Exhibit
10.47





SECOND
AMENDED AND RESTATED


EXECUTIVE
SEVERANCE BENEFITS AGREEMENT





This
Second
Amended and
Restated Executive Severance Benefits Agreement (the “Agreement”)
is entered into this 24th day
of  December, 2008 (the “Effective
Date”), betweenValerie L.
Pierce(“Executive”)
and Sunesis
Pharmaceuticals, Inc. (the “Company”).
This Agreement is intended to provide Executive with the compensation and
benefits described herein upon the occurrence of specific
events.  Certain capitalized terms used in this Agreement are defined
in Article 6.





Whereas,
the Company and the Executive previously entered into an Executive Severance
Benefits Agreement, dated May 14, 2007, which agreement was amended and restated
by that certain Amended and Restated Executive Severance Benefits Agreement,
dated May 22, 2008 (collectively the “Prior Benefits
Agreement”); and





Whereas,
the Company and the Executive wish to amend and restate the Prior Benefits
Agreement by entering into this Second Amended and Restated Executive Severance
Benefits Agreement to clarify certain matters previously agreed to by the
parties and to comply with the parties’ original intent that the Prior Benefits
Agreement be interpreted, construed and administered in a manner that satisfies
Section 409A of the Internal Revenue Code of 1986, as amended from time to time,
among other things.





Now,
Therefore, in consideration of the foregoing, the Company and the
Executive, intending to be legally bound, hereby amend and restate the Prior
Benefits Agreement and agree as follows:





ARTICLE
1





SCOPE
OF AND CONSIDERATION FOR THIS AGREEMENT





1.1  Position and
Duties.  Executive is currently employed by the Company as
Senior Vice President, General Counsel and Corporate
Secretary.  Executive has overall responsibility for the Company’s
corporate legal functions, including but not limited to, service as Secretary of
the Board and Corporate Secretary.  Executive reports directly to the
Chief Executive Officer.





1.2  Restrictions.  During
her employment by the Company, Executive agrees to the best of her ability and
experience that she will at all times loyally and conscientiously perform all of
the duties and obligations required of and from her as Senior Vice President and
General Counsel.  During the term of her employment, Executive further
agrees that she will devote all of her business time and attention to the
business of the Company, the Company will be entitled to all of the benefits and
profits arising from or incident to all such work, services and advice,
Executive will not render commercial or professional services of any nature to
any person or organization, whether or not for compensation, without the prior
written consent of the Board, and Executive will not directly or indirectly
engage or participate in any business that is competitive in any manner with the
business of the Company.  Nothing in this Agreement will prevent
Executive from accepting speaking or presentation engagements in exchange for
honoraria or from service on boards of charitable organizations or otherwise
participating in civic, charitable or fraternal organizations, or from owning no
more than one percent (1%) of the outstanding equity securities of a corporation
whose stock is listed on a national stock exchange.  It is
contemplated that Executive may serve on boards of directors of other,
non-competitive companies and the Board will not unreasonably withhold its
consent from such participation.  Such participation shall not exceed
the greater of six (6) days per year or such number of days as is required for
Executive to serve on the board of directors of one (1) such
company.









1.3  Professional
Requirements.  The Company shall pay the costs of Executive’s
State Bar dues, her required Continuing Legal Education courses and those
professional education programs reasonably necessary for the performance of
Executive’s duties as Senior Vice President and General
Counsel.  Executive’s participation in such programs will be
considered work time and the travel expenses associated with attendance at such
conferences will be paid according to the Company’s expense reimbursement
policies.





1.4  Confidential
Information and Invention Assignment Agreement.  Executive
acknowledges that she has previously executed and delivered to an officer of the
Company the Company’s Confidential Information and Invention Assignment
Agreement (the “Confidentiality
Agreement”) and that the Confidentiality Agreement remains in full force
and effect.





1.5  Confidentiality of
Terms.  Executive agrees to follow the Company’s strict policy
that employees must not disclose, either directly or indirectly, any
information, including any of the terms of this Agreement, regarding salary,
bonuses, or stock purchase or option allocations to any person, including other
employees of the Company; provided, however, that
Executive may discuss such terms with members of her immediate family and any
legal, tax or accounting specialists who provide Executive with individual
legal, tax or accounting advice, with third parties as needed to enforce the
terms of this Agreement, with other employees of the Company on a need to know
basis if required to carry out Executive’s duties as the Company’s Senior Vice
President and General Counsel or at the request of the Board or any other
superior officer of the Company.





1.6  Benefits Upon Change
of Control.  The Company and Executive wish to set forth the
compensation and benefits which Executive shall be entitled to receive in the
event of a Change of Control or if Executive’s employment with the Company is
terminated under the circumstances described herein.





