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EXHIBIT 4.3
CONNETICS CORPORATION
2000 NON-OFFICER EMPLOYEE STOCK PLAN
(ADOPTED FEBRUARY 17, 2000)
1. PURPOSES OF THE PLAN. The purposes of this 2000 Non-Officer Employee
Stock Plan ("PLAN") are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees and Consultants of the Company and its Subsidiaries and to promote the
success of the Company's business. Options granted under the Plan may be
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant and reflected in the terms of the written option agreement. Stock purchase
rights may also be granted under the Plan.
2. DEFINITIONS. As used in this Plan, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with SECTION 4(a) of the Plan below, if one is
appointed.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means Connetics Corporation, a Delaware corporation.
(g) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and
is compensated for such services, and any director of the Company, whether
compensated for such services or not.
(h) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Administrator, provided that such
leave is for a period of not more than ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted
from time to time, or in the case of transfers between locations of the
Company or between the Company, its Subsidiaries or its successor. For
purposes of this Plan, a change in status from an Employee to a Consultant
or from a Consultant to an Employee will not constitute a termination of
employment.
(i) "Director" means a member of the Board.
(j) "Employee" means any person, excluding Named Executives, Officers
and Directors, employed by the Company or any Parent or Subsidiary of the
Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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(l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the
National Market of the National Association of Securities Dealers,
Inc. Automated Quotation ("Nasdaq") System, its Fair Market Value
shall be the closing sales price for such stock as quoted on such
system on the date of determination (or the closing bid, if no sales
were reported on that day) as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but not
on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high bid and low asked prices for
the Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith
by the Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written option agreement.
(n) "Named Executive" means any individual who, on the last day of
the Company's fiscal year, is the chief executive officer of the Company
(or is acting in such capacity) or among the four highest compensated
officers of the Company (other than the chief executive officer). Such
officer status shall be determined pursuant to the executive compensation
disclosure rules under the Exchange Act.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable
written option agreement.
(p) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
(r) "Optioned Stock" means the Common Stock subject to an Option or a
Stock Purchase Right.
(s) "Optionee" means an Employee or Consultant who receives an Option
or Stock Purchase Right.
(t) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(u) "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under SECTION 11 below.
(v) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
as the same may
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be amended from time to time, as any successor provision.
(w) "Share" means a share of the Common Stock, as adjusted in
accordance with SECTION 13 below.
(x) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to SECTION 11 below.
(y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(z) "Plan" means this 2000 Non-Officer Employee Stock Plan.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of SECTION
13, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 500,000 shares of Common Stock. The shares may be
authorized, but unissued, or reacquired Common Stock. If an Option should
expire or become unexercisable for any reason without having been exercised
in full, the unpurchased Shares which were subject thereto shall, unless
the Plan shall have been terminated, become available for future grant
under the Plan. Notwithstanding any other provision of the Plan, Shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) Composition of the Administrator.
(i) Administration of the Plan. With respect to grants of
Options or Stock Purchase Rights to Employees or Consultants who
are neither Directors nor Officers of the Company, the Plan shall
be administered by (A) the Board or (B) a committee designated by
the Board, which committee shall be constituted in such a manner
as to satisfy the legal requirements relating to the
administration of stock option plans, if any, of the applicable
securities laws and the Code (collectively the "Applicable
Laws").
(ii) General. If a Committee has been appointed pursuant to
subsection (i) of this SECTION 4(a), such Committee shall
continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer
the Plan, all to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated
by the Board to such Committee, and subject to the approval of any
relevant authorities, including the approval, if required, of any
stock exchange upon which the Common Stock is listed, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock,
in accordance with SECTION 2(l) of the Plan;
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(ii) to select the Consultants and Employees to whom Options
and Stock Purchase Rights may from time to time be granted
hereunder;
(iii) to determine whether and to what extent Options and
Stock Purchase Rights or any combination thereof are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under SUBSECTION 10(f) instead of
Common Stock;
(viii) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option shall have declined since the
date the Option was granted; and
(ix) to determine the terms and restrictions applicable to
Stock Purchase Rights and the Restricted Stock purchased by
exercising such Stock Purchase Rights.
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options or Stock Purchase Rights.
5. ELIGIBILITY.
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. An Employee or Consultant who has
been granted an Option or Stock Purchase Right may, if he is otherwise
eligible, be granted additional Options or Stock Purchase Rights.
(b) Each Option shall be designated in the written option agreement
as a Nonstatutory Stock Option.
(c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board of Directors. It shall continue in effect for a term of ten (10) years
unless sooner terminated under SECTION 17 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Option granted
to an Optionee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from
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the date of grant thereof or such shorter term as may be provided in the Option
Agreement.
