Document:

exv10w1

Exhibit 10.1

CONSULTING AGREEMENT

     This Consulting Agreement (“Agreement”) is made and entered into as of the 26th day of August,
2008, by and between Vermillion, Inc. (the “Company”), and Richard G. Taylor (“Consultant”). The
Company desires to retain Consultant as an independent contractor to perform consulting services
for the Company, and Consultant is willing to perform such services, on terms set forth more fully
below. In consideration of the mutual promises contained herein, the parties hereto (the
“Parties”) agree as follows:

     1. SERVICES AND COMPENSATION

          (a) Consultant agrees to perform for the Company the services (“Services”) described in
Exhibit A, attached hereto.

          (b) The Company agrees to pay Consultant the compensation set forth in Exhibit A for the
performance of the Services.

     2. CONFIDENTIALITY

          (a) Definition. “Confidential Information” means any information, technical data,
trade secrets or know-how that Consultant knows or should know to be considered to be proprietary
by the Company, including, but not limited to, research, product plans, products, services,
suppliers, customer lists and customers, prices and costs, markets, software, developments,
inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, licenses, finances, compensation packages, budgets
or other business information disclosed by the Company either directly or indirectly in writing,
orally or by drawings or through Consultant’s allowed observation of parts or equipment, or through
creation by Consultant in the course of providing the Services during the term of this Agreement.
Consultant also understands that Confidential Information includes, but is not limited to,
information pertaining to any aspects of the Company’s business that is either information not
known by actual or potential competitors of the Company or is proprietary information of the
Company or its customers or suppliers, whether of a technical nature or otherwise. Further,
Confidential Information, as defined herein, may include, but is not limited to, information
disclosed to Consultant prior to the formal incorporation of the Company and information disclosed
to the Company by third parties. Confidential Information does not include information that
Consultant can establish (i) was publicly known and made generally available in the public domain
prior to the time of disclosure to Consultant by the Company; (ii) becomes publicly known and made
generally available after disclosure to Consultant by the Company through no wrongful action or
inaction of Consultant; (iii) is in the possession of Consultant, without confidentiality
restrictions, at the time of disclosure to Consultant by the Company as shown by Consultant’s files
and records immediately prior to the time of disclosure; or (iv) has been approved for release by
the Company’s prior written authorization.

          (b) Non-Use and Non-Disclosure. Consultant will not, during or subsequent to the term
of this Agreement, use the Company’s Confidential Information for any purpose whatsoever other than
the performance of the Services on behalf of the Company. Consultant will not, during or
subsequent to the term of this Agreement, disclose the Company’s Confidential Information to any
third party. Consultant shall not reverse engineer, disassemble or decompile any prototypes,
software or other tangible objects, that embody the Company’s Confidential Information. Consultant
further agrees to take all reasonable precautions to prevent any unauthorized disclosure of such
Confidential Information including, but not limited to, having each employee of Consultant, if any,
with access to any Confidential Information, execute a nondisclosure agreement containing
provisions no less favorable to the Company and protective of Confidential Information than those
contained in this Agreement.

 

 

Consultant shall not make any copies of Confidential Information unless Consultant has
received prior written approval for such action from the Company; and in such event, Consultant
shall reproduce on any such approved copies, any of Company’s proprietary rights and
confidentiality notices in the same manner in which such notices were set forth in or on the
original. Consultant shall immediately notify the Company in the event of any unauthorized use or
disclosure of Confidential Information.

          (c) Former Employer’s Confidential Information. Consultant agrees that Consultant
will not, during the term of this Agreement, improperly use, disclose, or induce the Company to use
any proprietary information or trade secrets of any former or concurrent employer or other person
or entity, and that Consultant will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity. Consultant will indemnify the Company
and hold it harmless from and against all claims, liabilities, damages and expenses, including
reasonable attorneys fees and costs of suit, arising out of or in connection with any violation or
claimed violation of a third party’s rights resulting in whole or in part from the Company’s use of
the work product of Consultant under this Agreement.

