Document:

exv10w2

 

Exhibit 10.2

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of ___, 200___, between
QUINTANA MARITIME LIMITED, a Marshall Islands company (the “Company”), and
___(the “Employee”). The parties agree as follows:

     1) Award. Pursuant to the QUINTANA MARITIME LIMITED 2005 STOCK INCENTIVE PLAN (the
“Plan”), as of the date of this Agreement, ___shares (the “Restricted Shares”) of the
Company’s common stock shall be issued as hereinafter provided in the Employee’s name subject to
certain restrictions thereon. The Restricted Shares shall be issued upon acceptance hereof by
Employee and upon satisfaction of the conditions of this Agreement. The Employee acknowledges
receipt of a copy of the Plan and agrees that this award of Restricted Shares shall be subject to
all of the terms and provisions of the Plan, including future amendments thereto, if any, pursuant
to the terms thereof.

     2) Restricted Shares. The Employee hereby accepts the Restricted Shares when issued
and agrees with respect thereto as follows:

     a) Forfeiture Restrictions. The Restricted Shares may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the
extent then subject to the Forfeiture Restrictions, and in the event of termination of the
Employee’s employment with the Company for any reason other than as provided in Section
2(b), the Employee shall, for no consideration, forfeit to the Company all Restricted Shares
then subject to the Forfeiture Restrictions. The prohibition against transfer and the
obligation to forfeit and surrender Restricted Shares to the Company upon termination of
employment are herein referred to as the “Forfeiture Restrictions.” The Forfeiture
Restrictions shall be binding upon and enforceable against any transferee of Restricted
Shares.

     b) Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse
as to the Restricted Shares in accordance with the following schedule provided that the
Employee has been continuously employed by the Company from the date of this Agreement
through the lapse date:

	 	 	 	 	 
	 	 	Number	 
	 	 	of Restricted Shares Granted	 
	 	 	as to Which	 
	Date	 	Forfeiture Restrictions Lapse	 
	_________
	 	 	—%	 
	 
	 	 	 	 
	_________
	 	 	—%	 
	 
	 	 	 	 
	_________
	 	 	—%	 
	 
	 	 	 	 
	_________
	 	 	—%	 
	 
	 	 	 	 
	_________
	 	 	—%	 
	 
	 	 	 	 
	_________
	 	 	—%	 

 

 

Notwithstanding the foregoing, if the Employee’s employment with the Company is
terminated by reason of his death or disability (within the meaning of section 22(e)(3) of
the Code), the Forfeiture Restrictions shall lapse as to all of the Restricted Shares then
subject to the Forfeiture Restrictions.

     2. Certificates. A certificate evidencing the Restricted Shares shall be issued by
the Company in the Employee’s name, pursuant to which the Employee shall have all of the rights of
a shareholder of the Company with respect to the Restricted Shares, including, without limitation,
voting rights and the right to receive dividends (provided, however, that dividends paid in shares
of the Company’s stock shall be subject to the Forfeiture Restrictions). The Employee may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the stock until the
Forfeiture Restrictions have expired (except with regard to a “qualified domestic relations
order”), and a breach of the terms of this Agreement shall cause a forfeiture of the Restricted
Shares. The certificate shall contain an appropriate endorsement reflecting the Forfeiture
Restrictions. The certificate shall be delivered upon issuance to the Secretary of the Company or
to such other depository as may be designated by the Committee as a depository for safekeeping
until the forfeiture of such Restricted Shares occurs or the Forfeiture Restrictions lapse pursuant
to the terms of the Plan and this award. On the date of this Agreement, the Employee shall, if
required by the Committee, deliver to the Company a stock power, endorsed in blank, relating to the
Restricted Shares. Upon the lapse of the Forfeiture Restrictions without forfeiture, the Company
shall cause a new certificate or certificates to be issued without legend (except for any legend
required pursuant to applicable securities laws or any other agreement to which the Employee is a
party) in the name of the Employee in exchange for the certificate evidencing the Restricted
Shares.

     3. Corporate Acts. The existence of the Restricted Shares shall not affect in any way
the right or power of the Board of Directors of the Company or the shareholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company, any issue of debt or
equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other corporate act or
proceeding. The prohibitions of Section 2(a) hereof shall not apply to the transfer of Restricted
Shares pursuant to a plan of reorganization of the Company, but the stock, securities or other
property received in exchange therefor shall also become subject to the Forfeiture Restrictions and
provisions governing the lapsing of such Forfeiture Restrictions applicable to the original
Restricted Shares for all purposes of this Agreement and the certificates representing such stock,
securities or other property shall be legended to show such restrictions.

