EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of January 24, 2000, between Robert D. Thompson ("Employee") and Epitope, Inc., an Oregon corporation (the "Company").
1. SERVICES.
1.1 EMPLOYMENT. The Company agrees to employ Employee as president and chief executive officer of the Company, and Employee hereby accepts such employment in accordance with the terms and conditions of this Agreement. Employment shall continue until terminated pursuant to the terms 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, (b) as otherwise set forth in Exhibit A attached to this Agreement, and (c) as determined by the board of directors from time to time. Subject to the provisions of Section 6.4 hereof, Employee's position and duties may be changed from time to time during the term of this Agreement. Employee's place of work shall be the Company's headquarters, at its present location or as it may be relocated.
1.3 OUTSIDE ACTIVITIES. Employee shall obtain the consent of 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. The Company consents to the consulting agreement between Employee and LabOne, Inc., under which Employee will provide services to LabOne, Inc. ending no later than March 31, 2000.
1.4 DIRECTION OF SERVICES. Employee shall at all times discharge his duties in consultation with and under the supervision and direction of 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 $22,916.67 per month. Subject to the provisions of Section 6.4 hereof, such salary may be adjusted from time to time in the discretion of 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. The board of directors may also authorize payment to Employee of bonuses at such times and in such amounts as may be determined by the board of directors.
2.2 ADDITIONAL EMPLOYEE BENEFITS. To the extent otherwise eligible, Employee shall be entitled to receive or participate in any additional benefits, including without limitation medical and dental insurance programs, profit sharing or
Pension Plans and medical reimbursement plans, which may from time to time be made available by the Company to corporate officers. The Company may change or discontinue such benefits at any time in its sole discretion.
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2.3 EXPENSES.
2.3.1 JOB-RELATED. The Company shall reimburse Employee for all reasonable and necessary expenses incurred in carrying out his duties under this Agreement.
2.3.2 RELOCATION EXPENSES. The Company shall further reimburse Employee for reasonable and necessary expenses incurred as follows: (a) reasonable expenses incurred by Employee in moving himself, his family, and his household goods from Olathe, Kansas, to the Portland, Oregon, metropolitan area (not to exceed $10,000 without the approval of the chairman of the board in his discretion at Employee's request); (b) up to three months of temporary housing at a cost of up to $2,800 per month (or such longer time period and/or amount as may be approved by the chairman of the board in his discretion at Employee's request); (c) one round-trip, coach airline ticket per month (up to a maximum of six) for Employee for travel between Olathe, Kansas, and Portland, Oregon, until Employee has relocated his residence to the Portland, Oregon, metropolitan area; and (d) two round-trip, coach airline tickets for Employee's spouse for travel between Olathe, Kansas, and Portland, Oregon, for purposes of locating and obtaining a new residence in the Portland, Oregon metropolitan area. 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.
2.3.3 RELOCATION ALLOWANCE. The Company shall also pay Employee a one-time relocation allowance of $50,000 upon relocation of his residence to the Portland, Oregon metropolitan area.
2.3.4 TAX PROVISION. To the extent the payments under Sections 2.3.2 or 2.3.3 are includable in Employee's net taxable income, the Company shall pay Employee an additional amount so that the amount paid to him, less taxes at Employee's effective marginal tax rate, equals the amounts required to be paid to him under those sections.
2.3.5 REAL ESTATE LOAN. The Company will loan Employee up to $75,000 to be applied toward Employee's purchase of a home in the Portland, Oregon metropolitan area. The loan will not bear interest, will be secured by a second position mortgage on the home purchased, will be subject to Employee's execution of loan documentation satisfactory to the Company, and will be repayable upon Employee's sale of his Kansas residence.
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.
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3. STOCK OPTIONS. Employee has been granted non-qualified options to purchase 375,000 shares of common stock of the Company at an exercise price equal to 75 percent of the mean between the high and low sales prices of the common stock as quoted on The Nasdaq Stock Market on the date of the grant. The options will vest over a three-year period, with one-third of the options to vest on the first anniversary of the grant date and the remainder to vest on a monthly basis thereafter.
4. 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.
5. BUSINESS PROTECTION AGREEMENT. Employee and the Company are concurrently entering a Business Protection Agreement. Employee's compliance with the terms of the Business Protection Agreement is a material requirement of this Agreement.
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 60 days' written notice to the Company.
6.3 TERMINATION BY THE COMPANY FOR CAUSE. Officer's employment may be terminated by the Company at any time for cause. Only the following actions, failures, or events by or affecting Employee shall constitute "cause" for termination of Employee by the Company: (i) willful and continued failure by Employee to substantially perform his duties provided herein after a written demand for substantial performance is delivered to E ...