Document:

EXHIBIT 10.21

 

Amendment Three to Letter Agreement

 

            WHEREAS,
this Amendment Three to Letter Agreement
shall be effective January 1, 2002, and amends that certain Letter Agreement
made between NeoRx Corporation (hereinafter referred to as NeoRx), 410 West
Harrison Street, Seattle, WA 98119, and Bay City Capital BD LLC (hereinafter
referred to as Bay City), 750 Battery, Suite 600, San Francisco, CA 94111, said
original Letter Agreement being dated August 16, 2000 (and agreed to and
accepted by NeoRx Corporation on August 31, 2000) and as amended, and 

 

                WHEREAS,
the parties wish to extend the term of said Letter Agreement and further wish
to provide for increased compensation to be paid to Bay City for services
rendered. 

 

                NOW,
THEREFORE, the Letter Agreement, as amended, shall be extended to January 1,
2003 and, further, paragraph 5 (a) of said Letter Agreement shall be modified
to provide for increased compensation as follows:

 

                “5(a):  A retainer fee of Eighty Thousand Dollars
($80,000) shall be payable by NeoRx to Bay City on a quarterly basis; payment
due dates shall be January 1, April 1, July 1 and October 1.”

 

                All
other terms and conditions of the Letter Agreement shall remain in full force
and effect, as stated.

 

	
   

  	
  NeoRx
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Doug
  Given, M.D., Ph.D.

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  Bay
  City Capital BD LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Sanford
  S. Zweifach

  
	
   

  	
  PresidentEXHIBIT
10.22

 

September 13, 2001

 

Richard L.
Anderson

14031 216th Way NE

Woodinville, WA
98072

 

Re:    Employment; Prior Agreement

 

Dear Dick:

 

This letter agreement
(“Agreement”) establishes
our understanding and agreement.

 

Upon your signing below
the following will constitute the agreement of you and NeoRx Corporation
(“NeoRx”)  regarding your
employment.

 

The
Continuation/Separation Agreement and General Release,
dated March 20, 2001 (“Continuation/Separation
Agreement”), is hereby rescinded in its entirety, except
that: (1) you and NeoRx acknowledge and reaffirm their respective obligations
under the NeoRx Corporation Invention, Confidentiality and Noncompetition
Agreement, dated January 22, 1997, and the Nondisclosure and Return of
Materials terms contained in Section 7.1 and Section 7.2 of the Key Executive
Severance Agreement, dated January 22, 1997, each between NeoRx and you; (2)
the confidentiality and release provisions in the Continuation/Separation Agreement
shall continue to be effective as to events arising before and through March
20, 2001; and (3) the Change of Control Agreement, dated February 17, 1999,
between NeoRx and you shall continue to be terminated as of March 20, 2001 and you
and NeoRx shall enter into a new Change of Control Agreement in substantially
the form attached to this Agreement as Exhibit A (“Change of Control Agreement").

 

You will be employed by
NeoRx as an at will employee, which means that either you or NeoRx may
terminate your employment at any time for any reason, with or without notice,
with or without cause, in their discretion.

 

 

You will be employed by
NeoRx in the position of Senior Vice President and Chief Financial Officer,
reporting to either the Chief Executive Officer or the Chief Operating Officer,
as determined by NeoRx.  Your areas of
responsibility will include (1) financial and administrative functions and (2)
various corporate and business development matters, as will be assigned to you
by either the CEO or COO from time to time.

 

You will be paid an initial
annual base salary of $238, 000, at regular payroll
intervals and subject to withholding and deductions, with future increases, if
any, to be determined in the discretion of NeoRx.  For 2002 and subsequent years, you will be eligible for
consideration for annual bonus payments in an amount to be determined by NeoRx
in its sole discretion, up to twenty-five per cent (25%) of your base salary.

 

You will receive such
employee benefits during your employment as are generally received by other
NeoRx employees, except that you will not be entitled to receive a severance
agreement similar to what may be offered to other officers.  You will be reimbursed reasonable and
necessary business expenses consistent with NeoRx policy.