1.7  Consideration.  The
duties and obligations of the Company to Executive under this Agreement shall be
in consideration for Executive’s past services to the Company, Executive’s
continued employment with the Company, and Executive’s execution of a release in
accordance with Section 4.1.




2.




ARTICLE
2





OPTION
ACCELERATION





2.1  Change of Control
Option Acceleration.  In the event of a Change of Control, the
vesting and/or exercisability of fifty percent (50%) of Executive’s
then-outstanding Stock Awards shall be automatically accelerated immediately
prior to the effective date of such Change of Control.





2.2  Covered
Termination Option Acceleration.





(a)In the event of
a Covered Termination of Executive’s employment prior to or more than twelve
(12) months following the effective date of a Change of Control, the vesting
and/or exercisability of each of Executive’s then-outstanding Stock Awards shall
be automatically accelerated on the date of termination as to the number of
Stock Awards that would vest in the ordinary course over the twelve (12) month
period following the date of termination had Executive remained continuously
employed by the Company during such period.





(b)In the event of
a Covered Termination of Executive’s employment on or within twelve (12) months
following the effective date of a Change of Control, the vesting and/or
exercisability of one hundred percent (100%) of Executive’s then-outstanding
Stock Awards shall be automatically accelerated on the date of
termination.





2.3  Outstanding Stock
Awards.  For the avoidance of doubt, the fifty percent (50%),
twelve (12) month and one hundred percent (100%) accelerated vesting described
in Sections 2.1 and 2.2 shall apply toward that portion of Executive’s
outstanding Stock Awards that are unvested as of the date of accelerated
vesting.





ARTICLE
3





SEVERANCE
BENEFITS





3.1  Severance
Benefits.  A Covered Termination of Executive’s employment
prior to or more than twelve (12) months following the effective date of a
Change of Control entitles Executive to receive the benefits set forth in this
Section 3.1.





(a)  Base
Salary.  The Company shall pay to Executive an amount equal to
nine (9) months’ Base Salary.  Such severance amount shall be paid in
cash in a single lump sum within sixty (60) days following the Covered
Termination, subject to Sections 4.1 and 4.3 below, and shall be subject to all
required tax withholding.





(b)  Health
Benefits.  Provided that Executive elects continued coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(together with any state or local laws of similar effect, “COBRA”),
the Company shall pay the premiums of Executive’s group health insurance
coverage, including coverage for Executive’s eligible dependents, for a maximum
period of the first nine (9) months following such Covered Termination or such
lesser number of months as Executive and Executive’s eligible dependents are
eligible for such coverage; provided, however, that the
Company shall pay premiums for Executive and Executive’s eligible dependents
only for coverage for which they were enrolled immediately prior to the Covered
Termination.  Executive (and Executive’s eligible dependents, as
applicable) shall be solely responsible for making a timely and accurate
election for continuation of coverage pursuant to COBRA.  No premium
payments will be made following the effective date of Executive’s coverage by a
health insurance plan of a subsequent employer.  For the balance of
the period that Executive and Executive’s eligible dependents are entitled to
coverage under COBRA, if any, Executive shall maintain such coverage at
Executive’s own expense.




3.




3.2  Change of Control
Severance Benefits.  A Covered Termination of Executive’s
employment on or within twelve (12) months following the effective date of a
Change of Control entitles Executive to receive the benefits set forth in this
Section 3.2.





(a)  Base
Salary.  The Company shall pay to Executive an amount equal to
fourteen (14) months’ Base Salary.  Such severance amount shall be
paid in cash in a single lump sum within sixty (60) days following the Covered
Termination, subject to Sections 4.1 and 4.3 below, and shall be subject to all
required tax withholding.





(b)  Bonus.  The
Company shall pay to Executive an amount equal to fourteen twelfths (14/12ths)
of Executive’s target annual bonus for the fiscal year during which the Covered
Termination occurs, with such bonus determined assuming that all of the
performance objectives for such fiscal year have been attained at target
levels.  Such severance amount shall be paid in cash in a single lump
sum within sixty (60) days following the Covered Termination, subject to
Sections 4.1 and 4.3 below, and shall be subject to all required tax
withholding.





(c)  Health
Benefits.  Provided that Executive elects continued coverage
under COBRA, the Company shall pay the premiums of Executive’s group health
insurance coverage, including coverage for Executive’s eligible dependents, for
a maximum period of the first fourteen (14) months following such Covered
Termination or such lesser number of months as Executive and Executive’s
eligible dependents are eligible for such coverage; provided, however, that the
Company shall pay premiums for Executive and Executive’s eligible dependents
only for coverage for which they were enrolled immediately prior to the Covered
Termination.  Executive (and Executive’s eligible dependents, as
applicable) shall be solely responsible for making a timely and accurate
election for continuation of coverage pursuant to COBRA.  No premium
payments will be made following the effective date of Executive’s coverage by a
health insurance plan of a subsequent employer.  For the balance of
the period that Executive and Executive’s eligible dependents are entitled to
coverage under COBRA, if any, Executive shall maintain such coverage at
Executive’s own expense.





