EXHIBIT 10.1
STOCK INCENTIVE PLAN OF VICAL INCORPORATED
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was adopted on October 14, 1992. The Plan was amended and
restated effective as of January 7, 1993, was amended and restated effective as
of December 4, 1996, was amended December 11, 1997, subject to the approval of
the stockholders at the 1998 annual meeting, and was amended March 11, 1998.
The purpose of the Plan is to offer Employees an opportunity to acquire a
proprietary interest in the success of the Company, or to increase such
interest, by purchasing Shares of the Company's Stock. The Plan provides both
for the direct award or sale of Shares and for the grant of Options to purchase
Shares. Options granted under the Plan may include NSOs as well as ISOs
intended to qualify under Section 422 of the Code.
The Plan is intended to comply in all respects with Rule 16b-3 (or its
successor) under the Exchange Act and shall be construed accordingly.
SECTION 2. DEFINITIONS.
(a) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company,
as constituted from time to time.
(b) "CHANGE IN CONTROL" shall mean the occurrence of either of the
following events:
(i) A change in the composition of the
Board of Directors, as a result of which fewer than one-half of the incumbent
directors are directors who either:
a. Had been directors of the Company
24 months prior to such change; or
b. Were elected, or nominated for
election, to the Board of Directors with
the affirmative votes of at least a
majority of the directors who had been
directors of the Company 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 Exchange Act) by the acquisition or
aggregation of securities is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 50 percent 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, shall be
disregarded until such person increases in any manner, directly or
indirectly, such person's beneficial ownership of any securities of the
Company.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(d) "COMMITTEE" shall mean a committee of the Board of Directors, as
described in Section 3(a).
(e) "COMMON-LAW EMPLOYEE" means an individual paid from W-2 Payroll of the
Company or a Subsidiary. If, during any period, the Company (or a Subsidiary,
as applicable) has not treated an individual as a Common-Law Employee and, for
that reason, has not withheld employment taxes with respect to him or her, then
that individual shall not be an Employee for that period, even if any person,
court of law or government agency determines, retroactively, that that
individual is or was a Common-Law Employee during all or any portion of that
period.
(f) "COMPANY" shall mean Vical Incorporated, a Delaware corporation.
(g) "EMPLOYEE" shall mean (i) any individual who is a Common-Law Employee
of the Company or of a Subsidiary or (ii) an Outside Director and (iii) a
consultant or adviser who provides services to the Company or a Subsidiary as an
independent contractor. Service as an Outside Director or as an independent
contractor shall be considered employment for all purposes of the Plan except as
provided in Sections 4(b) and 4(c).
(h) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.
(j) "FAIR MARKET VALUE" shall mean the market price of Stock, determined
by the Committee as follows:
(i) If Stock was traded over-the-counter on
the date in question but was not traded on the Nasdaq Stock Market or the
Nasdaq National Market, then the Fair Market Value shall be equal to the
mean between the last reported representative bid and asked prices quoted
for such date by the principal automated inter-dealer quotation system on
which Stock is quoted or, if Stock is not quoted on any such system, the
"Pink Sheets" published by the National Quotation Bureau, Inc.;
(ii) If Stock was traded over-the-counter on
the date in question and was traded on the Nasdaq Stock Market or the
Nasdaq National Market, then the Fair Market Value shall be equal to the
last transaction price quoted for such date by the Nasdaq Stock Market or
the Nasdaq National Market;
(iii) If Stock was traded on a stock
exchange on the date in question, then the Fair Market Value shall be equal
to the closing price reported by the applicable composite transactions
report for such date; and
(iv) If none of the foregoing provisions is
applicable, then the Fair Market Value shall be determined by the Committee
in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.
(k) "INCENTIVE STOCK OPTION" or "ISO" shall mean an employee incentive
stock option described in Section 422(b) of the Code.
(l) "NONSTATUTORY OPTION" or "NSO" shall mean an employee stock option not
described in Sections 422(b) or 423(b) of the Code.
