Exhibit 10.1

 

EXECUTION VERSION

 

COOPERATION AND SUPPORT AGREEMENT

 

This Cooperation and Support Agreement (this “Agreement”) is made and entered
into as of March 28, 2017 by and among Depomed, Inc. (the “Company”) and the
entities and natural persons set forth in the signature pages hereto
(collectively, “Starboard”) (each of the Company and Starboard, a “Party” to
this Agreement, and collectively, the “Parties”).

 

RECITALS

 

WHEREAS, as of the date hereof, Starboard has a beneficial ownership interest in
shares of common stock of the Company (the “Common Stock”) totaling
approximately 8.8% of the Common Stock issued and outstanding on the date
hereof;

 

WHEREAS, the Company and Starboard have engaged in various constructive
discussions and communications concerning the Company’s business, financial
performance, governance and strategic plans, and based on, among other things,
such discussions and communications the Board of Directors of the Company (the
“Board”) determined that it is in the best interests of all Company shareholders
(i) to implement certain changes to the governance of the Company and (ii) to
have Starboard’s support and cooperation as a large shareholder of the Company
in connection with the implementation of certain of those changes and other
matters related therewith, as provided in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, intending to be legally bound hereby, agree as follows:

 

1.                                      Board Composition and Related
Agreements.

 

(a)           Board Composition.

 

(i)            The Company agrees that immediately following the execution of
this Agreement, (A) the Board of Directors of the Company (the “Board”) shall
consist of Ms. Karen Dawes, Mr. James Fogarty, Mr. Arthur Higgins, Mr. Louis
Lavigne, Mr. William McKee, Mr. Gavin Molinelli, Mr. Robert Savage, Mr. Peter
Staple and Mr. James Tyree (collectively, the “Directors”) and (B) Mr. Fogarty
shall be appointed Chairman of the Board.

 

(ii)           The Company’s slate of nominees for election as directors of the
Company at the Company’s 2017 Annual Meeting of Shareholders (the “2017 Annual
Meeting”) shall consist of the nine Directors (the “2017 Slate”).  The Company
agrees to use reasonable best efforts to cause the election of the 2017 Slate at
the 2017 Annual Meeting including recommending that the Company’s shareholders
vote in favor of the election of each member of the 2017 Slate and supporting
each member of the 2017 Slate for election in a manner no less rigorous and
favorable than the manner in which the Company supports any other member of the
2017 Slate.

 

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(iii)          If any Director is unable or unwilling to serve on the 2017
Slate, such Director shall be replaced on the 2017 Slate by a qualified
candidate that is (A) recommended by the Nominating and Corporate Governance
Committee and (B) approved by the Board.

 

(iv)          If during the Period (as defined below), Mr. Molinelli or any
Starboard Replacement Director (as defined below) ceases to be a member of the
Board for any reason, and at such time Starboard beneficially owns in the
aggregate at least the lesser of (x) 3.0% of the Company’s then outstanding
Common Stock and (y) 1,862,986 shares of Common Stock (subject to adjustment for
stock splits, reclassifications, combinations and similar adjustments), then
Starboard will have the right to recommend a replacement director candidate for
Mr. Molinelli or any Starboard Replacement Director (any such replacement
director nominee shall be referred to as a “Starboard Replacement Director”). 
Any Starboard Replacement Director who is an employee of Starboard will be
approved and appointed to the Board no later than five (5) business days
following the submission of all completed onboarding documentation required so
long as such Starboard Replacement Director meets the independence requirements
pursuant to Nasdaq Stock Market listing standards.  Any Starboard Replacement
Director who is independent of Starboard (for the avoidance of doubt, the
nomination by Starboard of such person to serve on the board of another company
shall not (in and of itself) cause such person not to be deemed independent of
Starboard) must be (A) reasonably acceptable to the Board (such acceptance not
to be unreasonably withheld), (B) qualify as “independent” pursuant to Nasdaq
Stock Market listing standards, and (C) have the relevant financial and business
experience to be a director of the Company.  The Nominating and Corporate
Governance Committee shall make its determination and recommendation regarding
whether such independent Starboard Replacement Director meets the foregoing
criteria within five (5) business days after (1) such nominee has submitted to
the Company the onboarding documentation required for directors and
(2) representatives of the Board have conducted customary interview(s) of such
nominee.  The Company shall use its reasonable best efforts to conduct any
interview(s) contemplated by this section as promptly as practicable, but in any
case, assuming reasonable availability of the nominee, within ten (10) business
days after Starboard’s submission of such nominee.  In the event the Nominating
and Corporate Governance Committee does not accept an independent candidate
recommended by Starboard as the Starboard Replacement Director, then Starboard
may recommend additional Starboard Replacement Director candidate(s), who may be
an employee of Starboard or independent of Starboard, and whose appointment to
the Board will be subject to the respective procedures outlined in this
section.  Upon the recommendation of an independent Starboard Replacement
Director nominee by the Nominating and Corporate Governance Committee, the Board
shall vote on the appointment of such Starboard Replacement Director to the
Board no later than five (5) business days after the Nominating and Corporate
Governance Committee recommendation of such Starboard Replacement Director;
provided, however, that if the Board does not elect such independent Starboard
Replacement Director to the Board pursuant to this section, the Parties shall
continue to follow the procedures of this section until a Starboard Replacement
Director is elected to the Board.  Upon a Starboard Replacement Director’s
appointment to the Board, the Board and all applicable committees of the Board
shall take all necessary actions to appoint such Starboard Replacement Director
to any applicable committee of the Board of which the replaced director was a
member immediately prior to such director’s resignation or removal.  Until such
time as any Starboard Replacement Director is appointed to any applicable
committee, one of the other Directors (as designated by Starboard) will serve as
an interim member of such applicable committee.

