EX-10.37



 Exhibit 10.37 

VANDA PHARMACEUTICALS INC. 2016 EQUITY INCENTIVE
PLAN 
 NOTICE OF STOCK OPTION GRANT 

You have been granted the following option to purchase shares of the Common Stock of Vanda Pharmaceuticals Inc. (the “Company”):

  

			
	Name of Optionee:	  	[Name]
		
	Total Number of Shares:	  	[Number of Shares]
		
	Type of Option:	  	Nonstatutory Stock Option
		
	Exercise Price Per Share:	  	$[Exercise Price]
		
	Date of Grant:	  	[Date]
		
	Vesting Commencement Date:	  	[Date]
		
	Vesting Schedule:	  	This option may be exercised with respect to 25% of the Shares subject to this option when the Optionee completes one year of continuous Service after the Vesting Commencement Date and with respect to 2.08334% of the Shares
subject to this option when the Optionee completes each month of continuous Service thereafter.
		
	Expiration Date:	  	[Date]. This option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement.

 You and the Company agree that this option is granted under and governed by the terms and conditions of the 2016 Equity
Incentive Plan (the “Plan”) and of the Stock Option Agreement, which is 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 option (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 web site maintained by the Company or by a third party under contract with
the Company. If the Company posts these documents on a web site, it will notify you by email. 
  

									
	OPTIONEE:	 		 		 	VANDA PHARMACEUTICALS INC.
				
	  
	 		 	By:	 	  

	[Name]	 		 		 	Title:	 	  









 VANDA PHARMACEUTICALS INC. 2016
EQUITY INCENTIVE PLAN 
 STOCK OPTION
AGREEMENT 
  

			
	Tax Treatment	  	This option is intended to be an incentive stock option under section 422 of the Internal Revenue Code or a nonstatutory stock option, as provided in the Notice of Stock Option Grant.
		
	Vesting	  	 This option becomes exercisable in installments, as shown in the Notice of Stock Option Grant.

 
 This option will in no event become exercisable for additional shares after your Service
has terminated for any reason.

		
	Term	  	This option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Date of Grant, as shown in the Notice of Stock
Option Grant. (It will expire earlier if your Service terminates, as described below.)
		
	Regular Termination	  	If your Service terminates for any reason except death or total and permanent disability, then this option will expire at the close of business at Company headquarters on the date three months after your termination date. The
Company determines when your Service terminates for this purpose.
		
	Death	  	If you die before your Service terminates, then this option will expire at the close of business at Company headquarters on the date 12 months after the date of death.
		
	Disability	  	 If your Service terminates because of your total and permanent disability, then this option will expire at the close of business at
Company headquarters on the date 12 months after your termination date.
  
 For all
purposes under this Agreement, “total and permanent disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result
in death or which has lasted, or can be expected to last, for a continuous period of not less than one year.



  
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	Leaves of Absence and Part-Time Work	  	 For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide
leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately
return to active work.
  
 If you go on a leave of absence, then the vesting schedule
specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice
of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.

		
	Restrictions on Exercise	  	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
		
	Notice of Exercise	  	 When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address
given on the form. Your notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. The notice will be effective when the Company receives it.

 
 If someone else wants to exercise this option after your death, that person must prove to
the Company’s satisfaction that he or she is entitled to do so.

		
	Form of Payment	  	 When you submit your notice of exercise, you must include payment of the option exercise price for the shares that you are purchasing. To
the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the following forms:
  

•       Your personal check, a cashier’s check or a money order.

 

•       Certificates for shares of Company stock that you own, along with any
forms needed to effect a transfer of those shares to the Company. The value of the shares, determined as of the effective date of the option exercise, will be applied to the option exercise price. Instead of surrendering shares of Company stock, you
may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the option shares issued to you.
  

•       Irrevocable directions to a securities broker approved by the Company
to sell all or part of your option shares and to deliver to the Company from the sale proceeds an amount sufficient to pay the option exercise price and any withholding taxes. (The balance of the sale proceeds, if any, will be delivered to you.) The
directions must be given by signing a special “Notice of Exercise” form provided by the Company.



  
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	Withholding Taxes and Stock Withholding	  	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. With the Company’s consent, these
arrangements may include withholding shares of Company stock that otherwise would be issued to you when you exercise this option. The value of these shares, determined as of the effective date of the option exercise, will be applied to the
withholding taxes.
		
	Restrictions on Resale	  	You agree not to sell any option 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.
		
	Transfer of Option	  	Prior to your death, only you may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option
will immediately become invalid. You may, however, dispose of this option in your will or a beneficiary designation.
		
		  	Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your
option in any other way.
		
	Retention Rights	  	Your option 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.
		
	Stockholder Rights	  	You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company and paying the exercise price. No adjustments are made for dividends
or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
		
	Adjustments	  	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share will be adjusted pursuant to the Plan.
		
	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.

 
 This Agreement and the Plan constitute the entire understanding between you and the
Company regarding this option. Any prior agreements, commitments or negotiations concerning this option 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. 

  
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