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Exhibit 10.1

 

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EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) between Vermillion, Inc., a
Delaware corporation (the “Company”), and Laura Miller (“Executive,” and
together with the Company, the “Parties”) is effective as of Executive’s first
day of employment (the “Effective Date”).

 

WHEREAS, the Company and Executive desire to enter into a Employment Agreement;

NOW, THEREFORE, the Parties agree as follows:

1.

Position.  The Company will employ Executive as its Senior Vice President of
Sales and Customer Experience on January 7th, 2015.  In this position, Executive
will be expected to devote Executive’s full business time, attention and
energies to the performance of Executive’s duties with the Company.  Executive
may devote time to outside Board or advisory positions as pre-approved by the
Company’s Board of Directors.  Executive will render such business and
professional services in the performance of such duties, consistent with
Executive’s position within the Company, as shall be reasonably assigned to
Executive by the Company’s CEO or Board of Directors. Executive may perform his
duties and responsibilities principally from Breaux Bridge, Louisiana, USA, but
will travel as needed, including to Austin, Texas and to collaborator and
partner locations, academic medical centers, conferences, and other locations as
necessary or advisable in performance of Executive’s duties.

2.

Compensation.  The Company will pay Executive a base salary of $250,000 on an
annualized basis, payable in accordance with the Company’s standard payroll
policies, including compliance with applicable tax withholding requirements.  In
addition, Executive will be eligible for a bonus of up to 40% of Executive’s
base salary (prorated for partial years) for achievement of reasonable
performance-related goals to be defined by the Company’s CEO or Board of
Directors. The exact payment terms of a bonus, if any, are to be set by the
Compensation Committee of the Board of Directors, in its sole discretion.  Any
such bonus will be payable to Executive within 30 days of receipt by the
Compensation Committee of the Board of Directors of the Company’s final year-end
financial statements.

On or as soon as administratively practicable after the Effective Date, the
Company shall grant to Executive a stock option award with respect to 150,000
shares of common stock of the Company, subject to the terms and conditions of
the Company’s Amended and Restated 2010 Stock Incentive Plan (the “Stock
Incentive Plan”) and a stock option award agreement in a form substantially
similar to that used by the Company for other senior executives of the Company
(the “Option”).  The Option shall be granted as an incentive stock option to the
maximum extent possible in accordance with the limitations set forth in Section
422 of the Internal Revenue Code,

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and the remainder of the Option shall be granted as a nonqualified stock
option.  The Option shall have a per share exercise price equal to the closing
price of a share of common stock of the Company as of the date of grant and,
except as otherwise provided in the Stock Incentive Plan or the stock option
award agreement, 1/4th of the shares subject to the Option shall become vested
and exercisable on the first anniversary date of Executive’s first day of
employment and then the remainder 1/36th monthly thereafter over a period of 36
consecutive months, subject to Executive’s continued employment with the Company
through each such anniversary date.  To the extent the Option is vested and
exercisable as of the date of Executive’s termination of employment, the Option
shall remain exercisable for the period prescribed by the terms of the stock
option award agreement; provided that if Executive’s employment is terminated by
the Company without Cause or Executive resigns for Good Reason, as such terms
are defined below, the Option shall remain exercisable until the earliest to
occur of (i) the 12-month anniversary of the date of Executive’s termination of
employment, (ii) the date on which the Options would have expired if Executive’s
employment had continued through the full term of the Option and (iii) the date
on which Executive breaches this Agreement, the PIIA or any other agreement
between Executive and the Company or any of its affiliates.  

3.

Benefits.  During the term of Executive’s employment, Executive will be entitled
to the Company’s standard benefits covering employees at Executive’s level,
including the Company’s group medical, dental, vision and term life insurance
plans, section 125 plan, and 401(k) plan, as such plans maybe in effect from
time to time, subject to the Company’s right to cancel or change the benefit
plans and program it offers to its employees at any time.

4.

At-Will Employment.  Executive’s employment with the Company is for an
unspecified duration and constitutes “at will” employment.  This employment
relationship may be terminated at any time, with or without good cause or for
any or no cause, at the option either of the Company or Executive, with or
without notice.

