TARGETED GENETICS CORP /WA/
AMENDED AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT
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<TYPE>EX-10.2
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<FILENAME>dex102.htm
<DESCRIPTION>AMENDED AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT
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<TITLE>Amended and Restated Senior Management Employment Agreement</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>SENIOR MANAGEMENT EMPLOYMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">SENIOR MANAGEMENT EMPLOYMENT AGREEMENT, dated as of the 27th
day of March, 2009, between TARGETED GENETICS CORPORATION, a Washington corporation (the &#147;Company&#148;), and B.G. Susan Robinson (&#147;Executive&#148;). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>RECITALS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. Executive is currently employed by the Company or one of its Subsidiaries. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. The Board of Directors of the Company (the &#147;Board&#148;) has determined that it is appropriate to reinforce the continued attention and
dedication of certain members of the Company&#146;s management, including Executive, to their assigned duties without distraction in potentially disturbing circumstances arising from the possibility of a Change in Control of the Company, as defined
in Schedule&nbsp;A attached hereto. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AGREEMENTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the Company and Executive agree as follows: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>DEFINITIONS</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Terms capitalized in this Agreement
which are not otherwise defined shall have the meanings assigned to such terms in Schedule&nbsp;A attached hereto. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>EFFECTIVENESS; PRIOR AGREEMENT</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Except with respect
to Sections&nbsp;6 through 9 of this Agreement, which shall be effective immediately, this Agreement shall become effective immediately upon the occurrence of a Change in Control, provided that Executive is employed by the Company immediately prior
to such Change in Control. This Agreement revokes and supersedes the Amended and Restated Change In Control Agreement between Executive and Company dated March&nbsp;13, 2008, which shall be of no further force and effect. </FONT></P> <P
STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>TERM</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Unless earlier terminated as provided herein,
the initial term of this Agreement shall be from the date hereof until the second anniversary date of this Agreement; provided, however, that, unless terminated as provided herein or there shall have occurred a Change in Control, on each annual
anniversary date of this Agreement this Agreement shall automatically be renewed for successive two-year terms. In the event of a Change in Control, unless earlier terminated as provided herein, this Agreement shall continue in effect until the
second anniversary date of the Change in Control at which time this Agreement shall expire. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1 </FONT></P>


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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>BENEFITS UPON CHANGE IN CONTROL</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Executive shall be
entitled to the following payments and benefits following a Change in Control, whether or not a Termination occurs: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(A) SALARY AND
BENEFITS.</B> While employed by the Company or any Subsidiary, Executive shall (i)&nbsp;receive an annual base salary no less than the Executive&#146;s annual base salary in effect immediately prior to the date that the Change in Control occurs,
including any salary that has been earned but deferred, and an annual bonus equal to at least the average of the three annual bonuses paid to Executive in the three years prior to the Change in Control (which bonus shall vest on the last day of the
applicable bonus year and be paid no later than the 15th day of the third month following the later of the end of the calendar year or the Company&#146;s taxable year in which the bonus vests), and (ii)&nbsp;be entitled to participate in all
employee expense reimbursement, incentive, savings and retirement plans, practices, policies and programs (including any Company plan qualified under Section&nbsp;401(a) of the Code) available to other peer executives of the Company and its
Subsidiaries, but in no event shall the benefits provided to Executive under this item (ii)&nbsp;be less favorable, in the aggregate, than the most favorable of those plans, practices, policies or programs in effect immediately prior to the date
that the Change in Control occurs. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(B) WELFARE PLAN BENEFITS.</B> While employed by the Company or any Subsidiary, the Company shall at
the Company&#146;s expense (except for the amount, if any, of any required employee contribution which would have been necessary for Executive to contribute as an active employee under the plan or program as in effect on the date of the Change in
