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EMPLOYMENT AGREEMENT    
  

    This Employment Agreement (the "Agreement") is entered into as of July 25, 2001 (the "Effective Date"), by and between Internap Network Services
Corporation (the "Company"), and Anthony C. Naughtin ("Executive") (collectively the "Parties"). 

RECITALS  

    WHEREAS, Executive has been employed by Company as Chief Executive Officer, and Executive and the Company now
wish to redefine their employment relationship on the terms stated herein; 

    NOW, THEREFORE, in consideration of the premises and mutual promises herein contained, and other consideration, the receipt and
sufficiency of which is hereby acknowledged, it is agreed as follows: 

AGREEMENT  

    1.  Transition Date. The parties agree that effective as of July 25, 2001 (the "Transition Date"), Executive will
resign from his position as Chief Executive Officer of the Company, and from all other corporate offices he then holds with the Company and any of its subsidiaries, other than as described in this
Agreement. 

    2.  Transition Assignment and Period. Executive will provide services to the Company as an employee member of the
Company's Board of Directors for one (1) year from the Transition Date (the "Transition Period"), on which date Executive's employment with the Company will terminate (the "Separation Date").
Executive agrees to provide services to the Company at the direction of the Chairman of the Company's Board of Directors, and that he will have no authority on behalf of the Company except pursuant to
such directions. 

    3.  Compensation. During the Transition Period, Executive shall receive a base salary of two hundred ninety-seven
thousand five hundred dollars ($297,500), less deductions and withholdings (the "Base Salary"), for the first six (6) months of the Transition Period, and fifty percent (50%) of the Base Salary
thereafter until the Separation Date. Executive will be eligible to receive seven-twelfths (7/12) of his discretionary 2001 bonus, which will be paid out solely at the discretion of the
Company's Board of
Directors. Executive will not be eligible to receive any other bonus payments during or with respect to the Transition Period; provided, however, that it is agreed that nothing in this Agreement will
affect the receipt by Executive of his year 2000 bonus, as determined in the sole discretion of the Company's Board of Directors. 

    4.  Vacation Eligibility. Executive will accrue vacation and holiday pay during the Transition Period at the same rate
as prior to the Transition Date for the first six (6) months of the Transition Period, and at fifty percent (50%) of his accrual rate thereafter until the Separation Date. 

    5.  Benefits. Executive will be eligible for standard Company benefits to the extent permitted by and in accordance with
the terms of the Company plans governing those benefits. From and after such time as the Company determines that Executive is no longer eligible for coverage as an employee under the Company's health
insurance plan, Executive will be eligible for continued group health insurance benefits at his own expense to the extent provided by the federal COBRA law or any other applicable law. Should
Executive elect COBRA coverage at any time prior to the Separation Date, as part of this Agreement the Company will pay Executive's COBRA premiums through that date. 

    6.  Stock Options. Executive's stock options will continue to vest according to the terms of his stock option
agreements, and the applicable stock option plan, until the Separation Date. Executive will then have until the close of market ninety (90) days after the Separation Date to exercise any option
shares that are vested as of the Separation Date. The Company makes no representations or warranties regarding the tax status or treatment of Executive's stock options after the Transition Date, and
Executive is hereby advised to consult an independent professional in this regard. 

    7.  T1 Line. Executive currently has a T1 line installed in his house that the Company provides to him free of charge.
Executive will continue to have this T1 line through the Separation Date, after 

which time he has the option of canceling the T1 line or compensating the Company for it at the then-prevailing market rate. 

    8.  Other Compensation or Benefits. Executive will not receive from the Company any additional compensation (including
but not limited to salary, bonuses or stock option grants), severance or benefits after the Transition Date, except as expressly provided in this Agreement. 

    9.  Company Policies and Procedures. As an employee of the Company, Executive will be expected to abide by all of the
Company's policies and procedures during the Transition Period. The general employment policies and procedures of the Company shall also govern Executive's employment
relationship with the Company, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or procedures, this Agreement shall control. 

