Exhibit 10.26
April 13, 2007
Mr. Edward F. Kenney
Onyx Pharmaceuticals, Inc.
2100 Powell Street
Emeryville, CA 94608
Dear Ed:
This letter sets forth the substance of the retirement agreement (the
“Agreement”) that Onyx Pharmaceuticals, Inc. (the “Company”) is offering to you
to facilitate your retirement from the Company:
     1. Retirement Date. On December 31, 2007, you shall retire from your
position as Chief Commercial Officer and your employment with the Company will
end (the “Retirement Date”). Until the Retirement Date, you shall continue to
use your best efforts to perform your assigned duties and responsibilities,
including, without limitation, the product launch of any Company products. You
will continue to receive your full current salary and benefits until the
Retirement Date, and you will continue to comply with all of the Company’s
policies and procedures during this time.
     2. Accrued Salary and Vacation. On the Retirement Date, the Company will
pay you all accrued salary, and all accrued and unused vacation earned through
the Retirement Date, subject to standard payroll deductions and withholdings.
You are entitled to these payments whether or not you sign this Agreement.
     3. Retirement Benefits. If you: (i) sign this Agreement and allow the
Release contained herein to become effective; and (ii) sign the Retirement Date
Release attached hereto as Exhibit A on or within 21 days after the Retirement
Date and allow this Retirement Date Release to become effective; then the
Company will provide you with the following retirement benefits:
          (a) Retirement Payments. The Company will make retirement payments to
you in the form of continuation of your base salary in effect on the Retirement
Date for twelve (12) months following the Retirement Date (the “Retirement
Payments”). The Retirement Payments will be made on the Company’s ordinary
payroll dates, and will be subject to standard payroll deductions and
withholdings.
          (b) Health Insurance. As provided by the federal COBRA law, state
insurance laws, and by the Company’s current group health insurance policies,
you will be eligible to continue your current health insurance benefits at your
own expense for a period of time following the Retirement Date and, later, to
convert to an individual policy if you wish. You will be provided with a
separate notice of your COBRA rights. If you timely elect continued coverage
under COBRA, as part of this Agreement, the Company will pay the COBRA premiums
necessary to continue your current health insurance coverage for a period of
twelve (12) months from the Retirement Date.

 

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Edward F. Kenney
April 13, 2007
          (c) 2007 Bonus. You will be eligible to receive a bonus for 2007
pursuant to the terms of the Company’s Bonus Plan. The Company shall have the
sole discretion to determine whether you receive any such bonus and, if so, the
amount of any such bonus. If awarded, this bonus will be paid at the same time
as bonuses paid to other Company executives.
     4. Consulting Agreement. You will serve as a consultant to the Company
under the terms specified below. The consulting relationship commences on the
Retirement Date and continues for fifteen months from the Retirement Date (the
“Consulting Period”).
          (a) Consulting Services. You agree to provide consulting services to
the Company in any area of your expertise upon request by the Chief Executive
Officer (“CEO”) of the Company. During the Consulting Period, you will report
directly to the CEO, or as otherwise specified by the CEO. You agree to exercise
the highest degree of professionalism and utilize your expertise and creative
talents in performing these services. You agree to make yourself available to
perform such consulting services throughout the Consulting Period, up to a
maximum of forty (40) hours per month.
          (b) Consulting Fees and Benefits.
               (i) Consulting Fees. During the Consulting Period, you will
receive as consulting fees $400.00 per hour for each hour or portion thereof
that you actually provide services to the Company (“Consulting Fees”).
               (ii) Independent Contractor Relationship. During the Consulting
Period, your relationship with the Company will be that of an independent
contractor, and nothing in this Agreement is intended to, or should be construed
to, create a partnership, agency, joint venture or employment relationship.
Except as set forth above in Section 3(b) of this Agreement, you will not be
entitled to any of the benefits which the Company may make available to its
employees during the Consulting Period, including, but not limited to, group
health or life insurance, profit-sharing or retirement benefits.
               (iii) Taxes and Withholding. You are solely responsible for, and
will file, on a timely basis, all tax returns and payments required to be filed
with, or made to, any federal, state or local tax authority with respect to the
performance of consulting services and receipt of fees under this Agreement. You
are solely responsible for, and must maintain adequate records of, expenses
incurred in the course of performing services under this Agreement. The Company
will not withhold from the Consulting Fees any amount for taxes, social security
or other payroll deductions. The Company will regularly report amounts paid to
you by filing Form 1099-MISC with the Internal Revenue Service as required by
law. You acknowledge that you will be entirely responsible for payment of any
such taxes, and you hereby indemnify and hold harmless the Company from any
liability for any taxes, penalties or interest that may be assessed by any
taxing authority with respect to all Consulting Fees you receive under this
Agreement, with the exception of the employer’s share of social security, if
any.
               (iv) Stock Option. Your outstanding stock options (the “Options”)
and stock bonus awards will continue to vest through the Consulting Period,
provided that you remain in compliance with the terms of this Agreement. You
will have ninety (90) days to exercise any vested Option shares following the
end of the Consulting Period. The Options that vest during the Consulting Period
will cease being incentive stock options under Section 422 of the Internal
Revenue Code due to the extension of your vesting period beyond your employment
termination.

