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**LORUS THERAPEUTICS INC.**

 

**EXECUTIVE EMPLOYMENT AGREEMENT**

 

**for**

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**GREGORY CHOW**

 

This ExecutiveEmployment Agreement (the “***Agreement***”), made between Lorus Therapeutics Inc. (the“***Company***”) and Gregory Chow (“***Executive***”) (together, the“***Parties***”), is effective as of November 29, 2013 (the “***Effective Date***”).From and following the Effective Date, this Agreement shall replace and supersede that certain Consulting Services Agreementbetween Executive and the Company entered into as of November 4, 2013 (the “***Consulting Agreement***”); *providedthat,* Executive will retain the right to receive all consulting fees earned as of the Effective Date, pursuant to theterms of the Consulting Agreement.

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**Whereas,**the Company desires for Executive to provide services to the Company, and wishes to provide Executive with certain compensationand benefits in return for such employment services; and

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**Whereas,**Executive wishes to be employed by****the Company and to provide personal services to the Company in return forcertain compensation and benefits;

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**Now, Therefore,**in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the receiptand sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

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**1.1           Position.**Executive shall serve as the Company’s Chief Financial Officer. During the term of Executive’s employment withthe Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time andattention to the business of the Company, except for approved vacation periods and reasonable periods of illness or other incapacitiespermitted by the Company’s general employment policies.

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**1.2           Dutiesand Location.**Executive shall perform such duties as are required by the Company’s Chief Executive Officer, to whom Executivewill report. Executive’s primary office location shall be the Company’s California office. The Company reserves theright to reasonably require Executive to perform Executive’s duties at places other than Executive’s primary officelocation from time to time, and to require reasonable business travel. The Company may modify Executive’s job title and dutiesas it deems necessary and appropriate in light of the Company’s needs and interests from time to time.

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**1.3           Policiesand Procedures.**The employment relationship between the Parties shall be governed by the general employment policies and practicesof the Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employmentpolicies or practices, this Agreement shall control.

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**2.1           Salary.**For services to be rendered hereunder, Executive shall receive a base salary at the rate of U.S. $250,000 per year (the “***BaseSalary***”), which Base Salary will be increased to the rate of $315,000 per year effective as of the closing of theSecond Financing (as defined in Section 5.2 herein). The Base Salary will be subject to standard payroll deductions and withholdingsand payable in accordance with the Company’s regular payroll schedule.

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**2.2           Bonus.**Executive will be eligible for an annual discretionary bonus of up to forty percent (40%) of Executive’s then currentBase Salary (the “***Annual Bonus***”). Whether Executive receives an Annual Bonus for any given fiscal year,and the amount of any such Annual Bonus, will be determined in the good faith discretion of the Company’s Board of Directors(“***Board***”), based upon the Company’s and Executive’s achievement of objectives and milestonesto be determined on an annual basis by the Board. Executive must remain an active employee through the end of any given fiscalyear in order to earn an Annual Bonus for that fiscal year, and any such bonus will be paid prior to the fifteenth (15th)day of the third (3rd) month following the close of the Company’s fiscal year in which Executive’s rightto such amount became vested. Except as otherwise provided in Section 6.2 herein, Executive will not be eligible for, and willnot earn, any Annual Bonus (including a prorated bonus) if Executive’s employment terminates for any reason before the endof the fiscal year.

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**3.          Standard Company Benefits.**Executive shall, in accordance with Company policy and the termsand conditions of the applicable Company benefit plan documents, be eligible to participate in the benefit and fringe benefitprograms provided by the Company to its U.S. based executive officers and other employees from time to time.

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**4.          Expenses.**The Company will reimburse Executive for reasonable travel, entertainmentor other expenses incurred by Executive in furtherance or in connection with the performance of Executive’s dutieshereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time. Specifically,Executive will be reimbursed for the cost of any business visitor visas necessary for the performance of his duties whileemployed by the Company.