          (d) Third Party Confidential Information. Consultant recognizes that the Company has
received and in the future will receive confidential or proprietary information of third parties
subject to a duty on the Company’s part to maintain the confidentiality of such information and to
use it only for certain limited purposes. Consultant agrees that Consultant owes the Company and
such third parties, during the term of this Agreement and thereafter, a duty to hold all such
confidential or proprietary information in the strictest confidence and not to disclose it to any
person, firm, corporation or other entity or to use it except as necessary in carrying out the
Services for the Company consistent with the Company’s agreement with such third party.

          (e) Return of Materials. All documents and other tangible objects containing or
representing Confidential Information and all copies thereof that are in the possession of
Consultant shall be and remain the property of the Company, and Consultant shall promptly return
such Confidential Information and all copies thereof to the Company upon termination of this
Agreement or upon the Company’s earlier request.

     3. OWNERSHIP

          (a) Assignment. Consultant agrees that all copyrightable material, notes, records,
drawings, designs, inventions, improvements, developments, discoveries and trade secrets
(collectively, “Inventions”) conceived, made or discovered by Consultant, solely or in
collaboration with others, during the period of this Agreement that relate in any manner to the
business of the Company that Consultant may be directed to undertake, investigate or experiment
with, or that Consultant may become associated with in work, investigation or experimentation in
the line of business of Company in performing the Services hereunder, are the sole property of the
Company. In addition, any Inventions made by Consultant that constitute copyrightable subject
matter shall be considered “works made for hire” as that term is defined in the United States
Copyright Act. Consultant hereby assigns fully (and agrees to further assign or cause to be
assigned, as necessary to effect such full assignment) to the Company all Inventions and any
copyrights, patents, mask work rights or other intellectual property rights relating thereto.

          (b) Further Assurances. Consultant agrees to assist Company, or its designee, at the
Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any
copyrights, patents, mask work rights or other intellectual property rights relating thereto in any
and all countries, including in the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths, assignments and all
other instruments that the Company shall deem necessary in order to apply for and obtain such
rights and in order to assign and convey to the Company, its successors, assigns and nominees the
sole and exclusive right, title and interest in and to such Inventions, and any copyrights,
patents, mask work rights or other intellectual property rights relating thereto. Consultant
further agrees that Consultant’s obligation to execute or cause to be executed any such instrument
or papers, when it is in Consultant’s power to do so, shall continue after the termination of this
Agreement.

          (c) Pre-Existing Materials. Consultant agrees that if in the course of performing the
Services, Consultant incorporates into any Invention developed hereunder any invention,
improvement,

 

 

development, concept, discovery or other proprietary information owned by Consultant or in
which Consultant has an interest, (i) Consultant shall inform Company, in writing before
incorporating such invention, improvement, development, concept, discovery or other proprietary
information into any Invention; and (ii) the Company is hereby granted and shall have a
nonexclusive, royalty-free, perpetual, irrevocable, worldwide license to make, have made, modify,
use and sell such item as part of or in connection with such Invention. In addition, Consultant
agrees that Consultant will promptly make full written disclosure to the Company, will hold in
trust for the sole right and benefit of the Company, and hereby assign to the Company, or its
designees, all Consultant’s right, title, and interest in and to any Inventions created within
three years after the termination of this Agreement that are based upon or derived from
Confidential Information, and Consultant agrees that such Inventions are and shall be the sole and
exclusive property of the Company. Nothing in the preceding sentence shall be construed to limit
Consultant’s obligations under Section 2 (“Confidentiality”) of this Agreement. Consultant
understands and agrees that the decision whether or not to commercialize or market any Invention is
within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be
due to Consultant as a result of the Company’s efforts to commercialize or market any Invention.
Consultant shall not incorporate any invention, improvement, development, concept, discovery or
other proprietary information owned by any third party into any Invention without Company’s prior
written permission.

