Document:

Severance Rights Agreement

 Exhibit 10.37 
 SEVERANCE RIGHTS AGREEMENT 
 This Severance Rights Agreement (the
“Agreement”) is made and entered into by and between KENNETH C. CUNDY, PHD (the “Executive”) and XENOPORT,
INC., a Delaware corporation (the “Company”), effective as of June 1, 2012 (the “Effective Date”). This Agreement replaces and supersedes all prior agreements on the subject matter of this
Agreement, including, but not limited to, the Change of Control Agreement between the Executive and the Company dated November 7, 2007 (the “Prior Agreement”). 
 1. At-Will Employment. The Company and the Executive acknowledge that the Executive’s employment is and will continue to be at-will. If the Executive’s employment terminates for
any reason, whether or not in connection with a Change of Control, the Executive will not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement. 

(a) Transition Period. The Company appreciates the important role the Executive plays in preclinical and clinical sciences,
including, but not limited to, supporting the preparation of regulatory filings, participating in regulatory meetings, participating in partnering diligence meetings and conducting collaborative partner alliance management (the “Executive
Duties”) and generally expects that the Executive’s employment will continue until the date the Company completes the Phase 3 clinical trial of AP for the treatment of spasticity, which is currently expected to occur in the first
quarter of 2013. The period of time between the Effective Date and the actual date of termination of his employment as determined by the Company (the “Termination Date”) is referred to as the “Transition Employment
Period”. 
 (b) Role. Effective on June 4, 2012, the Executive’s title and duties will
change, and he will become a XenoPort Fellow. As a XenoPort Fellow, the Executive will report to, and will be expected to perform, on a full-time basis, the Executive Duties as determined from time to time by, the Company’s Chief Executive
Officer. At all times, the Executive is expected to continue to comply with the Executive’s contractual and fiduciary obligations to the Company, including, but not limited to, full compliance with the Company’s policies and procedures.

 (c) Compensation and Benefits. As a XenoPort Fellow, the Executive’s base salary will be $362,440.00 on an
annualized basis, the Executive will continue to be eligible to participate in the Company’s employee benefit plans under the terms and conditions of those benefit plans, and the Executive’s outstanding compensatory equity awards (the
“Equity Awards”) will continue to be subject to the governing award agreements, except as expressly modified by this Agreement. The Executive will remain eligible to earn an annual bonus for performance in 2012 under the XenoPort,
Inc. Amended and Restated Corporate Bonus Plan (the “2012 Bonus Plan”), with any bonus amount to be determined by the Company’s Board of Directors (or duly authorized committee) under the terms of that 2012 Bonus Plan. The
Executive will not be eligible to earn an annual bonus for performance in 2013. 
 2. Conditions to Severance Benefits. All of the
severance payments, benefits and rights that Executive may receive on a termination of employment under this Agreement are subject to and contingent upon: (a) the Executive’s execution, delivery and non-revocation of an effective

 
release of all claims against the Company and its affiliates substantially in the form attached hereto as Exhibit A (the “Release”) as of a date not later than the
60th day following the Executive’s “separation
from service”, as defined under Treasury Regulations Section 1.409A-1(h) and without regard to any alternative definition thereunder (“Separation from Service”), (b) the Executive’s resignation from all positions
the Executive holds with the Company and its affiliates as of the date of the Separation from Service (or such other date requested or permitted by the Board of Directors of the Company (the “Board”), and (c) the
Executive’s continued compliance with all of the Executive’s obligations to the Company and its affiliates, including, but not limited to, obligations under this Agreement and the Employee Proprietary Information Agreement between the
Company and the Executive, dated March 15, 2000 (such agreement, as amended from time to time, or any successor agreement, the “Confidentiality Agreement”), (with (a) through (c) collectively referred to as the
“Severance Conditions”). 
 3. Severance. If the Executive’s employment with the Company is terminated
either (x) by the Company without Cause and other than as a result of death or disability, or (y) by the Executive for Good Reason (either such termination, provided it is also a Separation from Service, a “Qualifying
Termination”), then the Executive will be eligible to receive the following benefits (the “General Severance Benefits”), subject to the Executive’s satisfaction of the Severance Conditions: 