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**5.          Equity.**Pursuant to the Consulting Agreement, Executive was eligible to receive grants of optionsto acquire a total of 1,275,000 common shares of the Company (collectively, the “***Option***”).Executive acknowledges that he has already received a grant of the first tranche of the Option (for 425,000 shares) from theCompany, which were granted and became fully vested and exercisable on November 4, 2013 (the “***FirstTranche***”). Notwithstanding the termination of the Consulting Agreement, and in addition to the First Tranche,Executive shall be eligible to receive grants of the remaining portions of the Option on the following terms:

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**5.1           SecondTranche.**Subject to approval by the Board, and contingent upon Executive’s continued services through the closing ofa bridge financing of the Company of at least U.S. $4 million (the “***First Financing***”), within two (2)days following the closing of the First Financing, Executive shall be granted an option to purchase 425,000 common shares of theCompany with an exercise price equal to the fair market value of the common shares on the date of grant (the “***SecondTranche***”). The Second Tranche shall be governed in all respects by the terms of the Company’s Share OptionPlan and its standard form of Stock Option Agreement, and shall vest over 36 months from the date of grant in 36 equal monthlyinstallments, subject to Executive’s continued services through each vesting date.

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**5.2           ThirdTranche.**Subject to approval by the Board, and contingent upon Executive’s continued services through the closing ofa financing by the Company of at least U.S. $17 million (the “***Second Financing***”), within two (2) daysfollowing the closing of the Second Financing, Executive shall be granted an option to purchase 425,000 common shares of the Companywith an exercise price equal to the fair market value of the common shares on the date of grant (the “***Third Tranche***”).The Third Tranche shall be governed in all respects by the terms of the Company’s Share Option Plan and its standard formof Stock Option Agreement, and shall vest over 36 months from the date of grant in 36 equal monthly installments, subject to Executive’scontinued services through each vesting date.

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**6.1          At-WillEmployment.**Executive’s employment relationship is at-will. Either Executive or the Company may terminate the employmentrelationship at any time, with or without Cause (as defined below) or advance notice.

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**6.2          TerminationWithout Cause; Resignation for Good Reason.**

 

**(i)          **TheCompany may terminate Executive’s employment with the Company at any time without Cause. Further, Executive may resign atany time for Good Reason (as defined below).

 

**(ii)         **Inthe event Executive’s employment with the Company is terminated by the Company without Cause, or Executive resigns for GoodReason, then provided such termination constitutes a “separation from service” (as defined under Treasury RegulationSection 1.409A-1(h), without regard to any alternative definition thereunder, a “***Separation from Service***”),and provided that Executive satisfies the Release Requirement in Section 7 herein, and remains in compliance with the terms ofthis Agreement, the Company shall provide Executive with the following “***Severance Benefits***”:

 

**(a)          **Either(a) a lump sum cash payment equal to Executive’s annual Base Salary at the time of employment termination (without givingeffect to any reduction in Base Salary that would give Executive the right to resign for Good Reason), to be paid by the Companyon the first payroll period following the Effective Date of the Release, less applicable deductions and withholdings, (the “***LumpSum Payment***”); or (b) if the Company, in the good faith discretion of the Board, is unable to make the Lump Sum Paymentat the time of employment termination due to a lack of sufficient operating funds, an amount equal to Executive’s annualBase Salary (without giving effect to any reduction in Base Salary that would give Executive the right to resign for Good Reason)to be paid in substantially equal installments on a monthly basis during the nine (9) month period following the employment terminationdate (the “***Monthly Installment Payments***”); provided that, in each case, any payments scheduled to bemade prior to the Effective Date of the Release shall instead accrue and be paid in a single lump sum during the first payrollperiod following the Effective Date of the Release. Notwithstanding the foregoing, the Company may elect to make the Monthly InstallmentPayments in lieu of the Lump Sum Payment only if an exemption is available from application of Section 409A of the Code with respectto such payments so that such payment schedule will not result in adverse tax consequences to Executive under Section 409A of theInternal Revenue Code of 1986, as amended (the “***Code***”) and the regulations and other guidance thereunderand any state law of similar effect (collectively “***Section 409A***”).

