Exhibit 10.3


 


INDEMNITY AGREEMENT


 


THIS INDEMNITY
AGREEMENT, dated as of [DATE], between VICAL INCORPORATED, a Delaware
corporation (hereinafter referred to, together with its subsidiaries, if any,
as the “Corporation”), and [NAME OF INDEMNITEE] (the “Indemnitee”),


 


W I T N E S S E T H:


 


WHEREAS,
Indemnitee is a director, officer, employee or other agent of the Corporation,
or is serving at the request of the Corporation as a director, officer,
employee or other agent of another corporation, partnership, joint venture,
trust or other enterprise (an “Alternate Enterprise”) and in such capacity is
performing a valuable service for the Corporation; and


 


WHEREAS,
Indemnitee is willing to serve, continue to serve, and take on additional
service for or on behalf of the Corporation on the condition that he or she be
indemnified as herein provided; and


 


WHEREAS, it is
intended that Indemnitee shall be paid promptly by the Corporation all amounts
necessary to effectuate in full the indemnity provided herein.


 


NOW THEREFORE,
in consideration of the premises and the covenants in this Agreement, and
intending to be legally bound hereby, the parties hereto agree as follows:


 


1.             Services by Indemnitee.  Indemnitee agrees to serve as a director,
officer, employee or other agent of the Corporation, or at the request of the
Corporation as a director, officer, employee or other agent of an Alternate
Enterprise, so long as he or she is duly appointed or elected and qualified in
accordance with the applicable provisions of the Restated Certificate of
Incorporation and Bylaws of the Corporation or the applicable charter documents
of any Alternate Enterprise, and until such time as he or she resigns or fails
to stand for election or is removed from his or her position.  Indemnitee may at any time and for any
reason resign or be removed from such position (subject to any other
contractual obligation or other obligation imposed by operation of law), in
which event the Corporation shall have no obligation under this Agreement to
continue Indemnitee in any such position.


 


2.             Indemnification.


 


(a)           The Corporation shall indemnify
Indemnitee against Expenses and Liabilities in connection with any Proceeding
arising out of acts or omissions of Indemnitee occurring during Indemnitee’s
service as a director, officer, employee or other agent of the Corporation, or
during Indemnitee’s service at the request of the Corporation as a director,
officer, employee or other agent of an Alternate Enterprise, or to the fullest
extent permitted by the Delaware General Corporation Law (the “DGCL”) or the
Restated Certificate of Incorporation or Bylaws of the Corporation in effect on
the date hereof or as the DGCL or such Restated Certificate of


 

















 


Incorporation or Bylaws may
from time to time be amended (but, in the case of any such amendment, only to
the extent such amendment permits the Corporation to provide broader
indemnification rights than the DGCL or such Restated Certificate of
Incorporation or Bylaws permitted the Corporation to provide before such amendment).  The right to indemnification provided in the
Restated Certificate of Incorporation and Bylaws of the Corporation shall be
presumed to have been relied upon by Indemnitee in serving or continuing to
serve the Corporation and shall be enforceable as a contract right.  Without diminishing the scope of the
indemnification provided by this Section 2, the Corporation shall
indemnify Indemnitee whenever he or she is or was a party or is threatened to
be made a party to any Proceeding, including without limitation any such
Proceeding brought by or in the right of the Corporation, because he or she is
or was a director, officer, employee or other agent of the Corporation, or is
serving at the request of the Corporation as a director, officer, employee or
other agent of an Alternate Enterprise, or because of anything done or not done
by Indemnitee in any such capacity, against Expenses and Liabilities actually
and reasonably incurred by Indemnitee or on his or her behalf in connection
with such Proceeding, including the costs of any investigation, defense,
settlement or appeal, except that no indemnification shall be made with respect
to any claim, issue or matter if Indemnitee was finally adjudged to be liable
to the Corporation by a court of competent jurisdiction due to his or her gross
negligence or willful misconduct unless and to the extent that a Delaware Court
of Chancery or the court in which the action was heard determines that
Indemnitee is entitled to indemnification for such amounts as the court deems
proper.  For example, if Indemnitee is
adjudged liable due to gross negligence or willful misconduct with respect to
some but not all claims advanced against him or her, Indemnitee shall be
indemnified against those claims as to which he or she was adjudged not to have
been grossly negligent or to have engaged in willful misconduct.  In addition to, and not as a limitation of,
the foregoing, the rights of indemnification of Indemnitee provided under this
Agreement shall include those rights set forth in Sections 3, 7, 8 and 12
below.


