Document:

exv10w33

 

Exhibit 10.33

April 15, 2008

Vincent J. Angotti

Dear Vince:

On behalf of XenoPort, Inc. (the “Company”), I am pleased to invite you to join the Company as
Senior Vice President, Chief Commercialization Officer. In this position, you will report directly
to the President of the Company. Subject to Section 10 below, you will be expected to devote all
of your business time, attention and energies to the performance of your duties with the Company.
The effective date (the “Effective Date”) of your employment will be May 1, 2008, or as mutually
agreed upon with the Company.

The terms of this offer of employment are as follows:

	1.	 	Compensation. The Company will pay you a starting salary of $31,250.00 per month
(equivalent to $375,000.00 per year), payable in periodic installments on our regular paydays
in accordance with the Company’s standard payroll policies. Subject to Section 10 below, your
salary will begin as of the Effective Date of employment. The first and last payment by the
Company to you will be adjusted, if necessary, to reflect a commencement or termination date
other than the first or last working day of a pay period.

	2.	 	Bonuses. The Company will offer you a sign-on bonus in the amount of $50,000.00
(subject to applicable payroll taxes) to be paid on the first payroll date following the
Effective Date of your employment. If you voluntarily terminate your employment prior to the
one year anniversary of the Effective Date, other than for Good Reason (as defined in the
Change of Control Agreement, but excluding your relocation from New Jersey to the Bay Area for
the purposes of (iv)) or Disability (as defined in the Company’s long term disability plan)
you will return to the Company one hundred percent (100%) of the after-tax proceeds of this
bonus. Additionally, the Company will offer you a retention bonus in the amount of $30,000.00
(subject to applicable payroll taxes) to be payable on the first anniversary of the Effective
Date of your employment.

	3.	 	Bonus Plan. You will be entitled to participate in any bonus plan adopted by the
Company for its employees on such terms as the Company’s Board of Directors (the “Board”) may
determine in its discretion, including the existing XenoPort, Inc. Corporate Bonus Plan. The
target bonus for 2008 at your level is 40% of your base salary set forth in Section 1.
Starting in 2009, unless modified by the Board in connection with the annual compensation
review of executives and pursuant to the terms of the plan, fifty percent of your bonus will
be based on the performance of the Company against its corporate goals, and 50% of your bonus
will be based on your performance against your individual goals. Under the terms of the plan,
target bonus awards are determined and communicated to eligible employees annually. For the
2008 bonus year, the Company will guarantee the payment of a bonus that is based entirely on
the performance of the Company against its corporate goals, prorated to reflect the percentage
of the year spent working on Company matters. For example, in the event that you work 50% of
the time from May 1, 2008 until June 15, 2008 and 100% of the time from August 15, 2008
through the end of the year and the Company achieves 100% performance against its corporate
goals, your bonus would be $65,985.00, calculated as follows: $375,000.00 (base salary)
multiplied by 40% (bonus target) multiplied by 100% (2008 corporate
goal score) multiplied by .4399 (23 days in May and June (i.e., 46 days at 50%) plus 138 days between August 15,
2008 and year end divided by 366 days). As another example, in the event that you work 50%
of the time from May 1, 2008 until June 15, 2008 and 100% of the time from August 15, 2008

 

 

	 	 	through the end of the year and the Company achieves 60% performance against its corporate
goals, your bonus would be $39,591.00, calculated as follows: $375,000.00 (base salary)
multiplied by 40% (bonus target) multiplied by 60% (2008 corporate goal score) multiplied by .4399 (23 days in May and June (i.e., 46 days at 50%) plus 138 days between August 15, 2008
and year end divided by 366 days). All of the foregoing bonuses will be paid, to the extent
earned, within 60 days following the end of the applicable performance year. The Company
agrees to operate and maintain the foregoing bonus arrangements and applicable bonus plans
and programs in compliance with Section 409A of the Internal Revenue Code.

	4.	 	Benefits. During the term of your employment, you will be entitled to the Company’s
standard vacation and benefits covering employees and officers, as such may be in effect from
time to time.

