Document:

Separation Agreement dated June 29, 2004

 Exhibit 10.2 
  
 June 29, 2004 
  
 Alan E. Dow, Ph.D. 
 Via Hand Delivery

  

	Re:	Separation Agreement 

  
 Dear Alan: 
  
 This letter sets forth the terms
and conditions of our agreement (the “Separation Agreement”) regarding the termination of your employment with Vical Incorporated (the “Company”). This Separation Agreement shall be effective as
specified in Section 12 below. 
  
 1. SEPARATION
DATE. Effective July 30, 2004 your employment by the Company will terminate (the “Separation Date”). 
  
 2. VACATION LEAVE. You shall use all of your accrued vacation earned through June 30, 2004, during the
month of July, 2004. You will not be eligible to accrue vacation during the period of July 1 – July 30, 2004. While you are on vacation during July, 2004, you will receive your base salary in effect as of June 30, 2004, in
accordance with the Company’s standard payroll practices and policies. 
  
 3. SEVERANCE PAYMENT. Pursuant to the employment agreement between you and the Company of May 30, 2001 (the “Employment Agreement”), following the Effective Date of this Separation
Agreement (as defined below in Section 12) and in consideration of your promises, releases, and covenants in this Separation Agreement, the Company shall continue to pay your base salary at the rate in effect as of the Separation Date for a
period of six months following the Separation Date, subject to standard deductions and withholdings (the “Salary Continuation”). The provisions of Section 8(d) of the Employment Agreement notwithstanding, the Salary Continuation shall
not be reduced by any compensation you earn following the Separation Date. 
  
 4. EXPENSE REIMBURSEMENT. No later than July 30, 2004, you shall submit all final documented expense reimbursement statements reflecting all business expenses you incurred prior to June 30,
2004, if any, for which you seek reimbursement. The Company shall reimburse your expenses pursuant to Company policy and its regular business practices. 
  
 5. OTHER COMPENSATION AND BENEFITS. On or before June 30, 2004, you will be paid all accrued
salary earned through that date. Your right to exercise any vested stock options shall be controlled by the specific terms of the relevant stock option grant(s), stock option agreement(s), and Company stock option plan(s). Except as expressly
provided herein, you acknowledge and agree that you are not entitled to and will not receive any additional 

 
compensation, severance, stock options, stock, equity or equity rights, pay, vacation or paid time off pay, or benefits from the Company. 
  
 6. COBRA. To the extent provided by the federal COBRA law or, if applicable, state
insurance laws, and by the Company’s current group health insurance policies, you will be eligible to continue your health insurance benefits after the Separation Date. The Company will pay the cost of COBRA medical insurance for you and your
family on the same terms as you currently enjoy for the period of six (6) months following the Separation Date. Later, you may be able to convert to an individual policy through the provider of the Company’s health insurance, if you wish.
You will be provided with a separate notice of your COBRA rights. 
  
 7.
RETURN OF COMPANY PROPERTY. On or before June 30, 2004, you shall return to the Company all Company documents (and all copies thereof) and other Company property
that you have had in your possession at any time, including, but not limited to, Company files, notes, notebooks, memoranda, correspondence drawings, books and records, plans and forecasts, financial information, personnel information, sales and
marketing information, research and development information, specifications, computer-recorded information, tangible property, credit cards, entry cards, equipment, 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). 
  
 8. PROPRIETARY INFORMATION OBLIGATIONS. You hereby acknowledge that you have had access to confidential and proprietary information and trade secrets of the Company
in connection with your relationship therewith. You hereby acknowledge that such information includes, but is not limited to: (a) inventions, developments, designs, applications, improvements, trade secrets, formulae, know-how, methods or
processes, discoveries, techniques, plans, strategies and data (hereinafter “Inventions”); and (b) plans for research, development, new products, marketing and selling, information regarding business plans, budgets and unpublished
financial statements, licenses, prices and costs, information concerning potential and existing suppliers and customers and information regarding the skills and compensation of employees of the Company (collectively, with Inventions, hereinafter
referred to as “Proprietary Information”). In view of the foregoing, you hereby agree, warrant and acknowledge that: 
  
 (a) You will surrender and deliver to the Company all documents, notes, laboratory notebooks, drawings, specifications, calculations, sequences,
data and other materials of any nature pertaining to your work with the Company, and any documents or data of any description (or any reproduction of any documents or data) containing or pertaining to any of the foregoing Proprietary Information.