 

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(b)           Committee Appointments.

 

(i)            During the Period (as defined below) each committee of the Board,
including any new committee(s) that may be established, shall include at least
one of Ms. Dawes, Mr. Lavigne and Mr. Staple and each of Ms. Dawes, Mr. Lavigne
and Mr. Staple shall serve on at least one committee of the Board.

 

(ii)           The Company agrees that immediately following the execution of
this Agreement, the standing committees of the Board shall be composed as
follows:

 

Nominating and
Corporate Governance

 

Compensation

 

Audit

Gavin Molinelli (Chairman)

 

Robert Savage (Chairman)

 

Louis Lavigne (Chairman)

Louis Lavigne

 

William McKee

 

Karen Dawes

William McKee

 

Gavin Molinelli

 

Peter Staple

Robert Savage

 

Peter Staple

 

James Tyree

 

(c)           Additional Agreements.

 

Starboard agrees that (x) it will appear in person or by proxy at the 2017
Annual Meeting and vote all shares of Common Stock beneficially owned by
Starboard at the 2017 Annual Meeting for the 2017 Slate and (y) during the
Period it will vote its shares of Common Stock in any matter that is brought
before shareholders of the Company in a manner consistent with the
recommendation of the Board (provided, that in the case of clause (y) only, if
Mr. Molinelli has voted against such matter in a vote of the Board, Starboard
shall be permitted to vote against the Board’s recommendation with respect to
such matter).  For purposes of this agreement, the terms “beneficial owner” and
“beneficial ownership” shall have the respective meanings as set forth in
Rule 13d-3 promulgated by the U.S. Securities and Exchange Commission under the
Exchange Act (as defined above).  Starboard agrees that it will cause its
controlled Affiliates and Associates to comply with the terms of this Agreement
and shall be responsible for any breach of this Agreement by any such controlled
Affiliate or Associate.  As used in this Agreement, the terms “Affiliate” and
“Associate” shall have the respective meanings set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, or the rules or regulations promulgated
thereunder (the “Exchange Act”) and shall include all persons or entities that
at any time during the term of this Agreement become Affiliates or Associates of
any person or entity referred to in this Agreement.

 

2.                                      Certain Provisions.

 

(a)           Starboard agrees that, from the date of this Agreement until 12:01
a.m. Eastern Time on the date that is 15 business days prior to the deadline for
the submission of shareholder nominations for the Company’s 2018 Annual Meeting
of Shareholders (the “2018 Annual Meeting”) pursuant to the Company’s bylaws
(the “Period”), neither it nor any of its Affiliates or Associates under its
control will, and it will cause each of its Affiliates and Associates under its
control not to, directly or indirectly, in any manner:

 

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(i)            engage in any solicitation of proxies or consents or become a
“participant” in a “solicitation” (as such terms are defined in Regulation 14A
under the Exchange Act) of proxies or consents (including, without limitation,
any solicitation of consents that seeks to call a special meeting of
shareholders and any exempt solicitation under Rule 14a-2(b)(1) under the
Exchange Act), in each case, with respect to securities of the Company;