     4. Withholding of Tax and Tax Elections. To the extent that the receipt of the
Restricted Shares or the lapse of any Forfeiture Restrictions results in compensation income or
wages to the Employee for federal, state, or local income tax purposes, the Employee shall deliver
to the Company at the time of such receipt or lapse, as the case may be, such amount of

 

 

money as the Company may require to meet its obligation under applicable tax laws or
regulations. The Employee may elect with respect to this Agreement to surrender or authorize the
Company to withhold shares of stock of the Company (valued at their Fair Market Value on the date
of surrender or withholding of such shares) to satisfy any tax required to be withheld by reason of
compensation income resulting under this Agreement. An election pursuant to the preceding sentence
shall be referred to herein as a “Stock Withholding Election.” All Stock Withholding Elections
shall be made by written notice to the Company at its principal executive office addressed to the
attention of the Secretary. The Employee may revoke such election by delivering to the Secretary
written notice of such revocation prior to the date such election is implemented through actual
surrender or withholding of shares of stock of the Company. If the Employee fails to pay the
required amount to the Company or fails to make a Stock Withholding Election, the Company is
authorized to withhold from any cash remuneration or stock remuneration, including withholding any
Restricted Shares distributable to the Employee under this Agreement, then or thereafter payable to
the Employee any tax required to be withheld by reason of compensation income resulting under this
Agreement or the disposition of Restricted Shares acquired under this Agreement.

If the Employee makes the election authorized by section 83(b) of the Internal Revenue Code of
1986, as amended (the “Code”), the Employee shall submit to the Company a copy of the statement
filed by the Employee to make such election.

     5. Status of Stock. The Employee agrees that the Restricted Shares issued under this
Agreement will not be sold or otherwise disposed of in any manner that would constitute a violation
of any applicable federal or state securities laws. The Employee also agrees that (i) the
certificates representing the Restricted Shares may bear such legend or legends as the Committee
deems appropriate in order to reflect the Forfeiture Restrictions and to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the transfer of the Restricted
Shares on the stock transfer records of the Company if such proposed transfer would constitute a
violation of the Forfeiture Restrictions or, in the opinion of counsel satisfactory to the Company,
of any applicable securities law, and (iii) the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the Restricted Shares.

     6. Employment Relationship. For purposes of this Agreement, the Employee shall be
considered to be in the employment of the Company as long as the Employee remains an employee of
either the Company, a parent or subsidiary corporation (as defined in section 424 of the Code) of
the Company. Nothing in the adoption of the Plan, nor the award of the Restricted Shares
thereunder pursuant to this Agreement, shall confer upon the Employee the right to continued
employment by the Company or affect in any way the right of the Company to terminate such
employment at any time. Unless otherwise provided in a written employment agreement or by
applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the
employment relationship may be terminated at any time by either the Employee or the Company for any
reason whatsoever, with or without cause. Any question as to whether and when there has been a
termination of such employment, and the cause of such termination, shall be determined by the
Committee, and its determination shall be final.

 

 

     7. Notices. Any notices or other communications provided for in this Agreement shall
be sufficient if in writing. In the case of the Employee, such notices or communications shall be
effectively delivered if hand delivered to the Employee at his principal place of employment or if
sent by registered or certified mail to the Employee at the last address the Employee has filed
with the Company. In the case of the Company, such notices or communications shall be effectively
delivered if sent by registered or certified mail to the Company at its principal executive
offices.

     8. Amendment. This Agreement may not be modified in any respect by any verbal
statement, representation or agreement made by the Employee or by any employee, officer, or
representative of the Company or by any written agreement unless signed by the Employee and by an
officer of the Company who is expressly authorized by the Company to execute such document.

     9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under the Employee.

     10. Controlling Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the Marshall Islands, without regards to conflicts of laws principles.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, and the Employee has executed this Agreement, all as of the date first
above written.