  
 (b) You have held and will continue to hold in
confidence and trust all Proprietary Information and shall not use or disclose any Proprietary Information or anything related to such information without the prior written consent of the Company. 
  
 (c) You have assigned to the Company your entire right, title and
interest in and to any and all Inventions (and all proprietary rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made, conceived of, reduced to practice, or 

 
learned, by you, either alone or jointly with others, during the course of your relationship with the Company. 
  
 (d) You will assist the Company in every proper way to obtain, and
from time to time enforce, United States and foreign proprietary rights relating to Inventions in any and all countries. To that end you will execute, verify and deliver such documents and perform such other acts (including appearances as a witness)
as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such proprietary rights and the assignment thereof. In addition, you will execute, verify and deliver assignments of such
proprietary rights to the Company or its designee. Your obligation to assist the Company with respect to proprietary rights relating to such Inventions in any and all countries shall continue beyond the termination of your employment, but the
Company shall compensate you at a reasonable rate after your termination for the time actually spent by you at the Company’s request on such assistance. 
  
 (e) In the event the Company is unable for any reason, after reasonable effort, to secure your signature on any document needed in connection with
the actions specified in the preceding paragraph, you hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as your agents and attorneys in fact, which appointment is coupled with an interest, to act for
and in your behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by you. You hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which you now or may hereafter have for infringement of any proprietary rights assigned hereunder to the Company. 
  
 (f) Your breach of the foregoing agreements and acknowledgments will result in unique and special harm to the Company
and therefore the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that the Company may have for a
breach of this Agreement. 
  
 (g) You acknowledge your
continuing obligation to comply with any proprietary information and inventions agreement (“PIIA”) between you and the Company, both before and after the Separation Date. You represent that you have not violated
and will not violate the PIIA prior to the Effective Date. 
  
 9.
NONDISPARAGEMENT. You and the Company agree that each will not at any time disparage the other (including the Company’s officers, directors, employees, shareholders and agents), in any manner likely to be harmful to the other
or the other’s business, business reputation or personal reputation; provided that each shall respond accurately and fully to any questions, inquiry or request for information when required by legal process. 
  
 10. CONFIDENTIALITY. The provisions of this Separation Agreement shall
be held in strictest confidence and shall not be publicized or disclosed in any manner whatsoever. Notwithstanding the prohibition in the preceding sentence: (a) you may disclose this Separation Agreement, in confidence, to your immediate
family; (b) the parties may disclose this Separation Agreement in confidence to their attorneys, accountants, auditors, tax preparers, and financial 

 
advisors; and (c) the Company may disclose this Separation Agreement as necessary to complete any sale transaction and to comply with any reporting
requirements; and (d) the parties may disclose this Separation Agreement insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. 
  
 11. RELEASE OF CLAIMS. In exchange for the promises and covenants set forth herein, you
hereby release, acquit, and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, attorneys, shareholders, partners, successors, assigns, affiliates, customers, and clients of and
from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected,
disclosed and undisclosed, arising out of or in any way related to agreements, acts, or conduct at any time prior to the Effective Date, including, but not limited to: all such claims and demands directly or indirectly arising out of or in any way
connected with your employment with the Company, the termination of that employment, and the Company’s performance of its obligations as your former employer; claims or demands related to salary, bonuses, commissions, stock, stock options, the
issuance or re-purchase of restricted stock, put rights, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any form of compensation; claims pursuant to any federal, state or
local law or cause of action including, but not limited to, the California Fair Employment and Housing Act; the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act (“ADEA”), as
amended; the federal Americans With Disabilities the Employee Retirement Income Security Act; tort law; contract law; wrongful discharge; discrimination; harassment; fraud; defamation; emotional distress; and breach of the implied covenant of good
faith and fair dealing. 
  
