This
Voting
Agreement (this “ Agreement ”) is
made and entered into as of October 22, 2006, by and among
Stiefel Laboratories, Inc., a Delaware corporation (“
Parent ”) and the undersigned Stockholder (“
Stockholder ”) of Connetics Corporation, a Delaware
corporation (the “ Company ”). Terms not
otherwise defined herein shall have the respective meanings
ascribed to them in the Merger Agreement (as defined below). If the
terms of this Agreement conflict in any way with the provisions of
the Merger Agreement, then the provisions of the Merger Agreement
shall control.
A.
Stockholder has executed and delivered this Agreement in connection
with that certain Agreement and Plan of Merger, dated as of
October 22, 2006, by and among Parent, Merger Sub, and the
Company (the “ Merger Agreement ”), pursuant to
which Merger Sub will merge with and into the Company (the “
Merger ”) with the Company to survive the Merger and
become a wholly-owned subsidiary of Parent.
B.
Stockholder acknowledges that Stockholder’s entry into this
Agreement is an inducement and a condition to Parent and Merger Sub
entering into the Merger Agreement.
The parties to
this Agreement, intending to be legally bound, agree as
follows:
Section 1. Restriction on
Shares
1.1 Stockholder shall not, and shall not agree to, directly
or indirectly, transfer (except as may be specifically required by
court order or by operation of law), sell, exchange, tender,
pledge, assign, or otherwise dispose of or take any action to
encumber any Shares (as such term is defined in
Section 4.1 ), or enter into any agreement or other
arrangement relating thereto, at any time prior to the Expiration
Time (as defined below); provided, however, that Stockholder may
(a) transfer the Shares to any member of Stockholder’s
immediate family, or to a trust for the benefit of Stockholder or
any member of Stockholder’s immediate family for estate
planning purposes, (b) transfer Shares upon the death of
Stockholder, and (c) transfer Shares in accordance with the
terms of any 10b5-1 plan of Stockholder in effect as of the date
hereof, provided, further, that any such transfer shall be
permitted only if, as a precondition to such transfer, the
transferee agrees in writing to be bound by all of the terms of
this Agreement, other than transfers permitted pursuant to clause
(c) which shall not require satisfaction of such precondition.
As used herein, the term “ Expiration Time ”
shall mean the earlier of (i) such date and time as the Merger
shall become effective in accordance with the terms and provisions
of the Merger Agreement, and (ii) the termination of the
Merger Agreement in accordance with its terms.
1.2 Except pursuant to the terms of this Agreement
Stockholder shall not, and shall not agree to, prior to the
Expiration Time, directly or indirectly, grant any proxies or
powers of attorney with respect to any of the Shares, deposit any
of the Shares into a voting trust, or enter into a voting agreement
with respect to any of the Shares.
1.3 Stockholder shall not, prior to the Expiration Time,
knowingly take any action that would (a) make any
representation or warranty contained herein untrue or incorrect or
(b) reasonably be expected to have the effect of impairing the
ability of Stockholder to perform his or her obligations under this
Agreement; provided, however, that nothing contained in this
Agreement shall be construed to prohibit Stockholder as a director
or officer of the Company from exercising his or her fiduciary
duties to stockholders under applicable Legal Requirements or
taking on behalf of the Company any of the actions permitted to be
taken by the Company under the Merger Agreement.
1.4 Any shares of Company Common Stock that Stockholder
purchases or with respect to which Stockholder otherwise acquires
beneficial ownership (for avoidance of doubt, as used herein, the
term “beneficial ownership” and similar terms do not
include Company Options, but include any shares of Company Common
Stock issued upon the exercise of Company Options) after the date
of this Agreement and prior to the Expiration Time, including by
reason of any stock split, stock dividend, reverse stock split,
reclassification, recapitalization or other similar transaction
(collectively, the “ New Shares ”) shall be
subject to the terms and conditions of this Agreement to the same
extent as if they constituted Shares.
Section 2. Voting Agreement
Prior to the
Expiration Time, at every meeting of the stockholders of the
Company called with respect to either of the following, and at
every adjournment thereof, and on every action or approval by
written resolution or consent of the stockholders of the Company
with respect to any of the following, Stockholder shall vote the
Shares in respect of which Stockholder is entitled to vote at any
such meeting or in connection with any such written consent
(a) in favor of adoption of the Merger Agreement and approval
of the terms thereof, the Merger, and the Contemplated
Transactions, and (b) against any Acquisition
Proposal.
Concurrently with
the execution and delivery of this Agreement, Stockholder shall
deliver to Parent a duly executed proxy in the form attached hereto
as Exhibit A (the “ Proxy ”) with
respect to each and every meeting of stockholders of the Company or
action or approval by written resolution or consent of stockholders
of the Company prior to the Expiration Time covering the total
number of Shares in respect of which Stockholder is entitled to
vote at any such meeting or in connection with any such written
consent related to the subject matter of Section 2. Upon the
execution of this Agreement by Stockholder, (i) Stockholder
hereby revokes any and all prior proxies (other than the Proxy)
given by Stockholder with respect to the subject matter
contemplated by the Proxy and Parent hereby consents to the
revocation of any and all such prior proxies given by Stockholder
to Parent with respect to such subject matter and
(ii) Stockholder shall not grant any subsequent proxies with
respect to such subject matter until after the Expiration
Time.
Section 4. Representations and Warranties of
Stockholder
Stockholder hereby
represents and warrants to Parent as follows, which representations
and warranties are accurate in all respects as of the date of this
Agreement, will be accurate in all
2
respects at all
times through the Expiration Time and will be accurate in all
respects as of the Effective Time as if made at that
time:
4.1 As of the date hereof, Stockholder is the beneficial
owner of, and has good and marketable title to, that number of
shares of the Company Common Stock set forth on the signature page
hereto (all such shares beneficially owned by Stockholder on the
date hereof, collectively, the “ Shares ”). The
Shares constitute Stockholder’s entire interest in all the
outstanding shares of Company Common Stock. No person not a
signatory to this Agreement (or such signatory’s spouse for
purposes of applicable community property laws) has a beneficial
interest in or a right to acquire or vote any of the Shares. The
Stockholder has all requisite power to vote the Shares on all
matters submitted to the holders of shares of Company Common Stock.
The Stockholder owns the shares free and clear of any limitations
on voting rights that would conflict with this
Agreement.
4.2 Stockholder has all requisite power and authority to
enter into this Agreement and to perform its obligations under this
Agreement. This Agreement has been duly executed and delivered by
Stockholder and constitutes a valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its
terms, subject only to the effect, if any, of (a) applicable
bankruptcy, insolvency, fraudulent conveyance, moratorium and
similar laws affecting creditors’ rights and remedies
generally and (b) general principles of equity.
4.3 The execution and delivery of this Agreement by
Stockholder do not, and Stockholder’s performance of its
obligations under this Agreement will not: (a) conflict with
or violate any law, statute, rule, regulation, order, decree or
judgment applicable to Stockholder or by which Stockholder or any
of the Shares is bound; (b) result in any breach of or
constitute a default (with notice or lapse of time, or both) under,
or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any
Encumbrance on, any of the Shares pursuant to any Contract to which
Stockholder is a party or by which Stockholder or any of the Shares
is bound or affected; or (c)
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