 

(ii)           form, join or in any way participate in any “group” (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common
Stock (other than a “group” that includes all or some of the entities or persons
identified on Exhibit A, but does not include any other entities or persons not
identified on Exhibit A as of the date hereof); provided, however, that nothing
herein shall limit the ability of an Affiliate of Starboard to join the “group”
following the execution of this Agreement, so long as any such Affiliate agrees
to be bound by the terms and conditions of this Agreement;

 

(iii)          deposit any Common Stock in any voting trust or subject any
Common Stock to any arrangement or agreement with respect to the voting of any
Common Stock, other than any such voting trust, arrangement or agreement solely
among the members of Starboard and otherwise in accordance with this Agreement;

 

(iv)          seek, or encourage any person or entity, to submit nominations in
furtherance of a “contested solicitation” for the election or removal of
directors with respect to the Company or seek, encourage or take any other
action with respect to the election or removal of any directors; provided,
however, that nothing in this Agreement shall prevent Starboard or its
Affiliates or Associates from taking actions in furtherance of identifying
director candidates in connection with the 2018 Annual Meeting so long as such
actions do not create a public disclosure obligation for Starboard or the
Company and are not publicly disclosed by Starboard or its representatives or
Affiliates and are undertaken on a basis reasonably designed to be confidential
and in accordance in all material respects with Starboard’s normal practices in
the circumstances;

 

(v)           (A) make any proposal for consideration by shareholders at any
annual or special meeting of shareholders of the Company, (B) make any offer or
proposal (with or without conditions) with respect to any merger, acquisition,
recapitalization, restructuring, disposition or other business combination
involving Starboard and the Company, (C) affirmatively solicit a third party to
make an offer or proposal (with or without conditions) with respect to any
merger, acquisition, recapitalization, restructuring, disposition or other
business combination involving the Company, or publicly encourage, initiate or
support any third party in making such an offer or proposal, (D) publicly
comment on any third party proposal regarding any merger, acquisition,
recapitalization, restructuring, disposition, or other business combination with
respect to the Company by such third party prior to such proposal becoming
public or (E) call or seek to call a special meeting of shareholders;

 

(vi)          seek, alone or in concert with others, representation on the
Board, except as specifically permitted in Section 1;

 

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(vii)         seek to advise, encourage, support or influence any person or
entity with respect to the voting or disposition of any securities of the
Company at any annual or special meeting of shareholders, except in accordance
with Section 1; or

 

(viii)        make any request or submit any proposal to amend the terms of this
Agreement other than through non-public communications with the Company that
would not be reasonably determined to trigger public disclosure obligations for
any Party.

 

(b)           Nothing in Section 2(a) shall be deemed to limit the exercise in
good faith by any directors of their fiduciary duties solely in his capacity as
directors of the Company and in a manner consistent with their and Starboard’s
obligations under this Agreement.

 

3.                                      Representations and Warranties of the
Company.

 

The Company represents and warrants to Starboard that (a) the Company has the
corporate power and authority to execute this Agreement and to bind it thereto,
(b) this Agreement has been duly and validly authorized, executed and delivered
by the Company, constitutes a valid and binding obligation and agreement of the
Company, and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting the rights of creditors and subject to general equity
principles and (c) the execution, delivery and performance of this Agreement by
the Company does not and will not (i) violate or conflict with any law, rule,
regulation, order, judgment or decree applicable to the Company, or (ii) result
in any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both would constitute such a breach, violation or
default) under or pursuant to, any organizational document or agreement to which
the Company is a party or by which it is bound.

 

4.                                      Representations and Warranties of
Starboard.

 

Starboard represents and warrants to the Company that (a) the authorized
signatory of Starboard set forth on the signature page hereto has the power and
authority to execute this Agreement and any other documents or agreements to be
entered into in connection with this Agreement and to bind Starboard thereto,
(b) this Agreement has been duly authorized, executed and delivered by
Starboard, and is a valid and binding obligation of Starboard, enforceable
against Starboard in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws generally affecting the rights of
creditors and subject to general equity principles, (c) the execution of this
Agreement, the consummation of any of the transactions contemplated hereby, and
the fulfillment of the terms hereof, in each case in accordance with the terms
hereof, will not conflict with, or result in a breach or violation of the
organizational documents of Starboard as currently in effect, (d) the execution,
delivery and performance of this Agreement by Starboard does not and will not
(i) violate or conflict with any law, rule, regulation, order, judgment or
decree applicable to Starboard, or (ii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
would constitute such a breach, violation or default) under or pursuant to, or
result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document,