 

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Edward F. Kenney
April 13, 2007
          (c) Limitations on Authority. You will have no responsibilities or
authority as a consultant to the Company other than as provided above. You agree
not to represent or purport to represent the Company in any manner whatsoever to
any third party unless authorized by the Company, in writing, to do so.
          (d) Proprietary Information and Inventions. You agree that the
Employee Proprietary Information and Inventions Agreement between you and the
Company that you signed on May 10, 2004 (the “Proprietary Information and
Inventions Agreement” a copy of which is attached hereto as Exhibit B) shall
govern any Company information to which you have access or which you develop, or
inventions made by you, while performing services during the Consulting Period.
          (e) Other Work Activities. Throughout the Consulting Period, you
retain the right to engage in employment, consulting, or other work
relationships in addition to your work for the Company. The Company will make
reasonable arrangements to enable you to perform your work for the Company at
such times and in such a manner so that it will not interfere with other
activities in which you may engage. In order to protect the trade secrets and
confidential and proprietary information of the Company, you agree that, during
the Consulting Period, you will notify the Company, in writing, before you
obtain competitive employment, perform competitive work for any business entity,
or engage in any other work activity that is competitive with the Company, and
you will obtain the Company’s written consent before engaging in any such
competitive activity. If you engage in such competitive activity without the
Company’s express written consent, or otherwise materially breach this
Agreement, then, in addition to any other remedies, the Company’s obligation to
pay you Consulting Fees will cease immediately, and you will not receive option
vesting after the Retirement Date as provided in paragraph 4(b)(iv).
     5. Other Compensation or Benefits. You acknowledge that, except as
expressly provided in this Agreement, you will not receive from the Company any
additional compensation, including but not limited to salary or bonuses,
severance or employee benefits after the Retirement Date. You further
acknowledge and agree that you are not currently entitled to receive any Change
in Control severance benefits nor shall you be entitled to receive any Change in
Control severance benefits in the future (including without limitation any
accelerated vesting of your stock options provided for in your stock option
agreements or the Company’s stock option plan). Any such provisions in your
stock option agreements, stock bonus awards or the stock option plan providing
for accelerated vesting of stock options or stock bonus awards in the event of a
change in control are hereby superseded and shall have no further force or
effect.
     6. Proprietary Information Obligations. You acknowledge your continuing
obligations under your Proprietary Information and Inventions Agreement both
during and after the Consulting Period. You agree not to use or disclose any
confidential or proprietary information of the Company without prior written
authorization from a duly authorized representative of the Company.
     7. Nonsolicitation. You agree that for one year following the Retirement
Date you will not, either directly or through others, solicit or attempt to
solicit any employee, consultant, or independent contractor of the Company to
terminate his or her relationship with the Company in order to become an
employee, consultant or independent contractor to or for any other person or
entity.
     8. Nondisparagement. You agree not to disparage the Company or the
Company’s officers, directors, employees, shareholders, parents, subsidiaries,
affiliates, and agents, in any manner

 

