As filed with the Securities and Exchange Commission on December 31, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ARONEX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 76-0196535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3400 Research Forest Drive
The Woodlands, Texas 77381
(Address of Principal Executive Offices) (Zip Code)
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
James M. Chubb, Ph.D.
Aronex Pharmaceuticals, Inc.
3400 Research Forest Drive
The Woodlands, Texas 77381
(Name and address of agent for service)
(281) 367-1666
(Telephone number, including area code, of agent for service)
---------------------------
copy to:
Jeffrey L. Wade
Andrews & Kurth L.L.P.
2170 Buckthorne Place, Suite 150
The Woodlands, Texas 77380
(713) 220-4801
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Amount to Offering Price Aggregate Amount of
Title of Securities to be Registered be Registered Per Share(1) Offering Price(1) Registration Fee
<S> <C> <C> <C> <C>
- ---------------------------------------- --------------- ---------------- -------------------- --------------------
Common Stock, par value $0.001 per share 250,000 Shares $9.75 $2,437,500 $739
======================================== =============== ================ ==================== ====================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, based upon the average of the high and low prices
reported on The Nasdaq National Market of the Registrant's Common Stock
on December 27, 1996, pursuant to Rule 457(c) and (h).
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Aronex Pharmaceuticals, Inc. (the "Company") incorporates herein by
reference the following documents as of their respective dates as filed with the
Securities and Exchange Commission (the "Commission"):
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, as amended.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996, and September 30, 1996.
3. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed April 23, 1992, including any
amendments and reports filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of filing
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
registration statement since the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The information required by Item 5 is not applicable to this
registration statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL"), inter
alia, empowers a Delaware corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actually and reasonably incurred in connection with the defense or
settlement of any such threatened, pending or completed action or suit if such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and provided further that
(unless a court of competent jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation. Any such indemnification may
be made only as authorized in each specific case upon a determination by the
stockholders or disinterested directors or by independent legal counsel in a
written opinion that indemnification is proper because the indemnitee has met
the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145. The Company
maintains policies insuring its and its subsidiaries'
II-1
<PAGE>
officers and directors against certain liabilities for actions taken in such
capacities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act").
Article VIII of the Amended and Restated Certificate of Incorporation
of the Company and Article VII of the Bylaws of the Company provide for
indemnification of the directors of the Company to the full extent permitted by
law, as now in effect or later amended. Article VII of the Bylaws also permits
the indemnification to the same extent of officers, employees or agents of the
Company if, and to the extent, authorized by the Board of Directors. In
addition, the Bylaws provide for indemnification against expenses incurred by a
director to be paid by the Company at reasonable intervals in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall be ultimately determined that he is not entitled to be indemnified by
the Company. The Bylaws further provide for a contractual cause of action on the
part of directors of the Company for indemnification claims that have not been
paid by the Company.
The Company also has provided liability insurance for each director and
officer for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers of the Company.
Article VII of the Company's Amended and Restated Certificate of
Incorporation, as amended, limits under certain circumstances the liability of
the Company's directors for a breach of their fiduciary duty as directors. These
provisions do not eliminate the liability of a director (i) for a breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL (relating to the
declaration of dividends and purchase or redemption of shares in violation of
the DGCL) or (iv) for any transaction from which the director derived an
improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Information required by Item 7 is not applicable to this Registration
Statement.
II-2
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
4.1 Amended and Restated Certificate of Incorporation, as amended. Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1996 is incorporated herein by reference.
4.2 Restated Bylaws. Exhibit 3.2 to the Company's Registration Statement
on Form S-1 (No. 33-47418), declared effective by the Commission on
July 10, 1992, is incorporated herein by reference.
4.3 Specimen certificate for shares of Common Stock, par value $.001 per
share. Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1996 is incorporated herein by
reference.
5.1* Opinion of Andrews & Kurth L.L.P., as to the legality of the
securities being registered.
23.1* Consent of Arthur Andersen LLP
23.2* Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* Power of Attorney (set forth on the signature page contained in Part
II of this Registration Statement).
