Vanda
Pharmaceuticals Inc.
9605 Medical Center Drive,
Suite 300
Rockville, MD
20850
This
letter (the “Agreement”) confirms the agreement between
you and Vanda Pharmaceuticals Inc. (the “Company”)
regarding the termination of your employment with the
Company.
1. Termination Date . Your employment with the Company will
terminate on December 1, 2008 (the “Termination
Date”).
2. Effective Date and Revocation . You have up to
21 days after you receive this Agreement to review it. You are
advised to consult an attorney of your own choosing (at your own
expense) before signing this Agreement. Furthermore, you have up to
seven days after you sign this Agreement to revoke it. If you wish
to revoke this Agreement after signing it, you may do so by
delivering a letter of revocation to me. If you do not revoke this
Agreement, the eighth day after the date you sign it will be the
“Effective Date.” Because of the seven-day revocation
period, no part of this Agreement will become effective or
enforceable until the Effective Date.
3. Salary and Vacation Pay . On the Termination Date, the
Company will pay you $1,179.96 (less all applicable withholding
taxes and other deductions). This amount represents all of your
salary earned through the Termination Date. On December 15,
2008, the Company will pay you $10,619.64 (less all applicable
withholding taxes and other deductions). This amount represents all
of your accrued but unused vacation time. You acknowledge that,
prior to the execution of this Agreement, you were not entitled to
receive any additional money from the Company and that the only
payments and benefits that you are entitled to receive from the
Company in the future are those specified in this
Agreement.
4. Bonus . Although you otherwise would not have been
entitled to receive any bonus for 2008, the Company will pay you
$76,700 (less all applicable withholding taxes and other
deductions) on December 15, 2008. This amount represents 100%
of your target bonus for 2008.
5. Severance Pay . Although you otherwise would not have
been entitled to receive any severance pay from the Company, the
Company will continue paying you an amount equal to your current
base salary (less all applicable withholding taxes) for
12 months in accordance with the Company’s standard
payroll procedures, starting after the Effective Date. The
aggregate amount of these severance payments is equal to $306,800
(less all applicable
Mr. Albert
Gianchetti
December 1, 2008
Page 2
withholding
taxes). If you breach any provision of this Agreement, no
additional severance payments will be made but this Agreement will
remain in effect.
6. COBRA Premiums . You will receive information about your
right to continue your group health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) after the Termination Date. In order to
continue your coverage, you must file the required election form.
If you sign this Agreement and elect to continue group health
insurance coverage, then the Company will pay the employer portion
of the monthly premium under COBRA for yourself and, if applicable,
your dependents until the earliest of (a) the end of the
period of 12 months following the month in which the
Termination Date occurs, (b) the expiration of your
continuation coverage under COBRA or (c) the date when you
become eligible for health insurance in connection with new
employment or self-employment. You acknowledge that you otherwise
would not have been entitled to any continuation of Company-paid
health insurance.
7. Stock Options . On October 25, 2007, the Company
granted you an option to purchase 90,000 shares of its Common Stock
(the “First Option”). As of the Termination Date, you
will be vested in 24,374 of the shares that are subject to the
First Option. On January 4, 2008, the Company granted you an
option to purchase 10
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