(d)  No Duplication of
Benefits.  The payments and benefits provided for in this
Section 3.2 shall only be payable in the event of a Covered Termination of
Executive’s employment on or within twelve (12) months following the effective
date of a Change of Control.  In the event of a Covered Termination of
Executive’s employment prior to or more than twelve (12) months following a
Change of Control, then Executive shall receive the payments and benefits
described in Section 3.1 and shall not be eligible to receive any of the
payments and benefits described in this Section 3.2.




4.




3.3  Other
Terminations.  If Executive’s employment is terminated by the
Company for Cause, by Executive other than pursuant to a Constructive
Termination or as a result of Executive’s death or disability, the Company shall
not have any other or further obligations to Executive under this Agreement
(including any financial obligations) except that Executive shall be entitled to
receive (a) Executive’s fully earned but unpaid base salary, through the date of
termination at the rate then in effect, and (b) all other amounts or benefits to
which Executive is entitled under any compensation, retirement or benefit plan
or practice of the Company at the time of termination in accordance with the
terms of such plans or practices, including, without limitation, any eligibility
for continuation of benefits required by COBRA.  In addition, subject
to the provisions of the Company’s equity compensation plans and the terms of
Executive’s Stock Awards, if Executive’s employment is terminated by the Company
for Cause, by Executive other than pursuant to a Constructive Termination or as
a result of Executive’s death or disability, all vesting of Executive’s unvested
Stock Awards previously granted to her by the Company shall cease as of the date
of termination and none of such unvested Stock Awards shall be exercisable
following the date of such termination.  The foregoing shall be in
addition to, and not in lieu of, any and all other rights and remedies which may
be available to the Company under the circumstances, whether at law or in
equity.





3.4  Mitigation.  Except
as otherwise specifically provided herein, Executive shall not be required to
mitigate damages or the amount of any payment provided under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer or by any retirement
benefits received by Executive after the date of the Covered
Termination.





3.5  Exclusive
Remedy.  Except as otherwise expressly required by law (e.g.,
COBRA) or as specifically provided herein, all of Executive’s rights to salary,
severance, benefits, bonuses and other amounts hereunder (if any) accruing after
the termination of Executive’s employment shall cease upon such
termination.  In the event of a termination of Executive’s employment
with the Company, Executive’s sole remedy shall be to receive the payments and
benefits described in this Agreement.





ARTICLE
4





LIMITATIONS
AND CONDITIONS UPON BENEFITS





4.1  Release Prior to
Payment of Benefits.  Upon the occurrence of a Covered
Termination of Executive’s employment, and prior to the payment of any benefits
under this Agreement on account of such Covered Termination, Executive shall
execute a release (the “Release”) in the form attached hereto and incorporated
herein as Exhibit A or Exhibit B, as applicable.  Such Release shall
specifically relate to all of Executive’s rights and claims in existence at the
time of such execution and shall confirm Executive’s obligations under the
Confidentiality Agreement.  It is understood that, as specified in the
applicable Release, Executive has a certain number of calendar days to consider
whether to execute such Release, and Executive may revoke such Release within
seven (7) calendar days after execution.  In the event Executive does
not execute such Release within the applicable period, or if Executive revokes
such Release within the subsequent seven (7) day period, no benefits shall be
payable under this Agreement.  Notwithstanding the payment schedules set forth in
Article 3 above, no payments or benefits will be made prior to the effective
date of the Release. On the first regular payroll pay day following the
effective date of the Release(but in no event later than the 60th day
after the Covered Termination date), the Company
will pay the Executive the payments and benefits the Executive would otherwise
have received on or prior to such date but for the delay in payment related to
the effectiveness of the Release, with the balance of the payments and benefits
being paid as originally scheduled.




5.




4.2  Termination of
Benefits.  Benefits under this Agreement shall terminate
immediately if the Executive, at any time, violates any proprietary information
or confidentiality obligation to the Company, including, without limitation, the
Confidentiality Agreement.