    10. Termination. During the Transition Period, Executive's employment will remain at will. Either Executive or the
Company may terminate the employment relationship at any time and for any reason, with or without Cause (defined below) or advance notice. In the event that Executive's employment is terminated
without Cause, Executive shall receive salary continuation until the Separation Date in the manner provided in paragraph 3, above. In the event that Executive resigns from his employment or
Executive's employment is terminated for any reason other than by the Company without Cause, the payments and benefits provided in this Agreement will immediately cease upon such event. 

    11. Cause. For the purposes of this Agreement, Cause shall mean any of the following: (i) theft, dishonesty, or
falsification of the Company's documents or records; (ii) participation in a fraud or act of dishonesty against the Company; (iii) any action taken in bad faith which has a detrimental
effect on the Company's reputation or business; (iv) failure or inability to perform any reasonable assigned duties during the Transition Period that is not remedied within
forty-five (45) days of the Company's written notice of such failure or inability; (v) material breach of this Agreement that is not remedied within forty-five
(45) days of the Company's written notice of such breach, (vi) any violation of the Company's written policies constituting gross misconduct that adversely and demonstrably affects the
Company's business or reputation, (vii) any intentional violation by Executive of the his Employee Confidentiality, Non-Raiding and Non-Competition Agreement that is not
remedied within fourteen (14) days of written notice of such breach from the Company; or (viii) conviction (including any plea of guilty or nolo
contendere) of any felony or crime involving dishonesty. Executive's physical or mental disability or death shall not constitute Cause hereunder. 

    12. Employee Confidentiality, Non-Raiding and Non-Competition Agreement. Executive hereby
acknowledges his continuing obligations under the Employee Confidentiality, Non-Raiding and Non-Competition Agreement
(Exhibit A hereto) at all times hereafter, including but not limited to all times during and after the Transition Period. Among other obligations
in said agreement, Executive agrees not to use or disclose, at any time, any confidential or proprietary information of the Company without prior written authorization from a duly authorized
representative of the Company. 

    13. Confidentiality. The provisions of this Agreement will be held in strictest confidence by Executive and the Company
and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) Executive may disclose this Agreement to his
immediate family and any lender that requests that he provide information about his income; (b) the parties may disclose this Agreement in confidence to their respective attorneys, accountants,
auditors, tax preparers, and financial advisors; (c) the Company may disclose this Agreement to its investors or potential investors and as necessary to fulfill standard or legally required
corporate reporting or disclosure requirements; and (d) the parties may disclose this Agreement insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law.
In particular, and without limitation, Executive will not disclose the provisions of this Agreement to any current or former Company employee or any other Company personnel. 

    14. Public Statements. Notwithstanding the provisions of paragraph 13 above, and subject to the restrictions of
paragraph 18 below, the Company may issue a statement or make other public comment on Executive's transition employment, at its sole discretion. Executive agrees to refrain from making 

any statement to any press or media representative, or other third party, regarding his transition employment arrangement, or any other matter pertaining to the Company's business affairs, absent
written authorization from the Chairman of the Board. 

    15. Indemnification. That certain Indemnification Agreement by and between the Company and Executive dated
July 22, 1999, (the "Indemnification Agreement") will be unaffected by this Agreement. A copy of the Indemnification Agreement is attached hereto as  Exhibit B. 

    16. Expense Reimbursements. Pursuant to its regular business practice, the Company will reimburse Executive for
reasonable business expenses incurred during the Transition Period, provided that such expenses are routinely reimbursed for senior executives of the Company and Executive complies with standard
Company requirements relating to expense reimbursement, including but not limited to requirements regarding verification of expenses. Within ten (10) business days after the Separation Date
Executive will submit his final documented expense reimbursement statement reflecting all business expenses he has incurred through the Separation Date, if any, for which he seeks reimbursement. The
Company will reimburse Executive for these expenses pursuant to its regular business practice. 

