Exhibit 10.10

SEVERANCE AGREEMENT

This Severance Agreement (the “Agreement”) is dated as of January 23, 2015, by
and between Igor Bilinsky (the “Employee”) and Vical Incorporated (the
“Company”).

1. At-Will Employment.    The Company and the Employee acknowledge that the
Employee’s employment with the Company is and will continue to be “at-will,” as
defined under applicable law, and that the Employee’s employment with the
Company may be terminated by either party at any time for any or no reason. If
the Employee’s employment with the Company terminates for any reason, the
Employee will not be entitled to any payments, benefits, damages, awards or
compensation other than as provided in this Agreement, and as may otherwise be
available in accordance with the terms of the Company’s established employee
plans and written policies at the time of such termination.

2. Term.    The term of this Agreement will expire on the one (1)-year
anniversary of the date of this Agreement; provided, however, that such term
will automatically renew for successive one (1)-year periods, unless the Company
provides written notice to the Employee at least ninety (90) days prior to the
next scheduled expiration date that such term will not be renewed.
Notwithstanding the foregoing, if the Employee incurs a Qualifying Termination
prior to the expiration of such term, this Agreement will not terminate until
all obligations of the parties hereunder have been satisfied.

3. Qualifying Termination.    Subject to Section 7, if the Employee incurs a
Qualifying Termination and the Employee has satisfied the Release requirement
set forth in Section 6, then the Employee will be entitled to receive the
benefits set forth in Sections 3(a), 3(b) and 3(c) below, as applicable, subject
to any required payroll deductions and tax withholdings.

(a) Cash Severance Benefit.    The Employee will be entitled to receive a cash
payment equal to the following amount, as applicable (the “Cash Severance
Benefit”), in a lump sum within sixty (60) days following the Employee’s
Qualifying Termination:

(i) if such Qualifying Termination is a Non-Change of Control Termination, then
the Cash Severance Benefit will be equal to:

(1) twelve (12) months of the Employee’s base salary (as in effect on the date
of such Qualifying Termination or, if such Qualifying Termination is due to Good
Reason based on a reduction of the Employee’s base salary, then as in effect on
the date immediately prior to such reduction); and

(2) the amount of any annual bonus that the Employee received in the twelve
(12)-month period preceding such Qualifying Termination (or if such Qualifying
Termination occurs between the time an annual bonus is approved by the Board of
Directors of the Company (the “Board”) and paid to the Employee, then the amount
of the annual bonus that was approved but not paid).

 

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(ii) if such Qualifying Termination is a Change of Control Termination, then the
Cash Severance Benefit will be equal to:

(1) eighteen (18) months of the Employee’s base salary (as in effect on the date
of such Qualifying Termination or, if such Qualifying Termination is due to Good
Reason based on a reduction of the Employee’s base salary, then as in effect on
the date immediately prior to such reduction); and

(2) the amount of any annual bonus that the Employee received in the twelve
(12)-month period preceding such Qualifying Termination (or if such Qualifying
Termination occurs between the time an annual bonus is approved by the Board and
paid to the Employee, then the amount of the annual bonus that was approved but
not paid).

(b) COBRA Severance Benefit.    The Company will pay, on the Employee’s behalf,
on a monthly basis, the total amount of premiums required to continue the
Employee’s coverage under the Company’s health, dental and vision insurance
plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) from the date of the Employee’s Qualifying Termination until
the earliest of (i) the end of the twelve (12)-month period following such
Qualifying Termination, (ii) the expiration of the Employee’s eligibility for
such coverage pursuant to COBRA and (iii) the date the Employee becomes eligible
to enroll for coverage under a health, dental, or vision insurance plan of a
subsequent employer (such period from the date of such Qualifying Termination
through the earliest of (i) through (iii), the “COBRA Payment Period”), provided
that the Employee is eligible to continue such coverage pursuant to COBRA and
makes an election to continue such coverage pursuant to COBRA within the time
period prescribed under COBRA (the “COBRA Severance Benefit”). Such COBRA
premium payments will be inclusive of premiums for the Employee’s eligible
dependents for such health, dental, or vision plan coverage as in effect
immediately prior to such Qualifying Termination, provided that such dependents
continue to be eligible for such coverage during the COBRA Payment Period. The
Employee will be required to notify the Company immediately if the Employee
becomes eligible to enroll for coverage under a health, dental, or vision
insurance plan of a subsequent employer. For purposes of this Section 3(b), any
applicable insurance premiums that are paid by the Company will not include any
amounts payable by the Employee under an Internal Revenue Code Section 125
health care reimbursement plan, which amounts, if any, are the sole
responsibility of the Employee.

