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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001144204-08-014811.txt : 20080312
<SEC-HEADER>0001144204-08-014811.hdr.sgml : 20080312
<ACCEPTANCE-DATETIME>20080312172309
ACCESSION NUMBER:		0001144204-08-014811
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20080311
ITEM INFORMATION:		Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080312
DATE AS OF CHANGE:		20080312

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TARGETED GENETICS CORP /WA/
		CENTRAL INDEX KEY:			0000921114
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				911549568
		STATE OF INCORPORATION:			WA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-23930
		FILM NUMBER:		08684291

	BUSINESS ADDRESS:	
		STREET 1:		1100 OLIVE WAY
		STREET 2:		STE 100
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98101
		BUSINESS PHONE:		2066237612

	MAIL ADDRESS:	
		STREET 1:		1100 OLIVE WAY
		STREET 2:		STE 100
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98101
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;5.02(e).
      Compensatory Arrangements of Certain Officers.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      10, 2008, the Compensation Committee of the Board of Directors of Targeted
      Genetics Corporation, or the Company, approved Amended and Restated Senior
      Management Employment Agreements, or the Revised Agreements, to be entered
      into
      by each of H. Stewart Parker, the Company&#8217;s President and Chief Executive
      Officer, Barrie J. Carter, the Company&#8217;s Executive Vice President and Chief
      Scientific Officer and David J. Poston, the Company&#8217;s Vice President, Finance
      and Chief Financial Officer. The Company and each of Ms. Parker, Dr. Carter
      and
      Mr. Poston entered into the Revised Agreements on March 11, 2008. The Revised
      Agreements executed by each of Ms. Parker and Dr. Carter amend and restate
      and
      supersede in their entirety the Senior Management Employment Agreements entered
      into by each of Ms. Parker and Dr. Carter in the form filed as Exhibit 10.2
      to
      the Company&#8217;s annual report on Form 10-K for the year ended December 31, 1996.
      The Revised Agreement executed by Mr. Poston supersedes in its entirety the
      Change in Control Agreement entered into between the Company and Mr. Poston
      on
      September 14, 2006 filed as Exhibit 10.1 to Form 8-K on September 20, 2006.
      </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Revised Agreements executed by Ms. Parker and Dr. Carter amend the prior form
      of
      Senior Management Employment Agreement in the following material respects:
      (i)
      they increase the required notice period for termination of the agreement by
      the
      Company from thirty days to nine months; (ii) they add provisions intended
      to
      comply with Section 409A of the Internal Revenue Code of 1986, as amended;
      (iii)
      they provide that upon death or disability of the executive, executive&#8217;s
      insurance benefits shall be limited to payment of COBRA premiums, if applicable;
      (iv) they provide that following the termination of executive for good reason,
      as such term is defined in the Revised Agreements, and other than for death,
      disability or cause, as such terms are defined in the Revised Agreements,
      following change in control, as such term is defined in the Revised Agreements,
      payments by the Company to cover insurance will be limited to payment for up
      to
      a year of that portion of the COBRA premiums, if any, equal to the Company-paid
      portion of comparable coverage as in effect on the date of termination; and
      (v)
      they contain a revised definition of good reason, as set forth in the Revised
      Agreements. </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Revised Agreement executed by Mr. Poston amends Mr. Poston&#8217;s Change in Control
      Agreement in the following material respects: (i) the Revised Agreement
      increases the required notice period for termination of the agreement by the
      Company from thirty days to nine months; (ii) the Revised Agreement provides
      that upon death or disability of the executive, executive&#8217;s insurance benefits
      shall be limited to payment of COBRA premiums, if applicable; (iii) the Revised
      Agreement provides that following the termination of executive for good reason,
      as such term is defined in the Revised Agreement, and other than for death,
      disability or cause, as such terms are defined in the Revised Agreement,
      following change in control, as such term is defined in the Revised Agreement,
      payments by the Company to cover insurance will be limited to payment for up
      to
      a year of that portion of the COBRA premiums, if any, equal to the Company-paid
      portion of comparable coverage as in effect on the date of termination; (iv)
      the
      Revised Agreement has a two-year term subject to automatic renewal and continues
      in effect until the second anniversary following a change in control; (v) the
      Revised Agreement provides that while employed by the Company or a subsidiary
      of
      the Company following change in control, Mr. Poston shall receive salary no
      less
      than that in effect prior to the change in control and an average bonus equal
      to
      at least the average of the three annual bonuses paid to Mr. Poston in the
      three
      years prior to the change in control; and (vi) the Revised Agreement provides
      for a tax &#8220;gross-up&#8221; payment for Mr. Poston in the event payments to him are
      subject to excise taxes under Sections 280G and 4999 of the Internal Revenue
      Code. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      foregoing description of the Revised Agreements is qualified in its entirety
      by
      reference to the Amended and Restated Senior Management Employment Agreements
      attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3 and incorporated
      herein by reference. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;9.01
      Financial Statements and Exhibits.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;Exhibits:
      </font></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="bottom" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="1%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td align="left" valign="bottom" width="1%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Senior Management Employment Agreement, dated March
                11, 2008,
                between Targeted Genetics Corporation and H. Stewart
                Parker</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="3%">&#160;</td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Senior Management Employment Agreement, dated March
                11, 2008,
                between Targeted Genetics Corporation and Barrie J.
                Carter</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="3%">&#160;</td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Senior Management Employment Agreement, dated March
                11, 2008,
                between Targeted Genetics Corporation and David J.
                Poston</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned hereunto duly authorized. </font></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="middle" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" colspan="2" valign="top" width="31%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TARGETED
                GENETICS CORPORATION</font></div>
            </td>
            <td align="left" valign="middle" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="middle" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
                March 12, 2008</font></div>
            </td>
            <td align="left" valign="top" width="4%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:&#160;&#160;</font></div>
            </td>
            <td align="left" valign="top" width="27%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                David J. Poston</font></div>
            </td>
            <td align="left" valign="middle" width="8%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="2" valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">David
                J. Poston</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
                President Finance and Chief Financial Officer</font></div>
            </td>
            <td align="left" valign="middle" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INDEX
      TO EXHIBITS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="bottom" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="1%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td align="left" valign="bottom" width="1%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Senior Management Employment Agreement, dated March
                11, 2008,
                between Targeted Genetics Corporation and H. Stewart
                Parker</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="3%">&#160;</td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Senior Management Employment Agreement, dated March
                11, 2008,
                between Targeted Genetics Corporation and Barrie J.