5.

Termination without Cause or for Good Reason.  In the event the Company
terminates Executive’s employment for reasons other than for Cause (as defined
below) or Executive terminates his employment for Good Reason (as defined below)
at any time following the Effective Date, and provided that Executive signs and
does not revoke a standard separation agreement release of all claims against
the Company, in a form reasonably satisfactory to the Company, does not breach
any provision of this Agreement (including but not limited to Section 10 and
Section 11 hereof), and continues to comply with the PIIA, as hereinafter
defined, Executive shall be entitled to receive, subject to Section 13 below:

(a)continued payment of Executive’s base salary as then in effect for a period
of nine (9) months following the date of termination (the “Severance Period”),
to be paid periodically in accordance with the Company’s standard payroll
practices, provided that you shall immediately repay to the Company any amounts
that you receive hereunder if within sixty days following termination of your
employment you either have failed to execute the standard release described
above or have revoked the general release after you execute it; and

(b)continuation of Company health and dental benefits through COBRA premiums
paid by the Company directly to the COBRA administrator during the Severance

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Period; provided, however, that such premium payments shall cease prior to the
end of the Severance Period if Executive commences other employment with
reasonably comparable or greater health and dental benefits.

Executive will not be eligible for any bonus or other benefits not described
above after termination, except as may be required by law.

6.

Termination after Change of Control.  If Executive’s employment is terminated by
the Company for reasons other than for Cause (as defined below) or by Executive
for Good Reason (as defined below) within the twelve (12) month period following
a Change of Control (as defined below), then, in addition to the severance
obligations due to Executive under Section 5 above, one-hundred percent (100%)
of any then-unvested shares under Company stock options then held by Executive
will vest upon the date of such termination and the period of time for their
exercise will be at the discretion of the Company, provided that no option shall
be exercisable after expiration of its original term. It may very well be
necessary for the Executive to exercise such shares on the day of Change in
Control, and the Company shall use its best efforts to provide Executive with a
reasonable period of advance written notice in such event.

7.

Definitions.  For purposes of this Agreement:

“Cause” means termination of employment by reason of Executive’s:

material breach of this Agreement, the Proprietary Information and Inventions
Agreement entered into between Executive and the Company (the “PIIA”) or any
other confidentiality, invention assignment or similar agreement with the
Company;

repeated negligence in the performance of duties or nonperformance or
misperformance of such duties that in the good faith judgment of the Board of
Directors of the Company adversely affects the operations or reputation of the
Company;

refusal to abide by or comply with the good faith directives of the Company’s
CEO or Board of Directors or the Company’s standard policies and procedures,
which actions continue for a period of at least ten (10) days after written
notice from the Company;

violation or breach of the Company’s Code of Ethics, Financial Information
Integrity Policy, Insider Trading Compliance Program, or any other similar code
or policy adopted by the Company and generally applicable to the Company’s
employees, as then in effect;

willful dishonesty, fraud, or misappropriation of funds or property with respect
to the business or affairs of the Company;

conviction by or entry of a plea of guilty or nolo contendere, in a court of
competent and final jurisdiction, for any crime which constitutes a felony in
the jurisdiction involved; or

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abuse of alcohol or drugs (legal or illegal) that, in the Board of Director’s
reasonable judgment, materially impairs Executive’s ability to perform
Executive’s duties.

“Change of Control” means:

after the date hereof, any “person.” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the total voting power represented by the Company’s then outstanding
voting securities; or

the date of the consummation of a merger or consolidation of the Company with
any other corporation or entity that has been approved by the stockholders of
the Company, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or

the date of the consummation of the sale or disposition of all or substantially
all of the Company’s assets.

“Good Reason” means, the occurrence of any one or more of the following events,
without Executive’s consent, which continues uncured for a period of not less
than thirty (30) days following written notice given by Executive to the Company
within thirty (30) days following the occurrence of a material and adverse
change in Executive’s title or duties (excluding any changes in such duties
resulting from the Company becoming part of a larger entity pursuant to a Change
of Control) or in Executive’s base salary.

