Document:

exv10w15

 

Exhibit 10.15

CONNETICS CORPORATION

CONSULTANT CHANGE OF CONTROL AGREEMENT

     This Consultant Change of Control Agreement (the “Agreement”) is made and entered into
effective as of January 1, 2002 (the “Effective Date”), by and between G. Kirk Raab (the
“Consultant”) and Connetics Corporation, a Delaware corporation (“Connetics”). Certain capitalized
terms used in this Agreement are defined in Section 1 below.

R E C I T A L S

     A. It is expected that Connetics from time to time will consider the possibility of a Change
of Control, as defined in this Agreement. The Board of Directors of Connetics (the “Board”)
recognizes that such consideration can be a distraction to the Consultant and can cause the
Consultant to consider alternative service opportunities which would be detrimental to Connetics.

     B. Connetics believes that it is in the best interests of Connetics and its stockholders to
provide the Consultant with an incentive to continue his service to Connetics in his capacity as a
valued consultant and to maximize the value of Connetics upon a Change of Control for the benefit
of its stockholders.

     C. In order to encourage the Consultant to remain with Connetics notwithstanding the
possibility of a Change of Control, Connetics believes that it is imperative to provide the
Consultant with certain severance benefits upon the Consultant’s termination of his status as a
consultant under certain circumstances following a Change of Control.

     D. This Agreement supersedes any and all prior agreements that have as their primary purpose
the provision of benefits upon certain circumstances following a Change of Control.

AGREEMENT

     In consideration of the mutual covenants contained in this Agreement, the parties agree as
follows:

     1. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:

          (a) Cause. “Cause” shall mean (i) any act of dishonesty taken by the Consultant in
connection with his responsibilities as a consultant which is intended to result in personal
enrichment to the Consultant, (ii) Consultant’s conviction of a felony that the Board believes has
had or will have a material detrimental effect on Connetics’ reputation or business, (iii) a
willful act or willful failure to act by the Consultant that constitutes misconduct and is
injurious to Connetics, (iv) any material breach of any agreement with Connetics, or (v) continued
willful violations by the

 

 

Consultant of the Consultant’s obligations to Connetics or responsibilities/duties as a
consultant after there has been delivered to the Consultant a written demand for performance from
Connetics which describes the basis for Connetics’ belief that the Consultant has not substantially
performed his duties as a consultant.

          (b) Change of Control. “Change of Control” shall mean the occurrence of any of the
following events:

               (i) the approval by Connetics’ shareholders of a merger or consolidation of Connetics with any
other corporation, other than a merger or consolidation which would result in the voting securities
of Connetics outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting securities of Connetics or such
surviving entity outstanding immediately after such merger or consolidation;

               (ii) the approval by Connetics’ shareholders of a plan of complete liquidation of Connetics or
an agreement for the sale or disposition by Connetics of all or substantially all of Connetics’
assets;

               (iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of Connetics representing 50% or more of the total
voting power represented by Connetics’ then outstanding voting securities; or

               (iv) a change in the composition of the Board, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of Connetics as of the date hereof, or (B) are elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of those directors whose election or
nomination was not in connection with any transactions described in subsections (i), (ii), or (iii)
or in connection with an actual or threatened proxy contest relating to the election of directors
of Connetics.

          (c) Involuntary Termination. “Involuntary Termination” shall mean (i) without the
Consultant’s express written consent, a significant reduction of the Consultant’s duties, position
or responsibilities relative to the Consultant’s duties, position or responsibilities in effect
immediately prior to such reduction, or the removal of the Consultant from such position, duties
and responsibilities, unless the Consultant is provided with comparable duties, position and
responsibilities; provided, however, that a reduction in duties, position or responsibilities
solely by virtue of Connetics being acquired and made part of a larger entity (as, for example,
when the Chief Financial Officer of Connetics remains as such following a Change of Control but is
not made the Chief Financial Officer of the acquiring corporation) shall not constitute an
“Involuntary Termination;” (ii) without the Consultant’s express written consent, a significant
reduction, without good business reasons, of the facilities and perquisites (including office space
and location) available to the Consultant immediately prior to such reduction; (iii) without the
Consultant’s express written consent, a reduction by Connetics of the Consultant’s consulting fee
as in effect immediately prior to such reduction; (iv) without the Consultant’s express written
consent, a material reduction by Connetics in the kind or level of benefits to which the Consultant
is entitled immediately prior to such reduction with the result that the Consultant’s overall
benefits package is significantly reduced;

-2-

 

(v) without the Consultant’s express written consent, the relocation of the Consultant to a
facility or a location more than fifty (50) miles from his current location; (vi) any termination
of the Consultant by Connetics that is not effected for Cause or for which the grounds relied upon
are not valid; or (vii) the failure of Connetics to obtain the assumption of this Agreement by any
successors contemplated in Section 7 below.

