EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) between Vermillion, Inc., a Delaware corporation (the “ Company ”), and Valerie B. Palmieri (“ Executive ,” and together with the Company, the “ Parties ”) is effective as of January 1, 2015 (the “ Effective Date ”).  This Agreement amends and restates the Employment Agreement between the Parties, dated October 23, 2014.

WHEREAS, the Parties mutually desire to enter into this Agreement in order to establish the terms and conditions of the Executive’s employment with the Company on and after the Effective Date.

NOW, THEREFORE, the Parties agree as follows:

 

Executive will render such business and professional services in the performance of such duties, consistent with Executive’s positions within the Company, as shall be reasonably assigned to Executive by the Company’s Board of Directors. Executive may perform her duties and responsibilities from Monroe, Connecticut, but shall travel as needed, including to Austin, Texas, and to collaborator and partner locations, academic medical centers, banking and other 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 $375,000 on an annualized basis, payable in accordance with the Company’s standard payroll policies, including compliance

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with applicable tax withholding requirements. In addition, Executive will be eligible for a bonus of up to fifty percent (50%) of Executive’s base salary (prorated for partial years) for achievement of reasonable Company and individual performance-related goals to be defined by the Company’s 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, however it is agreed that if this Agreement is terminated by the Company without cause before the Executive has fully completed the performance-related goals she shall be paid, on a pro-rata basis, the bonus commensurate with the portion of the goals that have been achieved.     Except to the extent Executive elects to defer any such bonus under a plan established by the Company, such bonus will be payable to Executive within the earlier to occur of (i) 2½ months after the last day of the applicable performance period or (ii) 10 days after the effective date of a termination of Executive’s employment by the Company without Cause . 

On or as soon as administratively practicable after the Effective Date, the Company shall grant to Executive a stock option award with respect to 400,000 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, 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, 1/48 th of the shares subject to the Option shall become vested and exercisable on each monthly anniversary of the date of grant over a period of 48 consecutive months after the date of grant, subject to Executive’s continued employment by the Company as President and Chief Executive Officer through each such anniversary date.  To the extent the Option is vested and exercisable as of the date of Executive’s termination of employment as President and Chief Executive Officer, 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 not expire earlier than the earliest to occur of (i) the 12-month anniversary of the date of Executive’s termination of employment as President and Chief Executive Officer, (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 (i) the Company’s group health, life, short- and long-term disability, 401(k) and other employee benefit

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plans, as such plans may be in effect from time to time, subject to the Company’s right to cancel or change the benefit plans and programs it offers to its employees at any time, and (ii) paid time off in addition to standard holidays, in accordance with the Company’s policies in effect from time to 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 that the Company terminates Executive’s employment for reasons other than for Cause (as defined below) or Executive terminates her 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 releasing 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, Section 11 and Section 12 hereof), and continues to comply with the PIIA, as hereinafter defined, Executive shall be entitled to receive, subject to Section 14 below:

(i) continued payment of Executive’s base salary as then in effect for a period of twelve (12) months following the date of termination (the “ Severance Period ”), to be paid periodically in accordance with the Company’s standard payroll practices, provided that Executive shall immediately repay to the Company any amounts that she receives hereunder if within sixty (60) days following termination of her employment she either has failed to execute the standard release described above or has revoked the general release after she executes it;

(ii) 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 with reasonably comparable or greater health and dental benefits ; and

(iii) any vested and exercisable options to purchase common stock of the Company that are held by Executive as of the date of termination shall expire upon the earliest to occur of (i) the 12-month anniversary of the date of Executive’s termination of employment as President and Chief Executive Officer, (ii) the date on which such options would have expired if Executive’s employment had continued through the full term of such 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 .

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

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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 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. To the extent it is necessary for the Executive to exercise such options upon or before such Change of Control, the Company shall use its best efforts to provide Executive with a reasonable period of advance written notice of such requirement.