	 	 	 	 	 
	 
	 	QUINTANA MARITIME LIMITED
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	EMPLOYEE
	 
	 	 	 	 
	 
	 	 
	 
	 	[Name of Employee]exv10w1

 

Exhibit 10.1

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT (“Agreement”) is made and entered into on August 22, 2005 by and
between Connetics Corporation (“Connetics” or the “Company”) and G. Kirk Raab (“Consultant”).
Connetics and Consultant are each referred to in this Agreement as a “Party” and collectively as
the “Parties.”

BACKGROUND

     A. The Company desires to continue to engage Consultant as a consultant and a member of the
Board of Directors of the Company, and, through December 31, 2005, as the Chairman of the Board,
and Consultant desires to be so engaged by Connetics in such positions, on the terms and conditions
set forth in this Agreement.

     B. Connetics
and Consultant have entered into that certain consulting agreement
dated October 1,
1995 (the “Former Consulting Agreement”) and that certain Change of Control Agreement effective as
of January 1, 2002 (the “Former Change of Control Agreement”).

     C. Connetics and Consultant desire to terminate the Former Consulting Agreement and Former
Change of Control Agreement effective as of the date of this Agreement and to enter into this
Agreement in lieu of those agreements.

     NOW, THEREFORE, in consideration of the mutual premises, covenants and agreements contained in
this Agreement, intending to be legally bound, the Parties agree as follows:

AGREEMENT

     1. Term. This Agreement is for the period commencing on the date of this Agreement
and terminating on December 31, 2007, or upon the date of termination of engagement pursuant to
Section 6 of this Agreement (the “Term”). Commencing on January 1, 2008, Consultant’s engagement
shall continue month-to-month (and his service on the Board shall continue at the discretion of the
stockholders), provided that all other provisions of this Agreement shall continue to apply to
Consultant’s engagement.

     2. Consulting Fees. During the Term, Consultant’s annual fee shall be $300,000 (the
“Consulting Fee”), payable in two equal payments of $12,500 per month. The Consulting Fee shall be
in addition to any fees payable to Consultant for service on the Board of Directors. The Board or
a designated committee of the Board will review the Consulting Fee and adjust it as the Board deems
appropriate at the end of each calendar year.

     3. Stock Options. Consultant’s current Company stock options shall be governed by the
terms and conditions of the applicable Company stock option plans and/or stock option agreements.
Consultant may be granted additional options to purchase Company common stock, on such terms and
conditions as the Compensation Committee of the Board of Directors (or any other entity with
authority to make such determination) may determine.

     4. Expenses. During the Term, the Company will reimburse Consultant for all
reasonable travel and necessary business expenses he incurs in connection with his services,

Page 1

 

upon timely submission by the Consultant of an invoice and receipts or other documentation in
accordance with the Company’s normal reimbursement procedures. The Company will provide Consultant
with reimbursements within thirty (30) days of receipt of the invoice. Consultant agrees to obtain
the Company’s prior approval for any significant expenses.

     5. Independent Contractor Status. The Company and Consultant each acknowledge and
agree that Consultant shall serve as an independent contractor and not as an employee of the
Company. The Company and Consultant hereby covenant with one another to treat the engagement of
Consultant as that of an independent contractor, and not an employee, for all purposes including
employee benefits, unemployment insurance, workers’ compensation insurance and federal, state,
local and payroll taxes. Consultant understands and agrees that he is responsible for paying all
federal, state, and local income or business taxes, including estimated taxes, self-employment and
any other taxes, fees, additions to tax, interest or penalties which may be assessed, imposed, or
incurred as a result of the Consulting Fee or any other payments paid by the Company pursuant to
this Agreement.

     6. Termination of Consulting Relationship.

          (a) Notwithstanding any provision of this Agreement to the contrary, Consultant’s engagement
under this Agreement shall terminate on the first to occur of the following dates:

          (i) the date of Consultant’s death;

          (ii) the date on which Connetics gives Consultant notice of termination on account of
Disability (as defined below);

          (iii) the date on which Connetics gives Consultant notice of termination for Cause (as
defined below);

          (iv) the date on which Connetics gives Consultant notice of termination for any reason
other than the reasons set forth in (i) through (iii) above; or

          (v) the date on which Consultant gives Connetics notice of his resignation with or
without Good Reason (as defined below).

