Exhibit 10.2

 

DEPOMED, INC.

 

MANAGEMENT CONTINUITY AGREEMENT

 

This Management Continuity Agreement (the “Agreement”) is effective as of
                    , 2014 (the “Effective Date”) by and between
                       (“Employee”) and Depomed, Inc., a California corporation
(the “Company”).  This Agreement is intended to provide Employee with certain
benefits described herein upon the occurrence of specific events.

 

RECITALS

 

A.                                    It is expected that the Company may from
time to time consider the possibility of realigning its organization.

 

B.                                    It is further expected that another
company may from time to time consider the possibility of acquiring the Company
or that a change in control may otherwise occur, with or without the approval of
the Company’s Board of Directors.

 

C.                                    The Board of Directors recognizes that
such considerations can be a distraction to Employee and can cause Employee to
consider alternative employment opportunities.

 

D.                                    The Board of Directors has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication and objectivity of the Employee,
notwithstanding the foregoing factors.

 

E.                                     The Company’s Board of Directors believes
it is in the best interests of the Company and its shareholders to retain
Employee and provide incentives to Employee to continue in the service of the
Company.

 

F.                                      The Board of Directors further believes
that it is imperative to provide Employee with certain benefits upon certain
termination of Employee’s employment, including in connection with a Change in
Control, which benefits are intended to provide Employee with financial security
and provide sufficient income and encouragement to Employee to remain with the
Company, including and notwithstanding the possibility of a Change in Control.

 

G.                                    To accomplish the foregoing objectives,
the Board of Directors has directed the Company, upon execution of this
Agreement by Employee, to agree to the terms provided in this Agreement.

 

Now therefore, in consideration of the mutual promises, covenants and agreements
contained herein, and in consideration of the continuing employment of Employee
by the Company, the parties hereto agree as follows:

 

1.                                      At-Will Employment; Term.

 

(a)                                 The Company and Employee acknowledge that
Employee’s employment is and shall continue to be at-will, as defined under
applicable law, and that Employee’s

 

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employment with the Company may be terminated by either party at any time for
any or no reason.  If Employee’s employment terminates for any reason, Employee
shall not be entitled to any payments, benefits, damages, award or compensation
other than as provided in this Agreement or otherwise agreed to by the Company. 
The terms of this Agreement shall terminate upon the earliest of: (i) the date
on which Employee ceases to be employed by the Company, other than as a result
of a Change in Control Involuntary Termination or an Other Involuntary
Termination, (ii) the date that all obligations of the parties hereunder have
been satisfied, or (iii) the last day of the Term (or, if later in the case of
subclause (iii), the later to occur of (x) the termination of any Pending Change
in Control (the date determined pursuant to this clause (iii) being the “End
Date”) and (y) one year after the completion of any Pending Change in Control). 
A termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement.  The rights and duties created by this Section 1(a) are
contingent upon the Employee’s release of claims against the Company, in
substantially the form attached hereto as Appendix A within forty-five (45) days
following his termination of employment and the expiration of any statutory
revocation period and may not be modified in any way except by a written
agreement executed by an officer of the Company upon direction from the Board of
Directors.

 

(b)                                 Subject to Section 1(a), this Agreement
shall be for an initial term that begins on the Effective Date and continues in
effect through the third anniversary of the Effective Date (the “Initial Term”)
and, unless terminated sooner as herein provided, shall continue on a year to
year basis after the third anniversary of the Effective Date (each a “Renewal
Term” and together with the Initial Term, the “Term”).  If the Company or the
Employee elects not to renew this Agreement for a Renewal Term, the Company or
the Employee must give a written notice of termination to the other party at
least twelve (12) months before the expiration of the then-current Initial Term
or Renewal Term, as applicable.  In the event that one party provides the other
with a written notice of termination pursuant to this Section 1(b), no further
automatic extensions will occur and at the end of the then-existing Initial Term
or Renewal Term, as applicable, the Term shall expire.

 

2.                                      Termination Benefits.

 

(a)                                 Benefits Upon a Change in Control
Involuntary Termination.

