Vanda
Pharmaceuticals Inc.
Amended
and Restated Employment Agreement
This
Employment Agreement (this “Agreement”) was entered
into as of October 12, 2007, by and between Al Gianchetti (the
“Employee”) and Vanda Pharmaceuticals Inc. , a
Delaware corporation (the “Company”). This Agreement is
hereby amended and restated as of November 4, 2008.
1.
Duties and Scope of Employment.
(a)
Position . For the term of his employment under this
Agreement (“Employment”), the Company agrees to employ
the Employee in the position of Chief Commercial Officer. The
Employee shall be subject to the supervision of, and shall have
such authority as is delegated to him by, the Chief Executive
Officer of the Company, consistent with his position as Chief
Commercial Officer. The Employee hereby accepts such employment and
agrees to undertake the duties and responsibilities normally
inherent in such position and such other duties and
responsibilities as the Chief Executive Officer shall from time to
time reasonably assign to him consistent with his position as Chief
Commercial Officer.
(b)
Obligations to the Company . During the term of his
Employment, the Employee shall devote his full business efforts and
time to the Company. During the term of his Employment, without the
prior written approval of the Board of Directors of the Company
(the “Board”), the Employee shall not render services
in any capacity to any other person or entity and shall not act as
a sole proprietor or partner of any other person or entity or as a
shareholder owning more than five percent of the stock of any other
corporation. The Employee shall comply with the Company’s
policies and rules, as they may be in effect from time to time
during the term of his Employment.
(c)
No Conflicting Obligations . The Employee represents and
warrants to the Company that he is under no obligations or
commitments, whether contractual or otherwise, that are
inconsistent with his obligations under this Agreement. The
Employee represents and warrants that he will not use or disclose,
in connection with his employment by the Company, any trade secrets
or other proprietary information or intellectual property in which
the Employee or any other person has any right, title or interest
and that his employment by the Company as contemplated by this
Agreement will not infringe or violate the rights of any other
person or entity. The Employee represents and warrants to the
Company that he has returned all property and confidential
information belonging to any prior employers.
2.
Cash and Incentive Compensation.
(a)
Salary and Signing Bonus . The Company shall pay the
Employee as compensation for his services a base salary at a gross
annual rate of not less than $295,000. Such salary shall be payable
in accordance with the Company’s standard payroll procedures.
(The annual compensation specified in this Subsection (a),
together with any increases in such compensation that the Company
may grant from time to time, is referred to in
this Agreement
as “Base Compensation.”). The Employee will also
receive a $100,000 signing bonus that will be become due and
payable upon hire and a $35,000 bonus that will be become due and
payable once the Employee has completed one year of continuous
service to the Company. The payment of both bonuses will be subject
to standard federal and state taxes and will be made in accordance
with the Company’s standard payroll procedures.
(b)
Incentive Bonuses . The Employee shall be eligible to be
considered for an annual incentive bonus with a target amount equal
to 25% of his Base Compensation (the “Annual Target
Bonus”). Such annual incentive bonus (if any) shall be
awarded based on objective or subjective criteria established in
advance by the Board or its Compensation Committee. The
determinations of the Board or its Compensation Committee with
respect to such bonus shall be final and binding. Any incentive
bonus for a fiscal year shall in no event be paid later than
2 1
/ 2 months
after the close of such fiscal year. For the avoidance of doubt,
(i) to be eligible for an annual incentive bonus for any given
fiscal year of the Company, the Employee must have been employed
continuously by the Company throughout such fiscal year, and
(ii) provided the Employee has been employed
continuously by the Company from the date of this Agreement through
December 31, 2007, then, notwithstanding clause (i), the
Employee’s annual incentive bonus with respect to the
Company’s 2007 fiscal year shall not be prorated but shall
instead be based on the full amount of Base Compensation the
Employee would have been entitled to receive had the Employee
commenced his employment with the Company on January 1,
2007.
(c)
Stock Option . Subject to the approval of the Board or its
Compensation Committee, the Company shall grant the Employee an
incentive stock option under the Company’s 2006 Equity
Incentive Plan, covering 90,000 shares of the Company’s
Common Stock. Such option shall be granted as soon as reasonably
practicable after the date of this Agreement. The per-share
exercise price of such option shall be equal to the fair market
value of one share of the Company’s Common Stock on the date
of grant. The term of such option shall be 10 years, subject
to earlier expiration in the event of the termination of the
Employee’s Employment. The Employee shall vest in 25% of the
option shares after the first 12 months of continuous service
and shall vest in the remaining option shares in equal monthly
installments over the next three years of continuous service. The
vested and exercisable portion of the option shall be determined by
adding 24 months to the Employee’s actual period of
service if, after a Change in Control, (i) the
Employee’s Employment is terminated by the Company for
reasons other than Cause or (ii) the Employee’s
Employment is terminated by the Employee for Good Reason.
1 The grant of such option shall be subject to the
other terms and conditions set forth in the Company’s 2006
Equity Incentive Plan and the Company’s standard form of
stock option agreement under such Plan.
(d)
Restricted Stock Grant . Subject to the approval of the
Board or its Compensation Committee, the Company shall also award
the Employee as compensation 3,000 shares of the Company’s
Common Stock under the Company’s 2006 Equity Incentive Plan,
which shall be “Restricted Shares” as defined in such
Plan. The Employee shall vest in
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25% of such
Restricted Shares after the first 12 months of continuous
service and shall vest in the remaining Restricted Shares in equal
monthly installments over the next three years of continuous
service. The vested portion of the Restricted Shares shall be
determined by adding 24 months to the Employee’s actual
period of service if, after a Change in Control, (i) the
Employee’s Employment is terminated by the Company for
reasons other than Cause or (ii) the Employee’s
Employment is terminated by the Employee for Good Reason. The
Restricted Shares shall be subject to the terms of the
Company’s 2006 Equity Incentive Plan and such other terms as
shall be determined by the Board or its Compensation Committee and
shall be evidenced by a restricted stock agreement to be executed
by the Employee and the Company as soon as reasonably practicable
following approval thereof.
3.
Vacation and Employee Benefits. During the term of his
Employment, the Employee shall be eligible for 20 paid vacation
days each year in accordance with the Company’s standard
policy for similarly situated employees, as it may be amended from
time to time. During the term of his Employment (and beginning on
the first day of such Employment), the Employee shall be eligible
to participate in any employee benefit plans maintained by the
Company for similarly situated employees, subject in each case to
the generally applicable terms and conditions of the plan in
question, the completion of any required enrollment forms and the
determinations of any person or committee administering such
plan.
4.
Business Expenses. During the term of his Employment, the
Employee shall be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection
with his duties hereunder. The Company shall reimburse the Employee
for such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with the
Company’s generally applicable policies.
(a)
Basic Rule . The Company agrees to continue the
Employee’s Employment, and the Employee agrees to remain in
Employment with the Company, from the date of this Agreement until
the date when the Employee’s Employment terminates pursuant
to Subsection (b) or (c) below. The Employee’s
Employment with the Company shall be “at will,” meaning
that either the Employee or the Company may terminate the
Employee’s Employment at any time, with or without cause. Any
contrary representations which may have been made to the Employee
shall be superseded by this Agreement. This Agreement
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