Exhibit 10.4


 


PONIARD
PHARMACEUTICALS, INC.


KEY
EXECUTIVE SEVERANCE AGREEMENT


 


This Key Executive Severance Agreement (this “Agreement”), dated as
of February 5, 2010, is entered into by and between PONIARD
PHARMACEUTICALS, INC., a Washington corporation (as supplemented by
Section 10 hereof, the “Company”), and Michael S. Perry, DVM, Ph.D. (the “Executive”).


 


The Board of Directors of the Company (the “Board”) has
determined that it is in the best interests of the Company and its shareholders
to ensure that the Company will have the continued dedication of the Executive,
notwithstanding the fact that the Executive does not have any form of
traditional employment contract or other assurance of job security.  The Board believes it is imperative to
diminish any distraction of the Executive arising from the personal uncertainty
and insecurity that arises in the absence of any assurance of job security by
providing the Executive with reasonable compensation and benefit arrangements
in the event of termination of the Executive’s employment by the Company under
certain defined circumstances.


 


In order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.


 


1.                                      Term


 


The initial term of this Agreement (the “Initial Term”) shall be
for a period commencing on the date of this  Agreement and ending on February 23,
2011; provided, however, that this Agreement shall automatically renew for
successive additional one (1) year periods (“Renewal Terms”) unless notice of
nonrenewal is given by either party to the other party at least nine
(9) months prior to the end of the Initial Term or any Renewal Term; and
provided, further, that if a Change of Control (as defined in the Change of
Control Agreement referenced in Section 16 hereof) occurs during the Term,
the Term shall automatically extend for the duration of the Employment Period
(as defined in the Change of Control Agreement).  The “Term” of this Agreement shall be the Initial
Term plus all Renewal Terms and, if applicable, the duration of the Employment
Period.  At the end of the Term, this
Agreement shall terminate without further action by either the Company or the
Executive.


 


2.                                      Employment at Will


 


The Executive and the Company acknowledge that, except
as may otherwise be provided under any other written agreement between the
Executive and the Company, the employment of the Executive by the Company or
any affiliated companies is “at will” and may be terminated by either the
Executive or the Company or its affiliated companies at any time with or
without cause, subject to the termination payments prescribed herein.


 


3.                                      Attention and Effort


 


During any period of time that the Executive remains
in the employ of the Company, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive will devote all of the
Executive’s productive time, ability, attention and effort to the 


 

















 


business and affairs of the Company and the discharge
of the responsibilities assigned to the Executive hereunder, and will seek to
perform faithfully and efficiently such responsibilities.  It shall not be a violation of this Agreement
for the Executive to (a) serve on corporate, civic or charitable boards or
committees, (b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (c) manage personal investments, or
(d) engage in activities permitted by the policies of the Company or as
specifically permitted by the Company, so long as such activities do not
significantly interfere with the performance of the Executive’s
responsibilities in accordance with this Agreement.  It is expressly understood and agreed that to
the extent any such activities have been conducted by the Executive prior to
the Term, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) during the Term shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.


 


4.                                      Termination


 


During the Term, employment of the Executive may be
terminated as follows, but, in any case, the nondisclosure provisions set forth
in Section 7 hereof shall survive the termination of this Agreement and
the termination of the Executive’s employment with the Company:


 


4.1          Termination by the Company or the
Executive


 


At any time during the Term, the Company may terminate
the employment of the Executive with or without Cause (as defined below), and
the Executive may terminate the Executive’s employment for Good Reason (as
defined below) or for any reason, upon giving a Notice of Termination (as
defined below).


 


4.2          Automatic Termination


 


This Agreement and the Executive’s employment during
the Term shall terminate automatically upon the death or Total Disability of
the Executive.  The term “Total Disability” as
used herein shall mean the Executive’s inability (with such accommodation as
may be required by law and which places no undue burden on the Company), as
determined by a physician selected by the Company and acceptable to the
Executive, to perform the Executive’s essential duties for a period or periods
aggregating twelve (12) weeks in any three hundred sixty-five (365) day period
as a result of physical or mental illness, loss of legal capacity or any other
cause beyond the Executive’s control, unless the Executive is granted a leave
of absence by the Board.


