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                                                                     Exhibit 4.4

                              CONNETICS CORPORATION

                      2002 NON-OFFICER EMPLOYEE STOCK PLAN
                           (ADOPTED DECEMBER 13, 2001)

        1. PURPOSES OF THE PLAN. The purposes of this 2002 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 Connetics and its Subsidiaries and to promote the
success of Connetics' 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 Connetics.

           (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 Connetics.

           (f) "Company" or "Connetics" means Connetics Corporation, a Delaware
        corporation.

           (g) "Consultant" means any person, including an advisor, who is
        engaged by Connetics or any Parent or Subsidiary to render services and
        is compensated for such services, and any director of Connetics, 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 Connetics or between Connetics, its Subsidiaries or its successor.
        For purposes of this Plan, a change in status from an

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        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 Connetics or any Parent or Subsidiary of
        Connetics.

           (k) "Exchange Act" means the Securities Exchange Act of 1934, as
        amended.

           (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
        Connetics' fiscal year, is the chief executive officer of Connetics (or
        is acting in such capacity) or among the four highest compensated
        officers of Connetics (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 Connetics within
        the meaning of

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        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 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 2002 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 Connetics, the Plan shall be administered
           by (A) the Board or (B) a

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           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;

               (ii) to select the Consultants and Employees to whom Options and
           Stock Purchase Rights may from time to time be granted under this
           Plan;

               (iii) to determine whether and to what extent Options and Stock
           Purchase Rights or any combination thereof are granted under this
           Plan;

               (iv) to determine the number of shares of Common Stock to be
           covered by each such award granted under this Plan;

               (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 under this Plan;

               (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

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           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
        Connetics, 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
Connetics or any Parent or Subsidiary, the term of the Option shall be five (5)
years from 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 Connetics shall be 150,000 shares.

        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

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               (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 Connetics, 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 Connetics 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 Connetics 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 Connetics.

        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 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
        Connetics 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 Connetics.
        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

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        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. Connetics 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 in this Plan, 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 in this Plan, 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
            Optionee

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            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 Connetics, 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 in this Plan,
        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 in this Plan as
        "Restricted Stock."

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            (b) Repurchase Option. Unless the Administrator determines
        otherwise, the Restricted Stock purchase agreement shall grant Connetics
        a repurchase option exercisable upon the voluntary or involuntary
        termination of the purchaser's employment with Connetics 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 Connetics. The repurchase option
        shall lapse at such rate as the Board or Committee may determine.

            (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
        Connetics. 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 under this Plan, 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. Connetics 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
Connetics an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by electing to have
Connetics 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

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        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
Connetics 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 Connetics, 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 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 Connetics; provided, however, that conversion of any
        convertible securities of Connetics 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 in this Plan, no
        issuance by Connetics 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

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        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 Connetics. 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 Connetics:

                (i) any change in the designation of the class of persons
            eligible to be granted Options;

                (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 under this
            Plan 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 Connetics.

        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

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upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for Connetics with respect to such compliance. As a
condition to the exercise of an Option or Stock Purchase Right, Connetics 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 Connetics, such a representation is
required by any of the aforementioned relevant provisions of law.

        19. RESERVATION OF SHARES. Connetics, 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 Connetics
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by Connetics' counsel to be necessary to the lawful issuance
and sale of any Shares under this Plan, shall relieve Connetics 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. Connetics 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. Connetics 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
Connetics assure their access to equivalent information.

                                     * * * *

                                       12
<PAGE>

                              CONNETICS CORPORATION
                      2002 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 ("Connetics") as follows:

        OPTIONEE'S NAME:                   [first name] [middle] [last name]

        DATE OF GRANT:                     [grant date]

        GRANT NUMBER:                      [grant number]

        EXERCISE PRICE PER SHARE:          [option price]

        TOTAL NUMBER OF SHARES GRANTED:    [shares]

        TOTAL PRICE OF SHARES GRANTED:     [total price]

        TYPE OF OPTION:                    Nonstatutory Stock Option

        TERM/EXPIRATION DATE:              [expire date]

        VESTING COMMENCEMENT DATE:         [vest date]

        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
                                           Connetics, 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 2002 Non-Officer Employee Stock Plan
and the Stock Option Agreement, all of which are attached and made a part of
this document.