 

You will be entitled to
severance payments only as described in this paragraph and the Change of
Control Agreement.  You will not be
entitled to receive any severance payment if your employment continues for less
than one (1) year and three (3) months beyond the effective date
of this Agreement unless NeoRx terminates your employment without Cause (as
defined below) or you terminate your employment for Good Reason (as defined
below).  In the event (i) NeoRx
terminates your employment without Cause, (ii) you terminate your employment
for Good Reason, or (iii) after one year and three months from the effective date
of this Agreement, you voluntarily resign for any reason or no reason in
accordance with the prior written notice described in this paragraph, you will
receive (a) a severance amount equal to one (1) year of your then current base
annual salary, to be paid over one (1) year at regular payroll intervals, and
(b) for a period of eighteen (18) months after your termination or until you
qualify for comparable medical and dental insurance benefits from another
employer, whichever occurs first, the premiums for health insurance benefit
continuation for you and your family, if applicable, which NeoRx provides to
you under the provisions of the Federal Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (known as “COBRA”), to the extent that NeoRx would have paid such
premiums had you remained employed by NeoRx. 
If your employment is terminated for Cause or if you terminate your employment
other than for Good Reason 

 

2

 

 

 

within one (1) year and three (3)
months of the effective date of this Agreement, you will receive no
severance payment or COBRA payments. 
Notwithstanding Section 7.4 of the Change of Control Agreement, you must
give NeoRx three (3) months prior written notice of any voluntary resignation
and must be available, at NeoRx’s option, to work during the three (3) month
period.  For the avoidance of doubt, in
order to receive the severance payment and COBRA payments following your
voluntary resignation other than for Good Reason, your resignation must not be
given until after the first anniversary of the effective date of this
Agreement.  Nothing in this paragraph
affects or alters the at will status of your employment.

 

Your outstanding
stock options will continue to be handled in accordance with the terms of their
original grants and the terms of the Restated 1994 Stock Option Plan (the “Plan”), including
vesting; provided, however, that in the event (i) NeoRx terminates your
employment without Cause, (ii) you terminate your employment for Good
Reason, or (iii), more than one (1) year after the effective date
of this Agreement, you voluntarily resign your employment with NeoRx for
any reason or no reason in accordance with the prior written notice described
in the preceding paragraph, NeoRx will accelerate the vesting of all of your
unvested stock options (incentive and nonqualified stock options) that are
currently outstanding and all of your nonqualified stock options that are
currently outstanding may be exercised for up to twelve (12) months after such
termination, but no later than their normal ten (10) year expiration.

 

For the purpose of this Agreement, the
term "Cause" shall
mean cause given by you to NeoRx and shall include, without limitation,
the occurrence of one (1) or more of the following events:

 

(a)           A clear refusal to carry out any of
your material lawful duties or any directions of the board of directors or
senior management of NeoRx, all reasonably consistent with the duties described
in this Agreement;

 

(b)           Persistent failure to carry out any
of your lawful duties described in this Agreement or any directions of the
board of directors or senior management reasonably consistent with the duties
herein set forth to be performed by you, provided, however, that you have been
given reasonable notice and opportunity to correct any such failure;

 

3

 

(c)           Violation by you of a state or
federal criminal law involving the commission of a crime against NeoRx or any
other criminal act involving moral turpitude;

 

(d)           Current abuse by you of alcohol or
controlled substances; deception, fraud, misrepresentation or dishonesty by
you; or any incident materially compromising your reputation or ability to
represent NeoRx with investors, customers or the public; or

 

(e)           Any other material violation of any
provision of this Agreement by you, subject to notice and an opportunity to
cure such violation.

 

For the purpose of this Agreement, the
term "Good Reason"
shall mean:

 

(a)           The assignment to you of any duties
materially inconsistent with your position, authority, duties or
responsibilities as contemplated by this Agreement or any other action by NeoRx
that results in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated and inadvertent action
not taken in bad faith and that is remedied by NeoRx promptly after receipt of
notice thereof given by you;

 

(b)           Any failure by NeoRx to pay the
compensation contemplated by this Agreement, other than an isolated and
inadvertent failure not taken in bad faith and that is remedied by NeoRx
promptly after receipt of notice thereof given by you, including a reduction in
your annual base salary to a level below the level specified in this Agreement,
regardless of any change in your duties or responsibilities;

 

(c)           NeoRx’s requiring you to be based at
any office or location other than its current location or an office that is
less than twenty (20) miles from its current location;

 

(d)           Any failure by NeoRx to comply with
and satisfy Section 13 of the Change of Control Agreement; provided,
however, that NeoRx’s successor has received at least ten (10) days’ prior
written notice from NeoRx or you of the requirements of Section 13 of the
Change of Control Agreement; or

 

(e)           Any other material violation of any
provision of this Agreement by NeoRx, subject to notice and an opportunity to
cure such violation.

 

4

 

 

This Agreement shall be effective as of
September 13, 2001.