7. Definitions . For purposes of this Agreement:

 

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

(i) 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;

(ii) 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 , which actions or inactions continue for a period of at least ten (10) days after written notice from the Company ;  

(iii) refusal to abide by or comply with the good faith directives of the Company’s 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;

(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, for any crime 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 of Control ” means:

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(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 fifty percent (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) “ 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 (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; or

(ii) Executive being required to relocate to an office location more than fifty (50) miles from Executive’s current office in Monroe, Connecticut. Should Executive be required and agree to relocate from Executive’s current office in Monroe, Connecticut, all reasonable moving expenses to relocate Executive’s office and private residence shall be paid for and billed directly to Company, with all reimbursements being requested and made within one (1) year after being incurred.

In addition, Executive must actually terminate Executive’s employment with the Company within six (6) months following the initial existence of the condition described above in (i) and (ii) giving rise to Good Reason.  

(d) “ 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

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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 (6) 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 (6) 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 (1st) day immediately following the end of such six (6) month period. In applying the provisions of this Section, 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 .   Executive understands and agrees that the Company and its affiliates have legitimate interests in protecting their goodwill, relationships with customers, and in maintaining their trade secrets and other proprietary and confidential information, which are valuable assets of the Company and its affiliates.  As a condition of Executive’s employment, Executive shall complete, sign and return the Company’s standard form of PIIA.  Executive acknowledges and agrees that the PIIA and the provisions of Sections 10-12 of this Agreement are necessary and appropriate to protect the Company’s and its affiliates’ legitimate interests and are narrowly tailored to provide such protection.  Executive agrees and acknowledges that, in connection with Executive’s prior service to the Company, and her employment and unique relationship with the Company and its affiliates, Executive has had access to and become familiar with, and will continue to have access to and become familiar with, confidential and proprietary information and trade secrets belonging to the Company and its affiliates which Executive would not have otherwise had but for Executive’s employment with, or other service to, the Company or its affiliates. 

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 do not violate any agreement Executive has with any of Executive’s previous employers and Executive’s signature confirms this representation.

10. Conflicting Employment . Except as set forth in Section 1 of this Agreement, 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

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Executive engage in any other activities that conflict with Executive’s obligations to the Company. Executive acknowledges that compliance with the obligations of this Agreement is a condition to Executive’s right to receive the severance payments set forth in Section 5 above.

11. Nonsolicitation . From the Effective Date of this Agreement until twelve (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 Section is a condition to Executive’s right to receive and retain the severance payments set forth in Section 5 above.

12. Nondisparagement . From the Effective Date of this Agreement and surviving any termination for any reason, Executive will not disparage or defame, whether orally or in writing, whether directly or indirectly, whether truthfully or falsely, and whether acting alone or through any other person, the Company or its affiliates or their respective current or former directors, officers, employees, agents, successors or assigns (both individually or in their official capacities with the Company or its affiliates). Executive acknowledges that compliance with the obligations of this Section is a condition to Executive’s right to receive and retain the severance payments set forth in Section 5 above.

13. 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 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

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Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, and claims of harassment, discrimination or wrongful termination. Executive further understands that this agreement to arbitrate also applies to any disputes that the Company may have with Executive.

(b) 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 that Executive initiates. 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.

(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 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, nondisparagement 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.

(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

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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.

14. 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 (“ 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 (6th) calendar month beginning after Executive’s Separation from Service (the “ 409A Suspension Period ”). Within fourteen (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).

 

15. Liability Insurance . To the extent that the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Executive shall be covered by such policies in such a manner as to provide to Executive the same rights and benefits as are provided to the most favorably insured of the Company’s officers.

16. 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

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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.

17. Enforceability; Severability; Survival . 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 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. Sections 5-7, 10-14, 16-22 and 24 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination of Executive’s employment (without regard to the reason(s) for such termination).

18. Governing Law . This Agreement shall be construed and enforced in accordance with the laws of the State of Texas without giving effect to Texas’s 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.

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

20. 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.

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

22. 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, TX 78738

If to Executive:

Valerie B. Palmieri

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XXXXXX

XXXXXX

 

23. Expense Reimbursement . The Company shall promptly reimburse Executive for 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 (1) year after being incurred.