                Carter</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="3%">&#160;</td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="bottom" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Senior Management Employment Agreement, dated March
                11, 2008,
                between Targeted Genetics Corporation and David J.
                Poston</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
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          <hr style="COLOR: black" noshade size="2">
        </div>
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      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v106464_ex10-1.htm
<TEXT>
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    <pre>&#160;</pre>
    <div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDED
        AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AMENDED
        AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT, dated as of the&#160;11th
        day of March, 2008, between TARGETED GENETICS CORPORATION, a Washington
        corporation (the &#8220;Company&#8221;), and H. Stewart Parker (&#8220;Executive&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RECITALS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
        is currently employed by the Company or one of its Subsidiaries.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Board
        of Directors of the Company (the &#8220;Board&#8221;) has determined that it is appropriate
        to reinforce the continued attention and dedication of certain members of
        the
        Company&#8217;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&#160;A attached
        hereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AGREEMENTS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOW,
        THEREFORE, in consideration of the covenants and agreements hereinafter set
        forth, the Company and Executive agree as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEFINITIONS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Terms
        capitalized in this Agreement which are not otherwise defined shall have
        the
        meanings assigned to such terms in Schedule&#160;A attached hereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EFFECTIVENESS;
        PRIOR AGREEMENT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
        with respect to Sections&#160;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 Senior Management Employment Agreement between Executive
        and
        Company dated October 18, 1996 which shall be of no further force and
        effect.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERM</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
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      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BENEFITS
        UPON CHANGE IN CONTROL</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
        shall be entitled to the following payments and benefits following a Change
        in
        Control, whether or not a Termination occurs:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SALARY
        AND BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        While
        employed by the Company or any Subsidiary, Executive shall (i)&#160;receive an
        annual base salary no less than the Executive&#8217;s annual base salary in effect
        immediately prior to the date that the Change in Control occurs, including
        any
        salary which 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&#8217;s taxable
        year in which the bonus vests), and (ii)&#160;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&#160;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) 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WELFARE
        PLAN BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        While
        employed by the Company or any Subsidiary, the Company shall at the Company&#8217;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&#8217;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 &#8220;Welfare Benefits&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEATH
        OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        In the
        event of Executive&#8217;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)&#160;Executive&#8217;s salary at the rate then in effect through the date of
        death, as provided under the Company&#8217;s pay policy, (ii)&#160;any Accrued
        Benefits for the periods of service prior to the date of death, and
        (iii)&#160;&#160;payment of&#160;the applicable COBRA premiums, if any, for
        Executive&#8217;s dependents, provided the Company receives adequate substantiation of
        such&#160;COBRA&#160;coverage.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DISABILITY
        OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        In the
        event of Executive&#8217;s Disability prior to Termination, but while employed by the
        Company or any Subsidiary, Executive shall be entitled to receive (i)&#160;his
        or her salary at the rate then in effect through the date of the determination
        of Disability, as provided under the Company&#8217;s pay policy, (ii)&#160;any Accrued
        Benefits for the periods of service prior to the date of the determination
        of
        Disability, (iii)&#160;payments under the Company&#8217;s short and long term
        disability plans following the determination of Disability, and
        (iv)&#160;payment of&#160;the applicable COBRA premiums, if any, for Executive
        and Executive&#8217;s dependents, provided the Company receives adequate
        substantiation of such&#160;COBRA&#160;coverage. </font></div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CAUSE;
        UPON EXPIRATION OF THIS AGREEMENT; OTHER THAN FOR GOOD
        REASON.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        If,
        prior to Termination, Executive&#8217;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)&#160;his or her salary
        at the rate then in effect through the date of such termination, as provided
        under the Company&#8217;s pay policy, and (ii)&#160;any Accrued Benefits for the
        periods of service prior to the date of such termination.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WITHHOLDING.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        All
        payments under this Section&#160;4 are subject to applicable federal and state
        payroll withholding or other applicable taxes.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PAYMENTS
        AND BENEFITS UPON TERMINATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
        shall be entitled to the following payments and benefits following
        Termination:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
        PAYMENT.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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 two (2)
        times
        the sum of: (i)&#160;Executive&#8217;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&#8217;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&#160;5(a);
        plus (ii)&#160;a percentage of Executive&#8217;s annual base salary specified in
        subparagraph (i) 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&#160;5(a)
        (the &#8220;Termination Payments&#8221;) shall be paid within ten (10) business days
        following the date of Executive&#8217;s separation from service (within the meaning of
        Section 409A of the Internal Revenue Code (the &#8220;Code&#8221;)).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
        ADDITIONAL PAYMENTS BY THE COMPANY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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 &#8220;Termination Benefits&#8221;), would
        constitute a Parachute Payment, then the Payments to Executive under
        Section&#160;5(a) shall be increased (such increase, a &#8220;Gross-Up Payment&#8221;), 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&#8217;s expense, by the Company and Executive. If no
        agreement on the calculations is reached within thirty (30) business days
        after
        the date of Termination, then the accounting firm which regularly audits
        the
        financial statements of the Company (the &#8220;Auditors&#8221;) 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 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        a
        result of the uncertainty in the application of Section&#160;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 &#8220;Overpayment&#8221;) or that additional Gross-Up
        Payments which will not have been made by the Company should have been made
        (an
&#8220;Underpayment&#8221;). 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ACCRUED
        BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WELFARE
        PLAN BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        For a
        period of one year following the date of Termination, the Company shall pay
        a
        portion of &#160;the applicable COBRA premiums, if any, for Executive and
        Executive&#8217;s dependents equal to the Company-paid portion of comparable active
        employee&#160;coverage&#160;as in effect&#160;on&#160;the date of Termination,
        provided the Company receives adequate substantiation of
        such&#160;COBRA&#160;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&#160;coverage&#160;as
        in effect&#160;on&#160;the date of Termination (including with respect to the
        amount of employer premium subsidy), the Company&#8217;s obligation under this
        paragraph shall cease. </font></div>
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEATH
        OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        In the
        event of Executive&#8217;s death subsequent to Termination and prior to receiving all
        benefits and payments provided for by this Section 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXCLUSIVE
        SOURCE OF SEVERANCE PAY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(G)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NONSEGREGATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(H)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WITHHOLDING.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        All
        payments under this Section 5 are subject to applicable federal and state
        payroll withholding or other applicable taxes.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>6.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ARBITRATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s award in any jurisdiction.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>7.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONFLICT
        IN BENEFITS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>8.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
        PRIOR TO A CHANGE IN CONTROL.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        any
        time prior to a Change in Control, the Company may terminate this Agreement
        upon
        nine (9) months&#8217; 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        any
        time prior to a Change in Control, Executive may terminate this Agreement
        upon
        thirty (30) days&#8217; 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
        AFTER A CHANGE IN CONTROL.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        After a
        Change in Control, either party may terminate this Agreement upon thirty
        (30)
        days&#8217; prior written notice in the form of a Notice of Termination.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EFFECT
        OF TERMINATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>9.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MISCELLANEOUS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDMENT.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        This
        Agreement may not be amended except by written agreement between Executive
        and
        the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NO
        MITIGATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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&#160;5(d) hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EMPLOYMENT
        NOT GUARANTEED.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
        EXPENSES.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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&#8217; 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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTICES.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Targeted
        Genetics Corporation</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1100
        Olive Way, Suite 100</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seattle,
        WA 98101</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
        Chief Financial Officer</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
        to,
        in the case of Executive:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">H.