    17. Return of Company Property. On the Separation Date Executive agrees to return to the Company all Company documents
(and all copies thereof) and other Company property that he has had in his possession at any time, including, but not limited to, Company files, notes, drawings, records, business plans and forecasts,
financial information, specifications, training materials, computer-recorded information, tangible property including, but not limited to, computers, credit cards, entry cards, identification badges
and keys; and any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof). 

    18. Nondisparagement. Both Executive and the Company (by its officers and directors) agree not to disparage the other
party, and the other party's officers, directors, employees, shareholders, affiliates and agents, in any manner likely to be harmful to them or their business, business reputation or personal
reputation; provided, however, that both Executive and the Company shall respond accurately and fully to any question, inquiry or request for
information when required by legal process. 

    19. Dispute Resolution. To ensure rapid and economical resolution of any and all disputes that may arise in connection
with this Agreement, Executive and the Company agree that any and all disputes, claims, and causes of action, in law or equity, arising from or relating to this Agreement or its enforcement,
performance, breach, or interpretation, will be resolved solely and exclusively by final,
binding, and confidential arbitration, by a single arbitrator, in Seattle, Washington, and conducted by Judicial Arbitration & Mediation Services, Inc. ("JAMS") under its
then-existing employment rules and procedures. Nothing in this section, however, is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm
pending the conclusion of any such arbitration. The Company shall not terminate any compensation or benefits provided hereunder pending the outcome of such arbitration;  provided, however, that in the
event the Company prevails in such arbitration on any claim resulting in the termination of such compensation and/or
benefits, Executive will be liable to the Company for an amount equal to the compensation and value of benefits Executive received hereunder from the earliest date of the conduct giving rise to said
claim(s) until the date of the arbitration award. 

    20. Entire Agreement. This Agreement, including all exhibits, Executive's stock option agreements, and the stock option
plan applicable to Executive's stock option agreements, constitute the complete, final and exclusive embodiment of the entire agreement between the Parties with regard to the subject matters hereof.
It supersedes and merges any and all agreements entered into by and between the Parties. It is entered into without reliance on any promise or representation, written or oral, other than those
expressly contained herein. It may not be modified except in a writing signed by Executive and the Chairman of the Board of the Company. Each party has carefully read this Agreement, has been afforded
the opportunity to be advised of its meaning and consequences by his or its respective attorneys, and signed the same of his or its own free will. 

    21. Successors and Assigns. This Agreement will bind the heirs, personal representatives, successors, assigns, executors
and administrators of each party, and will inure to the benefit of each party, its heirs, successors and assigns. 

    22. Applicable Law. This Agreement will be deemed to have been entered into and will be construed and enforced in
accordance with the laws of the State of Washington as applied to contracts made and to be performed entirely within Washington, without regard to conflicts of laws. 

    23. Severability. If a court of competent jurisdiction determines that any term or provision of this Agreement is
invalid or unenforceable, in whole or in part, then the remaining terms and provisions hereof will be unimpaired. The court or arbitrator will then have the authority to modify or replace the invalid
or unenforceable term or provision with a valid and enforceable term or provision that most accurately represents the parties' intention with respect to the invalid or unenforceable term or provision. 

    24. Counterparts. This Agreement may be executed in two counterparts, each of which will be deemed an original, all of
which together constitutes one and the same instrument. 

    25. Construction. This Agreement will be deemed drafted by both parties, and shall not be construed against either party
as the drafter of the document. 

    In Witness Whereof, the Parties have executed this Agreement effected as of the day and year first above written. 