Control) continue to cover Executive (and his or her dependents) under, or provide Executive (and his or her dependents) with insurance coverage no less favorable than, the Company&#146;s life, disability, health, dental and any other employee
welfare benefit plans or programs, as in effect on the date of the Change in Control (such benefits, the &#147;Welfare Benefits&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2"><B>(C) DEATH OF EXECUTIVE.</B> In the event of Executive&#146;s death prior to Termination but while employed by the Company or any Subsidiary, his or her spouse, if any, or otherwise the personal representative of his or her estate, shall
be entitled to receive (i)&nbsp;Executive&#146;s salary at the rate then in effect through the date of death, as provided under the Company&#146;s pay policy, (ii)&nbsp;any Accrued Benefits for the periods of service prior to the date of death, and
(iii)&nbsp;payment of&nbsp;the applicable COBRA premiums, if any, for Executive&#146;s dependents, provided the Company receives adequate substantiation of such&nbsp;COBRA&nbsp;coverage. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(D) DISABILITY OF EXECUTIVE.</B> In the event of Executive&#146;s Disability prior to Termination but while employed by the Company or any Subsidiary,
Executive shall be entitled to receive (i)&nbsp;his or her salary at the rate then in effect through the date of the determination of Disability, as provided under the Company&#146;s pay policy, (ii)&nbsp;any Accrued Benefits for the periods of
service prior to the date of the determination of Disability, (iii)&nbsp;payments under the Company&#146;s short and long term disability plans following the determination of Disability, and (iv)&nbsp;payment of&nbsp;the applicable COBRA premiums,
if any, for Executive and Executive&#146;s dependents, provided the Company receives adequate substantiation of such&nbsp;COBRA&nbsp;coverage. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(E) CAUSE; UPON EXPIRATION OF THIS AGREEMENT; OTHER THAN FOR GOOD REASON.</B> If, prior to
Termination, Executive&#146;s employment shall be terminated by the Company for Cause or upon expiration of this Agreement or by Executive other than for Good Reason, Executive shall be entitled to receive (i)&nbsp;his or her salary at the rate then
in effect through the date of such termination, as provided under the Company&#146;s pay policy, and (ii)&nbsp;any Accrued Benefits for the periods of service prior to the date of such termination. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(F) WITHHOLDING.</B> All payments under this Section&nbsp;4 are subject to applicable federal and state payroll withholding or other applicable taxes.
</FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>5.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>PAYMENTS AND BENEFITS UPON TERMINATION</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Executive
shall be entitled to the following payments and benefits following Termination: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(A) TERMINATION PAYMENT.</B> In recognition of past
services to the Company by Executive, the Company shall make a lump sum payment in cash to Executive as severance pay equal to 1.25 times the sum of: (i)&nbsp;Executive&#146;s annual base salary in effect immediately prior to the date that either a
Change in Control shall occur or such date of Termination, whichever salary is higher, provided that if Executive is a part-time employee on the date of Termination then Executive&#146;s base salary in effect immediately prior to the date of
Termination shall be used in calculating the payment to which Executive may be entitled under this Section&nbsp;5(a); plus (ii)&nbsp;a percentage of Executive&#146;s annual base salary specified in subparagraph (i)&nbsp;above, which percentage is
equal to the percentage bonus paid to Executive for the fiscal year ended immediately prior to the Change in Control; provided, however, that if Termination occurs prior to the determination of such percentage for a fiscal year that has ended or if
Executive has not received a percentage bonus in the previous year, such percentage shall be ten percent (10%). All payments under this Section&nbsp;5(a) (the &#147;Termination Payments&#148;) shall be paid within ten (10)&nbsp;business days
following the date of Executive&#146;s separation from service (within the meaning of Section&nbsp;409A of the Internal Revenue Code (the &#147;Code&#148;)). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2"><B>(B) CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.</B> Notwithstanding the foregoing, if all or any portion of the Termination Payments either alone or together with all other payments and benefits which Executive
receives or is then entitled to receive (pursuant to this Agreement or otherwise) from the Company or any Subsidiary (all such payments and benefits, including the Termination Payments, the &#147;Termination Benefits&#148;), would constitute a
