Document:

Exhibit
10.3

DEPOMED, INC.

1995 STOCK OPTION PLAN

NONSTATUTORY STOCK OPTION
AGREEMENT

(A)      Name of Optionee:

(B)        Grant Date:

(C)        Number of Shares:

(D)       Exercise Price:

(E)         Vesting Base Date:

THIS NONSTATUTORY STOCK OPTION AGREEMENT (the “Agreement”)
is made and entered into as of the date set forth in Item B above (the “Grant
Date”) between DepoMed, Inc., a California corporation (the “Company”), and the
person named in Item A above (“Optionee”).

THE PARTIES AGREE AS FOLLOWS:

1.                                       Grant
of Option; Vesting Base Date.

1.1  Grant.  The Company hereby grants to Optionee
pursuant to the Company’s 1995 Stock Option Plan (the “Plan”), a copy of which
is attached to this Agreement as Exhibit 1, a nonstatutory stock option (the “NSO”)
to purchase all or any part of an aggregate of the number of shares (the “NSO
Shares”) of the Company’s Common Stock (as defined in the Plan) listed in Item
C above on the terms and conditions set forth herein and in the Plan, the terms
and conditions of the Plan being hereby incorporated into this Agreement by
reference.

1.2  Vesting Base Date.  The parties hereby establish the date set
forth in Item E above as the Vesting Base Date (as defined in Section 5.1
below).

2.                                       Exercise
Price.  The exercise price for
purchase of each share of Common Stock covered by this NSO shall be the price
set forth in Item D above.

3.                                       Term.  Unless otherwise specified on Exhibit 3
attached hereto, if any (the absence of such exhibit indicating that no such
exhibit was intended), this NSO shall expire as provided in Section 6.1.12 of
the Plan.

4.                                       Adjustment
of NSOs.  The Company shall adjust
the number and kind of shares and the exercise price thereof in certain
circumstances in accordance with the provisions of Section 6.1.1 of the
Plan.

5.                                       Exercise
of Options.

5.1  Vesting; Time of Exercise.  This NSO shall be exercisable according to
the schedule set forth on Exhibit 5.1 attached hereto.  Such schedule shall commence as of the date
set forth in Item E above (the “Vesting Base Date”).

5.2  Exercise After Termination
of Status as an Employee, Director or Consultant.  In the event of termination of Optionee’s
continuous status as an employee, director or consultant, this NSO may be
exercised only in accordance with the provisions of Section 6.1.7 of the Plan.

5.3  Manner of Exercise.  Optionee may exercise this NSO, or any
portion of this NSO, by giving written notice to the Company at its principal
executive office, to the attention of the officer of the Company designated by
the Plan Administrator, accompanied by the Notice of Exercise in substantially
the form attached hereto as Exhibit 5.3 executed by Optionee, payment of the
exercise price and payment of any applicable withholding or employment
taxes.  The date the Company receives
written notice of an exercise hereunder accompanied by payment will be
considered as the date this NSO was exercised.

5.4  Payment.  Except as provided in Exhibit 5.4 attached
hereto, if any (the absence of such exhibit indicating that no exhibit was
intended), payment may be made for NSO Shares purchased at the time written
notice of exercise of the NSO is given to the Company, by delivery of cash,
check or previously owned shares of Common Stock (provided that delivery of
previously owned shares may not be made other than once in any six-month
period).  The proceeds of any payment
shall constitute general funds of the Company.

5.5  Delivery of Certificate.  Promptly after receipt of written notice of
exercise of the NSO, the Company shall, without stock issue or transfer taxes
to the Optionee or other person entitled to exercise, deliver to the Optionee
or other person a certificate or certificates for the requisite number of NSO
Shares.  An Optionee or transferee of an
Optionee shall not have any privileges as a stockholder with respect to any NSO
Shares covered by the option until the date of issuance of a stock certificate.

6.                                       Limited
Transferability of NSO.

6.1  Transfer
to Immediate Family Members.  All or
any portion of this NSO may be transferred by Optionee to (i) the spouse, children
or grandchildren of the Optionee (“Immediate Family Members”), (ii) a
partnership in which such Immediate Family Members are the only partners, or
(iii) a trust or trusts for the exclusive benefit of such Immediate Family
Members, provided that (x) there may be no consideration for such transfer and
(y) subsequent transfers of this NSO shall be prohibited except those in
accordance with Section 6.2.  Following
transfer, this NSO shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer.  The events of termination of Section 5.2
shall continue to be applied with respect to the original Optionee, following
which this NSO shall be exercisable by the transferee only to the extent, and
for the periods specified in, Section 5.2. 
Neither the

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Company nor the Administrator shall have any
obligation to provide the transferee with notice of termination of an Optionee.

6.2  Nontransferability.   This NSO is not assignable or transferable
by Optionee except in accordance with Section 6.1 or by will or by the laws of
descent and distribution.  During the
life of Optionee, this NSO is exercisable only by the Optionee or by a
transferee permitted pursuant to Section 6.1. 
Any attempt to assign, pledge, transfer, hypothecate or otherwise
dispose of this NSO in a manner not herein permitted, and any levy of
execution, attachment, or similar process on this NSO, shall be null and void.