(a) Base Salary. The Company will pay, as severance, continued payment of the Executive’s then-current
base salary (ignoring any reduction in base salary that forms the basis for Good Reason) for the first 12 months following the Separation from Service, on the Company’s normal payroll schedule; provided, however, that no payments will be
made until the 60th day following the Separation from
Service in order to comply with Section 409A (such
60th day, the “Initial Payment Date”),
and on such day, the Company will make a lump sum payment of the base salary that would have been paid through the Initial Payment Date had payments commenced immediately following the Separation from Service, with the balance paid thereafter on the
original schedule. 
 (b) Pro-Rated Bonus. If termination occurs in 2012, the Company will pay, as severance, a lump sum
payment under the terms of the 2012 Bonus Plan equal to the product of (i) a fraction, the numerator of which is the number of days in the calendar year of termination from January 1 through the date of the Qualifying Termination and the
denominator of which is 365 (the “Service Fraction”), and (ii) the actual cash bonus the Executive would have earned, based on actual Company and individual performance, had the Executive remained employed through the payment
date under the annual cash bonus plan for that year. This pro-rated bonus payment will be paid on the same date that active employees are paid the cash bonus under that annual cash bonus plan, but in all cases not later than March 15 of the
year following the year of the Qualifying Termination. 
 (c) COBRA Payments. If the Executive is participating in the
Company’s group health insurance plans on the date of the Qualifying Termination, and timely elects to continue such coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, or, if applicable, comparable state or local
insurance laws (“COBRA”), then the Company will pay, directly to the COBRA carrier, as and when due, the COBRA premiums necessary to continue such health insurance coverage for the Executive and his eligible dependents
(“COBRA  

  
 2 

 
Continuation Payments”) until the earliest of: (i) the first 12 months of COBRA coverage following the Executive’s Separation from Service, (ii) the expiration of
eligibility for COBRA coverage, or (iii) the date when Executive or his dependents become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period, the “COBRA
Payment Period”). However, if at any time the Company determines, in its sole discretion, that the Company’s payment of the COBRA Continuation Payments would result in a violation of the nondiscrimination rules of
Section 105(h)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) or any statute or regulation of similar effect (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by
the 2010 Health Care and Education Reconciliation Act) or otherwise result in a material penalty to the Company, then in lieu of providing the COBRA Continuation Payments for the remainder of the COBRA Payment Period, the Company will instead pay
the Executive, on the first day of each month of the remainder of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA Continuation Payments for that month, subject to applicable tax withholdings. In all cases, the Company will
make the first payment under this clause on the Initial Payment Date in an amount equal to the aggregate payments that the Company would have paid through such date had such payments commenced on the Separation from Service, with the balance of the
payments paid thereafter on the schedule described above. If the Executive becomes eligible for coverage under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the COBRA Payment Period, the Executive must
immediately notify the Company of such event, and all payments and obligations under this clause will immediately cease. 
 (d)
Extended Exercise Period. The Company hereby amends the post-termination exercise period applicable to the Executive’s currently-outstanding Equity Awards that are stock options (the “Current Options”) in the event of a
Qualifying Termination so that, if the Executive is entitled to Severance under this Section 3, the Executive may exercise the Current Options (to the extent then-outstanding) until the earliest to occur of the following: (A) June 30,
2014; (B) the expiration of the original term of the Current Option set forth in the applicable stock option agreement (which may be prior to June 30, 2014); (C) the effective date of a Change of Control; and (D) the date the
Executive breaches this Agreement or the Confidentiality Agreement. The Executive expressly acknowledges that this amendment to his Current Options may result in such options ceasing to qualify as incentive stock option status as of the Effective
Date, regardless of when the Executive exercises the Current Options. The Executive is strongly encouraged to seek advice concerning the tax aspects of this Agreement (including with respect to the Executive’s Equity Awards) from the
Executive’s personal tax advisors. 
 4. Additional Severance on Change of Control. If the Executive experiences a Qualifying
Termination during the period beginning three months prior to, and ending 12 months after the closing of, a Change of Control (such 15-month period, the “Change of Control Period”), then in addition to the General Severance
Benefits, and subject to the Executive’s satisfaction of the Severance Conditions, the Company will accelerate in full the service-based vesting requirements of all of the Executive’s then-outstanding Equity Awards, with such accelerated
vesting effective as of the later of (i) the Initial Payment Date and (ii) the day immediately prior to the effective date of the Change in Control. For clarity, this Section 4 does not provide for the waiver of, or deemed
satisfaction of, any performance-based vesting requirements applicable to any Equity Awards. 