        Stewart Parker</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1733
        -
        39</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Avenue</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seattle,
        WA 98122</font><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Either
        party may designate a different address by giving written notice of change
        of
        address in the manner provided above.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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        CURE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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
        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) days of the
        date
        that such breaching party shall have received written notice of such breach
        from
        the party asserting such breach.</font></div>
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        EFFECT; SUCCESSORS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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&#160;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></div>
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        Any
        provision of this Agreement which 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></div>
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        409A. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        Agreement is not intended to constitute a &#8220;nonqualified deferred compensation
        plan&#8221; within the meaning of Section&#160;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&#160;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&#160;409A of the Code or to
        exempt such compensation or benefits from Section&#160;409A of the Code. In
        addition, to the extent (i)&#160;any compensation or benefits to which Executive
        becomes entitled under this agreement, or any agreement or plan referenced
        herein, in connection with Executive&#8217;s termination of employment with the
        Company constitute deferred compensation subject to Section&#160;409A of the
        Code and (ii)&#160;Executive is deemed at the time of such termination of
        employment to be a &#8220;specified employee&#8221; under Section&#160;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&#8217;s &#8220;separation from service&#8221; (or,
        if earlier, the date of the Executive&#8217;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 additional twenty
        percent (20%) tax for which Executive would otherwise be liable under
        Section&#160;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 &#8220;separation from
        service.&#8221; 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&#8217;s beneficiary, if applicable, in one
        lump sum.</font></div>
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          LAW.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          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></div>
        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
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        WITNESS WHEREOF, the Company and Executive have executed this Agreement as
        of
        the day and year first above written.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr valign="top" bgcolor="#ffffff">
              <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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              <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>TARGETED
                GENETICS CORPORATION</strong></font></td>
            </tr>
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              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/
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                L. Curnock Cook</font></td>
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                Chairman of the Board&#160;</font></td>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr valign="top" bgcolor="#ffffff">
              <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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                H.
                Stewart Parker</font></td>
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                Stewart Parker</font></td>
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              <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Title:
                President and Chief Executive
                Officer&#160;</font></td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Schedule
        A</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
        DEFINITIONS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        used
        in this Agreement, and unless the context requires a different meaning, the
        following terms have the meanings indicated:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Accrued
        Benefits&#8221; 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) business days following
        the
        Executive&#8217;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></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Beneficial
        Owner&#8221; and &#8220;Beneficial Ownership&#8221; have the meanings set forth in Rules 13d-3 and
        13d-5 of the General Rules and Regulations promulgated under the Exchange
        Act.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Board
        Change&#8221; means that a majority of the seats (other than vacant seats) on the
        Board have been occupied by individuals who were neither (a)&#160;nominated or
        appointed by a majority of the Incumbent Directors nor (b)&#160;nominated or
        appointed by directors so nominated or appointed.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Business
        Combination&#8221; means a reorganization, merger or consolidation or sale of
        substantially all of the assets of the Company.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Cause&#8221;
        means (a)&#160;willful misconduct on the part of Executive that has a materially
        adverse effect on the Company and its Subsidiaries, taken as a whole,
        (b)&#160;Executive&#8217;s engaging in conduct which 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 which would materially compromise the
        Company&#8217;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)&#160;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></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Change
        in Control&#8221; means, and shall be deemed to occur upon the happening of, any one
        of the following:</font></div>
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      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        Board
        Change; or</font></div>
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        acquisition (whether directly or indirectly, beneficially or of record) by
        any
        Person of (i)&#160;fifteen percent (15%) 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 is not approved in advance
        by a
        majority of the Incumbent Directors; or (ii)&#160;thirty-three percent (33%) 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)&#160;any acquisition by the Company,
        (y)&#160;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)&#160;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) and (iii) of the following
        subsection (c) are satisfied; or</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        in which the Company is not the continuing or surviving corporation, or pursuant
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        securities or other property, unless following such reorganization, merger
        or
        consolidation (i)&#160;at least sixty-six and two-thirds percent (66-2/3%) 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&#8217;s voting securities immediately prior to such
        reorganization, merger or consolidation, (ii)&#160;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
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        of the
        Company&#8217;s voting securities) beneficially owns, directly or indirectly,
        thirty-three percent (33%) or more of, respectively, the then outstanding
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        consolidation or the combined voting power of the then outstanding voting
        securities of such company entitled to vote generally in the election of
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        consolidation; or</font></div>
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        by the shareholders of the Company of (i)&#160;any plan or proposal for
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        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)&#160;at least
        sixty-six and two-thirds percent (66-2/3%) 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&#8217;s voting securities immediately prior to such sale or
        other disposition, (B)&#160;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%) or more of the Company&#8217;s
        voting securities) beneficially owns, directly or indirectly, thirty-three
        percent (33%) or more of, respectively, 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
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        directors, and (C)&#160;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
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        providing for such sale or other disposition of assets of the
        Company.</font></div>
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        means the Internal Revenue Code of 1986, as amended.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Disability&#8221;