7.                                       Market
Standoff.  Optionee hereby agrees
that if so requested by the Company or any representative of the underwriters
in connection with any registration of the offering of the securities of the
Company under the Securities Act of 1933, as amended (the “Securities Act”),
Optionee shall not sell or otherwise transfer the NSO Shares for a period of
180 days following the effective date of a Registration Statement filed  under the Securities Act; provided that such
restrictions shall apply only to the first two registration statements of the
Company to become effective under the Securities Act which include securities
to be sold on behalf of the Company in an underwritten public offering under
the Securities Act.  The Company may
impose stop-transfer instructions with respect to the NSO Shares subject
to the foregoing restrictions until the end of each such 180-day period.

8.                                       Restriction
on Issuance of Shares.

8.1  Legality of Issuance.  The Company shall not be obligated to sell or
issue any NSO Shares pursuant to this Agreement if such sale or issuance, in
the opinion of the Company and the Company’s counsel, might constitute a
violation by the Company of any provision of law, including without limitation
the provisions of the Securities Act.

8.2  Registration or
Qualification of Securities.  The
Company may, but shall not be required to, register or qualify the sale of this
NSO or any NSO Shares under the Securities Act or any other applicable
law.  The Company shall not be obligated
to take any affirmative action in order to cause the grant or exercise of this
option or the issuance or sale of any NSO Shares pursuant thereto to comply
with any law.

9.                                       Restriction
on Transfer.  Regardless whether the
sale of the NSO Shares has been registered under the Securities Act or has been
registered or qualified under the securities laws of any state, the Company may
impose restrictions upon the sale, pledge or other transfer of NSO Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and the Company’s counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions of
the Securities Act, the securities laws of any state, or any other law.

10.                                 Stock
Certificate Restrictive Legends. 
Stock certificates evidencing NSO Shares may bear such restrictive
legends as the Company and the Company’s counsel deem necessary or advisable
under applicable law or pursuant to this Agreement.

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11.                                 Employment
or Consulting Relationship.  Nothing
in this Agreement shall interfere with or limit in any way the right of the
Company or of any of its Affiliates to terminate the Optionee’s employment or
consulting at any time, nor confer upon the Optionee any right to continue in
the employ of, or consult with, the Company or any of its Affiliates.

12.                                 Assignment;
Binding Effect.  Subject to the
limitations set forth in this Agreement, this Agreement shall be binding upon
and inure to the benefit of the executors, administrators, heirs, legal
representatives, and successors of the parties hereto; provided, however, that
Optionee may not assign any of Optionee’s rights under this Agreement.

13.                                 Damages.  Optionee shall be liable to the Company for
all costs and damages, including incidental and consequential damages,
resulting from a disposition of NSO Shares which is not in conformity with the
provisions of this Agreement.

14.                                 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.

15.                                 Notices.  All notices and other communications under
this Agreement shall be in writing. 
Unless and until the Optionee is notified in writing to the contrary,
all notices, communications, and documents directed to the Company and related
to the Agreement, if not delivered by hand, shall be mailed, addressed as
follows:

DepoMed, Inc.

1360 O’Brien Drive

Menlo Park, CA 
94404

Unless and until the Company is notified in writing to
the contrary, all notices, communications, and documents intended for the Optionee
and related to this Agreement, if not delivered by hand, shall be mailed to
Optionee’s last known address as shown on the Company’s books.  Notices and communications shall be mailed by
first class mail, postage prepaid; documents shall be mailed by registered
mail, return receipt requested, postage prepaid.  All mailings and deliveries related to this
Agreement shall be deemed received when actually received, if by hand delivery,
and two business days after mailing, if by mail.

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IN WITNESS WHEREOF, the parties have executed this
Nonstatutory Stock Option Agreement as of the Grant Date.

	
  

  	
  DEPOMED, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President and CEO

  

 

The Optionee hereby accepts and agrees to be bound by
all of the terms and conditions of this Agreement and the Plan.

	
  

  	
  Optionee

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
					

 

Optionee’s spouse indicates by the execution of this
Nonstatutory Stock Option Agreement his or her consent to be bound by the terms
thereof as to his or her interests, whether as community property or otherwise,
if any, in the option granted hereunder, and in any NSO Shares purchased
pursuant to this Agreement.

	
  

  	
  Optionee’s Spouse

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
					

 

 5Exhibit 10.4

DEPOMED, INC.

1995 STOCK OPTION
PLAN

NOTICE OF EXERCISE

To
Depomed, Inc. (the “Company”):

This constitutes notice
under my stock option agreement, a copy of which is attached hereto (the “Stock
Option Agreement”), that I elect to purchase the number of shares of Company
Common Stock set forth below:

	
  Type of option (check one)

  	
   

  	
  Incentive  o

  	
   

  	
  Nonstatutory  o

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grant date

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exercise price

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Number of shares
  as to which option is exercised

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total exercise
  price

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash payment
  delivered herewith

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value of                     
  previously owned shares of Company Common Stock delivered herewith

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Certificate to
  be issued in name of

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

By this exercise, I agree
(i) to provide such additional documents as you may require pursuant to the
terms of the 1995 Stock Option Plan and my Stock Option Agreement, (ii) to
provide for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of my option, and
(iii) if this exercise relates to an incentive stock option, to notify you in
writing promptly after the date of any disposition of any of the shares of
Common Stock issued upon exercise of my option that occurs within two years
after the grant date of my option or within one year after the exercise date.

 

	
  

  	
  Purchaser:

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print Name):

  	
   

  
	
   

  	
   

  
	
   

  	
  Tax I.D.:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

Purchaser’s spouse indicates
by the execution of this Notice of Exercise his or her consent to be bound by
the terms herein as to his or her interests, whether as community property or
otherwise, if any, in the shares hereby purchased.

	
  

  	
  Purchaser’s Spouse:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print Name):

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

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