Vanda
Pharmaceuticals Inc.
This Employment
Agreement (this “Agreement”) was entered into as of
May 22, 2009, by and between Stephanie R. Irish (the
“Employee”) and Vanda Pharmaceuticals Inc. ,
a Delaware corporation (the “Company”).
1. Duties
and Scope of Employment.
(a)
Position . For the term of her employment under this
Agreement (“Employment”), the Company agrees to employ
the Employee in the position of Acting Chief Financial Officer. The
Employee shall be subject to the supervision of, and shall have
such authority as is delegated to her by, the Company’s Chief
Executive Officer and the board of directors of the Company (the
“Board”), consistent with her position as Acting Chief
Financial 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 her consistent with her position as Acting Chief
Financial Officer.
(b)
Obligations to the Company . During the term of her
Employment, the Employee shall devote her full business efforts and
time to the Company. During the term of her 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 her Employment.
(c)
No Conflicting Obligations . The Employee represents and
warrants to the Company that she is under no obligations or
commitments, whether contractual or otherwise, that are
inconsistent with her obligations under this Agreement. The
Employee represents and warrants that she will not use or disclose,
in connection with her Employment, 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 her Employment 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 she 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 her services a base salary at a gross annual rate of not less
than $200,000. 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 Employee shall be eligible to be
considered for an annual incentive bonus with a target amount equal
to 25% of her 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 . On the date of this Agreement, the Company
shall grant the Employee a nonstatutory stock option to purchase
95,000 shares of the Company’s Common Stock (the
“Option”). The per-share exercise price of the 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 the
Option shall be 10 years, subject to earlier expiration in the
event of the termination of the Employee’s service with the
Company. The grant of the Option shall be subject to the terms and
conditions set forth in the Vanda Pharmaceuticals Inc. 2006 Equity
Incentive Plan and in the Company’s standard form of Stock
Option Agreement. The Option shall become exercisable in equal
monthly installments over the four years of continuous service
commencing on the date of this Agreement. The exercisable portion
of the Option shall be determined by adding 24 months to the
Employee’s actual period of service if (i) the Company is
subject to a Change in Control before the Employee’s service
with the Company terminates and (ii) the Employee is subject
to an Involuntary Termination within 24 months after such
Change in Control. 1 In
addition, Section 6(d) shall apply to the Option.
3.
Vacation and Employee Benefits . During the term of her
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 her 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 her Employment, the
Employee shall be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection
with her 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. Any reimbursement
shall (a) be paid promptly but not later than the last day of
the calendar year following the year in which the expense was
incurred, (b) not be affected by any other expenses that are
eligible for reimbursement in any calendar year and (c) not be
subject to liquidation or exchange for another benefit.
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Certain
capitalized terms are defined in Section 9.
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2
(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 (other than the
Employee).
(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 her Employment by giving the Company
14 days’ advance notice in writing. The Employee’s
Employment shall terminate automatically in the event of her
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 her duties hereunder before the termination of
her 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.
(a)
General Release . Any other provision of this Agreement
notwithstanding, Subsections (b), (c) and (d) below shall
not apply unless the Employee has executed a general release of all
claims that she may then have against the Company or persons
affiliated with the Company. The release shall be in a form
prescribed by the Company, without alterations. The Employee shall
execute and return the release on or before the date specified by
the Company in
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