 12. ADEA. You acknowledge that you are
knowingly and voluntarily waiving and releasing any rights you may have under ADEA. You also acknowledge that the consideration given for the waiver in the above paragraph 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 Separation Agreement; (b) You should consult with an attorney prior to executing this
release; (c) You have twenty-one (21) 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
the Separation Agreement; and (e) this Separation Agreement will not be effective until the eighth day after this Separation Agreement has been signed both by you and by the Company and the revocation period has expired (the
“Effective Date”). 
  
 13.
SECTION 1542 WAIVER. In giving the releases herein, which includes claims which may be unknown to you at present, you acknowledge that you have read and understand Section 1542 of the Civil Code of the
State of California which reads as follows: 
  
 A general
release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. 

 You hereby expressly waive and relinquish all rights and benefits under this section and any law or legal principle of
similar effect in any jurisdiction with respect to claims released hereby. 
  
 14. NO ADMISSIONS. The parties hereto hereby acknowledge that this is a compromise settlement of various matters, and it shall not be construed to be an admission of any liability or obligation by either
party to the other party or to any other person whomsoever. 
  
 15.
ARBITRATION. To ensure rapid and economical resolution of any disputes which may arise under this Separation Agreement, you and the Company agree that any and all disputes or controversies of any nature whatsoever, arising from or
regarding the interpretation, performance, enforcement or breach of this Separation Agreement shall be resolved by confidential, final and binding arbitration (rather than trial by jury or court or resolution in some other forum). Any arbitration
proceeding pursuant to this Separation Agreement shall be conducted by the Judicial Arbitration & Mediation Service (“JAMS”) in San Diego, California, under the then-existing JAMS rules. 
  
 16. ENTIRE AGREEMENT. This Separation Agreement,
including all exhibits, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to the subject matter hereof. This Separation Agreement is entered into without reliance on any promise
or representation, written or oral, other than those expressly contained herein, and supercedes any such promises or representations. This Separation Agreement may not be modified except in a writing signed by you and a duly authorized officer of
the Company. Each party has carefully read this Separation 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 free will. 
  
 17. SUCCESSORS AND ASSIGNS. This
Separation Agreement shall bind the heirs, personal representatives, successors, assigns, executors, and administrators of each party, and inures to the benefit of each party, its agents, directors, officers, employees, servants, heirs, successors
and assigns. 
  
 18. APPLICABLE LAW. This
Separation Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to be performed entirely within California. 
  
 19. SEVERABILITY. If a court, arbitrator, or other authority of
competent jurisdiction determines that any term or provision of this Separation Agreement is invalid or unenforceable, in whole or in part, then the remaining terms and provisions hereof shall be unimpaired, and the invalid or unenforceable term or
provision shall be replaced 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. 
  
 20. AUTHORITY. You warrant and represent that there are no liens or
claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein and that you are duly authorized to give the release granted herein. 

 21. COUNTERPARTS. This Separation Agreement may be executed in two counterparts, each of which
shall be deemed an original, all of which together shall constitute one and the same instrument. 
  
 22. SECTION HEADINGS. The section and paragraph headings contained in this Separation Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Separation Agreement. 
  

	
	 Sincerely,

	
	VICAL INCORPORATED
	
	 /s/ Vijay B. Samant

	 Vijay B. Samant

	 President and Chief Executive Officer

  
 HAVING
READ AND UNDERSTOOD THE FOREGOING, I HEREBY AGREE TO THE TERMS AND
CONDITIONS STATED ABOVE. 
  

					
			
	 /s/ Alan E. Dow
	 	 	 	 Dated: June 30, 2004

	Alan E. Dow, Ph.D.Employment offer letter

 Exhibit 10.3 
  
 September 20, 2004 
  
 Jill Church 
 227 Muirfield Way 
 San Marcos, CA 92069 
  
 Dear Jill: 
  
 On behalf of Vijay Samant, I am pleased to confirm our offer of full-time employment with
Vical. We hope that you will join us in this rewarding endeavor. 
  
