Vanda
Pharmaceuticals Inc.
Amended
and Restated Employment Agreement
This Employment
Agreement (this “Agreement”) was entered into as of
February 10, 2005, by and between William D. Clark (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 Business Officer. The
Employee shall be subject to the supervision of, and shall have
such authority as is delegated to him by, the board of directors of
the Company (the “Board”), consistent with his position
as Chief Business 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 Board shall from time to time reasonably
assign to him consistent with his position as Chief Business
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, 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 . The Company shall pay the Employee as
compensation for his services a base salary at a gross annual rate
of not less than $227,625. 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.”)
(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 bonus (if any) shall be awarded based on
objective or subjective criteria established in advance by the
Board. The determinations of the Board 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.
(c) Stock Options . Subject to the approval of the
Board, the Company shall grant the Employee an incentive stock
option covering 463,400 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 stock plan governing the option, and the
Company’s standard form of stock option agreement.
3. Vacation and Employee Benefits . During the term of
his Employment, the Employee shall be eligible for 25 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, 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 and to 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.
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Certain
capitalized terms are defined in Section 9.
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(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 shall
constitute the full and complete agreement between the Employee and
the Company on the “at will” nature of the
Employee’s Employment, which may only be changed in an
express written agreement signed by the Employee and a duly
authorized officer of the Company.
(b) Termination . The Company may terminate the
Employee’s Employment at any time and for any reason (or no
reason), and with or without cause, by giving the Employee notice
in writing. The Employee may terminate his Employment by giving the
Company 14 days’ advance notice in writing. The
Employee’s Employment shall terminate automatically in the
event of his death.
(c) Permanent Disability . The Company may terminate
the Employee’s Employment due to Permanent Disability by
giving the Employee 30 days’ advance notice in writing.
In the event that the Employee satisfactorily resumes the
performance of substantially all of his duties hereunder before the
termination of his Employment under this Subsection (c)
becomes effective, the notice of termination shall automatically be
deemed to have been revoked.
(d) Rights Upon Termination . Except as expressly
provided in Section 6, upon the termination of the
Employee’s Employment pursuant to this Section 5, the
Employee shall only be entitled to the compensation, benefits and
reimbursements described in Sections 2, 3 and 4 for the
period preceding the effective date of the termination. The
payments under this Agreement shall fully discharge all
responsibilities of the Company to the Employee.
(e) Termination of Agreement . This Agreement shall
terminate when all obligations of the parties hereunder have been
satisfied. The termination of this Agreement shall not limit or
otherwise affect any of the Employee’s obligations under
Section 7.
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