	 	 	 	 	 
	/s/ ANTHONY NAUGHTIN   
ANTHONY NAUGHTIN	 	 
	 	 	 	 	 
	 	 	 	 	 
	 INTERNAP NETWORK SERVICES CORPORATION	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	/s/ EUGENE EIDENBERG   
 Eugene Eidenberg

Chief Executive Officer	 	 

EXHIBIT A Employee Confidentiality, Non-Raiding and Non-Competition Agreement
 EXHIBIT B Indemnification Agreement 

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EMPLOYMENT AGREEMENTPrepared by MERRILL CORPORATION

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EXHIBIT 10.25    
  

September 13,
2001 

Dr. David
Kaslow

741 Woodleave Rd.

Bryn Mawr, PA 19010 

Dear
David: 

    It
is with great pleasure that we present our offer to you of the position of Chief Scientific Officer of Vical Incorporated, (the "Company"), effective no later than
October 15, 2001. We are all delighted about the prospect of your joining our Senior Management team. 

    This
letter sets forth the basic terms and conditions of your employment with the Company. By signing this letter, you will be agreeing to these terms: 

    1.  Duties and Scope of Employment.  

    (a)  Position.  The Company agrees to employ you as Chief Scientific Officer. You will report to the
Chief Executive Officer of the Company and have the powers and duties commensurate with such position. 

    (b)  Obligations.  During the term of your employment, you will devote your full business efforts and
time to the Company and its subsidiaries (if any). You will not render services to any other person or entity without the express prior approval of the Chief Executive Officer. During your employment,
you will
not engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that is or may be competitive with the Company; provided that you may own less than
one percent of the outstanding securities of any publicly-traded corporation. 

    2.  Compensation.  

    (a)  Salary.  During your employment, the Company agrees to pay you as compensation for your services a
base salary at the annual rate of $250,000 or at such higher rate as the Company may determine from time to time. Such salary will be payable in accordance with the Company's standard payroll
procedures. (The annual compensation specified in this Section 2(a), together with any increases in such compensation that the Company may grant from time to time, is referred to in this
Agreement as "Base Compensation.") 

    (b)  Bonus.  You will be eligible for a performance-based annual cash bonus, at the discretion of the
Board of Directors, targeted at 20% to 30% of your Base Compensation during 2001. Bonuses are generally proposed in January of each year for the previous year and, if approved by the Board of
Directors, are paid out in February. 

    3.  Employee Benefits.  

    (a)  Company Benefits.  During the term of your employment, you will be eligible to participate in the
employee benefit plans maintained by the Company, subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee
administering such plan. The benefits may be changed from time to time by the Company. Current employee benefits are described in the enclosed benefit summary. 

    (b)  Vacation  You will be entitled to five weeks of vacation which accrues according to the following
schedule: 

	Annual Accrual (Hours)
 
	 	Pay Period Accrual (Hours)
	 	Maximum Accrual

	200	 	8.33	 	400

 

    4.  Business Expenses.  During your employment, you will be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection with your duties hereunder. The Company will reimburse you for such expenses upon presentation of an itemized account and appropriate
supporting documentation, all in accordance with the Company's generally applicable policies. 

    5.  Stock Option.  The Company will grant to you a stock option (such option to be an incentive stock
option to the extent permitted by law) to purchase from the Company 125,000 shares of the Company's common stock (the "Shares"). The exercise price of your stock option will be equal to the fair
market value on the date of the grant. Your stock option will be granted pursuant to the Stock Incentive Plan of Vical Incorporated and will be subject to the terms and conditions of the Plan and the
Company's form of stock option agreement, a copy of which is enclosed. Your stock options will vest (become exercisable) on a quarterly basis over a four-year period, subject to a
one-year "cliff" vesting provision. 

    6.  Proprietary Information and Inventions Agreement.  You will be required to sign and abide by the
terms of the Company's Employee's Proprietary Information and Inventions Agreement, a copy of which is enclosed. 

    7.  Immigration Documentation.  Please be advised that your employment is contingent on your ability to
prove your identity and eligibility to work in the United States. You must comply with the Immigration and Naturalization Service's employment verification requirements. Please review the attached
sample I-9 form. Documents which establish identity and employment eligibility must be presented to Vical within three days of commencing employment. 