 

 

**(b)          **Either(a) a lump sum cash payment in an amount equal to the average of the Annual Bonus payment Executive received from the Company duringthe last three years of employment completed prior to the year of the employment termination, pro rated based on the number ofdays Executive worked during the fiscal year of the employment termination, divided by 365 (the “***Severance Bonus Payment***”),to be paid by the Company on the first payroll period following the Effective Date of the Release, less applicable deductions andwithholdings (the “***Lump Sum Bonus Payment***”); or (b) if the Company, in the good faith discretion of theBoard, is unable to make the Lump Sum Bonus Payment at the time of employment termination due to a lack of sufficient operatingfunds, an amount equal to Executive’s Severance Bonus Payment to be paid in substantially equal installments on a monthlybasis during the nine (9) month period following the employment termination date (the “***Monthly Installment Bonus Payments***”);provided that, in each case, any payments scheduled to be made prior to the Effective Date of the Release shall instead accrueand be paid in a single lump sum during the first payroll period following the Effective Date of the Release. Notwithstanding theforegoing, the Company may elect to make the Monthly Installment Bonus Payments in lieu of the Lump Sum Bonus Payment only if anexemption is available from application of Section 409A of the Code with respect to such payments so that such payment schedulewill not result in adverse tax consequences to Executive under Section 409A of the Code.

 

**(c)          **Ifthe Company has previously established a group health plan in which Executive participates prior to Executive’s terminationand Executive timely elects COBRA coverage following any such termination, the Company will pay Executive for the full amount ofsuch COBRA premiums for himself and his covered dependents (on a monthly basis) for a period of up to twelve (12) months followingthe date of termination; *provided, that,* if and to the extent that any benefit described in this Section 6.2(ii)(c) is notor cannot be paid or provided under any Company plan or program without penalties or adverse tax consequences to the Company orfor any other reason, as determined by the Company in its sole discretion, then the Company shall pay Executive a fully taxablecash payment equal to the COBRA premium for that month, subject to applicable tax withholding premiums for a period of up to twelve(12) months following the date of termination; *provided, further, that* the COBRA payments or, if applicable, the taxablemonthly payment discussed above, shall terminate on the earliest to occur of (A) the close of the 12-month period following thetermination of Executive’s employment; (B) the expiration of Executive’s (or Executive’s dependents’) eligibilityfor continuation coverage under COBRA; and (C) the date when Executive becomes eligible for group health insurance coverage inconnection with new employment or self-employment. If Executive becomes eligible for coverage under another employer’s grouphealth plan or otherwise ceases to be eligible for COBRA coverage during the period provided in this Section 6.2(ii)(c), Executivemust immediately provide written notice to the Company of such event, and the Company-provided COBRA payments, or if applicable,the monthly payments under this Section 6.2(ii)(c) shall immediately cease.

 

 

**(iii)        **Furthermore,in the event Executive’s employment with the Company is terminated by the Company pursuant to Section 6.2(ii), in eithercase, within three (3) months immediately preceding or twelve (12) months immediately following the consummation of a Change inControl (as defined below), in lieu of (and not additional to) the severance benefits described in Section 6.2(ii), and providedthat Executive satisfies the Release Requirement in Section 7 herein and remains in compliance with the terms of this Agreement,the Company shall instead provide Executive with the following benefits (the “***Change in Control Severance Benefits***”).For the avoidance of doubt: (A) in no event will Executive be entitled to severance benefits under Section 6.2(ii) and this Section6.2(iii), and (B) if the Company has commenced providing severance benefits to Executive under Section 6.2(ii) prior to the datethat Executive becomes eligible to receive Change in Control Severance Benefits under this Section 6.2(iii), the benefits previouslyprovided to Executive under Section 6.2(ii) of this Agreement shall reduce the severance benefits provided under this Section 6.2(iii):

 