Notwithstanding the foregoing, if the Company determines, at any time and in its
sole discretion, that its payment of COBRA premiums pursuant to the COBRA
Severance Benefit would result in a violation of applicable law (including,
without limitation, Section 2716 of the Public Health Service Act), then in lieu
of providing the COBRA Severance Benefit, the Company will pay the Employee, for
each month of the remainder of the COBRA Payment Period, a fully taxable cash
payment equal to the COBRA premiums for such month, subject to applicable tax
withholdings and deductions (the “Special Severance Benefit”). Payments of the
Special Severance Benefit (if any) will be made without regard to the Employee’s
payment of COBRA premiums and without regard to the expiration of the COBRA
period prior to the end of the COBRA Payment Period. Payments of the Special
Severance Benefit (if any) will be made to the Employee on a monthly basis as
follows: (i) if the Company does not provide the COBRA Severance Benefit for any
month during the sixty (60)-day period following the Employee’s

 

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Qualifying Termination, the first payment of the Special Severance Benefit will
be made to the Employee within such sixty (60)-day period and will be equal to
the aggregate amount of the COBRA premiums for such months; and (ii) following
such sixty (60)-day period, if the Company does not provide the COBRA Severance
Benefit for any remaining month during the COBRA Payment Period, a payment of
the Special Severance Benefit will be made to the Employee on the last business
day of such month and will be equal to the COBRA premiums for such month.

(c) Equity Vesting Benefit.    Unless specifically provided otherwise in the
applicable equity award agreement, the Employee will receive the following
benefit, as applicable, with respect to all equity awards granted by the Company
to the Employee (other than any such awards issued under or held in any plan
sponsored by the Company that is intended to be qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the “Code”)), effective as of
the date of the Employee’s Qualifying Termination, to the extent that such
awards are outstanding and unvested as of the date of such Qualifying
Termination:

(i) if such Qualifying Termination is a Non-Change of Control Termination, such
awards will be credited with twelve (12) months of additional vesting; and

(ii) if such Qualifying Termination is a Change of Control Termination, such
awards will become fully vested.

(d) No Duplication of Benefits.    For the avoidance of doubt, in no event will
the Employee be entitled to receive any benefits under Section 3 for both a
Non-Change of Control Termination and a Change of Control Termination.

(e) Status of Incentive Stock Options.    The Employee acknowledges that
Section 3(c) above, if applicable, amends the terms of the Employee’s currently
outstanding stock options granted by the Company to the Employee, and as a
result, some or all of such stock options may cease, as of the date of the
Employee’s Qualifying Termination, to be treated as “incentive stock options”
within the meaning of Section 422 of the Code, in accordance with applicable
law.

4. Other Terminations.    If the Employee’s employment with the Company
terminates due to Cause, the Employee’s death or Disability, or any other reason
(other than due to a Qualifying Termination), then the Employee will not be
entitled to receive any benefits under Section 3. The Company, in its sole
discretion, will determine the reason for the Employee’s termination of
employment (including, but not limited to, whether such termination is due to
Cause or the Employee’s Disability).

 

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5. Accrued Salary and PTO/Vacation.    If the Employee’s employment with the
Company terminates for any reason, then the Employee will be entitled to receive
payment for all accrued salary and all accrued but unused paid time off/vacation
earned through the date of such termination, subject to any required payroll
deductions and tax withholdings. Such payment will be made on the date of such
termination or as soon as administratively practicable thereafter, but no later
than March 15th of the calendar year following such termination.

