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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 6, 2006
VANDA PHARMACEUTICALS INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
000-51863 03-0491827
(Commission File No.) (IRS Employer Identification No.)
9605 Medical Center Drive
Suite 300
Rockville, Maryland 20850
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (240) 599-4500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On July 6, 2006, Vanda Pharmaceuticals Inc. appointed Dr. Paolo Baroldi
as the Company's Senior Vice President and Chief Medical Officer.
Under his employment agreement, Dr. Baroldi will be paid a base salary
of $250,000 annually, subject to adjustment pursuant to the Company's employee
compensation policies in effect from time to time. Additionally, Dr. Baroldi
will receive a one-time bonus of $30,000, as well as the reimbursement of up to
$20,000 in relocation costs, in connection with his starting work for the
Company. Dr. Baroldi will further be eligible for an annual target bonus equal
to 25% of his annual base salary, prorated for fiscal year 2006 based on the
number of days worked in that year.
If Dr. Baroldi's employment is terminated without cause, if he becomes
permanently disabled, or if he terminates his employment for good reason, he
will receive the following severance benefits following termination: (a) a cash
payment of 12 months of his base salary, payable in regular monthly
installments, (b) payment of his monthly COBRA health insurance premiums, and
(c) a bonus in an amount determined as follows: (i) if he is terminated prior to
the first anniversary of his employment with the Company, a pro-rata portion of
the anticipated first-year target bonus will be given to him, (ii) if he is
terminated on or following the first anniversary of his employment and prior to
the third, the bonus will equal the greater of the most recent target bonus or
the average target bonus awarded over any prior years, or (iii) if he is
terminated on or following the third anniversary of his employment, the bonus
will be equal to the greater of the most recent target bonus or the average
target bonus awarded for the prior three years.
In connection with Dr. Baroldi's employment agreement, Dr. Baroldi has
been granted a nonqualified stock option to purchase 60,427 shares of the
Company's Common Stock at an exercise price of $8.30. Dr. Baroldi will vest in
25% of the shares underlying such option after 12 months of continuous service
to the Company, with the balance vesting in equal monthly installments over the
next 36 months of continuous service to the Company. However, if following a
Change of Control of the Company (as defined in the Company's 2006 Equity
Incentive Plan) Dr. Baroldi is terminated without cause or if Dr. Baroldi leaves
his employment following (i) the Company's relocation to offices more than 30
miles away, (ii) a material reduction of Dr. Baroldi's title, stature, authority
or responsibility or (iii) a material reduction of Dr. Baroldi's base salary, he
will become vested in 24 months' worth of his then unvested shares and options.
Prior to his employment by the Company, Dr. Baroldi served as Vice
President - Corporate Drug Development at Chiesi Farmaceutici SpA, in Parma,
Italy from 2003 to 2006. Prior to his position at Chiesi, Dr. Baroldi was the
Global Head of Clinical Pharmacology at Novartis AG from 1998 to 2002. Dr.
Baroldi holds degrees in Medicine and Surgery and Clinical Pharmacology from the
University of Milan, and an Executive Masters in Business Administration from
Harvard University.
A press release issued by the Company on July 6, 2006 relating to Dr.
Baroldi's hiring is furnished as Exhibit 99.1 to this Current Report on Form
8-K.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
See the disclosure in Item 1.01 above regarding the appointment of Dr.
Paolo Baroldi as the Company's Senior Vice President and Chief Medical Officer.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
EXHIBIT NO. DESCRIPTION
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99.1 Press release of Vanda Pharmaceuticals Inc. dated July 6, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VANDA PHARMACEUTICALS INC.
By: /s/ STEVEN A. SHALLCROSS
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Name: Steven A. Shallcross
Title: Senior Vice President,
Chief Financial Officer and
Treasurer
Dated: July 6, 2006