 

We look forward to having
you join the executive team at NeoRx.

 

	
   

  	
   

  	
  Best regards,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Doug Given, M.D., Ph.D.

  	
   

  
	
   

  	
   

  	
  Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED AND
  AGREED

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Richard L.
  Anderson

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
					

 

5

 

EXHIBIT A

 

CHANGE OF CONTROL AGREEMENT

 

This Change of Control
Agreement (this “Agreement”), dated as of September 13, 2001, is entered
into by and between NEORX CORPORATION, a Washington corporation (the
“Company”), and Richard L. Anderson (the “Executive”).

 

The Board of Directors of
the Company (the “Board”) has determined that it is in the best interests of
the Company and its shareholders to ensure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility, threat
or occurrence of a Change of Control (as defined in Section 1 hereof) of the
Company.  The Board believes it is
imperative to diminish the inevitable distraction of the Executive arising from
the personal uncertainties and risks created by a pending or threatened Change
of Control, to encourage the Executive’s full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with reasonable compensation and benefit
arrangements upon a Change of Control.  

 

In order to accomplish
these objectives, the Board has caused the Company to enter into this
Agreement.

 

1.             DEFINITIONS

 

1.1                                 “Change
of Control” shall have the definition set forth in Appendix A hereto, which
is hereby incorporated by reference.

 

1.2                                 “Change
of Control Date” shall mean the first date on which a Change of Control
occurs.

 

1.3                                 “Employment
Period” shall mean the two (2) year period commencing on the Change of
Control Date and ending on the second anniversary of such date.

 

2.             TERM

 

The term of this
Agreement (“Term”) shall commence on the date of this Agreement as first
appearing above and shall terminate without further action by either the
Company or the Executive on February 17, 2003; provided, however, that if 

 

1

 

a Change in Control occurs during the Term, the Term
shall automatically extend for the duration of the Employment Period.

 

3.             EMPLOYMENT

 

3.1          Employment Period

 

During the Employment
Period, the Company hereby agrees to continue the Executive in its employ or in
the employ of its affiliated companies, and the Executive hereby agrees to remain
in the employ of the Company or its affiliated companies, in accordance with
the terms and provisions of this Agreement; provided, however, that either the
Company or the Executive may terminate the employment relationship subject to
the terms of this Agreement.

 

3.2          Position and Duties

 

During the Employment
Period, the Executive’s position, authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the ninety (90) day
period immediately preceding the Change of Control Date.

 

3.3          Location

 

During the Employment
Period, the Executive’s services shall be performed at the Company’s
headquarters on the Change of Control Date or any office that is subsequently
designated as the headquarters of the Company and is less than twenty
(20) miles from such location.

 

3.4          Employment at Will

 

The Executive and the
Company acknowledge that, except as may otherwise be provided under any other
written agreement between the Executive and the Company, the employment of the
Executive by the Company or its affiliated companies is “at will” and may be
terminated by either the Executive or the Company or its affiliated companies
at any time with or without cause. 
Moreover, if prior to the Change of Control Date, the Executive’s
employment with the Company or its affiliated companies terminates for any
reason, then the Executive shall have no further rights under this Agreement;
provided, however, that the Company may not avoid liability for any termination
payments that would have been required during the Employment Period pursuant to
Section 8 hereof by terminating the Executive prior to the Employment
Period where such termination is carried out in anticipation of a Change 

 

2

 

of Control and the
principal motivating purpose is to avoid liability for such termination
payments.

 

4.             ATTENTION
AND EFFORT

 

During the Employment
Period, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive will devote all of his productive time,
ability, attention and effort to the business and affairs of the Company and
the discharge of the responsibilities assigned to him hereunder, and will use
his reasonable best efforts to perform faithfully and efficiently such
responsibilities.  It shall not be a
violation of this Agreement for the Executive to (a) serve on corporate,
civic or charitable boards or committees, (b) deliver lectures, fulfill
speaking engagements or teach at educational institutions, (c) manage
personal investments, or (d) engage in activities permitted by the
policies of the Company or as specifically permitted by the Company, so long as
such activities do not significantly interfere with the performance of the
Executive’s responsibilities in accordance with this Agreement.  It is expressly understood and agreed that
to the extent any such activities have been conducted by the Executive prior to
the Employment Period, the continued conduct of such activities (or the conduct
of activities similar in nature and scope thereto) during the Employment Period
shall not thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.

