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Exhibit 10.8




XenoPort, Inc.

2005 Equity Incentive Plan




Option Agreement

(Incentive Stock Option or Nonstatutory Stock Option)




     Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement,
XenoPort, Inc. (the “Company”) has granted you an option under its 2005 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined
in this Option Agreement but defined in the Plan shall have the same definitions as in the Plan.



     The details of your option are as follows:



     1. Vesting. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.



     2. Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.



     3. Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:



          (a) In the Company’s sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.



          (b) In the Company’s sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, by delivery to the Company (either by actual delivery or attestation) of already-owned
shares of Common Stock either that you have held for the period required to avoid a charge to the
Company’s reported earnings (generally six (6) months) or that you did not acquire, directly or
indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or
security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery”
for these purposes, in the sole discretion of the Company at the time you exercise your option,
shall include delivery to the Company of your attestation of ownership of such shares of Common
Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your
option by tender to the Company of Common Stock to the



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extent such tender would violate the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock.




     4. Whole Shares. You may exercise your option only for whole shares of Common Stock.



     5. Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.



     6. Term. You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:



          (a) three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three (3) month period your
option is not exercisable solely because of the condition set forth in Section 5, your option shall
not expire until the earlier of the Expiration Date or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of your Continuous Service;



          (b) twelve (12) months after the termination of your Continuous Service due to your
Disability;



          (c) eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;



          (d) twelve (12) months following the effective date of a Change in Control if your Continuous
Service terminates as of or within twelve (12) months following such Change in Control;



          (e) the Expiration Date indicated in your Grant Notice; or



          (f) the day before the tenth (10th) anniversary of the Date of Grant.



     If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or your permanent and total disability, as defined in Section 22(e) of the Code. (The
definition of disability in Section 22(e) of the Code is different from the definition of the
Disability under the Plan). The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee



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that your option will necessarily be treated as an Incentive Stock Option if you continue to
provide services to the Company or an Affiliate as a Consultant or Director after your employment
terminates or if you otherwise exercise your option more than three (3) months after the date your
employment with the Company or an Affiliate terminates.




     7. Exercise.



          (a) You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.



          (b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of
your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock
acquired upon such exercise.



          (c) If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.



     8. Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option. In addition, you may transfer your option to a trust if you are considered
to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law)
while the option is held in the trust, provided that you and the trustee enter into transfer and
other agreements required by the Company.



     9. Change In Control. 



          (a) If your Continuous Service terminates within twelve (12) months following the effective
date of a Change in Control due to (i) an involuntary termination (excluding death or Disability)
without Cause, or (ii) a voluntary termination for Good Reason, the vesting and exercisability of
your option shall be accelerated in full.



          (b) “Cause” shall have the meaning set forth in the Plan.



          (c) “Good Reason” means that one or more of the following are undertaken by the Company
without your express written consent: (i) the assignment to you of any duties or responsibilities
that results in a material diminution in your function as in effect immediately prior to the
effective date of the Change in Control; provided, however, that neither a change in



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your title or reporting relationships nor the Common Stock ceasing to be listed on any
established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market
shall provide the basis for a voluntary termination with Good Reason; (ii) a material reduction by
the Company in your annual base salary, as in effect on the effective date of the Change in Control
or as increased thereafter; provided, however, that Good Reason shall not be deemed to have
occurred in the event of a reduction in your annual base salary that is pursuant to a salary
reduction program affecting substantially all of the employees of the Company and that does not
adversely affect you to a greater extent than other similarly situated employees; (iii) any failure
by the Company to continue in effect any material benefit plan or program, including incentive
plans or plans with respect to the receipt of securities of the Company, in which you were
participating immediately prior to the effective date of the Change in Control (hereinafter
referred to as “Benefit Plans”), or the taking of any action by the Company that would materially
adversely affect your participation in or materially reduce your benefits under the Benefit Plans
or deprive you of any material fringe benefit that you enjoyed immediately prior to the effective
date of the Change in Control; provided, however, that Good Reason shall not be deemed to have
occurred if the Company provides for your participation in benefit plans and programs that, taken
as a whole, are comparable to the Benefit Plans; (iv) a relocation of your business office to a
location more than fifty (50) miles from the location at which you performed your duties as of the
effective date of the Change in Control, except for required travel by you on the Company’s
business to an extent substantially consistent with your business travel obligations prior to the
effective date of the Change in Control; or (v) a material breach by the Company of any provision
of the Plan or the Option Agreement or any other material agreement between you and the Company
concerning the terms and conditions of your employment.




          (d) If any payment or benefit you would receive pursuant to a Change in Control from the
Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced
Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would
result in no portion of the Payment being subject to the Excise Tax, or (y) the largest portion, up
to and including the total, of the Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all
computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis,
of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments”
is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following
order unless you elect in writing a different order (provided, however, that such election shall be
subject to Company approval if made on or after the effective date of the event that triggers the
Payment): reduction of cash payments; cancellation of accelerated vesting of Stock Awards;
reduction of employee benefits. In the event that acceleration of vesting of Stock Award
compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order
of the date of grant of your Stock Awards (i.e., earliest granted Stock Award cancelled last)
unless you elect in writing a different order for cancellation.



          (e) The accounting firm engaged by the Company for general tax purposes as of the day prior to
the effective date of the Change in Control shall perform the foregoing



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calculations. If the accounting firm so engaged by the Company is serving as accountant or
auditor for the individual, entity or group effecting the Change in Control, the Company shall
appoint a nationally recognized accounting firm to make the determinations required hereunder. The
Company shall bear all expenses with respect to the determinations by such accounting firm required
to be made hereunder.




          (f) The accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to you and the Company within
fifteen (15) calendar days after the date on which your right to a Payment is triggered (if
requested at that time by you or the Company) or such other time as requested by you or the
Company. If the accounting firm determines that no Excise Tax is payable with respect to a
Payment, either before or after the application of the Reduced Amount, it shall furnish you and the
Company with an opinion reasonably acceptable to you that no Excise Tax will be imposed with
respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall
be final, binding and conclusive upon you and the Company.



     10. Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.



     11. Withholding Obligations.



          (a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.



          (b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid variable award accounting). If the date of
determination of any tax withholding obligation is deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of such election,
shares of Common Stock shall be withheld solely



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from fully vested shares of Common Stock determined as of the date of exercise of your option
that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole responsibility.




          (c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.



     12. Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.



     13. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and 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 your option
and those of the Plan, the provisions of the Plan shall control.




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