                                       13
<PAGE>

Please contact Connetics' stock option administrator with any questions you may
have about this Option grant.

-------------------------------------
Thomas G. Wiggans
President & Chief Executive Officer

                                     * * * *

                                       14
<PAGE>

                              CONNETICS CORPORATION
                      2002 NON-OFFICER EMPLOYEE STOCK PLAN
                             STOCK OPTION AGREEMENT

                      OPTIONEE:        [first name] [middle] [last name]
                      GRANT NUMBER:    [grant number]

        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' 2002 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:

           (a) cash; or

                                       15
<PAGE>

           (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

                                       16
<PAGE>

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.

        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:

                                       17
<PAGE>

            (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 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

                                       18
<PAGE>

        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 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.

        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                                 CONNETICS CORPORATION
                                         a Delaware Corporation

                                         By: ___________________________________
____________________________________         Thomas G. Wiggans
[first name] [middle] [last name]            President & Chief Executive Officer

____________________________________
Social Security or Tax I.D. No.

____________________________________
Date

                                     * * * *

                                       19<PAGE>
                                                                    EXHIBIT 10.1

                            JDS UNIPHASE CORPORATION

                              AMENDED AND RESTATED
                       1993 FLEXIBLE STOCK INCENTIVE PLAN
                  (Amended and Restated as of November 9, 2001)

      1.    Establishment, Purpose, and Definitions.

            (a)   There is hereby adopted the 1993 Flexible Stock Incentive Plan
(the "Plan") of JDS Uniphase Corporation (the "Company").

            (b)   The purpose of the Plan is to provide a means whereby eligible
individuals (as defined in Section 4 below) can acquire shares of the Company's
Common Stock, $0.001 par value per share (the "Stock"). The Plan provides
employees (including officers and directors who are employees) of the Company
and of its Affiliates (as defined below) an opportunity to purchase shares of
Stock pursuant to options which may qualify as incentive stock options (referred
to as "incentive stock options") under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), and employees, officers, directors,
independent contractors, and consultants of the Company and its Affiliates an
opportunity to purchase shares of Stock pursuant to options which are not
described in Sections 422 or 423 of the Code (referred to as "nonqualified stock
options").

            (c)   The term "Affiliates" as used in the Plan means parent or
subsidiary corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.

      2.    Administration of the Plan.

            (a)   The Plan shall be administered by the Board of Directors of
the Company (the "Board"). The Board may delegate the responsibility for
administering the Plan to a committee, under such terms and conditions as the
Board shall determine (the "Committee"), which Committee shall be constituted in
such a manner as to satisfy all applicable laws pertaining to the administration
of stock incentive plans under relevant provisions of federal securities laws,
state corporate and securities laws, the Code, the rules of any relevant stock
exchange or national market system, and any foreign jurisdiction. If options are
to be granted under the Plan to employees who are also officers or directors of
the Company, the Committee shall also be constituted in such a manner as to
cause the options to be exempt from Rule 16b-3 promulgated under Section 16(b)
of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended. Except
as otherwise provided in Section 9 hereof, none of the members of the Committee
shall receive, while serving on the Committee, or during the one-year period
preceding appointment to the Committee, a grant or award of equity securities
under (i) the Plan or