 

5.             COMPENSATION

 

As long as the Executive
remains employed by the Company during the Employment Period, the Company
agrees to pay or cause to be paid to the Executive, and the Executive agrees to
accept in exchange for the services rendered hereunder by him, the following
compensation:

 

5.1          Salary

 

The Executive shall
receive an annual base salary (the “Annual Base Salary”), at least equal to the
annual salary established by the Board or the Compensation Committee of the
Board (the “Compensation Committee”) or the Chief Executive Officer for the
fiscal year in which the Change of Control Date occurs.  The Annual Base Salary shall be paid in
substantially equal installments and at the same intervals as the salaries of
other executives of the Company are paid. 
The Board or the Compensation Committee or the Chief Executive Officer
shall review the Annual Base Salary at least annually and shall determine in
good faith and consistent with any generally applicable Company policy any
increases for future years.

 

3

 

5.2          Bonus

 

In addition to the Annual
Base Salary, the Executive shall be awarded, for each fiscal year ending during
the Employment Period, an annual bonus (the “Annual Bonus”) in cash at least
equal to the average annualized (for any fiscal year consisting of less than
twelve (12) full months) bonus paid or payable (including by reason of any
deferral and including the value of any stock awards and the compensation
expense disclosed in the Company’s financial statements for the grant of any
stock options) to the Executive by the Company and its affiliated companies in
respect of the three fiscal years immediately preceding the fiscal year in
which the Change of Control Date occurs. 
Each Annual Bonus shall be paid no later than ninety (90) days after the
end of the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of the Annual Bonus.

 

6.             BENEFITS

 

6.1          Incentive, Retirement and Welfare
Benefit Plans; Vacation

 

During the Employment
Period, the Executive shall be entitled to participate, subject to and in
accordance with applicable eligibility requirements, in such fringe benefit
programs as shall be generally made available to other executives of the
Company and its affiliated companies from time to time during the Employment
Period by action of the Board (or any person or committee appointed by the
Board to determine fringe benefit programs and other emoluments), including,
without limitation, paid vacations; any stock purchase, savings or retirement
plan, practice, policy or program; and all welfare benefit plans, practices,
policies or programs (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans or programs).

 

6.2          Expenses

 

During the Employment
Period, the Executive shall be entitled to receive prompt reimbursement for all
reasonable employment expenses incurred by him in accordance with the policies,
practices and procedures of the Company and its affiliated companies in effect
for the executives of the Company and its affiliated companies during the
Employment Period.

 

7.             TERMINATION

 

During the
Employment Period, employment of the Executive may be terminated as follows,
but, in any case, the nondisclosure provisions set forth in 

 

4

 

Section 10
hereof shall survive the termination of this Agreement and the termination of
the Executive’s employment with the Company:

 

 

7.1          By the Company or the Executive

 

At any time during the
Employment Period, the Company may terminate the employment of the Executive
with or without Cause (as defined below), and the Executive may terminate his
employment for Good Reason (as defined below) or for any reason, upon giving
the Notice of Termination (as defined below).

 

7.2          Automatic Termination

 

This Agreement and the
Executive’s employment during the Employment Period shall terminate
automatically upon the death or Total Disability of the Executive.  The term “Total Disability” as used herein
shall mean the Executive’s inability (with such accommodation as may be
required by law and which places no undue burden on the Company), as determined
by a physician selected by the Company and acceptable to the Executive, to
perform the duties set forth in Section 3.2 hereof for a period or periods
aggregating twelve (12) weeks in any three hundred sixty-five (365) day period
as a result of physical or mental illness, loss of legal capacity or any other
cause beyond the Executive’s control, unless the Executive is granted a leave
of absence by the Board.  The Executive
and the Company hereby acknowledge that the duties specified in
Section 3.2 hereof are essential to the Executive’s position and that
Executive’s ability to perform those duties is the essence of this Agreement.

 

7.3          Notice of Termination

 

Any termination by the
Company or by the Executive during the Employment Period shall be communicated
by the Notice of Termination to the other party given in accordance with
Section 12 hereof.  The term
“Notice of Termination” shall mean a written notice that (a) indicates the
specific termination provision in this Agreement relied upon and (b) to
the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. 
The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

5

 

7.4          Date of Termination

 

During the Employment
Period, “Date of Termination” means (a) if the Executive’s employment is
terminated by reason of death, at the end of the calendar month in which the
Executive’s death occurs, (b) if the Executive’s employment is terminated
by reason of Total Disability, immediately upon a determination by the
Company of the Executive’s Total Disability, and (c) in all other cases,
ten (10) days after the date of personal delivery or mailing of the Notice of
Termination.  The Executive’s employment
and performance of services will continue during such ten (10) day period;
provided, however, that the Company may, upon notice to the Executive and
without reducing the Executive’s compensation during such period, excuse the
Executive from any or all of his duties during such period.

