LORUS THERAPEUTICS INC.


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


for


 


GREGORY CHOW


 


This Executive
Employment 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 Agreement
between Executive and the Company entered into as of November 4, 2013 (the “Consulting Agreement”); provided
that, Executive will retain the right to receive all consulting fees earned as of the Effective Date, pursuant to the
terms of the Consulting Agreement.


 


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


 


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


 


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


 


		1.	Employment by the Company.



 


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


 


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


 


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


 




    	 



    	 



    

 


		2.	Compensation.



 


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 “Base
Salary”), which Base Salary will be increased to the rate of $315,000 per year effective as of the closing of the
Second Financing (as defined in Section 5.2 herein). The Base Salary will be subject to standard payroll deductions and withholdings
and payable in accordance with the Company’s regular payroll schedule.


 


2.2           Bonus.
Executive will be eligible for an annual discretionary bonus of up to forty percent (40%) of Executive’s then current
Base 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 milestones
to be determined on an annual basis by the Board. Executive must remain an active employee through the end of any given fiscal
year 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 right
to such amount became vested. Except as otherwise provided in Section 6.2 herein, Executive will not be eligible for, and will
not earn, any Annual Bonus (including a prorated bonus) if Executive’s employment terminates for any reason before the end
of the fiscal year.


 


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


 


4.    
      Expenses. The Company will reimburse Executive for reasonable travel, entertainment
or other expenses incurred by Executive in furtherance or in connection with the performance of Executive’s duties
hereunder, 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 while
employed by the Company.


 


5.      
    Equity. Pursuant to the Consulting Agreement, Executive was eligible to receive grants of options
to 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 the
Company, which were granted and became fully vested and exercisable on November 4, 2013 (the “First
Tranche”). 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:


 




    	 



    	 



    

 


5.1           Second
Tranche. Subject to approval by the Board, and contingent upon Executive’s continued services through the closing of
a 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 the
Company with an exercise price equal to the fair market value of the common shares on the date of grant (the “Second
Tranche”). The Second Tranche shall be governed in all respects by the terms of the Company’s Share Option
Plan and its standard form of Stock Option Agreement, and shall vest over 36 months from the date of grant in 36 equal monthly
installments, subject to Executive’s continued services through each vesting date.


 


5.2           Third
Tranche. Subject to approval by the Board, and contingent upon Executive’s continued services through the closing of
a financing by the Company of at least U.S. $17 million (the “Second Financing”), within two (2) days
following the closing of the Second Financing, Executive shall be granted an option to purchase 425,000 common shares of the Company
with 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 form
of Stock Option Agreement, and shall vest over 36 months from the date of grant in 36 equal monthly installments, subject to Executive’s
continued services through each vesting date.


 


		6.	Termination of Employment; Severance.



 


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


 


6.2          Termination
Without Cause; Resignation for Good Reason.


 


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


 


(ii)         In
the event Executive’s employment with the Company is terminated by the Company without Cause, or Executive resigns for Good
Reason, then provided such termination constitutes a “separation from service” (as defined under Treasury Regulation
Section 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 of
this 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 giving
effect to any reduction in Base Salary that would give Executive the right to resign for Good Reason), 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 Payment”); or (b) if the Company, in the good faith discretion of the Board, is unable to make the Lump Sum Payment
at the time of employment termination due to a lack of sufficient operating funds, an amount equal to Executive’s annual
Base 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 termination
date (the “Monthly Installment 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 in a 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 Installment
Payments in lieu of the Lump Sum Payment only if an exemption is available from application of Section 409A of the Code with respect
to such payments so that such payment schedule will not result in adverse tax consequences to Executive under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder
and 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 during
the last three years of employment completed prior to the year of the employment termination, pro rated based on the number of
days 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 and
withholdings (the “Lump Sum Bonus Payment”); or (b) if the Company, in the good faith discretion of the
Board, is unable to make the Lump Sum Bonus Payment at the time of employment termination due to a lack of sufficient operating
funds, an amount equal to Executive’s Severance Bonus Payment to be paid in substantially equal installments on a monthly
basis 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 accrue
and be paid in a 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 Installment Bonus Payments in lieu of the Lump Sum Bonus Payment only if an
exemption is available from application of Section 409A of the Code with respect to such payments so that such payment schedule
will not result in adverse tax consequences to Executive under Section 409A of the Code.