Parachute Payment, then the Payments to Executive under Section&nbsp;5(a) shall be increased (such increase, a &#147;Gross-Up Payment&#148;), but only to the extent necessary to ensure that, after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Termination Benefits. The foregoing calculations shall be made, at the Company&#146;s expense, by the Company and Executive. If no agreement on the calculations is reached within thirty (30)&nbsp;business days after the date of Termination, then the
accounting firm that regularly audits the financial statements of the Company (the &#147;Auditors&#148;) shall review the calculations. The determination of such firm shall be conclusive and binding on all parties and the expense for such
accountants shall be paid by the Company. Pending such determination, the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">Company shall continue to make all other required payments to Executive at the time and in the manner provided herein. The Gross-Up Payment shall be made as
soon as reasonably practicable and shall in no event be made later than the end of the calendar year next following the calendar year in which Executive remits the related taxes. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As a result of the uncertainty in the application of Section&nbsp;4999 of the Code, it is possible that Gross-Up Payments will have been made by the
Company which should not have been made (an &#147;Overpayment&#148;) or that additional Gross-Up Payments which will not have been made by the Company should have been made (an &#147;Underpayment&#148;). If it is determined by the Company and
Executive, or, if no agreement is reached by the Company and Executive, the Auditors, that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company, together
with interest at the applicable federal rate provided for in section 7872(f)(2) of the Code. In the event that the Company and Executive, or, if no agreement is reached by the Company and Executive, the Auditors, determine that an Underpayment has
occurred, such Underpayment shall promptly be paid by the Company to or for the benefit of Executive, together with interest at the applicable federal rate provided for in section 7872(f)(2)(A) of the Code. The Company and Executive shall give each
other prompt written notice of any information that could reasonable result in the determination that an Overpayment or Underpayment has been made. Any Underpayment shall be made as soon as reasonably practicable and shall in no event be made later
than the end of the calendar year next following the calendar year in which Executive remits the related taxes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(C) ACCRUED
BENEFITS.</B> The Company shall make a lump sum payment in cash to Executive in the amount of any Accrued Benefits for the periods of service prior to the date of Termination. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(D) WELFARE PLAN BENEFITS.</B> For a period of one year following the date of Termination, the Company shall pay a portion of the applicable COBRA
premiums, if any, for Executive and Executive&#146;s dependents equal to the Company-paid portion of comparable active employee&nbsp;coverage&nbsp;as in effect&nbsp;on&nbsp;the date of Termination, provided the Company receives adequate
substantiation of such&nbsp;COBRA&nbsp;coverage. Notwithstanding the foregoing, if Executive is provided by another employer during such one-year period with health benefits that are substantially comparable to the active
employee&nbsp;coverage&nbsp;as in effect&nbsp;on&nbsp;the date of Termination (including with respect to the amount of employer premium subsidy), the Company&#146;s obligation under this paragraph shall cease. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(E) DEATH OF EXECUTIVE.</B> In the event of Executive&#146;s death subsequent to Termination and prior to receiving all benefits and payments provided
for by this Section&nbsp;5, such benefits shall be paid to his or her spouse, if any, or otherwise to the personal representative of his or her estate, in accordance with the payment terms described above, unless Executive has otherwise directed the
Company in writing prior to his or her death. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(F) EXCLUSIVE SOURCE OF SEVERANCE PAY.</B> Benefits provided hereunder shall replace the
amount of any severance payments to which Executive would otherwise be entitled under any severance plan or policy generally available to employees of the Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(G) NONSEGREGATION.</B> No assets of the Company need be segregated or earmarked to represent the
liability for benefits payable hereunder. The rights of any person to receive benefits hereunder shall be only those of a general unsecured creditor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2"><B>(H) WITHHOLDING.</B> All payments under this Section&nbsp;5 are subject to applicable federal and state payroll withholding or other applicable taxes. </FONT></P> <P
STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>6.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>ARBITRATION</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by arbitration in Seattle, Washington, in accordance with the Rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator&#146;s