          (d) Termination Date. “Termination Date” shall mean the effective date of any notice
of termination delivered by one party to the other under this Agreement.

     2. Term of Agreement. This Agreement shall terminate on the earlier of (a) the date
that all obligations of the parties under this Agreement have been satisfied or (b) on the date,
prior to a Change of Control, the Consultant is no longer providing services to Connetics in his
capacity as a consultant.

     3. Severance Benefits In the Event of an Involuntary Termination.

          (a) Termination of Service Following A Change of Control. If the Consultant’s service
with Connetics terminates as a result of an Involuntary Termination at any time within twenty-four
(24) months after a Change of Control, Consultant shall be entitled to the following severance
benefits:

               (i) 2.99 times the Consultant’s annual consulting fee as in effect as of the Termination Date,
less applicable withholding, payable in a lump sum within thirty (30) days of the Termination Date;

               (ii) the same level of health (i.e., medical, vision and dental) coverage and benefits as in
effect for the Consultant on the day immediately preceding the day of the Consultant’s termination
of employment for a period of thirty-six (36) months; and

               (iii) outplacement/administrative support for a period of six (6) months following the
Termination Date.

          (b) Termination Apart from a Change of Control. If the Consultant’s service with
Connetics terminates other than as a result of an Involuntary Termination within twenty-four (24)
months following a Change of Control, then the Consultant shall not be entitled to receive
severance or other benefits as described in this Section 5(b), but may be eligible for those
benefits (if any) as may then be established under Connetics’ then existing severance and benefits
plans and policies at the time of such termination.

          (c) Accrued Fee and Expenses. Without regard to the reason for, or the timing of,
Consultant’s termination of his consulting relationship with Connetics: (i) Connetics shall pay
the Consultant any unpaid consulting fee due for periods prior to the Termination Date;; and (ii)
following submission of proper expense reports by the Consultant, Connetics shall reimburse the
Consultant for all expenses reasonably and necessarily incurred by the Consultant in connection
with the business of Connetics prior to the Termination Date. These payments shall be made
promptly upon termination of the consulting relationship and within the period of time mandated by
law.

     4. Limitation on Payments. In the event that the option acceleration, severance or
other benefits provided for in this Agreement or otherwise payable to the Consultant (i) constitute

-3-

 

“parachute payments” within the meaning of Section 280G of the Code, and (ii) would be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Consultant’s
benefits under this Agreement shall be either

          (a) delivered in full, or

          (b) delivered to such lesser extent which would result in no portion of such benefits being
subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the Excise Tax, results in the receipt by Consultant on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code.

     Unless Connetics and the Consultant otherwise agree in writing, any determination required
under this Section shall be made in writing by Connetics’ independent public accountants (the
“Accountants”), whose determination shall be conclusive and binding upon the Consultant and
Connetics for all purposes. For purposes of making the calculations required by this Section, the
Accountants may make reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999
of the Code. Connetics and the Consultant shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a determination under this
Section. Connetics shall bear all costs the Accountants may reasonably incur in connection with
any calculations contemplated by this Section.

     5. Successors.

          (a) Company’s Successors. Any successor to Connetics (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of Connetics’ business and/or assets shall assume Connetics’ obligations under
this Agreement and agree expressly to perform Connetics’ obligations under this Agreement in the
same manner and to the same extent as Connetics would be required to perform such obligations in
the absence of a succession. For all purposes under this Agreement, the term “Company” shall
include any successor to Connetics’ business and/or assets which executes and delivers the
assumption agreement described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.

          (b) Consultant’s Successors. Without the written consent of Connetics, Consultant
shall not assign or transfer this Agreement or any right or obligation under this Agreement to any
other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights
of Consultant hereunder shall inure to the benefit of, and be enforceable by, Consultant’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.

     6. Notices.

          (a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when they are personally

-4-

 

delivered or when they are mailed by U.S. registered or certified mail, return receipt
requested and postage prepaid. In the case of the Consultant, mailed notices shall be addressed to
the Consultant at the home address which the Consultant most recently communicated to Connetics in
writing. In the case of Connetics, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its Secretary.

          (b) Notice of Termination. Any termination by Connetics for Cause or by the
Consultant as a result of a voluntary resignation or an Involuntary Termination shall be
communicated by a notice of termination to the other party to this Agreement given in accordance
with this Section. Such notice shall (i) indicate the specific termination provision in this
Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and (iii) specify the Termination
Date (which shall be not more than 30 days after the giving of such notice). If the Consultant
fails to include in the notice any fact or circumstance which contributes to a showing of
Involuntary Termination, that failure shall not waive any right of the Consultant under this
Agreement or preclude the Consultant from asserting such fact or circumstance in enforcing his
rights under this Agreement.

