Employment Agreement - Edward V. Collom, Jr.

EMPLOYMENT AGREEMENT


This Employment Agreement is entered into as of March 9, 1998, between Edward V. Collom, Jr. ("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 1.1 with such powers and duties appropriate to that office (a) as may be provided by the bylaws of the Company and (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 or the board of directors.


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 to the detriment of 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.


2. COMPENSATION AND EXPENSES.


2.1 SALARY. As compensation for services under this Agreement, the Company shall pay to Employee a regular salary of $11,666.67 per month. 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 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 available by the


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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 from time to time an itemized account of such expenses in such form as may be required by the Company. The Company shall further pay to Employee (a) a one-time relocation allowance of $25,000, which includes moving and relocation expenses; and (b) a temporary housing allowance through August 1998 in the amount of the most economic rate reasonably available. To the extent the temporary housing 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.


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. The Company shall grant Employee an option to purchase 75,000 shares of common stock of the Company at an exercise price equal to the fair market value of the stock on the date of hire. In the event of a change of control of the Company while Employee is employed by the Company, Employee's unvested stock options will vest on the date of the change of control, as defined in the option agreement.


4. CONFIDENTIAL INFORMATION.


4.1 DEFINED. "Confidential Information" is all nonpublic information relating to the Company or its business that is disclosed to Employee, that Employee produces, or that Employee otherwise obtains during employment. "Confidential Information" also includes information received from third parties that the Company has agreed to treat as confidential. Examples of Confidential Information are:


4.1.1 Marketing plans.


4.1.2 Customer lists.


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4.1.3 Product design and manufacturing information.


4.1.4 Financial information.


4.2 ACCESS TO INFORMATION. Employee acknowledges that in the course of his employment he will have access to Confidential Information, that such information is a valuable asset of the Company, and that its disclosure or unauthorized use will cause the Company substantial harm.


4.3 OWNERSHIP. Employee acknowledges that all Confidential Information shall continue to be the exclusive property of the Company (or the third party that disclosed it to the Company), whether or not prepared in whole or in part by Employee and whether or not disclosed to Employee or entrusted to his custody in connection with his employment by the Company.


4.4 NONDISCLOSURE AND NONUSE. Unless authorized or instructed in writing by the Company, or required by legally constituted authority, Employee will not, except as required in the course of the Company's business, during or after his employment, disclose to others or use any Confidential Information, unless and until, and then only to the extent that, such items become available to the public through no fault of Employee.


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