(m) "OFFEREE" shall mean an individual to whom the Committee has offered
the right to acquire Shares under the Plan (other than upon exercise of an
Option).
(n) "OPTION" shall mean an ISO or NSO granted under the Plan and entitling
the holder to purchase Shares.
(o) "OPTIONEE" shall mean an individual who holds an Option.
(p) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors who
is not a Common-Law Employee of the Company or of a Subsidiary.
(q) "PLAN" shall mean this Stock Incentive Plan of Vical Incorporated,
formerly the 1992 Stock Plan of Vical Incorporated.
(r) "PURCHASE PRICE" shall mean the consideration for which one Share may
be acquired under the Plan (other than upon exercise of an Option), as specified
by the Committee.
(s) "SERVICE" shall mean service as an Employee.
(t) "SHARE" shall mean one share of Stock, as adjusted in accordance with
Section 9 (if applicable).
(u) "STOCK" shall mean the Common Stock ($.01 par value) of the Company.
(v) "STOCK OPTION AGREEMENT" shall mean the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to the Optionee's Option.
(w) "STOCK PURCHASE AGREEMENT" shall mean the agreement between the
Company and an Offeree who acquires Shares under the Plan which contains the
terms, conditions and restrictions pertaining to the acquisition of such Shares.
(x) "SUBSIDIARY" shall mean any corporation if the Company and/or one or
more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.
(y) "TOTAL AND PERMANENT DISABILITY" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.
(z) "W-2 PAYROLL" shall mean whatever mechanism or procedure that the
Company or a Subsidiary utilizes to pay any individual which results in the
issuance of a Form W-2 to the individual. "W-2 Payroll" does not include any
mechanism or procedure which results in the issuance of any form other than a
Form W-2 to an individual, including, but not limited to, any Form 1099 which
may be issued to an independent contractor, an agency employee or a consultant.
Whether a mechanism or procedure qualifies as a "W-2 Payroll" shall be
determined in the absolute discretion of the Company (or Subsidiary, as
applicable), and the Company or Subsidiary determination shall be conclusive and
binding on all persons.
SECTION 3. ADMINISTRATION.
(a) COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. Except as provided below, the Committee shall consist exclusively of
directors of the Company, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy:
(i) Such requirements, if any, as the Securities
and Exchange Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its successor) under
the Exchange Act; and
(ii) Such requirements as the Internal Revenue
Service may establish for outside directors acting under plans intended to
qualify for exemption under Section 162(m)(4)(C) of the Code.
The Board may act on its own behalf with respect to Outside Directors and may
also appoint one or more separate committees composed of one or more officers of
the Company, who need not be directors of the Company and who need not satisfy
the foregoing requirements, who may administer the Plan with respect to
Employees who are not "covered employees" under Section 162(m)(3) of the Code
and who are not required to report pursuant to Section 16(a) of the Exchange
Act.
(b) COMMITTEE RESPONSIBILITIES. The Committee shall (i) select the
Employees who are to receive Options and other rights to acquire shares under
the Plan, (ii) determine the type, number, vesting requirements and other
features and conditions of such Options or other rights, (iii) interpret the
Plan and (iv) make all other decisions relating to the operation of the Plan.
The Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be
final and binding on all persons.
SECTION 4. ELIGIBILITY.
(a) GENERAL RULES. Only Employees (including, without limitation,
independent contractors who are not members of the Board) shall be eligible for
designation
as Optionees or Offerees by the Committee.
(b) OUTSIDE DIRECTORS. The Committee may provide that the NSOs that
otherwise would be granted to an Outside Director under this Plan shall instead
be granted to an affiliate of such Outside Director. Such affiliate shall then
be deemed to be an Outside Director for purposes of the Plan, provided that the
service-related vesting and termination provisions pertaining to the NSOs shall
be applied with regard to the service of the Outside Director.