     7. Arbitration.

          (a) Disputes. Except as provided in Section 7(c) below, the Company and Consultant
agree that any dispute or controversy arising out of, relating to or in connection with the
interpretation, validity, construction, performance, breach or termination of this Agreement shall
be settled by binding arbitration to be held in the county of Santa Clara, California, in
accordance with the Commercial Arbitration Rules, supplemented by the Supplemental Procedures for
Large Complex Disputes, of the American Arbitration Association as then in effect (the “Rules”).
The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision
of the arbitrator shall be final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator’s decision in any court of competent jurisdiction.

          (b) Consent to Personal Jurisdiction. The arbitrator(s) shall apply California law to
the merits of any dispute or claim, without reference to conflicts of law rules. Consultant hereby
consents to the personal jurisdiction of the state and federal courts located in California for any
action or proceeding arising from or relating to this Agreement or relating to any arbitration in
which the parties are participants.

          (c) Equitable Relief. The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or conservatory relief,
as necessary, without breach of this arbitration agreement and without abridgment of the powers of
the arbitrator.

          (d) Acknowledgment. CONSULTANT HAS READ AND UNDERSTANDS SECTION 7, WHICH DISCUSSES
ARBITRATION. CONSULTANT UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, CONSULTANT AGREES TO SUBMIT
ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING
ARBITRATION, EXCEPT AS PROVIDED IN SECTION 7 (c), AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF CONSULTANT’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL

-5-

 

DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP BETWEEN THE PARTIES.

     8. Miscellaneous Provisions.

          (a) No Duty to Mitigate. The Consultant shall not be required to mitigate the amount
of any payment contemplated by this Agreement, nor shall any such payment be reduced by any
earnings that the Consultant may receive from any other source.

          (b) Waiver. No provision of this Agreement may be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Consultant
and by an authorized officer of Connetics. No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition or provision at
another time.

          (c) Integration. This Agreement and any other agreement referenced in this Agreement
represent the entire agreement and understanding between the parties as to the subject matter of
this Agreement and supersede all prior or contemporaneous agreements, whether written or oral, with
respect to this Agreement.

          (d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules,
of the State of California.

          (e) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

          (f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.

-6-

 

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of Connetics
by its duly authorized officer, as of the day and year first written above.

	 	 	 	 	 
	COMPANY:	 	CONNETICS CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	/s/ Thomas G. Wiggans
	 

	 	 	 	 

	 
	 	 	 	 
	 

	 	Title:	 	President and Chief Executive Officer
	 

	 	 	 	 

	 
	 	 	 	 
	CONSULTANT:	 	/s/ G. Kirk Raab

	 	 	Signature
	 
	 	 	 	 
	 	 	G. Kirk Raab

	 	 	Printed Name

-7-exv10w25

 

Exhibit 10.25

CONNETICS CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

     Connetics Corporation, a Delaware corporation (the “Corporation”), effective May 16, 2005,
hereby grants to Michael Eison (the “Optionee”), an option to purchase a maximum of 30,000 shares
(the “Option Shares”) of its Common Stock, at an exercise price equal to the fair market value on
the date of grant with the following terms and conditions:

	I.  	NOTICE OF STOCK OPTION GRANT

	 	 	 	 	 
	 
	 	Michael Eison	 	 
	 
	 	3160 Porter Drive	 	 
	 
	 	Palo Alto CA  94304	 	 
	

	 	 	 	 
	 
	 	Date of Grant	 	May 16, 2005
	

	 	 	 	 
	 
	 	Vesting Commencement Date	 	May 16, 2005
	

	 	 	 	 
	 
	 	Exercise Price per Share	 	$21.83
	

	 	 	 	 
	 
	 	Total Number of Shares Granted	 	30,000 Shares
	

	 	 	 	 
	 
	 	Total Exercise Price	 	$654,900.00
	

	 	 	 	 
	 
	 	Type of Option:	 	þ Nonstatutory Stock Option
	

	 	 	 	 
	 
	 	Term/Expiration Date:	 	May 16, 2015

     Vesting Schedule:

     This Option may be exercised, in whole or in part, in accordance with the following schedule:

     1/8 of the Shares subject to the Option shall vest six months after the Vesting Commencement
Date, and 1/48 of the Shares subject to the Option shall vest each month thereafter, subject to the
Optionee continuing to be an Employee on such dates.

     Termination Period:

     This Option may be exercised for (3) three months after Optionee ceases to be an employee.
Upon the Disability of the Optionee, this Option may be exercised for (6) six months; or, upon
Death or Total Disability of the Optionee, this Option may be exercised for (12) twelve months
after Optionee ceases to be an employee. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

 

 

	II.  	AGREEMENT

     1. Grant of Option. The Administrator of Connetics hereby grants to the Optionee
named in the Notice of Grant attached as Part I of this Agreement (the “Optionee”) an option (the
“Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise
price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and
conditions, which is incorporated in this Agreement by reference.