 

(i)                                     Treatment of Equity Awards.  In the
event that Employee is subject to a Change in Control Involuntary Termination,
100% of Employee’s unvested Company option shares, restricted stock units and
other equity-based awards shall become immediately vested on such termination
date and the risk of forfeiture of 100% of Employee’s restricted stock shall
lapse on such termination date.  Each such equity award shall be exercisable in
accordance with the provisions of the award agreement and plan pursuant to which
such equity award was granted, including, in the case of stock options, the plan
or award agreement provisions regarding any post-termination period of
exercisability.

 

(ii)                                  Severance.  In the event that Employee is
subject to a Change in Control Involuntary Termination, Employee shall be
entitled to receive severance benefits as

 

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follows:  (A) severance payments for [twelve (12) (if Employee is not the CEO)]
[twenty-four (24) (if Employee is the CEO)] months after the effective date of
the termination (for purposes of this Section 2(a)(ii), the “Severance Period”)
equal to the higher of (1) the base salary which Employee was receiving
immediately prior to the Change in Control or (2) the base salary which Employee
was receiving immediately prior to the Change in Control Involuntary
Termination, which payments shall be paid during the Severance Period in
accordance with the Company’s standard payroll practices; (B) a lump sum payment
equal to [two (2) times (if Employee is the CEO)] Employee’s Target Annual
Bonus; and (C)  payment by the Company of the full cost of the health insurance
benefits provided to Employee immediately prior to the Change in Control
pursuant to the terms of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”) or other applicable law through the earlier of the
end of the Severance Period or the date upon which Employee is no longer
eligible for such COBRA or other benefits under applicable law.  The payments to
be provided under clauses (a)(i) and (a)(ii) shall be paid or commence to be
paid within sixty (60) days of Employee’s termination of employment (subject to
Employee’s release of claims against the Company as set forth in Section 1(a));
provided that if the sixty (60) day period commences in one calendar year and
ends in a second calendar year, such payment shall be made or commence to be
made in the second calendar year.  Notwithstanding the foregoing, in the event
the Board of Directors concludes in its reasonable judgment that the provision
of subsidized COBRA benefits to Employee could cause the Company to become
subject to excise tax as a result of the Patient Protection and Affordable Care
Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the
“Healthcare Reform Act”), the Company shall pay Employee a monthly amount in
cash equal to the amount of the COBRA subsidy during the period the Company is
obligated to provide subsidized COBRA benefits to Employee.  In addition,
Employee shall receive payment(s) for all salary, bonuses and unpaid vacation
accrued as of the date of Employee’s termination of employment and up to three
(3) months of outplacement services (with a provider and in a program selected
by the Company, provided Employee commences such services within ninety (90)
days of such services being offered to Employee).

 

(b)                                 Benefits Upon an Other Involuntary
Termination.

 

[Item (i) - if Employee is CEO only]

 

(i)                                     Treatment of Equity Awards.  In the
event that Employee is subject to an Other Involuntary Termination, twelve (12)
months’ of Employee’s unvested Company option shares, restricted stock units and
other equity-based awards (as measured from the termination date) shall become
immediately vested on such termination date and the risk of forfeiture of
Employee’s applicable number of restricted stock shall lapse on such termination
date.  Each such equity award shall be exercisable in accordance with the
provisions of the award agreement and plan pursuant to which such equity award
was granted, including, in the case of stock options, the plan or award
agreement provisions regarding any post-termination period of exercisability.

 

(ii)                                  Severance.  In the event that Employee is
subject to an Other Involuntary Termination, Employee shall be entitled to
receive severance benefits as follows:  (A) severance payments for [twelve (12)
months (if Employee is a SVP)] [eighteen months (18) (if Employee is the

 