                                       1
<PAGE>

(ii) any other plan of the Company or its Affiliates under which the
participants are entitled to acquire Stock (including restricted Stock), stock
options, stock bonuses, related rights or stock appreciation rights of the
Company or any of its Affiliates, other than pursuant to transactions in any
such other plan which would not have disqualified a director from being a
"disinterested person" under the version of Rule 16b-3 in effect immediately
preceding the current form of Rule 16b-3. The limitations set forth in this
Section 2(a) shall automatically incorporate any additional requirements that
may in the future be necessary for the Plan to comply with Rule 16b-3. Members
of the Committee shall serve at the pleasure of the Board. The Committee shall
select one of its members as chairman, and shall hold meetings at such times and
places as it may determine. A majority of the Committee shall constitute a
quorum and acts of the Committee at which a quorum is present, or acts reduced
to or approved in writing by all the members of the Committee, shall be the
valid acts of the Committee. If the Board does not delegate administration of
the Plan to the Committee, then each reference in this Plan to "the Committee"
shall be construed to refer to the Board.

            (b)   The Committee shall determine which eligible individuals (as
defined in Section 4 below) shall be granted options under the Plan, the timing
of such grants, the terms thereof (including any restrictions on the Stock), and
the number of shares of Stock subject to such options.

            (c)   The Committee may amend the terms of any outstanding option
granted under this Plan, but any amendment which would adversely affect an
optionee's rights under an outstanding option shall not be made without the
optionee's written consent; provided, however, that the Committee may not amend
the terms of any outstanding option to reduce the purchase price of the Stock
covered by such option without the consent of the stockholders then sufficient
to approve the Plan in the first instance. The Committee may, with the
optionee's written consent, cancel any outstanding stock option or accept any
outstanding stock option in exchange for a new option; provided, however, that
the Committee may not cancel any outstanding option and replace such cancelled
option with an option or options having a purchase price of the Stock covered by
such option or options which is lower than that of the cancelled option without
the consent of the stockholders then sufficient to approve the Plan in the first
instance.

            (d)   The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend, and rescind such rules and regulations as, in its
opinion, may be advisable for the administration of the Plan, to construe and
interpret the Plan, the rules and the regulations, and the instruments
evidencing options granted under the Plan and to make all other determinations
deemed necessary or advisable for the administration of the Plan. The Committee
shall establish additional terms, conditions, rules or procedures to accommodate
the rules or laws of applicable foreign jurisdictions and to afford participants
favorable treatment under such rules or laws; provided, however, that no option
shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions that are materially more favorable to

                                       2
<PAGE>

optionees than the terms and conditions under the Plan, except as otherwise
determined by the Committee. The Committee shall take any other action as the
Committee deems appropriate. All decisions, determinations, and interpretations
of the Committee shall be binding on all participants.

            (e)   Notwithstanding the foregoing provisions of this Section 2,
grants of options to any "Covered Employee," as such term is defined by Section
162(m) of the Code shall be made only by a subcommittee of the Committee which,
in addition to meeting other applicable requirements of this Section 2, is
composed solely of two or more "outside directors," within the meaning of
Section 162(m) of the Code and the regulations thereunder (the "Subcommittee")
to the extent necessary to qualify such grants as "performance-based
compensation" under Section 162(m). In the case of such grants to Covered
Employees, reference to the "Committee" shall be deemed to be references to the
Subcommittee as specified above.

      3.    Stock Subject to the Plan.

            (a)   An aggregate of 157,524,403 shares of Stock shall be available
for the grant of stock options and the issuance of Stock under the Plan, subject
to increase as provided in this Section 3. Notwithstanding the foregoing, the
maximum aggregate number of shares of Stock available for grant of incentive
stock options shall be 4,250,000 shares of Stock, subject to increase as
provided in this Section 3. If an option is surrendered (except surrender for
shares of Stock) or for any other reason ceases to be exercisable in whole or in
part, the shares of Stock which were subject to such option but as to which the
option had not been exercised shall continue to be available under the Plan. Any
Stock which is retained by the Company upon exercise of an option in order to
satisfy the exercise price for such option or any withholding taxes due with
respect to such option exercise shall be treated as issued to the optionee and
will thereafter not be available under the Plan.