24. 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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SEPARATION AGREEMENT AND RELEASE

RECITALS

 

This Separation Agreement and Release (“Agreement”) is made by and between James T. LaFrance (“Employee”) and Vermillion, Inc. (“Vermillion” or the “Company”), collectively referred to as the (“Parties”):

WHEREAS, Employee is employed by the Company as its President and Chief Executive Officer;

WHEREAS, Employee has decided to resign from such employment effective as of the end of the day on December 31, 2014 (“Termination Date”);

WHEREAS, Employee will continue to serve as Chairman of the Board of Directors of the Company (the “Board”) following the Termination Date; and

WHEREAS, the Parties, and each of them, wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that Employee may have against the Company as defined herein, including, but not limited to, any and all claims arising or in any way relating to Employee’s employment with, or separation from, the Company;

NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:

COVENANTS  

 

1.  Consideration . I n exchange for the execution and agreement by Employee to abide by the terms of this Agreement, the Company and Employee agree that:

(a)  Employee shall be eligible to receive an annual bonus for the 2014 fiscal year, which shall be paid at the same time and pursuant to the same terms and conditions applicable to active employees of the Company, provided that such bonus shall not be paid later than March 15, 2015.

(b)  With respect to the options to purchase shares of common stock of the Company granted on April 23, 2014 only and held by Employee as of the Termination Date (“Options”), (i) each of the Options shall be vested and exercisable as of the Termination Date with respect to 25% of the aggregate number of shares subject to such Option as of the grant date, reduced by

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the number of any shares purchased pursuant to the exercise of such Option prior to the Termination Date, and such Option shall remain exercisable until the earlier to occur of (A) 30 days after the cessation of Employee’s continuous service with the Company as a director, employee or consultant and (B) 5:00 p.m., Eastern Time, on April 23, 2024, and (ii) each of the Options shall terminate as of the Termination Date with respect to 75% of the aggregate number of shares subject to such Option as of the grant date.

(c)  With respect to Employee’s continued service on the Board, as Chairman of the Board and on any duly established committee of the Board, Employee shall be eligible for such director compensation as shall be approved by the Board or the Compensation Committee of the Board. 

(d)  Except as expressly provided herein, Employee shall not be eligible for any severance pay or benefits in connection with his termination of employment with the Company, including without limitation any severance pay or benefits under the terms of the Employment Agreement between the Company and Employee dated April 23, 2014, as amended and restated (the “Employment Agreement”) or any severance plan or policy maintained by the Company.  The Company shall have the right to discontinue all amounts payable under this Agreement, to recover all payments previously made under this Agreement, and to obtain injunctive relief should Employee breach the terms and conditions of this Agreement, the Employment Agreement or the Confidentiality Agreement (as defined in Section 2) .  Employee hereby reaffirms and confirms that he remains subject to, and shall continue to comply with, Sections 8 through 13 of the Employment Agreement.  Employee agrees that he has no present or future right to employment with Company or any of the other Released Parties (as defined in Section 4) and will not apply for employment with any of them. As of the Termination Date, Employee hereby is removed from any and all officer, committee and other positions that Employee holds with the Company and, as applicable, its affiliates as of the Termination Date, except for Employee’s continued service on the Board.

2.  Confidential Information . Employee agrees to continue to maintain the confidentiality of all confidential information of the Company, and shall continue to abide by the terms of Proprietary Information and Inventions Agreement, which is incorporated herein by reference (“Confidentiality Agreement”). Employee acknowledges that, as of the date of this Agreement, he has not engaged in any conduct which violates the terms of the Confidentiality Agreement. Employee further agrees to return (not delete or destroy), and not retain any hard or electronic copies of, all Company property and data in his possession (including information stored on home computers, other computer media such as USB storage devices, and in Web accounts) on or before his final day of employment or service with the Company. By signing this Agreement and accepting the benefits hereunder, Employee certifies that he is in compliance with his obligations under this provision, and understands that his compliance with this provision was a material inducement to the Company providing him with the benefits described in this Agreement.