 


4.3          Notice of Termination


 


Any termination by the Company or by the Executive
during the Term shall be communicated by a Notice of Termination to the other
party given in accordance with Section 9 hereof.  The term “Notice of Termination” shall mean a
written notice that (a) indicates the specific termination provision in
this Agreement relied upon and (b) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so
indicated.  The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the 


 


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Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the Executive’s
or the Company’s rights hereunder.


 


4.4          Date of Termination


 


“Date
of Termination” means (a) if the Executive’s employment is
terminated by reason of death, the last day of the calendar month in which the
Executive’s death occurs, (b) if the Executive’s employment is terminated
by reason of Total Disability, immediately upon a determination by the
Company of the Executive’s Total Disability, and (c) in all other cases,
ten (10) days after the date of personal delivery or mailing of the Notice
of Termination.  The Executive’s
employment and performance of services will continue during such ten
(10) day period; provided, however, that the Company may, upon notice to
the Executive and without reducing the Executive’s compensation during such
period, excuse the Executive from any or all of the Executive’s duties during
such period.  Notwithstanding anything
contained in this Agreement to the contrary, the date on which a “separation
from service” (“Separation from Service”) pursuant to
Section 409A of the Internal Revenue Code of 1986, as amended (“Code
Section 409A”), occurs shall be the “Date of
Termination” or termination of employment for purposes of determining the
timing of payments under this Agreement to the extent necessary to have such
payments and benefits under this Agreement be exempt from the requirements of
Code Section 409A or comply with the requirements of Code
Section 409A.


 


5.                                      Termination Payments


 


In the event of termination of the Executive’s
employment during the Term, all compensation and benefits shall terminate,
except as specifically provided in this Section 5.


 


5.1                               Termination by the
Company Other Than for Cause or by the Executive for Good Reason


 


If during the Term the Company terminates the
Executive’s employment other than for Cause or the Executive terminates the
Executive’s employment for Good Reason, the Executive shall be entitled to:


 


(a)           receive
payment of the following accrued obligations (the “Accrued Obligations”):


 


(i)            the
Executive’s then current annual base salary through the Date of Termination to
the extent not theretofore paid;


 


(ii)           any
compensation previously deferred by the Executive (together with accrued
interest or earnings thereon, if any); and


 


(iii)          any
accrued vacation pay that would be payable under the Company’s standard policy,
in each case to the extent not theretofore paid;


 


(b)           have
the Company pay for nine (9) months after the Date of Termination or until
the Executive qualifies for comparable medical and dental insurance benefits
from another employer, whichever occurs first, the Executive’s premiums for
health insurance benefit 


 


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continuation for the Executive and the Executive’s
family members, if applicable, that the Company provides to the Executive under
the provisions of the federal Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”),
to the extent that the Company would have paid such premiums had the Executive
remained employed by the Company (such continued payment is hereinafter referred
to as “COBRA
Continuation”); and


 


(c)           an
amount as severance pay equal to seventy-five percent (75%) of the Executive’s
then current annual base salary for the fiscal year in which the Date of
Termination occurs, subject to payment as set forth in Sections 5.5 and
5.9 hereof.


 


5.2          Termination for Cause or Other Than
for Good Reason


 


If during the Term the Executive’s employment shall be
terminated by the Company for Cause or by the Executive for other than Good
Reason, this Agreement shall terminate without further obligation on the part
of the Company to the Executive, other than the Company’s obligation to pay the
Executive the Accrued Obligations to the extent theretofore unpaid.


 


5.3          Expiration of Term


 


In the event the Executive’s employment is not
terminated prior to expiration of the Term, this Agreement shall terminate
without further obligation on the part of the Company to the Executive.


 


5.4          Termination Because of Death or Total
Disability


 


If during the Term the Executive’s employment is terminated
by reason of the Executive’s death or Total Disability, this Agreement shall
terminate automatically without further obligation on the part of the Company
to the Executive or the Executive’s legal representatives under this Agreement,
other than the Company’s obligation to pay the Executive the Accrued
Obligations (which shall be paid to the Executive’s estate or beneficiary, as
applicable in the case of the Executive’s death) and to provide COBRA
Continuation.


