Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into this
24th day of August, 2007, between Depomed, Inc., a California corporation (the
"Company") and John W. Fara, Ph.D. ("CONSULTANT").
THE PARTIES AGREE AS FOLLOWS:
1.
CONSULTANCY.
CONSULTANT SHALL SERVE AS A CONSULTANT TO THE
COMPANY FOR A PERIOD COMMENCING ON THE DATE OF THIS AGREEMENT AND CONCLUDING ON
THE DATE SET FORTH IN SCHEDULE A HERETO.
THE PERIOD DURING WHICH CONSULTANT
SHALL SERVE AS A CONSULTANT TO THE COMPANY PURSUANT TO THIS AGREEMENT SHALL
CONSTITUTE THE "CONSULTING PERIOD".
2.
DUTIES.
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 AT SCHEDULE A, WHICH CONSULTING WILL TAKE PLACE AT SUCH PLACES
AND AT SUCH TIMES AS THE COMPANY AND CONSULTANT MUTUALLY AGREE.
3.
COMPENSATION; STOCK OPTIONS; CHANGE IN CONTROL.
3.1.
COMPENSATION.
SUBJECT TO THE PROVISIONS OF SECTION 4.3 BELOW, 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.
THROUGH DECEMBER 31, 2008, CONSULTANT WILL
NOT BE ENTITLED TO ANY ADDITIONAL CASH COMPENSATION FOR HIS SERVICE AS A MEMBER
OF THE COMPANY'S BOARD OF DIRECTORS WHILE HE IS RECEIVING FEES PURSUANT TO THIS
AGREEMENT.
3.2.
STOCK OPTIONS.
THE PARTIES ACKNOWLEDGE THAT, SUBJECT TO THE
PROVISIONS OF SECTION 4.3 BELOW, ANY STOCK OPTIONS TO PURCHASE THE COMMON STOCK
OF THE COMPANY ("COMPANY OPTIONS") HELD BY CONSULTANT WILL CONTINUE TO VEST
DURING THE CONSULTING PERIOD IN ACCORDANCE WITH THE TERMS OF SUCH COMPANY
OPTIONS.
3.3.
CHANGE IN CONTROL.
IN THE EVENT THAT A CHANGE IN CONTROL (AS
DEFINED BELOW) OCCURS DURING THE CONSULTING PERIOD:
(A) 100% OF CONSULTANT'S
UNVESTED OPTIONS TO PURCHASE SHARES SHALL BECOME IMMEDIATELY VESTED ON THE DATE
OF SUCH CHANGE IN CONTROL; AND (B) CONSULTANT SHALL RECEIVE, ON THE DATE THE
CHANGE IN CONTROL OCCURS AND IN LIEU OF ANY FURTHER MONTHLY PAYMENTS SET FORTH
IN SCHEDULE A, A LUMP SUM PAYMENT EQUAL TO THE REMAINDER OF (X) $340,000, MINUS
(Y) THE SUM OF ALL PAYMENTS RECEIVED UNDER THIS AGREEMENT BY CONSULTANT PRIOR TO
THE DATE OF THE CHANGE IN CONTROL (IF SUCH REMAINDER IS A POSITIVE NUMBER).
FOR
PURPOSES
OF THIS AGREEMENT, "CHANGE IN CONTROL" SHALL MEAN ANY EVENT SO DETERMINED BY THE
COMPANY'S BOARD OF DIRECTORS PURSUANT TO SECTION 10.4 OF THE COMPANY'S 2004
EQUITY INCENTIVE PLAN.
3.4.
COBRA.
THROUGH DECEMBER 31, 2008, THE COMPANY SHALL CONTINUE TO
PAY (OR REIMBURSE CONSULTANT FOR) ITS PORTION OF THE HEALTH INSURANCE BENEFITS
PROVIDED TO CONSULTANT IMMEDIATELY PRIOR TO THE COMMENCEMENT OF THE CONSULTING
PERIOD PURSUANT TO THE TERMS OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION
ACT OF 1985, AS AMENDED ("COBRA") OR OTHER APPLICABLE LAW THROUGH THE EARLIER OF
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