 

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agreement, contract, commitment, understanding or arrangement to which such
member is a party or by which it is bound, (e) as of the date of this Agreement,
Starboard beneficially owns in the aggregate 5,490,000 shares of Common Stock
and (f) as of the date hereof, other than as disclosed herein or in the Press
Release defined in Section 5 below, Starboard does not currently have, and does
not currently have any right to acquire, any interest in any other securities of
the Company (or any rights, options or other securities convertible into or
exercisable or exchangeable (whether or not convertible, exercisable or
exchangeable immediately or only after the passage of time or the occurrence of
a specified event) for such securities or any obligations measured by the price
or value of any securities of the Company or any of its controlled Affiliates,
including any swaps or other derivative arrangements designed to produce
economic benefits and risks that correspond to the ownership of Common Stock,
whether or not any of the foregoing would give rise to beneficial ownership, and
whether or not to be settled by delivery of Common Stock, payment of cash or by
other consideration, and without regard to any short position under any such
contract or arrangement).

 

5.                                      Press Release.

 

Promptly following the execution of this Agreement, the Company will issue a
press release (the “Press Release”) in the form attached hereto as Exhibit B. 
Prior to the issuance of the Press Release and subject to the terms of this
Agreement, neither the Company (including the Board and any committee thereof)
nor Starboard shall issue any press release or make public announcement
regarding this Agreement or the matters contemplated hereby without the prior
written consent of the other Party.  During the Period, neither the Company nor
Starboard shall make any public announcement or statement that is inconsistent
with or contrary to the terms of this Agreement.

 

6.                                      Specific Performance.

 

Each of Starboard, on the one hand, and the Company, on the other hand,
acknowledges and agrees that irreparable injury to the other Party hereto would
occur in the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached and that such
injury would not be adequately compensable by the remedies available at law
(including the payment of money damages).  It is accordingly agreed that
Starboard, on the one hand, and the Company, on the other hand (the “Moving
Party”), shall each be entitled to specific enforcement of, and injunctive
relief to prevent any violation of, the terms hereof, and the other Party hereto
will not take action, directly or indirectly, in opposition to the Moving Party
seeking such relief on the grounds that any other remedy or relief is available
at law or in equity.  This Section 6 is not the exclusive remedy for any
violation of this Agreement.

 

7.                                      Expenses.

 

The Company shall reimburse Starboard for its reasonable, documented
out-of-pocket fees and expenses (including legal expenses) incurred in
connection with Starboard’s recent involvement at the Company, including, but
not limited to, its Schedule 13D filings and the negotiation and execution of
this Agreement, provided that such reimbursement shall not exceed $75,000 in the
aggregate.

 

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8.                                      Severability.

 

If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.  It is hereby stipulated and declared to be the intention of the
Parties that the Parties would have executed the remaining terms, provisions,
covenants and restrictions without including any of such which may be hereafter
declared invalid, void or unenforceable.  In addition, the Parties agree to use
their best efforts to agree upon and substitute a valid and enforceable term,
provision, covenant or restriction for any of such that is held invalid, void or
enforceable by a court of competent jurisdiction.

 

9.                                      Notices.

 

Any notices, consents, determinations, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (a) upon receipt, when delivered
personally; (b) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending Party); (c) upon confirmation of receipt, when sent by email (provided
such confirmation is not automatically generated); or (d) one (1) business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the Party to receive the same.  The addresses and
facsimile numbers for such communications shall be (A) for the Company, 7999
Gateway Blvd., Suite 300, Newark, California 94560, mgosling@depomed.com or
(B) for Starboard Value LP, 777 Third Avenue, 18th Floor, New York, NY 10017,
JSmith@starboardvalue.com.