 


5.5          Payment Schedule


 


All payments of Accrued Obligations, or any portion
thereof payable pursuant to this Section 5, other than deferred
compensation pursuant to Section 5.1(a)(ii) hereof, shall be made to
the Executive within ten (10) working days of the Date of Termination.  Deferred compensation pursuant to
Section 5.1(a)(ii) hereof shall be payable pursuant to the terms of
the deferred compensation program.  Any
severance payments payable to the Executive pursuant to Section 5.1(c) hereof
shall be made to the Executive in the form of salary continuation, payable at
normal payroll intervals during the nine (9) month period following the
Date of Termination.  Notwithstanding the
preceding provisions of this Section 5, if any payment or benefit pursuant
to this Agreement constitutes a “deferral of compensation” subject to Code
Section 409A (after taking into account, to the maximum extent possible,
any applicable exemptions) (a “409A Payment”) treated as payable to a Specified
Employee (as defined in Section 20.1 hereof) upon Separation from Service,
the provisions of Section 20.1 hereof shall apply.  Section 5.8 hereof must be satisfied to
receive payments and benefits under this Agreement.


 


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5.6          Cause


 


For purposes of this Agreement, “Cause” means cause
given by the Executive to the Company and shall include, without limitation,
the occurrence of one (1) or more of the following events:


 


(a)           a
clear refusal to carry out any material lawful duties of the Executive or any
directions of the Board or senior management of the Company reasonably
consistent with those duties;


 


(b)           persistent
failure to carry out any lawful duties of the Executive or any directions of
the Board or senior management reasonably consistent with those duties;
provided, however, that the Executive has been given reasonable notice and
opportunity to correct any such failure;


 


(c)           violation
by the Executive of a state or federal criminal law involving the commission of
a crime against the Company or any other criminal act involving moral
turpitude;


 


(d)           current
abuse by the Executive of alcohol or controlled substances; deception, fraud,
misrepresentation or dishonesty by the Executive; or any incident materially
compromising the Executive’s reputation or ability to represent the Company
with investors, customers or the public; or


 


(e)           any
other material violation of any provision of this Agreement by the Executive,
subject to the notice and opportunity-to-cure requirements of Section 8
hereof.


 


5.7          Good Reason


 


For purposes of this Agreement, “Good Reason” means:


 


(a)           material
reduction of the Executive’s annual base salary to a level below the level in
effect on the date of this Agreement, regardless of any change in the
Executive’s duties or responsibilities;


 


(b)           the
assignment to the Executive of any duties materially inconsistent with the
Executive’s position, authority, duties or responsibilities or any other action
by the Company that results in a material diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated
and inadvertent action not taken in bad faith and that is remedied by the
Company promptly after receipt of notice thereof given by the Executive;


 


(c)           the
Company’s requiring the Executive to be based at any office or location more
than fifty (50) miles from the city in which the Executive is currently
employed by the Company, i.e., San Francisco, California or Seattle,
Washington;


 


(d)           any
failure by the Company to comply with and satisfy Section 10 hereof;
provided, however, that the Company’s successor has received at least ten
(10) days’ prior written notice from the Company or the Executive of the
requirements of Section 10 hereof; or


 


(e)           any
other material violation of any provision of this Agreement by the Company;


 


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provided, however, that the Executive has notified the
Company of such salary reduction, assignment, failure, situation or violation
within ninety (90) days of its occurrence and there has been compliance with
the notice and opportunity-to-cure requirements of Section 8 hereof.


 


5.8          General Release of Claims


 


As a condition to receiving the payments and benefits
under this Section 5 other than Accrued Obligations set forth in Sections
5.1(a)(i) and 5.1(a)(iii) hereof, the Executive shall execute (and
not later revoke) a general release and waiver of all claims against the
Company, which release and waiver shall be in a form satisfactory to the
Company, in its sole discretion, and delivered to the Company no later than the
seventh day of the third month of the fiscal year following the year in which
the Date of Termination occurs.  By way
of example and not limitation, the general release and waiver of claims will include
any claims for wages, bonuses, employment benefits, or damages of any kind
whatsoever, arising out of any contracts, express or implied, any covenant of
good faith and fair dealing, express or implied, any theory of wrongful
discharge, any legal restriction on the Company’s right to terminate
employment, or any federal, state or other governmental statute or ordinance,
including, without limitation, Title VII of the Civil Rights Act of 1964, the
federal Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Family and Medical Leave Act, the Washington Law Against
Discrimination, or any other legal limitation on the employment
relationship.  To the extent any payment
or benefit is a 409A Payment, the provisions of Section 20.3 hereof shall
apply.


