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EXHIBIT 10.11
INDEMNIFICATION AGREEMENT dated __________ , between VANDA
PHARMACEUTICALS
INC., a Delaware corporation (the "Company"), and _______ (the
"Indemnitee").
WHEREAS, the Company has adopted provisions in its Certificate
of
Incorporation and Bylaws providing for indemnification of its
officers and
directors to the fullest extent permitted by the DGCL, and the
Company wishes to
clarify and enhance the rights and obligations of the Company
and the Indemnitee
with respect to indemnification;
NOW, THEREFORE, in consideration of the Indemnitee's service or
continued
service as a director or officer of the Company, the parties
hereto agree as
follows:
1. Service by Indemnitee. The Indemnitee agrees to serve or
continue to
serve as a director or officer of the Company so long as the
Indemnitee is duly
elected and qualified or appointed and until such time as the
Indemnitee resigns
or fails to stand for reelection or is removed from his
position. The Indemnitee
may at any time and for any reason resign or be removed from
such position in
the sole discretion of the Company (subject to any other
contractual obligation
or any obligation or restriction imposed by the Certificate of
Incorporation or
Bylaws or otherwise by operation of law), in which event the
Company shall have
no obligation hereunder to continue the Indemnitee in any such
position.
2. Indemnification. The Company shall indemnify the Indemnitee
as provided
in this Agreement and to the fullest extent permitted by the
DGCL in effect on
the date hereof and as amended from time to time (but, in the
case of any such
amendment, only to the extent that such amendment permits the
Company to provide
broader indemnification rights than such law permitted the
Company to provide
prior to such amendment). Without limiting the scope of the
indemnification
provided by this Section 2, the right to indemnification of the
Indemnitee
provided hereunder shall include, but shall not be limited to,
those rights
hereinafter set forth; provided, however, that no
indemnification shall be paid
to the Indemnitee:
(a) to the extent prohibited by the DGCL, the Certificate of
Incorporation or the Bylaws;
(b) to the extent payment with respect to any indemnifiable
matter is
actually made to the Indemnitee under a valid and
collectible
insurance policy or under a valid and enforceable indemnity
clause,
bylaw or other agreement of the Company or any other Person on
whose
board the Indemnitee serves at the request of the Company;
or
(c) in connection with an action, suit or proceeding, or part
thereof
(including claims and counterclaims) initiated by the
Indemnitee,
except a judicial proceeding or arbitration pursuant to Section
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to enforce the rights under this Agreement, unless the action,
suit
or proceeding (or part thereof) was authorized by the Board.
3. Indemnification in Proceedings other than Proceedings by or
in the
Right of the Company. Subject to Section 2, the Indemnitee shall
be entitled to
the indemnification rights provided in this Section 3 if the
Indemnitee was, is,
or is threatened to be made, a party to or a
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participant in any Proceeding (other than a Proceeding by or in
the right of the
Company) by reason of the Indemnitee's Corporate Status, or by
reason of
anything done or not done by the Indemnitee in any such
capacity. Pursuant to
this Section 3, the Indemnitee shall be indemnified against all
costs,
judgments, penalties, fines, liabilities, amounts paid in
settlement by or on
behalf of the Indemnitee, and Expenses (including all interest,
assessments and
other charges paid or payable in connection with or in respect
of such Expenses)
actually and reasonably incurred by or on behalf of the
Indemnitee in connection
with such Proceeding or any claim, issue or matter therein, if
the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably
believed to be in
or not opposed to the best interests of the Company, and with
respect to any
criminal Proceeding, had no reasonable cause to believe the
Indemnitee's conduct
was unlawful.
4. Indemnification in Proceedings by or in the Right of the
Company.
Subject to Section 2, the Indemnitee shall be entitled to the
indemnification
rights provided in this Section 4 if the Indemnitee was, is, or
is threatened to
be made, a party to or participant in any Proceeding brought by
or in the right
of the Company to procure a judgment in its favor by reason of
the Indemnitee's
Corporate Status, or by reason of anything done or not done by
the Indemnitee in
any such capacity. Pursuant to this Section 4, the Indemnitee
shall be
indemnified against all costs, judgments, penalties, fines,
liabilities, amounts
paid in settlement by or on behalf of the Indemnitee, and
Expenses (including
all interest, assessments and other charges paid or payable in
connection with
or in respect of such Expenses) actually and reasonably incurred
by or on behalf
of the Indemnitee in connection with such Proceeding or any
claim, issue or
matter therein, if the Indemnitee acted in good faith and in a
manner the
Indemnitee reasonably believed to be in or not opposed to the
best interests of
the Company; provided, however, that no such indemnification
shall be made in
respect of any claim, issue or matter as to which applicable law
expressly
prohibits such indemnification by reason of any adjudication of
liability of the
Indemnitee to the Company, unless and only to the extent that
the Court of
Chancery of the State of Delaware or the court in which such
action or suit was
brought shall determine upon application that, despite the
adjudication of
liability but in view of all the circumstances of the case, the
Indemnitee is
entitled to indemnification for such costs, judgments,
penalties, fines,
liabilities and Expenses as such court shall deem proper.
5. Indemnification for Costs, Charges and Expenses of Successful
Party.
Notwithstanding the limitations of Sections 3 and 4, to the
extent that the
Indemnitee is successful, on the merits or otherwise, in whole
or in part, in
defense of any Proceeding or in defense of any claim, issue or
matter therein,
including, without limitation, the dismissal of any action
without prejudice, or
if it is ultimately determined that the Indemnitee is otherwise
entitled to be
indemnified against Expenses, the Indemnitee shall be
indemnified against all
Expenses actually and reasonably incurred by the Indemnitee in
connection
therewith.