 


(b)           Indemnitee shall be paid promptly by
the Corporation all amounts necessary to effectuate the foregoing indemnity.


 


(c)           Indemnitee shall be entitled under
this Agreement to indemnification by the Corporation for a portion of the
Expenses and Liabilities that Indemnitee becomes legally obligated to pay in
connection with any Proceeding referred to in paragraph (a) above even if not
entitled hereunder to indemnification for the total amount thereof, and the
Corporation shall indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.


 


3.             Advancement of Expenses.  All reasonable Expenses incurred by or on
behalf of Indemnitee shall be advanced from time to time by the Corporation to
Indemnitee within thirty (30) days after the Corporation’s receipt of a written
request for an advance of Expenses, whether prior to or after final disposition
of a Proceeding (except to the extent that there has been a Final Adverse
Determination that Indemnitee is not entitled to be indemnified for such
Expenses), including without limitation any Proceeding brought by or in the
right of the Corporation.  The written
request for an advancement of any and all Expenses under this paragraph shall
contain reasonable detail of the Expenses incurred by Indemnitee.  If required by the DGCL at the time of such
advance, Indemnitee hereby agrees to repay the amounts advanced if it is
ultimately determined that Indemnitee is not entitled to be indemnified
pursuant to the terms of this Agreement.


 


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4.             Limitations.  The foregoing indemnity and advancement of
Expenses shall not apply:


 


(a)           to the extent that Indemnitee has
been indemnified and reimbursed pursuant to such insurance as the Corporation
may maintain for Indemnitee’s benefit, or otherwise; provided, however, that
notwithstanding the availability of such other indemnification and
reimbursement, Indemnitee may claim indemnification and advancement of Expenses
pursuant to this Agreement by assigning to the Corporation, at its request,
Indemnitee’s claims under such insurance to the extent Indemnitee has been paid
by the Corporation;


 


(b)           on account of any claim against
Indemnitee solely for an accounting of profits made from the purchase or sale
by Indemnitee of securities of the Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state or local statutory law;


 


(c)           on account of Indemnitee’s conduct
that is established by a final judgment as constituting a breach of
Indemnitee’s duty of loyalty to the Corporation or resulting in any personal
profit or advantage to which Indemnitee was not legally entitled;


 


(d)           if indemnification is not lawful
(and, in this respect, both the Corporation and Indemnitee have been advised
that the Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public policy
and is, therefore, unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication); or


 


(e)           in connection with any proceeding (or
part thereof) initiated by Indemnitee, or any proceeding by Indemnitee against
the Corporation or its directors, officers, employees or other agents, unless
(i) such indemnification is expressly required to be made by the DGCL,
(ii) the proceeding was authorized by the Board of Directors of the
Corporation (the “Board of Directors”), (iii) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the DGCL, or (iv) the proceeding is
initiated pursuant to Section 8 hereof.


 


5.             Insurance and Funding.  The Corporation may purchase and maintain
insurance to protect itself and/or Indemnitee against any Expenses and
Liabilities in connection with any Proceeding to the fullest extent permitted
by the DGCL.  The Corporation may create
a trust fund, grant an interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification or advancement of Expenses as provided in
this Agreement.


