Exhibit 10.1


CONSULTING AGREEMENT


THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered
into this 10th day of October, 2007, between Depomed, Inc., a California
corporation (the “Company”), and John F. Hamilton (“CONSULTANT”).


THE
PARTIES AGREE AS FOLLOWS:


1.                                       Consultancy.  CONSULTANT shall serve as a consultant
to the Company for a period commencing on October 18, 2007.  The period during which CONSULTANT shall
serve as a consultant to the Company pursuant to this Agreement shall
constitute the “Consulting Period”.


2.                                       Duties; Expenses. 
CONSULTANT shall serve as a consultant to the Company in the activities
of the Company set forth in Schedule A, or as otherwise requested by the
chief executive officer of the Company. 
In the performance of such duties, CONSULTANT shall consult with the
Company up to the number of hours per month set forth on Schedule A,
which consulting will take place at such places and at such times as the
Company and CONSULTANT mutually agree. 
The Company will reimburse CONSULTANT for all reasonable, ordinary and
necessary travel and other expenses incurred by CONSULTANT in conjunction with
his services performed at the request of the Company under this Agreement.  CONSULTANT will provide commercially
customary support documentation to the Company for all such expenses.


3.                                       Compensation; Change in Control.


3.1.                              Compensation.  The
Company agrees to pay CONSULTANT, and CONSULTANT agrees to accept for
CONSULTANT’s services under this Agreement, consulting fees (the “Consulting
Fees”) as set forth in Schedule A.


3.2.                              In
the event that an Acceleration Event (as defined below) occurs during the
Consulting Period, CONSULTANT or his estate (as applicable) shall receive, on
the date (in the event of a Change in Control described below), or promptly
following the date, that the Acceleration Event occurs and in lieu of any
further monthly payments set forth in Schedule A, a lump sum payment
equal to the remainder of (x) $308,000, minus (y) the sum of all monthly
consulting fee payments received under this Agreement by CONSULTANT prior to
the date of the Acceleration Event (if such remainder is a positive
number).  For purposes of this Agreement,
an Acceleration Event is any of the following: 
(a) CONSULTANT’s death; (b) CONSULTANT’s permanent disability (as
determined in good faith by the Company, taking into account any evidence of
such permanent disability provided by or on behalf of CONSULTANT); or (c) the
occurrence of an event of “Change in Control”, as so determined by the
Company’s Board of Directors pursuant to Section 10.4 of the Company’s
2004 Equity Incentive Plan.


4.                                       Other Employment.


4.1.                              Other Affiliation. 
CONSULTANT represents that he is not now and will not at any time during
the term of this Agreement be a party to any agreement that would prevent 













him from entering into this Agreement, and that CONSULTANT is not a
party to any agreement with third parties which may restrict his consulting
activities on behalf of the Company or obligate CONSULTANT to assign
inventions.


4.2.                              Conflict of Interest. 
CONSULTANT warrants that he is not obligated under any other consulting,
employment, or other agreement which would affect the Company’s rights or
CONSULTANT’s duties under this Agreement.


5.                                       Confidentiality.


5.1.                              Protection of Information and Scientific
Publications.  CONSULTANT shall hold all the Company
Confidential Information (as defined below) in confidence and shall not
disclose Confidential Information to any unauthorized person.  Except as required in his duties for the
Company, CONSULTANT will never directly or indirectly use, disseminate,
disclose, lecture upon, or publish articles concerning, Confidential
Information or remove Confidential Information from the Company’s premises.


5.2.                              Records.  CONSULTANT agrees to keep
separate and segregated from other work all documents, records, notebooks and
correspondence which directly relate to his work under this Agreement.


5.3.                              Company Property.  All
notes, memoranda, reports, drawings, manuals, materials, files, samples,
products, data, and any papers or records of every kind which are or shall come
into CONSULTANT’s possession at any time during the Consulting Period related
to the business of the Company shall be the sole and exclusive property of the
Company, whether or not such items are Confidential Information.  This property shall be surrendered to the
Company upon termination of the Consulting Period or upon request of the
Company at any time either during or after the termination of the Consulting
Period, and no copies, notes, or excerpts thereof shall be retained.