	5.	 	Moving and Relocation Related Expenses.

	 	a.	 	Should you elect this option, the Company will provide you with a
cash payment (subject to the usual, required withholding) intended to cover
moving and relocation related expenses in the amount of $200,000.00 (the
“Relocation Amount”), to be paid on or about the Effective Date, in accordance
with the Company’s normal payroll practices; OR
	 
	 	b.	 	Should you elect this option, the Company will reimburse you for
customary relocation expenses actually incurred, such expenses not to exceed
$150,000.00 (the “Relocation Amount”), including (i) closing costs associated
with purchasing a home in the Bay Area, (ii) real estate fees incurred in
selling your home in New Jersey and (iii) the cost of packing and shipping
your household goods to the Bay Area. Reimbursements for all taxable expenses
referred to in the option described in this subsection 5b will be ‘grossed-up’
to compensate for applicable taxes.

	 	 	If you voluntarily terminate your employment other than for Good Reason or Disability: (i)
prior to the one-year anniversary of the Effective Date, you will return to the Company one
hundred percent (100%) of the after-tax proceeds of any amounts paid as the Relocation Amount
under this Section 5; or (ii) after the one-year anniversary of the Effective Date but prior
to the two-year anniversary of the Effective Date, you will return to the Company fifty
percent (50%) of the after-tax proceeds of any amounts paid as the Relocation Amount under
this Section 5. The Company agrees to operate the foregoing payments and reimbursements in
accordance with Section 409A of the Internal Revenue Code.

	6.	 	Housing Subsidies. In accordance with the Company’s normal payroll practices and
subject to the usual, required withholding:

	 	a.	 	until the earlier to occur of the sale or rental of your current
residence in New Jersey or September 1, 2009, the Company will: (i) pay you the
cost of reasonable temporary housing in the Bay Area; and (ii) pay or reimburse
you for reasonable and customary travel expenses, including airline transportation
(coach class), in connection with your services while your family continues to
reside in the New Jersey area; and
	 
	 	b.	 	in connection with your purchase of a new home in the Bay Area, the
Company will negotiate in good faith the terms to pay you additional housing
assistance, which
could include either (i) a cash bonus payment when you finalize a loan with a
third-party bank; (ii) monthly housing cash supplements paid for up to four years;
or (iii) 

 

 

	 	 	 	some combination of (i) and (ii); provided, however, that in no event
shall the housing assistance provided pursuant to this Section 6(b) exceed
$500,000.00 in the aggregate.

	 	 	Each of these payments will be subject to your continued service to the Company through the
relevant payment dates. If you voluntarily terminate your employment other than for Good
Reason or Disability: (i) prior to the one-year anniversary of the Effective Date, you will
return to the Company one hundred percent (100%) of the after-tax proceeds of any amounts
paid as the Housing Subsidy under this Section 6; or (ii) after the one-year anniversary of
the Effective Date but prior to the two-year anniversary of the Effective Date, you will
return to the Company fifty percent (50%) of the after-tax proceeds of any amounts paid as
the Housing Subsidy under this Section 6. The Company agrees to operate the foregoing
payments and reimbursements in accordance with Section 409A of the Internal Revenue Code.

	7.	 	Stock Options. Upon the approval of the Compensation Committee of the Board as soon
as practicable following your Effective Date, you will be granted a stock option, which will
be, to the maximum extent possible under the $100,000.00 rule of Section 422(d) of the
Internal Revenue Code of 1986, as amended (the “Code”), an “incentive stock option” (as
defined in Section 422 of the Code)(with the remainder granted as non-qualified stock
options), to purchase 150,000 shares of the Company’s Common Stock (as adjusted for stock
splits, stock dividends and similar events) pursuant to the Company’s 2005 Equity Incentive
Plan (the “2005 Plan”) or outside of the 2005 Plan. The exercise price of such options will
be set at the fair market value on the date of grant. The options will have a ten year term.
Company Common Stock subject to the option shall vest, assuming uninterrupted full-time
service to the Company, over a 4-year period, with 25% of the shares subject to the option
vesting one year from your Effective Date, and 1/48th of the shares subject to the
option vesting each month thereafter subject to your continued service to the Company through
the respective vesting dates. The actual vesting schedule will be attached to this letter
agreement following the ultimate resolution of your request for part-time service and unpaid
leave of absence, as further described in Section 10.