          (b) For purposes of this Agreement, “Disability” means an illness, injury or other
incapacitating condition as a result of which Consultant is unable to perform, with reasonable
accommodation, the services required to be performed under this Agreement for 90 consecutive days
during any 12-month period. In such event, Connetics, in its sole discretion, may terminate this
Agreement by giving notice to Consultant of termination for Disability. Consultant agrees to
submit to such medical examinations as may be necessary to determine whether a Disability exists,
pursuant to reasonable requests made by Connetics from time to time. Any determination as to
whether a Disability exists shall be made by a physician selected by Connetics.

          (c) For purposes of this Agreement, “Cause” shall mean the occurrence of any of the following
events, as the Board reasonably determines:

Page 2

 

          (i) an act of dishonesty by Consultant taken in connection with his responsibilities as
a consultant which is intended to result in his own personal enrichment;

          (ii) the indictment or conviction of, guilty plea to, or entry of a nolo contendere
plea to, a felony by or on behalf of Consultant that the Board believes has had or will have
a material detrimental effect on Connetics’ reputation or business;

          (iii) Consultant’s willful act or willful failure to act that constitutes misconduct
and is injurious to Connetics;

          (iv) Consultant’s material breach of any agreement with Connetics; or

          (v) continued willful violations by Consultant of his obligations to Connetics or
responsibilities or duties as a consultant after Connetics has delivered to Consultant a
written demand for performance, which describes the basis for the Company’s belief that
Consultant has not substantially performed his duties as a consultant.

          (d) For purposes of this Agreement, “Good Reason” shall be deemed to exist if, without the
Consultant’s express, written consent:

          (i) Connetics materially reduces Consultant’s duties, position or responsibilities
relative to Consultant’s duties, position or responsibilities in effect immediately prior to
such reduction, or removes Consultant from such position, duties and responsibilities unless
Consultant is provided with comparable duties, position and responsibilities; provided,
however, that a reduction in duties, position or responsibilities solely by virtue of the
Company being acquired and made part of a larger entity shall not constitute Good Reason;

          (ii) Connetics significantly reduces, without good business reasons, the facilities and
perquisites (including office space and location) available to Consultant immediately before
such reduction;

          (iii) Connetics materially reduces Consultant’s Consulting Fee as in effect immediately
prior to such reduction; or

          (iv) any successor of Connetics fails to assume this Agreement.

     7. Compensation in Event of Termination Other Than Upon a Change in Control. Except
as provided in Sections 8 and 9, upon termination of the Term for any reason, this Agreement shall
terminate and Connetics shall have no further obligation to Consultant except to pay the amounts
set forth in this Section 7.

          (a) Termination for Cause. Subject to the restrictions set forth in Section 10, if
Consultant’s engagement is terminated pursuant to Section 6(a)(iii) during or after the Term,
Consultant shall be entitled to payment of any earned but unpaid Consulting Fee and unpaid
reimbursements, in accordance with Sections 2 and 4, through the date of termination.

Page 3

 

Following any such termination, Consultant shall not be entitled to receive any other payment
provided for under this Agreement with respect to any period after such termination.

          (b) Termination, Death or Disability Before January 1, 2008. Subject to the restrictions set
forth in Section 10, if Consultant’s engagement is terminated pursuant to Section 6(a) for any
reason other than Cause during or at the expiration of the Term, Consultant or his estate,
conservator or designated beneficiary, as the case may be, shall be entitled to receive, as
Consultant’s or his estate’s sole and exclusive remedy, (x) payment of any earned but unpaid
Consulting Fee through the date of termination, and (y) a lump sum payment equal to 24 months of
the Consulting Fee, and (z) all stock options granted by Connetics to Consultant shall become fully
vested and immediately exercisable, provided that Consultant or his conservator or designated
beneficiary, as the case may be, executes a valid release of any and all claims that Consultant or
his estate may have against Connetics and its agents, including but not limited to its officers,
directors and employees, in a form provided by Connetics. To the extent necessary to comply with
section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the payments described
in this Agreement shall be made no sooner than six months following the termination of the Term.