          (d) Attorney in Fact. Consultant agrees that if the Company is unable because of
Consultant’s unavailability, dissolution, mental or physical incapacity, or for any other reason,
to secure Consultant’s signature to apply for or to pursue any application for any United States or
foreign jurisdiction’s patents or mask work or copyright registrations covering the Inventions
assigned to the Company above, then Consultant hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Consultant’s agent and attorney in fact, to
act for and in Consultant’s behalf and stead to execute and file any such applications and to do
all other lawfully permitted acts to further the prosecution and issuance of patents, copyright and
mask work registrations thereon with the same legal force and effect as if executed by Consultant.

     4. CONFLICTING OBLIGATIONS

     Consultant certifies that Consultant has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, or that would preclude Consultant from
complying with the provisions hereof, and further certifies that Consultant will not enter into any
such conflicting agreement.

     5. TERM AND TERMINATION

          (a) Term. This Agreement will commence on the date first written above and will
continue until the earlier of (i) 90 days from initial commencement of Services or (ii) termination
as provided below. The all terms and conditions of this Agreement may be extended for additional
90 periods by written mutual consent of both parties.

          (b) Termination. Either Party may terminate this Agreement for any reason or no
reason upon giving thirty (30) days prior written notice thereof to the other Party. Any such
notice shall be addressed to the other Party at the address shown below and shall be deemed given
upon delivery if personally delivered, or forty-eight (48) hours after deposited in the United
States mail, postage prepaid, registered or certified mail, return receipt requested. Either Party
may terminate immediately and without prior notice if the other Party is in breach of any material
provision of this Agreement, but such termination shall not preclude any other legal or equitable
remedy available to the terminating Party.

          (c) Survival. Upon such termination of this Agreement, all rights and duties of the
Parties toward each other shall cease except that:

               (i) the Company shall be obliged to pay, within thirty (30) days of the effective date of
termination, all amounts owing to Consultant for Services completed and accepted by the Company
prior to the termination date and related expenses, if any, in accordance with the provisions of
Section 1 (“Services and Compensation”) hereof; and

 

 

               (ii) Sections 2 (“Confidentiality”), 3 (“Ownership”) and 7 (“Independent Contractors”),
Section 9 (“Arbitration and Equitable Relief”) and such other provisions that by their terms extend
shall survive termination of this Agreement.

     6. ASSIGNMENT

     Neither this Agreement nor any right hereunder or interest herein may be assigned or
transferred by Consultant without the express written consent of the Company.

     7. INDEPENDENT CONTRACTOR

     The express intention of the Parties is that Consultant is an independent contractor to the
Company hereunder. Nothing in this Agreement shall in any way be construed to constitute
Consultant as an agent, employee or representative of the Company, but Consultant shall perform the
Services hereunder as an independent contractor. Consultant agrees to furnish (or reimburse the
Company for) all tools and materials necessary to accomplish this contract, and shall incur all
expenses associated with performance without reimbursement from the Company, except as expressly
provided on Exhibit A of this Agreement. Consultant acknowledges and agrees that Consultant is
obligated to report as income to all applicable taxing authorities all compensation received by
Consultant pursuant to this Agreement, and Consultant agrees to and acknowledges the obligation to
pay all self-employment and other taxes thereon. Consultant further agrees to indemnify and hold
harmless the Company and its directors, officers, and employees from and against all taxes, losses,
damages, liabilities, costs and expenses, including attorney’s fees and other legal expenses,
arising directly or indirectly from (i) any negligent, reckless or intentionally wrongful act of
Consultant or Consultant’s assistants, employees or agents, (ii) a determination by a court or
agency that the Consultant is not an independent contractor, or (iii) any breach by the Consultant
or Consultant’s assistants, employees or agents of any of the covenants contained in this
Agreement.