**(a)          **Either(a) a lump sum cash payment equal to eighteen (18) months of Executive’s annual Base Salary at the time of employment termination(without giving effect to any reduction in Base Salary that would give Executive the right to resign for Good Reason), to be paidby the Company on the first payroll period following the Effective Date of the Release, less applicable deductions and withholdings(the “***Lump Sum CIC Payment***”); or (b) if the Company, in the good faith discretion of the Board, is unableto make the Lump Sum Payment at the time of employment termination due to a lack of sufficient operating funds, an amount equalto eighteen (18) months of Executive’s annual Base Salary (without giving effect to any reduction in Base Salary that wouldgive Executive the right to resign for Good Reason) to be paid in substantially equal installments on a monthly basis during thenine (9) month period following the employment termination date, less applicable deductions and withholdings (the “***MonthlyCIC Installment Payments***”); provided that, in each case, any payments scheduled to be made prior to the EffectiveDate of the Release shall instead accrue and be paid in a single lump sum during the first payroll period following the EffectiveDate of the Release. Notwithstanding the foregoing, the Company may elect to make the Monthly CIC Installment Payments in lieuof the Lump Sum CIC Payment only if an exemption is available from application of Section 409A of the Code with respect to suchpayments so that such payment schedule will not result in adverse tax consequences to Executive under Section 409A of the Code.

 

 

**(b)          **Either(a) a lump sum cash payment in an amount equal to 150% of the average of the Annual Bonus payment Executive received from theCompany during the last three years of employment completed prior to the year of the employment termination, pro rated based onthe number of days Executive worked during the fiscal year of the employment termination, divided by 365 (the “***CICBonus Payment***”), to be paid by the Company on the first payroll period following the Effective Date of the Release,less applicable deductions and withholdings, (the “***Lump Sum CIC Bonus Payment***”); or (b) if the Company,in the good faith discretion of the Board, is unable to make the Lump Sum CIC Bonus Payment at the time of employment terminationdue to a lack of sufficient operating funds, an amount equal to Executive’s CIC Bonus Payment to be paid in substantiallyequal installments on a monthly basis during the nine (9) month period following the employment termination date, less applicabledeductions and withholdings (the “***Monthly CIC Installment Bonus Payments***”);******provided that,in each case, any payments scheduled to be made prior to the Effective Date of the Release shall instead accrue and be paid ina single lump sum during the first payroll period following the Effective Date of the Release. Notwithstanding the foregoing,the Company may elect to make the Monthly CIC Installment Bonus Payments in lieu of the Lump Sum CIC Bonus Payment only if anexemption is available from application of Section 409A of the Code with respect to such payments so that such payment schedulewill not result in adverse tax consequences to Executive under Section 409A of the Code.

 

**(c)          **Ifthe Company has previously established a group health plan in which Executive participates prior to Executive’s terminationand Executive timely elects COBRA coverage following any such termination, the Company will pay Executive for the full amount ofsuch COBRA premiums for himself and his covered dependants (on a monthly basis) for a period of up to twelve (12) months followingthe date of termination; *provided, that,* if and to the extent that any benefit described in this Section 6.2(ii)(c) is notor cannot be paid or provided under any Company plan or program without penalties or adverse tax consequences to the Company orfor any other reason, as determined by the Company in its sole discretion, then the Company shall pay Executive a fully taxablecash payment equal to the COBRA premium for that month, subject to applicable tax withholding premiums for a period of up to twelve(12) months following the date of termination; *provided, further, that* the COBRA payments or, if applicable, the monthlypayment discussed above, shall terminate on the earliest to occur of (A) the close of the 12-month period following the terminationof Executive’s employment; (B) the expiration of Executive’s (or Executive’s dependents) eligibility for continuationcoverage under COBRA; and (C) the date when Executive becomes eligible for group health insurance coverage in connection with newemployment or self-employment. If Executive becomes eligible for coverage under another employer’s group health plan or otherwiseceases to be eligible for COBRA coverage during the period provided in this Section 6.2(iii)(c), Executive must immediately providewritten notice to the Company of such event, and the Company-provided COBRA payments, or if applicable, the monthly payments underthis Section 6.2(iii)(c) shall immediately cease.

