Exhibit 10.1
 
 

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10390 Pacific Center Court, San Diego, CA  92121-4340
858·646·1100, FAX: 858·646·1150
www.vical.com

 
 
August 22, 2013

 
Alain Rolland
10390 Pacific Center Court
San Diego, CA 92121-4340
 

Dear Alain:
 
This letter sets forth the substance of the separation and release agreement
(the “Agreement”) that Vical Incorporated (the “Company”) is offering to you to
aid in your employment transition.
 
Your last day of work with the Company and your employment termination date will
be August 22, 2013 (the “Separation Date”).  On the Separation Date, the Company
will pay you all accrued salary and all accrued and unused vacation earned
through the Separation Date, at the rates then in effect, subject to standard
payroll deductions and withholdings.  You are entitled to these payments by law.
 
If you sign this Agreement and allow it to become effective as specified below,
you will receive the “Severance Benefits” set forth in Section 6(c) of your
Amended and Restated Letter Agreement dated January 9, 2009 (the “Letter
Agreement”).  For the avoidance of doubt, you will not be entitled to any
“Change of Control Severance Benefits” as such term is defined in the Letter
Agreement. Upon the Effective Date of this Agreement, Section 6(f) of the Letter
Agreement relating to mitigation shall be null and void. Any payments otherwise
scheduled to be made prior to the Effective Date (as defined below) shall accrue
and be paid or received in the first payroll period that follows the Effective
Date.  These benefits are contingent upon your cooperation for two (2) months
with the reasonable transition of any remaining duties and information to other
representatives of the Company.  In this regard, you agree to be reasonably
available to answer questions and assist the Company with the transition of your
duties, provided, however, that such assistance will not exceed five (5) hours
per week to be performed at mutually agreeable times. Anything to the contrary
notwithstanding, unless the Company agrees otherwise, if you accept employment
with another company focused on the development of DNA vaccines or are engaged
as consultant to another company focused on the development of DNA vaccines, you
will not be entitled to any further salary continuation payments as part of the
“Severance Benefits”.
 
You hereby acknowledge that, except as expressly provided in this Agreement, you
will not receive any additional compensation, severance, or benefits from the
Company after the Separation Date.  In particular, you hereby acknowledge and
agree that, except as expressly provided in the immediately preceding paragraph,
the Company shall have no obligation or liability to you under the Letter
Agreement.
 
You currently hold outstanding stock options to purchase shares of common stock
of the Company, as set forth on Exhibit A-1 (the “Options”) granted under the
Company’s Amended and Restated Stock Incentive Plan (the “Plan”). Provided that
this Agreement becomes effective as specified herein, and provided that you
comply with all material terms of this Agreement, the period during which you
may exercise vested shares of the Options shall be extended as provided on
Exhibit A.  You also currently hold outstanding restricted stock units (the
“RSUs”) and the vesting and delivery of any underlying shares will require the
satisfaction of federal, state, local and foreign tax withholding obligations
(the “Withholding Taxes”).  You and the Company agree that to the extent
permissible, the Company will satisfy the Withholding Taxes obligation relating
to the RSUs by
 
 

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withholding shares of the Company’s common stock from the shares issued or
otherwise issuable to you in connection with the RSUs with a fair market value
(measured as of the date shares are issued to pursuant to the terms of the RSUs)
equal to the amount of such Withholding Taxes.

You understand and agree that the promises and payments in consideration of this
Agreement shall not be construed to be an admission of any liability or
obligation by the Company to you or to any other person, and that the Company
makes no such admission.
 
In exchange for the consideration provided to you by this Agreement that you are
not otherwise entitled to receive, you hereby generally and completely release
the Company and its current and former directors, officers, employees,
stockholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns (collectively, the
“Released Parties”) from any and all claims, liabilities and obligations, both
known and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to or on the date that you sign this
Agreement (collectively, the “Released Claims”).  The Released Claims include,
but are not limited to:  (a) all claims arising out of or in any way related to
your employment with the Company, or the termination of that employment; (b) all
claims related to your compensation or benefits from the Company including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Age Discrimination in Employment Act of 1967 (as
amended) (“ADEA”), the federal Americans with Disabilities Act of 1990 (as
amended), the federal Family and Medical Leave Act (as amended) (“FMLA”), the
federal Equal Pay Act of 1963, the federal Fair Labor Standards Act, the federal
Employee Retirement Income Security Act of 1974 (as amended) with respect to
severance benefits, the California Family Rights Act (“CFRA”), the California
Labor Code (as amended), and the California Fair Employment and Housing Act (as
amended).  Notwithstanding the foregoing, the following are not included in the
Released Claims (the “Excluded Claims”): (a) any rights or claims for
indemnification you may have pursuant to any written indemnification agreement
with the Company to which you are a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; (b) any rights that are not
waivable as a matter of law; or (c) any claims arising from the breach of this
Agreement.  You hereby represent and warrant that, other than the Excluded
Claims, you are not aware of any claims you have or might have against any of
the Released Parties that are not included in the Released Claims.
 
You acknowledge that you are knowingly and voluntarily waiving and releasing any
rights you may have under the ADEA (“ADEA Waiver”).  You also acknowledge that
the consideration given for the ADEA Waiver is in addition to anything of value
to which you were already entitled.  You are advised by this writing, as
required by the ADEA, that:  (a) your waiver and release do not apply to any
claims that may arise after you sign this Agreement; (b) you should consult with
an attorney prior to executing this release; (c) you have forty-five (45) days
within which to consider this release (although you may choose to voluntarily
execute this release earlier); (d) you have seven (7) days following the
execution of this release to revoke this Agreement (in a written revocation
directed to me); and (e) this Agreement will not be effective until the eighth
day after you sign this Agreement, provided that you have not earlier revoked
this Agreement (the “Effective Date”).  You will not be entitled to receive any
of the benefits specified by this Agreement unless and until it becomes
effective.  The information required to be provided by the Older Worker Benefits
Protection Act is attached as Exhibit B hereto.
 