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CEO)] months after the effective date of the termination (for purposes of this
Section 2(b)[(i)][(ii)], the “Severance Period”) equal to the base salary which
Employee was receiving immediately prior to the Other Involuntary Termination,
which payments shall be paid during the Severance Period in accordance with the
Company’s standard payroll practices; and (B)  payment by the Company of the
full cost of the health insurance benefits provided to Employee immediately
prior to the Other Involuntary Termination pursuant to the terms of COBRA or
other applicable law through the earlier of the end of the Severance Period or
the date upon which Employee is no longer eligible for such COBRA or other
benefits under applicable law.  The payments to be provided under clauses
(b)(i) and (b)(ii) shall be paid or commence to be paid within sixty (60) days
of Employee’s termination of employment (subject to Employee’s release of claims
against the Company as set forth in Section 1(a)); provided that if the sixty
(60) day period commences in one calendar year and ends in a second calendar
year, such payment shall be made or commence to be made in the second calendar
year.  Notwithstanding the foregoing, in the event the Board of Directors
concludes in its reasonable judgment that the provision of subsidized COBRA
benefits to Employee could cause the Company to become subject to excise tax as
a result of the Patient Protection and Affordable Care Act, as amended by the
Healthcare Reform Act, the Company shall pay Employee a monthly amount in cash
equal to the amount of the COBRA subsidy during the period the Company is
obligated to provide subsidized COBRA benefits to Employee.  In addition,
Employee shall receive payment(s) for all salary, bonuses and unpaid vacation
accrued as of the date of Employee’s termination of employment and up to three
(3) months of outplacement services (with a provider and in a program selected
by the Company, provided Employee commences such services within ninety (90)
days of such services being offered to Employee).

 

(c)                                  Termination for Cause.  If Employee’s
employment is terminated for Cause at any time, then Employee shall not be
entitled to receive payment of any severance benefits or equity award
acceleration.  Employee shall receive payment(s) for all salary, bonuses and
unpaid vacation accrued as of the date of Employee’s termination of employment.

 

(d)                                 Voluntary Resignation.  If Employee
voluntarily resigns from the Company under circumstances which do not constitute
a Change in Control Involuntary Termination or an Other Involuntary Termination,
then Employee shall not be entitled to receive payment of any severance benefits
or equity award acceleration.  Employee shall receive payment(s) for all salary,
bonuses and unpaid vacation accrued as of the date of Employee’s termination of
employment.

 

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

 

(a)                                 Cause.  “Cause” shall mean (i) gross
negligence or willful misconduct in the performance of Employee’s duties to the
Company where such gross negligence or willful misconduct has resulted or is
likely to result in substantial and material damage to the Company or its
subsidiaries (ii) repeated unexplained or unjustified absence from the Company,
(iii) a material and willful violation of any federal or state law;
(iv) commission of any act of fraud with respect to the Company or
(v) conviction of a felony or a crime involving moral turpitude causing material
harm to the standing and reputation of the Company, in each case as determined
in good faith by the Board of Directors.

 

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(b)                                 Change in Control; Pending Change in
Control.  “Change in Control” shall have the meaning given such term in the
Depomed, Inc. 2014 Omnibus Incentive Plan.  “Pending Change in Control” shall
mean any Change in Control with respect to which the Company enters into a
definitive agreement prior to the End Date which has not been completed or
terminated, as determined by the Board of Directors in its discretion, as of the
End Date.  Pending Change in Control shall include any Change in Control with
respect to which the Company enters into a binding agreement within thirty (30)
days after the termination of any other Pending Change in Control.

 

(c)                                  Change in Control Involuntary Termination. 
“Change in Control Involuntary Termination” shall mean: (i) any termination by
the Company other than for Cause, death or disability, or (ii) Employee’s
voluntary termination for Good Reason (as defined in this Section 3(c)), in each
case in connection with, or within (A) ninety (90) days prior to the effective
date of a Change in Control or (B) twelve (12) months following the effective
date of a Change in Control.  For purposes of this Section 3(c), “Good Reason”
shall mean that Employee has complied with the “Good Reason Process” following
the occurrence of any of the following events:  (i) a material diminution in
Employee’s responsibilities, authority or duties; (ii) a material diminution in
the authority, duties, or responsibilities of the supervisor to whom Employee is
required to report [including a requirement that Employee report to a corporate
officer or other employee instead of reporting directly to the board of
directors of a corporation (or similar governing body with respect to an entity
other than a corporation) if Employee is the CEO]; (iii) a material diminution
in Employee’s base salary, target annual bonus amount or paid bonus amount
(relative to the last annual bonus paid), in each case other than in connection
with a general decrease in base salaries, target annual bonuses or paid annual
bonuses, as applicable, for most officers of the successor corporation; or
(iv) a change in the geographic location at which Employee provides services to
the Company by more than fifty (50) miles.