	8.	 	Restricted Stock Unit Award. On the first business day of the month following your
Effective Date, you will be granted 10,000 restricted stock units relating to shares of the
Company Common Stock (as adjusted for stock splits, stock dividends and similar events), which
may be settled in stock, pursuant to the 2005 Plan or outside of the 2005 Plan. Such
restricted stock units shall vest, assuming uninterrupted full-time service to the Company, in
four equal annual installments on each anniversary of the grant date of the restricted stock
unit award, subject to your continued service to the Company through the respective vesting
dates. The actual vesting schedule will be attached to this letter agreement following the
ultimate resolution of your request for part-time service and unpaid leave of absence, as
further described in Section 10. The Company agrees to operate the foregoing payments and
reimbursements in accordance with Section 409A of the Internal Revenue Code.

	9.	 	Severance. If, prior to the two-year anniversary of the Effective Date, your
services to the Company are terminated by the Company without Cause (as defined below), or if
you terminate your employment for Good Reason, you will be entitled to receive Severance
Benefits (as defined below).
	 
	 	 	If you become entitled to receive such Severance Benefits pursuant to this Section 9, the
continued payments of base salary, to the extent of payments made from the date of your
termination of employment through March 15 of the calendar year following such termination,
are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in

 

 

	 	 	Section 1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made
following said March 15, they are intended to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination from
service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to
the maximum extent permitted by such provision, with any excess amount being regarded as
subject to the distribution requirements of Section 409A(a)(2)(A) of the Code, including,
without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payment be
delayed until six (6) months after your termination of employment if you are a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of such
termination.
	 
	 	 	For the purposes of this Section 9, “Cause” shall mean either: (i) any act of personal
dishonesty taken by you in connection with your responsibilities as an officer or employee of
the Company and intended to result in substantial personal enrichment; (ii) the conviction of
a felony; (iii) a willful act that constitutes gross misconduct and that is demonstrably
injurious to the Company; or (iv) following delivery to you of a written demand for
performance from the Company that describes the basis for the Company’s belief that you have
not substantially performed your duties, continued violations of your obligations to the
Company that are demonstrably willful and deliberate.
	 
	 	 	For purposes of this Section 9, “Severance Benefits” shall mean continued payment of your
base salary in effect immediately prior to such termination of employment for a period of 12
months following the effective date of such termination of employment. In addition, you
shall have the right to continue your health insurance benefits pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and any analogous provisions of
applicable state law. Should you so elect, the Company shall reimburse you (within 30 days
following the Company’s receipt of your monthly payment in accordance with the terms of the
plan) for 12 months of such health care coverage following the effective date of such
termination of employment.
	 
	 	 	Notwithstanding the foregoing, the payment of Severance Benefits, if any, pursuant to this
Section 9 will cease immediately and terminate permanently at the earlier of (i) 12 months
following the effective date of such termination of employment and (ii) such time as you
commence full-time employment (or a comparable full-time consulting engagement) after your
termination of employment with the Company.
	 
	 	 	The receipt of any Severance Benefits pursuant to this Section 9 shall be subject to you
executing and not revoking a separation agreement and release of all claims in a form
acceptable to the Company and in the form used by the Company with respect to the termination
of employment of other executive officers of the Company.
	 
	10.	 	Part-time Status; Leave of Absence. Commencing on the Effective Date, you will
devote 50% or your business time, attention and energies to the performance of your duties
with the Company. These duties could include, without limitation, attendance at meetings (in
person or telephonically) with the Company’s management, collaborators and/or investors.
During this time, you will receive base salary equal to 50% of the normal rate and any equity
grants will vest at 50% of the full-time rate. Commencing on June 14, 2008, you will be
reclassified to unpaid leave of absence (“LOA”) status, which LOA status will terminate upon
your commencement of full-time employment in California, currently estimated to be on or about
September 2, 2008. During the unpaid LOA, there will be no vesting of any equity granted to
you. Any equity grants that do not vest during the unpaid LOA or that vest at a 50% rate
during the period referenced in this paragraph above shall remain outstanding and re-commence
vesting in accordance with the normal 48 month vesting schedule upon your return

 

 

	 	 	to full-time
duty. In the event you have not commenced full-time employment by October 1, 2008, this
offer letter agreement, the Change of Control Agreement and the Indemnification Agreement
will be terminated.
	 