        means that (a)&#160;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) days in any twelve (12)
        month period, and (b)&#160;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></div>
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        Tax&#8221; means the excise tax, including any interest or penalties thereon, imposed
        by Section 4999 of the Code.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Fiscal
        Year&#8221; means the twelve (12) month period ending on December&#160;31 in each year
        (or such other fiscal year period established by the Board).</font></div>
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        Reason&#8221; means, without Executive&#8217;s express written consent:</font></div>
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        assignment to Executive of duties, or limitation of Executive&#8217;s
        responsibilities, materially inconsistent with Executive&#8217;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></div>
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        by the Company to pay in any material respect, or material reduction by the
        Company of, Executive&#8217;s annual base salary, as reflected in the Company&#8217;s
        payroll records for Executive&#8217;s last pay period immediately prior to the Change
        in Control;</font></div>
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        Company materially reduces Executive&#8217;s bonus described in Section 4(A)(i);
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        Company requires that Executive relocate to a distance more than thirty (30)
        miles from the Company&#8217;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></div>
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        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&#160;9(g) of this Agreement.</font></div>
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        of the
        reason(s) Executive believes Good Reason exists within 90 days of the initial
        existence thereof and provide (30) days for the Company to cure. The parties
        intend that this &#8220;Good Reason&#8221; trigger qualify as an involuntary trigger under
        Treasury Regulation Section 1.409A-1(n)(2)(i).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Incumbent
        Director&#8221; means a member of the Board who has been either (a)&#160;nominated by
        a majority of the directors of the Company then in office or (b)&#160;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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Notice
        of Termination&#8221; 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&#8217;s
        employment constituting a Termination, if any, under the provision so
        indicated.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Parachute
        Payment&#8221; means any payment deemed to constitute a &#8220;parachute payment&#8221; as defined
        in Section 280G of the Code.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Person&#8221;
        means any individual, entity or group within the meaning of Section 3(a)(9)
        or
        of Section 13(d)(3) (as in effect on the date of this Agreement) of the Exchange
        Act.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Subsidiary&#8221;
        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></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Termination&#8221;
        means, following the occurrence of any Change in Control by the Company,
        (a)&#160;the involuntary termination of the employment of Executive for any
        reason other than death, Disability or for Cause or (b)&#160;the termination of
        employment by Executive for Good Reason.</font></div>
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        Securities&#8221; means the voting securities of the Company entitled to vote
        generally in the election of directors.</font></div>
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<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>v106464_ex10-2.htm
<TEXT>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDED
      AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AMENDED
      AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT, dated as of the&#160;11th
      day of March, 2008, between TARGETED GENETICS CORPORATION, a Washington
      corporation (the &#8220;Company&#8221;), and Barrie J. Carter (&#8220;Executive&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RECITALS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      is currently employed by the Company or one of its Subsidiaries.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Board
      of Directors of the Company (the &#8220;Board&#8221;) has determined that it is appropriate
      to reinforce the continued attention and dedication of certain members of the
      Company&#8217;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&#160;A attached
      hereto.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AGREEMENTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOW,
      THEREFORE, in consideration of the covenants and agreements hereinafter set
      forth, the Company and Executive agree as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEFINITIONS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Terms
      capitalized in this Agreement which are not otherwise defined shall have the
      meanings assigned to such terms in Schedule&#160;A attached hereto.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EFFECTIVENESS;
      PRIOR AGREEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
      with respect to Sections&#160;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 Senior Management Employment Agreement between Executive
      and
      Company dated October 18, 1996 which shall be of no further force and
      effect.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERM</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BENEFITS
      UPON CHANGE IN CONTROL</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      shall be entitled to the following payments and benefits following a Change
      in
      Control, whether or not a Termination occurs:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SALARY
      AND BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      While
      employed by the Company or any Subsidiary, Executive shall (i)&#160;receive an
      annual base salary no less than the Executive&#8217;s annual base salary in effect
      immediately prior to the date that the Change in Control occurs, including
      any
      salary which 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&#8217;s taxable
      year in which the bonus vests), and (ii)&#160;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&#160;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) 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WELFARE
      PLAN BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      While
      employed by the Company or any Subsidiary, the Company shall at the Company&#8217;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&#8217;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 &#8220;Welfare Benefits&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEATH
      OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In the
      event of Executive&#8217;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)&#160;Executive&#8217;s salary at the rate then in effect through the date of
      death, as provided under the Company&#8217;s pay policy, (ii)&#160;any Accrued
      Benefits for the periods of service prior to the date of death, and
      (iii)&#160;&#160;payment of&#160;the applicable COBRA premiums, if any, for
      Executive&#8217;s dependents, provided the Company receives adequate substantiation of
      such&#160;COBRA&#160;coverage.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DISABILITY
      OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In the
      event of Executive&#8217;s Disability prior to Termination, but while employed by the
      Company or any Subsidiary, Executive shall be entitled to receive (i)&#160;his
      or her salary at the rate then in effect through the date of the determination
      of Disability, as provided under the Company&#8217;s pay policy, (ii)&#160;any Accrued
      Benefits for the periods of service prior to the date of the determination
      of
      Disability, (iii)&#160;payments under the Company&#8217;s short and long term
      disability plans following the determination of Disability, and
      (iv)&#160;payment of&#160;the applicable COBRA premiums, if any, for Executive
      and Executive&#8217;s dependents, provided the Company receives adequate
      substantiation of such&#160;COBRA&#160;coverage. </font></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CAUSE;
      UPON EXPIRATION OF THIS AGREEMENT; OTHER THAN FOR GOOD
      REASON.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      If,
      prior to Termination, Executive&#8217;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)&#160;his or her salary
      at the rate then in effect through the date of such termination, as provided
      under the Company&#8217;s pay policy, and (ii)&#160;any Accrued Benefits for the
      periods of service prior to the date of such termination.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WITHHOLDING.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      All
      payments under this Section&#160;4 are subject to applicable federal and state
      payroll withholding or other applicable taxes.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PAYMENTS
      AND BENEFITS UPON TERMINATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      shall be entitled to the following payments and benefits following
