ALEXZA PHARMACEUTICALS, INC. DIRECTOR/OFFICER INDEMNIFICATION AGREEMENT

Exhibit 10.2

ALEXZA PHARMACEUTICALS, INC.
DIRECTOR/OFFICER INDEMNIFICATION AGREEMENT

Effective Date:

 

     This Agreement is made as of the Effective Date set forth above, between Alexza Pharmaceuticals, Inc., a Delaware corporation (the Company”), whose address is 1001 East Meadow Circle, Palo Alto, California 94303, and                                (the “Indemnitee”), whose address is                               .

RECITALS

     A. The Indemnitee is a Director and/or officer of the Company.

     B. The Company recognizes that, in order to attract and retain highly competent persons to serve as members (“Directors”) of the Board of Directors of the Company (the “Board”) and/or in other executive capacities with the Company, the Company must provide adequate and competitive protection against inordinate risks of claims and actions against them arising out of their service to and lawful activities on behalf of the Company.

     C. The Certificate of Incorporation (the “Certificate of Incorporation”) and Bylaws of the Company (the “Bylaws”), and the General Corporation Law of the State of Delaware (“DGCL”), expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and certain other persons with respect to indemnification.

     D. Although the Certificate of Incorporation and Bylaws currently require indemnification of the Indemnitee to the fullest extent permitted by law, any amendment to or revocation of such Certificate of Incorporation or Bylaws could result in this protection becoming unavailable to the Indemnitee in the future.

     E. It is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, officers or Directors of the Company to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified.

     F. The Company wishes to provide the Indemnitee with specific contractual assurance that the protections currently provided by the Certificate of Incorporation or Bylaws will remain available to the Indemnitee, regardless of any future changes in the Certificate of Incorporation or Bylaws, or in the management and control of the Company. The Company therefore wishes to provide in this Agreement for the indemnification of and the advancing of expenses to the Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement.

     G. This Agreement is a supplement to and in furtherance of the Certificate of Incorporation and Bylaws and any resolutions adopted pursuant to the Certificate of Incorporation or Bylaws and will not be deemed a substitute therefor, nor to diminish or abrogate any other rights the Indemnitee may have by law or otherwise to indemnification.

Alexza Pharmaceuticals, Inc.
Directors/Officers Indemnification Agreement

     The parties therefore hereby agree as follows:

1. Definitions and Interpretation.

     1.1 “Change in Control”: a Change in Control will be deemed to have occurred:

          (a) If before the Company has a class of securities registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”):

               (i) The Company, or any material subsidiary of the Company, is merged, consolidated or reorganized into or with another corporation or other legal person (an “Acquiring Person”) or securities of the Company are exchanged for securities of an Acquiring Person, and as a result of such merger, consolidation, reorganization or exchange, less than a majority of the combined voting power of then outstanding securities of the Acquiring Person immediately after such transaction are held, directly or indirectly, in the aggregate, by the holders of Voting Securities immediately prior to such transaction;

               (ii) The Company, or any material subsidiary of the Company, in any transaction or series of related transactions, sells or otherwise transfers all or substantially all of its assets to an Acquiring Person, and less than a majority of the combined voting power of then outstanding securities of the Acquiring Person immediately after such sale or transfer are held, directly or indirectly, in the aggregate, by the holders of Voting Securities immediately prior to such sale or transfer;

               (iii) During any period of two consecutive years, individuals who at the beginning of such relevant period constitute the Directors cease for any reason to constitute at least a majority of the Directors then serving, unless the election, or the nomination for election by the Company’s stockholders, of each Director first elected during such period was approved by a unanimous vote of the Directors then still serving who were Directors at the beginning of such relevant period;

               (iv) The Company and its subsidiaries, in any transaction or series of related transactions, sell or otherwise transfer business operations that generated 66.67% or more of the consolidated revenues (determined on the basis of the Company’s four most recently completed fiscal quarters) of the Company and its subsidiaries, on a consolidated basis, immediately prior to the closing of such transaction or the last of such series of related transactions; or

               (v) Any other transaction or series of related transactions occur that have substantially the effect as the transactions specified in any of Sections 1.1(a)(i)-(iv) hereof; or

          (b) If after the Company has a class of securities registered under Section 12 of the Exchange Act:

               (i) Any person, as that term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act, becomes, is discovered to be, or files a report on Schedule 13D or 14D-1 (or any successor schedule, form or report) disclosing that such person is, a beneficial owner (as defined in Rule 13d-3 under the Exchange Act or any successor rule or regulation), directly or indirectly, of securities of the Company representing 20% or more of the