 

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In granting the release herein, which includes claims that may be unknown to you
at present, you acknowledge that you have read and understand Section 1542 of
the California Civil Code:  “A general release does not extend to claims that
the creditor does not know or suspect to exist in his or her favor at the time
of executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor.”  You hereby expressly waive and
relinquish all rights and benefits under that section and any law or legal
principle of similar effect in any jurisdiction with respect to the releases
granted herein, including but not limited to the release of unknown and
unsuspected claims granted in this Agreement.
 
You hereby acknowledge your continuing obligations under your Employee’s
Proprietary Information and Inventions Agreement (“EPIIA”), a copy of which has
been provided to you.  Pursuant to the EPIIA, you understand that among other
things, you must not use or disclose any confidential or proprietary information
of the Company without written authorization from the Company and must
immediately return all Company property and documents (including all embodiments
of proprietary information) and all copies thereof in your possession or
control.
 
This Agreement constitutes the complete, final and exclusive embodiment of the
entire agreement between the Company and you with regard to the subject matter
hereof.  You acknowledge that you are not relying on any promise or
representation by the Company that is not expressly stated herein.  This
Agreement may only be modified by a writing signed by both you and a duly
authorized officer of the Company.
 
If this Agreement is acceptable to you, please sign below and return the
original to me within the 45-day period specified above.
 
We wish you the best in your future endeavors.
 
Sincerely,
 
Vical Incorporated
 

By:    /s/ Vijay Samant      
      Vijay Samant
   
      Chief Executive Officer
 

 
 
I have read, understand and agree fully to the foregoing Agreement:
 
 

   /s/ Alain Rolland  
Alain Rolland
        Date:    August 22, 2013    

 
                                                             
 
 

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Exhibit A

Option Terms

1.1           Extension; Amendment.  You acknowledge that certain of the Options
are currently outstanding incentive stock options held by you to purchase shares
of common stock of the Company.  Your employment with the Company will terminate
on the Separation Date, and therefore the term of each of the Options is
currently scheduled to expire no later than 90 days following the Separation
Date.  In consideration of your promises herein, and effective and contingent
upon (i) this Agreement becoming effective in accordance with the terms below;
and (ii) your consent (by signing and not revoking this Agreement) to the
amendment of the Options as described herein, the Board has approved an
amendment to the Options to extend the post-termination exercise period to
permit you to exercise the Options for a period of 12 months following the
Separation Date (the “Amendment”); provided, however, that nothing in this
Agreement shall prevent earlier termination of the Options in connection with a
merger or consolidation of the Company that occurs during such period, as
further specified in the Plan.

1.2           Modification; Tax Treatment.  Section 424(h) of the Internal
Revenue Code of 1986, as amended (the “Code”), provides that if the terms of an
option are modified, then such modification shall be considered as the granting
of a new option.  An extension of the post-termination exercise period of the
Options would be deemed a modification and, thus, the grant of new
options.  Section 422(b) of the Code provides that an option is treated as an
incentive stock option only if the option price is not less than the fair market
value of the stock at the time such option is granted.  The Amendment would be
treated as the grant of a new option (as described above) and, thus, would
require a new comparison of the option exercise price and the current fair
market value of the Company’s common stock.  As a result, to the extent that one
or more of the Options that is an incentive stock option has an exercise price
less than the fair market value of the Company’s common stock as of the
Separation Date, then each such option would immediately fail to be treated as
an incentive stock option but rather, will be treated as a nonstatutory stock
option.  Under Section 424(h) of the Code relating to modification, you also
understand and acknowledge that even if the Options do not immediately lose
incentive stock option status as a result of the Amendment, the holding period
with respect to the disposition of shares acquired pursuant to the Options
necessary to obtain the favorable tax treatment of incentive stock option (i.e.,
2 years from the date of grant) would restart as of the Separation Date, which
is the effective date of the new grant.  Section 422(a)(2) of the Internal
Revenue Code provides that the holder of an incentive stock option must be an
employee of the Company (or an affiliate of the Company) during the period
beginning on the date that the option is granted and ending on the day three (3)
months before the date of exercise.  According to this rule, you understand and
acknowledge that even if the Options do not immediately lose incentive stock
option status as a result of the Option Amendment, if you exercise the Options
more than 3 months after the Separation Date, then each such option would fail
to be treated as an incentive stock option, but rather, will be treated as a
nonstatutory stock option.

 
 

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1.3           Consent to Amendment. You understand that the Board may not amend
the terms of the Options in a manner that would adversely affect your rights
under such Options without your written consent.  You further understand that
you are under no obligation to consent to the Amendment.  You represent that
have read this consent and have had sufficient time to review and discuss this
matter.  You acknowledge that neither the Company nor its agents have
recommended or influenced your decision to consent to the Amendment.  You
further acknowledge that you have had the opportunity to seek independent advice
regarding this matter from your legal counsel and tax advisor.  After due
consideration of the above, you hereby agree to the Amendment and to the
provisions of this Agreement which amend the vesting of the Options.  You
acknowledge that the Amendment may result in a loss of incentive stock option
status for each of the Options.