Form of Notice of Stock Option Grant and Stock Option Agreement for UK Employees under the UK Sub Plan under Amended and Restated 2016 Equity Incentive Plan, as amended

EX-10.8 9 vnda9302023ex108.htm EX-10.8 Document
Exhibit 10.8

UK Sub-Plan to the
Vanda Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan
Notice of Stock Option Grant
You have been granted the following option to purchase shares of the Common Stock of Vanda Pharmaceuticals Inc. (the “Company”):
Name of Optionee:    [Name]
Total Number of Shares:    [Number of Shares]
Type of Option:    Unapproved Option
Exercise Price Per Share:    $[Exercise Price]
Date of Grant:    [Date]
Vesting Commencement Date:    [Date]
Vesting Schedule:    This option vests and may be exercised with respect to 25% of the Shares subject to this option when the Optionee completes one year of continuous Service (as defined in the Plan) after the Vesting Commencement Date and with respect to 2.08334% of the Shares subject to this option when the Optionee completes each month of continuous Service thereafter.
Expiration Date:    [Date + 10 years minus 1 Day]. This option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement.
You and the Company agree that this option is granted under and governed by the terms and conditions of the UK Sub-Plan to the Vanda Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan, as amended to date (the “Plan”), and of the Stock Option Agreement, which is attached to and made a part of this document.
You further agree that the Company may deliver by email all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you by email.
Optionee:Vanda Pharmaceuticals Inc.
By:
[Name]
Title:


    



UK Sub-Plan to the Vanda Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan
Stock Option Agreement

Tax TreatmentThis option is intended to be an Unapproved Option, as provided in the Notice of Stock Option Grant.
Vesting
This option vests and becomes exercisable in installments, as shown in the Notice of Stock Option Grant, provided that you have provided continuous Service to the Company through the date of such installment.
This option will in no event vest or become exercisable for additional shares after your Service has terminated for any reason.

Term
This option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Date of Grant, as shown in the Notice of Stock Option Grant. (It will expire earlier if your Service terminates, as described below.)

Regular TerminationIf your Service terminates for any reason except death or total and permanent disability, then this option will expire at the close of business at Company headquarters on the date three months after your termination date. The Company determines when your Service terminates for this purpose.
DeathIf you die before your Service terminates, then this option will expire at the close of business at Company headquarters on the date 12 months after the date of death.
Disability
If your Service terminates because of your total and permanent disability, then this option will expire at the close of business at Company headquarters on the date 12 months after your termination date.
For all purposes under this Agreement, “total and permanent disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one year.

Leaves of Absence and Part-Time Work
For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work.
If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
    
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Restrictions on ExerciseThe Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise
In the event of your death, this option may be exercised by your Personal Representative (provided evidence is produced by such Personal Representative that they are so authorized and entitled to do so) only.
When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. The notice will be effective when the Company receives it, together with the signed Section 431 Election.

Form of Payment
Except as set forth below in “Default Same Day Sale at Expiration”, when you submit your notice of exercise, together with the signed Section 431 Election, you must include payment of the option exercise price for the shares that you are purchasing (together with any Award Tax Liability and Secondary NIC Liability). To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the following forms (each, a permissible Form of Payment”):
Cash payment (including cheque, electronic wire transfer or other method permitted by the Company).
To the extent permissible by law, withholding from any compensation (on an after-tax basis) otherwise payable to you by the Company or an Affiliate; provided the Company has consented to such withholding.
Withholding shares subject to the option that would otherwise be issued to you upon exercising the option (i.e., net exercise). The value of such shares, determined as of the effective date of the option exercise, will be applied to the option exercise price.
Irrevocable directions to a securities broker approved by the Company to sell all or part of your option shares and to deliver to the Company from the sale proceeds an amount sufficient to pay the option exercise price and any Award Tax Liability and Secondary NIC Liability, such sale, a “same day sale”. (The balance of the sale proceeds, if any, will be delivered to you.) The directions must be given by signing a special “Notice of Exercise” form provided by the Company and delivered to the securities broker (with a copy to the Company) on a Permissible Trading Day (as defined below).

    
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“Permissible Trading Day”
“Permissible Trading Day” means a day that satisfies each of the following requirements:
•    The Nasdaq Global Market is open for trading on that day,
•    You are permitted to sell shares of the Company’s Common Stock on that day without incurring liability under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
•    Under the Company’s Policy Memorandum Concerning Securities Trading, you would be permitted to sell shares of the Company’s Common Stock on that day without reliance on the “Same Day Sale-to-Cover Transactions” exclusion therein, and
    You are not prohibited from selling shares of the Company’s Common Stock on that day by a written agreement between you and the Company or a third party.

Default “Same Day Sale” at ExpirationIf (i) you submit your notice of exercise on a day that is not a Permissible Trading Day (other than by reason of The Nasdaq Global Market not being open for trading on that day), and (ii) you are then exercising this option because it would otherwise expire if not exercised on such day or within 5 business days thereafter (such exercise, an “Expiration Exercise”), then, unless you have previously made arrangements on a Permissible Trading Day for the payment of the option exercise price by one (or a combination of two or more) of the Permissible Forms of Payment, the aggregate exercise price shall be paid from the sale proceeds of a “same day sale” as described above (other than the requirement to deliver the Notice of Exercise on a Permissible Trading Day).
    