 


6.             Procedure for
Determination of Entitlement to Indemnification.


 


(a)           Whenever Indemnitee believes that he
or she is entitled to indemnification pursuant to this Agreement, Indemnitee
shall submit a written request for indemnification to the Corporation.  Any request for indemnification shall
include sufficient documentation or information reasonably available to
Indemnitee to support his or her claim for indemnification.  Indemnitee shall submit such claim for
indemnification within a reasonable time not to exceed five (5) years after any
judgment, order, settlement, dismissal, arbitration award, conviction,


 


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acceptance of a plea of nolo
contendere or its equivalent, final termination or other disposition or partial
disposition of any Proceeding, whichever is the later date for which Indemnitee
requests indemnification.  The President
or the Secretary or other appropriate officer shall, promptly upon receipt of
Indemnitee’s request for indemnification, advise the Board of Directors in
writing that Indemnitee has made such request. 
Determination of Indemnitee’s entitlement to indemnification shall be
made not later than ninety (90) days after the Corporation’s receipt of his or
her written request for such indemnification.


 


(b)           The Indemnitee shall be entitled to
select the forum in which Indemnitee’s request for indemnification will be
heard, which selection shall be included in the written request for
indemnification required in Section 6(a). 
The forum shall be any one of the following:


 


(i) 
The stockholders of the Corporation, who shall make the determination by
majority vote or written consent;


 


(ii) 
The Disinterested Directors, or if designated by a majority of such
Disinterested Directors, a committee of the Board of Directors consisting
entirely of Disinterested Directors, who shall make the determination by
majority vote or written consent; or


 


(iii) If there are no Disinterested
Directors, by Independent Legal Counsel, who shall make the determination in a
written opinion.


 


If Indemnitee
fails to make such designation, his or her claim shall be heard in a forum
selected by the Corporation in accordance with the DGCL, or shall be determined
by an appropriate court of the State of Delaware.


 


7.             Fees and Expenses of Independent
Legal Counsel.  The Corporation
agrees to pay the reasonable fees and expenses of Independent Legal Counsel
should such Independent Legal Counsel be retained to make a determination of
Indemnitee’s entitlement to indemnification pursuant to Section 6 of this
Agreement, and to fully indemnify such Independent Legal Counsel against any
and all expenses and losses incurred by any of them arising out of or relating
to this Agreement or their engagement pursuant hereto.


 


8.             Remedies of
Indemnitee.


 


(a)           In the event that (i) a
determination pursuant to Section 6 hereof is made that Indemnitee is not
entitled to indemnification, (ii) advances of Expenses are not made
pursuant to this Agreement, (iii) payment has not been timely made
following a determination of entitlement to indemnification pursuant to this
Agreement, or (iv) Indemnitee otherwise seeks enforcement of this
Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware of his or her rights.  The Corporation shall not oppose Indemnitee’s
right to seek any such adjudication.


 


(b)           In the event that a determination
that Indemnitee is not entitled to indemnification, in whole or in part, has
been made pursuant to Section 6 hereof, the decision in the judicial
proceeding provided in paragraph (a) of this Section 8 shall be made
de novo and Indemnitee shall not be prejudiced by reason of a determination
that he or she is not entitled to indemnification.


 


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(c)           If a determination that Indemnitee is
entitled to indemnification has been made pursuant to Section 6 hereof or
otherwise pursuant to the terms of this Agreement, the Corporation shall be
bound by such determination in the absence of (i) a misrepresentation of a
material fact by Indemnitee or (ii) a specific finding (which has become
final) by an appropriate court of the State of Delaware that all or any part of
such indemnification is expressly prohibited by law.


 


(d)           In any court proceeding pursuant to
this Section 8, the Corporation shall be precluded from asserting that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable.  The Corporation shall
stipulate in any such court that the Corporation is bound by all the provisions
of this Agreement and is precluded from making any assertion to the contrary.