 


5.9          Dispute Regarding Existence of Good
Reason for Termination


 


In the event the Company disputes whether Good Reason
existed for the Executive to terminate the Executive’s employment for Good
Reason, the Company shall pay salary continuation as provided in
Section 5.5 until the earliest of (a) settlement by the parties,
(b) determination by arbitration in accordance with Section 14 hereof
that Good Reason did not exist, and (c) completion of the payments
required by Section 5.5 and Section 5.1(c) hereof.  If, pursuant to Section 14 hereof, an
arbitrator determines that Good Reason did not exist, the arbitrator shall also
decide whether the Executive had a reasonable, good-faith basis for claiming
that there was Good Reason to terminate. 
If the arbitrator determines that there was not such a basis, the
Executive shall be obligated to repay promptly to the Company the salary
continuation payments; if the arbitrator determines that there was such a
basis, the Executive shall not be obligated to repay the salary continuation.


 


6.                                      Representations,
Warranties and Other Conditions


 


In order to induce the Company to enter into this
Agreement, the Executive represents and warrants to the Company as follows:


 


6.1          Health


 


The Executive is in good health and knows of no
physical or mental disability that, with any accommodation that may be required
by law and that places no undue burden on the Company, would prevent the
Executive from fulfilling the Executive’s obligations hereunder.  The Executive agrees, if the Company
requests, to submit to reasonable periodic medical 


 


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examinations by a physician or physicians designated
by, paid for and arranged by the Company. 
The Executive agrees that each examination’s medical report shall be
provided to the Company.


 


6.2          No Violation of Other Agreements


 


The Executive represents that neither the execution
nor the performance of this Agreement by the Executive will violate or conflict
in any way with any other agreements or obligations by which the Executive may
be bound.


 


7.                                      Nondisclosure; Return of
Materials


 


7.1          Nondisclosure


 


Except as required by the Executive’s employment with
the Company, the Executive will not, at any time during the term of employment
by the Company, or at any time thereafter, directly, indirectly or otherwise,
use, communicate, disclose, disseminate, lecture upon or publish articles
relating to any confidential, proprietary or trade secret information of the
Company without the prior written consent of the Company.  The Executive understands that the Company
will be relying on this Agreement in continuing the Executive’s employment,
paying the Executive’s compensation, granting the Executive any promotions or
raises, or entrusting the Executive with any information that helps the Company
compete with others.


 


7.2          Return of Materials


 


All documents, records, notebooks, notes, memoranda,
drawings or other documents made or compiled by the Executive at any time while
employed by the Company, or in the Executive’s possession, including any and
all copies thereof, shall be the property of the Company and shall be held by
the Executive in trust and solely for the benefit of the Company, and shall be
delivered to the Company by the Executive upon termination of employment or at
any other time upon request by the Company.


 


8.                                      Notice and Cure of
Breach


 


Whenever a breach of this Agreement by either party is
relied upon as justification for any action taken by the other party pursuant
to any provision of this Agreement, other than clause (a), (b),
(c) or (d) of Section 5.6 hereof, before such action is taken,
the party asserting the breach of this Agreement shall give the other party at
least twenty (20) days’ prior written notice of the existence and the nature of
such breach before taking further action hereunder and shall give the party
purportedly in breach of this Agreement the opportunity to correct such breach
during the twenty (20) day period.


 


9.                                      Form of Notice


 


Every notice required by the terms of this Agreement
shall be given in writing by serving the same upon the party to whom it was
addressed personally or by registered or certified mail, return receipt
requested, at the address set forth below or at such other address as may
hereafter be designated by notice given in compliance with the terms hereof:


 


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  If to the Executive:

  	
  Michael S. Perry, DVM, Ph.D.

  	 

	 
	
   

  	
  [address]

  
	 
	
   

  	
   

  
	 
	
  If to the Company:

  	
  Poniard Pharmaceuticals, Inc.

  
	 
	
   

  	
  300 Elliott Avenue
  West, Suite 500

  
	 
	
   

  	
  Seattle, Washington
  98119

  
	 
	
   

  	
  Attn: Chief Executive
  Officer

  
	 
	
   

  	
   

  
	 
	
  With a copy to:

  	
  Perkins Coie LLP

  
	 
	
   

  	
  1201 Third Avenue,
  Suite 4800

  
	 
	
   

  	
  Seattle, Washington
  98101-3099

  
	 
	
   

  	
  Attn: James R.
  Lisbakken

  
				



 


Except as set forth in Section 4.4 hereof, if
notice is mailed, such notice shall be effective upon mailing.