 

8.             TERMINATION
PAYMENTS

 

In the event of
termination of the Executive’s employment during the Employment Period, all compensation
and benefits set forth in this Agreement shall terminate except as specifically
provided in this Section 8.

 

8.1          Termination by the Company Other Than
for Cause or by the Executive for Good Reason

 

If during the Employment
Period the Company terminates the Executive’s employment other than for Cause
or the Executive terminates his employment for Good Reason, the Executive shall
be entitled to:

 

(a)           receive payment of the following
accrued obligations (the “Accrued Obligations”):

 

(i)            the Annual Base Salary through the
Date of Termination to the extent not theretofore paid;

 

(ii)           the product of (x) the Annual
Bonus payable with respect to the fiscal year in which the Date of Termination
occurs and (y) a fraction the numerator of that is the number of days in the
current fiscal year through the Date of Termination, and the denominator of
which is three hundred sixty-five (365); and

 

(iii)          any compensation previously deferred
by the Executive (together with accrued interest or earnings thereon, if any)
and any accrued vacation pay that would be payable under the Company’s standard
policy, in each case to the extent not theretofore paid;

 

6

 

(b)           for one year after the Date of
Termination or until the Executive qualifies for comparable medical and dental
insurance benefits from another employer, whichever occurs first, the Company
shall pay the Executive’s premiums for health insurance benefit continuation
for the Executive and his family members, if applicable, which the Company
provides to the Executive under the provisions of the federal Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), to the extent
that the Company would have paid such premiums had the Executive remained employed
by the Company (such continued payment is hereinafter referred to as “COBRA
Continuation”);

 

(c)           an amount as severance pay equal to
one (1) times the Annual Base Salary for the fiscal year in which the Date of
Termination occurs; and

 

(d)           immediate vesting of all outstanding
stock options previously granted to the Executive by the Company.

 

8.2          Termination for Cause or Other Than
for Good Reason

 

If during the Employment
Period the Executive’s employment shall be terminated by the Company for Cause or
by the Executive for other than Good Reason, this Agreement shall terminate
without further obligation on the part of the Company to the Executive, other
than the Company’s obligation to pay the Executive (a) the Annual Base
Salary through the Date of Termination, (b)  the amount of any
compensation previously deferred by the Executive, and (c) any accrued
vacation pay that would be payable under the Company’s standard policy, in each
case to the extent theretofore unpaid.

 

8.3          Expiration of Term

 

In the event the
Executive’s employment is not terminated prior to expiration of the Term, this
Agreement shall terminate without further obligation on the part of the Company
to the Executive, other than the Company’s obligation to pay the Executive the
product of (a) the Annual Bonus payable with respect to the fiscal year in
which the Term expired and (b) a fraction the numerator of which is the
number of days in the current fiscal year through the end of the Term and the
denominator of which is three hundred sixty-five (365).

 

8.4          Termination Because of Death or Total
Disability

 

If during the Employment
Period the Executive’s employment is terminated by reason of the Executive’s
death or Total Disability, this Agreement shall terminate automatically without
further obligation on the part of the Company to the Executive or his legal
representatives under this Agreement, other than the Company’s obligation to
pay the Executive the Accrued Obligations (which shall be paid to the
Executive’s estate or beneficiary, as applicable in the case of the Executive’s
death), and to provide COBRA Continuation.

 

7

 

8.5          Payment Schedule

 

All payments of Accrued
Obligations, or any portion thereof payable pursuant to this Section 8,
shall be made to the Executive within ten (10) working days of the Date of
Termination.  Any payments payable to
the Executive pursuant to Section 8.1(c) hereof shall be made to the
Executive in a lump sum within ten (10) working days of the Date of Termination.

