XENOPORT, INC. TRAN EMPLOYMENT AGREEMENT

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Exhibit 10.19

XENOPORT, INC.

TRAN EMPLOYMENT AGREEMENT

This Agreement is entered into as of July 15 2004, by and between

XenoPort, Inc. (the "COMPANY"), and Pierre Tran ("EXECUTIVE").

1. Duties and Scope of Employment.

(a) Effective Date. Executive will commence employment with the

Company on the "EFFECTIVE DATE," which shall be no later than September 15,

2004, as mutually agreed by the Company and Executive.

(b) Positions and Duties. As of the Effective Date, Executive will

serve as the Senior Vice President and Chief Medical Officer of the Company and

will report to the Company's Chief Executive Officer. Executive will render such

business and professional services in the performance of his duties, consistent

with Executive's position within the Company, as will reasonably be assigned to

him by the Company's Chief Executive Officer (the "CEO"). The CEO may modify

Executive's job duties, and the Company's Board of Directors (the "BOARD") may

modify Executive's title, as they deem necessary and appropriate in light of the

Company's needs and interests from time to time. The period of Executive's

employment under this Agreement is referred to herein as the "EMPLOYMENT TERM."

(c) Obligations. During the Employment Term, Executive will perform

his duties faithfully and to the best of his ability and will devote his full

business efforts and time to the Company. For the duration of the Employment

Term, Executive agrees not to actively engage in any other employment,

occupation or consulting activity for any direct or indirect remuneration

without the prior approval of the CEO.

2. At-Will Employment. The parties agree that Executive's employment with

the Company will be "at-will" employment and may be terminated at any time with

or without cause or notice. Executive understands and agrees that neither his

job performance nor promotions, commendations, bonuses or the like from the

Company give rise to or in any way serve as the basis for modification,

amendment, or extension, by implication or otherwise, of his employment with the

Company.

3. Compensation.

(a) Base Salary. During the Employment Term, the Company will pay

Executive an annual salary of $250,000 as compensation for his services (the

"BASE SALARY"). The Base Salary will be paid periodically in accordance with the

Company's normal payroll practices and be subject to the usual, required

withholding. Executive's salary will be subject to review and adjustments will

be made based upon the Company's standard practices; provided, however, that

Executive's Base Salary will not be reduced during the Employment Term unless

the Company also similarly reduces the base salaries of all other executives of

the Company.

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(b) Bonus. Executive will be entitled to participate in any bonus

plan adopted by the Company for its employees or executive officers on such

terms as the Board may determine in its discretion, including the existing

XenoPort, Inc. Bonus Plan. Executive's target bonus under the terms of such

Bonus Plan for 2004 equals twenty percent (20%) of his Base Salary.

(c) Stock Option. Subject to approval of the Board, Executive will

be granted a stock option, which will be, to the extent possible under the

$100,000 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), to purchase 500,000 shares of the Company's Common Stock (as adjusted for

stock splits, stock dividends and similar events) at an exercise price equal to

the fair market value of such stock on the date of grant as determined by the

Board in its sole discretion (the "OPTION"). The Option will vest as to

twenty-five percent (25%) of the shares subject to the Option one year after the

Effective Date, and as to 1/48th of the shares subject to the Option monthly

thereafter, so that the Option will be fully vested four (4) years from the

Effective Date, subject to Executive's continued service to the Company through

the relevant vesting dates. The Option will be subject to the terms, definitions

and provisions of the Company's 1999 Stock Plan (the "OPTION PLAN") and the

stock option agreement by and between Executive and the Company (the "OPTION

AGREEMENTS"), both of which documents are incorporated herein by reference.

(d) Housing.

(i) Housing Search. The Company will reimburse Executive for

reasonable travel expenses for one trip by Executive and Executive's immediate

family to the San Francisco Bay Area in connection with Executive's search for a

home, in accordance with the Company's current expense reimbursement policy.

(ii) Moving and Relocation Related Expenses. Executive will be

entitled to a cash payment intended to cover Executive's moving and relocation

related expenses (the "RELOCATION AMOUNT") in the amount of $75,000 to be paid

on or about the Effective Date, in accordance with the Company s normal payroll

practices and subject to the usual, required withholding. In the event

Executive's services to the Company terminate for any reason on or prior to the

six-month anniversary of the Effective Date, Executive will return to the

Company one hundred percent (100%) of the Relocation Amount; provided, however,

that if Executive's services to the Company are (1) terminated by the Company

without Cause (as defined below), (2) terminated by Executive for Good Reason

(as defined below) or (3) terminated due to Executive's death or disability, on

or prior to the six-month anniversary of the Effective Date, Executive shall not

be required to return any portion of the Relocation Amount.

