Document:

exv10w13

 

Exhibit 10.13

Award
Number:                                       

Date of Award:                                         

CONNETICS CORPORATION STOCK PLAN (2000)

RESTRICTED STOCK PURCHASE AGREEMENT

     You (the “Grantee”) have been granted the right to purchase shares of Connetics’ Common Stock
(the “Award”), subject to the terms and conditions of the Connetics Corporation Stock Plan (2000)
(the “Plan”), as amended from time to time, and this Restricted Stock Purchase Agreement (the
“Agreement”), as follows. Unless otherwise defined, the capitalized terms in this Agreement shall
have the same defined meanings as in the Plan.

	 	 	 
	Grantee’s Name and Address:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	Total Number of Shares
	 	 
	of Common Stock Awarded
	 	 
	(the “Shares”)

	 	               Up to                                    
	Purchase Price per Share

	 	               $0.001 Par Value per Share
	Total Purchase Price

	 	$     
	 

	 	 

     1.     Issuance of Shares. Subject to the forfeiture provisions set forth in Section 3,
Connetics Corporation, a Delaware corporation (“Connetics” or the “Company”), hereby issues the
Shares to the Grantee for the Purchase Price per Share set forth above (the “Total Purchase
Price”), subject to this Agreement and the terms and provisions of the Plan. All Shares issued
under this Agreement will be deemed issued to the Grantee as fully paid and nonassessable shares,
and the Grantee will have the right to vote the Shares at meetings of the Company’s stockholders.
Connetics shall pay any applicable stock transfer taxes imposed upon the issuance of the Shares to
the Grantee.

     2.     Payment of Total Purchase Price. The Total Purchase Price is payable to Connetics
upon execution of this Agreement. To the extent such payment method and form of consideration is
permitted by Applicable Laws, the Administrator has determined that (check one):

	 	 	 
	o 	 	payment of the Total Purchase Price is due at the time the Grantee signs this
Agreement, and is payable in cash or by check at Grantee’s election;
	 
	o 	 	payment of the Total Purchase Price is deemed paid in full at the time Grantee signs
this Agreement, by Grantee’s prior services provided to the Company.

 

 

     3.     Forfeiture of Shares.

          (a)     All of the Shares are initially subject to forfeiture based on either elapsed time,
performance requirements, or a combination of the two. For purposes of this Agreement, the term
“vest” shall mean, with respect to any Shares, that such Shares (and the applicable portion of the
Total Purchase Price) are no longer subject to forfeiture to Connetics. If the Grantee would
become vested in a fraction of a Share, such Share shall not vest until the Grantee becomes vested
in the entire Share. “Forfeiture” means any return of Shares to the Company pursuant to Sections
3(b) or (c) below. “Unvested Shares” means all Shares that remain subject to Forfeiture pursuant
to either Section 3(b) or (c), and “Vested Shares” means all Shares that are no longer subject to
any Forfeiture. “Contingent Shares” means those shares that are no longer subject to Forfeiture
pursuant to the terms of Section 3(b), but remain subject to Forfeiture pursuant to Section 3(c).
Connetics shall be the legal and beneficial owner of any Forfeited Shares and shall have all rights
and interest in or related to Forfeited Shares without further action by the Grantee. In addition,
the Grantee shall forfeit the Purchase Price per Share for any Forfeited Shares that are forfeited
and reconveyed to the Company.

          (b)     Subject to the Grantee’s continued status as a Service Provider and other limitations set
forth in the Plan and this Agreement, the Shares will vest in accordance with the following
schedule:

	 	(i)	 	Time-Based Vesting. A total of                                     Shares are subject to time-based vesting as
follows: [1/3rd of the Shares shall vest twelve months
after the Award Date, and an additional 1/6th of the Shares
shall vest on each six month anniversary of the Award Date thereafter.]
	 
	 	(ii)	 	Performance Vesting. A total of                                     Shares are subject to performance-based vesting, on
the performance standards set forth in the Attachment to this
Agreement. Based upon the achievement of Company goals as determined
by the Committee for the year ending December 31, [generally, the year
following grant year] (the “20___Actual Goals”), then all Shares that
are not Contingent Shares shall be automatically forfeited to the
Company, effective as of the date of the Committee meeting at which the
decision is made regarding goal achievement. Contingent Shares shall
remain “Unvested Shares” pursuant to this Agreement until the
Contingent Shares are no longer subject to Forfeiture pursuant to
Section 3(c) below.