	11.	 	At-Will Employment. You should be aware that your employment with the Company is for
no specified period and constitutes “at-will” employment. As a result, you are free to
terminate your employment at any time, for any reason or for no reason. Similarly, the
Company is free to terminate your employment at any time, for any reason or for no reason.
	 
	12.	 	Proprietary Information Agreement. As a condition of accepting this offer of
employment, you will be required to complete, sign and return the Company’s standard form of
Employee Proprietary Information Agreement (sent under separate cover).
	 
	13.	 	Immigration Laws. For purposes of federal immigration laws, you will be required to
provide to the Company documentary evidence of your identity and eligibility for employment in
the United States. Such documentation must be provided within 3 business days of the
Effective Date, or your employment relationship with the Company may be terminated.
	 
	14.	 	General. This offer letter, the Employee Proprietary Information Agreement, the
XenoPort employee handbook, the stock award agreements covering the grants described in
Sections 7 and 8 above, the Change of Control Agreement, and Indemnification Agreement, when
signed by you, set forth the terms of your employment with the Company and supersede any and
all prior representations and agreements, whether written or oral. This agreement can only be
amended in writing, signed by you and an officer of the Company. Any waiver of a right under
this agreement must be in writing. This agreement will be governed by California law.
	 
	15.	 	Taxation. This offer letter agreement is intended to comply with the requirements of
Section 409A of the Code (“Section 409A”) and the regulations and guidance promulgated
thereunder. To the extent that any provision in this offer letter agreement is ambiguous as to
its compliance with Section 409A, the provision shall be read in such a manner so that no
payment or reimbursement due hereunder shall be subject to an “additional tax” under Section
409A. For purposes of Section 409A, each payment made under this offer letter agreement shall
be treated as a separate payment. All reimbursements provided under this offer letter
agreement shall be made or provided in accordance with the requirements of section 409A,
including, where applicable, the requirement that (i) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for reimbursement in
any other calendar year; (ii) the reimbursement of an eligible expense will be made on or
before the last day of the calendar year following the year in which the expense is incurred;
and (iii) the right to reimbursement is not subject to liquidation or exchange for another
benefit.

 

 

	 	 	We look forward to your joining the Company. If the foregoing terms are agreeable, please
indicate your acceptance by signing the enclosed copy of this letter in the space provided
below and returning it to me, along with your completed and signed Employee Proprietary
Information Agreement. This offer will terminate if not accepted on or before April 15,
2008.

	 	 	 	 	 
	 	Sincerely,

XENOPORT, INC.

 	 
	 	By:  	/s/ Ronald W. Barett
 	 
	 	 	Ronald W. Barrett 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 	 	 
	AGREED AND ACCEPTED:

	 	 	 	DATE	 	 
	 
	 	 	 	 	 	 
	/s/ Vincent J. Angotti
 

Vincent J. Angotti

	 	 
	 	04/29/08exv10w34

 

Exhibit 10.34

CHANGE OF CONTROL AGREEMENT

     This Change of Control Agreement (the “Agreement”) is made and entered into by and
between Vincent J. Angotti (the “Executive”) and XenoPort, Inc., a
Delaware corporation (the “Company”), effective as of May 1, 2008.

RECITALS

     It is expected that the Company from time to time may consider the possibility of an
acquisition by another company or other change of control. The Board of Directors of the Company
(the “Board”) recognizes that such consideration can be a distraction to the Executive and
can cause the Executive to consider alternative employment opportunities. The Board has determined
that it is in the best interests of the Company and its stockholders to assure that the Company
will have the continued dedication and objectivity of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of the Company.

     The Board believes that it is in the best interests of the Company and its stockholders to
provide the Executive with an incentive to continue his employment and to motivate the Executive to
maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

     Certain capitalized terms used in the Agreement are defined in Section 5 below.

     The parties hereto agree as follows:

1. Term of Agreement. This Agreement shall terminate upon the date that all obligations of
the parties hereto with respect to this Agreement have been satisfied.