award in any jurisdiction. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>7.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>CONFLICT IN BENEFITS</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Except for the amount of any
severance payments to which Executive would otherwise be entitled under any severance plan or policy generally available to employees of the Company, this Agreement is not intended to and shall not adversely affect, limit or terminate any other
agreement or arrangement between Executive and the Company presently in effect or hereafter entered into, including any employee benefit plan under which Executive is entitled to benefits. </FONT></P> <P
STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>8.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>TERMINATION</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(A) TERMINATION PRIOR TO A CHANGE
IN CONTROL.</B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) At any time prior to a Change in Control, the Company may terminate this Agreement upon nine (9)&nbsp;months&#146;
prior written notice in the form of a Notice of Termination, and this Agreement shall terminate upon the effective date specified in such Notice of Termination; provided, however, such Notice of Termination shall have no force or effect in the event
of the occurrence of a Change in Control prior to such effective date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii) At any time prior to a Change in Control, Executive may
terminate this Agreement upon thirty (30)&nbsp;days&#146; prior written notice in the form of a Notice of Termination, and this Agreement shall terminate upon the effective date specified in such Notice of Termination notwithstanding the occurrence
of a Change in Control prior to such effective date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(B) TERMINATION AFTER A CHANGE IN CONTROL.</B> After a Change in Control, either
party may terminate this Agreement upon thirty (30)&nbsp;days&#146; prior written notice in the form of a Notice of Termination. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2"><B>(C) EFFECT OF TERMINATION.</B> Notwithstanding the termination or expiration of this Agreement, the Company shall remain liable for any rights or payments arising prior to such termination to which Executive is entitled under this
Agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>9.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>MISCELLANEOUS</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(A) AMENDMENT.</B> This Agreement
may not be amended except by written agreement between Executive and the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(B) NO MITIGATION.</B> All payments and benefits to
which Executive is entitled under this Agreement shall be made and provided without offset, deduction or mitigation on account of income Executive could or may receive from other employment or otherwise, except as provided in Section&nbsp;5(d)
hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(C) EMPLOYMENT NOT GUARANTEED.</B> Nothing contained in this Agreement, and no decision as to the eligibility for benefits or
the determination of the amount of any benefits hereunder, shall give Executive any right to be retained in the employ of the Company or rehired, and the right and power of the Company to dismiss or discharge any employee for any reason is
specifically reserved. Except as expressly provided herein, no employee or any person claiming under or through him or her shall have any right or interest herein, or in any benefit hereunder. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(D) LEGAL EXPENSES.</B> In connection with any litigation, arbitration or similar proceeding, whether or not instituted by the Company or Executive,
with respect to the interpretation or enforcement of any provision of this Agreement, the prevailing party shall be entitled to recover from the other party all costs and expenses, including reasonable attorneys&#146; fees and disbursements, in
connection with such litigation, arbitration or similar proceeding. The Company shall pay prejudgment interest on any money judgment obtained by Executive as a result of such proceedings, calculated at the published commercial interest rate of
Seafirst Bank for its best customers, as in effect from time to time from the date that payment should have been made to Executive under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2"><B>(E) NOTICES.</B> Any notices required under the terms of this Agreement shall be effective when mailed, postage prepaid, by certified mail and addressed to, in the case of the Company: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">Targeted Genetics Corporation </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">1100 Olive
Way, Suite 100 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">Seattle, WA 98101 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman"
SIZE="2">Attention: Chief Financial Officer </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">and to, in the case of Executive: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">B.G. Susan Robinson </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">8571 SE 82nd Street
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">Mercer Island, WA 98040 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Either party may