          This option grant constitutes an offer by the Corporation to provide the Optionee with Option
Shares, and is subject to and conditioned upon Optionee’s acceptance of the Option Shares by
returning to the Corporation an executed original of this Non-Qualified Stock Option Agreement (the
“Option Agreement”). This offer shall be null and void and of no force and effect, unless Optionee
executes and returns to the Corporation the Stock Option Agreement.

          This option is granted as an “inducement grant” under NASDAQ rules, and is therefore being
granted outside the Corporation’s equity option plans.

          This option is not intended to be an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).

     2. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Grant and the applicable provisions of this Option
Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice,
which shall state the election to exercise the Option, the number of Shares in respect of which the
Option is being exercised (the “Exercised Shares”). The notice shall be completed by the Optionee
and delivered to the Secretary of Connetics. The notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by Connetics of such fully executed notice accompanied by such aggregate Exercise
Price.

          No Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

     3. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

          (a) cash; or

          (b) check; or

-2-

 

          (c) consideration received by Connetics under a cashless exercise program implemented by
Connetics in connection with this agreement; or

          (d) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.

     4. 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 the Optionee. The terms of this Option Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the Optionee.

     5. No Obligation to Exercise Option. The grant and acceptance of this option imposes
no obligation on the Optionee to exercise it.

     6. No Obligation to Continue Business Relationship. The Corporation and any its’
subsidiaries are not by this option obligated to continue to maintain a business relationship with
the Optionee.

     7. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the terms of this
Option Agreement.

     8. Tax Consequences. Some of the federal tax consequences relating to this Option, as
of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option.

               (i) Nonstatutory Stock Option. The Optionee may incur regular federal income tax
liability upon exercise of a NSO. 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 Exercised Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, Connetics will be required to withhold from his or
her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in
cash equal to a percentage of this compensation income at the time of exercise, and may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.

          (b) Disposition of Shares.

               (i) NSO. The Optionee holds NSO Shares for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal income tax
purposes.

-3-

 

     9. No Rights as Stockholder until Exercise. The Optionee shall have no rights as a
stockholder with respect to the Option Shares until a stock certificate has been issued to the
Optionee and is fully paid for in accordance with Section 3. With respect to certain changes in
the capitalization of the Corporation, no adjustment shall be made for dividends or similar rights
for which the record date is prior to the date such stock certificate
is issued.

     10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

          (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, and the number
of shares of Common Stock which have been authorized for issuance under the Option Agreement but as
to which no Options have yet been granted, as well as the price per share of Common Stock covered
by each such outstanding Option, 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 Option Agreement, 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.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of Connetics, the Administrator shall notify each Optionee as soon as practicable prior
to the effective date of such proposed transaction. The Administrator in its discretion may
provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior
to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which
the Option would not otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and
in the manner contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.

          (c) Merger or Asset Sale. In the event of a merger of Connetics with or into another
corporation, or the sale of substantially all of the assets of Connetics, each outstanding Option
shall be assumed or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the successor corporation
refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall

-4-

 

terminate upon the expiration of such period. For the purposes of this paragraph, the Option
shall be considered assumed if, following the merger or sale of assets, the option confers the
right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common
stock of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of assets.

     11. Entire Agreement; Governing Law. This Option Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of Connetics and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing
signed by Connetics and Optionee. This agreement is governed by the internal substantive laws, but
not the choice of law rules, of California.

     12. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE OF THIS AGREEMENT IS EARNED ONLY BY CONTINUING
AS AN EMPLOYEE AT THE WILL OF CONNETICS (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN
OPTION OR PURCHASING SHARES UNDER THIS AGREEMENT). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT AND THE VESTING SCHEDULE SET
FORTH IN THIS AGREEMENT DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS
AN EMPLOYEE FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
OPTIONEE’S RIGHT OR CONNETICS’ RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS AN EMPLOYEE AT ANY
TIME, WITH OR WITHOUT CAUSE.

-5-

 

     By your signature and the signature of Connetics’ representative below, you and Connetics
agree that this Option is granted under and governed by the terms and conditions of the this Option
Agreement. Optionee has reviewed this Option Agreement in its’ entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option Agreement and fully understands all
provisions of this Option Agreement. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Administrator upon any questions relating to this
Option Agreement. Optionee further agrees to notify Connetics upon any change in the residence
address indicated below.

	 	 	 
	OPTIONEE:	 	
CONNETICS CORPORATION
	     /s/ Michael Eison

Signature	 	
     /s/ Thomas G. Wiggans

By:  Thomas G. Wiggans
	     Michael Eison

Print Name	 	
     Chief Executive Officer

Title
	 

Residence Address	 	 
	 

	 	 

-6-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]