  
 3 

 5. Section 409A. It is intended that all of the benefits provided under the Agreement
satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”)
provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and the Agreement will be construed to the greatest extent possible as consistent with those provisions, taking into account the effect of the status of
the benefits under the Prior Agreement on this Agreement. To the extent not so exempt, the Agreement (and any definitions under the Agreement) will be construed in a manner that complies with Section 409A, and incorporates by reference all
required definitions and payment terms. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), the Executive’s right to receive any installment payments under
the Agreement will be treated as a right to receive a series of separate payments and, accordingly, each installment payment under the Agreement will at all times be considered a separate and distinct payment. If the Board determines that any of the
payments in connection with a Separation from Service constitute “deferred compensation” under Section 409A, and if the Executive is a “specified employee” of the Company, as such term is defined in
Section 409A(a)(2)(B)(i), at the time of his Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments due on a Separation
from Service will be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after the effective date of the Executive’s Separation from Service, and (ii) the date of the Executive’s death (such
earlier date, the “Delayed Initial Payment Date”), the Company will (A) pay to the Executive a lump sum amount equal to the sum of the payments that the Executive would otherwise have received through the Delayed Initial
Payment Date if the commencement of the payments had not been delayed pursuant to this paragraph, and (B) commence paying the balance of the payments in accordance with the applicable payment schedules set forth in above. No interest will be
due on any amounts so deferred. 
 6. Section 280 - Best After Tax. If any payment or benefit the Executive would receive
from the Company or otherwise in connection with a change of control of the Company (a “Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and, (b) but for
this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (a) the
largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (b) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable
federal, state, provincial, foreign and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the greatest economic benefit
(as determined in accordance with the cancellation/reduction order below) 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 will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of stock awards other than stock options (in the reverse order of
the date of grant); (3) cancellation of accelerated vesting of stock options (in reverse order of exercise price, that is, cancelling the highest priced options first); and (4) reduction of other benefits paid to the Executive. Within any
such category of Payments (that is, (1), (2), (3) or (4)), a reduction will occur first with 

  
 4 

 
respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code and then with respect to amounts that are. The Executive has no rights to
receive any Excise Tax gross up on any Payments. The Company will select a reputable third-party professional firm to make all determinations required to be made under this Section 6. The Company will bear all reasonable expenses with respect
to the determinations by such firm required to be made hereunder 
 7. Duty of Loyalty & Confidentiality. 

(a) Confidentiality Agreement. The Executive acknowledges and agrees that at all times during his employment with the
Company he has been in compliance with, and he represents that he will continue to comply with, the terms of the Confidentiality Agreement. The Executive understands and agrees that as part of the consideration for the payments by the Company to the
Executive under this Agreement, the Executive must remain in compliance with the terms of the Confidentiality Agreement following his Qualifying Termination, including, but not limited to, the obligations of confidentiality and non-solicitation, as
well as any comparable duties (such as the duty of loyalty) under applicable law. 
 (b) Non-Disparagement. The
Executive understands and agrees that as part of the consideration for the payments by the Company to the Executive under this Agreement, all times during the Executive’s employment and during any period in which he is receiving severance
benefits following a Qualifying Termination, the Executive will not take any actions to disrupt the Company’s business or tarnish the Company’s reputation. Without limitation, the Executive will not (i) disparage the Company or its
officers, directors, employees, stockholders, parents, subsidiaries, affiliates and agents, including, but not limited to, statements that may be harmful to its or their business, business reputation or personal reputation, or (ii) interfere or
attempt to interfere with any existing relationship between the Company and any Company customer or supplier. Nothing in this paragraph is intended to restrain the Executive in any manner from (x) engaging in any lawful profession, trade or
business of any kind, (y) seeking legal counsel or (z) making truthful statements as required by law. 
 (c)
Enforcement. The Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of this Section 7 (including any breach of the Confidentiality Agreement, collectively,
the “Covenants”) would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company will be entitled to obtain equitable
relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. In addition, the Company will be entitled to immediately cease paying any amounts
remaining due under this Agreement. It is expressly understood and agreed that although the Executive and the Company consider the Covenants to be reasonable, if a judicial determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the Covenants will not be rendered void but will be deemed amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any of the Covenants is unenforceable, and such Covenant cannot be amended so as to make it enforceable,
such finding will not affect the enforceability of the remainder of the Covenants. In any action, suit or proceeding to enforce the Covenants, the prevailing party will be entitled to an award of its or his reasonable attorneys’ fees and costs
incurred. 