3.  Payment of Sums Owed . Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to him, once the aforementioned amounts are paid.

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4.  Release of Claims . Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to him by the Company. Employee, on his own behalf, and on behalf of his respective heirs, family members, executors, and assigns, hereby fully and forever releases the Company and its officers, directors, employees, attorneys, investors, agents, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns (the “Released Parties”), from any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that he may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation:

(a) any and all claims relating to or arising from his employment relationship with the Company and the termination of that relationship;

(b) any and all claims under the law of any jurisdiction including, but not limited to, wrongful discharge of employment, constructive discharge from employment, termination in violation of public policy, discrimination (including age discrimination), retaliation, failure to accommodate a disability, breach of contract, both express and implied, breach of a covenant of good faith and fair dealing, both express and implied, promissory estoppel, negligent or intentional infliction of emotional distress, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false imprisonment, and conversion;

(c) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, and the Employee Retirement Income Security Act of 1974;  

(d) any and all claims for violation of the federal, or any state, constitution;

(e) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

(f) any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

(g) any and all claims for attorneys’ fees and costs.

The Parties agree that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement. The Released Parties are intended to be third-party beneficiaries of this release, and this release may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Released Parties hereunder.  Employee understands that the payments or benefits paid or provided to him under

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this Agreement represent consideration for signing this release and are not salary, wages or benefits to which he was already entitled.  Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or any of its affiliates.  Employee will not receive the payments and benefits pursuant to this Agreement unless he executes this release within 21 days after it has been provided to him for review and does not revoke this release within seven (7) days after he has executed it.

5.  Claims Not Released . This Agreement does not release any claims that the law does not permit Employee to release.

6.  Pursuit of Claims . Employee acknowledges that he has not filed, initiated, or prosecuted (or caused to be filed, initiated, or prosecuted) any lawsuit, complaint, charge, action, compliance review, investigation, or proceeding with respect to any claim this Release purports to waive, and promises never to do so in the future, whether as a named plaintiff, class member, or otherwise. However, the preceding sentence shall not preclude Employee from filing or prosecuting a charge with any administrative agency with respect to any such claim as long as he does not seek any damages, remedies, or other relief for himself personally, which Employee promises not to do, and any right to which Employee hereby waives. If Employee is ever awarded or recovers any amount as to a claim he has purported to waive in this Release, Employee agrees that the amount of the award or recovery shall be reduced by the amounts he was paid under this Release, increased appropriately for the time value of money, using an interest rate of 10 percent per annum . To the extent such a setoff is not effected, Employee promises to pay, or assign to the Company his right to receive, the amount that should have been set off.

8.  Waiver of Known and Unknown Claims . Employee represents that he is not aware of any claim by him other than the claims that are released by this Agreement. Employee acknowledges that he has been advised by legal counsel and is familiar with the principle that:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Employee, being aware of this principle, agrees to expressly waive any rights he may have thereunder.

9.  No Cooperation . Employee agrees that he will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so. Employee further agrees both to immediately notify the Company upon receipt of any court order, subpoena, or any legal discovery device that seeks or might require the disclosure or production of the existence or terms of this Agreement, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or legal discovery device to the Company.

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10.  Non-Disparagement . Employee agrees to refrain from any defamation, libel, slander or disparagement of any of the Released Parties or tortious interference with the contracts and relationships of the Company.

11.  Tax Consequences . The Company makes no representations or warranties with respect to the tax consequences of the payment of any sums to Employee under the terms of this Agreement. Employee agrees and understands that he is responsible for payment, if any, of local, state and/or federal taxes on the sums paid hereunder by the Company and any penalties or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of any failure to pay federal or state taxes or damages sustained by the Company by reason of any such claims, including reasonable attorneys’ fees.