8. LIMITATION ON GRANTS TO EMPLOYEES. Subject to adjustment as provided
in this Plan, the maximum number of Shares which may be subject to Options or
Stock Purchase Rights granted to any one Employee under this Plan for any fiscal
year of the Company shall be 150,000.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, but shall in any event be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Administrator and may consist entirely of
(1) cash,
(2) check,
(3) promissory note,
(4) other Shares which (x) in the case of Shares acquired upon
exercise of an Option either have been owned by the Optionee
for more than six months on the date of surrender or were
not acquired, directly or indirectly, from the Company, and
(y) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which
said Option shall be exercised,
(5) authorization from the Company to retain from the total
number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of
Shares as to which the Option is exercised,
(6) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the
broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale or
loan proceeds required to pay the exercise price,
(7) any combination of the foregoing methods of payment, or
(8) such other consideration and method of payment for the
issuance of Shares to the extent permitted under Applicable
Laws.
In making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
10. EXERCISE OF OPTION.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted under this Plan shall be exercisable at such times and under such
conditions as the Administrator
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determines, including performance criteria with respect to the Company
and/or the Optionee, and as shall be permissible under the terms of the
Plan. An Option may not be exercised for a fraction of a Share. An Option
shall be deemed to be exercised when written notice of such exercise has
been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company.
Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under SECTION 9(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company)
of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate as
promptly as practicable upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in SECTION 14
of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Status as an Employee or Consultant. In the event
of termination of an Optionee's Continuous Status as an Employee or
Consultant, such Optionee may, but only within thirty (30) days (or such
other period of time not exceeding six (6) months as is determined by the
Administrator) after the date of such termination (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that he or she
was entitled to exercise it at the date of such termination. To the extent
that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the optionee does not exercise such Option (which
he or she was entitled to exercise) within the time specified herein, the
Option shall terminate.
(c) Disability of Optionee.
(i) Notwithstanding the provisions of SECTION 9(b) above, in the
event of termination of an Optionee's Continuous Status as an Employee
or Consultant as a result of his or her total and permanent disability
(within the meaning of Section 22(e)(3) of the Code), Optionee may,
but only within twelve (12) months from the date of such termination
(but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to
the extent otherwise entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise
the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(ii) In the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of a disability which
does not fall within the meaning of total and permanent disability (as
set forth in Section 22(e)(3) of the Code), Optionee may, but only
within six (6) months from the date of such termination (but in no
event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the Option at
the date of termination, or if
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Optionee does not exercise such Option to the extent so entitled
within six months (6) from the date of termination, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee
during the term of the Option who is at the time of death an Employee or
Consultant of the Company, the Option may be exercised, at any time within
twelve (12) months following the date of death (but in no event later than
the expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to the extent
the Optionee was entitled to exercise the Option at the date of death. To
the extent that Optionee was not entitled to exercise the Option at the
date of termination, or if Optionee does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall
terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
11. NON-TRANSFERABILITY OF OPTIONS. Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
12. STOCK PURCHASE RIGHTS.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid (which price
shall not be less than 85% of the Fair Market Value of the Shares as of the
date of the offer or, in the case of a stockholder owning ten percent (10%)
or more of the Company's outstanding stock or a person who is a Named
Executive, 100% of the Fair Market Value of the Shares as of the date of
the offer), and the time within which such person must accept such offer,
which shall in no event exceed thirty (30) days from the date upon which
the Administrator made the determination to grant the Stock Purchase Right.
The offer shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator. Shares purchased
pursuant to the grant of a Stock Purchase Right shall be referred to herein
as "Restricted Stock."
(b) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination
of the purchaser's employment with the Company for any reason (including
death or Disability). The purchase price for Shares repurchased pursuant to
the Restricted Stock purchase agreement shall be the original price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as
the Board or Committee may determine.
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(c) Other Provisions. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
In addition, the provisions of Restricted Stock purchase agreements need
not be the same with respect to each purchaser.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as
provided in SECTION 15 of the Plan.
13. WITHHOLDING TAXES. As a condition to the exercise of Options or the
purchase of Restricted Stock pursuant to awards granted hereunder, the Optionee
or purchaser shall make such arrangements as the Administrator may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise, receipt or vesting
of such award. The Company shall not be required to issue any Shares under the
Plan until such obligations are satisfied.
14. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
Administrator's discretion, Optionees may satisfy withholding obligations as
provided in this paragraph. When an Optionee incurs tax liability in connection
with an Option or Stock Purchase Right, which tax liability is subject to tax
withholding under applicable tax laws, and the Optionee is obligated to pay the
Company an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by electing to have the
Company withhold from the Shares to be issued upon exercise of the Option, or
the Shares to be issued in connection with the Stock Purchase Right, if any,
that number of Shares having a Fair Market Value equal to the amount required to
be withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "TAX DATE"). All elections by an Optionee to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the Administrator and
shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option or Stock Purchase Right as to which the election is
made; and
(c) all elections shall be subject to the consent or disapproval of
the Administrator.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTION.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized
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for issuance under the Plan but as to which no Options or Stock Purchase
Rights have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option or Stock Purchase Right, as well as
the price per share of Common Stock covered by each such outstanding Option
or Stock Purchase Right, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to an Option or Stock Purchase Right.
(b) Corporate Transactions. In the event of a dissolution or
liquidation of the Company, the Option will terminate immediately prior to
the consummation of such action, unless otherwise provided by the
Administrator. The Administrator may, in the exercise of its sole
discretion in such instances, declare that any Option shall terminate as of
a date fixed by the Administrator and give each Optionee the right to
exercise his or her Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. In the
event of a proposed sale of all or substantially all of the assets of the
Company, the merger of the Company with or into another corporation or any
other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, the Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless
the Administrator determines, in the exercise of its sole discretion and in
lieu of such assumption or substitution, that the Optionee shall have the
right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. If the
Administrator makes an Option exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee that the Option shall be exercisable for a period
of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
16. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator;
provided however that in the case of any Incentive Stock Option, the grant date
shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.
17. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided, however, that the following revisions or amendments shall require
approval of the stockholders of the Company:
(i) any change in the designation of the class of persons
eligible to be granted Options;
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(ii) any change in the limitation on grants to employees as
described in SECTION 8 of the Plan or other changes which would
require stockholder approval to qualify options granted hereunder as
performance-based compensation under Section 162(m) of the Code; or
(iii) any revision or amendment requiring stockholder approval in
order to preserve the qualification of the Plan under Rule 16b-3.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by
the Optionee and the Company.
18. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option or Stock Purchase Right, the Company may
require the person exercising such Option or Stock Purchase Right to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.
19. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
20. AGREEMENTS. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Board shall approve from time to time.
21. INFORMATION TO OPTIONEES AND PURCHASERS. The Company shall provide
financial statements at least annually to each Optionee and to each individual
who acquired Shares Pursuant to the Plan, during the period such Optionee or
purchaser has one or more Options or Stock Purchase Rights outstanding, and in
the case of an individual who acquired Shares pursuant to the Plan, during the
period such individual owns such Shares. The Company shall not be required to
provide such information if the issuance of Options or Stock Purchase Rights
under the Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information.
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Exhibit
CONNETICS CORPORATION
2000 NON-OFFICER EMPLOYEE STOCK PLAN
STOCK OPTION AGREEMENT
OPTIONEE: <<firstname>> <<middle>> <<lastname>>
GRANT NUMBER: <<grantnumber>>
1. Grant of Option. Connetics Corporation, a Delaware corporation
("CONNETICS"), hereby grants to the Optionee (the "OPTIONEE") named in the
attached Notice of Stock Option Grant (the "NOTICE"), an option (the "OPTION")
to purchase a total number of shares of Common Stock (the "SHARES") set forth in
the Notice, at the Exercise Price Per Share set forth in the Notice subject to
the terms, definitions and provisions of Connetics' 2000 Non-Officer Employee
Stock Plan (the "PLAN") adopted by Connetics, which is incorporated into this
Agreement by reference. Unless otherwise defined in this Agreement, the terms
defined in the Plan shall have the same defined meanings as applied to this
Option.
2. Exercise of Option. This Option shall be exercisable during its term
in accordance with the Vesting Schedule set out in the Notice and with the
provisions of Section 9 of the Plan as follows:
(i) Right to Exercise.
(a) This Option may not be exercised for a fraction of a share.
(b) In the event of Optionee's death or disability, or other
termination of Optionee's consulting relationship or employment ("CONTINUOUS
STATUS"), the exercisability of the Option is governed by SECTIONS 5, 6 and 7
below, subject to the limitation contained in SUBSECTION 2(i)(c).
(c) In no event may this Option be exercised after the date of
expiration of the Term of this Option as set forth in the Notice.