  
 5 

 8. Definition of Terms. 

(a) “Cause” will mean: (i) any act of personal dishonesty taken by the Executive in connection with his
responsibilities as an employee and intended to result in substantial personal enrichment of the Executive; (ii) the Executive’s conviction of or plea of nolo contendre to 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. 

(b) “Change of Control” has the meaning of “Change in Control” set forth in the Company’s 2005
Equity Incentive Plan, as of the date of this Agreement, except that if required for compliance with Section 409A, in no event will a Change of Control be deemed to have occurred if such transaction is not also a “change in the ownership
or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative
definition thereunder). 
 (c) “Good Reason” will mean any of the following conditions arising without
the Executive’s prior written consent: 
 (i) a material reduction in the Executive’s annual base compensation;

 (ii) a material diminution in the Executive’s authority, duties, or responsibilities; or 

(iii) a requirement that the Executive relocate his principal work location to a location that increases the Executive’s one-way
commute by more than forty (40) miles; 
 provided, however, that in any case, the Executive must (A) provide the Company with
written notice setting forth with specificity the occurrence of such act or event within thirty (30) days after such act or event first occurs, (B) allow the Company thirty (30) days to cure such act or event from the date it receives
such notice, and (C) if the Company does not cure such act or event within such period, the Executive’s resignation from all positions he then holds is effective not later than sixty (60) days after the conclusion of such cure period.
Neither entry into this Agreement, nor the occurrence of the changes to the terms of the Executive’s employment set forth herein, will provide a basis for resignation for Good Reason. 
 9. Successors. 
 (a) Company’s Successors. This
Agreement will be binding upon any surviving entity resulting from a Change of Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard
to whether or not such person or entity actively assumes the obligations hereunder. 

  
 6 

 (b) Executive’s Successors. The Executive may not assign his obligations
hereunder. The rights of the Executive hereunder will inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 10. Notice. For the purpose of this Agreement, notices and all other communications provided for in this Agreement must be
given in writing and will be deemed to have been duly given if (i) delivered personally, (ii) delivered by overnight courier service, (iii) mailed by registered mail, return receipt requested, postage prepaid, or (iv) sent via
facsimile or email (with the receipt function turned on) to the Company’s facsimile numbers and email addresses. Notices sent by personal delivery, registered mail, or overnight courier will be deemed given when delivered and notices sent by
facsimile transmission or email will be deemed given upon the sender’s receipt of confirmation of complete transmission. 
 11.
Offsets. The Company will reduce the Executive’s benefits under this Agreement by any statutory severance obligations or other contractual severance benefits, obligations for pay in lieu of notice, and any other similar benefits payable
to the Executive by the Company (or any successor thereto) that are due in connection with the Executive’s Qualifying Termination and that are in the same form as the benefits provided under this Agreement (e.g., equity award vesting credit).
Without limitation, this reduction includes a reduction for any benefits required pursuant to (a) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act (the “WARN
Act”), (b) a written employment, severance or equity award agreement with the Company, (c) any Company policy or practice providing for the Executive to remain on the payroll for a limited period of time after being given notice
of termination, and (d) any required salary continuation, notice pay, statutory severance payment, or other payments either required by local law, or owed pursuant to a collective labor agreement, as a result of the termination of the
Executive’s employment. The benefits provided under this Agreement are intended to satisfy, to the greatest extent possible, and not to provide benefits duplicative of, any and all statutory, contractual and collective agreement obligations of
the Company. Reductions may be applied on a retroactive basis, with benefits previously provided being recharacterized as benefits pursuant to the Company’s statutory or other contractual obligations. If the Executive is indebted to the Company
on the effective date of his Qualifying Termination, the Company reserves the right to offset the payment of any severance benefits under this Agreement by the amount of such indebtedness. Such offset will be made in accordance with all applicable
laws. 
 12. Miscellaneous Provisions. 
 (a) No Duty to Mitigate. Except with respect to COBRA benefits, the Executive is not required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment
be reduced by any compensation that the Executive may receive from any other source. 
 (b) Amendment; Waiver. No
provision of this Agreement will be amended, modified, waived or discharged unless the amendment, modification, waiver or discharge is 

  
 7 

 
agreed to in writing by the adversely affected party. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will 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, including the Prior Agreement.