designate a different address by giving written notice of change of address in the manner provided above. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(F) WAIVER; CURE.</B> No
waiver or modification in whole or in part of this Agreement, or any term or condition hereof, shall be effective against any party unless in writing </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">and duly signed by the party sought to be bound. Any waiver of any breach of any provision hereof or any right or power by any party on one occasion shall
not be construed as a waiver of, or a bar to, the exercise of such right or power on any other occasion or as a waiver of any subsequent breach. Any breach of this Agreement may be cured by the breaching party within ten (10)&nbsp;days of the date
that such breaching party shall have received written notice of such breach from the party asserting such breach. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(G) BINDING EFFECT;
SUCCESSORS.</B> Subject to the provisions hereof, nothing in this Agreement shall prevent the consolidation of the Company with, or its merger into, any other corporation, or the sale by the Company of all or substantially all of its properties and
assets, or the assignment of this Agreement by the Company in connection with any of the foregoing actions. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company and Executive and their respective heirs,
legal representatives, successors and assigns. If the Company shall be merged into or consolidated with another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting
from such consolidation. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, including the successor to all or
substantially all of the business or assets of any Subsidiary, division or profit center of the Company, to expressly assume 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. The provisions of this Section&nbsp;10(g) shall continue to apply to each subsequent employer of Executive hereunder in the event of any subsequent merger, consolidation or transfer of assets of such
subsequent employer. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(H) SEPARABILITY.</B> Any provision of this Agreement that is held to be unenforceable or invalid in any respect
in any jurisdiction shall be ineffective in such jurisdiction to the extent that it is unenforceable or invalid without affecting the remaining provisions hereof, which shall continue in full force and effect. The enforceability or invalidity of any
provision of this Agreement in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2"><B>(I) SECTION 409A. </B>This Agreement is not intended to constitute a &#147;nonqualified deferred compensation plan&#148; within the meaning of Section&nbsp;409A of the Code. Notwithstanding the foregoing, in the event this Agreement or
any compensation or benefit paid to Executive hereunder is deemed to be subject to Section&nbsp;409A of the Code, Executive and the Company agree to negotiate in good faith to adopt such amendments that are necessary to comply with Section&nbsp;409A
of the Code or to exempt such compensation or benefits from Section&nbsp;409A of the Code. In addition, to the extent (i)&nbsp;any compensation or benefits to which Executive becomes entitled under this agreement, or any agreement or plan referenced
herein, in connection with Executive&#146;s termination of employment with the Company constitute deferred compensation subject to Section&nbsp;409A of the Code and (ii)&nbsp;Executive is deemed at the time of such termination of employment to be a
&#147;specified employee&#148; under Section&nbsp;409A of the Code, then such compensation or benefits shall not be made or commence until the date that is six months after the date of Executive&#146;s &#147;separation from service&#148; (or, if
earlier, the date of the Executive&#146;s death); provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Executive, including (without limitation) the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">additional twenty percent (20%)&nbsp;tax for which Executive would otherwise be liable under Section&nbsp;409A(a)(1)(B) of the Code in the absence of such
deferral. During any period compensation or benefits to Executive are deferred pursuant to the foregoing, Executive shall be entitled to interest on such deferral at a per annum rate equal to the highest rate of interest applicable to six (6)-month
money market accounts offered by the following institutions: Citibank N.A., Wells Fargo Bank, N.A. or Bank of America, on the date of such &#147;separation from service.&#148; Upon the expiration of the applicable deferral period, any compensation
or benefits which would have otherwise been paid during that period (whether in a single sum or in installments) in the absence of this section shall be paid to Executive or Executive&#146;s beneficiary, if applicable, in one lump sum. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>(J) GOVERNING LAW.</B> This Agreement shall be governed by and construed in accordance with the laws of the state of Washington applicable to
contracts made and to be performed therein. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the day and year first above written.