(c) INCENTIVE STOCK OPTIONS. Only Employees who are Common-Law
Employees of the Company or a Subsidiary shall be eligible for the grant of
ISOs. In addition, an Employee who owns more than 10% of the total combined
voting power of all classes of outstanding stock of the Company or any of its
Subsidiaries shall not be eligible for the grant of an ISO unless the
requirements set forth in Section 422(c)(6) of the Code are satisfied.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan shall be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares which
may be issued under the Plan (upon exercise of Options or other rights to
acquire Shares) shall not exceed 2,450,000 Shares (subject to adjustment
pursuant to Section 9). Of the Shares available hereunder, no more than 30% in
the aggregate shall be available with respect to Outside Directors, subject to
adjustment pursuant to Section 9. The number of Shares that are subject to
Options or other rights outstanding at any time under the Plan shall not exceed
the number of Shares that then remain available for issuance under the Plan.
The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.
Notwithstanding any other provision of the Plan, no Employee shall receive a
grant of more than 300,000 Shares in any calendar year.
(b) ADDITIONAL SHARES. In the event that any outstanding Option or other
right for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan. In the event that Shares issued
under the Plan are reacquired by the Company pursuant to any forfeiture
provision, right of repurchase or right of first refusal, such Shares shall
again be available for the purposes of the Plan.
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) STOCK PURCHASE AGREEMENT. Each award or sale of Shares under the Plan
(other than upon exercise of an Option) shall be evidenced by a Stock Purchase
Agreement between the Offeree and the Company. Such award or sale shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and
which the Committee deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered into
under the Plan need not be identical.
(b) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to
acquire Shares under the Plan (other than an Option) shall automatically expire
if not exercised by the Offeree within 30 days after the grant of such right was
communicated to the Offeree by the Committee. Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such right was
granted.
(c) PURCHASE PRICE. The Purchase Price of Shares to be offered under the
Plan shall not be less than the par value of such Shares. Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee at
its sole discretion. The Purchase Price shall be payable in a form described in
Section 8.
(d) WITHHOLDING TAXES. As a condition to the purchase of Shares, the
Offeree shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such purchase. The Committee may permit the
Offeree to satisfy all or part of his or her tax obligations related to such
Shares by having the Company withhold a portion of any Shares that otherwise
would be issued to him or her or by surrendering any Shares that previously were
acquired by him or her. The Shares withheld or surrendered shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. The payment of taxes by assigning Shares to the Company, if permitted by
the Committee, shall be subject to such restrictions as the Committee may
impose, including any restrictions required by rules of the Securities and
Exchange Commission.
(e) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold under
the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Purchase Agreement and shall apply in addition to any restrictions that
may apply to holders of Shares generally.
(f) EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting Shares or thereafter, that such Shares shall become fully vested on
an accelerated basis in the event that a Change in Control occurs with respect
to the Company. If the Committee finds that there is a reasonable possibility
that, within the succeeding six months, a Change in Control will occur with
respect to the Company, then the Committee may determine that all Shares shall
be fully vested on an accelerated basis.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The Stock Option Agreement shall specify whether the Option
is an ISO or an NSO. The provisions of the various Stock Option Agreements
entered into under the Plan need not be identical.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 9.
(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price of an ISO shall in no event be
less than 100% of the Fair Market Value of a Share on the date of grant (except
as a higher percentage may be required by Section 4(c)) and the Exercise Price
of an NSO shall not be less than the par value of a Share subject to such NSO.
Subject to the preceding two sentences, the Exercise Price under any Option
shall be determined by the Committee at its sole discretion. The Exercise Price
shall be payable in a form described in Section 8.
(d) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Committee may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of
Shares acquired by exercising an Option. The Committee may permit the Optionee
to satisfy all or part of his or her tax obligations related to the Option by
having the Company withhold a portion of any Shares that otherwise would be
issued to him or her or by surrendering any Shares that previously were acquired
by him or her. Such Shares shall be valued at their Fair Market Value on the
date when taxes otherwise would be withheld in cash. The payment of taxes by
assigning Shares to the Company, if permitted by the Committee, shall be subject
to such restrictions as the Committee may impose, including any restrictions
required by rules of the Securities and Exchange Commission.