 


(c)          If
the Company has previously established a group health plan in which Executive participates prior to Executive’s termination
and Executive timely elects COBRA coverage following any such termination, the Company will pay Executive for the full amount of
such COBRA premiums for himself and his covered dependents (on a monthly basis) for a period of up to twelve (12) months following
the date of termination; provided, that, if and to the extent that any benefit described in this Section 6.2(ii)(c) is not
or cannot be paid or provided under any Company plan or program without penalties or adverse tax consequences to the Company or
for any other reason, as determined by the Company in its sole discretion, then the Company shall pay Executive a fully taxable
cash 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 taxable
monthly payment discussed above, shall terminate on the earliest to occur of (A) the close of the 12-month period following the
termination of Executive’s employment; (B) the expiration of Executive’s (or Executive’s dependents’) eligibility
for continuation coverage under COBRA; and (C) the date when Executive becomes eligible for group health insurance coverage in
connection with new employment or self-employment. If Executive becomes eligible for coverage under another employer’s group
health plan or otherwise ceases to be eligible for COBRA coverage during the period provided in this Section 6.2(ii)(c), Executive
must 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 either
case, within three (3) months immediately preceding or twelve (12) months immediately following the consummation of a Change in
Control (as defined below), in lieu of (and not additional to) the severance benefits described in Section 6.2(ii), and provided
that 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 Section
6.2(iii), and (B) if the Company has commenced providing severance benefits to Executive under Section 6.2(ii) prior to the date
that Executive becomes eligible to receive Change in Control Severance Benefits under this Section 6.2(iii), the benefits previously
provided 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 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 Payment”); or (b) if the Company, in the good faith discretion of the Board, is unable
to make the Lump Sum Payment at the time of employment termination due to a lack of sufficient operating funds, an amount equal
to eighteen (18) months of Executive’s annual Base 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 termination date, less applicable deductions and withholdings (the “Monthly
CIC Installment 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 in a 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 Payments in lieu
of the Lump Sum CIC Payment only if an exemption is available from application of Section 409A of the Code with respect to such
payments 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 the
Company during the last three years of employment completed prior to the year of the employment termination, pro rated based on
the number of days Executive worked during the fiscal year of the employment termination, divided by 365 (the “CIC
Bonus 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 termination
due to a lack of sufficient operating funds, an amount equal to Executive’s CIC Bonus Payment to be paid in substantially
equal installments on a monthly basis during the nine (9) month period following the employment termination date, less applicable
deductions 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 in
a 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 an
exemption is available from application of Section 409A of the Code with respect to such payments so that such payment schedule
will not result in adverse tax consequences to Executive under Section 409A of the Code.


 


(c)          If
the Company has previously established a group health plan in which Executive participates prior to Executive’s termination
and Executive timely elects COBRA coverage following any such termination, the Company will pay Executive for the full amount of
such COBRA premiums for himself and his covered dependants (on a monthly basis) for a period of up to twelve (12) months following
the date of termination; provided, that, if and to the extent that any benefit described in this Section 6.2(ii)(c) is not
or cannot be paid or provided under any Company plan or program without penalties or adverse tax consequences to the Company or
for any other reason, as determined by the Company in its sole discretion, then the Company shall pay Executive a fully taxable
cash 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 monthly
payment discussed above, shall terminate on the earliest to occur of (A) the close of the 12-month period following the termination
of Executive’s employment; (B) the expiration of Executive’s (or Executive’s dependents) eligibility for continuation
coverage under COBRA; and (C) the date when Executive becomes eligible for group health insurance coverage in connection with new
employment or self-employment. If Executive becomes eligible for coverage under another employer’s group health plan or otherwise
ceases to be eligible for COBRA coverage during the period provided in this Section 6.2(iii)(c), Executive must 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(iii)(c) shall immediately cease.


 


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


 




    	 



    	 



    

 


6.3          Termination
for Cause; Resignation Without Good Reason; Death or Disability.


 


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


 


(ii)         If
Executive resigns without Good Reason, or the Company terminates Executive’s employment for Cause, or upon Executive’s
death or disability, then (i) Executive will no longer vest in the Option, (ii) all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to amounts already earned), and (c) Executive will not be entitled to
any severance benefits, including (without limitation) the Severance Benefits and Change in Control Benefits listed in Sections
6.2(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.


 


7.     
     Conditions to Receipt of Severance Benefits and Change in Control Severance Benefits. Notwithstanding
the 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 “Release
Requirement”) to return to the Company a signed and dated general release of all known and unknown claims in a
form acceptable to the Company (the “Release and Waiver”) and allow that Release and Waiver to
become effective in accordance with its terms (such date, the “Effective Date of the Release”). No
Severance 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 executed
Release and Waiver or signs and delivers to the Company the Release and Waiver but exercises his right, if any, under
applicable law to revoke the Release and Waiver (or any portion thereof), then Executive will not be entitled to any
severance, payment or benefit under this Agreement.