      Termination:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
      PAYMENT.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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 1.5 times
      the
      sum of: (i)&#160;Executive&#8217;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&#8217;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&#160;5(a);
      plus (ii)&#160;a percentage of Executive&#8217;s annual base salary specified in
      subparagraph (i) 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&#160;5(a)
      (the &#8220;Termination Payments&#8221;) shall be paid within ten (10) business days
      following the date of Executive&#8217;s separation from service (within the meaning of
      Section 409A of the Internal Revenue Code (the &#8220;Code&#8221;)).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
      ADDITIONAL PAYMENTS BY THE COMPANY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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 &#8220;Termination Benefits&#8221;), would
      constitute a Parachute Payment, then the Payments to Executive under
      Section&#160;5(a) shall be increased (such increase, a &#8220;Gross-Up Payment&#8221;), 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&#8217;s expense, by the Company and Executive. If no
      agreement on the calculations is reached within thirty (30) business days after
      the date of Termination, then the accounting firm which regularly audits the
      financial statements of the Company (the &#8220;Auditors&#8221;) 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 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></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      a
      result of the uncertainty in the application of Section&#160;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 &#8220;Overpayment&#8221;) or that additional Gross-Up
      Payments which will not have been made by the Company should have been made
      (an
&#8220;Underpayment&#8221;). 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ACCRUED
      BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WELFARE
      PLAN BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      For a
      period of one year following the date of Termination, the Company shall pay
      a
      portion of &#160;the applicable COBRA premiums, if any, for Executive and
      Executive&#8217;s dependents equal to the Company-paid portion of comparable active
      employee&#160;coverage&#160;as in effect&#160;on&#160;the date of Termination,
      provided the Company receives adequate substantiation of
      such&#160;COBRA&#160;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&#160;coverage&#160;as
      in effect&#160;on&#160;the date of Termination (including with respect to the
      amount of employer premium subsidy), the Company&#8217;s obligation under this
      paragraph shall cease. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEATH
      OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In the
      event of Executive&#8217;s death subsequent to Termination and prior to receiving all
      benefits and payments provided for by this Section 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></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXCLUSIVE
      SOURCE OF SEVERANCE PAY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(G)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NONSEGREGATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(H)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WITHHOLDING.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      All
      payments under this Section 5 are subject to applicable federal and state
      payroll withholding or other applicable taxes.</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>6.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ARBITRATION</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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&#8217;s award in any jurisdiction.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>7.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONFLICT
      IN BENEFITS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>8.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
      PRIOR TO A CHANGE IN CONTROL.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      any
      time prior to a Change in Control, the Company may terminate this Agreement
      upon
      nine (9) months&#8217; 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      any
      time prior to a Change in Control, Executive may terminate this Agreement upon
      thirty (30) days&#8217; 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
      AFTER A CHANGE IN CONTROL.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      After a
      Change in Control, either party may terminate this Agreement upon thirty (30)
      days&#8217; prior written notice in the form of a Notice of Termination.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EFFECT
      OF TERMINATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>9.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MISCELLANEOUS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDMENT.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      This
      Agreement may not be amended except by written agreement between Executive
      and
      the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NO
      MITIGATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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&#160;5(d) hereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EMPLOYMENT
      NOT GUARANTEED.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
      EXPENSES.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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&#8217; 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTICES.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Targeted
      Genetics Corporation</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1100
      Olive Way, Suite 100</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seattle,
      WA 98101</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
      Chief Financial Officer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
      to,
      in the case of Executive:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Barrie
      J.
      Carter</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1218
      -
      3</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>rd</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Avenue
      N.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seattle,
      WA 98109</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Either
      party may designate a different address by giving written notice of change
      of
      address in the manner provided above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WAIVER;
      CURE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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 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) days of the date
      that such breaching party shall have received written notice of such breach
      from
      the party asserting such breach.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(G)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BINDING
      EFFECT; SUCCESSORS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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&#160;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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      Any
      provision of this Agreement which 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
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      409A. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Agreement is not intended to constitute a &#8220;nonqualified deferred compensation
      plan&#8221; within the meaning of Section&#160;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&#160;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&#160;409A of the Code or to
      exempt such compensation or benefits from Section&#160;409A of the Code. In
      addition, to the extent (i)&#160;any compensation or benefits to which Executive
      becomes entitled under this agreement, or any agreement or plan referenced
      herein, in connection with Executive&#8217;s termination of employment with the
      Company constitute deferred compensation subject to Section&#160;409A of the
      Code and (ii)&#160;Executive is deemed at the time of such termination of
      employment to be a &#8220;specified employee&#8221; under Section&#160;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&#8217;s &#8220;separation from service&#8221; (or,
      if earlier, the date of the Executive&#8217;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 additional twenty
      percent (20%) tax for which Executive would otherwise be liable under
      Section&#160;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 &#8220;separation from
      service.&#8221; 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&#8217;s beneficiary, if applicable, in one
      lump sum.</font></div>
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      the
      state of Washington applicable to contracts made and to be performed
      therein.</font></div>
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      WITNESS WHEREOF, the Company and Executive have executed this Agreement as
      of
      the day and year first above written.</font></div>
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            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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              J.