 (d) Choice of Law. The validity, interpretation, construction and performance of this Agreement will be
governed by the laws of the State of California as applied to agreements entered 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 will not affect the
validity or enforceability of any other provision hereof, which will remain in full force and effect. 
 (f)
Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 

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 above. 
  

							
	COMPANY:	 		 	XENOPORT, INC.
				
		 		 	By:	 	 /s/ Ronald W. Barrett, PhD

		 		 		 	Ronald W. Barrett, PhD
			
	EXECUTIVE:	 		 	KENNETH C. CUNDY, PHD
				
		 		 		 	 /s/ Kenneth C. Cundy, PhD

  

  
 8 

 EXHIBIT A 

GENERAL RELEASE 
 THIS
GENERAL RELEASE, dated as of             , 20            (this “Agreement”), is entered into by and between
Kenneth C. Cundy, PhD (“Executive”) and XenoPort, Inc. (the “Company”). The Executive’s employment with the Company has terminated effective
            , 201  . As set forth in the Severance Rights Agreement between the Executive and the Company dated June 1, 2012, Executive and the Company hereby agree as
follows: 
 1. Executive will be provided severance pay and other benefits (the “Severance Benefits”)
set forth in Section     of the Severance Rights Agreement, subject to his satisfaction of the conditions for payment set forth therein and in this Agreement. 

2. Executive, for and on behalf of himself and Executive’s heirs, successors, agents, representatives, executors and assigns,
hereby waives and releases the Company and its affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and their partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys,
predecessors, insurers, affiliates and assigns (collectively, the “Company Releasees”), from any and all claims, liabilities and obligations, both known and unknown (each, a “Claim”) that arise out of or are in any
way related to events, acts, conduct, or omissions occurring at any time prior to and including the date Executive signs this Agreement. This general release includes, but is not limited to: (a) all claims arising out of or in any way related
to Executive’s employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to Executive’s compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, provincial and
local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as
amended), the federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal Employee Retirement Income Security Act of 1974 (as amended), and the California Fair Employment and Housing Act (as amended). 

3. By signing this Agreement, Executive acknowledges that Executive intends to waive and release any rights known or unknown
Executive may have against the Company Releasees under these and any other laws; provided that, Executive does not waive or release Claims (i) with respect to the right to enforce this Agreement or those provisions of the Severance Rights
Agreement that expressly survive the termination of Executive’s employment with the Company, (ii) with respect to any vested right Executive may have under any employee pension or welfare benefit plan of the Company, or (iii) any
rights to indemnification preserved under any applicable indemnification agreement, any D&O insurance policy applicable to Executive and/or the Company’s certificates of incorporation, charter and by-laws, or (iv) with respect to any
claims that cannot legally be waived. 

  
 A-1

 4. Executive acknowledges that Executive has been given twenty-one (21) days
from the date of receipt of this Agreement to consider all of the provisions of the Agreement and, to the extent he has not used the entire 21-day period prior to executing the Agreement, he does hereby knowingly and voluntarily waive the remainder
of said 21-day period. EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW HE IS GIVING UP CERTAIN RIGHTS WHICH HE MAY HAVE TO
SUE OR ASSERT A CLAIM AGAINST ANY OF THE COMPANY RELEASEES, AS DESCRIBED HEREIN AND THE OTHER PROVISIONS HEREOF. EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT AND EXECUTIVE AGREES TO
ALL OF ITS TERMS VOLUNTARILY. 
 5. Executive will have seven (7) days from the date of Executive’s execution
of this Agreement to revoke the release, including with respect to all claims referred to herein (including, without limitation, any and all claims arising under ADEA). If Executive revokes the Agreement, Executive will be deemed not to have
accepted the terms of this Agreement. 
 6. Executive acknowledges having read and understood Section 1542 of the
California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.” Executive hereby expressly waives and relinquishes all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to Executive’s
release of any claims hereunder. 
 7. Executive hereby represents that Executive has been paid all compensation owed and
for all hours worked; has received all the leave and leave benefits and protections for which Executive is eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise; and has not suffered any on-the-job
injury for which Executive has not already filed a workers’ compensation claim. 
 IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written. 
  