5.4.                              Information
of Others.  CONSULTANT will safeguard
and keep confidential the proprietary information of customers, vendors,
consultants, and other parties with which the Company does business to the same
extent as if it were Company Confidential Information.  CONSULTANT will not, during his consulting
with the Company or otherwise, use or disclose to the Company any confidential,
trade secret, or other proprietary information or material of any previous
employer or other person, and will not bring onto the Company’s premises any
unpublished document or any other property belonging to any former employer
without the written consent of that former employer.


6.                                       Inventions.


6.1.                              Company Property.  All
Inventions (as defined below) made, conceived, or completed by CONSULTANT,
individually or in conjunction with others, resulting from work or consulting
services performed by CONSULTANT on behalf of the Company or from access to the
Company Confidential Information or property, whether or not patentable,
copyrightable, or qualified for mask work protection, shall be the sole and
exclusive property of the Company and 



 2
 









to the extent permitted by law shall be “works made for hire.”  CONSULTANT hereby assigns and agrees to assign
to the Company or its designee, without further consideration, his entire
right, title, and interest in and to all Inventions, other than those protected
by Section 2870 of the California Labor Code, including all rights to obtain,
register, perfect, and enforce patents, copyrights, mask work rights, and other
intellectual property protection for Inventions.


6.2.                              Technical Information, Copyrights, Patents. 
CONSULTANT shall, without royalty or any other further consideration to
CONSULTANT therefore, but at the expense of the Company:


6.2.1.                     Disclosure.  As promptly as known or
possessed by CONSULTANT, disclose to the Company all information with respect
to any Inventions whether or not such Invention qualifies under Section 2870 of
the California Labor Code.


6.2.2.                       Copyright and Patent Applications.  Whenever requested to do so by the Company,
promptly execute and assign any and all applications, assignments and other
instruments which the Company shall deem necessary to apply for and obtain
copyrights, letters patent, or mask work rights in the United States and in
foreign countries, for all Inventions, and convey to the Company or to the
Company’s nominee the sole and exclusive right, title and interest in and to
said Inventions or copyrights, mask work rights, patents, or applications for
any of the foregoing.


6.2.3.                       Legal Proceedings.  Whenever requested to do so by the Company,
deliver to the Company evidence for interference purposes or other legal
proceedings and testify in any administrative or other legal proceedings which
relates to any matters on which CONSULTANT has provided services to the
Company.


6.3.                              Excluded Inventions. 
Nothing contained in this Agreement shall affect the rights or
obligations of CONSULTANT with respect to any Inventions protected by Section
2870 of the California Labor Code. 
Attached as Schedule B is a list of all inventions, improvements,
and original works of authorship related to the Company’s business that are
excluded from this Agreement.


7.                                       Effectiveness; Termination.  This
Agreement shall become effective only upon the satisfaction of the following
conditions:  (a) the Company shall have
received a fully-executed original of that certain letter agreement, dated as
of October 10, 2007, between CONSULTANT and the Company (the “Letter Agreement”);
and (b) CONSULTANT shall not have revoked the Letter Agreement within the
period of revocation contemplated by the Letter Agreement.  The failure of either of the foregoing
conditions shall have the effect of terminating this Agreement without any
further action on the part of either the Company or the CONSULTANT.  The Consulting
Period may be terminated by CONSULTANT upon 30 days’ written notice to the
Company.


8.                                       Survival of Certain Agreements.  The
covenants and agreements set forth in paragraphs 3, 5 and 6 shall survive the
Consulting Period and remain in full force and effect regardless of such
termination.



 3
 









9.                                       Notice.  Any notice to be delivered
pursuant to this Agreement shall be in writing and shall be deemed delivered upon
service, if served personally, or three days after deposit in the United States
Mail, if mailed by first class mail, postage prepaid, registered or certified
with return receipt requested, and addressed to the other party at the
following address, or such address as may be designated in accordance herewith:


	
  To the Company:

  	
   

  	
  Depomed, Inc.