 

8.6          Cause

 

For purposes of this
Agreement, “Cause” means cause given by the Executive to the Company and shall
include, without limitation, the occurrence of one (1) or more of the following
events:

 

(a)           A clear refusal to carry out any
material lawful duties of the Executive or any directions of the Board or
senior management of the Company, all reasonably consistent with the duties
described in Section 3.2 hereof;

 

(b)           Persistent failure to carry out any
lawful duties of the Executive described in Section 3.2 hereof or any
directions of the Board or senior management reasonably consistent with the
duties herein set forth to be performed by the Executive, provided, however,
that the Executive has been given reasonable notice and opportunity to correct
any such failure;

 

(c)           Violation by the Executive of a state
or federal criminal law involving the commission of a crime against the Company
or any other criminal act involving moral turpitude;

 

(d)           Current abuse by the Executive of
alcohol or controlled substances; deception, fraud, misrepresentation or
dishonesty by the Executive; or any incident materially compromising the
Executive’s reputation or ability to represent the Company with investors,
customers or the public; or

 

(e)           Any other material violation of any
provision of this Agreement by the Executive, subject to the notice and
opportunity-to-cure requirements of Section 11 hereof.

 

8.7          Good Reason

 

For purposes of this
Agreement, “Good Reason” means

 

8

 

(a)           The assignment to the Executive of
any duties materially inconsistent with the Executive’s position, authority,
duties or responsibilities as contemplated by Section 3.2 hereof or any
other action by the Company that results in a material diminution in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated and inadvertent action not taken in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by the Executive;

 

(b)           Any failure by the Company to comply
with any of the provisions of Section 5 or Section 6 hereof, other
than an isolated and inadvertent failure not taken in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

 

(c)           The Company’s requiring the Executive
to be based at any office or location other than that described in Section 3.3
hereof;

 

(d)           Any failure by the Company to comply
with and satisfy Section 13 hereof; provided, however, that the Company’s
successor has received at least ten (10) days’ prior written notice from the
Company or the Executive of the requirements of Section 13 hereof; or

 

(e)           Any other material violation of any
provision of this Agreement by the Company, subject to the notice and
opportunity-to-cure requirements of Section 11 hereof.

 

8.8          Excess Parachute Limitation

 

If any portion of the
payments or benefits for the Executive under this Agreement, the letter
agreement, effective as of the date hereof, or any other agreement or benefit
plan of the Company (including stock option plan) would be characterized as an
“excess parachute payment” to the Executive under Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), the Executive shall be
paid an excise tax that the Executive owes under Section 4999 of the Code
as a result of such characterization, such excise tax to be paid to the
Executive at least ten (10) days prior to the date that he is obligated to make
the excise tax payment.  The
determination of whether and to what extent any payments or benefits would be
“excess parachute payments” and the date by which any excise tax shall be due,
shall be determined in writing by recognized tax counsel selected by the
Company and reasonably acceptable to the Executive.

 

9.             REPRESENTATIONS,
WARRANTIES AND OTHER CONDITIONS

 

In order to induce the
Company to enter into this Agreement, the Executive represents and warrants to
the Company as follows:

 

9

 

9.1          Health

 

The Executive is in good
health and knows of no physical or mental disability that, with any
accommodation that may be required by law and that places no undue burden on
the Company, would prevent him from fulfilling his obligations hereunder.  The Executive agrees, if the Company
requests, to submit to reasonable periodic medical examinations by a physician
or physicians designated by, paid for and arranged by the Company.  The Executive agrees that the examination’s medical
report shall be provided to the Company.

 

9.2          No Violation of Other Agreements

 

The Executive represents
that neither the execution nor the performance of this Agreement by the
Executive will violate or conflict in any way with any other agreement by which
the Executive may be bound.

 

10.          NONDISCLOSURE;
RETURN OF MATERIALS

 

10.1        Nondisclosure

 

Except as required by his
employment with the Company, the Executive will not, at any time during the
term of employment by the Company, or at any time thereafter, directly,
indirectly or otherwise, use, communicate, disclose, disseminate, lecture upon
or publish articles relating to any confidential, proprietary or trade secret
information without the prior written consent of the Company.  The Executive understands that the Company
will be relying on this Agreement in continuing the Executive’s employment,
paying him compensation, granting him any promotions or raises, or entrusting
him with any information that helps the Company compete with others.

 

10.2        Return of Materials

 

All documents, records, notebooks,
notes, memoranda, drawings or other documents made or compiled by the Executive
at any time, or in his possession, including any and all copies thereof, shall
be the property of the Company and shall be held by the Executive in trust and
solely for the benefit of the Company, and shall be delivered to the Company by
the Executive upon termination of employment or at any other time upon request
by the Company.

 

10

 

11.          NOTICE
AND CURE OF BREACH

 

Whenever a breach of this
Agreement by either party is relied upon as justification for any action taken
by the other party pursuant to any provision of this Agreement, other than
clause (a), (b), (c) or (d) of Section 8.6 hereof, before such action
is taken, the party asserting the breach of this Agreement shall give the other
party at least twenty (20) days’ prior written notice of the existence and the
nature of such breach before taking further action hereunder and shall give the
party purportedly in breach of this Agreement the opportunity to correct such
breach during the twenty (20) day period.