 

**(d)          **Notwithstandinganything to the contrary set forth in the Company’s Share Option Plan or form of award agreement, effective as of Executive’semployment termination date, the vesting and exercisability of all then outstanding unvested stock options, restricted shares orother equity awards then held by Executive shall accelerate such that all shares become immediately vested and exercisable, ifapplicable, by Executive upon such termination and shall remain exercisable, if applicable, following Executive’s terminationas set forth in the applicable equity award documents.

 

 

**6.3          Terminationfor Cause; Resignation Without Good Reason; Death or Disability.**

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**(i)          **TheCompany may terminate Executive’s employment with the Company at any time for Cause. Further, Executive may resign at anytime without Good Reason. Executive’s employment with the Company may also be terminated due to Executive’s death ordisability.

 

**(ii)         **IfExecutive resigns without Good Reason, or the Company terminates Executive’s employment for Cause, or upon Executive’sdeath or disability, then (i) Executive will no longer vest in the Option, (ii) all payments of compensation by the Company toExecutive hereunder will terminate immediately (except as to amounts already earned), and (c) Executive will not be entitled toany severance benefits, including (without limitation) the Severance Benefits and Change in Control Benefits listed in Sections6.2(h) and 6.2(iii). In addition, Executive shall resign from all positions and terminate any relationships as an employee, advisor,officer or director with the Company and any of its affiliates, each effective on the date of termination.

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**7.          Conditions to Receipt of Severance Benefits and Change in Control Severance Benefits.**Notwithstandingthe foregoing, to be eligible for any of the Severance Benefits or Change in Control Severance Benefits, on or within thirty(30) days following the termination of employment, Executive must satisfy the requirement (the “***ReleaseRequirement***”) to return to the Company a signed and dated general release of all known and unknown claims in aform acceptable to the Company (the “***Release and Waiver***”) and allow that Release and Waiver tobecome effective in accordance with its terms (such date, the “***Effective Date of the Release***”). NoSeverance Benefits or Change in Control Severance Benefits will be paid hereunder prior to the Effective Date of the Release.Accordingly, if Executive breaches the preceding sentence and/or refuses to sign and deliver to the Company an executedRelease and Waiver or signs and delivers to the Company the Release and Waiver but exercises his right, if any, underapplicable law to revoke the Release and Waiver (or any portion thereof), then Executive will not be entitled to anyseverance, payment or benefit under this Agreement.

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**8.          Section 409A.** It is intended that all of the severance benefits and other payments payable underthis Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A providedunder Treasury Regulations 1.409A-1(b)(4), 1.409A-l(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to thegreatest extent possible as consistent with those provisions, and to the extent no so exempt, this Agreement (and anydefinitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Code Section 409A(including, without limitation, for purposes of Treasury Regulation Section 1,409A-2(b)(2)(iii)), Executive’s right toreceive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall betreated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at alltimes be considered a separate and distinct payment. Notwithstanding any provision to the contraryin this Agreement, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specifiedemployee” for purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forthherein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then to the extentdelayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Code Section409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior tothe earliest of (i) the expiration of the six-month and one day period measured from the date of Executive’s Separation fromService with the Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A withoutthe imposition of adverse taxation. Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i)period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments dueshall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred.If the Company determines that any severance benefits provided under this Agreement constitutes “deferred compensation”under Section 409A, for purposes of determining the schedule for payment of the severance benefits, the effective date of the Releasewill not be deemed to have occurred any earlier than the sixtieth (60th) date following the Separation From Service, regardlessof when the Release actually becomes effective.