2. At-Will Employment. The Company and the Executive acknowledge that the Executive’s
employment is and shall continue to be at-will. If the Executive’s employment terminates for any
reason, including (without limitation) any termination prior to a Change of Control, the Executive
shall not be entitled to any payments, benefits, damages, awards or compensation other than as
provided by this Agreement, or as may otherwise be available in accordance with written plans or
agreements with the Company, including the Executive’s offer letter, dated April 15, 2008 (the
“Offer Letter”) with respect to severance arrangements in the absence of a Change of
Control (as defined below).

3. Termination Following a Change of Control.

     (a) Termination Without Cause or Voluntary Termination For Good Reason. In the event
that a Change of Control of the Company occurs, and during the period beginning on the closing
date of the transaction giving rise to such Change of Control and ending twelve (12) months after
such closing date, the Executive’s employment with the Company (or the successor entity in such
Change of Control transaction) is either (1) terminated by the Company (or its successor entity)
without Cause (as defined below) or (2) terminated by the Executive for Good Reason (as defined

1

 

below), then the Executive shall be entitled to receive Termination Benefits (as defined below);
provided, however, that in order for the Executive to terminate for Good Reason, (i) the Executive
must provide written notice to the Company (or the successor entity in the Change of Control
transaction) of the existence of the Good Reason condition within ninety (90) days following the
initial existence of the Good Reason condition, and (ii) the Company (or the successor entity in
the Change of Control transaction) shall not be required to provide Termination Benefits if it is
able to remedy the Good Reason condition within a period of thirty (30) days following such notice.

     (b) Payment of Termination Benefits. If the Executive becomes entitled to receive
Termination Benefits pursuant to Section 3(a), the continued payments of (i) base salary and/or
(ii) housing assistance benefits (if any) as set forth in Section 6(b)(ii) of the Offer Letter, to
the extent of payments made from the date of the Executive’s termination of employment through
March 15 of the calendar year following such termination, are intended to constitute separate
payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable
pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations; to the extent such payments are made following said March 15, they are intended to
constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations
made upon an involuntary termination from service and payable pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by such provision,
with any excess amount being regarded as subject to the distribution requirements of Section
409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), including,
without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payment be delayed
until six (6) months after the Executive’s termination of employment if the Executive is a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of such
termination.

4. Certain Additional Payments by the Company.

     (a) If any payment or benefit the Executive would receive pursuant to a Change of Control from
the Company or otherwise would (i) constitute a “parachute payment” within the meaning of Section
280G of the Code (collectively, the “Payment”) and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code or any interest or penalties payable with
respect to such excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then such Payment shall be
reduced to an amount that results in no portion of the Payment being subject to the Excise Tax,
provided that such reduction would not result in a ten percent (10%) or greater reduction in the
amount of the Payment.

     If such reduction would result in a ten percent (10%) or greater reduction in the amount of
the Payment, then there shall be no such reduction and the Executive shall be entitled to receive
from the Company an additional payment (a “Gross-Up Payment”) in an amount such that after
payment by the Executive of all taxes (including, without limitation, any income and employment
taxes and any interest and penalties imposed with respect thereto resulting from any improper
reporting by the Company for employment tax purposes) imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payment; provided, however, that the maximum amount of any such Gross-Up Payment shall be
$3,000,000.

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     (b) For purposes of determining the amount of the Gross-Up Payment: (1) the Executive shall be
deemed to have paid federal income taxes calculated at the lower rate between: (i) 35% (which
represents the highest marginal rate of federal income taxation applicable to ordinary income for
the 2007 calendar year (the “2007 Federal Tax Rate”)); and (ii) the highest marginal rate
of federal income taxation applicable to ordinary income then in effect for the calendar year in
which the Gross-Up Payment is to be made; (2) the Executive shall be deemed to have paid applicable
state income taxes calculated at the lower rate between: (i) 10.3% (which represents the highest
marginal rate of California state income taxation applicable to ordinary income for the 2007
calendar year, net of the maximum reduction in federal income taxes that could be obtained from
deduction of such state taxes in the 2007 calendar year (the “2007 State Tax Rate”)); and
(ii) the highest marginal rate of California state income taxation applicable to ordinary income
for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes that could be obtained from deduction of such state taxes; and (3) the Excise
Tax rate shall be deemed to equal the lower rate between: (i) 20% (which represents the Excise Tax
rate in effect for the 2007 calendar year (the “2007 Excise Tax Rate”)); and (ii) the
actual excise tax rate imposed by Section 4999 of the Code, or by comparable laws and regulations,
then in effect for the calendar year in which the Gross-Up Payment is to be made. Any Gross-Up
Payment shall be paid to the Executive by the end of the calendar year following the calendar year
in which the Executive remits the applicable taxes.