12.  No Admission of Liability . The Parties understand and acknowledge that this Agreement constitutes a compromise and settlement of disputed claims. No action taken by the Parties hereto, or either of them, either previously or in connection with this Agreement shall be deemed or construed to be:

(a) an admission of the truth or falsity of any claims heretofore made; or

(b) an acknowledgment or admission by either party of any fault or liability whatsoever to the other party or to any third party.

13.  Costs . The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement.

14.  Indemnification . Each of Employee and Company agrees to indemnify and hold harmless the other Party from and against any and all loss, costs, damages or expenses, including, without limitation, attorneys’ fees or expenses incurred by such other Party arising out of the breach of this Agreement by Employee or Company, or from any false representation made herein by Employee or the Company. The Parties further agree that in any legal proceeding, this Agreement may be pled by either the Employee or the Company as a complete defense (meaning that either Party may use this Agreement to demonstrate to a judge, jury, or any other deciding authority that the other Party has waived and released any and all claims they have against the other as of the Effective Date of this Agreement), or may be asserted by way of counterclaim or cross-claim.

15.  Authority . The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

16.  No Representations . Each Party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of

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this Agreement. Neither Party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.

17.  Severability . In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision so long as the remaining provisions remain intelligible and continue to reflect the original intent of the Parties.

18.  Entire Agreement . This Agreement, the Employment Agreement, the Confidentiality Agreement and, subject to Section 1 hereof, the Amended and Restated Vermillion, Inc. 2010 Stock Incentive Plan and the Vermillion, Inc. 2010 Stock Incentive Plan Stock Option Award Agreement between the Company and Employee, constitute the entire agreement and understanding between the Parties concerning the subject matter of this Agreement and all prior representations, understandings, and agreements concerning the subject matter of this Agreement have been superseded by this Agreement.  

19.  No Waiver . The failure of any Party to insist upon the performance of any of the terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms and conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms or conditions. This entire Agreement shall remain in full force and effect as if no such forbearance or failure of performance had occurred.

20.  No Oral Modification . Any modification or amendment of this Agreement, or additional obligation assumed by either party in connection with this Agreement, shall be effective only if placed in writing and signed by both Parties or by authorized representatives of each Party. No provision of this Agreement can be changed, altered, modified, or waived except by an executed writing by the Parties.

21.  Governing Law . This Agreement shall be deemed to have been executed and delivered within the State of Texas, and it shall be construed, interpreted, governed, and enforced in accordance with the laws of the State of Texas, without regard to conflict of law principles.

22.  Attorneys’ Fees . In the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs incurred in connection with such an action.

23.  Effective Date . This Agreement is effective immediately after having been signed by both Parties.

24.  Counterparts . This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

25.  Voluntary Execution of Agreement . This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:

(a) They have read this Agreement;

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(b) They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

(c) They understand the terms and consequences of this Agreement and of the releases it contains;

(d) They are fully aware of the legal and binding effect of this Agreement;

(e)  Employee acknowledges that he has had at least 21 days from the date of his receipt of this release to consider it, and any changes made since his receipt of this release are not material or were made at his request and will not restart the required 21- day period; and

(f)  Employee understands that he has seven (7) days after the execution of this release to revoke it and that this release shall not become effective or enforceable until the revocation period has expired.

 

 

(The remainder of this page is left intentionally blank.)

 

 

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

 

 

 

 

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Vermillion Strengthens Board of Directors with Appointments of Veronica Jordan, Ph.D., and David Schreiber

 

AUSTIN, Texas, December 12, 2014 – Vermillion, Inc. (NasdaqCM:  VRML), a bio-analytical solutions company focused on gynecologic disease, announced today the appointments of Veronica G. H. Jordan, Ph.D., and David R. Schreiber to the Company’s Board of Directors, bringing the total number of directors to eight, seven of whom are independent.

 

Jim LaFrance, Chairman, President, and Chief Executive Officer of Vermillion, stated, “I am tremendously pleased to announce the appointments of Veronica and David to our board of directors.  Each of them brings vast experience in key areas of operations, as well as broad and deep understanding of the healthcare industry and the growing need for predictive medicine.  We look forward to benefiting from their insights and strategic guidance as we advance our agenda of bringing high value diagnostic and analytics solutions to the healthcare industry with the goal of improving patient outcomes in the area of women’s health.”