 

12.          FORM
OF NOTICE

 

Every notice required by
the terms of this Agreement shall be given in writing by serving the same upon
the party to whom it was addressed personally or by registered or certified
mail, return receipt requested, at the address set forth below or at such other
address as may hereafter be designated by notice given in compliance with the
terms hereof:

 

If to the Executive:                                                                                                Richard
L. Anderson

14031 216th Way NE

Woodinville, WA  98072

 

If to the Company:                                                                                                NeoRx
Corporation

410 West Harrison

Seattle, Washington  98119

Attn:  President

 

With a copy to:                                                                                                                Perkins
Coie LLP

1201 Third Avenue, 40th Floor

Seattle, Washington 98101-3099

Attn:  James R. Lisbakken

 

Except as set
forth in Section 7.4 hereof, if notice is mailed, such notice shall be
effective upon mailing.

 

13.          ASSIGNMENT

 

This Agreement is
personal to the Executive and shall not be assignable by the Executive.

 

The Company shall assign
to and require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all the 

 

11

 

business and/or
assets of the Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean NeoRx Corporation
and any successor to its business and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law, or otherwise.  All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and permitted assigns.

 

14.          WAIVERS

 

No delay or failure by
any party hereto in exercising, protecting or enforcing any of its rights,
titles, interests or remedies hereunder, and no course of dealing or
performance with respect thereto, shall constitute a waiver thereof.  The express waiver by a party hereto of any
right, title, interest or remedy in a particular instance or circumstance shall
not constitute a waiver thereof in any other instance or circumstance.  All rights and remedies shall be cumulative
and not exclusive of any other rights or remedies.

 

15.          AMENDMENTS
IN WRITING

 

No amendment,
modification, waiver, termination or discharge of any provision of this
Agreement, or consent to any departure therefrom by either party hereto, shall
in any event be effective unless the same shall be in writing, specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by the Company and the Executive,
and each such amendment, modification, waiver, termination or discharge shall
be effective only in the specific instance and for the specific purpose for
which given.  No provision of this
Agreement shall be varied, contradicted or explained by any oral agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by the Company and the Executive.

 

16.          APPLICABLE
LAW

 

This Agreement shall in
all respects, including all matters of construction, validity and performance,
be governed by, and construed and enforced in accordance with, the laws of the
State of Washington, without regard to any rules governing conflicts of laws.

 

12

 

17.          ARBITRATION;
ATTORNEYS’ FEES

 

Except in connection with
enforcing Section 10 hereof, for which legal and equitable remedies may be
sought in a court of law, any dispute arising under this Agreement shall be
subject to arbitration.  The arbitration
proceeding shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the “AAA Rules”) then in effect,
conducted by one arbitrator either mutually agreed upon or selected in
accordance with the AAA Rules.  The
arbitration shall be conducted in King County, Washington, under the
jurisdiction of the Seattle office of the American Arbitration
Association.  The arbitrator shall have
authority only to interpret and apply the provisions of this Agreement, and shall
have no authority to add to, subtract from or otherwise modify the terms of
this Agreement.  Any demand for
arbitration must be made within sixty (60) days of the event(s) giving rise to
the claim that this Agreement has been breached.  The arbitrator’s decision shall be final and binding, and each
party agrees to be bound to by the arbitrator’s award, subject only to an
appeal therefrom in accordance with the laws of the State of Washington.  Either party may obtain judgment upon the
arbitrator’s award in the Superior Court of King, County, Washington.

 

If it becomes necessary
to pursue or defend any legal proceeding, whether in arbitration or court, in
order to resolve a dispute arising under this Agreement, the prevailing party
in any such proceeding shall be entitled to recover its reasonable costs and
attorneys’ fees.

 

18.          SEVERABILITY

 

If any provision of this
Agreement shall be held invalid, illegal or unenforceable in any jurisdiction,
for any reason, including, without limitation, the duration of such provision,
its geographical scope or the extent of the activities prohibited or required
by it, then, to the full extent permitted by law, (a) all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having jurisdiction
thereover shall have the power to reform such provision to the extent necessary
for such provision to be enforceable under applicable law.