(iii) Housing Loan. The Company will provide Executive a loan

secured by a deed of trust on Executive's principle residence (which security

interest will be subordinate to Executive's first mortgage from a financial

institution on such residence) in a principal amount of up to $150,000 (the

"LOAN"), in order to assist Executive in the purchase of a home in the San

Francisco Bay Area. The Loan, including principal and outstanding interest

thereon, will be payable by Executive at the earlier of (i) immediately prior to

the filing by the Company of its first registration statement with the

Securities and Exchange Commission under

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the Securities Act of 1933, as amended (the "REGISTRATION STATEMENT FILING"),

(ii) immediately upon Executive's termination of services to the Company or

(iii) immediately upon the sale of the residence securing the Loan. If Executive

continues to provide services to, and be in good standing with, the Company

immediately prior to the Registration Statement Filing, the Company shall

forgive repayment of the Loan, including accrued interest thereon. In connection

with any such forgiveness of the Loan, Executive shall be entitled to receive a

cash payment (a "GROSS-UP PAYMENT") from the Company, or the Company shall pay

such amount on Executive's behalf to the applicable government agency, in the

sole discretion of the Company, in an aggregate amount sufficient to pay (i)

Executive's initial applicable federal and state personal income tax liability

as a result of any such forgiveness of the Loan (the "PRIMARY PAYMENT"), (ii)

Executive's applicable federal and state personal income tax liability on the

Primary Payment (the "SECONDARY PAYMENT") and (iii) Executive's applicable

federal and state personal income tax liability on the Secondary Payment;

provided, however, in no event shall the total Gross-Up Payment exceed $115,000.

Executive shall provide the Company with such documentation as it reasonably

requests to confirm the appropriate amount of such Gross-Up Payment and to

process the payment thereof. Executive will be responsible for any further

applicable federal and state taxes associated with any forgiven principal and

interest on the Loan. The Loan will be reflected in appropriate promissory note

and security agreement documentation, all of which documents are incorporated

herein by reference. The Loan will bear interest at the minimum rate allowed by

applicable legal and accounting regulations in order for the Company not to

suffer adverse legal and/or accounting consequences, as reasonably determined by

the Company and its advisors.

(iv) Housing Expenses. In accordance with the Company's normal

payroll practices and subject to the usual, required withholding, the Company

will pay Executive an additional cash amount as a housing expense supplement

according to the following schedule: (1) $2,500 per month during the first year

of the Employment Term; (2) $2,250 per month during the second year of the

Employment Term; and (3) $2,000 per month during the third year of the

Employment Term. Thereafter during the Employment Term, if Executive's then

applicable annual base salary is less than $280,000, the Company will pay

Executive a monthly housing expense supplement equal to one-twelfth (1/12th) of

the difference between $280,000 and Executive's then applicable annual base

salary.

4. Employee Benefits. During the Employment Term, Executive will be

entitled to participate in the employee benefit plans currently and hereafter

maintained by the Company of general applicability to other senior executives of

the Company. The Company reserves the right to cancel or change the benefit

plans and programs it offers to its employees at any time.

5. Vacation. Executive will be entitled to paid vacation time in

accordance with the Company's vacation policy (including, without limitation,

its policy relation to maximum accrual), with the timing and duration of

specific vacations mutually and reasonably agreed to by the parties hereto.

6. Expenses. The Company will reimburse Executive for reasonable travel,

entertainment or other expenses incurred by Executive in the furtherance of or

in connection with the performance of Executive's duties hereunder, in

accordance with the Company's expense reimbursement policy as in effect from

time to time.

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7. Severance During First Three Years of Employment.

(a) Termination for other than Cause, Death or Disability;

Resignation for Good Reason. If on or prior to the third anniversary of the

Effective Date (i) the Company terminates Executive's employment with the

Company other than for Cause (as defined herein), death or disability, or (ii)

Executive resigns from his employment with the Company for Good Reason (as

defined herein), then, subject to Section 8, Executive will be entitled to (A)

receive continuing payments of severance pay at a rate equal to his Base Salary

rate, as then in effect, payable ratably over twelve (12) months from the date

of such termination in accordance with the Company's normal payroll policies and

(B) Company-paid coverage for Executive and Executive's eligible dependents

under the Company's Benefit Plans (as defined herein) for twelve (12) months

following such termination.

(b) Termination for Cause; Voluntary Termination. If Executive's

employment with the Company terminates voluntarily by Executive (excep