99.1* Aronex Pharmaceuticals, Inc. 1997 Employee Stock Purchase Plan
- ---------------------------
*Filed with this Registration Statement.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
II-3
<PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933,
the Registrant certifies that is has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in The Woodlands, State of Texas on the 30th day of December,
1996.
ARONEX PHARMACEUTICALS, INC.
By: /s/ James M. Chubb
--------------------------------
James M. Chubb
President
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Aronex Pharmaceuticals, Inc. (the "Company") hereby constitutes
and appoints James M. Chubb and Terance A. Murnane, or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file this Registration Statement under the Securities Act of 1933,
as amended, and any or all amendments (including, without limitation,
post-effective amendments), with all exhibits and any and all documents required
to be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same, as fully to all intents and purposes as he
himself might or could do if personally present, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or any of them, or their substitute
or substitutes, may lawfully do or cause to be done.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James M. Chubb President and Director December 30, 1996
- ----------------------------- (Principal Executive Officer)
James M. Chubb
/s/ Terance A. Murnane Controller December 30, 1996
- ----------------------------- (Principal Financial and Accounting Officer)
Terance A. Murnane
/s/ Martin P. Sutter Chairman of the Board of Directors December 30, 1996
- -----------------------------
Martin P. Sutter
Director December , 1996
- -----------------------------
Gabriel Lopez-Berestein
Director December , 1996
- -----------------------------
Donald J. Brenner
/s/ Geoffrey F. Cox Director December 30, 1996
- -----------------------------
Geoffrey F. Cox
/s/ George B. Mackaness Director December 30, 1996
- -----------------------------
George B. Mackaness
Director December , 1996
- -----------------------------
Gregory F. Zaic
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.1 Amended and Restated Certificate of Incorporation, as amended. Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1996 is incorporated herein by reference.
4.2 Restated Bylaws. Exhibit 3.2 to the Company's Registration Statement
on Form S-1 (No. 33-47418), declared effective by the Commission on
July 10, 1992, is incorporated herein by reference.
4.3 Specimen certificate for shares of Common Stock, par value $.001 per
share. Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1996 is incorporated herein by
reference.
5.1* Opinion of Andrews & Kurth L.L.P., as to the legality of the
securities
being registered.
23.1* Consent of Arthur Andersen LLP
23.2* Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* Powerof Attorney (set forth on the signature page contained in Part
II of this Registration Statement).
99.1* Aronex Pharmaceuticals, Inc. 1997 Employee Stock Purchase Plan
- ---------------------------
*Filed with this Registration Statement.
EXHIBIT 5.1
December 31, 1996
Board of Directors
Aronex Pharmaceuticals, Inc.
3400 Research Forest Drive
The Woodlands, Texas 77381
Ladies and Gentlemen:
We have acted as counsel to Aronex Pharmaceuticals, Inc. (the
"Company") in connection with the Company's Registration Statement on Form S-8
(the "Registration Statement") relating to the registration under the Securities
Act of 1933, as amended, of the issuance of up to 250,000 shares (the "Shares")
of the Company's common stock, $0.001 par value (the "Common Stock"), pursuant
to the Aronex Pharmaceuticals, Inc. 1997 Employee Stock Purchase Plan (the
"Plan").
In connection herewith, we have examined copies of such
statutes, regulations, corporate records and documents, certificates of public
and corporate officials and other agreements, contracts, documents and
instruments as we have deemed necessary as a basis for the opinion hereafter
expressed. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with the original documents of all documents submitted to us as
copies. We have also relied, to the extent we deem such reliance proper, upon
information supplied by officers and employees of the Company with respect to
various factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares will, when issued in accordance with
the terms of the Plan, be legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
ANDREWS & KURTH L.L.P.
2365/1096
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of Aronex
Pharmaceuticals, Inc. of our report dated March 7, 1996 included in Aronex
Pharmaceuticals, Inc.'s Form 10-K/A for the year ended December 31, 1995.