 As we discussed, the basic components of the position and compensation will be as follows: 
  

			
	Title:	 	Vice President, Chief Financial Officer
	Reporting To:	 	Vijay Samant
	Salary Rate:	 	$17,500.00/month (Which is equivalent to an annual salary of $210,000)
	Start Date:	 	October 11, 2004

  
 Additionally, you will receive stock
options exercisable for 60,000 shares of Vical common stock. These options will be granted by the Stock Plan Committee of the Board and will reflect the fair market value of the stock on the date you begin as a Vical employee. The specific terms and
conditions of these options are governed by both the Stock Incentive Plan of Vical Incorporated and the Option Agreement between you and the company. These will be provided to you upon execution of the required documents. 
  
 You will also be considered for a cash bonus award targeted at 0 - 25% of the base salary
paid to you during 2005. Bonuses are proposed in February of each year and, if approved by the Vical Board of Directors, are paid out in March. 
  
 The enclosed benefit summary describes the benefits Vical currently offers to its employees. The effective date of group medical/dental coverage is the first of the month
following your date of hire. 
  
 Jill, this offer is also contingent upon
(1) the execution of the Company’s standard form of Employee Proprietary Information and Inventions Agreement (see attachment), and (2) satisfying the requirements of the Immigration Control and Reform Act. The latter issue can be
accomplished by presenting a document or documents that establish identity and eligibility for employment within three days of commencing employment. A copy of the INS (Employment Eligibility Verification) form is attached. If you have any questions
with regard to documents appropriate for these purposes, please contact me directly. 
  
 This offer is also contingent upon a background check and drug screen. A positive test will result in resention of the offer. Please contact HR at 858-646-1142 to set up the process. 

 Jill Church 
 Page 2 
  
 Your employment with Vical is “at-will”. In other words, either you or Vical can terminate your employment at any time for any reason, with or without cause and
with or without notice. Except as described in the attachment titled “Salary Continuation,” upon termination of your employment you will only be entitled to the compensation and benefits described previously in this letter for the period
preceding the effective date of the termination. 
  
 Please note that this offer
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. It constitutes the full, complete and exclusive agreement
between you and Vical with respect to the subject matters herein. 
  
 We hope you will decide to join us. We look forward to hearing positively from you. 
  
 Sincerely, 
  
 Vicki Hewlett 
 Director Human Resources 
  
 Upon acceptance of this offer, please sign
one copy of this letter and one copy of the Employee Proprietary Information and Inventions Agreement and return them to Vicki Hewlett at Vical. 
  
 This offer of employment is accepted and agreed to: 
  

			
	  
 /s/ Jill Church
	    	September 21, 2004
	Jill Church	    	Date            

 Jill Church 
 Attachment 
  
 Salary
Continuation 
  
 Subject to mitigation, Vical will continue to pay
your base compensation, at the rate then in effect, for up to six months following the termination of your employment if, prior to the fourth annual anniversary of the commencement of your employment: 
  

	 	1.	Vical terminates your employment without your consent for any reason other than Cause or Disability; or 

  

	 	2.	You voluntarily resign your employment for Good Reason 

  
 The salary continuation payments 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 Vical, of any and all claims that you may have against Vical. 
  
 Definitions: 
  

	 	1.	Mitigation. The payments described in the section above titled “Salary Continuation” 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 six-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 six-month period in order to mitigate the Company’s obligations. At reasonable intervals, you will report to Vical with respect to such
efforts and any compensation earned during such six-month period. 

  

	 	2.	Cause shall mean a failure to perform your duties, other than a failure resulting from complete or partial incapacity due to physical or mental illness or impairment, gross
misconduct or fraud or conviction of, or a plea of “guilty” or “no contest” to a felony. 

  

	 	3.	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. 

  

	 	4.	Good Reason shall mean that you have incurred a material reduction in your authority or responsibility or a reduction in base salary of more than 25%.

  

			
	  
 /s/ Jill Church
	    	September 21, 2004
	Jill Church	    	Date

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