exv10w12



 






Exhibit 10.12




XenoPort, Inc.




2005 Employee Stock Purchase Plan

Offering Document




Adopted by the Board of Directors: January 4, 2005




     In this document, capitalized terms not otherwise defined shall have the same definitions of
such terms as in the XenoPort, Inc. 2005 Employee Stock Purchase Plan.



1. Grant; Offering Date.




     (a) The Board hereby authorizes a series of Offerings pursuant to the terms of this Offering
document.



     (b) The first Offering hereunder (the “Initial Offering”) shall begin on the date the Common
Stock is first offered to the public under a registration statement declared effective under the
Securities Act and shall end on May 15, 2006, unless terminated earlier as provided below. The
Initial Offering shall consist of two (2) Purchase Periods, with the first Purchase Period ending
on November 15, 2005 and the second Purchase Period ending on May 15, 2006.



     (c) After the Initial Offering commences, a concurrent Offering shall begin on November 16,
2005 and May 16 and November 16 each year after 2005 over the term of the Plan and shall be
approximately one (1) year in duration. Each Offering shall consist of two (2) Purchase Periods
each of which shall be approximately six (6) months in length ending on or about May 15 and
November 15 each year. Except as provided below, a Purchase Date is the last day of a Purchase
Period or of an Offering, as the case may be.



     (d) Notwithstanding the foregoing: (i) if any Offering Date falls on a day that is not a
Trading Day, then such Offering Date shall instead fall on the next subsequent Trading Day, and
(ii) if any Purchase Date falls on a day that is not a Trading Day, then such Purchase Date shall
instead fall on the immediately preceding Trading Day.



     (e) Prior to the commencement of any Offering, the Board may change any or all terms of such
Offering and any subsequent Offerings. The granting of Purchase Rights pursuant to each Offering
hereunder shall occur on each respective Offering Date unless prior to such date (i) the Board
determines that such Offering shall not occur, or (ii) no shares of Common Stock remain available
for issuance under the Plan in connection with the Offering.



     (f) If the Company’s accountants advise the Company that the accounting treatment of purchases
under the Plan is such that the Company determines is detrimental to its best interests, then the
Board may, in its sole discretion, terminate each Offering hereunder that is then ongoing as of the
next Purchase Date (after the purchase of stock on such Purchase Date) under such Offering.



     (g) Notwithstanding anything in this Section 1 to the contrary, if on the first day of a new
Purchase Period during the Offering the Fair Market Value of a share of Common Stock is



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less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date
for that Offering, then that Offering shall immediately terminate. Participants in the terminated
Offering shall automatically be enrolled in the new Offering that starts on or about such day.




2. Eligible Employees.




     (a) Each Eligible Employee, who has been an Employee for a continuous period of at least four
(4) weeks ending on the Offering Date of an Offering hereunder and is either (i) an employee of the
Company; (ii) an employee of a Related Corporation incorporated in the United States; or (iii) an
employee of a Related Corporation that is not incorporated in the United States, provided that the
Board has designated the employees of such Related Corporation as eligible to participate in the
Offering, shall be granted a Purchase Right on the Offering Date of such Offering.



     (b) Each person who first becomes an Eligible Employee during an Offering shall not be able to
participate in such Offering.



     (c) Notwithstanding the foregoing, the following Employees shall not be Eligible
Employees or be granted Purchase Rights under an Offering:



          (i) Employees whose customary employment is five (5) months per calendar year or less;



          (ii) five percent (5%) stockholders (including ownership through unexercised and/or unvested
stock options) as described in Section 6(c) of the Plan; or



          (iii) Employees in jurisdictions outside of the United States if, as of the Offering Date of
the Offering, the grant of such Purchase Rights would not be in compliance with the applicable laws
of any jurisdiction in which the Employee resides or is employed.