          (c)     Continued Status as a Service Provider. In addition to any Forfeiture pursuant to
Section 3(b)(ii) above, if the Grantee ceases to be a Service Provider for any reason or no reason
(except for death or Disability), with or without cause, before the third anniversary after the
Award Date, then effective at the time of such cessation all Unvested Shares shall automatically be
forfeited to Connetics. If the Grantee ceases to be a Service Provider by reason of death or
Disability before the third anniversary after the Award Date, then the percentage of

 

 

the Shares that was not previously Forfeited pursuant to Section 3(b)(ii) as of that date
shall be pro-rated for the period of time between the Award Date and the date of death or
Disability (and those shares shall become Vested shares) and the remainder of the Shares shall
automatically be Forfeited to Connetics.

          (d)     Effect of Changes on Vesting.

	 	(i)	 	If the Grantee takes an authorized leave of absence,
the Shares shall continue to Vest for up to three months; the vesting
of the Shares shall be suspended after the leave of absence exceeds a
period of three months. Vesting of the Shares shall resume when the
Grantee’s leave of absence has terminated and the Grantee has returned
to service to Connetics or any Parent or Subsidiary of Connetics. The
Vesting Schedule of the Shares shall be extended by the length of the
suspension.
	 
	 	(ii)	 	If Grantee has a change in status from Employee,
Director or Consultant to any other status of Employee, Director or
Consultant, the Shares shall continue to vest in accordance with the
Vesting Schedule set forth above.

          (e)     Change in Control. Notwithstanding the foregoing, if, before the third
anniversary of the Award Date there is a change in control of the Company as outlined in Section 13
of the Plan, then 100% of the Grantee’s Unvested Shares shall immediately become Vested Shares and
shall no longer be subject to the Forfeiture provisions under this Agreement.

     (f)     Notice. Within 90 days after any Forfeiture, Connetics shall provide the Grantee
(or the Grantee’s estate) a written notice of forfeiture, specifying the number of Shares
forfeited. Failure to provide such notice on a timely basis shall have no effect on the Forfeiture
of the Shares.

     4.     Transfer Restrictions. The Grantee may not sell, transfer by gift, pledge,
hypothecate, or otherwise transfer or dispose of the Shares before the Shares become Vested Shares.
Any attempt to transfer Restricted Shares in violation of this Section 3 will be null and void.

     5.     Certificates. This Agreement is the sole proof of Grantee’s ownership of the
Shares, and Grantee acknowledges that he/she will not receive a stock certificate representing the
Shares. The Grantee agrees that the Shares shall be subject to Forfeiture as set forth in Section
3 of this Agreement and the restrictions on transfer set forth in Section 4 of this Agreement. The
Company or Charles Schwab & Co. (or any other broker with which the Company has established a
relationship) (“Broker”) shall retain custody of the Shares until the Shares have Vested in
accordance with Section 3 of this Agreement. Upon vesting of the Shares, the Company shall
instruct its transfer agent to deposit the Vested Shares into the Grantee’s existing account at
Broker, subject to payment (through sale of a portion of the Shares in accordance with Section 7)
of all applicable withholding taxes.

 

 

     6.     Additional Securities and Distributions.

          (a)     Any securities or cash received (other than a regular cash dividend) as the result of
ownership of the Restricted Shares (the “Additional
Securities”), including, but not by way of
limitation, warrants, options and securities received as a stock dividend or stock split, or as a
result of a recapitalization or reorganization or other similar change in the Company’s capital
structure, shall be retained by the Broker in the same manner and subject to the same conditions
and restrictions as the Shares with respect to which they were issued. The Grantee shall be
entitled to direct Connetics to exercise any warrant or option received as Additional Securities if
the Grantee supplies the funds necessary to do so, in which event the securities so purchased shall
constitute Additional Securities, but the Grantee may not direct Connetics to sell any such warrant
or option. If Additional Securities consist of a convertible security, the Grantee may exercise
any conversion right, and any securities so acquired shall constitute Additional Securities. If
there is any change in certificates evidencing the Shares or the Additional Securities by reason of
any recapitalization, reorganization or other transaction that results in the creation of
Additional Securities, Connetics or the Broker is authorized to deliver to the issuer the
certificates evidencing the Shares or the Additional Securities in exchange for the certificates of
the replacement securities.

          (b)     Connetics shall disburse to the Grantee all regular cash dividends with respect to the
Shares and Additional Securities (whether vested or not), less any applicable withholding
obligations.

