Vanda
Pharmaceuticals Inc.
Amended
and Restated Employment Agreement
This
Employment Agreement (this “Agreement”) was entered
into as of July 6, 2006, by and between Paolo Baroldi (the
“Executive”) 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 Executive in the position of Senior Vice President and Chief
Medical Officer. The Executive shall be subject to the supervision
of, and shall have such authority as is delegated to him by, the
Company’s Chief Executive Officer. The Executive 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 Company’s board of
directors (the “Board”) shall from time to time
reasonably assign to him.
(b)
Obligations to the Company . During the term of his
Employment, the Executive 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 Executive 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 Executive 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 Executive 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
Executive 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 Executive 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 Executive 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 Executive as compensation
for his services a base salary at a gross annual rate of $250,000.
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.”)
(b)
Incentive Bonuses . The Executive shall be eligible 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. Any bonus for the
fiscal year in which Executive’s employment begins shall be
prorated, based on the number of days Executive is employed by the
Company during that fiscal year. 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. Such bonus shall be paid only if Executive is employed
by the Company at the time of payment. The determinations of the
Board with respect to such bonus shall be final and
binding.
(c)
Signing Bonus . The Company shall pay the Executive a
signing bonus of $30,000 in the first pay period after the
commencement of his Employment.
(d)
Relocation . The Company shall reimburse the reasonable
expenses, not to exceed $20,000, that the Executive incurs in
moving himself, his family and his household to the Rockville
area.
(e)
Stock Options . Subject to the approval of the Compensation
Committee of the Board, the Company shall grant the Executive an
option covering 60,427 shares of the Company’s Common Stock.
Such option shall be granted as soon as reasonably practicable
after commencement of Employment. 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 later of (i) the
closing of the last trading day prior to date of the Board (or
Compensation Committee) meeting or written consent approving such
option or (ii) the date the Executive’s service to the
Company commences. The term of such option shall be 10 years,
subject to earlier expiration in the event of the termination of
the Executive’s Employment. The option shall vest and become
exercisable for 25% of the option shares after the first
12 months of the Executive’s continuous service and for
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 Executive’s actual period of service if, after a
Change in Control (as defined in the 2006 Equity Incentive Plan
(the “Plan”)), the Executive is subject to an
Involuntary Termination (as defined in the Plan). The grant of such
option shall be subject to the other terms and conditions set forth
in the Plan and the Company’s form stock option
agreement.
3.
Vacation and Employee Benefits. During the term of his
Employment, the Executive 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, the Executive
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.
2
4.
Business Expenses. During the term of his Employment, the
Executive 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
Executive 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
Executive’s Employment, and the Executive agrees to remain in
Employment with the Company, from the date of this Agreement until
the date the Executive’s Employment terminates pursuant to
Subsection (b) below. The Executive’s Employment with
the Company shall be “at will,” meaning that either the
Executive or the Company may terminate the Executive’s
Employment at any time, with or without cause. Any contrary
representations which may have been made to the Executive shall be
superseded by this Agreement. This Agreement shall constitute the
full and complete agreement between the Executive and the Company
on the “at will” nature of the Executive’s
Employment, which may only be changed in an express written
agreement signed by the Executive and a duly authorized officer of
the Company (other than Executive).
(b)
Termination . The Company may terminate the
Executive’s Employment at any time and for any reason (or no
reason), and with or without cause, by giving the Executive
14 days’ advance notice in writing. The Executive may
terminate his Employment by giving the Company 14 days’
advance notice in writing. The Executive’s Employment shall
terminate automatically in the event of his death.
(c)
Rights Upon Termination . Except as expressly provided in
Section 6, upon the termination of the Executive’s
Employment pursuant to this Section 5, the Executive 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
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