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              Executive Vice President and Chief&#160; <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Scientific
              Officer</font>&#160;</font></td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 279pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 279pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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      A</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
      DEFINITIONS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      used
      in this Agreement, and unless the context requires a different meaning, the
      following terms have the meanings indicated:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Accrued
      Benefits&#8221; 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) business days following
      the
      Executive&#8217;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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Beneficial
      Owner&#8221; and &#8220;Beneficial Ownership&#8221; have the meanings set forth in Rules 13d-3 and
      13d-5 of the General Rules and Regulations promulgated under the Exchange
      Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Board
      Change&#8221; means that a majority of the seats (other than vacant seats) on the
      Board have been occupied by individuals who were neither (a)&#160;nominated or
      appointed by a majority of the Incumbent Directors nor (b)&#160;nominated or
      appointed by directors so nominated or appointed.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Business
      Combination&#8221; means a reorganization, merger or consolidation or sale of
      substantially all of the assets of the Company.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Cause&#8221;
      means (a)&#160;willful misconduct on the part of Executive that has a materially
      adverse effect on the Company and its Subsidiaries, taken as a whole,
      (b)&#160;Executive&#8217;s engaging in conduct which 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 which would materially compromise the
      Company&#8217;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)&#160;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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Change
      in Control&#8221; means, and shall be deemed to occur upon the happening of, any one
      of the following:</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      Board
      Change; or</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      acquisition (whether directly or indirectly, beneficially or of record) by
      any
      Person of (i)&#160;fifteen percent (15%) 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 is not approved in advance
      by a
      majority of the Incumbent Directors; or (ii)&#160;thirty-three percent (33%) 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)&#160;any acquisition by the Company,
      (y)&#160;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)&#160;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) and (iii) of the following
      subsection (c) are satisfied; or</font></div>
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      in which the Company is not the continuing or surviving corporation, or pursuant
      to which shares of the Company&#8217;s Common Stock are converted into cash,
      securities or other property, unless following such reorganization, merger
      or
      consolidation (i)&#160;at least sixty-six and two-thirds percent (66-2/3%) 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&#8217;s voting securities immediately prior to such
      reorganization, merger or consolidation, (ii)&#160;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%) or more of
      the
      Company&#8217;s voting securities) beneficially owns, directly or indirectly,
      thirty-three percent (33%) 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)&#160;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></div>
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      by the shareholders of the Company of (i)&#160;any plan or proposal for
      liquidation or dissolution of the Company or (ii)&#160;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)&#160;at least
      sixty-six and two-thirds percent (66-2/3%) 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&#8217;s voting securities immediately prior to such sale or
      other disposition, (B)&#160;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%) or more of the Company&#8217;s
      voting securities) beneficially owns, directly or indirectly, thirty-three
      percent (33%) or more of, respectively, 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, and (C)&#160;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></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Code&#8221;
      means the Internal Revenue Code of 1986, as amended.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Disability&#8221;
      means that (a)&#160;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) days in any twelve (12)
      month period, and (b)&#160;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></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Exchange
      Act&#8221; means the Securities Exchange Act of 1934, as amended.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Excise
      Tax&#8221; means the excise tax, including any interest or penalties thereon, imposed
      by Section 4999 of the Code.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Fiscal
      Year&#8221; means the twelve (12) month period ending on December&#160;31 in each year
      (or such other fiscal year period established by the Board).</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Good
      Reason&#8221; means, without Executive&#8217;s express written consent:</font></div>
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      assignment to Executive of duties, or limitation of Executive&#8217;s
      responsibilities, materially inconsistent with Executive&#8217;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></div>
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      by the Company to pay in any material respect, or material reduction by the
      Company of, Executive&#8217;s annual base salary, as reflected in the Company&#8217;s
      payroll records for Executive&#8217;s last pay period immediately prior to the Change
      in Control;</font></div>
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</font></div>
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      Company requires that Executive relocate to a distance more than thirty (30)
      miles from the Company&#8217;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></div>
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      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&#160;9(g) of this Agreement.</font></div>
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      the
      reason(s) Executive believes Good Reason exists within 90 days of the initial
      existence thereof and provide (30) days for the Company to cure. The parties
      intend that this &#8220;Good Reason&#8221; trigger qualify as an involuntary trigger under
      Treasury Regulation Section 1.409A-1(n)(2)(i).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Incumbent
      Director&#8221; means a member of the Board who has been either (a)&#160;nominated by
      a majority of the directors of the Company then in office or (b)&#160;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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Notice
      of Termination&#8221; 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&#8217;s
      employment constituting a Termination, if any, under the provision so
      indicated.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Parachute
      Payment&#8221; means any payment deemed to constitute a &#8220;parachute payment&#8221; as defined
      in Section 280G of the Code.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Person&#8221;
      means any individual, entity or group within the meaning of Section 3(a)(9)
      or
      of Section 13(d)(3) (as in effect on the date of this Agreement) of the Exchange
      Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Subsidiary&#8221;
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Termination&#8221;
      means, following the occurrence of any Change in Control by the Company,
      (a)&#160;the involuntary termination of the employment of Executive for any
      reason other than death, Disability or for Cause or (b)&#160;the termination of
      employment by Executive for Good Reason.</font></div>
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      Securities&#8221; means the voting securities of the Company entitled to vote
      generally in the election of directors.</font></div>
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<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>v106464_ex10-3.htm
<TEXT>
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  <head>
    <title>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDED
      AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AMENDED
      AND RESTATED SENIOR MANAGEMENT EMPLOYMENT AGREEMENT, dated as of the&#160;11th
      day of March, 2008, between TARGETED GENETICS CORPORATION, a Washington
      corporation (the &#8220;Company&#8221;), and David J. Poston (&#8220;Executive&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RECITALS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      is currently employed by the Company or one of its Subsidiaries.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Board
      of Directors of the Company (the &#8220;Board&#8221;) has determined that it is appropriate
      to reinforce the continued attention and dedication of certain members of the
      Company&#8217;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&#160;A attached
      hereto.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AGREEMENTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOW,
      THEREFORE, in consideration of the covenants and agreements hereinafter set
      forth, the Company and Executive agree as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEFINITIONS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Terms
      capitalized in this Agreement which are not otherwise defined shall have the
      meanings assigned to such terms in Schedule&#160;A attached hereto.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EFFECTIVENESS;
      PRIOR AGREEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