6. Release.    In order to be eligible to receive any benefits under Section 3,
the Employee must (i) execute and return a general waiver and release in a form
that will be determined by the Company, in its sole discretion (a “Release”), to
the Company within the applicable time period set forth therein and (ii) not
revoke the Release within the revocation period (if any) set forth therein;
provided, however, that in no event may the applicable time period or revocation
period extend beyond sixty (60) days following the Employee’s date of
termination.

7. Section 409A.    If any benefit provided under this Agreement is subject to
Section 409A of the Code and the regulations and other guidance thereunder or
any state law of similar effect (“Section 409A”), and such benefit otherwise is
payable in connection with the Employee’s termination of employment with the
Company, then such benefit will not be payable unless such termination
constitutes a “separation from service” (as such term is defined in Treasury
Regulations Section 1.409A-1(h) without regard to any alternative definition
thereunder) (“Separation from Service”). It is intended that (i) each
installment of any benefit payable under this Agreement be regarded as a
separate “payment” for purposes of Treasury Regulations
Section 1.409A-2(b)(2)(i), and (ii) all payments of any such benefits satisfy,
to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company determines that any
benefit payable under this Agreement constitutes “deferred compensation” under
Section 409A and the Employee is a “specified employee” (as such term is defined
in Section 409A(a)(2)(B)(i) of the Code) as of the date of the Employee’s
Separation from Service, then, solely to the extent necessary to avoid the
imposition of the adverse personal tax consequences under Section 409A, (a) the
commencement of such benefit payments will be delayed until the earlier of
(1) the date that is six (6) months and one (1) day after such Separation from
Service and (2) the date of the Employee’s death (such applicable date, the
“Delayed Initial Payment Date”), and (b) the Company will (1) pay the Employee a
lump sum amount equal to the sum of any benefit payments that the Employee
otherwise would have received through the Delayed Initial Payment Date if the
commencement of such benefit payments had not been delayed pursuant to this
paragraph and (2) commence paying the balance, if any, of such benefit in
accordance with the applicable payment schedule set forth in this Agreement. In
addition, if the Company determines that any benefit payable under this
Agreement constitutes “deferred compensation” under Section 409A and the
Employee’s Separation from Service occurs at a time during the calendar year
when the Release could become effective in the calendar year following the
calendar year in which such Separation from Service occurs, then for purposes of
such benefit, the Release will not be deemed effective any earlier than the
latest permitted effective date set forth therein (which date, in all cases,
will be in the subsequent calendar year).

 

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8. Definition of Terms.    The following terms referred to in this Agreement
will have the following meanings:

(a) “Cause”    will mean (i) the sustained inadequate performance of the
Employee’s duties, as determined by the Company in its sole discretion, (ii) a
failure to perform the Employee’s duties, other than a failure resulting from
complete or partial incapacity due to physical or mental illness or impairment,
(iii) gross misconduct or fraud, or (iv) conviction of, or a plea of “guilty” or
“no contest” to, a felony.

(b) “Change of Control”    will mean the occurrence of either of the following
events:

(i) A change in the composition of the Board, as a result of which fewer than
one-half (1/2) of the incumbent directors are directors who either: (A) had been
directors of the Company twenty-four (24) months prior to such change; or
(B) were elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the directors who had been directors of the
Company twenty-four (24) months prior to such change and who were still in
office at the time of the election or nomination; or

(ii) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) by the acquisition or aggregation
of securities is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote at elections of directors (the “Base Capital Stock”); except that any
change in the relative beneficial ownership of the Company’s securities by any
person resulting solely from a reduction in the aggregate number of outstanding
shares of Base Capital Stock, and any decrease thereafter in such person’s
ownership of securities, will be disregarded until such person increases in any
manner, directly or indirectly, such person’s beneficial ownership of any
securities of the Company.

(c) “Change of Control Termination”    will mean a Qualifying Termination that
occurs upon or within twelve (12) months following a Change of Control.