	
	XENOPORT, INC.
	
	  

	 By:

	
	EXECUTIVE
	
	  

	KENNETH C. CUNDY, PHD

  
 A-2XenoPort Corporate Bonus Plan

 Exhibit 10.38 
 XenoPort, Inc. Corporate Bonus Plan 
 Adopted January 30, 2007

 Effective January 1, 2007 
 Amended and Restated, Effective June 1, 2012 
 Plan Objectives 

The objectives of the Corporate Bonus Plan (the “Plan”) are to: 
  

	 	•	 	 provide employees of XenoPort, Inc. (the “Company”) with incentives to achieve the highest level of individual and team performance and to
meet or exceed specified goals, which contribute to the overall success of the Company; 

  

	 	•	 	 motivate participants to achieve both individual and Company objectives; and 

 

	 	•	 	 enable the Company to attract and retain high-quality employees. 

 Administration 
 The Plan will be administered by the Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”) and the Chief Executive Officer. The Compensation Committee generally sets a one-year performance period under the Plan to run from January 1 through December 31.
The Compensation Committee is responsible for approving any incentive compensation for executive officers (as that term is defined in Section 16 of the Securities Exchange Act of 1934, as amended, the Company’s “Executive
Officers”) and for recommending to the Company’s Board of Directors (the “Board”) the incentive compensation for the Chief Executive Officer. The Chief Executive Officer is responsible for any incentive compensation for employees
who are not Executive Officers (i.e., positions below the level of Senior Vice President, the Company’s “Non-Executive Officer Employees”) in accordance with the approved annual budgets. 

Eligibility 
 All Company
employees holding a position with the Company that is covered by this Plan as determined by the Compensation Committee from time to time in its discretion are eligible to participate in the Plan for each performance year; provided, however, that,
unless otherwise provided by the Compensation Committee, in order to receive their awards, if any, eligible employees (“Participants”) must: (i) be employed by the Company on the last day of the Plan’s performance year and at the
time awards are paid out under the Plan; (ii) have completed at least six months of full-time, active service with the Company during the Plan performance year period (active service excludes all time while the Participant is on any leave of
absence) or have been deemed by the Compensation Committee to be eligible to participate fully in the Plan; and (iii) not have been placed on a written performance improvement plan at any time during the Plan performance year period.

 Participants with at least six, but less than 12, months of active service during the performance year period may be eligible for a prorated
bonus, depending on their length of service that year. A Participant who changes job grades during the performance year may be eligible for a bonus based on the length of time in each grade and the respective bonus targets that would apply.

 Unless the terms of an applicable severance plan or severance agreement provide otherwise, a Participant who terminates employment (or gives
notice of his or her intent to terminate) for reasons other than death or disability prior to a payout date of an award under the Plan will not be eligible for a bonus award. If an employee dies prior to a payout date of an award under this Plan,
then the award that the employee otherwise would have been eligible to receive under the Plan, if any, may be paid to his/her estate at the discretion of the Company. 

  
 1 

 Target Bonus Awards  
 Target bonus awards are determined and communicated to eligible employees annually. The Chief Executive Officer determines target bonus awards for Non-Executive Officer Employees, and the Compensation
Committee determines (subject to approval by the Board) target bonus awards for all Executive Officers, including the Chief Executive Officer. Target bonus awards may be modified from time to time. 