     7.     Taxes.

          (a)     No Section 83(b) Election. As a condition to receiving the Shares, the Grantee
agrees to refrain from making an election pursuant to Section 83(b) of the Internal Revenue Code
with respect to the Shares.

          (b)     Tax Liability. The Grantee is ultimately liable and responsible for all taxes
owed by the Grantee in connection with the Award, regardless of any action Connetics or its Parent
or Subsidiary takes with respect to any tax withholding obligations that arise in connection with
the Award. Neither Connetics nor any Parent or Subsidiary of Connetics makes any representation or
undertaking regarding the treatment of any tax withholding in connection with the grant or vesting
of the Award or the subsequent sale of Shares subject to the Award. Connetics and its Parent and
Subsidiaries do not commit and are under no obligation to structure the Award to reduce or
eliminate the Grantee’s tax liability.

          (c)     Payment of Withholding Taxes. Prior to any event in connection with the Award
(e.g., vesting) that the Company determines may result in any tax withholding obligation, whether
United States federal, state, local or non-U.S. (the “Tax Withholding Obligation”), the Grantee
must arrange for the minimum amount of such Tax Withholding Obligation to be satisfied in a manner
acceptable to Connetics.

 

 

	 	(i)	 	By Share Withholding. The Grantee authorizes Connetics
to, upon the exercise of Connetics’ sole discretion, withhold from
those Shares issuable to the Grantee the whole number of Shares
sufficient to satisfy the minimum applicable Tax Withholding
Obligation. The Grantee acknowledges that the withheld Shares may not
be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation. Accordingly, the Grantee agrees to pay to Connetics or any
Parent or Subsidiary of Connetics as soon as practicable, including
through additional payroll withholding, any amount of the Tax
Withholding Obligation that is not satisfied by the withholding of
Shares described above.
	 
	 	(ii)	 	By Sale of Shares. Unless the Grantee determines to
satisfy the Tax Withholding Obligation by some other means in
accordance with clause (iii) below, the Grantee’s acceptance of this
Award constitutes the Grantee’s instruction and authorization to
Connetics or Broker to sell on the Grantee’s behalf a whole number of
Shares from those Shares issuable to the Grantee as Connetics
determines to be appropriate to generate cash proceeds sufficient to
satisfy the minimum applicable Tax Withholding Obligation. Such Shares
will be sold on the day such Tax Withholding Obligation arises (e.g., a
vesting date) or as soon after that day as practicable. The Grantee
agrees to execute and deliver any documents, instruments, or
certificates that Connetics or the Broker may require in connection
with the sale of Shares pursuant to this Section. The Grantee will be
responsible for all Broker’s fees and other costs of sale, and the
Grantee agrees to indemnify and hold Connetics harmless from any
losses, costs, damages, or expenses relating to any such sale. To the
extent the proceeds of such sale exceed the Grantee’s minimum Tax
Withholding Obligation, the Company agrees to pay the excess amount in
cash to the Grantee. The Grantee acknowledges that Connetics or its
designee is under no obligation to arrange to sell any Shares at any
particular price, and that the proceeds of any such sale may not be
sufficient to satisfy the Grantee’s minimum Tax Withholding Obligation.
Accordingly, the Grantee agrees to pay to Connetics or its Parent or
Subsidiary as soon as practicable, including through additional payroll
withholding, any amount of the Tax Withholding Obligation that is not
satisfied by the sale of Shares described above.
	 
	 	(iii)	 	By Check, Wire Transfer or Other Means. At any time
not less than five business days (or such fewer number of business days
as the Administrator determines) before any Tax Withholding Obligation
arises (e.g., a vesting date), the Grantee may elect to satisfy the
Grantee’s Tax Withholding Obligation by delivering to Connetics an
amount that Connetics determines is sufficient to satisfy the Tax

 

 

	 	 	 	Withholding Obligation by (x) wire transfer to an account that Connetics
designates, (y) delivery of a certified check payable to the Company, or
(z) such other means as the Administrator specifies.

     8.     Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Agreement or the Plan, the Company may issue appropriate “stop transfer”
instructions to its transfer agent and, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

     9.     Refusal to Transfer. Connetics shall not be required (a) to transfer on its books
any Shares that have been sold or otherwise transferred in violation of any of the provisions of
this Agreement or (b) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom Shares have been sold or transferred in
violation of any of the provisions of this Agreement.

     10.      Restrictive Legends. The Grantee understands and agrees that Connetics shall
cause the legends set forth below or substantially equivalent legends, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other legends that Connetics or
state or federal securities laws may require:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED AND
SUBJECT TO FORFEITURE BY THE TERMS OF A RESTRICTED STOCK PURCHASE
AGREEMENT BETWEEN THE COMPANY AND THE NAMED STOCKHOLDER. THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THAT AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.