(ii) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
shares of Common Stock in respect of which the Option is being exercised (the
"Shares Exercised"), and such other representations and agreements as to the
Optionee's investment intent with respect to such Shares Exercised as may be
required by Connetics pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary or Assistant Secretary of Connetics. The written
notice shall be accompanied by payment in the amount of the Shares Exercised
times the Exercise Price Per Share (the "EXERCISE PRICE"). Exercise of this
Option shall be deemed to be effective (the "EFFECTIVE DATE") upon receipt by
Connetics of such written notice accompanied by the Exercise Price. No stock
certificate will be issued pursuant to the exercise of an Option unless such
issuance and such exercise comply with all relevant provisions of law and the
requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, the Shares Exercised shall be considered for income
tax purposes to have been issued to the Optionee on the Effective Date on which
the Option was exercised with respect to those Shares.
3. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination of one or more of the following, at the
Optionee's election:
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(a) cash; or
(b) check; or
(c) surrender of other shares of Connetics Common Stock which
(A) in the case of Shares acquired pursuant to the exercise of a
Connetics option, the Optionee has owned for more than six (6) months
on the date of surrender, and (B) have a fair market value on the date
of surrender equal to the Exercise Price; or
(d) delivery of a properly executed exercise notice together
with such other documentation as the Administrator of the Plan and any
broker assisting in such exercise, if applicable, shall require to
effect an exercise of the Option and delivery to Connetics of the sale
or loan proceeds required to pay the exercise price.
4. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("REGULATION G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, Connetics may require Optionee to make any representation and warranty
to Connetics as may be required by any applicable law or regulation.
5. Termination of Relationship. In the event of termination of Optionee's
Continuous Status, Optionee may, to the extent otherwise so entitled at the date
of such termination (the "TERMINATION DATE"), exercise this Option during the
Termination Period set out in the Notice of Grant. To the extent that Optionee
was not entitled to exercise this Option at the date of such termination, or if
Optionee does not exercise this Option within the time specified herein, the
Option shall terminate.
6. Disability of Optionee.
(a) Notwithstanding the provisions of SECTION 5 above, in the event
of termination of Optionee's Continuous Status as a result of his or her
total and permanent disability (within the meaning of Section 22(e)(3) of
the Code), Optionee may, but only within twelve (12) months from the date
of such termination (but in no event later than the Expiration Date of the
Term of such Option as set forth in Section 9 below), exercise the Option
to the extent otherwise entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise the
Option at such date of termination, or if Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(b) In the event of termination of an Optionee's Continuous Status as
a result of a disability which does not fall within the meaning of total
and permanent disability (as set forth in Section 22(e)(3) of the Code),
Optionee may, but only within six (6) months from the date of such
termination (but in no event later than the Expiration Date of the Term of
such Option as set forth in SECTION 9 below), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination.
To the extent that Optionee was not entitled to exercise the Option at such
date of termination, or if Optionee does not exercise such Option to the
extent so entitled within six months (6) from such date of termination, the
Option shall terminate.
7. Death of Optionee. In the event of the death of Optionee, the Option
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the Expiration Date of the Term of this Option
as set forth in SECTION 9 below), by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent the Optionee could exercise the Option at the date of death.
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8. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
9. Term of Option. This Option may be exercised only within the Term set
out in the Notice, and may be exercised during such term only in accordance with
the Plan and the terms of this Option. The limitations set out in Section 7 of
the Plan regarding Options granted to more than ten percent (10%) stockholders
shall apply to this Option.
10. Taxation Upon Exercise of Option.
10.1. Optionee understands that, upon exercising a nonstatutory
Option, he or she will recognize income for tax purposes in an amount equal to
the excess of the then fair market value of the Shares over the exercise price.
If the Optionee is an employee, Connetics will be required to withhold from
Optionee's compensation, or collect from Optionee and pay to the applicable
taxing authorities, an amount equal to a percentage of this compensation income.
10.2 The Optionee shall satisfy his or her tax withholding obligation
arising upon the exercise of this Option by one or some combination of the
following methods:
(a) by cash payment, or
(b) out of Optionee's current compensation, or
(c) if permitted by the Administrator, in its discretion, by
surrendering to Connetics Shares which (a) in the case of Shares previously
acquired from Connetics, have been owned by the Optionee for more than six
months on the date of surrender, and (b) have a fair market value on the
date of surrender equal to or less than Optionee's marginal tax rate times
the ordinary income recognized; or
(d) by electing to have Connetics withhold from the Shares to be
issued upon exercise of the Option that number of Shares having a fair
market value equal to the amount required to be withheld. For this purpose,
the fair market value of the Shares to be withheld shall be determined on
the date that the amount of tax to be withheld is to be determined (the
"TAX DATE").