 


10.                               Assignment


 


This Agreement is personal to the Executive and shall
not be assignable by the Executive.


 


The Company shall assign to and require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place.  As used in
this Agreement, “Company”
shall mean Poniard Pharmaceuticals, Inc. and any affiliated company or
successor to its business and/or assets as aforesaid that assumes and agrees to
perform this Agreement by contract, operation of law or otherwise; and as long
as such successor assumes and agrees to perform this Agreement, the termination
of the Executive’s employment by one such entity and the immediate hiring and
continuation of the Executive’s employment by the succeeding entity shall not
be deemed to constitute a termination or trigger any severance obligation under
this Agreement.  All the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.


 


11.                               Waivers


 


No delay or failure by any party hereto in exercising,
protecting or enforcing any of its rights, titles, interests or remedies
hereunder, and no course of dealing or performance with respect thereto, shall
constitute a waiver thereof.  The express
waiver by a party hereto of any right, title, interest or remedy in a
particular instance or circumstance shall not constitute a waiver thereof in
any other instance or circumstance.  All
rights and remedies shall be cumulative and not exclusive of any other rights
or remedies.


 


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12.                               Amendments in Writing


 


No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, or consent to any departure
therefrom by either party hereto, shall in any event be effective unless the
same shall be in writing, specifically identifying this Agreement and the
provision intended to be amended, modified, waived, terminated or discharged
and signed by the Company and the Executive, and each such amendment,
modification, waiver, termination or discharge shall be effective only in the
specific instance and for the specific purpose for which given.  No provision of this Agreement shall be
varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Company and the Executive.


 


13.                               Applicable Law


 


This Agreement shall in all respects, including all
matters of construction, validity and performance, be governed by, and
construed and enforced in accordance with, the laws of the State of Washington,
without regard to any rules governing conflicts of laws.


 


14.                               Arbitration; Attorneys’
Fees


 


Except in connection with enforcing Section 7
hereof, for which legal and equitable remedies may be sought in a court of law,
any dispute arising under this Agreement shall be subject to arbitration.  The arbitration proceeding shall be conducted
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the “AAA Rules”) then in effect, conducted by one
(1) arbitrator either mutually agreed upon or selected in accordance with
the AAA Rules.  The arbitration shall be
conducted in King County, Washington, under the jurisdiction of the Seattle
office of the American Arbitration Association. 
The arbitrator shall have authority only to interpret and apply the
provisions of this Agreement, and shall have no authority to add to, subtract
from or otherwise modify the terms of this Agreement.  Any demand for arbitration must be made
within sixty (60) days of the event(s) giving rise to the claim that this
Agreement has been breached.  The
arbitrator’s decision shall be final and binding, and each party agrees to be
bound by the arbitrator’s award, subject only to an appeal therefrom in
accordance with the laws of the State of Washington.  Either party may obtain judgment upon the
arbitrator’s award in the Superior Court of King County, Washington.


 


If it becomes necessary to pursue or defend any legal
proceeding, whether in arbitration or court, in order to resolve a dispute
arising under this Agreement, the prevailing party in any such proceeding shall
be entitled to recover its reasonable costs and attorneys’ fees.  To the extent necessary to prevent the
Executive from being subject to any additional tax pursuant to Code
Section 409A(a)(1)(B), any amounts payable to the Executive pursuant to
this paragraph shall be paid in no event later than the year following the year
during which such costs and fees were incurred.


 


15.                               Severability


 


If any provision of this Agreement shall be held
invalid, illegal or unenforceable in any jurisdiction, for any reason,
including, without limitation, the duration of such provision, its geographical
scope or the extent of the activities prohibited or required by it, then, to
the full


 


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extent permitted by law, (a) all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intent of the parties hereto as
nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having
jurisdiction thereover shall have the power to reform such provision to the
extent necessary for such provision to be enforceable under applicable law.