4.3Compliance with Section
409A.  It is intended that each
installment of the payments and benefits provided for in Articles 2 and 3 is a
separate “payment” for  purposes of Treasury Regulation Section
1.409A-2(b)(2)(i).  For the avoidance of doubt, it is intended that
payments of the amounts set forth in Articles 2 and 3 satisfy, to the greatest
extent possible, the exemptions from the application of Section 409A of the Code(together, with any state law of similar
effect, “Section
409A”)provided under Treasury Regulations 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9). However, ifthe Company (or, if applicable, the successor entity
thereto) determines that theseparationpayments and benefitsprovided under this Agreement(the “Agreement
Payments”) constitute “deferred
compensation” under Section 409A and Executive is a “specified employee” of the
Company or any successor entity thereto, as such term is defined in Section
409A(a)(2)(B)(i) of the Code(a
“Specified
Employee”), on her “separation from
service” (as defined under Treasury Regulation Section 1.409A-1(h)),then, solelyto
the extent necessaryto avoid the
incurrence of theadverse personal tax
consequences under Section 409A, the timing of the Agreement Payments shall be
delayed as follows:on the
earlier to occur of (i) the date that is six months and one day after
Executive’s “separation from service” (as defined under Section 409A) or (ii)
the date of Executive’s death (such earlier date, the “Delayed Initial
Payment Date”), the Company (or the
successor entity thereto, as applicable) shall (A) pay to the Executive a lump
sum amount equal to the sum of theAgreement Paymentsthat the Executive would otherwise have received through the Delayed Initial
Payment Date if the commencement of the payment of theAgreement Paymentshad not been so delayed and (B) commence paying the balance of theAgreement Paymentsin accordance with the applicable payment schedules set forth in this
Agreement.





ARTICLE
5





PARACHUTE
PAYMENTS





5.1  Best Pay
Provision.  Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any Payment under this
Agreement would, when combined with all other Payments Executive receives from
the Company or any successor or parent or subsidiary thereof, but for this
Article 5, be subject to the Excise Tax, then such Payments shall be either (a)
the full amount of such Payments or (b) such lesser amount as would result in no
portion of the Payments being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local
employment taxes, income taxes and the Excise Tax, results in Executive’s
receipt, on an after-tax basis, of the greater amount of the Payments
notwithstanding that all or some portion of the Payments may be subject to the
Excise Tax.  If a reduced amount is to
be paid, (i) the Executive shall have no rights to any additional payments
and/or benefits constituting the Payments, and (ii) reduction in payments and/or
benefits shall occur in the following order: (1) reduction of other cash
payments (if any); (2) cancellation of accelerated vesting of equity awards
other than stock options; (3) cancellation of accelerated vesting of stock
options; and (4) reduction of other benefits (if any) paid to the
Executive.  In the event that acceleration of compensation from the
Executive’s equity awards is to be reduced, such acceleration of vesting shall
be canceled in the reverse order of the date of grant.




6.




5.2  Determinations.  All
determinations required to be made under this Article 5, including whether and
to what extent the Payments shall be reduced and the assumptions to be utilized
in arriving at such determination, shall be made by the nationally recognized
certified public accounting firm used by the Company immediately prior to the
Change of Control or, if such firm declines to serve, such other nationally
recognized certified public accounting firm as may be designated by the
Executive (the “Accounting Firm”).  The Accounting Firm shall provide
detailed supporting calculations both to the Company and the Executive at such
time as is requested by the Company.  All fees and expenses of the
Accounting Firm shall be borne solely by the Company.  Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive.  For purposes of making the calculations required by this
Article 5, the Accounting Firm may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable,
good-faith interpretations concerning the application of Sections 280G and 4999
of the Code.





ARTICLE
6





DEFINITIONS





For
purposes of the Agreement, the following terms are defined as
follows:





6.1“Base
Salary” means Executive’s annual base salary as in effect during the last
regularly scheduled payroll period immediately preceding the Covered Termination
(or, in the case of a Covered Termination arising
from Constructive Termination, the annual base salary as in effect immediately
prior to the event that gives rise to a right to resign as a Constructive
Termination).





6.2“Board”
means the Board of Directors of the Company.





6.3“Cause”
means that, in the reasonable determination of the Company,
Executive:





(a)has committed
an act of fraud or embezzlement or has intentionally committed some other
illegal act that has a material adverse impact on the Company or any successor
or parent or subsidiary thereof;





(b)has been
convicted of, or entered a plea of “guilty” or “no contest” to, a felony which
causes or may reasonably be expected to cause substantial economic injury to or
substantial injury to the reputation of the Company or any subsidiary or
affiliate of the Company;





(c)has made any
unauthorized use or disclosure of confidential information or trade secrets of
the Company or any successor or parent or subsidiary thereof that has a material
adverse impact on any such entity;




7.




(d)has committed
any other intentional misconduct that has a material adverse impact on the
Company or any successor or parent or subsidiary thereof;





(e)has
intentionally refused or intentionally failed to act in accordance with any
lawful and proper direction or order of the Board or the appropriate individual
to whom Executive reports; provided such direction is not materially
inconsistent with the Executive’s customary duties and responsibilities;
or





(f)has ceased to
be certified by the Committee of Bar Examiners of the State of California to
practice law in the State of California.