     8. BENEFITS

     Consultant acknowledges and agrees and the Parties’ intent hereunder is that Consultant
receive no Company-sponsored benefits from the Company either as a Consultant or an employee. Such
benefits include, but are not limited to, paid vacation, sick leave, medical insurance, and 401(k)
participation. If Consultant is reclassified by a state or federal agency or court as an employee,
the Company may elect to have Consultant become a reclassified employee, receiving no benefits
except those mandated by state or federal law, even if by the terms of the Company’s standard
benefit plans in effect at the time of such reclassification Consultant would otherwise be eligible
for such benefits.

     9. ARBITRATION AND EQUITABLE RELIEF

          (a) Disputes. Except as provided in Section 9(d) below, the Company and Consultant
agree that any dispute or controversy arising out of, relating to or in connection with the
interpretation, validity, construction, performance, breach or termination of this Agreement shall
be settled by binding arbitration to be held in Fremont, California in accordance with the
Commercial Arbitration Rules, supplemented by the Supplemental Procedures for Large Complex
Disputes, of the American Arbitration Association as then in effect (the “Rules”). The arbitrator
may grant injunctions or other relief in such dispute or controversy. The decision of the
arbitrator shall be final, conclusive and binding on the Parties to the arbitration. Judgment may
be entered on the arbitrator’s decision in any court of competent jurisdiction.

          (b) Consent to Personal Jurisdiction. The arbitrator(s) shall apply California law to
the merits of any dispute or claim, without reference to conflicts of law rules. Consultant hereby
consents to the personal jurisdiction of the state and federal courts located in California for any
action or proceeding arising from or relating to this Agreement or relating to any arbitration in
which the Parties are participants.

          (c) Equitable Relief. The Parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or conservatory relief,
as necessary, without breach of this arbitration provision and without abridgment of the powers of
the arbitrator. Consultant further agrees, for the purposes of this Section (9)(c) and Section
9(a) of this Agreement, that any breach of the covenants

 

 

set forth in Sections 2 (“Confidentiality”) and 3 (“Ownership”) of this Agreement would cause
the Company irreparable injury for which it would not have an adequate remedy at law. Accordingly,
Consultant agrees that if Consultant breaches Sections 2 (“Confidentiality”) and 3 (“Ownership”) of
this Agreement, the Company will be entitled, in addition to any other right or remedy available,
to temporary or preliminary equitable relief (including, but not limited to, a temporary
restraining order or a preliminary injunction) from a court of competent jurisdiction restraining
such breach or threatened breach and final and permanent equitable relief (including, but not
limited to, the granting of a permanent injunction and the ordering of specific performance) from
the arbitrator restraining such breach or threatened breach.

          (d) Acknowledgment. CONSULTANT HAS READ AND UNDERSTANDS SECTION 9 (“ARBITRATION AND
EQUITABLE RELIEF”), WHICH DISCUSSES ARBITRATION. CONSULTANT UNDERSTANDS THAT BY SIGNING THIS
AGREEMENT, CONSULTANT AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR
TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS PROVIDED IN SECTION 9 (c), AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF CONSULTANT’S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP BETWEEN THE PARTIES.

     10. GOVERNING LAW

     This Agreement shall be governed by the internal substantive laws, but not the choice of law
rules, of the state of California.

     11. ENTIRE AGREEMENT

     This Agreement is the entire agreement of the Parties and supersedes any prior agreements
between them, whether written or oral, with respect to the subject matter hereof. No waiver,
alteration, or modification of any of the provisions of this Agreement shall be binding unless in
writing and signed by duly authorized representatives of the Parties hereto.

     12. ATTORNEY’S FEES

     In any court action at law or equity that is brought by one of the Parties to enforce or
interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable
attorney’s fees, in addition to any other relief to which that party may be entitled.

     13. SEVERABILITY

     If one or more of the provisions in this Agreement are deemed void by law, then the remaining
provisions will continue in full force and effect.

     14. TITLES AND SUBTITLES

     The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.

