AND TERM OF PLAN..................... 14
4. USE OF PROCEEDS..................................... 15
5. WITHHOLDING......................................... 15
6. REGULATORY APPROVALS................................ 15
7. NO EMPLOYMENT/SERVICE RIGHTS ....................... 15 2
MATRIX PHARMACEUTICAL, INC.
1988 RESTRICTED STOCK PLAN


(AMENDED THROUGH DECEMBER 14, 1995)


ARTICLE I


GENERAL


1. PURPOSE OF THE PLAN


(a) This 1988 Restricted Stock Plan (the "Plan") is intended to promote the interests of Matrix Pharmaceutical, Inc., a Delaware corporation (the "Corporation"), by providing incentives to eligible individuals to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation and to remain in the employ or service of the Corporation (or its parent or subsidiary corporations).


(b) For purposes of the Plan, the following provisions shall be applicable in determining the parent and subsidiary corporations of the Corporation:


(i) Any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation shall be
considered to be a PARENT corporation of the Corporation, provided each
such 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.


(ii) Each corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation shall be
considered to be a SUBSIDIARY of the Corporation, provided each such
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. STRUCTURE OF THE PLAN


The Plan shall be divided into two separate components: the Option Grant Program specified in Article II and the Stock Issuance Program specified in Article III. Under the Option Grant Program, eligible individuals may be granted options to purchase shares of the Corporation's Common Stock at a discount of up to 15% of the fair market value of such shares on the grant date.


The Stock Issuance Program will allow eligible individuals to purchase shares of the Corporation's Common Stock at discounts from the fair market value of such shares of up to 15%. Such shares may be issued as fully-vested shares or as shares to vest over time. Issuances may be effected either through direct purchases or through the exercise of intervening option grants.


Unless the context clearly indicates otherwise, the provisions of Articles I and IV of the Plan shall apply to both the Option Grant Program and the Stock Issuance Program and shall accordingly govern the interests of all individuals in the Plan. 3
3. ADMINISTRATION OF THE PLAN


(a) The Plan shall be administered by a committee ("Committee") of two (2) or more members of the Corporation's Board of Directors appointed by the Board. No Board member shall be eligible to serve on the Committee if such individual has, within the twelve (12)-month period immediately preceding the date he or she is to be appointed to the Committee, received an option grant or stock issuance under this Plan or any other stock plan of the Company (or any parent or subsidiary corporation), other than pursuant to the automatic option grant program in effect for non-employee Board members under the Corporation's 1991 Director Stock Option Plan. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time.


(b) The Committee as Plan Administrator shall have full power and authority (subject to the express provisions of the Plan) to establish such rules and regulations as it may deem appropriate for the proper administration of the Plan and to make such determinations under the Plan and any outstanding option grants or share issuances as it may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all parties with an interest in the Plan.


(c) Service on the Committee shall constitute service as a Board member, and members of the Committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on the Committee. No member of the Committee shall be liable for any act or omission made in good faith with respect to the Plan or any option granted under the Plan.


4. OPTION GRANTS AND SHARE ISSUANCES


(a) The persons eligible to receive share issuances under the Stock Issuance Program ("Participant") and/or option grants pursuant to the Option Grant Program ("Optionee") are as follows:


(i) key employees (including officers) of the Corporation (or
its parent or subsidiary corporations) who render services which
contribute to the success and growth of the Corporation (or its parent
or subsidiary corporations) or which may reasonably be anticipated to
contribute to the future success and growth of the Corporation (or its
parent or subsidiary corporations); and


(ii) those consultants or independent contractors who provide
valuable services to the Corporation (or its parent or subsidiary
corporations).


(b) Non-employee members of the Board shall not be eligible to participate in this Plan or in any other stock option, stock purchase, stock bonus or other stock plan of the Corporation (or its parent or subsidiary corporations). However, non-employee members of the Board shall be eligible to receive automatic option grants pursuant to the provisions of the Corporation's 1991 Director Stock Option Plan.


(c) The Plan Administrator shall have full authority to determine, (I) with respect to the option grants made under the Plan, the number of shares to be covered by each grant, the time or times at which each granted option is to become exercisable, the option price, and the maximum term for which the option may remain outstanding and (II) with respect to share issuances under the Stock Issuance Program, the number of shares to be issued to each Participant, the vesting schedule (if any) to be applicable to the issued shares, and the purchase price to be paid by the individual for such shares.


(d) The Plan Administrator shall have the absolute discretion to grant options in accordance with Article II of the Plan and/or to effect share issuances in accordance with Article III of the Plan.