 

10.                               Applicable Law.

 

This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of California without reference to the conflict of
laws principles thereof.  By its execution and delivery of this Agreement, each
of the Parties hereto hereby irrevocably and unconditionally agrees for itself
that any legal action, suit or proceeding with respect to any matter under or
arising out of or in connection with this Agreement or for recognition or
enforcement of any judgment in any such action, suit or proceeding may be
brought, on a non-exclusive basis, in any federal or state court of competent
jurisdiction in any California State or federal court sitting in Santa Clara
County.  By execution and delivery of this Agreement, each of the Parties hereto
irrevocably accepts and submits itself to the non-exclusive jurisdiction of any
such court, generally and unconditionally, with respect to any such action, suit
or proceeding and waives any defense of forum non conveniens or based upon venue
if such action, suit or proceeding is brought in accordance with this
provision.  Each Party hereby irrevocably and unconditionally waives, and agrees
not to assert, by way of motion or as a defense, counterclaim or otherwise, in
any action or proceeding arising out of or relating to this Agreement, (i) any
claim that it is not personally subject to the jurisdiction of the courts in
California as described herein for any reason, (ii) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) and (iii) that (A) the suit, action or proceeding in any such court
is brought in an inconvenient forum, (B) the venue of such suit, action or
proceeding is improper or (C) this Agreement, or the subject matter hereof, may
not be enforced in or by such courts.

 

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11.                               Counterparts.

 

This Agreement may be executed in two or more counterparts, each of which shall
be considered one and the same agreement and shall become effective when
counterparts have been signed by each of the Parties and delivered to the other
Party (including by means of electronic delivery or facsimile).

 

12.                               Mutual Non-Disparagement.

 

Subject to applicable law, each of the Parties covenants and agrees that, during
the Period or if earlier, until such time as the other Party or any of its
agents, subsidiaries, affiliates, successors, assigns, officers, key employees
or directors shall have breached this section, neither it nor any of its
respective agents, subsidiaries, affiliates, successors, assigns, officers, key
employees or directors, shall in any way publicly criticize, disparage, call
into disrepute or otherwise defame or slander the other Party or such other
Party’s subsidiaries, affiliates, successors, assigns, officers (including any
current officer of a Party or a Party’s subsidiaries who no longer serves in
such capacity following the execution of this Agreement), directors (including
any current director of a Party or a Party’s subsidiaries who no longer serves
in such capacity following the execution of this Agreement), employees,
shareholders, agents, attorneys or representatives, or any of their businesses,
products or services, in any manner that would reasonably be expected to damage
the business or reputation of such other Party, their businesses, products or
services or their subsidiaries, affiliates, successors, assigns, officers (or
former officers), directors (or former directors), employees, shareholders,
agents, attorneys or representatives; provided, however, any statements
regarding the Company’s operational or stock price performance or any strategy,
plans, or proposals of the Company not supported by Mr. Molinelli that do not
criticize, disparage, call into disrepute or otherwise defame or slander any of
the Company’s officers, directors, employees, shareholders, agents, attorneys or
representatives (“Opposition Statement”), shall not be deemed to be a breach of
this Section 12 (subject to, for the avoidance of doubt, any obligations of
confidentiality as a director that may otherwise apply); provided, further, that
if any Opposition Statement is made by Starboard, the Company shall be permitted
to publicly respond with a statement similar in scope to any such Opposition
Statement.

 

13.                               Confidentiality.

 

Mr. Molinelli, if he wishes to do so, may provide confidential information of
the Company which Mr. Molinelli learns in his capacity as a director of the
Company, including discussions or matters considered in meetings of the Board or
Board committees (collectively, “Company Confidential Information”), to
Starboard, its Affiliates and Associates and legal counsel (collectively,
“Starboard Representatives”), in each case solely to the extent such Starboard
Representatives need to know such information in connection with Starboard’s
investment in the Company; provided, however, that Starboard (i) shall inform
such Starboard Representatives of the confidential nature of any such Company
Confidential Information and (ii) shall cause such Starboard Representatives to
refrain from disclosing such Company Confidential Information to anyone (whether
to any company in which Starboard has an investment or otherwise), by any means,
or otherwise from using the information in any way other than in connection with
Starboard’s investment in the Company.  Mr. Molinelli and Starboard shall not,
without the prior written consent of the Company, otherwise disclose any Company
Confidential Information to any other person or entity.

 

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14.                               Securities Laws.

 

Starboard acknowledges that it is aware, and will advise each of its
representatives who are informed as to the matters that are the subject of this
Agreement, that the United States securities laws may prohibit any person who
has received from an issuer material, non-public information from purchasing or
selling securities of such issuer or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities.

 

15.                               Entire Agreement; Amendment and Waiver;
Successors and Assigns; Third Party Beneficiaries; Term.