     11.     Entire Agreement: Governing Law. The Plan and this Agreement constitute the
entire agreement of the Parties with respect to the subject matter of those documents, and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to that subject matter. Neither the Plan nor this Agreement may be modified adversely
to the Grantee’s interest except by means of a writing signed by the Company and the Grantee.
These agreements are to be construed in accordance with and governed by the laws of the State of
California without giving effect to any choice of law rule that would cause the application of the
laws of any other jurisdiction. If any provision of this Agreement is determined to be illegal or
unenforceable, it is the intention of the Parties that all the other provisions shall nevertheless
remain effective and shall remain enforceable.

     12.     No Rights to Employment. The Grantee acknowledges and agrees that the Shares
shall Vest, if at all, only during the period of the Grantee’s continued status as a Service
Provider, and that there is no express or implied promise of continued engagement as a Service
Provider for the vesting period. Moreover, nothing in this Agreement or the Plan confers on the
Grantee any right with respect to continuation of the Grantee’s status as a Service Provider, nor

 

 

shall it interfere in any way with the Grantee’s right or the Company’s right to terminate the
Grantee’s status as a Service Provider at any time, with or without cause, and with or without
notice. The Grantee acknowledges that unless the Grantee has a written employment agreement with
the Company to the contrary, the Grantee’s status is at will.

     13.     Construction. The captions used in this Agreement are inserted for convenience
and shall not be deemed a part of the Award for construction or interpretation. Except when
otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.

     14.     Administration and Interpretation. If the Grantee or the Company has any question
or dispute regarding the administration or interpretation of the Plan or this Agreement, they shall
submit the matter to the Administrator. The Administrator’s resolution of such question or dispute
shall be final and binding on all persons.

     15.     Venue. The Parties agree that any suit, action, or proceeding arising out of or
relating to the Plan or this Agreement shall be brought in the United States District Court for the
Northern District of California (or should such court lack jurisdiction to hear such action, suit
or proceeding, in a California state court in the County of Santa Clara) and that the Parties shall
submit to the jurisdiction of such court. The Parties irrevocably waive, to the fullest extent
permitted by law, any objection the Party may have to the laying of venue for any such suit, action
or proceeding brought in such court. If any one or more provisions of this Section 13 is for any
reason be held invalid or unenforceable, it is the specific intent of the Parties that such
provisions shall be modified to the minimum extent necessary to make it or its application valid
and enforceable.

     16.     Notices. Any notice required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by
an internationally recognized express mail courier service or upon deposit in the United States
mail by certified mail, with postage and fees prepaid, addressed to the other Party at its address
as shown in these documents, or to such other address as the Party may designate in writing from
time to time to the other Party.

     Connetics and the Grantee have executed this Agreement and agree that the Award is to be
governed by the terms and conditions of this Agreement and the Plan.

	 	 	 	 	 
	 	Connetics Corporation,
 

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	 
	 	Title:	 	 
	 	 	 
	 	 	 
	 

 

 

     The Grantee acknowledges receipt of a copy of the Plan and the Agreement and represents that
he or she is familiar with the terms and provisions of both those documents, and hereby accepts the
Award subject to all of the terms and provisions of this Agreement and the Plan. The Grantee has
reviewed this Agreement and the Plan in their entirety, has obtained the advice of counsel before
executing this Agreement or has voluntarily declined to seek such counsel, and fully understands
all provisions of this Agreement and the Plan. The Grantee hereby agrees that all questions of
interpretation and administration relating to this Agreement, the Plan and the Agreement shall be
resolved by the Administrator in accordance with Section 14 of the Agreement. The Grantee further
agrees to notify Connetics upon any change in the residence address indicated on the first page of
this Agreement.

	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	     (Grantee)

 

 

ATTACHMENT

PERFORMANCE VESTING CRITERIAexv10w16

 

Exhibit 10.16

Summary Compensation Information for Named Executive Officers and Directors

     Base Salary/Bonus Compensation. The table below sets forth the 2006 annual base salary levels
of the Named Executive Officers in the Company’s proxy statement for its Annual Meeting of
Stockholders held on April 22, 2005, and who are expected to be listed as the Named Executive
Officers in the Company’s Proxy Statement for the Annual Meeting of Stockholders to be held in
2006.