6.4“Change of
Control” means and includes each of the following:





(a)the
acquisition, directly or indirectly, by any “person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended, and the rules thereunder) of “beneficial ownership” (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of securities entitled to vote generally in the election of
directors (“voting
securities”) of the Company that represent fifty percent (50%) or more of
the combined voting power of the Company’s then outstanding voting securities,
other than:





(i)an acquisition
by a trustee or other fiduciary holding securities under any employee benefit
plan (or related trust) sponsored or maintained by the Company or any person
controlled by the Company or by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any person controlled by the Company,
or





(ii)an acquisition
of voting securities by the Company or a corporation owned, directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company;





Notwithstanding
the foregoing, the following event shall not constitute an “acquisition” by any
person or group for purposes of this Section: an acquisition of the Company’s
securities by the Company that causes the Company’s voting securities
beneficially owned by a person or group to represent fifty percent (50%) or more
of the combined voting power of the Company’s then outstanding voting
securities; provided,
however, that if a person or group shall become the beneficial owner of
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding voting securities by reason of share acquisitions by the Company as
described above and shall, after such share acquisitions by the Company, become
the beneficial owner of any additional voting securities of the Company, then
such acquisition shall constitute a Change of Control; or





(b)the
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the Company’s assets or (z) the
acquisition of assets or stock of another entity, in each case other than a
transaction:




8.




(i)which results
in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor
Entity”)) directly or indirectly, at least a majority of the combined
voting power of the Successor Entity’s outstanding voting securities immediately
after the transaction, and





(ii)after which no
person or group beneficially owns voting securities representing fifty percent
(50%) or more of the combined voting power of the Successor Entity; provided, however, that no
person or group shall be treated for purposes of this clause (ii) as
beneficially owning fifty percent (50%) or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the Company
prior to the consummation of the transaction; or





(c)the Company’s
stockholders approve a liquidation or dissolution of the Company.





Notwithstanding
the foregoing, a transaction shall not constitute a Change of Control if: (i) it
constitutes the Company’s initial public offering of its securities; or (ii) it
is a transaction effected primarily for the purpose of financing the Company
with cash (as determined by the Board in its discretion and without regard to
whether such transaction is effectuated by a merger, equity financing or
otherwise).  The Board shall have full and final authority, which
shall be exercised in its discretion, to determine conclusively whether a Change
of Control of the Company has occurred pursuant to the above definition, and the
date of the occurrence of such Change of Control and any incidental matters
relating thereto.





6.5“Code”
means the Internal Revenue Code of 1986, as amended from time to time and the
Treasury Regulations thereunder.





6.6“Company”
means Sunesis Pharmaceuticals, Inc. or, following a Change of Control, the
surviving entity resulting from such transaction.





6.7“Constructive
Termination” means that Executive voluntarily terminates employment with
the Company (or any successor thereto) if and only if:





(a)one of the following actions have been takenwithout Executive’s express written
consent:





(i)there is a
material diminution in the authority, duties or responsibilities of Executive,
or the assignment to Executive of duties that are materially inconsistent with
and materially adverse to Executive’s position;





(ii)a change in
the Executive’s direct reporting relationship so that Executive no longer
reports directly to the Company’s (or its successor’s) most senior executive
officer;




9.




(iii)there is a
material reduction in Executive’s Base Salary (which the parties agree is a
reduction of 5% or more), unless the base salaries of all other executives are
similarly reduced (but in no event by an amount more than 10%
each);





(iv)there is a
material reduction in Executive’s target bonus on or within twelve (12) months
following the effective date of a Change of Control (which the parties agree is
a reduction of 20% or more of the target bonus, and which the parties agree is a
material breach of the terms of Executive’s employment with the Company), unless
the target bonuses of all other executives are similarly reduced (but in no
event by an amount more than 40% each);





(v)Executive is
required to relocate Executive’s principal place of employment to a facility or
location that would increase Executive’s one way commute distance by more than
thirty (30) miles from such Executive’s place of employment immediately prior to
such change;





(vi)the Company materially breaches its obligations under
this Agreement or any then-effective written employment agreement with
Executive; or





(vii)any acquirer, successor or assignee of the Company
materially fails to assume and perform, in all material respects, the
obligations of the Company hereunder; and





(b)Executive provides written notice to the Company’sChief Executive Officerwithin the ninety (90)-day period immediately following
such action; and





(c)such action is not remedied by the Company within thirty
(30) days following the Company’s receipt of such written notice; and





(d)Executive’s resignation is effective not later than
sixty (60) days after the expiration of such thirty (30) day cure
period.