ARTHUR ANDERSEN LLP
The Woodlands, Texas
December 31, 1996
EXHIBIT 99.1
ARONEX PHARMACEUTICALS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
(a) The purpose of the Aronex Pharmaceuticals, Inc. 1997 Employee Stock
Purchase Plan (the "Plan") is to provide a means by which employees of Aronex
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and its
"Affiliates" (as defined in subparagraph 1(b)), which are designated as provided
in subparagraph 2(b), may be given an opportunity to purchase stock of the
Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration of
the Plan to a committee, as provided in Subparagraph 2(c). Whether or not the
Board has delegated administration of the Plan to a committee, the Board shall
have the final power to determine all questions of policy and expediency that
may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) to determine when and how rights to purchase stock of
the Company shall be granted and the provisions of each offering
of such rights (which need not be identical);
(ii) to designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan;
(iii) to construe and interpret the Plan and rights granted
under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in
the Plan, in a manner and to the extent it shall deem necessary
or expedient to make the Plan fully effective;
(iv) to amend the Plan as provided in paragraph 13; and
(v) generally, to exercise such powers and to perform such
acts as the Board deems necessary, or expedient to promote the
best interests of the Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration of the Plan is delegated to the Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in the Board
the administrative duties of the Plan.
<PAGE>
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 12 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to rights granted
under the Plan shall not exceed in the aggregate two hundred fifty thousand
(250,000) shares of the Company's common stock (the "Common Stock"). If any
right granted under the Plan shall for any reason terminate without having been
exercised, the Common Stock not purchased under such right shall again become
available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. GRANT OF RIGHTS; OFFERING.
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. If an employee has more than one right outstanding under the Plan,
unless he or she otherwise indicates in agreements or notices delivered
hereunder: (1) each agreement or notice delivered by that employee will be
deemed to apply to all of his or her rights under the Plan, and (2) a right with
a lower exercise price (or an earlier-granted right, if two rights have
identical exercise prices) will be exercised to the fullest possible extent
before a right with a higher exercise price (or a later-granted right, if two
rights have identical exercise prices) will be exercised. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs 5
through 8, inclusive.
5. ELIGIBILITY.
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is at least 20 hours per week, and at least five
(5) months per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering, which coincides with the day on which such person becomes an eligible
employee occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including
determination of the exercise price of such right;
(ii) the Offering Period for such right shall begin on its
Offering Date and end simultaneously with the end of such
Offering; and
(iii) the Board or the Committee may provide that if such
person first becomes an eligible employee within a specified
period of time before the end of the Offering, he or she will not
receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights under
the Plan if, immediately after any such rights are granted, such employee owns
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or of an Affiliate. For purposes of
this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.
<PAGE>
(d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of the fair market value of such stock (determined at
the time such rights are granted) for each calendar year in which such rights
are outstanding at any time.
(e) Officers of the Company and any designated Affiliate shall be
eligible to participate in Offerings under the Plan, provided, however, that the
Board may provide in an Offering that certain employees who are highly
compensated employees within the meaning of Section 423(b)(4)(D) of the Code
shall not be eligible to participate.
6. RIGHTS; PURCHASE PRICE.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to the
number of shares of Common Stock of the Company purchasable with a percentage
designated by the Board or the Committee not exceeding fifteen percent (15%) of
such employee's Earnings (as defined in Section 7(a)) during the period which
begins on the Offering Date (or such later date as the Board or the Committee
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than 12 months after the Offering Date
(the "Offering Period"). In connection with each Offering made under this Plan,
the Board or the Committee shall specify a maximum number of shares which may be
purchased by any employee as well as a maximum aggregate number of shares which
may be purchased by all eligible employees pursuant to such Offering. In
addition, in connection with each Offering which contains more than one
"Purchase Date" (as defined in the Offering), the Board or the Committee may
specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Purchase Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Purchase Date.