(e) EXERCISABILITY. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. The vesting
of any Option shall be determined by the Committee at its sole discretion. A
Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee's death, Total and Permanent Disability, retirement or other
events.
(f) EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become
exercisable on an accelerated basis in the event that a Change in Control
occurs with respect to the Company. If the Committee finds that there is a
reasonable possibility that, within the succeeding six months, a Change in
Control will occur with respect to the Company, then the Committee may
determine that all outstanding Options shall be exercisable on an accelerated
basis.
(g) TERM. The Stock Option Agreement shall specify the term of the
Option. The term shall not exceed 10 years from the date of grant, except as
otherwise provided in Section 4(c). Subject to the preceding sentence, the
Committee at its sole discretion shall determine when an Option is to expire.
(h) NONTRANSFERABILITY. An Option granted under the Plan shall not be
anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law, except as approved by the Committee. Notwithstanding the
foregoing, ISOs may not be transferable. However, this Section 7 shall not
preclude an Optionee from designating a beneficiary who will receive any
outstanding Options in the event of the Optionee's death, nor shall it preclude
a transfer of Options by will or by the laws of descent and distribution.
(i) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's Service
terminates for any reason other than the Optionee's death, then the Optionee's
Option(s) shall, except to the extent determined by the Committee, expire on the
earliest of the following occasions:
(i) The expiration date determined
pursuant to Subsection (g) above;
(ii) The date 90 days after the
termination of the Optionee's Service for any reason other than Total and
Permanent Disability; or
(iii) The date six months after the
termination of the Optionee's Service by reason of Total and Permanent
Disability.
The Optionee may exercise all or part of the Optionee's Option(s) at any time
before the expiration of such Option(s) under the preceding sentence, but only
to the extent that such Option(s) had become exercisable before the Optionee's
Service terminated. The balance of such Option(s) shall lapse when the
Optionee's Service terminates. In the event that the Optionee dies after the
termination of the Optionee's Service but before the expiration of the
Optionee's Option(s), all or part of such Option(s) may be exercised (prior to
expiration) by the executors or administrators of the Optionee's estate or by
any person who has acquired such Option(s) directly from the Optionee by
bequest, beneficiary designation or inheritance, but only to the extent that
such Option(s) had become exercisable before the Optionee's Service terminated.
(j) LEAVES OF ABSENCE. For purposes of Subsection (i) above, Service
shall, except to the extent determined by the Committee, be deemed to continue
while the Optionee is on military leave, sick leave or other bona fide leave of
absence (as determined by the Committee). The foregoing notwithstanding, in the
case of an ISO granted under the Plan, Service shall not be deemed to continue
beyond the first 90 days of such leave, unless the Optionee's reemployment
rights are guaranteed by statute or by contract.
(k) DEATH OF OPTIONEE. If an Optionee dies while the Optionee is in
Service, then the Optionee's Option(s) shall, except to the extent determined by
the Committee, expire on the earlier of the following dates:
(i) The expiration date determined
pursuant to Subsection (f) above; or
(ii) The date six months after the
Optionee's death.
All or part of the Optionee's Option(s) may be exercised at any time before the
expiration of such Option(s) under the preceding sentence by the executors or
administrators of the Optionee's estate or by any person who has acquired such
Option(s) directly from the Optionee by bequest, beneficiary designation or
inheritance, but only to the extent that such Option(s) had become exercisable
before the Optionee's death. The balance of such Option(s) shall lapse when the
Optionee dies.
(l) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by the Optionee's Option until such person is entitled, pursuant to the
terms of such Option, to receive such Shares. No adjustments shall be made,
except as provided in Section 9.