          (c) Termination, Resignation, Death or Disability On or After January 1, 2008. Subject to the
restrictions set forth in Section 10, if Consultant’s engagement is terminated pursuant to Section
6(a) for any reason other than Cause after expiration of the Term, or if Consultant resigns after
that date, Consultant or his estate, conservator or designated beneficiary, as the case may be,
shall be entitled to receive, as Consultant’s or his estate’s sole and exclusive remedy, (x)
payment of any earned but unpaid Consulting Fee through the date of termination, (y) a lump sum
payment equal to 24 months of the Consulting Fee, and (z) all stock options granted by Connetics to
Consultant shall become fully vested and immediately exercisable, provided that Consultant or his
conservator or designated beneficiary, as the case may be, executes a valid release of any and all
claims that Consultant or his estate may have against Connetics and its agents, including but not
limited to its officers, directors and employees, in a form provided by Connetics. To the extent
necessary to comply with section 409A of the Code, the payments described in this Agreement shall
be made no sooner than six months following the termination of the Term.

     8. Termination after a Change in Control; Other Change in Control Provisions.

          (a) If a Change in Control (as defined below) occurs during the Term and Consultant’s service
with the Company is terminated pursuant to Section 6(a) for any reason other than Cause within 24
months following a Change in Control, whether or not such termination occurs during the Term, then
Consultant or his estate, conservator, or designated beneficiary, as the case may be, shall be
entitled to the following payments and arrangements, in lieu of any payments and arrangements
provided in Section 7 above:

          (i) 2.99 times Consultant’s annual Consulting Fee in effect as of the date of
Consultant’s termination of service with the Company (the “Termination Date”), payable in a
lump sum within 30 days following the Termination Date; provided, however, that such payment
shall be made six months following the Termination Date to the extent necessary to comply
with section 409A of the Code;

Page 4

 

          (ii) reimbursement for all costs reasonably incurred by Consultant up to and including
the Termination Date, in accordance with Section 4; and

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

          (b) If a Change in Control occurs during the Term, then all stock options granted by the
Company to Consultant prior to the Change in Control shall become fully vested and immediately
exercisable as of the date of the Change in Control to the extent such stock options are
outstanding as of such date.

          (c) For purposes of this Agreement, a “Change in Control” shall mean the first to occur of the
following:

          (i) any Person (as defined below) is or becomes the Beneficial Owner (as defined
below), directly or indirectly, of Connetics securities (not including in the securities
beneficially owned by such Person any securities acquired directly from Connetics or its
affiliates) representing 50% or more of the combined voting power of the Company’s then
outstanding securities; or

          (ii) there is consummated a merger or consolidation of Connetics or any direct or
indirect subsidiary of Connetics with any other corporation, other than (A) a merger or
consolidation that would result in the voting securities of Connetics outstanding
immediately prior to such merger or consolidation (1) continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity
or any parent thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any subsidiary of
Connetics, at least 50% of the combined voting power of the securities of Connetics or such
surviving entity or any parent thereof outstanding immediately after such merger or
consolidation and (2) continuing to be held by holders thereof immediately prior to such
merger or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of Connetics (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of Connetics representing 25% or
more of the combined voting power of Connetics’ then outstanding securities;

          (iii) the following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the date of this Agreement, constitute
the Board and any new director (other than a director whose initial assumption of office is
in connection with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the date of this Agreement or
whose appointment, election or nomination for election was previously so approved or
recommended; or

Page 5

 

          (iv) there is consummated an agreement for the sale or disposition by Connetics of all
or substantially all of the Company’s assets, other than a sale or disposition by Connetics
of all or substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which is owned by substantially all of
Connetics’ stockholders immediately prior to such sale in substantially the same proportions
as their ownership of Connetics immediately prior to such sale.

          (v) For purposes of this Section 8 (c), “Person” shall have the meaning given in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as
modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its affiliates, (C) an
underwriter temporarily holding securities pursuant to an offering of such securities, or
(D) a corporation owned, directly or indirectly, by substantially all of the stockholders of
the Company in substantially the same proportions as their ownership of stock of the Company
and “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.