 


(e)           Expenses reasonably incurred by
Indemnitee in connection with his or her request for indemnification under this
Agreement, seeking enforcement of this Agreement or to recover damages for
breach of this Agreement shall be borne by the Corporation.


 


9.             Modification, Waiver,
Termination and Cancellation.  No
supplement, modification, termination, cancellation or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver.


 


10.           Notice by Indemnitee and Defense
of Claim.  Indemnitee shall promptly
notify the Corporation in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding, if an claim for indemnification in respect thereof is to be made
against the Corporation under this Agreement, but the omission so to notify the
Corporation will not relieve it from any liability which it may have to
Indemnitee if such omission does not prejudice the Corporation’s rights.  If such omission does prejudice the
Corporation’s rights, the Corporation will be relieved from liability only to
the extent of such prejudice; nor will such omission relieve the Corporation
from any liability which it may have to Indemnitee otherwise than under this
Agreement.  With respect to any
Proceeding as to which Indemnitee notifies the Corporation of the commencement
thereof:


 


(a)           The Corporation will be entitled to
participate therein at its own expense; and


 


(b)           The Corporation jointly with any
other indemnifying party similarly notified will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to Indemnitee; provided,
however, that the Corporation shall not be entitled to assume the defense of
any Proceeding if Indemnitee shall have reasonably concluded, and so notified
the Corporation, that there may be a conflict of interest between the
Corporation and Indemnitee with respect to such Proceeding.  After notice from the Corporation to Indemnitee
of its election to assume the defense thereof, the Corporation will not be
liable to Indemnitee under this Agreement for any Expenses subsequently
incurred by Indemnitee in connection with the defense thereof, other than
reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right


 


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to employ his or her own
counsel in such Proceeding but the fees and expenses of such counsel incurred
after notice from the Corporation of its assumption of the defense thereof
shall be at the expense of Indemnitee unless:


 


(i) 
The employment of counsel by Indemnitee has been authorized by the
Corporation; or


 


(ii) 
The Corporation shall not in fact have employed counsel to assume the
defense in such Proceeding or shall not in fact have assumed such defense and
be acting in connection therewith with reasonable diligence;


 


in each of which cases the fees
and expenses of such counsel shall be at the expense of the Corporation.


 


(c)           The Corporation shall not settle any
Proceeding in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee’s written consent; provided, however, that
Indemnitee will not unreasonably withhold his or her consent to any proposed
settlement.  The Corporation shall not
be liable to indemnify Indemnitee under this Agreement for any amounts paid in
settlement of any Proceeding effected without the Corporation’s written
consent; provided, however, that the Corporation will not unreasonably withhold
its consent to any proposed settlement.


 


11.           Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom
said notice or other communication shall have been directed, or
(ii) mailed by certified or registered mail with postage prepaid, on the
third business day after the date on which it is so mailed:


 


(a)  If to Indemnitee, to:


 


[Name of Indemnitee]


[Address of Indemnitee]


 


(b)  If to the Corporation, to:


Vical Incorporated


9373 Towne Centre Drive, Suite 100


San Diego, CA  92121


Attention:  Chief Executive
Officer


 


or to such other address as may
have been furnished to Indemnitee by the Corporation or to the Corporation by
Indemnitee, as the case may be.


 


12.           Nonexclusivity.  The rights of Indemnitee hereunder shall not
be deemed exclusive of any other rights to which Indemnitee may now or in the
future be entitled under the DGCL, the Corporation’s Restated Certificate of
Incorporation or Bylaws, or any agreements, vote of stockholders, resolution of
the Board of Directors or otherwise.


 


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13.           Certain Definitions.


 


(a)           “Disinterested Director” shall mean a
director of the Corporation who is not or was not a party to the Proceeding in
respect of which indemnification is being sought by Indemnitee.