3. Purchase Rights.




     (a) Subject to the limitations herein and in the Plan, a Participant’s Purchase Right shall
permit the purchase of the number of shares of Common Stock purchasable with up to fifteen percent
(15%) of such Participant’s Earnings paid during the period of such Offering beginning immediately
after such Participant first commences participation; provided, however, that no Participant may
have more than fifteen percent (15%) of such Participant’s Earnings applied to purchase shares of
Common Stock under all ongoing Offerings under the Plan and all other plans of the Company and
Related Corporations that are intended to qualify as Employee Stock Purchase Plans.



     (b) For Offerings hereunder, “Earnings” means the total compensation paid to a Participant,
including all salary, wages (including amounts elected to be deferred by such Participant, that
would otherwise have been paid, under any cash or deferred arrangement or other deferred
compensation program established by the Company or a Related Corporation), overtime pay,
commissions, bonuses, and other remuneration paid directly to such Participant, but excluding
profit sharing, the cost of employee benefits paid for by the Company or a Related Corporation,
education or tuition reimbursements, imputed income arising under any Company



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or Related Corporation group insurance or benefit program, traveling expenses, business and
moving expense reimbursements, income received in connection with stock options, contributions made
by the Company or a Related Corporation under any employee benefit plan, and similar items of
compensation.




     (c) Notwithstanding the foregoing, the maximum number of shares of Common Stock that a
Participant may purchase on any Purchase Date in an Offering shall be such number of shares as has
a Fair Market Value (determined as of the Offering Date for such Offering) equal to (x) $25,000
multiplied by the number of calendar years in which the Purchase Right under such Offering has been
outstanding at any time, minus (y) the Fair Market Value of any other shares of Common Stock
(determined as of the relevant Offering Date with respect to such shares) that, for purposes of the
limitation of Section 423(b)(8) of the Code, are attributed to any of such calendar years in which
the Purchase Right is outstanding. The amount in clause (y) of the previous sentence shall be
determined in accordance with regulations applicable under Section 423(b)(8) of the Code based on
(i) the number of shares previously purchased with respect to such calendar years pursuant to such
Offering or any other Offering under the Plan, or pursuant to any other Company or Related
Corporation plans intended to qualify as Employee Stock Purchase Plans, and (ii) the number of
shares subject to other Purchase Rights outstanding on the Offering Date for such Offering pursuant
to the Plan or any other such Company or Related Corporation Employee Stock Purchase Plan.



     (d) The maximum aggregate number of shares of Common Stock available to be purchased by all
Participants under an Offering shall be the number of shares of Common Stock remaining available
under the Plan on the Offering Date. If the aggregate purchase of shares of Common Stock upon
exercise of Purchase Rights granted under all concurrent Offerings would exceed the maximum
aggregate number of shares available, the Board shall make a uniform and equitable allocation of
the shares available.



4. Purchase Price.




     The purchase price of shares of Common Stock under the Offering shall be the lesser of: (i)
eighty-five percent (85%) of the Fair Market Value of such shares of Common Stock on the Offering
Date, or (ii) eighty-five percent (85%) of the Fair Market Value of such shares of Common Stock on
the applicable Purchase Date. For the Initial Offering, the Fair Market Value of the shares of
Common Stock at the time when the Offering commences shall be the price per share at which shares
are first sold to the public in the Company’s initial public offering as specified in the final
prospectus for that initial public offering.



5. Participation.




     (a) An Eligible Employee may elect to participate in an Offering on the Offering Date. An
Eligible Employee may enroll in only one Offering at a time. An Eligible Employee shall elect his
or her payroll deduction percentage on such enrollment form as the Company provides. The completed
enrollment form must be delivered to the Company prior to the date participation is to be
effective, unless a later time for filing the enrollment form is set by the Company for all
Eligible Employees with respect to a given Offering. Payroll deduction percentages must be
expressed in whole percentages of Earnings, with a minimum percentage of



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one percent (1%) and a maximum percentage of fifteen percent (15%). Except as provided in
Section 5(e), a Participant may participate only by way of payroll deductions.




