**Exhibit10.16**

 

**AMENDMENTNO. 1 TO**

 

**NEORXCORPORATION**

 

**KEYEXECUTIVE SEVERANCE AGREEMENT**

 

ThisAmendment, dated as of March 30, 2005, is entered into by and betweenNEORX CORPORATION (the “Company”) and KAREN AUDITORE-HARGREAVES (the “Executive”)with respect to the Key Executive Severance Agreement between the Company andthe Executive dated as of May 13, 2003 (the “Agreement”) as follows:

 

1.               It is recognizedand acknowledged that, pursuant to Section 1 of the Agreement, theAgreement will automatically renew for an additional two (2) year periodeffective May 13, 2005 (since notice of nonrenewal has not been given).

 

2.               The first sentenceof Section 1 of the Agreement shall be amended by replacing “ninety (90)days” with “twelve (12) months” in reference to advance notice of nonrenewal inthe future.

 

3.               The third sentenceof Section 5.5 of the Agreement (which relates to offset for otherearnings) shall be deleted in its entirety. The words “and Offset” shall be removed from the title of Section 5.5.  The words “and potential reduction” shall bedeleted from Section 5.1(c) of the Agreement.

 

4.               Notwithstanding theprovisions of Sections 4.3, 5.1, 5.2, and 5.7 of the Agreement, in the eventthe Executive elects voluntarily to terminate her employment with the Companyby giving written notice of termination to the Company in accordance with Section 9of the Agreement between June 1, 2005 and December 21, 2005 (the “ResignationPeriod”), which notice is given ten (10) days in advance of the effective dateof termination, the termination shall be treated for all purposes under theAgreement as if the Executive had terminated for “Good Reason” under theAgreement.  Section 4.3 of theAgreement is modified to provide that the notice of termination that is to begiven pursuant to this section of the Amendment need state only that theExecutive is terminating pursuant to this section and the effective dateof the termination.  In the event, theExecutive does not provide written notice of termination during the ResignationPeriod, the specific right to severance benefits upon a voluntary terminationcreated by this section of the Amendment shall expire and cease to haveany further effect.

 

5.               In the event theExecutive’s employment is terminated, the Executive and the Company may agreethat the Executive will provide consulting services on such terms as aremutually agreed, subject to an appropriate agreement to protect the Company’sconfidential information, trade secrets, and inventions.  The provision of such consulting servicesshall not be construed to create any relationship other than that of anindependent contractor relationship and, in performing such services, theExecutive shall not be an agent, employee, officer or trustee of NeoRx, andwill not be entitled to the benefits provided by NeoRx to its agents,employees, officers or trustees, except as may be mutually agreed in writing bythe Executive and the Company.

 

6.               Except as amendedby this Amendment, the Agreement shall remain in full and force effect.

 

IN WITNESS WHEREOF, theparties have executed this Amendment as of the date first above written.

 
|   |                          | NeoRx Corporation          |
|--------|-------------------------------|----------------------------|
|   |                          |                       |
|   | /s/ Karen Auditore-Hargreaves |                       | By: | /s/Anna L. Wight |   |
|   | Karen Auditore-Hargreaves     | Its: Vice President, Legal |
|        |                               |                            |  |  |  |

 

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