(d) “Disability”    will mean that the Employee, at the time that the Employee’s
employment with the Company is terminated, has performed substantially none of
the Employee’s duties for a period of not less than three (3) consecutive months
as the result of the Employee’s incapacity due to physical or mental illness.

(e) “Good Reason”    will mean any of the following conditions arising without
the consent of the Employee: (i) a material reduction in the Employee’s
authority or responsibilities; or (ii) a reduction in the Employee’s base salary
of more than 25%. Notwithstanding anything in this Agreement to the contrary, in
order to qualify as a resignation for Good Reason, (x) the Employee must provide
written notice to the Company of the existence of any of the foregoing
conditions that forms the basis for such resignation within sixty (60) days
following its initial existence, (y) the Company must fail to remedy such
condition within thirty (30) days following such notice, and (z) the Employee’s
termination of employment with the

 

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Company must occur within thirty (30) days following the Company’s failure to
remedy such condition (and in no event later than one hundred twenty (120) days
following the initial existence of such condition).

(f) “Non-Change of Control Termination”    will mean any Qualifying Termination
other than a Change of Control Termination.

(g) “Qualifying Termination”    will mean a termination of the Employee’s
employment with the Company as a result of either: (i) a termination by the
Company without Cause and other than as a result of the Employee’s death or
Disability; or (ii) the Employee’s resignation for Good Reason.

9. Successors.    Any successor to the Company (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation, or otherwise)
will assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession. Notwithstanding anything in this Agreement to the contrary, in the
event of a Change of Control, if the Company is not the surviving entity
resulting from such Change of Control, then for purposes of this Agreement, upon
and following such Change of Control, the term “Company” will mean the surviving
entity or other successor to the Company resulting from such Change of Control.
The terms of this Agreement and all of the Employee’s rights hereunder will
inure to the benefit of, and be enforceable by, the Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees.

10. Notice.    Notices and all other communications contemplated by this
Agreement will be in writing and will be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. Mailed notices to the Employee will be
addressed to the Employee at the home address that the Employee most recently
communicated to the Company in writing. In the case of the Company, mailed
notices will be addressed to its corporate headquarters, and all notices will be
directed to the attention of its Secretary.

11. Parachute Payments.

(a) If any payment or benefit the Employee will or may receive from the Company
or otherwise (a “280G Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Code, and (ii) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then any such 280G Payment pursuant to this Agreement (a “Payment”) will
be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the
largest portion of the Payment that would result in no portion of the Payment
(after reduction) being subject to the Excise Tax or (y) the largest portion, up
to and including the total, of the Payment, whichever amount (i.e., the amount
determined by clause (x) or by clause (y)), after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
the Employee’s receipt, on an after-tax basis, of the greater economic benefit
notwithstanding that all or some portion of the Payment may be subject to the
Excise Tax. If a

 

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reduction in a Payment is required pursuant to the preceding sentence and the
Reduced Amount is determined pursuant to clause (x) of the preceding sentence,
the reduction will occur in the manner (the “Reduction Method”) that results in
the greatest economic benefit for the Employee. If more than one method of
reduction will result in the same economic benefit, the items so reduced will be
reduced pro rata (the “Pro Rata Reduction Method”).

(b) Notwithstanding any provision of Section 11(a) to the contrary, if the
Reduction Method or the Pro Rata Reduction Method would result in any portion of
the Payment being subject to taxes pursuant to Section 409A that would not
otherwise be subject to taxes pursuant to Section 409A, then the Reduction
Method and/or the Pro Rata Reduction Method, as the case may be, will be
modified so as to avoid the imposition of taxes pursuant to Section 409A as
follows: (A) as a first priority, the modification will preserve to the greatest
extent possible, the greatest economic benefit for the Employee as determined on
an after-tax basis; (B) as a second priority, Payments that are contingent on
future events (e.g., being terminated without Cause), will be reduced (or
eliminated) before Payments that are not contingent on future events; and (C) as
a third priority, Payments that are “deferred compensation” within the meaning
of Section 409A will be reduced (or eliminated) before Payments that are not
“deferred compensation” within the meaning of Section 409A.