    8.  Term and Termination of Employment.  

    (a)  "At Will" Employment.  Your employment with the Company is "at will" and not for a specified term
and may be terminated by you or the Company at any time for any reason, with or without cause. Except as expressly provided in subsection (c) below, upon a termination of your employment, you
will only be entitled to the compensation, benefits and reimbursements described in Section 2, 3 and 4 for the period preceding the effective date of the termination. 

    (b)  Definitions.  For all purposes under this Agreement, 

    (i)  "Good
Reason" shall mean (A) you have incurred a material reduction in your authority or responsibility, (B) a more than 25 percent reduction
in Base Compensation or (C) a material breach of this Agreement by the Company; 

    (ii) "Cause"
shall mean (A) a failure to perform your duties hereunder, other than a failure resulting from complete or partial incapacity due to physical or
mental illness or impairment, (B) gross misconduct or fraud or (C) conviction of, or a plea of "guilty" or "no contest" to, a felony. 

    (iii) "Disability"
shall mean that you, at the time your employment is terminated, have performed substantially none of your duties under this Agreement for a period of
not less than three consecutive months as the result of your incapacity due to physical or mental illness. 

    (c)  Salary Continuation.  Subject to subsection (d) below, the Company will continue to pay your
Base Compensation (at the annual rate then in effect) for up to twelve months following the termination of your employment if, prior to the fourth annual anniversary of the commencement of your
employment: 

    (i)  the
Company terminates your employment without your consent for any reason other than Cause or Disability; or 

    (ii) you
voluntarily resign your employment for Good Reason. 

2

 

The
payments under this subsection (c) will cease in the event of your death. In order to receive your salary continuation, you will be required to sign a release in a form acceptable to the
Company, of any and all claims that you may have against the Company. 

    (d)  Mitigation.  The payments under subsection (c) above shall be reduced on a
dollar-for-dollar basis by any other compensation earned by you for personal services performed as an employee or independent contractor during the twelve-month period
following the termination of your employment, including (without limitation) deferred compensation. You will apply your best efforts to seek and obtain other employment or consulting engagements,
whether on a full- or part-time basis, during such twelve-month period in order to mitigate the Company's obligations under subsection (c) above. At reasonable
intervals, you will report to the Company with respect to such efforts and any compensation earned during such twelve-month period. 

    9.  Dispute Resolution.  You and the Company ("the parties ") agree that any dispute arising out of or
related to your employment shall be resolved as provided in the Dispute Resolution Procedures attached hereto as Exhibit A. 

    10.  Relocation & Housing.  Vical will provide you with an interest free promissory note
forgivable over a four year period. The total loan amount will be $300,000.00. One fourth of such note shall be forgiven on each of the first four anniversaries of your first day of employment,
assuming purchase of a residence in California. I encourage you to discuss the tax consequences of this note, including taxes on the imputed interest amounts, with your tax advisor. Additionally,
Vical will provide an interest only promissory note in the amount of $150,000 for a four year period. Interest will be calculated at the Annual Federal Rate (AFR) and payable monthly. In the event
that you voluntarily terminate your employment with Vical or if you are involuntarily terminated for cause after less than four consecutive years of service, the unpaid balances of these notes shall
be due and payable within 30 days after the last day of employment. In the event of a change of control with respect to the company, any unpaid balance of the forgivable loan will be forgiven
as of the date of the closing of the transaction that results in the change of control. You can use these funds as a down payment on a residence in California. Vical will also provide a housing
differential in the amount of $1,500 per month for a period of 24 months. Additionally, Vical will cover relocation costs for you and your family including a tax gross up on the following
costs: Moving of household goods, packing and unpacking, closing costs, temporary housing for 60 days, reasonable trips for you and your family to locate housing, settle in new schools, etc.
Vical will also arrange with a third party to purchase your current residence if you are unable to sell it within 60 days of the start of your employment at Vical. The sales price for the house
will be determined by the third party's program for such sales. Please note that this Agreement supersedes any prior agreements, representations or promises of any kind, whether written, oral, express
or implied between the parties hereto with respect to the subject matters herein, and it, together with your stock option agreement and Employee's Proprietary Information and Inventions Agreement,
constitutes the full, complete and exclusive agreement between you and the Company with respect to the subject matters herein. This Agreement cannot be changed unless in writing, signed by you and an
authorized officer of the Company. If any term of this Agreement is held to be invalid, void or unenforceable, the remainder of this Agreement shall remain in full force and effect and shall in no way
be affected, and the parties will use their best efforts to find an alternative way to achieve the same result. 