The
termination of Executive’s employment as a result of Executive’s death or
disability will not be deemed to be a Constructive Termination.





6.8“Covered
Termination” means an Involuntary Termination Without Cause or a
Constructive Termination, in either case, provided such termination constitutes
a “separation from service” under Treasury Regulation Section
1.409A-1(h).





6.9“Excise
Tax” means the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to such excise
tax.





6.10“Involuntary
Termination Without Cause” means Executive’s dismissal or discharge other
than for Cause.  The termination of Executive’s employment as a result
of Executive’s death or disability will not be deemed to be an Involuntary
Termination Without Cause.





6.11A “Payment”
shall mean any payment or distribution in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) to or for the benefit of the
Executive, whether paid or payable pursuant to this Agreement or
otherwise.




10.




6.12“Stock
Awards” means all stock options, restricted stock and such other awards
granted pursuant to the Company’s stock option and equity incentive award plans
or agreements and any shares of stock issued upon exercise thereof, and any awards into which such awards are converted by
reason of a Change of Control (e.g., by reason of assumption, substitution or
conversion by the successor entity or acquiring
corporation).





ARTICLE
7





GENERAL
PROVISIONS





7.1  Employment
Status.  This Agreement does not constitute a contract of
employment or impose upon Executive any obligation to remain as an employee, or
impose on the Company any obligation (a) to retain Executive as an employee, (b)
to change the status of Executive as an at-will employee, or (c) to change the
Company’s policies regarding termination of employment.





7.2  Notices.  Any
notices provided hereunder must be in writing, and such notices or any other
written communication shall be deemed effective upon the earlier of personal
delivery (including personal delivery by facsimile) or the third day after
mailing by first class mail to the Company at its primary office location and to
Executive at Executive’s address as listed in the Company’s payroll
records.  Any payments made by the Company to Executive under the
terms of this Agreement shall be delivered to Executive either in person or at
the address as listed in the Company’s payroll records.





7.3  Severability.  Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provisions had never been contained
herein.





7.4  Waiver.  If
either party should waive any breach of any provisions of this Agreement, she or
it shall not thereby be deemed to have waived any preceding or succeeding breach
of the same or any other provision of this Agreement.





7.5  Arbitration.  Any
dispute, claim or controversy based on, arising out of or relating to
Executive’s employment or this Agreement shall be settled by final and binding
arbitration in San Mateo County, California, before a single neutral arbitrator
in accordance with the National Rules for the Resolution of Employment Disputes
(the “Rules”) of
the American Arbitration Association, and judgment on the award rendered by the
arbitrator may be entered in any court having
jurisdiction.  Arbitration may be compelled pursuant to the California
Arbitration Act (Code of Civil Procedure §§ 1280 et seq.).  If the
parties are unable to agree upon an arbitrator, one shall be appointed by the
AAA in accordance with its Rules.  Each party shall pay the fees of
its own attorneys, the expenses of its witnesses and all other expenses
connected with presenting its case; however, Executive and the
Company agree that, to the extent permitted by law, the arbitrator may, in his
or her discretion, award reasonable attorneys’ fees to the prevailing
party.  Other costs of the arbitration, including the cost of any
record or transcripts of the arbitration, AAA’s administrative fees, the fee of
the arbitrator, and all other fees and costs, shall be borne by the
Company.  This Section 7.5 is intended to be the exclusive method for
resolving any and all claims by the parties against each other for payment of
damages under this Agreement or relating to Executive’s employment; provided, however, that
neither this Agreement nor the submission to arbitration shall limit the
parties’ right to seek provisional relief, including, without limitation,
injunctive relief, in any court of competent jurisdiction pursuant to California
Code of Civil Procedure § 1281.8 or any similar statute of an applicable
jurisdiction.  Seeking any such relief shall not be deemed to be a
waiver of such party’s right to compel arbitration.  Both Executive
and the Company expressly waive their right to a jury trial.  Pursuant
to California Civil Code Section 1717, each party warrants that it was
represented by counsel in the negotiation and execution of this Agreement,
including the attorneys’ fees provision herein.




11.




7.6  Complete
Agreement.  This Agreement, including Exhibit A and Exhibit B,
constitutes the entire agreement between Executive and the Company, and is the
complete, final, and exclusive embodiment of their agreement with regard to
severance benefits to Executive in the event of employment termination, wholly
superseding all written and oral agreements with respect to severance benefits
to Executive in the event of employment termination.  It is entered
into without reliance on any promise or representation other than those
expressly contained herein.  Notwithstanding anything herein to the
contrary, this Agreement shall not supersede any indemnification agreement
between Executive and the Company.