            (b)   The shares of Stock available for the grant of stock options
and the issuance of Stock under the Plan shall be automatically increased as
follows:

                  (i)   effective on the first day of each fiscal year of the
Company, beginning July 1, 2000, the number of shares of Stock so available
shall automatically be increased by an amount, rounded to the nearest whole
share (the "Annual Increase Shares"), equal to four percent (4%) of the
aggregate number of shares of Stock and Exchangeable Stock (as defined below)
outstanding as of such date ("Outstanding Shares") or such lesser number of
shares as determined by the Committee; provided that, with respect to each such
increase effective on the first day of each fiscal year of the Company beginning
July 1, 2001, the number of Annual Increase Shares shall be reduced by the
Excess Carryover, if any, and

                  (ii)  effective upon the closing of a Company Acquisition (as
defined below), the number of shares of Stock so available shall

                                       3
<PAGE>

automatically be increased by an amount, rounded to the nearest whole share
("Acquisition Increase Shares"), equal to the product obtained by multiplying
four percent (4%) times the Acquisition Consideration (as defined below).

            For the purposes of this Section 3(b), the term "Exchangeable Stock"
shall mean the exchangeable shares of JDS Uniphase Canada Ltd, an indirect
subsidiary of the Company; the term "Excess Carryover" shall mean, as of the
effective date of each annual increase pursuant to clause (i) of this Section
3(b), the number of shares of Stock subject to the Plan that are not then-issued
and are not subject to then-outstanding option grants in each case as of such
effective date, minus the number of shares of Stock equal to one percent (1%) of
the aggregate number of Outstanding Shares as of such effective date; the term
"Company Acquisition" shall mean (x) if the consideration paid by the Company or
its subsidiary consists, in whole or in part, of Stock, Exchangeable Shares or a
combination thereof ("Stock Consideration"), the number of shares of Stock
and/or Exchangeable Shares, (y) if the consideration paid by the Company or its
subsidiary consists, in whole or in part, of cash, promissory notes or cash
equivalents, or any combination thereof ("Cash Consideration"), the number of
shares of Stock (rounded to the nearest whole share) equal to the Cash
Consideration divided by the Market Value (as defined below), and (z) if the
consideration paid by the Company or its subsidiary consists, in whole or in
part, of any consideration (other than Stock Consideration or Cash
Consideration), the number of shares of Stock (rounded to the nearest whole
share) equal to the fair market value of such other consideration, as determined
by the Committee, divided by the Market Value; the term "Market Value" shall
mean the closing market price of one share of Stock on the NASDAQ National
Market (or such other exchange upon which the Stock is then listed or quoted, if
the Stock is not then-listed on the NASDAQ National Market) on the trading day
immediately preceding the closing of the applicable Company Acquisition, as
reported in the Wall Street Journal, Eastern Edition. Any increase in the number
of shares of Stock subject to the Plan pursuant to this Section 3(b) shall not
increase the number of shares of Stock available for the grant of incentive
stock options under the Plan.

            (c)   If there is any change in the Stock subject to either the Plan
or an option agreement pursuant to the Plan, through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
(in excess of two percent (2%)), or other change in the corporate structure of
the Company, appropriate adjustments shall be made by the Committee in order to
preserve but not to increase the benefits to the individual, including
adjustments to the aggregate number, kind of shares and price per share subject
to either the Plan or an option agreement, and the maximum number of shares with
respect to which options may be granted to any participant in any fiscal year of
the Company.

      4.    Eligible Individuals. Individuals who shall be eligible to have
granted to them the options provided for by the Plan shall be such employees,
officers, directors, independent contractors and consultants of the Company or
an Affiliate as the Committee, in its discretion, shall designate from time to
time. Notwithstanding the

                                       4
<PAGE>

foregoing, only employees of the Company or an Affiliate (including officers and
directors who are bona fide employees) shall be eligible to receive incentive
stock options under the Plan.