     9. Change in Control Adjustment for Excise Tax.

          (a) For the purposes of this Agreement, that the term “Total Payments” shall mean any payment
or benefit received or to be received by Consultant, including any payment or benefit received or
to be received in connection with a Change in Control or the termination of Consultant’s service
with the Company, whether pursuant to the terms of this Agreement or any other plan, arrangement or
agreement “Notwithstanding any other provisions of this Agreement if the Total Payments” would be
subject (in whole or part), to an excise tax (the “Excise Tax”) pursuant to section 4999 of the
Code, then, after taking into account any reduction in the Total Payments provided by reason of
section 280G of the Code in such other plan, arrangement or agreement, the cash payments and
benefits under this Agreement shall first be reduced, and the noncash payments and benefits under
this Agreement shall thereafter be reduced, to the extent necessary so that no portion of the Total
Payments is subject to the Excise Tax. Notwithstanding the foregoing, the cash and noncash
payments under this Agreement shall only be reduced if:

          (i) the net amount of such Total Payments, as so reduced (and after subtracting the net
amount of federal, state and local income taxes on such reduced Total Payments and after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments) is greater than or equal to

          (ii) the net amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state and local income taxes on such Total Payments
and the amount of Excise Tax to which Consultant would be subject in respect of such
unreduced Total Payments and after taking into account the phase out of itemized deductions
and personal exemptions attributable to such unreduced Total Payments);

provided, however, that the Consultant may elect to have the noncash payments under this Agreement
reduced (or eliminated) before any reduction of the cash payments under this Agreement.

Page 6

 

          (b) For purposes of determining whether the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax:

          (i) no portion of the Total Payments the receipt or enjoyment of which Consultant shall
have waived at such time and in such manner as not to constitute a “payment” within the
meaning of section 280G(b) of the Code shall be taken into account,

          (ii) no portion of the Total Payments shall be taken into account which, in the opinion
of tax counsel (“Tax Counsel”) reasonably acceptable to Consultant and selected by the
accounting firm (the “Auditor”) which was, immediately prior to the Change in Control, the
Company’s independent auditor, does not constitute a “parachute payment” within the meaning
of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code)
and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into
account which, in the opinion of Tax Counsel, constitutes reasonable compensation for
services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in
excess of the Base Amount (as defined in section 280G(b)(3) of the Code) allocable to such
reasonable compensation, and

          (iii) the Auditor shall determine the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.

For purposes of this Section 9, (x) Consultant shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the calendar year in which the applicable Total
Payment is to be made and state and local income taxes at the highest marginal rate of taxation in
the state and locality of Consultant’s residence in the calendar year in which the applicable Total
Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes and (y) except to the extent that Consultant otherwise
notifies the Company, the Consultant shall be deemed to be subject to the loss of itemized
deductions and personal exemptions to the maximum extent provided by the Code for each dollar of
incremental income.

          (c) At the time that payments are made under this Agreement, Connetics shall provide
Consultant with a written statement setting forth the manner in which such payments were calculated
and the basis for such calculations including, without limitation, any opinions or other advice
Connetics has received from Tax Counsel, the Auditor or other advisors or consultants (and any such
opinions or advice which are in writing shall be attached to the statement). If Consultant objects
to the Company’s calculations, Connetics shall pay to the Consultant such portion of the payments
and benefits under this Agreement (up to 100% thereof) as the Consultant determines is necessary to
result in the proper application of subsection (b)(iii) of this Section 9.

     10. Covenant Not to Compete. Consultant agrees that during the term of this Agreement
and for a period of two years after its termination, he will not serve on the Board of Directors or
any advisory board of, or perform services on behalf of, any company or business involved in the
development, production, manufacture, sale, distribution or marketing of

Page 7

 

dermatology products similar to or competing with Connetics’ then-marketed products or
products under development. Consultant acknowledges that the breach of this Section 10 would cause
substantial and irreparable harm to Connetics that cannot be remedied by the payment of damages
alone. Accordingly, the Parties agree that (a) if Consultant is terminated or resigns pursuant to
Section 6, and then breaches this covenant, he will forfeit the payments due under Section 7, and
(b) Connetics would be entitled to seek and obtain preliminary and permanent injunctive relief and
other equitable relief for any breach of this covenant,

     11. Binding Agreement. This Agreement is a personal contract and Consultant may not
sell, transfer, assign, pledge, encumber or hypothecate his rights and interest under this
Agreement.

     12. Confidentiality; Proprietary Information; Return of Company Property. Consultant
hereby agrees to keep in confidence and not disclose or make available to third parties or make any
use of any information or documents relating to his services for Connetics or to the products,
methods of manufacture, trade secrets, processes, business or affairs or confidentiality or
proprietary information of Connetics (other than information in the public domain through no fault
of Consultant), except with Connetics’ prior written consent or to the extent necessary in
performing services for the Company. Upon termination of Consultant’s service to the Company, he
hereby agrees to return to Connetics all Company documents and other materials relating to the
services provided under this Agreement or furnished to Consultant by Connetics. Consultant’s
obligations under this provision shall terminate three years after termination of his service to
the Company.