 


16.                               Coordination With Change
of Control Agreement


 


Contemporaneously with this Agreement, the Company and
the Executive are entering into a Change of Control Agreement (the “Change of Control Agreement”),
which agreement provides for certain forms of severance and benefit payments in
the event of termination of the Executive’s employment under certain defined
circumstances.  This Agreement is in
addition to the Change of Control Agreement, providing certain assurances to
the Executive in circumstances that the Change of Control Agreement does not
cover, and in no way supersedes or nullifies the Change of Control Agreement.  Nevertheless, it is possible that a
termination of employment by the Company or by the Executive may fall within
the scope of both agreements.  In such
event, payments made to the Executive under Section 5.1 hereof shall be
coordinated with payments made to the Executive under Section 8.1 of the
Change of Control Agreement as follows:


 


(a)           Accrued
Obligations under this Agreement need not be paid if paid under the Change of
Control Agreement;


 


(b)           COBRA
Continuation under this Agreement need not be provided if provided under the
Change of Control Agreement; and


 


(c)           the
severance payment required under Section 5.1(c) hereof (and paid
pursuant to Section 5.5 hereof) need not be paid to the extent a severance
payment is made under Section 8.1(d) of the Change of Control
Agreement in connection with a Change of Control under the Change of Control
Agreement that constitutes a change in the ownership or effective control of
the Company or in the ownership of a substantial portion of the assets of the
Company within the meaning of subsection (a)(2)(A)(v) of Code
Section 409A, i.e., the credit from Section 8.1(d) of the Change
of Control Agreement is applied as amounts become due under Section 5.5
hereof.


 


17.                               Excess Parachute
Payments


 


Unless provided by Section 8.8 of the Change of
Control Agreement, if any portion of the payments or benefits under this
Agreement or any other agreement or benefit plan of the Company (including
stock options) would be characterized as an “excess parachute payment” to the
Executive under Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”),
the Executive shall be paid any excise tax that the Executive owes under Code
Section 4999 as a result of such characterization, such excise tax to be
paid to the Executive at least ten (10) days prior to the date that the
Executive is obligated to make the excise tax payment.  The determination of whether and to what
extent any payments or benefits would be “excess parachute payments” and the
date by which any excise tax shall be due shall be determined in writing by
recognized tax counsel selected by the Company and reasonably


 


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acceptable to the Executive.  Without limitation on the foregoing, the
payments made pursuant to this Section 17 shall be made no later than the
end of the year following the year in which the Executive remits such excise
tax to the Internal Revenue Service.


 


18.                               Entire Agreement


 


Except as described in Section 16 hereof, this
Agreement constitutes the entire agreement between the Company and the
Executive with respect to the subject matter hereof, and all prior or
contemporaneous oral or written communications, understandings or agreements
between the Company and the Executive with respect to such subject matter are
hereby superseded and nullified in their entireties, except that the
Proprietary Information and Invention Agreement between the Executive and the
Company shall continue in full force and effect to the extent not superseded by
Section 7 hereof.


 


19.                               Withholding


 


The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.


 


20.                               409A Interpretation
Provision


 


The parties intend that this Agreement and the
payments and benefits provided hereunder be exempt from the requirements of
Code Section 409A to the maximum extent possible, whether pursuant to the
short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4),
the involuntary separation pay plan exception described in Treasury Regulation
Section 1.409A-1(b)(9)(iii), or otherwise. 
To the extent Code Section 409A is applicable to this Agreement,
the parties intend that this Agreement comply with the deferral, payout and
other limitations and restrictions imposed under Code Section 409A.  Notwithstanding anything herein to the
contrary, this Agreement is intended to be interpreted and operated to the
fullest extent possible so that the payments and benefits under this Agreement
either shall be exempt from the requirements of 
Code Section 409A or shall comply with the requirements of such
provision; provided, however, that notwithstanding anything to the contrary in
this Agreement in no event shall the Company be liable to the Executive for or
with respect to any taxes, penalties or interest that may be imposed upon the
Executive pursuant to Code Section 409A.


