Document:

EX-10.3

 Exhibit 10.3 

VANDA PHARMACEUTICALS INC. 

AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN

 NOTICE OF RESTRICTED STOCK UNIT AWARD

 You have been granted units representing shares of Common Stock of Vanda Pharmaceuticals Inc. (the “Company”) on the following terms: 

 

			
	 Name of Recipient:
	  	 [Name]

		
	Total Number of Units Granted:	  	[Number of Shares]
		
	Date of Grant:	  	[Date]
		
	Vesting Schedule:	  	25% of the units subject to this award will vest on each of January 1, [Year 1], January 1, [Year 2], January 1, [Year 3] and January 1, [Year 4].

 You and the Company agree that these units are granted under and governed by the terms and conditions of the Vanda
Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan (the “Plan”) and the Restricted Stock Unit Award Agreement, both of which are 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 award (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 website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it will notify you by email. 

 

							
	RECIPIENT:	 		 	VANDA PHARMACEUTICALS INC.
				
	                                      
                                         
     	 		 	 By:
	 	                                     
                                         
      
		 		 	Title:	 	                                      
                                         
     

 VANDA PHARMACEUTICALS INC. 

AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN

 RESTRICTED STOCK UNIT AWARD AGREEMENT 

 

			
	Payment for Units	  	No payment is required for the units that you are receiving.
		
	Vesting	  	The units vest in installments, as shown in the Notice of Stock Unit Award. No additional units vest after your Service has terminated for any reason.
		
	Forfeiture	  	 If your Service terminates for any reason, then your units will be forfeited to the extent that they have not vested before the termination
date. This means that any units that have not vested under this Agreement will be cancelled immediately. You receive no payment for units that are forfeited.

The Company determines when your Service terminates for this purpose.

		
	Settlement of Units	  	 Each unit will be settled on the first Permissible Trading Day that occurs on or after the day when the unit vests. However, each unit must
be settled not later than the March 15 of the calendar year after the calendar year in which the unit vests.
  

At the time of settlement, you will receive one share of the Company’s Common Stock for each vested unit. But the Company, at its sole discretion, may
substitute an equivalent amount of cash if the distribution of stock is not reasonably practicable due to the requirements of applicable law. The amount of cash will be determined on the basis of the market value of the Company’s Common Stock
at the time of settlement.

		
	“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,
  

  
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		  	 •    Either (a) you are not in possession of material non-public information that would make it illegal for you to sell shares of the Company’s Common Stock on that day under Rule 10b-5 of the Securities and Exchange
Commission or (b) Rule 10b5 1 of the Securities and Exchange Commission is applicable,
  

•    Under the Company’s Policy Memorandum Concerning Securities Trading, you are
permitted to sell shares of the Company’s Common Stock on that day, 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.

		
	Section 409A	  	This paragraph applies only if the Company determines that you are a “specified employee,” as defined in the regulations under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), at
the time of your “separation from service,” as defined in those regulations. If this paragraph applies, then any units that otherwise would have been settled during the first six months following your separation from service will instead
be settled during the seventh month following your separation from service, unless the settlement of those units is exempt from Section 409A of the Code.
		
	Nature of Units	  	Your units are mere bookkeeping entries. They represent only the Company’s unfunded and unsecured promise to issue shares of Common Stock (or distribute cash) on a future date. As a holder of units, you have no rights other
than the rights of a general creditor of the Company.
		
	No Voting Rights or Dividends	  	Your units carry neither voting rights nor rights to cash dividends. You have no rights as a stockholder of the Company unless and until your units are settled by issuing shares of the Company’s Common Stock.
		
	Units Nontransferable	  	You may not sell, transfer, assign, pledge or otherwise dispose of any units. For instance, you may not use your units as security for a loan.
		