Award Determination  
 Actual
bonus payouts can range from 0 to 1.5 times the target bonus awards, based on individual and Company performance. 
 Following are the
weightings of the individual and Company performance components used for Participants in determining the actual bonus award amounts: 
  

									
	 Title
	  	Weighting of Company’s
Performance Against
Corporate Goals	 	 	Weighting of
Individual
Performance	 
	 Chief Executive Officer
	  	 	75	% 	 	 	25	% 
	 Executive Vice President
	  	 	65	% 	 	 	35	% 
	 Senior Vice President
	  	 	50	% 	 	 	50	% 
	 Vice President
	  	 	50	% 	 	 	50	% 
	 Executive Director/Senior Director/ Director/Associate Director
	  	 	40	% 	 	 	60	% 
	 Below Associate Director
	  	 	25	% 	 	 	75	% 

 At the beginning of each performance year period under the Plan, the criteria for assessing an individual’s
performance will be developed by the Company in consultation with the Participant (“Individual Bonus Criteria”). For the Chief Executive Officer, his or her Individual Bonus Criteria must be approved by the Compensation Committee and the
Board. For Executive Officers (other than the Chief Executive Officer) the Individual Bonus Criteria for such Participants must be approved by the Compensation Committee, in consultation with the Chief Executive Officer. For Non-Executive Officer
Employees, the Individual Bonus Criteria for such Participants must be approved by the respective functional area head or his or her designee. 

After the end of each Plan year, individual performance will be evaluated based on achievement of weighted goals and objectives as reflected in the
employee’s written performance objectives for the year. For Non-Executive Officer Employees, the Chief Executive Officer, in consultation with the respective functional area heads and Human Resources, will assess the extent to which Individual
Bonus Criteria have been met, identify any unplanned achievements that have been accomplished and approve an overall percentage of weighted goals achieved with respect to the individual component of the Plan. For Executive Officers (other than the
Chief Executive Officer), the Compensation Committee will assess, in consultation with the Chief Executive Officer, the extent to which Individual Bonus Criteria have been met, identify any unplanned achievements that have been accomplished and
approve an overall percentage of weighted goals achieved with respect to the individual component of the Plan. For the Chief Executive Officer, the Compensation Committee will assess the extent to which Individual Bonus Criteria have been met,
identify any unplanned achievements that have been accomplished and recommend to the Board for approval an overall percentage of weighted goals achieved with respect to the individual component of the Plan. 

At the beginning of each performance year period under the Plan, the criteria for assessing the Company’s corporate performance will be:
(i) developed by the Chief Executive Officer of the Company in consultation with management; (ii) reviewed and approved by the Compensation Committee; and (iii) approved by the Board. 

  
 2 

 After the end of each Plan year, the Compensation Committee will assess the extent to which corporate goals
and objectives have been met, identify any unplanned achievements that have been accomplished and recommend to the Board for approval an overall percentage of weighted goals achieved with respect to the corporate component of the Plan. This
percentage of corporate goal achievement, together with the percentage of achievement for the individual component, will be used to calculate bonus payouts for individuals who participate in the Plan. 

The Company must achieve at least 70% of the Company’s weighted corporate objectives in order for any bonus award payouts to occur. The Compensation
Committee and the Board have discretion in determining whether such threshold has been achieved. In addition, the Compensation Committee, in its discretion, may determine to grant an award under the Plan even though certain Individual Bonus Criteria
or corporate objectives are not met. 
 Awards under the Plan are subject to applicable withholdings. Employees who have elected to participate
in XenoPort’s Employee Stock Purchase Plan will have the applicable funds withheld from their bonus payment. 
 Other Provisions
 
 The Company reserves the right to interpret, modify, suspend or terminate this Plan at any time. Effective June 1, 2012, this
amended and restated Plan shall apply (retroactively as applicable) to all eligible Company employees for the full 2012 performance period. 

No Participant will have the right to alienate, assign, encumber, hypothecate or pledge his or her interest in any award under the Plan, voluntarily or
involuntarily, and any attempt to so dispose of any such interest will be void. 
 Participants who engage in an activity that violates
applicable local, state or federal laws, or who violate Company policies, may be subject to having their awards reduced or eliminated in the sole discretion of the Compensation Committee, except in the case of the Chief Executive Officer where the
Board shall make the final determination after considering the Compensation Committee’s recommendation. 
 Neither this Plan nor any action
taken hereunder shall be construed as giving any employee or Participant the right to be retained in the employ of the Company. Employees of the Company are employed “at will” unless they have an agreement signed by the Chief Executive
Officer or a member of the Board providing for other than at-will employment. 
 The provisions contained in this Plan set forth the entire
understanding of the Company with respect to the Plan and supercede any and all prior communications between the Company and any employee with respect to the Plan. 

  
 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}]]