In addition, Executive must actually terminate Executive’s employment with the
Company within six months following the initial existence of the condition
described above giving rise to Good Reason.

 

“Separation from Service” or “Separates from Service” shall mean Executive’s
termination of employment, as determined in accordance with Treas. Reg. §
1.409A-1(h).  Executive shall be considered to have experienced a termination of
employment when the facts and circumstances indicate that Executive and the
Company reasonably anticipate that either (i) no further services will be
performed for the Company after a certain date, or (ii) that the level of bona
fide services Executive will perform for the Company after such date (whether as
an employee or as an independent contractor) will permanently decrease to no
more than 20% of the average level of bona fide services performed by Executive
(whether as an employee or independent contractor) over the immediately
preceding 36-month period (or the full period of services to the Company if
Executive has been providing services to the Company for less than 36
months).  If Executive is on military leave, sick leave, or other bona fide
leave of absence, the employment relationship between Executive and the Company
shall be treated as continuing intact, provided that the period of such leave
does not exceed six months, or if longer, so long as Executive retains a right
to reemployment with the Company under an applicable statute or by

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contract.  If the period of a military leave, sick leave, or other bona fide
leave of absence exceeds six months and Executive does not retain a right to
reemployment under an applicable statute or by contract, the employment
relationship shall be considered to be terminated for purposes of this Agreement
as of the first day immediately following the end of such six-month period.  In
applying the provisions of this paragraph, a leave of absence shall be
considered a bona fide leave of absence only if there is a reasonable
expectation that Executive will return to perform services for the Company.

8.

Employment, Confidential Information and Invention Assignment Agreement.  As a
condition of Executive’s employment, Executive shall complete, sign and return
the Company’s standard form of Proprietary Information and Inventions Agreement.

9.

Non Contravention.  Executive represents to the Company that Executive’s signing
of this Agreement, the PIIA, the issuance of stock options to Executive, and
Executive’s commencement of employment with the Company does not violate any
agreement Executive has with Executive’s previous employer and Executive’s
signature confirms this representation.

10.

Conflicting Employment.  Executive agrees that, during the term of Executive’s
employment with the Company and during the Severance Period, Executive will not
engage in any other employment, occupation, consulting or other business
activity competitive with or directly related to the business in which the
Company is now involved or becomes involved during the term of Executive’s
employment, nor will Executive engage in any other activities that conflict with
Executive’s obligations to the Company. Executive acknowledges that compliance
with the obligations of this paragraph is a condition to Executive’s right to
receive the severance payments set forth in paragraph 5 above.

11.

Nonsolicitation.  From the date of this Agreement until 12 months after the
termination of this Agreement (the “Restricted Period”), Executive will not,
directly or indirectly, solicit or encourage any employee or contractor of the
Company or its affiliates to terminate employment with, or cease providing
services to, the Company or its affiliates. During the Restricted Period,
Executive will not, whether for Executive’s own account or for the account of
any other person, firm, corporation or other business organization, solicit or
interfere with any person who is or during the period of Executive’s engagement
by the Company was a collaborator, partner, licensor, licensee, vendor,
supplier, customer or client of the Company or its affiliates to the Company’s
detriment. Executive acknowledges that compliance with the obligations of this
paragraph is a condition to Executive’s right to receive the severance payments
set forth in paragraph 5 above.

12.

Arbitration and Equitable Relief.

(a) In consideration of Executive’s employment with the Company, its promise to
arbitrate all employment related disputes and Executive’s receipt of the
compensation and other benefits paid to Executive by the Company, at present and
in the future, EXECUTIVE AGREES THAT ANY AND ALL CONTROVERSIES, CLAIMS, OR
DISPUTES WITH ANYONE (INCLUDING THE COMPANY AND ANY EMPLOYEE, OFFICER, DIRECTOR,
STOCKHOLDER OR. BENEFIT PLAN OF THE COMPANY IN THEIR CAPACITY AS SUCH OR
OTHERWISE) ARISING OUT OF, RELATING TO, OR RESULTING FROM

