EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of 5/16/99, between William Block ("Employee") and Epitope, Inc., an Oregon corporation (the "Company").
1. SERVICES.
1.1 EMPLOYMENT. The Company agrees to employ Employee as Vice President of Sales and Marketing, and Employee hereby accepts such employment, in accordance with the terms and conditions of this Agreement.
1.2 DUTIES. Employee shall have the position named in Section 1 with such powers and duties appropriate to that office (a) as may be provided by the bylaws of the Company and/or (b) as determined from time to time by the President and Chief Executive Officer or the Board of Directors of the Company. Employee's position and duties may be changed from time to time during the term of this Agreement, and Employee's place of work may be relocated at the sole discretion of the President and Chief Executive Officer, the Board of Directors, or their designees.
1.3 OUTSIDE ACTIVITIES. Employee shall obtain the consent of the President and Chief Executive Officer or the Board of Directors before he engages, either directly or indirectly, in any other professional or business activities that may require an appreciable portion of Employee's time or effort or which could result in detriment to the Company's business.
1.4 DIRECTION OF SERVICES. Employee shall at all times discharge his duties in consultation with and under the supervision and direction of the President and Chief Executive Officer of the Company or such other designee appointed by the President and Chief Executive Officer or the Board of Directors.
2. COMPENSATION AND EXPENSES.
2.1 SALARY. As compensation for services under this Agreement, the Company shall pay to Employee a regular salary of $150,000 per year. Such salary may be adjusted from time to time in the discretion of the President and Chief Executive Officer or the Board of Directors. Payment shall be made on a bi-weekly basis, less all amounts deemed by the Company as required by law or authorized by Employee to be withheld or deducted, in accordance with the Company's usual payroll practices.
2.2 ADDITIONAL EMPLOYEE BENEFITS. To the extent otherwise eligible, Employee shall also be entitled to receive or participate in any additional benefits, including without limitation medical, dental, life, and long-term disability insurance programs, medical reimbursement plans, and a 401(k) plan, which may from time to time be made generally
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available by the Company to corporate officers. The Company may change or discontinue such benefits at any time in its sole discretion.
2.3 EXPENSES. The Company shall reimburse Employee for all reasonable and necessary expenses incurred in carrying out his duties under this Agreement. Employee shall present to the Company an itemized account of such expenses in such form and at such time as may be required by the Company. The Company shall further pay to Employee (a) a one-time relocation allowance of $30,000; (b) the Company will also reimburse Employee's actual and reasonable moving expenses for transferring Employee's family and his household goods to Portland from
North Carolina To the extent the relocation allowance described in this section is includable in Employee's net taxable income, the Company shall pay Employee an additional amount so that the amount paid to him under this section, less taxes at Employee's effective marginal tax rate, equals the expenses to be reimbursed. The relocation allowance and the moving expenses must be repaid by Employee on a prorated basis if Employee voluntarily leaves the Company pursuant to Section 6.2 within two years of the date of hire or is terminated pursuant to Section 6.3 within two years of the date of hire. The prorated basis will be based on the numbers of complete months worked during the initial two-year period.
2.4 FEES. All compensation earned by Employee, other than pursuant to this Agreement, as a result of services performed on behalf of the Company or as a result of or arising out of any work done by Employee in any way related to the scientific or business activities of the Company shall belong to the Company. Employee shall pay or deliver such compensation to the Company promptly upon receipt. For the purposes of this provision, "compensation" shall include, but is not limited to, all professional and nonprofessional fees, lecture fees, expert testimony fees, publishing fees, royalties, and any related income, earnings, or other things of value; and "scientific or business activities of the Company" shall include, but not be limited to, any project or projects in which the Company is involved and any subject matter that is directly or indirectly researched, tested, developed, promoted, or marketed by the Company.
3. STOCK OPTIONS. Subject to approval by the Executive Compensation Committee and/or the Board of Directors, the Company shall grant Employee an option to purchase up to 100,000 shares of common stock of the Company pursuant to the terms of the Epitope, Inc. 1991 Stock Award Plan. The options shall be incentive stock options up to the $100,000 annual limit imposed by law, the remainder of the options shall be nonqualified options. The exercise price shall be equal to the fair market value of the stock on the date of hire. In the event of a change of control, as defined in the option agreement, while Employee is employed by the Company, Employee's unvested stock options will vest on the date of the change of control.
4. RESTRICTED STOCK GRANT. Employee shall also be entitled to a restricted stock grant, valued at $30,000, up to a maximum of 7,500 Shares under the terms of the 1991 Stock Award Plan. The grant value shall be based on the stock price on Employee's hire date (i.e., the mean between the high and low sales prices of the Common Stock). This grant is expressly conditioned on final approval by the Board of Directors. Employee understands that this grant
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comes with certain restrictions, including inability to sell for one year from grant. The Company encourages Employee to seek advice concerning the tax consequences of this grant. Employee may elect to incur the tax expense at time of grant or at the time the restrictions are lifted.
5. PROTECTION OF EMPLOYER INFORMATION.
5.1 BUSINESS PROTECTION AGREEMENT. Employee understands and agrees to execute the Business Protection Agreement attached as Exhibit A. Such Agreement is hereby incorporated herein. Employee understands that the execution of this Business Protection Agreement is a pre-condition of his employment at the Company.
5.2 MATERIALS PREPARED AND INVENTIONS MADE DURING EMPLOYMENT. The Company shall be the exclusive owner of all materials, concepts, and inventions Employee prepares, develops, or makes (whether alone or jointly with others) within the scope of his employment, and of all related rights (including copyrights, trademarks, and patents) and proceeds. Without limitation, materials, concepts, and inventions that (a) relate to the Company's business or actual or demonstrably anticipated research or development, or (b) result from any work performed by Employee for the Company, shall be considered within the scope of Employee's employment. Employee shall promptly disclose all such materials, concepts, and inventions to the Company. Employee shall take all action reasonably requested by the Company to vest ownership of such materials, consents, and inventions in the Company and to permit the Company to obtain copyright, trademark, patent, or similar protection in its name.
6. TERMINATION.
6.1 TERMINATION UPON DEATH. This Agreement shall terminate immediately upon Employee's death.
6.2 TERMINATION BY EMPLOYEE. Employee may terminate his employment under this Agreement by 90 days' advance written notice to the Company.
6.3 TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate Employee's employment under this Agreement for cause at any time, with or without advance notice. "Cause" includes, but is not limited to: (a) a breach of this Agreement by Employee (de minimus violations excluded) and Employee's failure to promptly cure such breach after receipt of notice; (b) Employee's r ...