      5.    The Option Price. The purchase price of the Stock covered by each
incentive stock option shall be not less than one hundred percent (100%) of the
per share fair market value of such Stock on the date the option is granted. The
purchase price of the Stock covered by each nonqualified stock option shall be
not less than one hundred percent (100%) of the per share fair market value of
such Stock on the date the option is granted. Notwithstanding the foregoing, in
the case of an incentive stock option granted to a person possessing more than
ten percent (10%) of the combined voting power of the Company or an Affiliate (a
"10% Stockholder"), the exercise price shall be not less than 110 percent (110%)
of the fair market value of the Stock on the date the option is granted. The
exercise price of an option shall be subject to adjustment to the extent
provided in Section 3(c) above.

      6.    Terms and Conditions of Options.

            (a)   Each option granted pursuant to the Plan will be evidenced by
a written stock option agreement executed by the Company and the person to whom
such option is granted.

            (b)   The Committee shall determine the term of each option granted
under the Plan; provided, however, that the terms of all options granted under
the Plan shall not be for more than eight (8) years and that, in the case of an
incentive stock option granted to a 10% Stockholder, the term shall be for no
more than five (5) years.

            (c)   In the case of incentive stock options, the aggregate fair
market value (determined as of the date such option is granted) of the Stock
with respect to which incentive stock options are exercisable for the first time
by an eligible employee in any calendar year (under this Plan and any other
plans of the Company or its Affiliates) shall not exceed $100,000. To the extent
that the fair market value exceeds $100,000, such excess options, to the extent
of the shares of Stock covered thereby in excess of the foregoing limitation,
shall be treated as nonqualified stock options.

            (d)   An optionee's stock option agreement may contain such other
terms, provisions and conditions consistent with this Plan as may be determined
by the Committee. If an option, or any part thereof is intended to qualify as an
incentive stock option, the stock option agreement shall contain those terms and
conditions which are necessary to so qualify it.

            (e)   The maximum number of shares of Stock with respect to which
options may be granted to any individual per fiscal year of the Company under
the Plan shall be 3,000,000 shares of Stock, subject to adjustment after
September 20, 1996 pursuant to Section 3(c). To the extent required by Section
162(m) of the Code or the

                                       5
<PAGE>

regulations thereunder, in applying the foregoing limitation with respect to an
employee, if any option is cancelled, the cancelled option shall continue to
count against the maximum number of shares of Stock for which options may be
granted to the employee under this Section 6(e). For this purpose, the repricing
of an option, if effected pursuant to Section 2(c), shall be treated as a
cancellation of the existing option and the grant of a new option.

      7.    Use of Proceeds. Cash proceeds realized from the issuance of Stock
under the Plan shall constitute general funds of the Company.

      8.    Amendment, Suspension, or Termination of the Plan.

            (a)   The Board may at any time amend, suspend or terminate the Plan
as it deems advisable; provided that such amendment, suspension or termination
complies with all applicable requirements of state and federal law, including
any applicable requirement that the Plan or an amendment to the Plan be approved
by the Company's stockholders, and provided further that, except as provided in
Section 3 above, the Board shall in no event amend the Plan in the following
respects without the consent of stockholders then sufficient to approve the Plan
in the first instance:

                  (i)   To increase the maximum number of shares of Stock
subject to incentive stock options granted under the Plan; or

                  (ii)  To change the designation or class of persons eligible
to receive incentive stock options under the Plan.

            (b)   No option may be granted under the Plan during any suspension
or after the termination of the Plan, and no amendment, suspension or
termination of the Plan shall, without the affected individual's consent, alter
or impair any rights or obligations under any option previously granted under
the Plan. The Plan shall terminate with respect to the grant of incentive stock
options on August 26, 2003, unless previously terminated by the Board pursuant
to this Section 8.