6. Partial Indemnification. If the Indemnitee is entitled under
any
provision of this Agreement to indemnification by the Company
for some or a
portion of the costs, judgments, penalties, fines, liabilities
or Expenses
actually and reasonably incurred in connection with any
Proceeding, but not,
however, for the total amount thereof, the Company shall
nevertheless indemnify
the Indemnitee for the portion of such costs, judgments,
penalties, fines,
liabilities and Expenses actually and reasonably incurred to
which the
Indemnitee is entitled.
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7. Indemnification for Expenses of a Witness and Additional
Expenses.
Notwithstanding any other provision of this Agreement, to the
maximum extent
permitted by applicable law, the Indemnitee shall be entitled to
indemnification
against all Expenses actually and reasonably incurred or
suffered by the
Indemnitee or on the Indemnitee's behalf if the Indemnitee
appears as a witness
or otherwise incurs legal expenses as a result of or related to
the Indemnitee's
service as a director or officer of the Company, in any
threatened, pending or
completed legal, administrative, investigative or other
proceeding or matter to
which the Indemnitee neither is, nor is threatened to be made, a
party.
8. Determination of Entitlement to Indemnification. Upon written
request
by the Indemnitee for indemnification pursuant to Sections 3, 4,
5, 6 or 7, the
entitlement of the Indemnitee to indemnification, to the extent
not expressly
provided for pursuant to the terms of this Agreement, shall be
determined by the
following person or persons, who shall be empowered to make such
determination:
(a) if a Change of Control shall have occurred, by Independent
Counsel in a
written opinion to the Board, a copy of which shall be delivered
to the
Indemnitee; and (b) if a Change of Control shall not have
occurred, (i) by the
Board by a majority vote of Disinterested Directors, whether or
not such
majority constitutes a quorum; (ii) by a committee of
Disinterested Directors
designated by a majority vote of such directors, whether or not
such majority
constitutes a quorum; (iii) if there are no Disinterested
Directors, or if the
Disinterested Directors so direct, by Independent Counsel in a
written opinion
to the Board, a copy of which shall be delivered to the
Indemnitee; or (iv) the
stockholders of the Company. Such Independent Counsel shall be
selected by the
Board and approved by the Indemnitee. Upon any failure of the
Board so to select
such Independent Counsel or upon the failure of the Indemnitee
so to approve,
such Independent Counsel shall be selected upon application to a
court of
competent jurisdiction. Such determination of entitlement to
indemnification
shall be made not later than 30 days after receipt by the
Company of a written
request for indemnification. Such request shall include
documentation or
information that is necessary for such determination and which
is reasonably
available to the Indemnitee. Any Expenses incurred by the
Indemnitee in
connection with a request for indemnification or payment of
Expenses hereunder,
under any other agreement, any provision of the Certificate of
Incorporation,
Bylaws or any directors' and officers' liability insurance of
the Company, shall
be borne by the Company. The Company shall indemnify the
Indemnitee for any such
Expense and agrees to hold the Indemnitee harmless therefrom
irrespective of the
outcome of the determination of the Indemnitee's entitlement to
indemnification.
If the person or persons making such determination shall
determine that the
Indemnitee is entitled to indemnification as to part (but not
all) of the
application for indemnification, such person or persons shall
reasonably prorate
such partial indemnification among the claims, issues or matters
at issue at the
time of the determination. If it is determined that the
Indemnitee is entitled
to indemnification, payment to the Indemnitee shall be made
within seven days
after such determination.
9. Presumptions and Effect of Certain Proceedings. The Secretary
of the
Company shall, promptly upon receipt of the Indemnitee's request
for
indemnification, advise in writing the Board or such other
person or persons
empowered to make the determination as provided in Section 8
that the Indemnitee
has made such request for indemnification. Upon making such
request for
indemnification, the Indemnitee shall be presumed to be entitled
to
indemnification hereunder and the Company shall have the burden
of proof in
making any determination contrary
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to such presumption. If the person or persons so empowered to
make such
determination shall have failed to make the requested
determination with respect
to indemnification within 30 days after receipt by the Company
of such request,
a requisite determination of entitlement to indemnification
shall be deemed to
have been made and the Indemnitee shall be absolutely entitled
to such
indemnification, absent actual and material fraud in the request
for
indemnification. The termination of any Proceeding described in
Sections 3 or 4
by judgment, order, settlement or conviction, or upon a plea of
nolo contendere
or its equivalent, shall not, of itself, (a) create a
presumption that the
Indemnitee did not act in good faith and in a manner that the
Indemnitee
reasonably believed to be in or not opposed to the best
interests of the
Company, or, with respect to any criminal Proceeding, that the
Indemnitee had
reasonable cause to believe that the Indemnitee's conduct was
unlawful; or (b)
otherwise adversely affect the rights of the Indemnitee to
indemnification
except as may be provided herein.
10. Remedies of the Indemnitee in Cases of Determination not to
Indemnify
or to pay Expenses. In the event that a determination is made
that the
Indemnitee is not entitled to indemnification hereunder or if
payment has not
been timely made following a determination of entitlement to
indemnification
pursuant to Sections 8 and 9, or if Expenses are not paid
pursuant to Section
15, the Indemnitee shall be entit
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