 


8.      
    Section 409A. It is intended that all of the severance benefits and other payments payable under
this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A provided
under 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 the
greatest extent possible as consistent with those provisions, and to the extent no so exempt, this Agreement (and any
definitions 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 to
receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be
treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all
times be considered a separate and distinct payment. Notwithstanding any provision to the contrary
in this Agreement, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified
employee” for purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth
herein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then to the extent
delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Code Section
409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior to
the earliest of (i) the expiration of the six-month and one day period measured from the date of Executive’s Separation from
Service with the Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without
the 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 due
shall 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 Release
will not be deemed to have occurred any earlier than the sixtieth (60th) date following the Separation From Service, regardless
of when the Release actually becomes effective.


 




    	 



    	 



    

 





		9.	Section 280G; Limitations on Payment.



 


9.1           If
any 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 280G
Payment provided pursuant to this Agreement (a “Payment”) shall be equal to the Reduced Amount. The “Reduced
Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after
reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever
amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and
local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s
receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is
determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction
Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result
in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).


 


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


 




    	 



    	 



    

 


9.3           Unless
Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general
tax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoing
calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control transaction, the Company shall appoint a nationally recognized accounting or law firm to
make the determinations required by this section 10. The Company shall bear all expenses with respect to the determinations by
such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting
or 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 Payment
becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive
or the Company.


 


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


 


		10.	Definitions.



 


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


 




    	 



    	 



    

 


10.2         Good
Reason. For purposes of this Agreement, Executive shall have “Good Reason” for resignation from employment with
the Company if any of the following actions are taken by the Company without Executive’s prior written consent: (a) a material
reduction in Executive’s Base Salary, unless pursuant to a salary reduction program applicable generally to the Company’s
senior 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’s
principal place of employment to a place that increases Executive’s one-way commute by more than fifty (50) miles as compared
to Executive’s then-current principal place of employment immediately prior to such relocation. In order for Executive to
resign for Good Reason, each of the following requirements must be met: (i) Executive must provide written notice to the Company’s
Chief Executive Officer within 30 days after the first occurrence of the event giving rise to Good Reason setting forth the basis
for Executive’s resignation, (ii) the Executive must allow the Company at least 30 days from receipt of such written notice
to 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 expiration
of the Cure Period.


 


10.3         Change
in 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 the
Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any
sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting
securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securities
remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), following such
transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction or series of transactions; (b) a sale, lease or other conveyance of all or substantially
all 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, sale
or plan of arrangement undertaken to move the domicile of the Company to the U.S., pursuant to which the Company will become a
wholly-owned subsidiary of a Delaware corporation.


 


		11.	Proprietary Information Obligations.



 


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


 




    	 



    	 



    

 


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


 


		12.	Outside Activities During Employment.



 


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


 


12.2         No
Adverse Interests. Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment
or interest known to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.


 


13.         Tax
Equalization. The Company will provide Executive with tax equalization, if applicable, to account for any tax liabilities above
US tax liabilities, resulting from the performance of Executive’s duties hereunder.


 


14.         Dispute
Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employment
with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including
but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this
Agreement, 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 its
successors, 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 adequate
discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. The Parties
shall 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 Executive
and the Company acknowledge that by agreeing to this arbitration procedure, they waive the right to resolve any such dispute through
a trial by jury or judge or administrative proceeding. The Company shall pay all filing fees in excess of those which would
be required if the dispute were decided in a court of law, and shall pay the arbitrator’s fee. Nothing in this Agreement
is intended to prevent either the Company or Executive from obtaining injunctive relief in court to prevent irreparable harm pending
the conclusion of any such arbitration.


 




    	 



    	 



    

 


		15.	General Provisions.



 


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


 


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


 


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 be
deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.


 


15.4         Complete
Agreement. This Agreement, together with the Employee Confidential Information and Inventions Agreement between the Company
and Executive, of even date herewith, constitute the entire agreement between Executive and the Company with regard to the subject
matter hereof and is the complete, final, and exclusive embodiment of the Company’s and Executive’s agreement with
regard 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 cannot
be modified or amended except in a writing signed by a duly authorized officer of the Company.


 


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.


 


15.6         Headings.
The headings of the paragraphs hereof are inserted for convenience only and shall not be deemed to constitute a part hereof
nor to affect the meaning thereof.


 


15.7         Successors
and 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 his
duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which shall not
be withheld unreasonably.


 


15.8         Tax
Withholding and Indemnification. All payments and awards contemplated or made pursuant to this Agreement will be subject to
withholdings of applicable


 




    	 



    	 



    

 


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


 


	 	Lorus Therapeutics Inc.
	 	 	 
	 	By:	/s/ William G. Rice, Ph.D.
	 	 	William G. Rice, Ph.D.
	 	 	Chairman of the Board and Chief
	 	 	Executive Officer
	 	 	 
	 	Executive
	 	 
	 	/s/ Gregory Chow
	 	Gregory Chow