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Withholding Taxes and Stock Withholding
In the event that the Company determines that it or any Subsidiary is required to account to HM Revenue & Customs for the Award Tax Liability and any Secondary NIC Liability or to withhold any other tax as a result of the exercise of this option you, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it or any Subsidiary to satisfy all withholding liabilities. You shall also make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that may arise in connection with the vesting or disposition of Shares purchased by exercising this option. If, however, the exercise is an Expiration Exercise, then, unless you have previously made arrangements on a Permissible Trading Day for the payment of the withholding taxes by one (or a combination of two or more) of the Permissible Forms of Payment, the withholding taxes that may be due as a result of such exercise shall be paid from the sale proceeds of a “same day sale” as described above (other than the requirement to deliver the Notice of Exercise on a Permissible Trading Day). Withholding taxes due upon any exercise of this option shall be equal to the Company’s required tax withholding obligations using (i) the maximum statutory withholding rates for state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income and (ii) the minimum statutory withholding rate for federal tax purposes, including payroll taxes, that are applicable to supplemental taxable income unless you instruct the Company to use a higher withholding rate in a written notice delivered to the Company on a Permissible Trading Day.
Rule 10b5-1(c)It is the Company’s intent that the default “same day sale” to cover exercise price and withholding tax transaction requirements imposed by the Company on you herein with respect to Expiration Exercises comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act and be interpreted to comply with the requirements of Rule 10b5-1(c).
Tax ConsultationYou understand that you may suffer adverse tax consequences as a result of your purchase or disposition of the Shares. You represent that you will consult with any tax advisors you deem appropriate in connection with the purchase or disposition of the Shares and that you are not relying on the Company or any Affiliate for any tax advice.
Section 431 ElectionAs a further condition of the exercise of this option, you shall have signed a Section 431 Election in the form set out in Appendix A or in such other form as may be determined by HM Revenue & Customs from time to time.
    
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Your Tax Indemnity
To the extent permitted by law, you hereby agree to indemnify and keep indemnified the Company, and the Company as trustee for and on behalf of any related corporation, for any Award Tax Liability and Secondary NIC Liability.
The Company shall not be obliged to allot and issue any Shares or any interest in Shares pursuant to the exercise of this option unless and until you have paid to the Company such sum as is, in the opinion of the Company, sufficient to indemnify the Company in full against the Award Tax Liability and the Secondary NIC Liability, or you have made such other arrangement as in the opinion of the Company will ensure that the full amount of any Award Tax Liability and any Secondary NIC Liability will be recovered from you within such period as the Company may then determine.
In the absence of any such other arrangement being made, the Company shall have the right to retain out of the aggregate number of shares to which you would have otherwise been entitled upon the exercise of this option, such number of Shares as, in the opinion of the Company, will enable the Company to sell as agent for you (at the best price which can reasonably expect to be obtained at the time of the sale) and to pay over to the Company sufficient monies out of the net proceeds of sale, after deduction of all fees, commissions and expenses incurred in relation to such sale, to satisfy your liability under such indemnity.
Data Protection
By entering into this Stock Option Agreement, you acknowledge the necessity of the collection, use, and transfer of personal data as described in this paragraph to the full extent permitted by and in full compliance with applicable laws.
You understand that the Company and its Subsidiaries hold Data about you for the purpose of managing and administering the Plan and for the performance the contractual arrangements under this Agreement, to which you are a party.
You further understand that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration, and management of your participation in the Plan, and that the Company and/or its Subsidiary may each further transfer Data to any Data Recipients.
You understand that these Data Recipients may be located in your country of residence or elsewhere, such as the United States. You acknowledge that the Data Recipients to receive, possess, use, retain, and transfer Data in electronic or other form, for the purposes of implementing, administering, and managing your participation in the Plan, including any transfer of such Data, as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf, to a broker or third party with whom the Shares acquired on exercise may be deposited. Where the transfer is to be to a destination outside the European Economic Area, the Company shall take reasonable steps to ensure that your personal data continues to be adequately protected and securely held.
You understand that you may, at any time, review the Data or request that any necessary amendments be made to it,.
Restrictions on ResaleYou agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
    
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Transfer of Option
Prior to your death, only you may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, transfer this option in your will to your Personal Representative.
Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your option in any other way.

Retention RightsYour option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time.
Stockholder RightsYou or your Personal Representative have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company and paying the exercise price and satisfying any applicable Option Tax Liability and Secondary NIC Liability. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
AdjustmentsIn the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share will be adjusted pursuant to the Plan.
Additional Terms
You have no right to compensation or damages for any loss in respect of this option where such loss arises (or is claimed to arise), in whole or in part, from the termination of your employment; or notice to terminate employment given by or to you. This exclusion of liability shall apply however termination of employment, or the giving of notice, is caused other than in a case where a competent tribunal or court, from which there can be no appeal (or which the relevant employing company has decided not to appeal), has found that the cessation of your employment amounted to unfair or constructive dismissal of you and however compensation or damages may be claimed.
You have no right to compensation or damages for any loss in respect of this option where such loss arises (or is claimed to arise), in whole or in part, from any company ceasing to be a Subsidiary of the Company; or the transfer of any business from a Subsidiary of the Company to any person which is not a Subsidiary of the Company. This exclusion of liability shall apply however the change of status of the relevant company, or the transfer of the relevant business, is caused, and however compensation or damages may be claimed.
    
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Applicable LawThis Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions). The Section 431 Election shall be governed by the laws of England and Wales.
The Plan and Other Agreements
This Agreement, the Notice of Stock Option Grant, the Plan and the Section 431 Election are incorporated in this Agreement by reference. Any defined term not defined within this Agreement shall have the meaning as defined in the Plan.
This Agreement, the Section 431 Election, and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement between the parties.
By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.
    
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Appendix A
Section 431 Election
    
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