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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;
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(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
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(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
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