     (c) In the event that: (1) the highest marginal rate of federal income taxation applicable to
ordinary income then in effect for the Executive for the calendar year in which the Gross-Up
Payment could be made is higher than the 2007 Federal Tax Rate; (2) the highest marginal rate of
California state income taxation for the Executive’s applicable state income taxes applicable to
ordinary income for the calendar year in which the Gross-Up Payment could be made is higher than
the 2007 State Tax Rate; and/or (3) the actual excise tax rate imposed by Section 4999 of the Code,
or by comparable laws and regulations then in effect, is higher than the 2007 Excise Tax Rate, then
the amount of the Gross-Up Payment shall be determined based upon the 2007 Federal Tax Rate, 2007
State Tax Rate and 2007 Excise Tax Rate as set forth in Section 4(b) unless the Board of Directors
of the Company amends this Agreement with the Executive pursuant to Section 8(b) to specifically
provide that the amount of the Gross-Up Payment shall be determined for purposes of this Agreement
based upon rates higher than the 2007 Federal Tax Rate, 2007 State Tax Rate and/or 2007 Excise Tax
Rate. In the event that the Board of Directors of the Company elects to amend this Agreement as
set forth in this Section 4(c), the Company shall deliver an amendment to this Agreement to the
Executive for review and execution no later than twenty (20) calendar days after the date on which
the Executive’s right to a Payment is triggered (if requested at that time by the Company or the
Executive).

     (d) Any reduction of the Payment provided for in this Section 4 shall occur in the following
order unless the Executive elects in writing a different order (provided, however, that such
election shall be subject to Company approval if made on or after the date on which the event that
triggers the Payment occurs): (i) reduction of cash payments; (ii) cancellation of accelerated
vesting of Stock Rights; and (iii) reduction of employee benefits. In the event that acceleration
of vesting of Stock Rights compensation is to be reduced, such acceleration of vesting shall be
cancelled in the

3

 

reverse order of the date of grant of the Executive’s Stock Rights unless the Executive elects in
writing a different order for cancellation.

     (e) The accounting firm engaged by the Company for general audit purposes as of the day prior
to the effective date of the Change of Control shall perform the foregoing 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 of 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. The
accounting firm engaged to make the determinations hereunder shall provide its calculations,
together with detailed supporting documentation, to the Company and the Executive within fifteen
(15) calendar days after the date on which the Executive’s right to a Payment is triggered (if
requested at that time by the Company or the Executive) or such other time as requested by the
Company or the Executive. If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, it shall furnish the Company and the Executive with an opinion reasonably
acceptable to the Executive 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 the Company and the Executive.

5. Definition of Terms. The following terms referred to in this Agreement shall have the
following meanings:

          “Cause” shall mean either: (i) any act of personal dishonesty taken by the Executive
in connection with his responsibilities as an Executive and intended to result in substantial
personal enrichment of the Executive; (ii) the conviction of a felony; (iii) a willful act by the
Executive that constitutes gross misconduct and that is injurious to the Company; or (iv) following
delivery to the Executive of a written demand for performance from the Company that describes the
basis for the Company’s belief that the Executive has not substantially performed his duties,
continued violations by the Executive of the Executive’s obligations to the Company that are
demonstrably willful and deliberate on the Executive’s part.

          “Change of Control” means the completion by the Company of a reorganization, merger or
consolidation, in each case with respect to which persons who were the stockholders of the Company
immediately prior to such reorganization, merger or consolidation would not immediately thereafter
own more than 50% of, respectively, the capital stock and the combined voting power entitled to
vote generally in the election of directors of the reorganized, merged or consolidated
corporation’s then-outstanding voting securities, or of a liquidation or dissolution of the Company
or of the sale of all or substantially all of the assets of the Company. For purposes hereof, such
Change of Control shall be deemed to have occurred on the date on which the transaction closes.