  
	
   

  	
   

  	
  1360 O’Brien Drive

  
	
   

  	
   

  	
  Menlo Park, CA   94025

  
	
   

  	
   

  	
  Attention: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  To CONSULTANT:

  	
   

  	
  at the address set forth at Schedule A

  



 


10.                                 Binding Effect.  This
Agreement shall be binding upon CONSULTANT, and, except as regards the
provision of consulting services hereunder, upon CONSULTANT’s heirs, personal
representatives, executors and administrators, and shall inure to the benefit
of the Company, its successors and assigns.


11.                                 Enforcement.  If any provision of this
Agreement is determined to be invalid or unenforceable, the remainder of this
Agreement shall be valid and enforceable to the maximum extent possible.


12.                                 Amendment.  This Amendment may be modified
or amended only by mutual written consent of the parties.


13.                                 Governing Law.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of California excluding those laws that direct the application of the
laws of another jurisdiction.


14.                                 Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.


15.                                 Entire
Agreement.  This instrument contains
the entire agreement of the parties relating to the subject matter hereof, and
supersedes all prior and contemporaneous negotiations, correspondence,
understandings and agreements of the parties relating to the subject matter hereof.


16.                                 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
CONSULTANT’s rights hereunder shall inure to the benefit of, and be enforceable
by, CONSULTANT’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.



 4
 









17.                                 Definitions.  For the purposes of this Agreement:


17.1.                        “Confidential Information” shall mean
information disclosed to CONSULTANT as a consequence of or through performance
of services for the Company, its subsidiaries or affiliates, whether or not
related to his specific work at the Company. 
Confidential Information includes all information related to any aspect
of the Company’s business which is either information not known by actual or
potential competitors of the Company or is proprietary information of the Company,
whether of a technical nature or otherwise. 
Confidential Information includes Inventions (as defined in Section
17.2), know-how, data, financial information and forecasts, product plans,
marketing plans and strategies, and customer lists.  Information shall be considered, for purposes
of this Agreement, to be Confidential Information if not known by the trade
generally, even though such information has been disclosed to one or more third
parties pursuant to distribution agreements, joint research agreements or
agreements entered into by the Company or any of its affiliates.  For the purposes of this Agreement,
information shall not be considered confidential to the extent that such
information is or becomes, through no fault of CONSULTANT, part of the public
domain, or such information is lawfully furnished to CONSULTANT by a third
party without restriction or disclosure.


17.2.                        “Inventions” shall mean any and all
inventions, concepts, ideas, designs, circuits, schematics, formulas,
algorithms, trade secrets, works of authorship, mask works, developmental or
experimental work, processes, techniques, and improvements.


* * *


IN
WITNESS WHEREOF, the parties have executed this Consulting Agreement as of the
date first above written.


 


	
  CONSULTANT:

  	
   

  	
  DEPOMED, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ John F.
  Hamilton

  	
   

  	
   

  	
  By:

  	
  /s/ Carl A.
  Pelzel

  
	
  John F. Hamilton

  	
   

  	
  Carl A. Pelzel

  
	
   

  	
   

  	
  President & CEO

  
						



 



 5














SCHEDULE
A


to Consulting Agreement


1.                                       Name of Consultant:                                                                                                                                                                                   John F. Hamilton


2.                                       Address of Consultant for Notice:


3.                                       Term of Consulting Period: 
October  18, 2007 to October 17, 2008.


4.                                       Duties of Consultant:  To
consult in areas associated with the Company’s business (including without
limitation finance, accounting and investor relations) as requested from time
to time by the Company’s chief executive officer then in office.


5.                                       Number of Hours of Consulting to be Performed
Per Month:  Up to 10 hours per week and up to 40 hours
per month, as may be requested by the Company.


6.                                       Consulting Fees:  $25,667
per month (or $1,283 per business day for any partial month), which amount
shall be paid irrespective of the number of hours of consulting services per
month performed by Consultant.


Initialed By:


	
  CONSULTANT:

  	
  JFH

  	
   

  
	
   

  	
   

  	
   

  
	
  Depomed:

  	
  CAP

  	
   

  



 











SCHEDULE
B


to Consulting Agreement


(Excluded Inventions,
Improvements, and

Original Works of Authorship)


	
   

  	
   

  	
   

  	
   

  	
  Identifying Number

  
	
  Title

  	
   

  	
  Date

  	
   

  	
  or Brief Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  None