      with respect to Sections&#160;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 Employee Change In Control Agreement between Executive and
      Company dated September 14, 2006 which shall be of no further force and
      effect.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERM</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BENEFITS
      UPON CHANGE IN CONTROL</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      shall be entitled to the following payments and benefits following a Change
      in
      Control, whether or not a Termination occurs:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SALARY
      AND BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      While
      employed by the Company or any Subsidiary, Executive shall (i)&#160;receive an
      annual base salary no less than the Executive&#8217;s annual base salary in effect
      immediately prior to the date that the Change in Control occurs, including
      any
      salary which 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&#8217;s taxable
      year in which the bonus vests), and (ii)&#160;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&#160;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) 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WELFARE
      PLAN BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      While
      employed by the Company or any Subsidiary, the Company shall at the Company&#8217;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&#8217;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 &#8220;Welfare Benefits&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEATH
      OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In the
      event of Executive&#8217;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)&#160;Executive&#8217;s salary at the rate then in effect through the date of
      death, as provided under the Company&#8217;s pay policy, (ii)&#160;any Accrued
      Benefits for the periods of service prior to the date of death, and
      (iii)&#160;&#160;payment of&#160;the applicable COBRA premiums, if any, for
      Executive&#8217;s dependents, provided the Company receives adequate substantiation of
      such&#160;COBRA&#160;coverage.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DISABILITY
      OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In the
      event of Executive&#8217;s Disability prior to Termination, but while employed by the
      Company or any Subsidiary, Executive shall be entitled to receive (i)&#160;his
      or her salary at the rate then in effect through the date of the determination
      of Disability, as provided under the Company&#8217;s pay policy, (ii)&#160;any Accrued
      Benefits for the periods of service prior to the date of the determination
      of
      Disability, (iii)&#160;payments under the Company&#8217;s short and long term
      disability plans following the determination of Disability, and
      (iv)&#160;payment of&#160;the applicable COBRA premiums, if any, for Executive
      and Executive&#8217;s dependents, provided the Company receives adequate
      substantiation of such&#160;COBRA&#160;coverage. </font></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CAUSE;
      UPON EXPIRATION OF THIS AGREEMENT; OTHER THAN FOR GOOD
      REASON.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      If,
      prior to Termination, Executive&#8217;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)&#160;his or her salary
      at the rate then in effect through the date of such termination, as provided
      under the Company&#8217;s pay policy, and (ii)&#160;any Accrued Benefits for the
      periods of service prior to the date of such termination.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WITHHOLDING.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      All
      payments under this Section&#160;4 are subject to applicable federal and state
      payroll withholding or other applicable taxes.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PAYMENTS
      AND BENEFITS UPON TERMINATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      shall be entitled to the following payments and benefits following
      Termination:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
      PAYMENT.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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)&#160;Executive&#8217;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&#8217;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&#160;5(a);
      plus (ii)&#160;a percentage of Executive&#8217;s annual base salary specified in
      subparagraph (i) 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&#160;5(a)
      (the &#8220;Termination Payments&#8221;) shall be paid within ten (10) business days
      following the date of Executive&#8217;s separation from service (within the meaning of
      Section 409A of the Internal Revenue Code (the &#8220;Code&#8221;)).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
      ADDITIONAL PAYMENTS BY THE COMPANY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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 &#8220;Termination Benefits&#8221;), would
      constitute a Parachute Payment, then the Payments to Executive under
      Section&#160;5(a) shall be increased (such increase, a &#8220;Gross-Up Payment&#8221;), 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&#8217;s expense, by the Company and Executive. If no
      agreement on the calculations is reached within thirty (30) business days after
      the date of Termination, then the accounting firm which regularly audits the
      financial statements of the Company (the &#8220;Auditors&#8221;) 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 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      a
      result of the uncertainty in the application of Section&#160;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 &#8220;Overpayment&#8221;) or that additional Gross-Up
      Payments which will not have been made by the Company should have been made
      (an
&#8220;Underpayment&#8221;). 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ACCRUED
      BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WELFARE
      PLAN BENEFITS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      For a
      period of one year following the date of Termination, the Company shall pay
      a
      portion of &#160;the applicable COBRA premiums, if any, for Executive and
      Executive&#8217;s dependents equal to the Company-paid portion of comparable active
      employee&#160;coverage&#160;as in effect&#160;on&#160;the date of Termination,
      provided the Company receives adequate substantiation of
      such&#160;COBRA&#160;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&#160;coverage&#160;as
      in effect&#160;on&#160;the date of Termination (including with respect to the
      amount of employer premium subsidy), the Company&#8217;s obligation under this
      paragraph shall cease. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEATH
      OF EXECUTIVE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In the
      event of Executive&#8217;s death subsequent to Termination and prior to receiving all
      benefits and payments provided for by this Section 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXCLUSIVE
      SOURCE OF SEVERANCE PAY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
      </div>
    </div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
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      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></div>
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      All
      payments under this Section 5 are subject to applicable federal and state
      payroll withholding or other applicable taxes.</font></div>
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      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&#8217;s award in any jurisdiction.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      IN BENEFITS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>8.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION</strong></font></div>
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      PRIOR TO A CHANGE IN CONTROL.</strong></font></div>
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      any
      time prior to a Change in Control, the Company may terminate this Agreement
      upon
      nine (9) months&#8217; 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      any
      time prior to a Change in Control, Executive may terminate this Agreement upon
      thirty (30) days&#8217; 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TERMINATION
      AFTER A CHANGE IN CONTROL.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      After a
      Change in Control, either party may terminate this Agreement upon thirty (30)
      days&#8217; prior written notice in the form of a Notice of Termination.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EFFECT
      OF TERMINATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div id="GLFTR" style="WIDTH: 100%" align="left">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>9.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MISCELLANEOUS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(A)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDMENT.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      This
      Agreement may not be amended except by written agreement between Executive
      and
      the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NO
      MITIGATION.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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&#160;5(d) hereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(C)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EMPLOYMENT
      NOT GUARANTEED.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(D)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
      EXPENSES.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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&#8217; 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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(E)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTICES.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Targeted
      Genetics Corporation</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1100
      Olive Way, Suite 100</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seattle,
      WA 98101</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
      Chief Financial Officer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
      to,
      in the case of Executive:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">David
      J.