          “Good Reason” shall mean any of the following conditions arising without the
Executive’s express written consent:

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               (i) an assignment to the Executive of material duties or a material reduction of the
Executive’s duties, either of which results in a significant diminution in the Executive’s position
or responsibilities in effect immediately prior to the closing date of the Change of Control
transaction, or the removal of the Executive from such position and responsibilities;

               (ii) a material reduction by the Company (or the successor entity in the Change of Control
transaction) in the base compensation of the Executive as in effect immediately prior to such
reduction; or

               (iii) a relocation of the Executive’s principal place of employment to a facility or a
location more than 40 miles from the Executive’s then present location.

          “Stock Rights” shall mean all of the Executive’s options, restricted stock, restricted
stock units or rights to acquire vested ownership of shares of Common Stock of the Company under
plans, agreements or arrangements that are compensatory in nature, including, without limitation,
the Company’s 1999 Stock Plan, the Company’s 2005 Equity Incentive Plan and Restricted Stock
Purchase Agreements between the Company and the Executive.

          “Termination Benefits” shall mean (1) all unvested Stock Rights (as defined above)
shall become fully vested as of the effective date of such termination of employment described in
Section 3(a); (2) the Executive shall continue to receive for a period of twelve (12) months
following the effective date of such termination of employment described in Section 3(a) continued
payment of the greater of the Executive’s base salary in effect immediately prior to (i) such
termination or (ii) the closing date of the transaction giving rise to a Change of Control; and (3)
assuming that the Executive was receiving housing assistance benefits as set forth in Section
6(b)(ii) of the Offer Letter at the time of the closing date of the transaction giving rise to a
Change of Control, then the Executive shall continue to receive such housing assistance benefits as
set forth in Section 6(b)(ii) of the Offer Letter. In addition, the Executive shall have the right
to continue his health insurance benefits pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) and any analogous provisions of applicable state law.
Should the Executive so elect, the Company shall reimburse the Executive for twelve (12) months of
such health care coverage following the effective date of such termination of employment described
in Section 3(a).

6. Successors.

     (a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, 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.
For all purposes under this Agreement, the term “Company” shall include any successor to the
Company’s business and/or assets that executes and delivers the assumption agreement described in
this Section 6(a) or that becomes bound by the terms of this Agreement by operation of law.

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     (b) Executive’s Successors. The terms of this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.

7. Notice.

     (a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the
case of the Executive, mailed notices shall be addressed to the Executive at his home address most
recently communicated to the Company in writing. In the case of the Company, mailed notices shall
be addressed to its corporate headquarters, and all notices shall be directed to the attention of
its Secretary.

     (b) Notice of Termination. Any termination by the Company for Cause or by the
Executive as a result of a voluntary resignation shall be communicated by a notice of termination
to the other party hereto given in accordance with Section 7(a) of this Agreement. Such notice
shall indicate the specific termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination under the
provision so indicated, and shall specify the termination date (which shall be not more than 30
days after the giving of such notice).

8. Miscellaneous Provisions.

     (a) No Duty to Mitigate. Except as set forth in Section 4, the Executive shall not be
required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Executive may receive from any other source.

     (b) Amendment; Waiver. No provision of this Agreement shall be amended, modified,
waived or discharged unless the amendment, modification, waiver or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the Company (other than the
Executive). No waiver by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of any other condition
or provision or of the same condition or provision at another time.

     (c) Whole Agreement. No agreements, representations or understandings (whether oral
or written and whether express or implied) that are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the subject matter hereof. This
Agreement represents the entire understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior arrangements and understandings regarding same.

     (d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California as applied to agreements entered

6

 

into among California residents to be performed entirely within California, without regard to
conflict of laws rules.

     (e) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.

     (f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.

	 	 	 	 	 
	COMPANY:                  	XENOPORT, INC.

 	 
	 	By:  	/s/ William J. Rieflin
 	 
	 	 	William J. Rieflin 	 
	 	 	President 	 
	 
	EXECUTIVE:	Vincent J. Angotti

 	 
	 	 	/s/ Vincent J. Angotti
 	 
	 	 	Vincent J. Angotti

Senior Vice President, Chief 
Commercialization
Officer 	 
	 

Signature Page to XenoPort, Inc. Change of Control Agreement

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