7. PARTICIPATION; WITHDRAWAL; TERMINATION.
(a) An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time specified in
the Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to the maximum percentage specified by the
Board or the Committee of such employee's "Earnings" (as hereinafter defined)
during the Offering Period. "Earnings" is defined as the total compensation paid
to an employee, including all salary, wages (including amounts elected to be
deferred by the employee, that would otherwise have been paid, under any cash or
deferred arrangement established by the Company), overtime pay, commissions,
bonuses, and other remuneration paid directly to the employee, but excluding
profit sharing, the cost of employee benefits paid for the Company, education or
tuition reimbursements, imputed income arising under any Company group insurance
or benefit program, traveling expenses, business and moving expense
reimbursements, income received in connection with stock options, contributions
made by the Company under any employee benefit plan, and similar items of
compensation. The payroll deductions made for each participant shall be credited
to an account for such participant under the Plan and shall be deposited with
the general funds of the Company. A participant may reduce, increase or begin
such payroll deductions after the beginning of any Offering Period only as
provided for in the Offering. A participant may make additional payments into
his or her account only if specifically provided for in the Offering and only if
the participant has not had the maximum amount withheld during the Offering
Period.
(b) At any time during an Offering Period, a participant may terminate
his or her payroll deductions under the Plan and may withdraw from the Offering
by delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Offering Period except as provided by the Board or the Committee in the
Offering. Upon such withdrawal from the Offering by a participant, the Company
shall distribute to such
<PAGE>
participant all of his or her accumulated payroll deductions (reduced to the
extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participant's
interest in that Offering shall be automatically terminated. A participant's
withdrawal from an Offering will have no effect upon such participant's
eligibility to participate in any other Offerings under the Plan but such
participant will be required to deliver a new participation agreement in order
to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company and any designated Affiliate, for any reason, and the Company
shall distribute to such terminated employee all of his or her accumulated
payroll deductions (reduced to the extent, if any, such deductions have been
used to acquire stock for the terminated employee), under the Offering, without
interest.
(d) Rights granted under the Plan shall not be transferable, and shall
be exercisable only by the person to whom such rights are granted.
8. EXERCISE.
(a) On each Purchase Date, each participant's accumulated payroll
deductions and other additional payments specifically provided for in the
Offering (without any increase for interest) will be applied to the purchase of
whole shares of stock of the Company, up to the maximum number of shares
permitted pursuant to the terms of the Plan and the applicable Offering, at the
purchase price specified in the Offering. No fractional shares shall be issued
upon the exercise of rights granted under the Plan. The amount, if any, of
accumulated payroll deductions remaining in each participant's account after the
purchase of shares which is less than the amount required to purchase one share
of stock on the final Purchase Date of an Offering shall be held in each such
participant's account for the purchase of shares under the next Offering under
the Plan in which the participant enrolled, unless (i) the participant withdraws
from such next Offering under the Plan in which the participant is enrolled,
(ii) such participant withdraws from such next Offering, as provided in
subparagraph 7(b), or (iii) the participant is no longer eligible to be granted
rights under the Plan, as provided in paragraph 5, in which case such amount
shall be distributed to the participant after said final Purchase Date, without
interest. The amount, if any, of accumulated payroll deductions remaining in any
participant's account after the purchase of shares which is equal to the amount
required to purchase a whole share of stock on the final Purchase Date of an
Offering shall be distributed in full to the participant after such Purchase
Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). If on a Purchase Date of any Offering hereunder the Plan is
not so registered, no rights granted under such Offering shall be exercised on
said Purchase Date and the Purchase Date shall be delayed until the Plan is
subject to such an effective registration statement, except that the Purchase
Date shall not be delayed more than two (2) months and the Purchase Date shall
in no event be more than 12 months from the Offering Date. If on the Purchase
Date of any Offering hereunder, as delayed to the maximum extent permissible,
the Plan is not registered, no rights granted under such Offering shall be
exercised and all payroll deductions accumulated during the Offering Period
(reduced to the extent, if any, such deductions have been used to acquire stock)
shall be distributed to the participants, without interest.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
<PAGE>
11. RIGHTS AS A STOCKHOLDER.
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until the participant's shareholdings acquired upon
exercise of rights hereunder are recorded in the books of the Company.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
rights will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion (i) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (ii) such rights may
continue in full force and effect, or (iii) participants' accumulated payroll
deductions may be used to purchase Common Stock immediately prior to the
transaction described above and the participants' rights under the ongoing
Offering terminated.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within 12 months before or after the adoption of the amendment,
where the amendment will:
(i) increase the number of shares reserved for rights under
the Plan;
(ii) modify the provisions as to eligibility for
participation in the Plan (to the extent such modification
requires stockholder approval in order for the Plan to obtain
employee stock purchase plan treatment under Section 423 of the
Code or to comply with the requirements of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended ("Rule
16b-3")); or
(iii) modify the Plan in any way if such modification
requires stockholder approval in order for the Plan to obtain
employee stock purchase plan treatment under Section 423 of the
Code or to comply with the requirements of Rule 16b-3.