 

Veronica Jordan, Ph.D. is an accomplished entrepreneur and international business leader.  As an advisor to life science and healthcare firms, she brings to Vermillion significant experience in all aspects of the business cycle from raising capital, integrating acquisitions and negotiating licensing and partnership arrangements to business development and sales and marketing. From 2001-2006, she was President/CEO and a director of Medelle Corporation, a private, venture capital funded medical device company in women’s health. Prior to that she served for fourteen years in various executive positions at PAREXEL International. Earlier, she held business and international leadership roles at Biogen Idec and managed an R&D department for Baxter International. Dr. Jordan currently serves on the board of Albany Molecular Research Inc. (NASDAQ: AMRI), a global contract drug discovery, development, and manufacturing company. She also serves on the Boards of a number of not-for-profit organizations working to advance various healthcare initiatives.  Dr. Jordan received her Bachelor of Arts in Biochemistry from Cambridge University and her Ph.D. in Biochemistry/Cell Biology from Oxford University. She is a member of the National Association of Corporate Directors, Board Leaders, Corporate Directors Group, Women’s Corporate Directors, and Women Business Leaders in US Healthcare Industry.

 

David Schreiber has more than 30 years of corporate and consulting experience in the healthcare industry, particularly in the area of corporate finance, operations, and mergers and acquisitions. Since 2004, he has provided consulting services on a wide variety of healthcare projects including Welsh Carson Anderson & Stowe’s 2014 sale of Solstas Lab Partners to Quest Diagnostics and the 2007 sale of Ameripath/Specialty Laboratories to Quest. In addition, he currently supports M&A due diligence research in the lab industry for Warburg Pincus. His corporate experience includes serving as Senior Vice President & Chief Financial Officer of publicly traded DIANON Systems from 1996 until its successful sale to LabCorp in

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2003. He has also served in key management roles at Corning Clinical Laboratories and Unilab Corporation.  He currently serves on the board of directors of Response Genetics, Inc. (NASDAQ: RGDX) and has served on the boards of Nanogen Inc., DIANON Systems and Specialty Laboratories, Inc., where he served as interim CEO/CFO to oversee its turnaround and subsequent sale.  Mr. Schreiber received his Bachelor of Science in Finance and his Masters In Business Administration from Northern Illinois University.

 

About Vermillion

Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic and bio-analytical solutions that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in gynecologic disease. The company's lead diagnostic, OVA1®, is a blood test for pre-surgical assessment of ovarian tumors for malignancy, using an innovative algorithmic approach. As the first FDA-cleared, protein-based In Vitro Diagnostic Multivariate Index Assay, OVA1 represents a new class of software-based diagnostics. For additional information, including published clinical trials, visit www.vermillion.com.

 

 

Investor Relations Contact:

Michael Wood

LifeSci Advisors, LLC

Tel: 646 597 6983

mwood@lifesciadvisors.com  

 

 

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Vermillion Names Valerie Palmieri CEO;

James LaFrance to continue as Chairman of Board

 

 

AUSTIN, Texas, December 16, 2014 -- Vermillion, Inc. (NASDAQ: VRML), a bio-analytic solutions company focused on gynecologic disease, today announced the next step in its expanded strategy to rebuild the company into a premier bio-analytics solutions provider with the naming current Chief Operating Officer, Valerie Palmieri to President and Chief Executive Officer, while current Chairman of the Board and CEO James LaFrance will continue to serve as Chairman. These changes are effective January 1, 2015.

 

“ Jim and Valerie have worked in tandem for the last eight months to rebuild the Vermillion team, re-set the strategy, and create a five year operating plan that will position the Company to be a leader in the bio-analytics field,” said Eric Varma, Board member and partner at Oracle Investment Partners. “As the company re-focuses on the substantial opportunity for lab services, Valerie’s experience and expertise in this field gives Vermillion a great opportunity to realize its vision.”