 

 

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**9.1           **Ifany payment or benefit Executive will or may receive from the Company or otherwise (a “***280G Payment***”)would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence,be subject to the excise tax imposed by Section 4999 of the Code (the “***Excise Tax***”), then any such 280GPayment provided pursuant to this Agreement (a “***Payment***”) shall be equal to the Reduced Amount. The “***ReducedAmount***” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (afterreduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whicheveramount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state andlocal employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’sreceipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may besubject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount isdetermined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “***ReductionMethod***”) that results in the greatest economic benefit for Executive. If more than one method of reduction will resultin the same economic benefit, the items so reduced will be reduced pro rata (the “***Pro Rata Reduction Method***”).

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**9.2           **Notwithstandingany provision of section 10.1 to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portionof the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid theimposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatestextent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Paymentsthat are contingent on future events (*e.g.,* being terminated without Cause), shall be reduced (or eliminated) before Paymentsthat are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” withinthe meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaningof Section 409A.

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**9.3           **UnlessExecutive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for generaltax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoingcalculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity orgroup effecting the Change in Control transaction, the Company shall appoint a nationally recognized accounting or law firm tomake the determinations required by this section 10. The Company shall bear all expenses with respect to the determinations bysuch accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accountingor law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation,to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280G Paymentbecomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executiveor the Company.

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**9.4           **IfExecutive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 9.1 and the InternalRevenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptlyreturn to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 9.1) so that no portionof the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuantto clause (y) of Section 9.1, Executive shall have no obligation to return any portion of the Payment pursuant to the precedingsentence.

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**10.1         Cause.**For purposes of this Agreement, “Cause” for termination will mean: (a) Executive’s commission of any felonyor commission of a crime involving dishonesty; (b) Executive’s participation in any fraud against the Company; (c) materialbreach of Executive’s duties to the Company; (d) Executive’s persistent unsatisfactory performance of job duties afterwritten notice from the Board and a reasonable opportunity to cure (if deemed curable); (e) Executive’s intentional damageto any property of the Company; (f) Executive’s misconduct, or other violation of Company policy that causes harm: (g) breachof any written agreement between Executive and the Company; and (h) conduct by Executive which in the good faith and reasonabledetermination of the Board demonstrates gross unfitness to serve.

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**10.2         GoodReason.**For purposes of this Agreement, Executive shall have “Good Reason” for resignation from employment withthe Company if any of the following actions are taken by the Company without Executive’s prior written consent: (a) a materialreduction in Executive’s Base Salary, unless pursuant to a salary reduction program applicable generally to the Company’ssenior executives; (b) a material reduction in Executive’s duties (including responsibilities and/or authorities), *provided,however,* that a change in job position (including a change in title) shall not be deemed a “material reduction”in and of itself unless Executive’s new duties are materially reduced from the prior duties; or (c) relocation of Executive’sprincipal place of employment to a place that increases Executive’s one-way commute by more than fifty (50) miles as comparedto Executive’s then-current principal place of employment immediately prior to such relocation. In order for Executive toresign for Good Reason, each of the following requirements must be met: (i) Executive must provide written notice to the Company’sChief Executive Officer within 30 days after the first occurrence of the event giving rise to Good Reason setting forth the basisfor Executive’s resignation, (ii) the Executive must allow the Company at least 30 days from receipt of such written noticeto cure such event, (iii) such event is not reasonably cured by the Company within such 30 day period (the “***Cure Period***”),and (iv) Executive must resign from all positions Executive then holds with the Company not later than 30 days after the expirationof the Cure Period.

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**10.3         Changein Control.**For purposes of this Agreement, “Change in Control” shall mean the consummation of any of the following:(a) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which theCompany is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding anysale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the votingsecurities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securitiesremaining outstanding or by such voting securities being converted into voting securities of the surviving entity), following suchtransaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving entityoutstanding immediately after such transaction or series of transactions; (b) a sale, lease or other conveyance of all or substantiallyall of the assets of the Company; or (c) any liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.Notwithstanding the foregoing, the Company and Executive agree that Change in Control does not include any reorganization, saleor plan of arrangement undertaken to move the domicile of the Company to the U.S., pursuant to which the Company will become awholly-owned subsidiary of a Delaware corporation.