	Withholding Taxes	  	No stock certificates or cash will be distributed to you unless you have made arrangements satisfactory to the Company for the payment of any withholding taxes that are due as a result of the vesting or settlement of this award.
These arrangements include payment in cash. With the Company’s consent, these arrangements may also include (a) payment from the proceeds of the sale of shares through a Company-approved
broker,

  
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		  	(b) withholding shares of Company stock that otherwise would be issued to you when the units are settled, (c) surrendering shares that you previously acquired or (d) withholding cash from other compensation. The
fair market value of withheld shares, determined as of the date when taxes otherwise would have been withheld in cash, will be applied to the withholding taxes.
		
	Restrictions on Resale	  	You agree not to sell any 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.
		
	Employment at Will	  	Your award 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, with
or without cause.
		
	Adjustments	  	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of your units will be adjusted accordingly, as the Company may determine pursuant to the Plan.
		
	Beneficiary Designation	  	You may dispose of your units in a written beneficiary designation. A beneficiary designation must be filed with the Company on the proper form. It will be recognized only if it has been received at the Company’s
headquarters before your death. If you file no beneficiary designation or if none of your designated beneficiaries survives you, then your estate will receive any vested units that you hold at the time of your death.
		
	Effect of Merger	  	If the Company is a party to a merger, consolidation or reorganization, then your units will be subject to the applicable provision of the Plan, provided that any action taken must either (a) preserve the exemption of your
units from Section 409A of the Code or (b) comply with Section 409A of the Code.
		
	Applicable Law	  	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law
provisions).

  
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	The Plan and Other Agreements	  	 The text of the Plan is incorporated in this Agreement by reference.
  

The Plan, this Agreement and the Notice of Restricted Stock Unit Award constitute the entire understanding between you and the Company regarding this award.
Any prior agreements, commitments or negotiations concerning this award 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. 

  
 5EX-10.4

 Exhibit 10.4 

Neither this document, nor any stock option agreement connected with it, is an approved prospectus for the purposes of section 85(1) of the Financial
Services and Markets Act 2000 (“FSMA”) and no offer of transferable securities to the public (for the purposes of section 102B of FSMA) is being made in connection with the UK Sub-Plan to the Vanda
Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan (the “Sub-Plan”). The Sub-Plan is exclusively available to bona fide employees and former
employees of Vanda Pharmaceuticals Inc., Vanda Pharmaceuticals Limited and any other UK Subsidiary. 
 UK SUB-PLAN TO THE 
 VANDA PHARMACEUTICALS INC. 

AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN 

Additional Terms and Conditions for Options received by Optionees resident in the UK 
  

	1.	The purpose of this Sub-Plan is to provide incentives for present and future UK tax resident employees of Vanda Pharmaceuticals Inc., Vanda Pharmaceuticals Limited and any other
UK Subsidiary through the grant of options over shares of Common Stock of Vanda Pharmaceuticals Inc (the “Company”). 

  

	2.	Capitalized terms are defined in the Company’s Amended and Restated 2016 Equity Incentive Plan (the “US Plan”), subject to the provisions of this Sub-Plan.

  

	3.	References to Incentive Stock Options and Nonstatutory Stock Options shall not apply to Options granted under the Sub-Plan. 

 

	4.	The Options granted under this Sub-Plan shall be designated as Unapproved Options. 

  

	5.	This Sub-Plan is governed by the US Plan and all its provisions shall be identical to those of the US Plan SAVE THAT (i)
“Sub-Plan” shall be substituted for “Plan” where applicable and (ii) the following provisions shall be as stated in this Sub-Plan in order to
accommodate the specific requirements of the laws of England and Wales: 

  

	6.	ARTICLE 1. Introduction. 

 The words “Outside Directors and Consultants” shall
be deleted wherever they appear. 
 The words “Options (which may constitute ISOs or NSOs) or stock appreciation rights” shall be
deleted and replaced with “or Options”. 
 The words “the Section 431 Election and Joint Election shall be governed by
the laws of England and Wales” shall be added to the end of the second paragraph. 
  

	7.	ARTICLE 2. Administration. 

 Article 2.1(b) shall be deleted. 

