ONCOTHYREON INC. AMENDMENT TO ROBERT KIRKMAN OFFER LETTER
Exhibit 10.18(a)
AMENDMENT TO XXXXXX XXXXXXX OFFER LETTER
This amendment (the “Amendment”) is made by and between Xxxxxx Xxxxxxx (“Executive”) and
Oncothyreon Inc. (formerly Biomira Inc.), a Delaware corporation (the “Company” and together with
the Executive hereinafter collectively referred to as the “Parties”) on December 31, 2008.
WITNESSETH:
WHEREAS, the Parties previously entered into an offer letter, dated August 29, 2006 (the
“Offer Letter”); and
WHEREAS, the Company and Executive desire to amend certain provisions of the Offer Letter in
order to come into documentary compliance with Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), and any final regulations and official guidance promulgated thereunder
(together, “Section 409A”) so as to avoid the imposition of the additional tax imposed under
Section 409A, as set forth below.
NOW, THEREFORE, for good and valuable consideration, Executive and the Company agree that the
Offer Letter is hereby amended as follows:
1. Severance. Section 5 of the Offer Letter is hereby amended and replaced in its entirety
as follows:
“5.
Severance: In the event your employment is terminated for reasons other than
“Cause” (as defined below) or if there is a “Change of Control” as defined in “Exhibit A
of the Option Plan and you remain employed through the date of the Change of Control,
you will be entitled to the following:
i) Lump sum payment of one year’s base salary, less required withholding,
ii) Lump sum payment equivalent of variable pay at target for one year following
termination, less required withholding, and,
iii) Stock options will follow the schedule detailed in item 4.
Such payments will be made within sixty (60) days following your termination of
employment or the consummation of the Change of Control, as applicable.
“Cause” for the purpose of this agreement shall include but not be limited to (i)
willful engaging in illegal conduct or gross misconduct which is injurious to the
Company or an affiliated company, (ii) being convicted of, or entering a plea of nolo
contendere or guilty to, a felony or a crime of moral turpitude; (iii) engaging in
fraud,
misappropriation, embezzlement or any other act or acts of dishonesty resulting or
intended to result directly or indirectly in a gain or personal enrichment to you at the
expense of the Company or an affiliated company, (iv) material breach of any written
policies of the Company or an affiliated company, or (v) willful and continual failure
substantially to perform your duties with the Company, which failure has continued for a
period of at least 30 days after written notice by the Company.
Section 409A.
i) Notwithstanding anything to the contrary in this letter agreement, no severance
payable to you, if any, pursuant to this letter agreement that, when considered together
with any other severance payments or separation benefits, are considered deferred
compensation under Section 409A (together, the “Deferred Payments”) will be payable
until you have a “separation from service” within the meaning of Section 409A.
Similarly, no severance payable to you, if any, pursuant to this letter agreement that
otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9) will be payable until you have a “separation from service” within the
meaning of Section 409A.
ii) Notwithstanding anything to the contrary in this letter agreement, if you are a
“specified employee” within the meaning of Section 409A at the time of your separation
from service, then, if required, the Deferred Payments, which are otherwise due to you
on or within the six (6) month period following your separation from service will
accrue, to the extent required, during such six (6) month period and will become payable
in a lump sum payment on the date six (6) months and one (1) day following the date of
your separation from service or the date of your death, if earlier. All subsequent
Deferred Payments, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit. Each payment and benefit payable under this
letter agreement is intended to constitute a separate payment for purposes of Treasury
Regulation Section 1.409A-2(b)(2).
iii) Any amount paid under the letter agreement that satisfies the requirements of
the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations will not constitute Deferred Payments for purposes of clause (i) above.
iv) Any amount paid under this letter agreement that qualifies as a payment made as
a result of an involuntary separation from service pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A
Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section
409A Limit” will mean the lesser of two (2) times: (i) your annualized compensation
based upon the annual rate of pay paid to you during your taxable year preceding your
taxable year of your termination of employment as determined under Treasury Regulation
Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with
respect thereto; or (ii) the maximum amount that may be taken into account under a
qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year
in which your employment is terminated.
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v) The foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided hereunder will
be subject to the additional tax imposed under Section 409A, and any ambiguities herein
will be interpreted to so comply. You and the Company agree to work together in good
faith to consider amendments to this letter agreement and to take such reasonable
actions which are necessary, appropriate or desirable to avoid imposition of any
additional tax or income recognition prior to actual payment to you under Section 409A.”
2. Temporary Accommodations. Section 6 of the Offer Letter is hereby amended to add the
following sentence to the end thereof:
“Such temporary accommodations and travel costs provided by the Company is subject to
your continued employment with the Company through each Company provided payment date.”
3. Full Force and Effect. To the extent not expressly amended hereby, the Offer Letter
shall remain in full force and effect.
4. Entire Agreement. This Amendment and the Offer Letter constitute the full and entire
understanding and agreement between the Parties with regard to the subjects hereof and thereof.
This Amendment may be amended at any time only by mutual written agreement of the Parties.
5. Counterparts. This Amendment may be executed in counterparts, all of which together
shall constitute one instrument, and each of which may be executed by less than all of the parties
to this Amendment.
6. Governing Law. This Amendment will be governed by the laws of the State of Washington
(with the exception of its conflict of laws provisions).
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IN WITNESS WHEREOF, each of the Parties has executed this Amendment, in the case of the
Company by its duly authorized officer, as of the date set forth above.
| COMPANY | ONCOTHYREON INC. /s/ Xxxx Xxxxxxxxxxxx |
|||
| By: | Xxxx Xxxxxxxxxxxx | |||
| Title: | Chief Operating Officer | |||
| EXECUTIVE | XXXXXX XXXXXXX, M.D. | |||
| /s/ Xxxxxx X. Xxxxxxx, M.D. | ||||
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