 

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 
	VERMILLION, INC.	 	 	 	 	 	 
	6611 Dumbarton Circle	 	 	 	 	 	 
	Fremont, CA 94555	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gail Page
	 	 	 	By:
	 	/s/ Richard G. Taylor
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Gail Page
	 	 	 	 	 	Name: Richard G. Taylor
	 

	 	Title: President & Chief Executive Officer
	 	 	 	 	 	Date: 6/26/08
	 
	 	 	 	 	 	 	 	 
	Date: ____________________	 	 	 	 	 	 

 

 

EXHIBIT A

SERVICES AND COMPENSATION

     1. SERVICES — Senior Finance Consultant/Interim Chief Financial Officer: responsible
for managing/overseeing all financial activities and contributing to strategic organizational
initiatives of the Company. The CFO provides leadership and coordination in the administrative,
accounting and budgeting efforts of the company, including external financial reporting and
compliance requirements.

     2. COMPENSATION

          (a) $1,000.00 per day (for work in excess of 5 hours per day) for services performed. $125.00
per hour for work less than 5 hours per day. $62.50 per hour for travel time.

          (b) The Company shall reimburse Consultant for all reasonable travel and living expenses
incurred by Consultant in performing Services pursuant to this Agreement, provided Consultant
receives written consent from an authorized officer of the Company prior to incurring any such
expenses exceeding $2,500.

          (c) Consultant shall submit all statements for Services and expenses in a form prescribed by
the Company every two weeks and such statement shall be approved by the Company.

          (d) Consultant invoices will be paid by the Company within ten (10) days of receipt of each
invoice.exv10w1

Exhibit 10.1

VERMILLION, INC.

SEVERANCE AGREEMENT

     SEVERANCE AGREEMENT (“Agreement”) made this ___day of ___, 2008 (the “Effective Date”),
between Vermillion, Inc. (“Company”) and [     ] (“Executive,” and together with the Company,
the “Parties”).

     WHEREAS, Executive is a key executive of the Company and the Company’s Board of Directors (the
“Board”), or a duly-authorized committee thereof, has determined that it is in the best interests
of the Company to encourage Executive’s continued employment with, and dedication to, the Company
in the face of potentially distracting circumstances arising from the possibility of a future,
though presently unanticipated, “Change in Control” (as defined below), or upon a termination
without “Cause” (as defined below) or for “Good Reason” (as defined below);

     NOW, THEREFORE, the Parties agree as follows:

     1. Term. The term of this Agreement shall be for a period commencing on the Effective
Date and ending on the earlier of (a) the date twelve (12) months after the Effective Date,
including any extensions provided for herein, and (b) the date of Executive’s “Separation from
Service” (as defined in Section 2(e)) for any reason. If Executive has not incurred a Separation
from Service before the date determined by Section 1(a) hereof, this Agreement shall be
automatically renewed for one additional year on such date, and each annual anniversary thereof to
follow, unless the Company gives contrary written notice to Executive at least thirty (30) days
before any such renewal date. References herein to the term of this Agreement shall include the
initial term and any additional years for which this Agreement is renewed.

     2. Definitions. For purposes of this Agreement, the terms below that begin with
initial capital letters within this Agreement shall have the specially defined meanings set forth
below (unless the context clearly indicates a different meaning).

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

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

               (ii) repeated negligence in the performance of Executive’s duties or nonperformance or
misperformance of such duties that in the good faith judgment of the Company’s Board of Directors
adversely affects the operations or reputation of the Company;

               (iii) 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;

1

 

               (iv) 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;

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

               (vi) conviction by or entry of a plea of guilty or nolo contendere, in a court of competent
and final jurisdiction, which constitutes a felony in the jurisdiction involved; or

               (vii) 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.

          (b) “Change in Control” means:

               (i) 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

               (ii) 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

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

          (c) “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

          (d) “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 such event:

               (i) a material and adverse change in Executive’s title or duties, including a change in
reporting relationship; or

2

 

               (ii) the Company requiring Executive to relocate to a location that is more than fifty (50)
miles away from Executive’s current principal location in Fremont, California.

In addition, Executive must actually terminate Executive’s employment with the Company within two
years following the initial existence of the condition described above in (i) or (ii) giving rise
to Good Reason.