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EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY, INCLUDING ANY BREACH OF THIS AGREEMENT, SHALL BE
SUBJECT TO BINDING ARBITRATION UNDER THE ARBITRATION RULES SET FORTH IN TEXAS
CIVIL PRACTICE AND REMEDY CODE SECTION 171.001 THROUGH SECTION 171.098 (THE
“RULES”) AND PURSUANT TO TEXAS LAW. Disputes which Executive agrees to
arbitrate, and thereby agree to waive any right to a trial by jury, include any
statutory claims under state or federal law, including, but not limited to,
claims under Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the
Older Workers Benefit Protection Act, the California Fair Employment and Housing
Act, the California Labor Code, claims of harassment, discrimination or wrongful
termination and any statutory claims. Executive further understands that this
agreement to arbitrate also applies to any disputes that the Company may have
with Executive,

Executive agrees that any arbitration will be administered by the American
Arbitration Association (“AAA”) and that the neutral arbitrator will be selected
in a manner consistent with its National Rules for the Resolution of Employment
Disputes. Executive agrees that the arbitrator shall have the power to decide
any motions brought by any party to the arbitration, including motions for
summary judgment and/or adjudication and motions to dismiss and demurrers, prior
to any arbitration hearing. Executive also agrees that the arbitrator shall have
the power to award any remedies, including attorneys’ fees and costs, available
under applicable law. Executive understands the Company will pay for any
administrative or hearing fees charged by the arbitrator or AAA except that
Executive shall pay the first $125.00 of any filing fees associated with any
arbitration Executive initiates. Executive agrees that the arbitrator shall
administer and conduct any arbitration in a mariner consistent with the Rules
and that to the extent that the AAA’s National Rules for the Resolution of
Employment Disputes conflict with the Rules, the Rules shall take precedence.
Executive agrees that the decision of the arbitrator shall be in writing.

Except as provided by the Rules and this Agreement, arbitration shall be the
sole, exclusive and final remedy for any dispute between Executive and the
Company. Accordingly, except as provided for by the Rules and this Agreement,
neither Executive nor the Company will be permitted to pursue court action
regarding claims that are subject to arbitration. Notwithstanding, the
arbitrator will not have the authority to disregard or refuse to enforce any
lawful company policy, and the arbitrator shall not order or require the Company
to adopt a policy not otherwise required by law which the Company has not
adopted.

In addition to the right under the Rules to petition the court for provisional
relief, Executive agrees that any party may also petition the court for
injunctive relief where either party alleges or claims a violation of the PIIA
between Executive and the Company or any other agreement regarding trade
secrets, confidential information, nonsolicitation or Labor Code §2870.
Executive understands that any breach or threatened breach of such an agreement
will cause irreparable injury and that money damages will not provide an
adequate remedy therefor and both parties hereby consent to the issuance of an
injunction. In the event either party seeks injunctive relief, the prevailing
party shall be entitled to recover reasonable costs and attorneys fees.

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Executive understands that this Agreement does not prohibit Executive from
pursuing an administrative claim with a local, state or federal administrative
body such as the Department of Fair Employment and Housing, the Equal Employment
Opportunity Commission or the Workers’ Compensation Board. This Agreement does,
however, preclude Executive from pursuing court action regarding any such claim.

Executive acknowledges and agrees that Executive is executing this Agreement
voluntarily and without any duress or undue influence by the Company or anyone
else. Executive further acknowledges and agrees that Executive has carefully
read this Agreement and that Executive has asked any questions needed for
Executive to understand the terms, consequences and binding effect of this
Agreement and fully understand it, including that Executive is waiving
Executive’s right to a jury trial. Finally, Executive agrees that Executive has
been provided an opportunity to seek the advice of an attorney of Executive’s
choice before signing this Agreement.

13.