7.7  Amendment or
Termination of Agreement.  This Agreement may be changed or
terminated only upon the mutual written consent of the Company and
Executive.  The written consent of the Company to a change or
termination of this Agreement must be signed by an executive officer of the
Company after such change or termination has been approved by the Board or
committee thereof.





7.8  Counterparts.  This
Agreement may be executed in separate counterparts, any one of which need not
contain signatures of more than one party, but all of which taken together will
constitute one and the same Agreement.





7.9  Headings.  The
headings of the Articles and Sections hereof are inserted for convenience only
and shall not be deemed to constitute a part hereof nor to affect the meaning
thereof.





7.10  Successors and
Assigns.  This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, and the Company, and any surviving
entity resulting from a Change of Control and upon any other person who is a
successor by merger, acquisition, consolidation or otherwise to the business
formerly carried on by the Company, and their respective successors, assigns,
heirs, executors and administrators, without regard to whether or not such
person actively assumes any rights or duties hereunder; provided, however, that
Executive may not assign any duties hereunder and may not assign any rights
hereunder without the written consent of the Company, which consent shall not be
withheld unreasonably.




12.




7.11  Choice of
Law.  All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State of
California, without regard to such state’s conflict of laws rules.





7.12  Non-Publication.  The
parties mutually agree not to disclose publicly the terms of this Agreement
except to the extent that disclosure is mandated by applicable law or regulation
or to their respective advisors (e.g., attorneys,
accountants).





7.13  Construction of
Agreement.  In the event of a conflict between the text of the
Agreement and any summary, description or other information regarding the
Agreement, the text of the Agreement shall control.





(Signature Page
Follows)




13.







In Witness
Whereof,the parties have executed this Agreement on the Effective Date
written above.






Sunesis
      Pharmaceuticals, Inc.
              
              Valerie
      L. PierceBy:
              /s/ Daniel N. Swisher, Jr.
              
              /s/ Valerie L. PierceName:
              Daniel
      N. Swisher, Jr.Title:
              President
      and Chief Executive OfficerExhibit
      A:  Release (Individual Termination)Exhibit
      B:  Release (Group Termination)





Exhibit
A





RELEASE


(INDIVIDUAL
TERMINATION)




I understand that this Release, together with the
Amended and Restated Executive SeveranceBenefits Agreement,
constitutes the complete, final and exclusive embodiment of the entire agreement
between the Company, affiliates of the Company and me with regard to the subject
matter hereof.  I am not relying on any promise or representation by
the Company that is not expressly stated therein.Certain
capitalized terms used in this Release are defined in the Amended and Restated
Executive Severance Benefits Agreement, which I have executed and of which this
Release is a part.





1.Proprietary Information
Obligations.I hereby confirm
my obligations under my Confidentiality Agreement with the
Company.





2.General Release.In exchange for severance benefits and other
consideration provided to me by the Amended and Restated Executive SeveranceBenefits Agreement that I am nototherwise entitled to receive, I hereby generally and
completely release the Company and its current and former directors, officers,
employees, stockholders, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released
Parties”) 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 my
signing this Release (collectively, the “Released
Claims”).  The Released Claims
include, but are not limited to:  (1) all claims arising out of or in
any way related to my employment with the Company or its affiliates, or the
termination of that employment; (2) all claims related to my compensation or
benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (3) all claims for
breach of contract, wrongful termination, and breach of the implied covenant of
good faith and fair dealing; (4) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) 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”), the federal Employee Retirement Income Security Act
of 1974 (as amended), and the California Fair Employment and Housing Act (as
amended).  Notwithstanding the foregoing, the following are not
included in the Released Claims (the “Excluded
Claims”): (1) any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; or (2) any rights which are
not waiveable as a matter of law.  In addition, nothing in this
Release prevents me from filing, cooperating with, or participating in any
proceeding before the Equal Employment Opportunity Commission, the Department of
Labor, or the California Department of Fair Employment and Housing, except that
I hereby waive my right to any monetary benefits in connection with any such
claim, charge or proceeding.  I hereby represent and warrant that,
other than the Excluded Claims, I am not aware of any claims I have or might
have against any of the Released Parties that are not included in the Released
Claims.




1.




3.ADEA Waiver.I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under the ADEA.  I also acknowledge that the consideration
given for the Released Claims is in addition to anything of value to which I was
already entitled.  I further acknowledge that I have been advised by
this writing, as required by the ADEA, that: (a) the Released Claims do not
apply to any rights or claims that arise after the date I sign this Release; (b)
I should consult with an attorney prior to signing this Release (although I may
choose voluntarily not to do so); (c) I have twenty-one (21) days to consider
this Release (although I may choose to voluntarily sign it sooner); (d) I have
seven (7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release
(“Effective
Date”).