 


(b)           “Expenses” shall include all direct
and indirect costs (including, without limitation, attorneys’ fees, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or out-of-pocket expenses and
reasonable compensation for time spent by Indemnitee for which he or she is
otherwise not compensated by the Corporation) actually and reasonably incurred
in connection with a Proceeding or establishing or enforcing a right to
indemnification under this Agreement, the DGCL or otherwise; provided, however,
that “Expenses” shall not include any Liabilities.


 


(c)           “Final Adverse Determination” shall
mean that a determination that Indemnitee is not entitled to indemnification
shall have been made pursuant to Section 6 hereof and either (1) a final
adjudication in a Delaware court pursuant to Section 8(a) hereof shall
have denied Indemnitee’s right to indemnification hereunder, or (2) Indemnitee
shall have failed to file a complaint in a Delaware court pursuant to
Section 8(a) for a period of one hundred twenty (120) days after the
determination made pursuant to Section 6 hereof.


 


(d)           “Indemnification Period” shall mean
the period of time during which Indemnitee shall continue to serve as a
director, officer, employee or other agent of the Corporation, or at the
request of the Corporation as a director, officer, employee or other agent of
an Alternate Enterprise, and thereafter so long as Indemnitee shall be subject
to any possible Proceeding arising out of acts or omissions of Indemnitee while
serving as a director, officer, employee or other agent of the Corporation, or
while serving at the request of the Corporation as a director, officer,
employee or other agent of an Alternate Enterprise.


 


(e)           “Independent Legal Counsel” shall
mean a law firm or a member of a law firm selected by the Corporation and
approved by Indemnitee (which approval shall not be unreasonably withheld) and
that neither is presently nor in the past five (5) years has been retained to
represent:  (i) the Corporation, in
any material matter, or (ii) any other party to the Proceeding giving rise
to a claim for indemnification hereunder. 
Notwithstanding the foregoing, the term “Independent Legal Counsel”
shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Corporation or Indemnitee in an action to determine
Indemnitee’s right to indemnification under this Agreement.


 


(f)            “Liabilities” shall mean liabilities
of any type whatsoever including, but not limited to, any judgments, fines,
ERISA excise taxes and penalties, penalties and amounts paid in settlement
(including all interest assessments and other charges paid or payable in
connection with or in respect of such judgments, fines, penalties or amounts
paid in settlement) of any proceeding.


 


(g)           “Proceeding” shall mean any
threatened, pending or completed action, claim, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or investigative,
including any appeal therefrom.


 


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14.           Binding Effect, Duration and Scope
of Agreement.  This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Corporation), spouses, heirs
and personal and legal representatives. 
This Agreement shall continue in effect during the Indemnification
Period, regardless of whether Indemnitee continues to serve as a director or as
an officer.


 


15.           Severability.  If any provision or provisions of this
Agreement (or any portion thereof) shall be held to be invalid, illegal or
unenforceable for any reason whatsoever:


 


(a)           the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby; and


 


(b)           to the fullest extent legally
possible, the provisions of this Agreement shall be construed so as to give
effect to the intent of any provision held invalid, illegal or unenforceable.


 


16.           Governing Law and Interpretation
of Agreement.  This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware, as applied to contracts between Delaware residents entered
into and to be performed entirely within Delaware.  If the laws of the State of Delaware are hereafter amended to
permit the Corporation to provide broader indemnification rights than said laws
permitted the Corporation to provide prior to such amendment, the rights of
indemnification and advancement of expenses conferred by this Agreement shall
automatically be broadened to the fullest extent permitted by the laws of the
State of Delaware, as so amended.


 


17.           Consent to Jurisdiction.  The Corporation and Indemnitee each
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out
of or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.


 


18.           Entire Agreement.  This Agreement represents the entire
agreement between the parties hereto, and there are no other agreements,
contracts or understandings between the parties hereto with respect to the
subject matter of this Agreement, except as specifically referred to herein or
as provided in Section 12 hereof.


 


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19.           Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.


 


	
   

  	
  VICAL INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF INDEMNITEE]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
								



 


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