 

(d)                                 Good Reason Process.  “Good Reason Process”
shall mean that (i) Employee reasonably determines in good faith that a “Good
Reason” condition has occurred, as may be applicable; (ii) Employee notifies the
Company in writing of the first occurrence of the Good Reason condition within
ninety (90) days of the first occurrence of such condition; (iii) Employee
cooperates in good faith with the Company’s efforts, for a period of thirty (30)
days following such notice (the “Cure Period”), to remedy the condition;
(iv) notwithstanding such efforts, the Good Reason condition continues to exist;
and (v) Employee terminates his employment within ninety (90) days after the end
of the Cure Period.  If the Company cures the Good Reason condition during the
Cure Period, Good Reason shall be deemed not to have occurred.

 

(e)                                  Other Involuntary Termination.  “Other
Involuntary Termination” shall mean (i) any termination by the Company other
than for Cause, death or disability, or (ii) Employee’s voluntary termination
for Good Reason (as defined in this Section 3(e)), in each case, excluding a
Change in Control Involuntary Termination.  For purposes of this Section 3(e),
“Good Reason” shall mean that Employee has complied with the “Good Reason
Process” following the occurrence of any of the following events: (i) a ten
percent (10%) or greater decrease in Employee’s annual total cash compensation
target (annual base salary plus annual bonus target) other than in connection
with a general decrease in the total annual cash

 

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compensation target (annual base salary plus annual bonus target) for most
officers of the Company and the successor corporation, if applicable; or (ii) a
change in the geographic location at which Employee provides services to the
Company by more than fifty (50) miles.

 

(f)                                   Target Annual Bonus.  “Target Annual
Bonus” shall mean Employee’s target annual bonus that may be earned for
performance during the Company’s fiscal year in which a termination occurs;
provided, however, that sign-on or other special bonuses shall not be taken into
account.  If Employee’s Target Annual Bonus has not been set or determined as of
the termination date, the “Target Annual Bonus” shall mean Employee’s target
annual bonus for the Company’s most recently completed fiscal year.

 

4.                                      Limitation and Conditions on Payments.

 

In the event that the severance and other benefits provided to Employee under
this Agreement and any other agreement (i) constitute “parachute payments”
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) and (ii) but for this Section, would be subject to the
excise tax imposed by Section 4999 of the Code, then Employee’s severance
benefits under Sections 2(a) and 2(b) shall be payable either:

 

(a)                                 in full; or

 

(b)                                 as to such lesser amount which would result
in no portion of such severance benefits being subject to excise tax under
Section 4999 of the Code, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by Employee on an after-tax
basis, of the greatest amount of severance benefits under Section 2(a) and 2(b),
notwithstanding that all or some portion of such severance benefits may be
taxable under Section 4999 of the Code.  The reduction of payments and benefits
hereunder, if applicable, shall be made by reducing, first, payments or benefits
to be paid in cash hereunder in the order in which such payment or benefit would
be paid or provided (beginning with such payment or benefit that would be made
last in time and continuing, to the extent necessary, through to such payment or
benefit that would be made first in time) and, then, reducing any benefit to be
provided in kind hereunder in a similar order.  Unless the Company and Employee
otherwise agree in writing, any determination required under this Section 4
shall be made in writing by independent public accountants selected by the
Company (the “Accountants”), whose determination shall be conclusive and binding
upon Employee and the Company for all purposes.  For purposes of making the
calculations required by this Section 4, 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.  The Company and Employee shall furnish to
the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section.  The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4.

 

5.                                      Section 409A.  Notwithstanding any
provision of this Agreement to the contrary, if, at the time of Employee’s
termination of employment with the Company, Employee is a “specified employee”
(as defined in Section 409A of the Code) and the deferral of the

 