     13. Entire Agreement. This Agreement and any outstanding stock option agreements and
restricted stock purchase agreements contain all the understandings between the Parties pertaining
to the matters referred to in this Agreement, and supersedes the Former Consulting Agreement, the
Former Change of Control Agreement and all undertakings and other agreements, whether oral or in
writing, previously entered into by them with respect to the matters referred to in this Agreement.
Consultant represents that, in executing this Agreement, he does not rely and has not relied upon
any representation or statement not set forth in this Agreement made by Connetics with regard to
the subject matter of this Agreement or otherwise.

     14. Amendment or Modification, Waiver. No provision of this Agreement may be amended
or waived unless such amendment or waiver is agreed to in writing, signed by Consultant and by a
duly authorized officer of Connetics. The failure of either Party to enforce any of the terms,
provisions or covenants of this Agreement shall not be construed as a waiver of the same or of the
right of such Party to enforce the same. Waiver by either Party of any breach or default by the
other Party of any term or provision of this Agreement shall not operate as a waiver of any other
breach or default.

     15. Notices. Any notice to be given under this Agreement shall be in writing and
shall be deemed given when delivered personally, sent by courier or fax or registered or certified
mail, postage prepaid, return receipt requested, addressed to the Party concerned at the address
indicated below or to such other address as such Party may subsequently give notice of in writing
pursuant to this Section 15:

Page 8

 

	 	 	 	 	 
	 	 	To Consultant at:
	 

	 	 	 	G. Kirk Raab
	 

	 	 	 	518 Cresta Vista Lane
	 

	 	 	 	Portola Valley, CA 94028
	 
	 	 	 	 
	 	 	To Connetics at:
	 

	 	 	 	Connetics Corporation
	 

	 	 	 	3160 Porter Drive
	 

	 	 	 	Palo Alto, CA 94304 63
	 

	 	 	 	Attention: General Counsel

Any notice delivered personally or by courier under this Section 15 shall be deemed given on the
date delivered and any notice sent by telecopy or registered or certified mail, postage prepaid,
return receipt requested, shall be deemed given on the date telecopied or mailed.

     16. Each Party the Drafter. This Agreement and the provisions contained in it shall
not be construed or interpreted for or against any Party because that Party drafted or caused that
Party’s legal representative to draft any of its provisions.

     17. Successors.

          (a) In addition to any obligations imposed by law upon any successor to Connetics, Connetics
will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of Connetics to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that Connetics
would be required to perform it if no such succession had taken place. If Connetics fails to
obtain such assumption and agreement before the effectiveness of any such succession that failure
shall be a breach of this Agreement and shall entitle Consultant to compensation from Connetics,
upon termination of engagement, in the same amount and on the same terms as Consultant would be
entitled to under this Agreement if Consultant were to terminate engagement for Good Reason after a
Change in Control, except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Termination Date.

          (b) This Agreement shall inure to the benefit of and be enforceable by the Consultant’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Consultant dies while any amount would still be payable to Consultant
under this Agreement (other than amounts which, by their terms, terminate upon the death of
Consultant) if Consultant had continued to live, then all such amounts, unless otherwise provided
in this Agreement, shall be paid in accordance with the terms of this Agreement to the executors,
personal representatives or administrators of Consultant’s estate.

     18. No Duty to Mitigate. 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 Consultant may receive from any other source.

Page 9

 

     19. Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California, without regard to its conflicts of laws principles.

     20. Headings. All descriptive headings of sections and paragraphs in this Agreement
are intended solely for convenience, and no provision of this Agreement is to be construed by
reference to the heading of any section or paragraph.

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

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 	 	 	 	 
	CONNETICS CORPORATION	 	 	 	CONSULTANT	 	 
	 

	 	 	 	 	 	 	 	 
	By:

	 	  /s/ Thomas G. Wiggans
	 	 	 	  /s/ G. Kirk Raab	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Thomas G. Wiggans
	 	 	 	G. Kirk Raab	 	 
	 

	 	Chief Executive Officer	 	 	 	 	 	 

Page 10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]