 

This Agreement contains the entire understanding of the Parties with respect to
its subject matter.  There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings between the Parties other
than those expressly set forth herein.  No modifications of this Agreement can
be made except in writing signed by an authorized representative of each the
Company and Starboard.  No failure on the part of any Party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such Party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.  All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.  The
terms and conditions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the Parties hereto and their respective
successors, heirs, executors, legal representatives, and permitted assigns.  No
Party shall assign this Agreement or any rights or obligations hereunder
without, with respect to Starboard, the prior written consent of the Company,
and with respect to the Company, the prior written consent of Starboard.  This
Agreement is solely for the benefit of the Parties and is not enforceable by any
other persons or entities.  Notwithstanding the foregoing, each Director shall
be express third-party beneficiaries of, and shall be entitled to rely on and
enforce this Agreement and during the Period no amendment, waiver or other
modification of Section 1(a), Section 1(b)(i), Section 1(c), Section 2,
Section 6, Section 12, Section 13 or this Section 15 may be made without the
express written consent of at least 75% of the Directors (rounded up to the
nearest whole Director).  This Agreement shall terminate at the end of the
Period, except the provisions of Section 2, 13, 14 and 15, which shall survive
such termination.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized signatories of the Parties as of the date hereof.

 

DEPOMED, INC.

 

 

By:

/s/ Matthew M. Gosling

 

Name:

Matthew M. Gosling

 

Title

SVP & General Counsel

 

 

 

STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD

 

STARBOARD VALUE GP LLC

 

By: Starboard Principal Co LP,

By: Starboard Value LP,

 

its member

its investment manager

 

 

 

 

STARBOARD PRINCIPAL CO LP

STARBOARD VALUE AND OPPORTUNITY S LLC

 

By: Starboard Principal Co GP LLC,

By: Starboard Value LP,

 

its general partner

its manager

 

 

 

 

STARBOARD PRINCIPAL CO GP LLC

STARBOARD VALUE AND OPPORTUNITY C LP

 

 

By: Starboard Value R LP,

 

STARBOARD VALUE R GP LLC

its general partner

 

 

 

 

 

STARBOARD VALUE R LP

 

 

By: Starboard Value R GP LLC,

 

 

its general partner

 

 

 

 

 

STARBOARD VALUE LP

 

 

By: Starboard Value GP LLC,

 

 

its general partner

 

 

 

 

By:

/s/ Jeffrey C. Smith

 

 

Name: Jeffrey C. Smith

 

 

Title: Authorized Signatory

 

 

By:

/s/ Jeffrey C. Smith

 

 

Name: Jeffrey C. Smith

 

Individually and as attorney-in-fact for Mark R. Mitchell and Peter A. Feld

 

10

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EXHIBIT A

 

STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD

STARBOARD VALUE AND OPPORTUNITY S LLC

STARBOARD VALUE AND OPPORTUNITY C LP

STARBOARD VALUE R LP

STARBOARD VALUE LP

STARBOARD VALUE GP LLC

STARBOARD PRINCIPAL CO LP

STARBOARD PRINCIPAL CO GP LLC

STARBOARD VALUE R GP LLC

JEFFREY C. SMITH

MARK R. MITCHELL

PETER A. FELD

GAVIN T. MOLINELLI

 

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EXHIBIT B

 

PRESS RELEASE

 

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Depomed Announces Cooperation Agreement with Starboard Value LP Including CEO
and Board Changes

 

-Pharmaceutical Veteran Arthur J. Higgins Joins as President, CEO and Director-

 

-Three New Directors Named to Board-

 

-James Fogarty Named New Chairman of the Board-

 

-Q1 2017 Net Sales Estimated to be $95-$100 Million-

 

Newark, CA - March 28, 2017  Depomed, Inc. (NASDAQ: DEPO) today announced that
Arthur J. Higgins has joined the Company as President and Chief Executive
Officer and member of the Board of Directors, following the resignation of James
Schoeneck as President and Chief Executive Officer and member of the Board of
Directors.  Mr. Higgins is a highly respected executive with over 35 years’
experience in the pharmaceutical and healthcare industry.  Serving as CEO of
Bayer Healthcare, he helped transform the company into a leader in global
pharmaceutical and consumer healthcare.  He previously served as Chairman and
CEO of Enzon, Inc., and President of Abbott Laboratories Pharmaceuticals
Division, and more recently has served as Senior Advisor to The Blackstone
Group.