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.
(b) Rights and obligations under any rights granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom such rights were granted or except as
necessary to comply with any laws or governmental regulation.
14. 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 a purchase under
the Offering but prior to delivery to him 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 the end of an Offering.
<PAGE>
(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.
15. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on December 31, 2006. No rights may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom such rights were granted or
except as necessary to comply with any laws or governmental regulation.
16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
rights granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company.
<PAGE>
ARONEX PHARMACEUTICALS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
FORM OF ENROLLMENT/CHANGE/WITHDRAWAL NOTICE
(Please type or use ballpoint pen and print clearly)
I. ENROLLMENT AND PAYROLL DEDUCTION PERCENTAGE
II. CHANGE IN PAYROLL DEDUCTION PERCENTAGE
III. ELECTION TO WITHDRAW
EMPLOYEE DATA:
Shares purchased under Aronex Pharmaceuticals, Inc. (the "Company") 1997
Employee Stock Purchase Plan (the "Plan") will be registered as shown below.
Name:
-------------------------------------------------------------------------
Last First M.I.
Address:
-------------------------------------------------------------------------
Street City State or Country Zip
Social Security No. ____________________ Date of Hire _______________
SECTION I - ENROLLMENT & PAYROLL DEDUCTION PERCENTAGE
|_| I wish to participate in the Plan and offerings thereunder and hereby
authorize payroll deductions as indicated below.
Percentage of base pay to be deducted:
|_| |_| |_| |_| |_| |_| |_|
1% 2% 3% 4% 5% 6% 7%
|_| |_| |_| |_| |_| |_| |_| |_|
8% 9% 10% 11% 12% 13% 14% 15%
I understand that deductions will begin as soon as permitted under the
Plan and the applicable Offering and that my participation in the Plan will
continue as set forth in any applicable Offering under the Plan until such time
as I elect to withdraw from the Plan.
In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Plan:
<PAGE>
Name: (Please Print)
---------------------------------------------------------
rst) (Middle) (Last)
Relationship:
---------------------------------------------------------
--------------------------------------------------------
(Address)
SECTION II - CHANGE IN PAYROLL DEDUCTION PERCENTAGE
|_| I wish to change my current payroll deduction percentage to the following
indicated percentage:
|_| |_| |_| |_| |_| |_| |_| |_|
0% 1% 2% 3% 4% 5% 6% 7%
|_| |_| |_| |_| |_| |_| |_| |_|
8% 9% 10% 11% 12% 13% 14% 15%
SECTION III - ELECTION TO WITHDRAW FROM PLAN
|_| I wish to stop my payroll deductions and to withdraw from the Plan
effective immediately.
I understand that all of my accumulated deductions (reduced to the
extent such deductions have been used to acquire stock) will be distributed to
me without interest. I understand that I must complete a new enrollment form to
rejoin the Plan and that I may only rejoin the Plan at the beginning of the next
Offering.
I hereby authorize the Company to enroll me in the Plan, to make
regular deductions in the amount indicated above, and to purchase shares for me.
If I have elected to withdraw from the Plan, I authorize the Company to
distribute my accumulated deductions to me. Any authorization for payroll
deductions will continue until cancelled or changed by me on a form prescribed
by the Company. Deductions will cease upon the termination of my employment or
termination of the Plan or if I have elected to withdraw from the Plan. I agree
to be bound by the terms and provisions of the Plan, as described in the
official text of the Plan, and any applicable Offering document.
- --------------------------------------- -------------------------------
Signature of Employee Date