     (b) A Participant may not increase his or her participation level during a Purchase Period but
may increase his or her participation level for a subsequent Purchase Period. In addition, a
Participant may decrease (including a decrease to zero percent (0%)) his or her participation level
no more than twice during a Purchase Period (and the second decrease in participation level must be
to zero percent (0%)). Any such change in participation level shall be made by delivering a notice
to the Company or a designated Related Corporation in such form as the Company provides prior to
the ten (10) day period (or such shorter period of time as determined by the Company and
communicated to Participants) immediately preceding the payroll date for which it is to be
effective.



     (c) A Participant may withdraw from an Offering and receive a refund of his or her
Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares
of Common Stock for the Participant on any prior Purchase Date) without interest, at any time prior
to the end of the Offering, excluding only each ten (10) day period immediately preceding a
Purchase Date (or such shorter period of time determined by the Company and communicated to
Participants), by delivering a withdrawal notice to the Company or a designated Related Corporation
in such form as the Company provides. A Participant who has withdrawn from an Offering shall not
again participate in such Offering, but may participate in subsequent Offerings under the Plan in
accordance with the terms of the Plan and the terms of such subsequent Offerings.



     (d) Notwithstanding the foregoing or any other provision of this Offering document or of the
Plan to the contrary, neither the enrollment of any Eligible Employee in the Plan nor any forms
relating to participation in the Plan shall be given effect until such time as a registration
statement covering the registration of the shares under the Plan that are subject to the Offering
has been filed by the Company and has become effective.



     (e) If the provisions of Section 5(d) are applicable, the Company shall establish such
procedures as will enable the purposes of the Plan to be satisfied while complying with applicable
securities laws. Such procedures may include, for example, allowing Participants to participate
other than by means of payroll deduction and/or allowing Participants to increase their level of
participation during a Purchase Period. Except as otherwise provided by the Company pursuant to
the preceding sentence, for the initial Purchase Period ending November 15, 2005, no payroll
deductions shall be required from the Eligible Employee until such time as the Eligible Employee
affirmatively elects to commence such payroll deductions following the Eligible Employee’s receipt
of the Securities Act prospectus for the Plan. To the extent that the Eligible Employee’s payroll
deductions for such initial Purchase Period are less than fifteen percent (15%) of Earnings paid to
the Eligible Employee during such initial Purchase Period, the Eligible Employee may make an
additional cash payment at any time on or prior to November 1, 2005 in order to fund the purchase
of shares of Common Stock purchased on behalf of the Eligible Employee on such initial Purchase
Date.



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6. Purchases.




     Subject to the limitations contained herein, on each Purchase Date, each Participant’s
Contributions (without any increase for interest) shall be applied to the purchase of whole shares,
up to the maximum number of shares permitted under the Plan and the Offering.



7. Notices and Agreements.




     Any notices or agreements provided for in an Offering or the Plan shall be given in writing,
in a form provided by the Company, and unless specifically provided for in the Plan or this
Offering, shall be deemed effectively given upon receipt or, in the case of notices and agreements
delivered by the Company, five (5) days after deposit in the United States mail, postage prepaid.



8. Exercise Contingent on Stockholder Approval.




     (a) The Purchase Rights granted under an Offering are subject to the approval of the Plan by
the stockholders of the Company as required for the Plan to obtain treatment as an Employee Stock
Purchase Plan.



9. Offering Subject to Plan.




     (a) Each Offering is subject to all the provisions of the Plan, and the provisions of the Plan
are hereby made a part of the Offering. The Offering is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and adopted pursuant
to the Plan. In the event of any conflict between the provisions of an Offering and those of the
Plan (including interpretations, amendments, rules and regulations which may from time to time be
promulgated and adopted pursuant to the Plan), the provisions of the Plan shall control.



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