10.3. If the Optionee is subject to Section 16 of the Exchange Act (an
"INSIDER"), any surrender of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act ("RULE 16b-3") and
shall be subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
10.4. All elections by an Optionee to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the
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Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator;
(d) if the Optionee is an Insider, the election must comply with the
applicable provisions of Rule 16b-3 and shall be subject to such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
11. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal and California tax consequences of exercise
of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(a) Exercise of Nonstatutory Stock Option. There may be a regular
federal income tax liability and a California income tax liability upon the
exercise of the Option. The Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an employee, Connetics
will be required to withhold from Optionee's compensation or collect from
Optionee and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal and California income tax purposes.
12. Entire Agreement. The Plan and Notice are incorporated into this
Agreement by reference. This Agreement, the Plan and the Notice constitute the
entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of Connetics and Optionee with respect to the
subject matter of this Agreement. This Agreement, the Plan and the Notice are
governed by California law except for its or any other jurisdiction's body of
law pertaining to choice of laws.
13. Optionee's Acknowledgements.
(a) Optionee represents that he or she is acquiring this option for
his or her own account for investment purposes only and not with the view
to or in connection with the resale or distribution of the option. Optionee
further acknowledges that any transfer or sale of this option or any
security under this agreement must be made in compliance with all
applicable federal and state securities laws.
(b) Optionee acknowledges and agrees that the vesting of shares
pursuant to the option hereof is earned only by continuing consultancy or
employment at the will of Connetics (not through the act of being hired,
being granted this option or acquiring shares under this Agreement).
Optionee further acknowledges and agrees that nothing in this Agreement,
nor in the Plan which is incorporated into this Agreement by reference,
shall confer upon Optionee any right with respect to continuation of
employment or consultancy by Connetics, nor shall it interfere in any way
with his or her right or Connetics' right to
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terminate his or her employment or consultancy at any time, with or without
cause.
(c) Optionee acknowledges receipt of a copy of the Plan and
represents that Optionee is familiar with the terms and provisions of the
Plan. Optionee has reviewed the Plan and this Option in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option and fully understands all provisions of the Option.
CONNETICS CORPORATION
a Delaware corporation
By:
------------------------------------
Thomas G. Wiggans
President & Chief Executive Officer
OPTIONEE HEREBY ACCEPTS THIS OPTION SUBJECT TO ALL OF THE TERMS AND PROVISIONS
OF THE PLAN, AND OPTIONEE HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND
FINAL ALL DECISIONS OR INTERPRETATIONS OF THE ADMINISTRATOR UPON ANY QUESTIONS
ARISING UNDER THE PLAN OR THIS OPTION.
OPTIONEE
---------------------------------------
<<firstname>> <<middle>> <<lastname>>
---------------------------------------
Social Security or Tax I.D. No.
---------------------------------------
Date
********
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Exhibit
CONNETICS CORPORATION
2000 NON-OFFICER EMPLOYEE STOCK PLAN
NOTICE OF STOCK OPTION GRANT
You (the "Optionee") have been granted an option (the "Option") to purchase
Common Stock of Connetics Corporation (the "Company") as follows:
OPTIONEE'S NAME: <<firstname>> <<middle>> <<lastname>>
DATE OF GRANT: <<grantdate>>
GRANT NUMBER: <<grantnumber>>
EXERCISE PRICE PER SHARE: $<<optionprice>>
TOTAL NUMBER OF SHARES GRANTED: <<shares>>
TOTAL PRICE OF SHARES GRANTED: $<<totalprice>>
TYPE OF OPTION: Nonstatutory Stock Option
TERM/EXPIRATION DATE: <<expiredate>>
VESTING COMMENCEMENT DATE: <<vestdate>>
VESTING SCHEDULE: [ ] 1/8th of the Total Number of Shares
Granted shall vest on the Vesting
Commencement Date (initial grant).
OR
[ ] 1/4th of the Total Number of Shares
Granted shall vest on the Vesting
Commencement Date (ongoing grant).
Thereafter, while Optionee remains an
employee of or consultant to the
Company, 1/48th of the Total Number of
Shares Granted shall vest on each
monthly anniversary of the Vesting
Commencement Date, until the Total
Number of Shares Granted is fully
vested.
TERMINATION PERIOD: This Option (to the extent vested and
not previously exercised) may be
exercised for three months (3 months)
after termination of employment or
consulting relationship except as
provided in Sections 4, 6, and 7 of the
Stock Option Agreement (but in no event
later than the Expiration Date).
By your signature and the signature of Connetics' representative on the Stock
Option Agreement, you and Connetics agree that this option is granted under and
governed by the terms and conditions of the 2000 Non-Officer Employee Stock Plan
and the Stock Option Agreement, all of which are attached and made a part of
this document.
Please contact Connetics' stock option administrator with any questions you may
have about this Option grant.
---------------------------------
Thomas G. Wiggans
President and CEO
******
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