(m) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of Shares and at the same or a different Exercise
Price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, impair the Optionee's rights or increase
the Optionee's obligations under such Option.
(n) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise
of an Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any restrictions that may
apply to holders of Shares generally.
SECTION 8. PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares
issued under the Plan shall be payable in lawful money of the United States of
America at the time when such Shares are purchased, except as provided in
Subsections (b), (c), (d), (e) and (f) below.
(b) SURRENDER OF STOCK. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with Shares which have already been
owned by the Optionee or the Optionee's representative for more than six months
and which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.
(c) SERVICES RENDERED. At the discretion of the Committee, Shares may be
awarded under the Plan in consideration of services rendered to the Company or a
Subsidiary prior to the award. If Shares are awarded without the payment of a
Purchase Price in cash, the Committee shall make a determination (at the time of
the award) of the value of the services rendered by the Offeree and the
sufficiency of the consideration to meet the requirements of Section 6(c).
(d) PROMISSORY NOTE. To the extent that a Stock Option Agreement or Stock
Purchase Agreement so provides, a portion of the Exercise Price or Purchase
Price (as the case may be) of Shares issued under the Plan may be paid with a
full-recourse promissory note, provided that (i) the par value of such Shares
must be paid in lawful money of the United States of America at the time when
such Shares are purchased, (ii) the Shares are pledged as security for payment
of the principal amount of the promissory note and interest thereon and
(iii) the interest rate payable under the terms of the promissory note shall not
be less than the minimum rate (if any) required to avoid the imputation of
additional interest under the Code. Subject to the foregoing, the Committee (at
its sole discretion) shall specify the term, interest rate, amortization
requirements (if any) and other provisions of such note.
(e) EXERCISE/SALE. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
(f) EXERCISE/PLEDGE. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.
SECTION 9. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock into a lesser
number of Shares, a recapitalization, a spinoff, a reclassification or a similar
occurrence, the Committee shall make appropriate adjustments in one or more of
(i) the number of Shares available for future grants under Section 5, (ii) the
number of Shares covered by each outstanding Option or (iii) the Exercise Price
under each outstanding Option.
(b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a party
to a merger or
consolidation, outstanding Options shall be subject to the agreement of merger
or consolidation. Such agreement may provide for the assumption of outstanding
Options by the surviving corporation or its parent or for their continuation by
the Company (if the Company is the surviving corporation). In the event the
Company is not the surviving corporation and the surviving corporation will not
assume the outstanding Options, the agreement of merger or consolidation may
provide for payment of a cash settlement for exercisable Options equal to the
difference between the amount to be paid for one Share under such agreement and
the Exercise Price and for the cancellation of Options not exercised or settled,
in either case without the Optionees' consent.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 9, an
Optionee or Offeree shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
SECTION 10. SECURITIES LAWS.
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares comply with (or are exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange on which the
Company's securities may then be listed.
SECTION 11. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any right or Option granted under the Plan,
shall be construed to give any person any right to become, to be treated as, or
to remain an Employee. The Company and its Subsidiaries reserve the right to
terminate any person's Service at any time and for any reason.
SECTION 12. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's stockholders. In the event that the stockholders fail
to approve the Plan on or before the date 12 months after its adoption by the
Board of Directors, any ISOs already granted shall be treated as NSOs, and no
additional ISOs shall be granted after such date. The Plan shall terminate
automatically 10 years after its adoption by the Board of Directors and may be
terminated on any earlier date pursuant to Subsection (b) below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may at
any time and for any reason, amend, suspend or terminate the Plan. An amendment
of the Plan shall be subject to the approval the Company's stockholders only to
the extent required by applicable laws, regulations and rules, including the
rules of any applicable exchange.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.
SECTION 13. EXECUTION.
To record the amendment of the Plan by the Board of Directors on March 11,
1998, the Company has caused its authorized officer to execute the same.
VICAL INCORPORATED
By: /s/ Martha J. Demski
-------------------------