Taxes.  All payments made pursuant to this Agreement will be subject to
withholding of applicable taxes.  Notwithstanding the foregoing, Executive is
solely responsible and liable for the satisfaction of any federal, state,
province or local taxes that may arise with respect to this Agreement (including
any taxes arising under Section 409A of the Internal Revenue Code (the
“IRC”).  Neither the Company nor any of its employees, officers, directors, or
service providers shall have any obligation whatsoever to pay such taxes, to
prevent Executive from incurring them, or to mitigate or protect Executive from
any such tax liabilities.  Notwithstanding anything in this Agreement to the
contrary, if any amounts that become due under this Agreement on account of
Executive’s termination of employment constitute “nonqualified deferred
compensation” within the meaning of IRC Section 409A, payment of such amounts
shall not commence until Executive incurs a Separation from Service.  If, at the
time of Executive’s termination of employment under this Agreement, Executive is
a “specified employee” (within the meaning of IRC Section 409A), any amounts
that constitute “nonqualified deferred compensation” within the meaning of IRC
Section 409A that become payable to Executive on account of Executive’s
Separation from Service (including any amounts payable pursuant to the preceding
sentence) will not be paid until after the end of the sixth calendar month
beginning after Executive’s Separation from Service (the “409A Suspension
Period”). Within 14 calendar days after the end of the 409A Suspension Period,
Executive shall be paid a lump sum payment in cash equal to any payments delayed
because of the preceding sentence. Thereafter, Executive shall receive any
remaining benefits as if there had not been an earlier delay.  Each payment due
under this Agreement is treated as a separate payment for purposes of Treasury
Regulations Sections 1.409A-1((b)(4)(F) and 1.409A-2(b)(2).

14.

Successors of the Company.  The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company. This Agreement shall be assignable by the
Company in the event of a merger or similar transaction in which the Company is
not the surviving entity, or of a sale of all or substantially all of the
Company’s assets.

15.

Enforceability; Severability.  If any provision of this Agreement shall be
invalid or unenforceable, in whole or in part, such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render
the same valid and enforceable, or shall be

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deemed excised from this Agreement, as the case may require, and this Agreement
shall be construed and enforced to the maximum extent permitted by law as if
such provision had been originally incorporated herein as so modified or
restricted, or as if such provision had not been originally incorporated herein,
as the case may be.

16.

Governing Law.  This Agreement shall be construed and enforced in accordance
with the laws of the State of Texas without giving effect to Texas choice of law
rules. This Agreement is deemed to be entered into entirely in the State of
Texas.  This Agreement shall not be strictly construed for or against either
party.

17.

No Waiver.  No waiver of any term of this Agreement constitutes a waiver of any
other term of this Agreement.

18.

Amendment To This Agreement.  This Agreement may be amended only in writing by
an agreement specifically referencing this Agreement, which is signed by both
Executive and an executive officer or member of the Board of Directors of the
Company authorized to do so by the Board by resolution.

19.

Headings.  Section headings in this Agreement are for convenience only and shall
be given no effect in the construction or interpretation of this Agreement.

20.

Notice.  All notices made pursuant to this Agreement, shall be given in writing,
delivered by a generally recognized overnight express delivery service, and
shall be made to the following addresses, or such other addresses as the Parties
may later designate in writing:

If to the Company:

Vermillion, Inc.

12117 Bee Caves Road, Building Three, Suite 100

Austin, Texas, 78738

 

If to Executive:

 

Laura Miller

XXXXXXXXX

XXXXXXXXX

 

21.

Expense Reimbursement.  The Company shall promptly reimburse Executive
reasonable business expenses incurred by Executive in furtherance of or in
connection with the performance of Executive’s duties hereunder, including
expenditures for travel, in accordance with the Company’s expense reimbursement
policy as in effect from time to time; provided that any and all reimbursements
hereunder shall be requested and made within one year after being incurred.

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22.

General; Conflict.  This Agreement and the PIIA, when signed by Executive, set
forth the terms of Executive’s employment with the Company and supersede any and
all prior representations and agreements, whether written or oral.

[Signature Page Follows]

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VERMILLION, INC.

a Delaware corporation

 

 

By:/s/ Valerie Palmieri

Name: Valerie Palmieri

Title:President & Chief Executive Officer

 

ACCEPTED AND AGREED TO this

7th day of January, 2015.

 

 

/s/ Laura Miller

Laura Miller

 

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