      9.    Automatic Grants to Outside Directors.

            (a)   Initial Grant. Each individual who first joins the Board as an
outside (i.e., non-employee) director of the Company after the 1993 annual
meeting of stockholders of the Company (the effective date of the Plan)
automatically shall be granted a nonqualified stock option to purchase 40,000
shares of Stock at the time such individual first joins the Board ("Initial
Option"). In addition, immediately after each annual meeting of stockholders of
the Company, commencing with the 1993 annual meeting, each individual who is at
the time continuing to serve as an outside director of the Company, whether or
not such outside director stood for re-election at such annual meeting,
automatically shall be granted a nonqualified stock option to purchase an

                                       6
<PAGE>

additional 10,000 shares of Stock, provided that each such individual has served
as an outside director for at least nine months ("Additional Option").

            (b)   Terms of Options. The terms and conditions that apply to each
such automatic option grant referred to above shall be as follows: (i) the per
share exercise price of the Stock covered by each such option shall be equal to
one hundred percent (100%) of the per share fair market value of such Stock on
the date of grant; (ii) the term of the option shall be eight (8) years; (iii)
the Initial Option shall be exercisable in thirty-six (36) equal monthly
installments beginning on the first monthly anniversary of the grant of such
Initial Option and Additional Options shall be exercisable in twelve (12) equal
monthly installments beginning on the first monthly anniversary of the grant of
such Additional Option; and (iv) all other terms and conditions of the option
shall be as set forth in the Company's then current form of nonqualified stock
option agreement under the Plan.

            (c)   No Other Grants. Except for the automatic grants under this
Section 9, members of the Committee who serve as administrator of the Plan shall
not be eligible to receive any additional options under the Plan or any other
stock plan of the Company or any Affiliate, except as otherwise permitted by
Rule 16b-3.

      10.   Assignability. Each option granted pursuant to this Plan shall,
during an optionee's lifetime, be exercisable only by such optionee, and neither
the option nor any right hereunder shall be transferable by such optionee by
operation of law or otherwise other than by will or the laws of descent and
distribution.

      11.   Payment Upon Exercise of Options.

            (a)   The consideration to be paid for the shares of Stock to be
issued upon exercise or purchase of an option including the method of payment,
shall be determined by the Committee (and, in the case of an incentive stock
option, shall be determined at the time of grant). In addition to any other
types of consideration the Committee may determine, the Committee is authorized
to accept as consideration for shares of Stock issued under the Plan the
following, provided that the portion of the consideration equal to the par value
of the shares of Stock must be paid in cash or other legal consideration
permitted by the Delaware General Corporation Law:

                  (i)   cash;

                  (ii)  check;

                  (iii) delivery of the optionee's promissory note with such
recourse, interest, security, and redemption provisions as the Committee
determines as appropriate;

                  (iv)  surrender of shares of Stock or delivery of a properly
executed form of attestation of ownership of shares of Stock as the Committee

                                       7
<PAGE>

may require (including withholding of shares of Stock otherwise deliverable upon
exercise of the option) which have a fair market value on the date of surrender
or attestation equal to the aggregate exercise price of the shares of Stock as
to which said option shall be exercised (but only to the extent that such
exercise of the option would not result in an accounting compensation charge
with respect to the shares of Stock used to pay the exercise price unless
otherwise determined by the Committee);

                  (v)   payment through a broker-dealer sale and remittance
procedure pursuant to which the optionee (A) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased shares of Stock and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares of Stock and (B) shall
provide written directives to the Company to deliver the certificates for the
purchased shares of Stock directly to such brokerage firm in order to complete
the sale transaction; or

                  (vi)  any combination of the foregoing methods of payment.

            (b)   In the event that the purchase price is satisfied by the
manner provided in (a)(iv) above, the Committee may grant such optionee an
additional option, with terms identical to the optionee's then existing stock
option agreement, entitling such optionee to purchase additional Stock in an
amount equal to the number of shares of Stock so retained.