 

Jim LaFrance stated, “As veterans in the industry, Valerie and I have known one another for more than 20 years. I was thrilled to attract her to Vermillion and have total confidence in her ability to transform the Company. As Chairman of the Board, I will continue to actively work with her and the management team to achieve the vision we have crafted together. Valerie’s passion for women’s health, coupled with her drive and management skills make her the ideal CEO to lead Vermillion.”

 

“I am very enthusiastic about the opportunity in front of us,” stated Valerie Palmieri.  “We have the ability to re-write the playbook on how gynecologic health issues are managed via bio-analytics. The market is substantial, fragmented and largely misunderstood. Our goal is to maximize our existing investment utilizing our current platform and intellectual property and adapt those resources to serve significantly larger markets. I am impressed and amazed at the relationships and partnerships this company has fostered. I believe we can build an organization that addresses targeted and largely unmet medical needs in the area of women’s health, which in turn will deliver growth and greatly enhance shareholder value over the long term.”

 

Prior to joining Vermillion as Chief Operating Officer in October, Valerie was President of Momentum Consulting and served as a strategic advisor to Vermillion for six months.  Prior to Momentum, Ms. Palmieri served as CEO/President of two healthcare startups that resulted in a successful exit for one and won her recognition as one of the “Top 10 Entrepreneurs of Springboard Enterprises” for the other.  She spent six years as National Vice President of Anatomic Pathology Operations with LabCorp, the acquiring company of Dianon Systems where

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she served as Senior Vice President of Operations. Under her leadership, Dianon saw a six-fold increase in its share price and was sold to LabCorp for approximately $600 million in 2003. Both Mr. LaFrance and Ms. Palmieri will be representing Vermillion at the JP Morgan Healthcare Conference in San Francisco, January 12-14.

 

 

 

 

About Vermillion

 

Vermillion, Inc. (NASDAQ: VRML) is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in gynecologic disease.  The company's lead diagnostic, OVA1®, is a blood test for pre-surgical assessment of ovarian tumors for malignancy, using an innovative algorithmic approach. As the first FDA-cleared, protein-based In Vitro Diagnostic Multivariate Index Assay, OVA1 represents a new class of software-based diagnostics. For additional information, including published clinical trials, visit www.vermillion.com.

Forward-Looking Statement

Certain matters discussed in this press release contain forward-looking statements that involve significant risks and uncertainties, including statements regarding Vermillion's plans, objectives, expectations and intentions. These forward-looking statements are based on Vermillion's current expectations. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. In order to comply with the terms of the safe harbor, Vermillion notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. Factors that could cause actual results to materially differ include but are not limited to: (1) uncertainty as to Vermillion's ability to protect and promote its proprietary technology; (2) Vermillion's lack of a lengthy track record successfully developing and commercializing diagnostic products; (3) uncertainty as to whether Vermillion will be able to obtain any required regulatory approval of its future diagnostic products; (4) uncertainty of the size of market for its existing diagnostic tests or future diagnostic products, including the risk that its products will not be competitive with products offered by other companies, or that users will not be entitled to receive adequate reimbursement for its products from third party payors such as private insurance companies and government insurance plans; (5) uncertainty that Vermillion has sufficient cash resources to fully commercialize its tests and continue as a going concern; (6) uncertainty whether the trading in Vermillion's stock will become significantly less liquid; and (7) other factors that might be described from time to time in Vermillion's filings with the   Securities and Exchange Commission. All information in this press release is as of the date of this report, and Vermillion expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in Vermillion's expectations or any change in events, conditions or circumstances on which any such statement is based, unless required by law.

This release should be read in conjunction with the consolidated financial statements and notes thereto included in Vermillion’s most recent reports on Form 10-K and Form 10-Q. Copies are available at   www.sec.gov .

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Investor Relations Contact

M ichael Wood

LifeSci Advisors LLC

Tel: 646 597 6983

mwood@lifesciadvisors.com

 

 

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