In Article 2.2 the words “Outside Directors and Consultants” shall be deleted. 

In Article 2.3 the words “and Consultants who are not Outside Directors and” shall be replaced with the word “who”. 

In Article 2.3 the words “such Employees and Consultants” shall be amended to read “such Employees” 

	8.	ARTICLE 3. Shares available for grants. 

 In Article 3 the words “under the
Plan” shall be replaced with the words “under the US Plan (together with the Plan)” wherever they appear. 
 In Article 3.1
the words “All Common Shares available under the Plan may be issued upon the exercise of ISOs” shall be deleted. 
 In Article 3.2,
the word “SARs” and the words “settled in cash (in whole or in part)” shall be deleted wherever they appear. 
  

	9.	ARTICLE 4. Eligibility. 

 Article 4.1 shall be deleted in its entirety. 

In Article 4.2 the words “Outside Directors and Consultants” shall be deleted. The words “NSOs or SARs” shall be deleted
and replaced with the words “or Unapproved Options”. 
  

	10.	ARTICLE 5. Options. 

 In Article 5.1 the words “The Stock Option Agreement shall
specify whether the Option is an ISO or an NSO” shall be deleted. 
 In Article 5.3 the words “(whether or not the Option is an
ISO)” shall be deleted. 
 In Article 5.4 the final sentence, from “Options may be awarded” to “SARs are forfeited”
shall be deleted. 
 In Article 5.5 the words “However, in the case of an ISO, the acceleration of exercisability shall not occur
without the Optionee’s written consent” shall be deleted. 
  

	11.	ARTICLE 6. Payment For Option Shares. 

 In Article 6.1 the words “(together with any
Award Tax Liability and Secondary NIC Liability)” shall be inserted immediately after the words “exercise of Options”. 
 In
Article 6.1 the words “cash equivalents” shall be deleted and replaced with the word “cheque”. 
 The final sentence of
Article 6.1, from “However, if the Optionee” to “section 13(k) of the Exchange Act” shall be deleted. 
 Articles 6.2 and
6.4 shall be deleted in their entirety. 
  

	12.	ARTICLE 7. Stock Appreciation Rights. 

 Article 7 shall be deleted in its entirety. 

 

	13.	ARTICLE 8. Restricted Shares. 

 The words 

“Specific UK securities laws advice must be taken where Restricted Shares are acquired by Participants other than on
exercise of an Option.” 
 shall be inserted at the beginning of this Article. 

 In Article 8.2 the words from “cash equivalents” to “grant of Restricted
Shares” shall be deleted and replaced with the words “or cheque”. 
  

	14.	ARTICLE 9. Stock Units. 

 In Article 9.5, the words “(a) cash, (b) Common
Shares or (c) any combination of both, as determined by the Committee” shall be deleted and replaced with “Common Shares only”. The words beginning “Methods of converting Stock Units” to “or by dividend
equivalents” shall also be deleted. 
 Article 9.6 shall be deleted in its entirety and replaced with “Any Stock Units Award that
becomes payable after the recipient’s death shall be distributed to the recipient’s Personal Representative only”. 
  

	15.	ARTICLE 10. Protection Against Dilution. 

 In Article 10.1 the words “and SAR”
shall be deleted wherever they appear. 
 In Article 10.2 the word “SARs” shall be deleted. 

In Article 10.3 the words “or SARs”; “(whether or not the Options are ISOs)”; and “and SARs” shall be deleted
wherever they appear. 
  

	16.	ARTICLE 12. Payment of Director’s Fees in Securities. 

 Article 12 shall be deleted
in its entirety 
  

	17.	ARTICLE 13. Limitation on Rights. 

 In Article 13 the words “Outside Director or
Consultant” shall be deleted wherever they appear. 
 In Article 13.1 the words “with or without cause” shall be deleted. 