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commencement of any severance payments or benefits otherwise payable pursuant to
this Agreement as a result of such termination of employment is necessary in
order to prevent any accelerated income recognition or additional tax under
Section 409A of the Code, then the Company will not commence any payment of any
such severance payments or benefits otherwise required hereunder (but without
any reduction in such payments or benefits ultimately paid or provided to
Employee) that (a) will not and may not under any circumstances, regardless of
when such termination occurs, be paid in full by March 15 of the year following
Employee’s termination of employment, and (b) are in excess of the lesser of
(i) two (2) times Employee’s then annual compensation or (ii) two (2) times the
limit on compensation then set forth in Section 401(a)(17) of the Code and will
not be paid by the end of the second calendar year following the year in which
the termination occurs, until the first payroll date that occurs after the date
that is six (6) months following Employee’s “separation of service” with the
Company (as defined under Code Section 409A).  If any payments are delayed due
to such requirements, such amounts will be paid in a lump sum to Employee on the
earliest of (x) the Employee’s death following the date of Employee’s
termination of employment with the Company or (y) the first payroll date that
occurs after the date that is six (6) months following Employee’s “separation of
service” with the Company.  For these purposes, each severance payment or
benefit is designated as a separate payment or benefit for purposes of Treas.
Reg. § 1.409A-2(b) and will not collectively be treated as a single payment or
benefit.  This paragraph is intended to comply with the requirements of
Section 409A of the Code so that none of the severance payments and benefits to
be provided hereunder will be subject to the additional tax imposed under
Section 409A of the Code and any ambiguities herein will be interpreted to so
comply.  Employee and the Company agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition prior to actual payment to Employee under Section 409A
of the Code.  Notwithstanding anything to the contrary contained herein, to the
extent that any amendment to this Agreement with respect to the payment of any
severance payments or benefits would constitute under Code Section 409A a delay
in a payment or a change in the form of payment, then such amendment must be
done in a manner that complies with Code Section 409A(a)(4)(C).

 

6.                                      Conflicts.  Employee represents that
Employee’s performance of all the terms of this Agreement will not breach any
other agreement to which Employee is a party.  Employee has not, and will not
during the term of this Agreement, enter into any oral or written agreement in
conflict with any of the provisions of this Agreement.  Employee further
represents that Employee is entering into or has entered into an employment
relationship with the Company of Employee’s own free will.

 

7.                                      Successors.  Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession.  The terms of this
Agreement and all of Employee’s rights hereunder and thereunder shall inure to
the benefit of, and be enforceable by, Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

 

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8.                                      Notice.  Notices and all other
communications contemplated by this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by U.S.
registered or certified mail, return receipt requested and postage prepaid. 
Mailed notices to Employee shall be addressed to Employee at the home address
which Employee most recently communicated to the Company in writing.  In the
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of the
Company’s Legal Department.

 

9.                                      Miscellaneous Provisions.

 

(a)                                 No Duty to Mitigate.  Employee shall not be
required to mitigate the amount of any payment contemplated by this Agreement
(whether by seeking new employment or in any other manner), nor shall any such
payment be reduced by any earnings that Employee may receive from any other
source.

 

(b)                                 Waiver.  No provision of this Agreement
shall be modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by Employee and by an authorized
officer of the Company (other than Employee).  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)                                  Whole Agreement.  No agreements,
representations or understandings (whether oral or written and whether express
or implied) which are not expressly set forth in this Agreement have been made
or entered into by either party with respect to the subject matter hereof.  This
Agreement supersedes any agreement of the same title and concerning similar
subject matter dated prior to the date hereof, and by execution of this
Agreement both parties agree that any such predecessor agreement shall be deemed
null and void.

 

(d)                                 Choice of Law.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California without reference to conflict of laws
provisions.

 

(e)                                  Severability.  If any term or provision of
this Agreement or the application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such term or
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining terms and provisions of this Agreement or the application of such
terms and provisions to circumstances other than those as to which it is held
invalid or unenforceable, and a suitable and equitable term or provision shall
be substituted therefor to carry out, insofar as may be valid and enforceable,
the intent and purpose of the invalid or unenforceable term or provision.

 

(f)                                   Arbitration.  All claims, demands, causes
of action, disputes, controversies or other matters in question (“Claims”)
arising out of this Agreement or the Employee’s service (or termination from
service) with the Company, whether arising in contract, tort or otherwise and
whether provided by statute, equity or common law, that the Company may have
against the Employee or that the Employee may have against the Company, or its
parents or

 

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subsidiaries, or against each of the foregoing entities’ respective officers,
directors, employees or agents in their capacity as such or otherwise, shall be
settled in accordance with the procedures described in Section 9(f)(i) and
(ii).  Claims covered by this Section 9(f) include, without limitation, claims
by the Employee for breach of this Agreement, wrongful termination,
discrimination (based on age, race, sex, disability, national origin, sexual
orientation, or any other factor), harassment and retaliation.

