'

                                 March 26, 1998

[NAME]
[ADDRESS 1]
[ADDRESS 2]
[CITY], [STATE] [ZIP]
[COUNTRY]

Dear [DEAR]:

                We are pleased to inform you that the Company has  selected  you
to participate in two special benefit  programs:  the first of these is designed
to preserve the value of any option grants made to you under the Company's  1988
Restricted  Stock Plan (the "1988  Plan"),  including  any options you currently
hold and any options which may  subsequently  be granted to you under that plan.
As a participant  in this program,  each of your  outstanding  options under the
1988 will vest in full on an accelerated basis should your employment  terminate
under certain circumstances within a specified time period following a change in
control of the Company.  The second benefit is to provide you with six months of
severance pay in the event of your  termination  without cause from the Company,
as further described below.

                As you know,  it is the Company's  policy to grant  officers and
key  employees  such as  yourself  options to purchase  shares of the  Company's
common  stock.  Those  options  normally  become  exercisable  in  a  series  of
installments  over  your  period  of  service  with the  Company.  The  specific
exercise/vesting  schedule  for each of your  options  is set forth in the stock
option agreement for that grant.

                Under  the  special  benefit  program,  should  your  employment
terminate  under  certain  circumstances  following  a change in  control,  each
outstanding  option which you hold at that time under the 1988 Plan will, to the
extent that option is not otherwise fully exercisable for all the option shares,
immediately vest on an accelerated  basis and become  exercisable for all of the
option  shares.  You will then have a limited  period in which to exercise those
options for any or all of the option shares as fully-vested shares.

                The exact  terms which will  govern the  accelerated  vesting of
your options are set forth below. Since these acceleration provisions will be in
effect for all option  grants  made to you under the 1988 Plan,  we ask that you
retain a copy of this letter as part of your option records so


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                                                                  March 26, 1998
                                                                          Page 2

that you will  remain  aware of all your  rights and  entitlements  under  those
options.

               The accelerated vesting provisions of the special benefit program
under the 1988 Plan are as follows:

                       1.  Accelerated  Vesting  of  Option  Grants  and  Option
Shares.  Should  your  employment  with the  Company  terminate  by reason of an
Involuntary  Termination,  other than a Termination  for Cause,  within eighteen
(18) months after a Change in Control,  then each  outstanding  option under the
1988 Plan which you hold at that time, to the extent not  otherwise  exercisable
for all the shares  subject to that option,  shall  immediately  vest and become
exercisable  for all those option  shares.  You will then have a limited  period
following such  termination of employment in which to exercise those options for
any or all of the option shares as  fully-vested  shares.  The exact duration of
the post-employment exercise period for each of your options is set forth in the
stock option agreement for that grant.

                       2. Definitions. For all purposes hereunder, the following
terms shall be defined as specified below:

                       A. The term "Change in Control" shall mean:

                            (i) a merger or  consolidation  in which  securities
possessing  more than 50% of the total  combined  voting power of the  Company's
outstanding  voting  securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such transaction;

                            (ii) a sale, transfer or other disposition of all or
substantially  all of the assets of the Company in liquidation or dissolution of
the Company;

                            (iii) the  acquisition of beneficial  ownership,  by
any  person or a group of  related  persons,  of  securities  possessing  thirty
percent  (30%) or more of the  total  combined  voting  power  of the  Company's
outstanding voting securities pursuant to a third-party tender or exchange offer
made to the Company's shareholders; 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 ceases, by reason of one or more contested elections for Board membership,
to be


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                                                                  March 26, 1998
                                                                          Page 3

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.

                       B.  The term  "Involuntary  Termination"  shall  mean the
termination of your employment with the Company:

                            (i) involuntarily upon your dismissal; or

                            (ii)  voluntarily  following:  (a) a change  in your
position   with  the  Company   which   materially   reduces   your  duties  and
responsibilities or the level of management to which you report; (b) a reduction
of ten  percent  (10%) or more in your  level of  compensation  (including  base
salary,  fringe  benefits  and target  bonus);  or (c) a change in your place of
employment which is more than 50 miles from your place of employment immediately
prior to the Change in Control, provided and only if such change or reduction is
effected without your written concurrence.

                       C.  The  term  "Termination  for  Cause"  shall  mean  an
Involuntary Termination effected by reason of your having engaged in fraud, acts
of  dishonesty  or in any other  illegal  or  intentional  misconduct  adversely
affecting the business reputation of the Company in a material manner.

                       3.  Severance.  If you are  Involuntarily  Terminated and
such  termination is not a Termination for Cause,  then you shall be entitled to
six (6) months of salary  continuation at your then salary level,  provided that
you must execute a standard  waiver and release form,  releasing the Company and
its officers,  directors and agents from any and all  employment or wage related
claims,  such waiver and release to be executed  and  delivered  by you prior to
your receipt of any severance benefits.

                       4.  Miscellaneous.  This Agreement  shall be binding upon
the Company,  its successors and assigns  (including,  without  limitation,  the
surviving  entity or successor  party  resulting from the Change in Control) and
shall be construed and  interpreted  under the laws of the State of  California.
This  Agreement  shall  govern  any and all  option  grants  you hold  under the
Company's  1988  Restricted  Stock  Plan.  To the extent  there is any  conflict
between the terms and conditions of the  documentation  evidencing  those grants
and the  provisions  of this  letter,  the  provisions  of this letter  shall be
controlling.




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                                                                  March 26, 1998
                                                                          Page 4

               Please  indicate your  acceptance of the foregoing by signing the
enclosed copy of this letter and returning it to the Company.

                                       Very truly yours,

                                       MATRIX PHARMACEUTICAL, INC.


                                       By:______________________________________

Accepted and agreed to:

___________________________

___________________________,1998
Date