 


20.1        Payments to Specified Employees


 


To the extent that any payment or benefit pursuant to
this Agreement constitutes a 409A Payment treated as payable upon Separation
from Service, then, if on the date of the Executive’s Separation from Service,
the Executive is a Specified Employee, then to the extent required for the
Executive not to incur additional taxes pursuant to Code Section 409A, no
such 409A Payment shall be made to the Executive earlier than the earlier of
(a) six (6) months after the Executive’s Separation from Service or
(b) the date of the Executive’s death. 
Should this Section 20 result in the delay of benefits, any such
benefit shall be made available to the Executive by the Company during such
delay period at the Executive’s expense. 
Should this Section 20.1 result in a delay of payments or benefits
to the Executive, on the first day any such payments or benefits may be made
without incurring additional tax pursuant to Code Section 409A (“409A


 


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Payment Date”), the Company shall make such payments
and provide such benefits as provided for in this Agreement, provided that any
amounts that would have been payable earlier but for the application of this
Section 20.1 as well as reimbursement of the amount the Executive paid for
benefits pursuant to the preceding sentence, shall be paid in a lump sum on the
409A Payment Date.  For purposes of this
Section 20.1, the term “Specified Employee” shall have the meaning set forth in
Code Section 409A, as determined in accordance with the methodology
established by the Company.


 


20.2        Reimbursements


 


For purposes of complying with Code Section 409A
and without extending the payment timing otherwise provided in this Agreement,
taxable reimbursements under this Agreement, subject to the following sentence
and to the extent required to comply with Code Section 409A, will be made
no later than the end of the calendar year following the calendar year the
expense was incurred.  To the extent
required to comply with Code Section 409A, any taxable reimbursements and
any in-kind benefit under this Agreement will be subject to the following:  (a) payment of such reimbursements or
in-kind benefits during one calendar year will not affect the amount of such
reimbursements or in-kind benefits provided during any other calendar year
(other than for medical reimbursement arrangements as excepted under Treasury
Regulation Section 1.409A-3(i)(1)(iv)(B) solely because the
arrangement provides for a limit on the amount of expenses that may be
reimbursed under such arrangement over some or all of the period the
arrangement remains in effect); (b) such right to reimbursements or
in-kind benefits is not subject to liquidation or exchange for another form of
compensation to the Executive; and (c) the right to reimbursements under
this Agreement will be in effect for the lesser of the time specified in this
Agreement or ten (10) years plus the lifetime of the Executive.  Any taxable reimbursements or in-kind
benefits shall be treated as not subject to Code Section 409A to the
maximum extent provided by Treasury Regulation
Section 1.409A-1(b)(9)(v) or otherwise under Code Section 409A.


 


20.3        Release


 


Subject to Section 20.1 hereof, (a) to the
extent that the Executive is required to execute and deliver a release to
receive a 409A Payment and (b) this Agreement provides for such 409A
Payment to be provided prior to the 55th day following the Executive’s
Separation from Service, such 409A Payment will be provided upon the 55th day
following the Executive’s Separation from Service, provided that the release in
the form acceptable to the Company, in its sole discretion, has been executed,
delivered and effective prior to such time. 
To the extent there is a delay in providing a 409A Payment because of
the provisions of this Section 20.3, interest for the delay and the opportunity
for the Executive to pay for benefits in the interim with subsequent
reimbursement from the Company shall be provided in a manner consistent with
that set forth in Section 20.1 hereof. 
If a release is required for a 409A Payment and such release is not
executed, delivered and effective by the 55th day following the Executive’s
Separation from Service, such 409A Payment shall not be provided to the
Executive to the extent that providing such 409A Payment would cause such 409A
Payment to fail to comply with Code Section 409A.


 


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20.4        No Acceleration; Separate Payments


 


No 409A Payment payable under this Agreement shall be
subject to acceleration or to any change in the specified time or method of
payment, except as otherwise provided under this Agreement and consistent with
Code Section 409A.  If under this
Agreement, a 409A Payment is to be paid in two (2) or more installments,
for purposes of Section 409A, each installment shall be treated as a
separate payment.


 


21.                               Counterparts


 


This Agreement may be executed in counterparts, each
of which counterpart shall be deemed an original, but all of which together
shall constitute one and the same instrument.


 


IN WITNESS WHEREOF, the parties have executed and entered
into this Agreement effective on the date first set forth above.


 


 


	
   

  	
  PONIARD PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anna Lewak Wight

  
	
   

  	
   

  	
  Name: Anna Lewak Wight

  
	
   

  	
   

  	
  Its: Vice President, Legal

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael S. Perry

  
	
   

  	
   

  
	
   

  	
  Name: Michael S. Perry, DVM, Ph.D.

  



 


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