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Edward F. Kenney
April 13, 2007
likely to be harmful to them or their business, business reputation or personal
reputation; provided that you may respond accurately and fully to any question,
inquiry or request for information when required by legal process.
     9. Dispute Resolution. Unless otherwise prohibited by law or specified
below, all disputes, claims and causes of action in law or equity arising from
or relating to this Agreement or its enforcement, performance, breach or
interpretation shall be resolved solely and exclusively by final and binding
confidential arbitration through the Judicial Arbitration and Mediation Service
(“JAMS”) to be held in San Francisco, California under the then-existing JAMS
arbitration rules for employment matters. Nothing in this section, however, is
intended to prevent either party from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any such arbitration.
     10. General Release. In exchange for the consideration provided to you by
this Agreement that you are not otherwise entitled to receive, you hereby
generally and completely release the Company and its current and former
directors, officers, employees, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns from any and all claims, liabilities and obligations, both known and
unknown, that arise out of or are in any way related to events, acts, conduct,
or omissions occurring prior to your signing this Agreement. This general
release includes, but is not limited to: (a) all claims arising out of or in any
way related to your employment with the Company or the termination of that
employment; (b) all claims related to your compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (c) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (d) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (e) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended). Notwithstanding the foregoing, nothing in this Agreement shall
prevent you from filing, cooperating with, or participating in any proceeding
before the Equal Employment Opportunity Commission or the California Department
of Fair Employment and Housing, except that you acknowledge and agree that you
shall not recover any monetary benefits in connection with any such claim,
charge or proceeding with regard to any claim released herein.
     11. ADEA Waiver. You acknowledge that you are knowingly and voluntarily
waiving and releasing any rights you may have under the ADEA (“ADEA Waiver”).
You also acknowledge that the consideration given for the ADEA Waiver is in
addition to anything of value to which you were already entitled. You further
acknowledge that you have been advised by this writing, as required by the ADEA,
that: (a) your ADEA Waiver does not apply to any rights or claims that arise
after the date you sign this Agreement; (b) you should consult with an attorney
prior to signing this Agreement; (c) you have twenty-one (21) days to consider
this Agreement (although you may choose to voluntarily sign it sooner); (d) you
have seven (7) days following the date you sign this Agreement to revoke the
ADEA Waiver; and (e) the ADEA Waiver will not be effective until the date upon
which the revocation period has expired unexercised, which will be the eighth
day after you sign this Agreement (“Effective Date”). Nevertheless, your general
release of claims, except for the ADEA Waiver, is effective immediately, and not
revocable.

 

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Edward F. Kenney
April 13, 2007
     12. Waiver. In giving the release herein, which includes claims which may
be unknown to you at present, you acknowledge that you have read and understand
Section 1542 of the California Civil Code, which reads as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.
(California Civil Code section 1542)
You hereby expressly waive and relinquish all rights and benefits under that
section and any law or legal principle of similar effect in any jurisdiction
with respect to the release of unknown and unsuspected claims granted in this
Agreement.
     13. Entire Agreement. This Agreement, including all exhibits, constitutes
the complete, final and exclusive embodiment of the entire agreement between you
and the Company with regard to the subject matter hereof. It supersedes any and
all other agreements entered into by and between you and the Company. It is
entered into without reliance on any promise or representation, written or oral,
other than those expressly contained herein. It may not be modified except in
writing signed by you and a duly authorized officer of the Company. Each party
has carefully read this Agreement, has been afforded the opportunity to be
advised of its meaning and consequences by his or its respective attorneys, and
signed the same of his or its own free will.
     14. Attorneys’ Fees. If either you or the Company brings any action to
enforce rights under this Agreement, the party successful in enforcing this
Agreement shall be entitled to recover reasonable attorneys’ fees and costs
incurred by that party in connection with such action.
     15. Successors and Assigns. This Agreement will bind the heirs, personal
representatives, successors, assigns, executors and administrators of each
party, and will inure to the benefit of each party, its heirs, successors and
assigns.
     16. Applicable Law. This Agreement will be deemed to have been entered into
and will be construed and enforced in accordance with the laws of the State of
California as applied to contracts made and to be performed entirely within
California.
     17. Severability. If a court or an arbitrator of competent jurisdiction
determines that any term or provision of this Agreement is invalid or
unenforceable, in whole or in part, then the remaining terms and provisions
hereof will be unimpaired. The court or the arbitrator will then have the
authority to modify or replace the invalid or unenforceable term or provision
with a valid and enforceable term or provision that most accurately represents
the parties’ intention with respect to the invalid or unenforceable term or
provision.
     18. Counterparts. This Agreement may be executed in two counterparts, each
of which will be deemed an original, all of which together constitutes one and
the same instrument. Facsimile signatures are as effective as original
signatures.
     19. If this Agreement is acceptable to you, please sign below and return
the original to me.

 

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Edward F. Kenney
April 13, 2007
I wish you the best of luck in your future endeavors.
Sincerely,
Onyx Pharmaceuticals, Inc.

         
By:
  /s/ Hollings C. Renton     
 
 
 
     Hollings C. Renton
     Chairman and Chief Executive Officer    

Exhibit A — Retirement Date Release
Exhibit B — Proprietary Information and Inventions Agreement
Understood and Agreed:
/s/ Edward F. Kenney                                                            
Edward F. Kenney
Date: April 17, 2007
749590/pa