 

“I am honored to be able to work with the management and the Board of Depomed. 
We have an opportunity to accelerate Depomed’s journey as a leader in pain
management and neurology as we maximize value for all shareholders,” said
Mr. Higgins.

 

Composition of the Board

 

Depomed also announced that Mr. Higgins, William McKee, former Chief Financial
Officer of Barr Pharmaceuticals, LLC, and Gavin Molinelli a Partner at Starboard
Value LP have joined the Board of Directors, and that Samuel Saks, M.D. and
David Zenoff, D.B.A. have resigned from the Board.  Karen Dawes, James Fogarty,
Louis Lavigne, Jr., Robert Savage, Peter Staple and James Tyree will continue as
members of the Board.  James Fogarty will serve as the new Chairman of the
Board.

 

Peter Staple said, “On behalf of the Board, I want to thank Sam Saks and David
Zenoff for their contributions as directors. They have each played an important
role in the Company’s growth and have provided the rest of the Board and the
management team with valuable insights and leadership over many years.”

 

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“We are pleased to have reached an agreement to work with Depomed.  We believe
that Arthur Higgins is an excellent choice to lead Depomed. We are excited to
have found such a qualified leader for the Company.  Furthermore, we believe the
addition of William McKee as a member of the Board of Directors will add
valuable industry experience to the boardroom.  I look forward to working with
my fellow board members to maximize value for all shareholders,” said Gavin
Molinelli, Partner of Starboard Value LP.

 

William McKee is a pharmaceutical industry consultant and board member of
Cerulean Pharma, Inc. and Agile Therapeutics.  Formerly, Mr. McKee served as COO
and CFO at EKR Therapeutics, Inc., a private specialty pharmaceutical company,
until EKR was sold to Cornerstone Therapeutics Inc.  Prior to that, Mr. McKee
served as the Executive Vice President and Chief Financial Officer of Barr
Pharmaceuticals Inc., a public specialty pharmaceutical company, which was
acquired by Teva Pharmaceutical Industries Ltd.

 

Gavin Molinelli is a Partner of Starboard Value LP.  Prior to joining Starboard
and its related funds in 2006, Mr. Molinelli was a member of the Technology
Investment Banking group at Banc of America Securities LLC.  Mr. Molinelli was
formerly on the Board of Directors of Wausau Paper Corp. and Actel Corporation.

 

First Quarter Results

 

Depomed also announced that it estimates net sales for the quarter ending
March 31, 2017 will be approximately $95 to $100 million.  First quarter results
reflect the impact of the previously announced realignment of the Company’s
sales force effective February 1, 2017 and the fact that the Company had a
significant number of openings in its field sales force in the first quarter, as
well as wholesalers’ reductions of inventory of our products in the first
quarter and continued weakness in the long-acting and short-acting opioid
markets.

 

The Company will revise its financial guidance for the year at its earnings call
for the first quarter which is expected to take place in the week of May 8,
2017.

 

About Depomed

 

Depomed is a leading specialty pharmaceutical company focused on enhancing the
lives of the patients, families, physicians, providers and payors we serve
through commercializing innovative products for pain and neurology related
disorders. Depomed markets six medicines with areas of focus that include mild
to severe acute pain, moderate to severe chronic pain, neuropathic pain,
migraine and breakthrough cancer pain. Depomed is headquartered in Newark,
California. To learn more about Depomed, visit www.depomed.com.

 

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About Starboard Value LP

 

Starboard Value LP is a New York-based investment adviser with a focused and
fundamental approach to investing in publicly traded U.S. companies. Starboard
invests in deeply undervalued companies and actively engages with management
teams and boards of directors to identify and execute on opportunities to unlock
value for the benefit of all shareholders.

 

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of
1995. The statements that are not historical facts contained in this release are
forward-looking statements that involve risks and uncertainties including, but
not limited to risks detailed in the Company’s Securities and Exchange
Commission filings, including the Company’s most recent Annual Report on
Form 10-K and most recent Quarterly Report on Form 10-Q. The inclusion of
forward-looking statements should not be regarded as a representation that any
of the Company’s plans or objectives will be achieved. You are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. The Company undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.

 

INVESTOR AND MEDIA CONTACT:

 

Christopher Keenan

VP, Investor Relations and Corporate Communications

510-744-8000

ckeenan@depomed.com

 

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