     Effective January 1, 2005, the annual incentive range for bonus awards for Named Executive
Officers for 2005 was set at between zero and sixty percent of base salary for each Named Executive
Officer except Mr. Wiggans. The range and target bonus for Mr. Wiggans for 2005 was set at the
discretion of the Board of Directors. The metrics used for measurement of bonus awards for 2005
included the Company’s success in achieving specific Company-wide goals as well as the Named
Executive Officers’ success in achieving individual and department goals in 2005. The table below
sets forth information regarding bonus compensation for our Named Executive Officers paid in 2006
for service provided in 2005.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Name and Position

	 	 	Year
	 	 	2006 Base

Salary
	 	 	Bonus for

2005

Performance
	 
	 	Thomas G. Wiggans

Chief Executive Officer

	 	 	 	2006	 	 	 	$	575,000	 	 	 	$	325,000	 	 
	 	C. Gregory Vontz

President and Chief Operating Officer

	 	 	 	2006	 	 	 	 	422,000	 	 	 	 	190,000	 	 
	 	Lincoln Krochmal

Executive Vice President, Research
and Product Development

	 	 	 	2006	 	 	 	 	400,000	 	 	 	 	154,000	 	 
	 	John L. Higgins

Executive Vice President, Finance
and Corporate Development and Chief
Financial Officer

	 	 	 	2006	 	 	 	 	360,000	 	 	 	 	167,000	 	 
	 	Katrina J. Church

Executive Vice President, Legal
Affairs, General Counsel and
Secretary

	 	 	 	2006	 	 	 	 	305,000	 	 	 	 	97,000	 	 
	 

     Acceleration of Option Vesting. The Company accelerated the vesting of certain unvested
incentive and non-qualified stock options previously awarded to employees and Outside Directors
with option exercise prices greater than $18.00, effective November 7, 2005, as described in the
Company’s Current Report on Form 8-K dated November 23, 2005 and filed with the SEC on November 30,
2005.

 

 

     The Named Executive Officers and Outside Directors whose stock options were accelerated
pursuant to this decision were:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Named Executive Officer

	 	 	No. of Unvested

Options

Accelerated
	 	 	Exercise

Price
	 
	 	Thomas G. Wiggans

	 	 	 	200,000	 	 	 	$	18.05	 	 
	 	 

	 	 	 	135,000	 	 	 	 	23.35	 	 
	 	C. Gregory Vontz

	 	 	 	112,000	 	 	 	 	18.05	 	 
	 	 

	 	 	 	90,000	 	 	 	 	23.35	 	 
	 	Lincoln Krochmal

	 	 	 	25,000	 	 	 	 	18.05	 	 
	 	 

	 	 	 	45,000	 	 	 	 	23.35	 	 
	 	John L. Higgins

	 	 	 	90,000	 	 	 	 	18.05	 	 
	 	 

	 	 	 	81,000	 	 	 	 	23.35	 	 
	 	Katrina J. Church

	 	 	 	72,000	 	 	 	 	18.05	 	 
	 	 

	 	 	 	45,000	 	 	 	 	23.35	 	 
	 	Outside Directors
	 	 	 	 	 	 	 	 	 	 	 
	 	R. Andrew Eckert

	 	 	 	15,000	 	 	 	 	28.00	 	 
	 	Carl B. Feldbaum

	 	 	 	30,000	 	 	 	 	22.08	 	 
	 	Denise Gilbert

	 	 	 	15,000	 	 	 	 	18.01	 	 
	 	 

	 	 	 	15,000	 	 	 	 	28.00	 	 
	 	John C. Kane

	 	 	 	15,000	 	 	 	 	28.00	 	 
	 	Thomas Kiley

	 	 	 	15,000	 	 	 	 	28.00	 	 
	 	Leon Panetta

	 	 	 	15,000	 	 	 	 	28.00	 	 
	 	G. Kirk Raab

	 	 	 	15,000	 	 	 	 	28.00	 	 
	 

     Restricted Stock Purchase Awards. On February 1, 2006, the Compensation Committee also approved grants of restricted stock
purchase awards to each of the Named Executive Officers, as described in the Company’s Current
Report on Form 8-K dated February 1, 2006 and filed with the SEC on February 7, 2006.

     No stock options were granted to the Named Executive Officers in 2006 as part of their
compensation for 2005.

     Information regarding the compensation paid and awarded to the Named Executive Officers and
Outside Directors for the year ended December 31, 2005 will be provided in the definitive proxy
statement for the Company’s 2006 Annual Meeting of Stockholders.

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