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**11.1         ConfidentialInformation Agreement.**As a condition of employment, Executive shall execute and abide by the Company’s standardform of Employee Confidential Information and Inventions Assignment Agreement (the “***ConfidentialityAgreement***”).

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**11.2         Third-PartyAgreements and Information.**Executive represents and warrants that Executive’s employment by the Company does not conflictwith any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executive’sduties to the Company without violating any such agreement. Executive represents and warrants that Executive does not possess confidentialinformation arising out of prior employment, consulting, or other third party relationships, that would be used in connection withExecutive’s employment by the Company, except as expressly authorized by that third party. During Executive’s employmentby the Company, Executive will use in the performance of Executive’s duties only information which is generally known andused by persons with training and experience comparable to Executive’s own, common knowledge in the industry, otherwise legallyin the public domain, or obtained or developed by the Company or by Executive in the course of Executive’s work for the Company.

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**12.1         Non-CompanyBusiness.**Except with the prior written consent of the Board, Executive will not during the term of Executive’s employmentwith the Company undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executiveis a passive investor. Executive may engage in civic and not-for-profit activities so long as such activities do not materiallyinterfere with the performance of Executive’s duties hereunder.

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**12.2         NoAdverse Interests.**Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investmentor interest known to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.

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**13.         TaxEqualization.**The Company will provide Executive with tax equalization, if applicable, to account for any tax liabilities aboveUS tax liabilities, resulting from the performance of Executive’s duties hereunder.

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**14.         DisputeResolution.**To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employmentwith the Company, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, includingbut not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of thisAgreement, Executive’s employment with the Company, or the termination of Executive’s employment from the Company,will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final,binding and confidential arbitration conducted in San Jose, California by JAMS, Inc. (“***JAMS***”) or itssuccessors, under JAMS’ then applicable rules and procedures for employment disputes (which can be found at http://www.jamsadr.com/rules-clauses/,and which will be provided to Executive on request); provided that the arbitrator shall: (a) have the authority to compel adequatediscovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a writtenarbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. The Partiesshall be entitled to all rights and remedies that either would be entitled to pursue in a court of law, *provided, however*,that in no event shall the arbitrator be empowered to hear or determine any class or collective claim of any type. **Both Executiveand the Company acknowledge that by agreeing to this arbitration procedure, they waive the right to resolve any such dispute througha trial by jury or judge or administrative proceeding.**The Company shall pay all filing fees in excess of those which wouldbe required if the dispute were decided in a court of law, and shall pay the arbitrator’s fee. Nothing in this Agreementis intended to prevent either the Company or Executive from obtaining injunctive relief in court to prevent irreparable harm pendingthe conclusion of any such arbitration.

 

 

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**15.1         Notices.**Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (including personaldelivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to Executiveat the address as listed on the Company payroll.

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**15.2         Severability.**Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicablelaw, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicablelaw or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any otherjurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keepingwith the intent of the Parties.

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**15.3         Waiver.**Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby bedeemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

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**15.4         CompleteAgreement.**This Agreement, together with the Employee Confidential Information and Inventions Agreement between the Companyand Executive, of even date herewith, constitute the entire agreement between Executive and the Company with regard to the subjectmatter hereof and is the complete, final, and exclusive embodiment of the Company’s and Executive’s agreement withregard to this subject matter. This Agreement is entered into without reliance on any promise or representation, written or oral,other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. It cannotbe modified or amended except in a writing signed by a duly authorized officer of the Company.

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**15.5         Counterparts.**This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party,but both of which taken together will constitute one and the same Agreement.

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**15.6         Headings.**The headings of the paragraphs hereof are inserted for convenience only and shall not be deemed to constitute a part hereofnor to affect the meaning thereof.

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**15.7         Successorsand Assigns.**This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company,and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of hisduties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall notbe withheld unreasonably.

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**15.8         TaxWithholding and Indemnification.**All payments and awards contemplated or made pursuant to this Agreement will be subject towithholdings of applicable

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**In Witness Whereof****,**the Parties have executed this Agreement on the day and year first written above.