          (e) “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 twenty percent (20%) of
the average level of bona fide services performed by Executive (whether as an employee or
independent contractor) over the immediately preceding thirty-six (36) month period (or the full
period of services to the Company if Executive has been providing services to the Company for less
than thirty six (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 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.

     3. Severance Benefits and Conditions.

          (a) Termination without Cause or for Good Reason. In the event the Company
terminates Executive’s employment for reasons other than for Cause or for Good Reason, and
provided that Executive signs and does not revoke a standard release of all claims against the
Company, in a form reasonably satisfactory to the Company, and does not breach any material
surviving provision of this Agreement or the PIIA, Executive shall receive, subject to Section 5:

               (i) continued payment of Executive’s base salary, as then in effect, payable over a period of
[          ] months following the date of termination (the “Severance Period”), to be paid periodically
in accordance with the Company’s standard payroll practices;

               (ii) immediate, accelerated vesting of twenty four (24) months of any options previously
granted by the Company to Executive; and

3

 

               (iii) continuation of Company health and dental benefits through COBRA premiums paid by the
Company directly to the COBRA administrator during the Severance Period; provided, however, that
such premium payments shall cease prior to the end of the Severance Period if Executive commences
other employment and receives reasonably comparable or greater health and dental benefits.

     Executive will not be eligible for any salary, bonus, vesting of stock options or
other benefits not described above after termination of employment, except as may be required by
law.

          (b) Termination after Change in Control. If Executive’s employment is terminated by
the Company for reasons other than for Cause or by Executive for Good Reason within the twelve (12)
month period following a Change in Control, then, in addition to the severance obligations due to
Executive under Section 3 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.

     4. Employment, Confidential Information and Invention Assignment Agreement. As a
condition of this Agreement, Executive shall complete, sign and return the Company’s PIIA.

     5. 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”),
except to the extent otherwise specifically provided in a written agreement with the Company.
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 Separation from Service 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.

     6. 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 compensation

4

 

and other benefits paid to Executive by the Company, at present and in the future, Executive
aggress that any and all controversies, claims, or disputes with anyone (including the Company and
any employee, officer, director, or benefit plan of the Company in their capacity as such or
otherwise) arising out of, relating to, or resulting from 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 pursuant to California 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 of
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 the Executive.

          (b) Executive aggress 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 aggress that the parties
are entitled to adequate discovery and 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, unless such would cause
undue hardship to the Executive. Executive agrees that the arbitrator shall administer and conduct
any arbitration in a manner 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 and
subject to limited judicial review where provided by law.

          (c) 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
reasonable and 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.

          (d) 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

5

 

therefore 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, consistent with applicable law.

          (e) 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.

          (f) 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.

     7. Entire Agreement. All oral or written agreements or representations express or
implied, with respect to the subject matter of this Agreement are set forth in this Agreement.
This Agreement contains the entire understanding between the parties hereto and supersedes any
prior employment or change-in-control protective agreement between the Company or any predecessor
and Executive, except that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided. No provision of this Agreement
shall be interpreted to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.

     8. Notices. 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.

47350 Fremont Blvd.

Fremont, California 94538

If to the Executive:

[          ]

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

     10. 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.

     11. Non-Disclosure. Unless required by law or to enforce this Agreement, the parties
hereto shall not disclose the existence of this Agreement or the underlying terms to any third
party, other than their representatives who have a need to know such matters.

     12. 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
deemed exercised 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.

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

     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 a sale of all or substantially all
of the Company’s assets.

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     IN WITNESS WHEREOF, the Company and Executive have executed and entered into this Agreement
effective as of the date first shown above.

	 	 	 	 	 
	Date:  _________________, 2008       	VERMILLION, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Gail Page 	 
	 	 	Title:  	President 	 
	 
	 	 	 
	Date:  _________________, 2008 	 	 
	 	[          ] 	 
	 	 	 
	 

8

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