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="90%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>TARGETED GENETICS CORPORATION</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Jeremy L. Curnock Cook</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Jeremy L. Curnock Cook</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chairman</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2"><B>EXECUTIVE:</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ B.G. Susan Robinson</FONT></P></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Schedule A </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>CERTAIN DEFINITIONS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As used in this Agreement, and unless the context requires a different meaning, the following terms
have the meanings indicated: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Accrued Benefits&#148; means the aggregate of any compensation previously deferred by Executive
(together with any accrued interest or earnings thereon), any accrued vacation pay and, in the case of Termination, if the date of Termination occurs after the end of a Fiscal Year for which a bonus is payable to Executive, such bonus, in each case
to the extent previously earned and not paid, plus an amount equal to the product of the bonus paid to Executive the prior Fiscal Year and a fraction, the numerator of which is the number of days since the end of the prior Fiscal Year, and the
denominator of which is 365. Accrued Benefits payable under this Agreement shall be paid within ten (10)&nbsp;business days following the Executive&#146;s separation from service, provided that any compensation previously deferred by Executive
(together with any accrued interest or earnings thereon) shall be paid in accordance with the terms of such deferred compensation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">&#147;Beneficial Owner&#148; and &#147;Beneficial Ownership&#148; have the meanings set forth in Rules 13d-3 and 13d-5 of the General Rules and Regulations promulgated under the Exchange Act. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Board Change&#148; means that a majority of the seats (other than vacant seats) on the Board have been occupied by individuals who were neither
(a)&nbsp;nominated or appointed by a majority of the Incumbent Directors nor (b)&nbsp;nominated or appointed by directors so nominated or appointed. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">&#147;Business Combination&#148; means a reorganization, merger or consolidation or sale of substantially all of the assets of the Company. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Cause&#148; means (a)&nbsp;willful misconduct on the part of Executive that has a materially adverse effect on the Company and its Subsidiaries,
taken as a whole, (b)&nbsp;Executive&#146;s engaging in conduct that could reasonably result in his or her conviction of a felony or a crime against the Company or involving substance abuse, fraud or moral turpitude, or that would materially
compromise the Company&#146;s reputation, as determined in good faith by a written resolution duly adopted by the affirmative vote of not less than two-thirds of all of the directors who are not employees or officers of the Company, or
(c)&nbsp;unreasonable refusal by Executive to perform the duties and responsibilities of his or her position in any material respect. No action, or failure to act, shall be considered willful or unreasonable if it is done by Executive in good faith
and with reasonable belief that his or her action or omission was in the best interests of the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Change in Control&#148;
means, and shall be deemed to occur upon the happening of, any one of the following: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) A Board Change; or </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) The acquisition (whether directly or indirectly, beneficially or of record) by any Person of (i)&nbsp;fifteen percent (15%)&nbsp;or more of the
combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, which </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-1 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">acquisition is not approved in advance by a majority of the Incumbent Directors; or (ii)&nbsp;thirty-three percent (33%)&nbsp;or more of the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, which acquisition has been approved in advance by a majority of the Incumbent Directors; provided, however, that the following
acquisitions shall not constitute a Change in Control: (x)&nbsp;any acquisition by the Company, (y)&nbsp;any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by the Company,
or (z)&nbsp;any acquisition by any company pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii)&nbsp;and (iii)&nbsp;of the following
subsection (c)&nbsp;are satisfied; or </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(c) Approval by the shareholders of the
Company of a reorganization, merger or consolidation in which the Company is not the continuing or surviving corporation, or pursuant to which shares of the Company&#146;s Common Stock are converted into cash, securities or other property, unless
following such reorganization, merger or consolidation (i)&nbsp;at least sixty-six and two-thirds percent (66<FONT SIZE="1"><SUP>&nbsp;2</SUP></FONT><FONT SIZE="2">/</FONT><FONT SIZE="1">3</FONT><FONT FACE="Times New Roman" SIZE="2">%) of the then
outstanding shares of common stock of the company resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company&#146;s voting securities immediately prior to such reorganization, merger or
consolidation, (ii)&nbsp;no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such company 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%)&nbsp;or more of the Company&#146;s voting securities) beneficially owns, directly or indirectly, thirty-three percent (33%)&nbsp;or more of,
respectively, the then outstanding shares of common stock of the company resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such company entitled to vote generally in
the election of directors, and (iii)&nbsp;at least a majority of the members of the board of directors of the company resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization, merger or consolidation; or </FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman"
SIZE="2">(d) Approval by the shareholders of the Company of (i)&nbsp;any plan or proposal for liquidation or dissolution of the Company or (ii)&nbsp;any sale, lease, exchange or other transfer in one transaction or a series of transactions of all or