 

	18.	ARTICLE 14. Taxes. 

 Article 14 shall be deleted in its entirety and replaced with the
following: 
 “In the event that the Company or any Subsidiary determines that it is required to account to HM
Revenue & Customs for any Award Tax Liability or Secondary NIC Liability (under the Stock Option Agreement or Restricted Stock Unit Award Agreement) arising from the grant, exercise, assignment, release, cancellation or any other disposal
of an Award or arising out of the acquisition, retention and disposal of the Shares acquired pursuant to this Award, the Participant, as a condition to the issue of Shares in connection with the exercise of an Award, or on the grant, assignment,
release or cancellation of an Award, shall make such arrangements satisfactory to the Company to enable it or any Subsidiary to satisfy any requirement to account for any Award Tax Liability (and, if applicable, any Secondary NIC Liability) that may
arise in connection with the Award or the award of Shares pursuant to it including, but not limited to, arrangements satisfactory to the Company for withholding Shares that would otherwise be issued pursuant to the Stock Option Agreement or
Restricted Stock Unit Award Agreement to the Participant.” 

	19.	ARTICLE 16. Future of the Plan. 

 In Article 16.1 the words “earlier of (a) the
date when the Plan is terminated under Section 16.2 or (b) the 10th anniversary of the date when the Board adopted the Plan” shall be deleted and replaced with the words “date
when the US Plan is terminated”. 
  

	20.	Definitions. 

 The following definitions shall be amended to read as follows: 

In the definition of “Award” the words “an SAR” shall be deleted. 

In the definition of “Exercise Price” the second sentence shall be deleted. 

In the definition of “Option” the words “ISO or NSO” shall be deleted and replaced with the word “option”. 

In the definition of “Service” the words “Outside Director or Consultant” shall be deleted. 

The following definitions shall be deleted: 

“Consultant”; “ISO”; “NSO”; “Outside Director”; “SAR”; and “SAR Agreement”. 

The following definitions shall be inserted and will read as follows: 

“Award Tax Liability” means any liability or obligation of the Company and/or any related company or Subsidiary to account for income
tax (under Pay As You Earn) or any other taxation provisions and primary class 1 National Insurance Contributions in the United Kingdom to the extent arising from the grant, exercise, assignment, release, cancellation or any other disposal of an
Award or arising out of the acquisition, retention and disposal of the Shares acquired under this Plan. 
 “Data” means certain
personal information about the Participant, including, but not limited to, name, home address and telephone number, date of birth, social insurance number, salary, nationality, job title, any stock, units or directorships held in the Company,
details of all options or other entitlement to shares awarded, cancelled, exercised, vested, unvested, or outstanding in the Participant’s favour. 

“Data Recipients” means third parties assisting the Company in the implementation, administration, and management of the Plan. 

“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003. 

“Joint Election” means an election (in such terms and such form as provided in paragraphs 3A and 3B of Schedule 1 to the Social
Security Contributions and Benefits Act 1992), which has been approved by HM Revenue & Customs for the transfer of the whole or any liability of the secondary contributor for any Secondary NIC Liability. 

“Personal Representative” means the personal representative(s) of an Participant (being either the executors of his will or if he
dies intestate the duly appointed administrator(s) of his estate) who have provided to the Board evidence of their appointment as such. 

“Secondary Contributor” means a person or company who has a liability to account (or pay) the Secondary NIC Liability to HM Revenue
and Customs. 
 “Secondary NIC Liability” means any liability to employer’s Class 1 National Insurance Contributions to
the extent arising from the grant, exercise, release or cancellation of an Award or arising out of the acquisition, retention and disposal of the Shares acquired pursuant to an Award. 

 “Section 431 Election” means an election made under section 431 of the Income Tax
(Earnings and Pensions) Act 2003. 
 “UK Subsidiary” means a Subsidiary of the Company which is incorporated in the UK. 

“Unapproved Option” means an option over shares in the Company that is neither an HM Revenue & Customs company share option
(under Schedule 4 ITEPA) nor an enterprise management incentive (EMI) option which meets the requirements of Schedule 5 ITEPA. 
 “US
Plan” means the Vanda Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan, as amended from time to time.

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