Alexza Pharmaceuticals, Inc.
Directors/Officers Indemnification Agreement

total voting power of the Company’s then outstanding Voting Securities (unless such person becomes such a beneficial owner in connection with the initial public offering of the Company);

               (ii) Individuals who, as of the consummation date of the Company’s initial public offering, constitute the Board cease for any reason to constitute at least a majority of the Board, unless any such change is approved by a unanimous vote of the members of the Board in office immediately prior to such cessation;

               (iii) the Company, or any material subsidiary of the Company, is merged, consolidated or reorganized into or with an Acquiring Person or securities of the Company are exchanged for securities of an Acquiring Person, and immediately after such merger, consolidation, reorganization or exchange less than a majority of the combined voting power of then outstanding securities of the Acquiring Person immediately after such transaction are held, directly or indirectly, in the aggregate by the holders of Voting Securities immediately prior to such transaction;

               (iv) The Company, or any material subsidiary of the Company, in any transaction or series of related transactions, sells or otherwise transfers all or substantially all of its assets to an Acquiring Person, and less than a majority of the combined voting power of then outstanding securities of the Acquiring Person immediately after such sale or transfer is held, directly or indirectly, in the aggregate, by the holders of Voting Securities immediately prior to such sale or transfer;

               (vi) The Company and its subsidiaries, in any transaction or series of related transactions, sell or otherwise transfer business operations that generated 66.67% or more of the consolidated revenues (determined on the basis of the Company’s four most recently completed fiscal quarters) of the Company and its subsidiaries, on a consolidated basis, immediately prior to the closing of such transaction or the last of such series of related transactions;

               (vii) The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing that a Change in Control has occurred or may have occurred or will occur or may occur in the future pursuant to any then existing contract or transaction; or

               (viii) Any other transaction or series of related transactions occur that have substantially the effect of the transactions specified in any of Sections 1.1(b)(i)-(vii) hereof.

Notwithstanding the provisions of Sections 1.1(b)(i) or 1.1(b)(iv) hereof, unless otherwise determined in a specific case by majority vote of the Board, a Change in Control will not be deemed to have occurred for purposes of this Agreement solely because (1) the Company, (2) an entity in which the Company directly or indirectly beneficially owns 50% or more of such entity’s voting securities, or (3) any Company-sponsored employee stock ownership plan, or any other employee benefit plan of the Company, either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of stock of the Company, or because the Company reports that

Alexza Pharmaceuticals, Inc.
Directors/Officers Indemnification Agreement

a Change in Control of the Company has or may have occurred or will or may occur in the future by reason of such beneficial ownership.

     1.2 “Claim” means any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any inquiry, hearing or investigation whether conducted by the Company or any other party, whether civil, criminal, administrative, investigative or other.

     1.3 “Expenses” include attorneys’ fees and all other costs, fees, expenses and obligations of any nature whatsoever paid or incurred in connection with investigating, defending, being a witness in or participating in (including appeal), or preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable Event. Expenses also include all federal, state, local or foreign taxes payable by the Indemnitee as a result of the actual or deemed receipt of any payments of Expenses, judgments, fines, penalties and amounts paid under this Agreement.

     1.4 “Indemnifiable Event” means any event or occurrence (whether before or after the date hereof) related to the fact that the Indemnitee is or was a Director, officer, employee, consultant, agent or fiduciary of or to the Company, or is or was serving at the request of the Board as a Director, officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by the Indemnitee in any such capacity.

     1.5 “Reviewing Party” means, if there has not been a Change in Control, (i) the Board (provided that a majority of Directors are not parties to the particular Claim for which the Indemnitee is seeking indemnification) or (ii) any other person or body appointed by the Board, who is not a party to the particular Claim for which the Indemnitee is seeking indemnification; or, if there has been a Change in Control other than a Change in Control approved by two thirds or more of the Board who were Directors prior to the Change in Control, the independent Special Counsel referred to in Sections 1.6 and 4 hereof.

     1.6 “Special Counsel” means an independent attorney or law firm designated to advise the Company, after a Change in Control (other than a Change in control approved by two thirds or more of the Board who were Directors prior to the Change in Control), on all matters concerning the rights of the Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement, the Bylaws or Certificate of Incorporation now or hereafter in effect relating to Claims for Indemnifiable Events.

     1.7 “Voting Securities” means any securities of the Company, or of the relevant subsidiary of the Company, as applicable, which vote generally in the election of Director of the Company or of such subsidiary, as applicable.

     1.8 Interpretation. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

2. Indemnification.

     2.1 General. Subject to the terms of this Agreement, if the Indemnitee was, is or is threatened to be made a party to or witness or other participant in a Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company will indemnify the Indemnitee to the fullest