      12.   Withholding Taxes.

            (a)   No option granted under the Plan shall be exercised until the
optionee has made arrangements acceptable to the Committee for the satisfaction
of foreign, federal, state, and local income and employment tax withholding
obligations, including without limitation obligations incident to the receipt of
Stock under the Plan, the lapsing of restrictions applicable to such Stock, the
failure to satisfy the conditions for treatment as incentive stock options under
applicable tax law. Upon an optionee's exercise of a stock option, the Company
may satisfy its withholding obligations by withholding from such optionee or
requiring the optionee to surrender shares of Stock sufficient to satisfy the
minimum foreign, federal, state and local income and employment tax withholding
obligations.

            (b)   In the event that such withholding is satisfied by the Company
or an optionee's employer retaining from the shares of Stock otherwise to be
issued to such optionee shares of Stock having a value equal to such withholding
tax, the Committee may grant to an optionee an additional option, with terms
identical to such optionee's then existing stock option agreement under which
the option was received, entitling optionee to purchase additional Stock in an
amount equal to the number of shares of Stock so retained.

                                       8
<PAGE>

      13.   Restrictions on Transfer of Shares. The Stock acquired pursuant to
the exercise of options granted under the Plan shall be subject to such
restrictions and agreements regarding sale, assignment, encumbrances or other
transfer as are in effect among the stockholders of the Company at the time such
Stock is acquired, as well as to such other restrictions as the Committee shall
deem advisable.

      14.   Corporate Transaction.

            (a)   For purposes of this Section 14 for options granted on or
after November 9, 2001, a "Corporate Transaction" shall include any of the
following transactions:

                  (i)   a merger or consolidation in which the Company is not
the surviving entity;

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

                  (iii) the liquidation or dissolution of the Company;

                  (iv)  any reverse merger in which the Company is the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated; or

                  (v)   the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities but
excluding any such transaction that the Committee determines shall not be a
Corporate Transaction.

            (b)   For purposes of this Section 14 for options granted before
November 9, 2001, a "Corporate Transaction" shall include any of the following
stockholder-approved transactions to which the Company is a party:

                  (i)   a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state of the Company's incorporation;

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

                                       9
<PAGE>

                  (iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a holder or holders different from those who held such securities
immediately prior to such merger.

            (c)   In the event of any Corporate Transaction, all outstanding
options shall vest in their entirety and become exercisable immediately prior to
the specified effective date of the Corporate Transaction, unless such options
are either (i) assumed by the successor corporation or its parent company
pursuant to options providing substantially equal value and having substantially
equivalent provisions as the options granted under this Plan or (ii) the options
are affirmed by the Company; provided however that all options issued to
non-employee directors shall vest in their entirety and become exercisable
immediately prior to the specified effective date of the Corporate Transaction
irrespective of whether such options are assumed by the successor corporation or
its parent company or are affirmed by the Company.

      15.   No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or an
Affiliate, options shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or an
Affiliate, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
"Retirement Plan" or "Welfare Plan" under the Employee Retirement Income
Security Act of 1974, as amended.

      16.   Approval of the Plan. The Plan became effective when adopted by the
Board in August, 1993, and was approved by the Company's stockholders in
October, 1993. In addition to previous amendments, the Board adopted and
approved an amendment and restatement of the Plan on November 9, 2001 to modify
the following: (i) the revision of Section 2(a) to ensure compliance with the
new requirements under Rule 16b-3 of the Exchange Act; (ii) the reduction of the
maximum number of shares of Stock with respect to which options may be granted
to an individual per fiscal year of the Company in Section 6(e) to 3,000,000
shares of Stock and (iii) for new options granted on or after November 9, 2001,
the revision of the definition of "Corporate Transaction" as set forth in
Section 14.

                                       10

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