substantially all of the assets of the Company other than to a company with respect to which following such sale or other disposition (A)&nbsp;at least sixty-six and two-thirds percent (66<FONT SIZE="1"><SUP>&nbsp;2</SUP></FONT><FONT
SIZE="2">/</FONT><FONT SIZE="1">3</FONT><FONT FACE="Times New Roman" SIZE="2">%) of the then outstanding shares of common stock of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote
generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company&#146;s voting securities immediately prior to such
sale or other disposition, (B)&nbsp;no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such company and any Person beneficially owning, immediately prior to such sale or other disposition, directly or
indirectly, thirty-three percent (33%)&nbsp;or more of the Company&#146;s voting securities) beneficially owns, directly or indirectly, thirty-three percent (33%)&nbsp;or more of, respectively, the then outstanding shares of common stock of such
company and the combined </FONT></FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-2 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors, and (C)&nbsp;at least a
majority of the members of the board of directors of such company were approved by a majority of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets
of the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Code&#148; means the Internal Revenue Code of 1986, as amended. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Disability&#148; means that (a)&nbsp;a person has been incapacitated by bodily injury or physical or mental disease so as to be prevented thereby
from performance of his or her duties with the Company for one hundred twenty (120)&nbsp;days in any twelve (12)&nbsp;month period, and (b)&nbsp;such person is disabled for purposes of any and all of the plans or programs of the Company or any
Subsidiary that employs Executive under which benefits, compensation or awards are contingent upon a finding of disability. The determination with respect to whether Executive is suffering from such a Disability will be determined by a mutually
acceptable physician or, if there is no physician mutually acceptable to the Company and Executive, by a physician selected by the then Dean of the University of Washington Medical School. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Exchange Act&#148; means the Securities Exchange Act of 1934, as amended. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Excise Tax&#148; means the excise tax, including any interest or penalties thereon, imposed by Section&nbsp;4999 of the Code. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Fiscal Year&#148; means the twelve (12)&nbsp;month period ending on December&nbsp;31 in each year (or such other fiscal year period established by
the Board). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Good Reason&#148; means, without Executive&#146;s express written consent: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) the assignment to Executive of duties, or limitation of Executive&#146;s responsibilities, materially inconsistent with Executive&#146;s duties and
responsibilities with the Company or any Subsidiary that employs Executive as such duties and responsibilities existed immediately prior to the date of the Change in Control, or </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) failure by the Company to pay in any material respect, or material reduction by the Company of, Executive&#146;s annual base salary, as reflected in
the Company&#146;s payroll records for Executive&#146;s last pay period immediately prior to the Change in Control; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) the Company
materially reduces Executive&#146;s bonus described in Section&nbsp;4(A)(i); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d) the Company requires that Executive relocate to a
distance more than thirty (30)&nbsp;miles from the Company&#146;s present location in Seattle, Washington or such other location where Executive is employed by the Company prior to being asked to relocate; or </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(e) the material breach of any material provision of this Agreement by the Company, including, without limitation, failure by the Company to bind any
successor to the Company to the terms and provisions of this Agreement in accordance with Section&nbsp;9(g) of this Agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">To have Good Reason to resign, Executive must first notify the Company in writing of the reason(s)
Executive believes Good Reason exists within 90 days of the initial existence thereof and provide (30)&nbsp;days for the Company to cure. The parties intend that this &#147;Good Reason&#148; trigger qualify as an involuntary trigger under Treasury
Regulation Section&nbsp;1.409A-1(n)(2)(i). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Incumbent Director&#148; means a member of the Board who has been either
(a)&nbsp;nominated by a majority of the directors of the Company then in office or (b)&nbsp;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 Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Notice of Termination&#148; means a written notice to Executive or to the Company, as the case may be, which shall indicate those
specific provisions in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for the termination of Executive&#146;s employment constituting a Termination, if any, under the
provision so indicated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Parachute Payment&#148; means any payment deemed to constitute a &#147;parachute payment&#148; as defined in
Section&nbsp;280G of the Code. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Person&#148; means any individual, entity or group within the meaning of Section&nbsp;3(a)(9) or of
Section&nbsp;13(d)(3) (as in effect on the date of this Agreement) of the Exchange Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Subsidiary&#148; with respect to the Company
has the meaning set forth in Rule 12b-2 of the General Rules and Regulations promulgated under the Exchange Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Termination&#148;
means, following the occurrence of any Change in Control by the Company, (a)&nbsp;the involuntary termination of the employment of Executive for any reason other than death, Disability or for Cause or (b)&nbsp;the termination of employment by
Executive for Good Reason. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;Voting Securities&#148; means the voting securities of the Company entitled to vote generally in the
election of directors. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-4 </FONT></P>

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