2. 4
5. STOCK SUBJECT TO THE PLAN


(a) The stock issuable under the Plan shall be shares of the Corporation's authorized but unissued or reacquired common stock ("Common Stock"). The maximum number of shares issuable over the term of the Plan shall not exceed 2,869,048 shares*, subject to adjustment as provided in Section 5(b). Should an outstanding option under the Plan expire or terminate for any reason prior to exercise in full, the shares subject to the portion of the option not so exercised will be available for subsequent option grants and share issuances under the Plan. In no event may any one individual participating in the Plan be granted stock options, separately exercisable stock appreciation rights and direct stock issuances for more than 750,000 shares of Common Stock in the aggregate over the remaining term of the Plan, subject to adjustment from time to time in accordance with paragraph 5(b) of this Article I. For purposes of such limitation, no stock options, stock appreciation rights or direct stock issuances granted prior to January 1, 1994 shall be taken into account. Shares subject to an option (or portion of an option) surrendered or cancelled in accordance with Section 3 of Article II of the Plan and shares repurchased by the Corporation pursuant to its repurchase rights under the Plan shall not be available for subsequent option grants or share issuances under the Plan.


(b) If any change is made to the Common Stock issuable under the Plan by reason of any stock dividend, stock split, combination of shares, recapitalization, or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, then appropriate adjustments will be made to (i) the number and/or class of shares issuable under the Plan, (ii) the maximum number and/or class of shares for which stock options, separately exercisable stock appreciation rights and direct stock issuances may be granted to any one participant in the aggregate after December 31, 1993, and (iii) the number and/or class of shares and the option price per share in effect under each outstanding option in order to prevent the dilution or enlargement of rights and benefits under such options. The adjustments determined by the Plan Administrator will be final, binding and conclusive.


(c) Common Stock issuable under the Plan, whether under the Option Grant Program or the Stock Issuance Program, may be subject to such restrictions on transfer, repurchase rights or other restrictions as are determined by the Plan Administrator.


- -------- *Adjusted to reflect the 2.1-for-1 reverse stock split of the outstanding Common Stock effected in January 1992. Reflects an 850,000-share increase authorized for issuance under the Plan approved by the Board on December 14, 1995. From and after February 29, 1996, not more than 2,324,907 shares may be issued under the Plan.


3. 5
ARTICLE II


OPTION GRANT PROGRAM


1. TERMS AND CONDITIONS OF OPTIONS


Options granted pursuant to the Plan shall be authorized by action of the Plan Administrator and may, at the Plan Administrator's discretion, be either incentive stock options qualified under Internal Revenue Code Section 422 ("Incentive Options") or non-statutory options which do not so qualify. Individuals who are not employees of the Corporation or its parent or subsidiary corporations may only be granted non-statutory options. Each granted option shall be evidenced by one or more instruments in the form approved by the Plan Administrator; provided, however, that each such instrument shall comply with the terms and conditions specified below. Each instrument evidencing an Incentive Option shall, in addition, be subject to the applicable provisions of Section 2 of this Article II.


(a) Option Price.


(1) The option price per share shall be fixed by the Plan
Administrator, but in no event shall the option price per share be less
than eighty-five percent (85%) of the fair market value of a share of
Common Stock on the date of the option grant.


(2) The option price will become immediately due upon exercise
of the option and, subject to the provisions of Article IV, Section 1
and the instrument evidencing the grant, will be payable in one of the
following alternative forms:


(A) full payment in cash or check payable to the
Corporation; or


(B) full payment in shares of Common Stock held by
the Optionee for the requisite period necessary to avoid a
charge to the Corporation's earnings for financial reporting
purposes and valued at fair market value on the Exercise Date
(as such term is defined below); or


(C) full payment in a combination of shares of Common
Stock held by the Optionee for the requisite period necessary
to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at fair market value on the
Exercise Date and cash or check payable to the Corporation; or


(D) full payment through a broker-dealer sale and
remittance procedure pursuant to which the Optionee (I) shall
provide irrevocable written instructions to a designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover
the aggregate option price payable for the purchased shares
plus all applicable Federal and State income and employment
taxes required to be withheld by the Corporation in connection
with such purchase and (II) shall provide written directives
to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to
complete the sale transaction.


4. 6
For purposes of this subsection (a)(2), the Exercise Date shall be the date on which written notice of the option exercise is delivered to the Corporation. Except to the extent the sale and remittance procedure is utilized in connection with the exercise of the option, payment of the option price for the purchased shares must accompany such notice.


(3) For purposes of subsection (1) above (and for all other valuation purposes under the Plan), the fair market value of a share of Common Stock on any relevant date under the Plan will be determined in accordance with the following provisions:


(A) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange but is traded on the
Nasdaq National Market System, the fair market value will be
the closing selling price of one share of Common Stock on the
date in question, as such price is reported by the National
Association of Securities Dealers through the Nasdaq National
Market System or any successor system. If there is no reported
closing selling price for the Common Stock on the date in
question, then the closing selling price on the last preceding
date for which such quotation exists shall be determinative of
fair market value.


(B) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair
market value will be the closing selling price of one share of
Common Stock on the date in question on the stock exchange
determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted on
such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market
value will be the closing selling price on the exchange on the
last preceding date for which such quotation exists.


(b) Term and Exercise of Options. Each option granted under the Plan will be exercisable at such time or times and during such period as is determined by the Plan Administrator and set forth in the stock option agreement evidencing such grant. However, no option granted under this Plan will have a term in excess of ten (10) years measured from the grant date. During the lifetime of the Optionee, the option will be exercisable only by the Optione ...