4.Section 1542 Waiver.I acknowledge that I 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 or her favor at the time of executing the release, which if known
by him or her must have materially affected his or her settlement with the
debtor.”  I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the
Company.





5.Representations.I hereby represent that I have been paid all
compensation owed and for all hours worked, I have received all the leave and
leave benefits and protections for which I am eligible, and I have not suffered
any on-the-job injury for which I have not already filed a workers’ compensation
claim.





6.Non-Disparagement.I hereby agree not to disparage the Company,
or its officers, directors, employees, shareholders or agents, in any manner
likely to be harmful to its or their business, business reputation, or personal
reputation;provided,
however,that I will respond accurately and
fully to any question, inquiry or request for information when required by legal
process.





I acknowledge that to become effective, I must sign and
return this Release to the Company on or after ____________________, so that it
is received not later than twenty-one (21) days following the date it is
provided to me, and I must not revoke it thereafter.




Valerie
      L. PierceDate:
  2.





Exhibit
B





RELEASE


(GROUP
TERMINATION)








I understand that this Release, together with the
Amended and Restated Executive SeveranceBenefits Agreement,
constitutes the complete, final and exclusive embodiment of the entire agreement
between the Company, affiliates of the Company and me with regard to the subject
matter hereof.  I am not relying on any promise or representation by
the Company that is not expressly stated therein.Certain
capitalized terms used in this Release are defined in the Amended and Restated
Executive Severance Benefits Agreement, which I have executed and of which this
Release is a part.





1.Proprietary Information
Obligations.I hereby confirm
my obligations under my Confidentiality Agreement with the
Company.





2.General Release.In exchange for severance benefits and other
consideration provided to me by the Amended and Restated Executive SeveranceBenefits Agreement that I am not otherwise entitled to
receive, I hereby generally and completely release the Company and its current
and former directors, officers, employees, stockholders, shareholders, partners,
agents, attorneys, predecessors, successors, parent and subsidiary entities,
insurers, affiliates, and assigns (collectively, the “Released
Parties”) 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 my
signing this Release (collectively, the “Released
Claims”).  The Released Claims
include, but are not limited to:  (1) all claims arising out of or in
any way related to my employment with the Company or its affiliates, or the
termination of that employment; (2) all claims related to my compensation or
benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (3) all claims for
breach of contract, wrongful termination, and breach of the implied covenant of
good faith and fair dealing; (4) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) 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”), the federal Employee Retirement Income Security Act
of 1974 (as amended), and the California Fair Employment and Housing Act (as
amended).  Notwithstanding the foregoing, the following are not
included in the Released Claims (the “Excluded
Claims”): (1) any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; or (2) any rights which are
not waiveable as a matter of law.  In addition, nothing in this
Release prevents me from filing, cooperating with, or participating in any
proceeding before the Equal Employment Opportunity Commission, the Department of
Labor, or the California Department of Fair Employment and Housing, except that
I hereby waive my right to any monetary benefits in connection with any such
claim, charge or proceeding.  I hereby represent and warrant that,
other than the Excluded Claims, I am not aware of any claims I have or might
have against any of the Released Parties that are not included in the Released
Claims.




1.




3.ADEA Waiver.  I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the
ADEA.  I also acknowledge that the consideration given for the
Released Claims is in addition to anything of value to which I was already
entitled.  I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) the Released Claims do not apply to
any rights or claims that arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have forty-five (45) days to consider this
Release (although I may choose to voluntarily sign it sooner); (d) I have seven
(7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release
(“Effective
Date”).  I have received with
this Release all of the information
required by the ADEA, including without limitationa detailed list of the job titles and ages of all
employees who were terminated in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who were not terminated,along with information on the eligibility factors used
to select employees for the group termination and any time limits applicable to
this group termination program.





4.Section 1542 Waiver.I acknowledge that I 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 or her favor at the time of executing the release, which if known
by him or her must have materially affected his or her settlement with the
debtor.”  I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the
Company.





5.Representations.I hereby represent that I have been paid all
compensation owed and for all hours worked, I have received all the leave and
leave benefits and protections for which I am eligible, and I have not suffered
any on-the-job injury for which I have not already filed a workers’ compensation
claim.





6.Non-Disparagement.I hereby agree not to disparage the Company,
or its officers, directors, employees, shareholders or agents, in any manner
likely to be harmful to its or their business, business reputation, or personal
reputation;provided,
however,that I will respond accurately and
fully to any question, inquiry or request for information when required by legal
process.




2.




I acknowledge that to become effective, I must sign and
return this Release to the Company on or after ____________________, so that it
is received not later than forty-five (45) days following the date it is
provided to me, and I must not revoke it thereafter.


Valerie
      L. PierceDate:
  3.