 

19.          ENTIRE
AGREEMENT

 

This Agreement
constitutes the entire agreement between the Company and the Executive with
respect to the subject matter hereof, and all prior or contemporaneous oral or
written communications, understandings or agreements between the Company 

 

13

 

and the Executive
with respect to such subject matter are hereby superseded and nullified in
their entireties, except that the letter agreement, effective as of the date
hereof, between the Company and the Executive and those agreements referred to
therein shall continue in full force and effect to the extent stated in the
letter agreement and not superseded by Section 10 hereof.

 

20.          WITHHOLDING

 

The Company may withhold
from any amounts payable under this Agreement such federal, state or local
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.

 

21.          COUNTERPARTS

 

This Agreement may be
executed in counterparts, each of which counterparts shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

22.          COORDINATION
WITH LETTER AGREEMENT

 

The letter agreement
regarding the Executive's employment with the Company that the parties are
entering into contemporaneously with this Agreement provides for certain forms
of severance and benefit payments in the event of termination of the Executive's
employment under certain conditions. 
This Agreement is in addition to the letter agreement and in no way
supersedes or nullifies the letter agreement. 
Nevertheless, it is possible for termination of employment to fall
within the scope of both agreements.  In
such event, payments made to the Executive under Section 8.1 hereof shall be
coordinated with payments made to the Executive under the letter agreement as
follows:  

 

(a)           COBRA Continuation under this
Agreement need not be provided to the extent COBRA continuation is provided
under the letter agreement; and

 

(c)           the severance payment required under
Section 8.1(c) hereof shall be paid in addition to any severance payment
required under the letter agreement.

 

[Signature page follows.]

 

14

 

IN WITNESS WHEREOF, the
parties have executed and entered into this Agreement effective on the date
first set forth above.

 

	
   

  	
  NEORX CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Doug Given, M.D., Ph.D.

  	
   

  
	
   

  	
   

  	
  Its Chief
  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Richard L.
  Anderson

  	
   

  

 

15

 

APPENDIX
A

 

For purposes of this
Agreement, a “Change of Control” shall mean:

 

(a)           A “Board Change” that, for purposes
of this Agreement, shall have occurred if a majority (excluding vacant seats)
of the seats on the Board are occupied by individuals who were neither
(i) nominated by a majority of the Incumbent Directors nor
(ii) appointed by directors so nominated. 
An “Incumbent Director” is a member of the Board who has been either
(i) nominated by a majority of the directors of the Company then in office
or (ii) appointed by directors so nominated, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person (as
hereinafter defined) other than the Board; or

 

(b)           The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of (i) twenty percent (20%) or
more of either (A) the then outstanding shares of Common Stock of the
Company (the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”), in the case of either (A) or (B) of this clause (i), which
acquisition is not approved in advance by a majority of the Incumbent
Directors, or (ii) thirty-three percent (33%) or more of either
(A) the Outstanding Company Common Stock or (B) the Outstanding
Company Voting Securities, in the case of either (A) or (B) of this clause
(ii), which acquisition is approved in advance by a majority of the Incumbent
Directors; provided, however, that the following acquisitions shall not
constitute a Change of Control: 
(x) any acquisition by the Company, (y) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (z) any acquisition by
any corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (c) of this
Appendix A are satisfied; or

 

1

 

(c)           Approval by the shareholders of the
Company of a reorganization, merger or consolidation, in each case, unless,
immediately following such reorganization, merger or consolidation,
(i) more than sixty percent (60%) of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such reorganization,
merger or consolidation in substantially the same proportion as their ownership
immediately prior to such reorganization, merger or consolidation of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding the Company, any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such reorganization, merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization, merger or consolidation,
directly or indirectly, thirty-three percent (33%) or more of the Outstanding
Company Common Stock or the Outstanding Company Voting Securities, as the case
may be) beneficially owns, directly or indirectly, thirty-three percent (33%)
or more of, respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors, and (iii) at
least a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were the Incumbent
Directors at the time of the execution of the initial agreement providing for
such reorganization, merger or consolidation; or

 

(d)           Approval by the shareholders of the
Company of (i) a complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all the assets
of the Company, other than to a corporation with respect to which immediately
following such sale or other disposition, (A) more than sixty percent
(60%) of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership, immediately prior to
such sale or other disposition, of the Outstanding Company

 

2

 

Common Stock and
the Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, thirty-three
percent (33%) or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, thirty–three percent (33%) or more of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors, and
(C) at least a majority of the members of the board of directors of such
corporation were approved by a majority of the Incumbent Directors at the time
of the execution of the initial agreement or action of the Board providing for
such sale or other disposition of the Company’s assets.

 

3

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