    This
offer letter may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This
Agreement is governed by California law without regard to its choice of law provisions. 

3

 

    To indicate your acceptance of this offer of employment, please sign below and return one signed copy to me no later than September 21, 2001. 

	 	 	Sincerely,
	 	 	 	 	 
	 	 	VICAL INCORPORATED
	 	 	 	 	 
	 	 	By	 	 
	 	 	 	 	
 Vijay B. Samant

President and Chief Executive Officer
	ACCEPTED AND AGREED

This      day of      , 2001:	 	 	 	 
	 	 	 	 	 
	
 Dr. David Kaslow

	 	 	 	 

4

 
 
 

EXHIBIT A
  
    Dispute Resolution Procedure    
  

    You and the Company ("the parties ") agree that any dispute arising out of or related to your employment shall be resolved by binding arbitration, except where
the law specifically forbids the use of arbitration as a final and binding remedy, or where subsection (g) below specifically allows a different remedy. 

    (a) The
complainant shall provide the other party with a written statement of the claim identifying any supporting witnesses or documents and the requested relief. 

    (b) The
respondent shall furnish a statement of the relief, if any, that it is willing to provide, and identify supporting witnesses or documents. If the matter is not
resolved, the parties shall submit the dispute to nonbinding mediation, paid for by the Company, before a mediator to be selected by the parties. 

    (c) If
the matter is not resolved through mediation, the parties agree that the dispute shall be resolved by binding arbitration. If the parties are unable to jointly
select an arbitrator, they will obtain a list of arbitrators from the Federal Mediation and Conciliation Service and select an arbitrator by striking names from that list. 

    (d) The
arbitrator shall have the authority to determine whether the conduct complained of in subsection (a) of this Section 9 violates the complainant's
rights and, if so, to grant any relief authorized by law; subject to the exclusions of subsection (g) below. The arbitrator shall not have the authority to modify, change or refuse to enforce
the terms of any employment agreement between the parties, or change any lawful policy or benefit plan. 

    (e) The
Company will bear the costs of the arbitration if you prevail. If the Company prevails, you will pay half the cost of the arbitration or $500, whichever is
less. Each party shall pay its own attorneys fees, unless the arbitrator orders otherwise pursuant to applicable law. 

    (f)  Arbitration
shall be the exclusive final remedy for any dispute between the parties, such as disputes involving claims for discrimination or harassment (such as
claims under the Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, or the Age Discrimination in Employment Act), wrongful termination,
breach of contract, breach of public policy, physical or mental harm or distress or any other disputes, and the parties agree that no dispute shall be submitted to arbitration where the complainant
has not complied with the preliminary steps provided for in sections (a) and (b) above. 

    (g) The
parties agree that the arbitration award shall be enforceable in any court having jurisdiction to enforce this Agreement, so long as the arbitrator's findings
of fact are supported by substantial evidence on the whole and the arbitrator has not made errors of law; however, either party may bring an action in a court of competent jurisdiction regarding or
related to matters involving the Company's confidential, proprietary or trade secret information, or regarding or related to inventions that you may claim to have developed prior to joining the
Company or after joining the Company, pursuant to California Labor Code Section 2870 ("Disputes Related to Inventions"). The parties further agree that for Disputes Related to Inventions that
the parties have elected to submit to arbitration, each party retains the right to seek preliminary injunctive relief in court in order to preserve the status quo or prevent irreparable injury before
the matter can be heard in arbitration. 

5

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EXHIBIT 10.25

EXHIBIT A Dispute Resolution Procedure

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