      Poston</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3202
      -
      10</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Avenue
      W.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seattle,
      WA 98119</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Either
      party may designate a different address by giving written notice of change
      of
      address in the manner provided above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(F)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WAIVER;
      CURE.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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 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) days of the date
      that such breaching party shall have received written notice of such breach
      from
      the party asserting such breach.</font></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(G)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BINDING
      EFFECT; SUCCESSORS.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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&#160;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></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(H)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SEPARABILITY.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Any
      provision of this Agreement which 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></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(I)</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECTION
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      Agreement is not intended to constitute a &#8220;nonqualified deferred compensation
      plan&#8221; within the meaning of Section&#160;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&#160;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&#160;409A of the Code or to
      exempt such compensation or benefits from Section&#160;409A of the Code. In
      addition, to the extent (i)&#160;any compensation or benefits to which Executive
      becomes entitled under this agreement, or any agreement or plan referenced
      herein, in connection with Executive&#8217;s termination of employment with the
      Company constitute deferred compensation subject to Section&#160;409A of the
      Code and (ii)&#160;Executive is deemed at the time of such termination of
      employment to be a &#8220;specified employee&#8221; under Section&#160;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&#8217;s &#8220;separation from service&#8221; (or,
      if earlier, the date of the Executive&#8217;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 additional twenty
      percent (20%) tax for which Executive would otherwise be liable under
      Section&#160;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 &#8220;separation from
      service.&#8221; 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&#8217;s beneficiary, if applicable, in one
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      LAW.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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></div>
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      WITNESS WHEREOF, the Company and Executive have executed this Agreement as
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      the day and year first above written.</font></div>
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            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>TARGETED
              GENETICS CORPORATION</strong></font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Jeremy
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Title:
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            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;David
              J.
              Poston</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Title:
              Vice President, Finance and Chief <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
              Officer</font>&#160;</font></td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 252pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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      A</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
      DEFINITIONS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      used
      in this Agreement, and unless the context requires a different meaning, the
      following terms have the meanings indicated:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Accrued
      Benefits&#8221; 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) business days following
      the
      Executive&#8217;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></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Beneficial
      Owner&#8221; and &#8220;Beneficial Ownership&#8221; have the meanings set forth in Rules 13d-3 and
      13d-5 of the General Rules and Regulations promulgated under the Exchange
      Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Board
      Change&#8221; means that a majority of the seats (other than vacant seats) on the
      Board have been occupied by individuals who were neither (a)&#160;nominated or
      appointed by a majority of the Incumbent Directors nor (b)&#160;nominated or
      appointed by directors so nominated or appointed.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Business
      Combination&#8221; means a reorganization, merger or consolidation or sale of
      substantially all of the assets of the Company.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Cause&#8221;
      means (a)&#160;willful misconduct on the part of Executive that has a materially
      adverse effect on the Company and its Subsidiaries, taken as a whole,
      (b)&#160;Executive&#8217;s engaging in conduct which 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 which would materially compromise the
      Company&#8217;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)&#160;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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Change
      in Control&#8221; means, and shall be deemed to occur upon the happening of, any one
      of the following:</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      Board
      Change; or</font></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      acquisition (whether directly or indirectly, beneficially or of record) by
      any
      Person of (i)&#160;fifteen percent (15%) 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 is not approved in advance
      by a
      majority of the Incumbent Directors; or (ii)&#160;thirty-three percent (33%) 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)&#160;any acquisition by the Company,
      (y)&#160;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)&#160;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) and (iii) of the following
      subsection (c) are satisfied; or</font></div>
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      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&#8217;s Common Stock are converted into cash,
      securities or other property, unless following such reorganization, merger
      or
      consolidation (i)&#160;at least sixty-six and two-thirds percent (66-2/3%) 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&#8217;s voting securities immediately prior to such
      reorganization, merger or consolidation, (ii)&#160;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%) or more of
      the
      Company&#8217;s voting securities) beneficially owns, directly or indirectly,
      thirty-three percent (33%) 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)&#160;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></div>
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    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approval
      by the shareholders of the Company of (i)&#160;any plan or proposal for
      liquidation or dissolution of the Company or (ii)&#160;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)&#160;at least
      sixty-six and two-thirds percent (66-2/3%) 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&#8217;s voting securities immediately prior to such sale or
      other disposition, (B)&#160;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%) or more of the Company&#8217;s
      voting securities) beneficially owns, directly or indirectly, thirty-three
      percent (33%) or more of, respectively, 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, and (C)&#160;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></div>
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      means that (a)&#160;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) days in any twelve (12)
      month period, and (b)&#160;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></div>
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      Tax&#8221; means the excise tax, including any interest or penalties thereon, imposed
      by Section 4999 of the Code.</font></div>
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      (or such other fiscal year period established by the Board).</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Good
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      assignment to Executive of duties, or limitation of Executive&#8217;s
      responsibilities, materially inconsistent with Executive&#8217;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></div>
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      by the Company to pay in any material respect, or material reduction by the
      Company of, Executive&#8217;s annual base salary, as reflected in the Company&#8217;s
      payroll records for Executive&#8217;s last pay period immediately prior to the Change
      in Control;</font></div>
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      Company requires that Executive relocate to a distance more than thirty (30)
      miles from the Company&#8217;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></div>
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      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&#160;9(g) of this Agreement.</font></div>
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      existence thereof and provide (30) days for the Company to cure. The parties
      intend that this &#8220;Good Reason&#8221; trigger qualify as an involuntary trigger under
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Incumbent
      Director&#8221; means a member of the Board who has been either (a)&#160;nominated by
      a majority of the directors of the Company then in office or (b)&#160;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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Notice
      of Termination&#8221; 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&#8217;s
      employment constituting a Termination, if any, under the provision so
      indicated.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Parachute
      Payment&#8221; means any payment deemed to constitute a &#8220;parachute payment&#8221; as defined
      in Section 280G of the Code.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Person&#8221;
      means any individual, entity or group within the meaning of Section 3(a)(9)
      or
      of Section 13(d)(3) (as in effect on the date of this Agreement) of the Exchange
      Act.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Subsidiary&#8221;
      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></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Termination&#8221;
      means, following the occurrence of any Change in Control by the Company,
      (a)&#160;the involuntary termination of the employment of Executive for any
      reason other than death, Disability or for Cause or (b)&#160;the termination of
      employment by Executive for Good Reason.</font></div>
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      Securities&#8221; means the voting securities of the Company entitled to vote
      generally in the election of directors.</font></div>
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