EXHIBIT 10.37
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of
_____________, ____, is entered into by and between NEORX CORPORATION, a
Washington corporation (the "Company"), and ________________ (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.
1.4 "SEVERANCE AGREEMENT" shall mean the Key Executive Severance Agreement
dated as of the date hereof between the parties, as it may be amended
from time to time, that provides for certain benefits related to
termination of the Executive's employment that are unrelated to a Change
of Control.
2. TERM
The term of this Agreement ("Term") shall be for a period of two (2)
years from the date of this Agreement as first appearing above, at which time
this Agreement shall terminate without further action by either the Company
or the Executive; provided, however, that the Term shall automatically renew
for additional two (2) year periods unless notice of nonrenewal is given by
either party to the other at least ninety (90) days prior to the end of the
initial Term or any renewal Term, and provided further that if 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 of
Control and the principal motivating purpose is to avoid liability for such
termination payments.
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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.
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
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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 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
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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.
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.
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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;
(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
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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.
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;
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(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
(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 Severance Agreement, 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
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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:
9.1 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
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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.
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: -----------------------
-----------------------
-----------------------
If to the Company: NeoRx Corporation
410 West Harrison
Seattle, Washington 98119
Attn: President
With a copy to: Perkins Coie
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 business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same
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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.
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
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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
Except as described in Section 22 hereof, 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 and the
Executive with respect to such subject matter are hereby superseded and
nullified in their entireties, except that the Proprietary Information and
Invention Agreement between the Company and the Executive shall continue in
full force and effect to the extent 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.
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22. COORDINATION WITH SEVERANCE AGREEMENT
The Severance Agreement 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. This Agreement is in addition to the Severance Agreement and in
no way supersedes or nullifies the Severance Agreement. Nevertheless, it is
possible that termination of employment by the Company or by the Executive
may 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 Section 5.1 of the Severance Agreement as follows:
(a) Accrued Obligations under this Agreement need not be paid if
paid under the Severance Agreement;
(b) COBRA Continuation under this Agreement shall need not be
provided to the extent COBRA Continuation is provided under Section 5.1(c) of
the Severance Agreement; and
(c) The severance payment required under Section 8.1(c) hereof
shall be paid in addition to any severance payment required under Section
5.1(c) of the Severance Agreement.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement effective on the date first set forth above.
NEORX CORPORATION
By
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Its
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EXECUTIVE
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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
(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
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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 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.
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