 

(i)                                     Agreement to Negotiate.  First, the
parties shall attempt in good faith to resolve any Claims promptly by
negotiations between the Employee and executives or directors of the Company or
its affiliates who have authority to settle the Claims.  Either party may give
the other disputing party written notice of any Claim not resolved in the normal
course of business.  Within five (5) days after the effective date of that
notice, the Employee and such executives or directors of the Company shall agree
upon a mutually acceptable time and place to meet and shall meet at that time
and place, and thereafter as often as they reasonably deem necessary, to
exchange relevant information and to attempt to resolve the Claim.  The first of
those meetings shall take place within thirty (30) days of the date of the
disputing party’s notice.  If the Claim has not been resolved within sixty (60)
days of the date of the disputing party’s notice, or if the parties fail to
agree on a time and place for an initial meeting within five (5) days of that
notice, either party may elect to undertake arbitration in accordance with
Section 9(f)(ii).

 

(ii)                                  Agreement to Arbitrate.  If a Claim is not
resolved by negotiation pursuant to Section 9(f)(i), such Claim must be resolved
through arbitration regardless of whether the Claim involves claims that the
Agreement is unlawful, unenforceable, void, or voidable or involves claims under
statutory, civil or common law.  Any arbitration shall be conducted in
accordance with the then-current International Arbitration Rules of the American
Arbitration Association (“AAA”).  If a party refuses to honor its obligations
under this Section 9(f)(ii), the other party may compel arbitration any federal
or state court of competent jurisdiction.  The arbitrator shall apply the
substantive law of California (excluding choice-of-law principles that might
call for the application of some other jurisdiction’s law) or federal law as
applied by the United States Court of Appeals for the Ninth Circuit, or both as
applicable to the Claims asserted.  The arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, applicability
or enforceability or formation of this Agreement (including this Section 9(f)),
including any claim that all or part of the Agreement is void or voidable and
any Claim that an issue is not subject to arbitration.  The results of
arbitration will be binding and conclusive on the parties hereto.  Any
arbitrator’s award or finding or any judgment or verdict thereon will be final
and unappealable.  The seat of arbitration shall be in the State of California,
and unless agreed otherwise by the parties, all hearings shall take place at the
seat.  Any and all of the arbitrator’s orders, decisions and awards may be
enforceable in, and judgment upon any award rendered by the arbitrator may be
confirmed and entered by any federal or state court having jurisdiction.  All
evidentiary privileges under applicable state and federal law, including
attorney-client, work product and party communication privileges, shall be
preserved and protected.  The decision of the arbitrator will be binding on all
parties.  Arbitrations will be conducted in such a manner that the final
decision of the arbitrator will be made and provided to the Employee and the
Company no later than 120 days after a matter is submitted to arbitration.  All
proceedings conducted pursuant to this agreement to arbitrate, including any
order, decision or award of the arbitrators, shall be kept confidential by all
parties.  Each party shall pay its own

 

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attorneys fees and disbursements and other costs of arbitration.  The parties to
the arbitration shall split all of the arbitrator’s fees equally.  EMPLOYEE
ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, EMPLOYEE IS WAIVING ANY RIGHT THAT
EMPLOYEE MAY HAVE TO A JURY TRIAL OR A COURT TRIAL OF ANY SERVICE RELATED CLAIM
ALLEGED BY EMPLOYEE.

 

(g)                                  Legal Fees and Expenses.  The parties shall
each bear their own expenses, legal fees and other fees incurred in connection
with this Agreement.

 

(h)                                 No Assignment of Benefits.  The rights of
any person to payments or benefits under this Agreement shall not be made
subject to option or assignment, either by voluntary or involuntary assignment
or by operation of law, including (without limitation) bankruptcy, garnishment,
attachment or other creditor’s process, and any action in violation of this
Section 8(h) shall be void.

 

(i)                                     Employment Taxes.  All payments made
pursuant to this Agreement will be subject to withholding of applicable income
and employment taxes.

 

(j)                                    Assignment by Company.  The Company may
assign its rights under this Agreement to an affiliate, and an affiliate may
assign its rights under this Agreement to another affiliate of the Company or to
the Company.  In the case of any such assignment, the term “Company” when used
in a section of this Agreement shall mean the corporation that actually employs
the Employee.

 

(k)                                 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.

 

[SIGNATURE PAGE FOLLOWS]

 

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The parties have executed this Management Continuity Agreement on the date first
written above.

 

 

DEPOMED, INC.

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

[NAME]

 

 

 

Address:

 

 

 

 

 

11

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