(c) The independent registered public accounting firm engaged by the Company for
general audit purposes as of the day prior to the effective date of the event
described in Section 280G(b)(2)(A)(i) of the Code will perform the foregoing
calculations. If the independent registered public accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting such event, the Company will appoint a nationally recognized
independent registered public accounting firm to make the determinations
required hereunder. The Company will bear all expenses with respect to the
determinations by such independent registered public accounting firm required to
be made hereunder. The Company will use commercially reasonable efforts to cause
the independent registered public accounting firm engaged to make the
determinations hereunder to provide its calculations, together with detailed
supporting documentation, to the Company and the Employee within thirty
(30) calendar days after the date on which the Employee’s right to a 280G
Payment becomes reasonably likely to occur (if requested at that time by the
Company or the Employee) or such other time as requested by the Company or the
Employee.

(d) If the Employee receives a Payment for which the Reduced Amount was
determined pursuant to clause (x) of Section 11(a) and the Internal Revenue
Service determines thereafter that some portion of the Payment is subject to the
Excise Tax, the Employee agrees to promptly return to the Company a sufficient
amount of the Payment (after reduction pursuant to clause (x) of Section 11(a))
so that no portion of the remaining Payment is subject to the Excise Tax. For
the avoidance of doubt, if the Reduced Amount was determined pursuant to clause
(y) of Section 11(a), the Employee will have no obligation to return any portion
of the Payment pursuant to the preceding sentence.

12. Miscellaneous Provisions.

(a) No Mitigation.    Except as provided in Section 3(b), the Employee will not
be required to mitigate the amount of any payment or benefit contemplated by
Section 3

 

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(whether by seeking new employment or in any other manner), nor will any such
payment or benefit be reduced by any earnings or benefits that the Employee may
receive from any other source.

(b) Modification and Waiver.    No provision of this Agreement will be modified,
amended, waived, or discharged unless the modification, amendment, waiver, or
discharge is agreed to in writing and signed by the Employee and by the Chief
Executive Officer of the Company. No waiver by either party of any breach of, or
of compliance with, any condition or provision of this Agreement by the other
party will be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

(c) Whole Agreement; Other Agreements.    This Agreement constitutes the
complete, final and exclusive embodiment of the entire Agreement between the
Employee and the Company with regard to the subject matter hereof. No
agreements, representations, or understandings (whether oral or written and
whether expressed or implied) which are not expressly set forth in this
Agreement have been made or entered into by either party with respect to the
subject matter hereof. This Agreement supersedes any agreement concerning
severance payments or other benefits payable to the Employee upon the
termination of the Employee’s employment with the Company (including, but not
limited to, the prior severance agreement between the Employee and the Company
dated October 28, 2010), and by execution of this Agreement, both parties agree
that any such predecessor agreement will be deemed null and void. Any equity
awards granted by the Company to the Employee prior to or after the date of this
Agreement will be governed in accordance with their terms, except to the extent
specifically modified by this Agreement. For the avoidance of doubt, nothing in
this Agreement supersedes or replaces the terms of the Proprietary Information
and Inventions Agreement between the Company and the Employee, the terms of
which remain in full force and effect.

(d) Choice of Law.    The validity, interpretation, construction and performance
of this Agreement will be governed by the laws of the State of California
without reference to conflict of laws provisions.

(e) Severability.    If any term or provision of this Agreement or the
application thereof to any circumstance will, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision will be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions of this Agreement or the application of such terms and provisions to
circumstances other than those as to which it is held invalid or unenforceable,
and a suitable and equitable term or provision will be substituted therefore to
carry out, insofar as may be valid and enforceable, the intent and purpose of
the invalid or unenforceable term or provision.

(f) Counterparts.    This Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

[SIGNATURE PAGE FOLLOWS]

 

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The parties have executed this Agreement on the date first written above.

 

VICAL INCORPORATED By:

/s/ Vijay B. Samart

Title: Chief Executive Officer

IGOR BILINSKY Signature:    

/S/     IGOR BILINSKY        

 

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