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Exhibit 10.5    
    


 
  STOCK OPTION GRANT PROGRAM
  FOR
  NONEMPLOYEE DIRECTORS UNDER THE
  PONIARD PHARMACEUTICALS, INC.
  2004 INCENTIVE COMPENSATION PLAN
  (as amended June 15, 2005,
September 27, 2006, February 7, 2007 and June 14, 2007)    
    


        The following provisions set forth the terms of the stock option grant program (the "Program") for nonemployee directors of Poniard Pharmaceuticals, Inc.
(the "Company") under the Company's 2004 Incentive Compensation Plan (the "Plan"). The following terms are intended to supplement, not alter or change, the provisions of the Plan, and in the event of
any inconsistency between the terms contained herein and in the Plan, the Plan shall govern. All capitalized terms that are not defined herein shall be as defined in the Plan. 



	1.
	Eligibility




        Each
director of the Company elected or appointed to the Board who is not otherwise an employee of the Company or any Related Corporation (an "Eligible Director") shall be eligible to
receive New Grants and Annual Grants under the Plan, as discussed below. 



	2.
	New Grants




        Each
Eligible Director shall receive a nonqualified stock option to purchase 30,000 shares of Common Stock ("New Grant") upon such Eligible Director's initial election or appointment to
the Board. New Grants shall vest and become exercisable in two equal installments according to the schedule set forth in Section 4 below. 



	3.
	Annual Grants




        Beginning
with the 2007 annual meeting of shareholders, each Eligible Director shall automatically receive a nonqualified stock option to purchase 15,000 shares of Common Stock
immediately following each year's annual meeting of shareholders (each, an "Annual Grant"); provided that any Eligible Director who received a New Grant within five months prior to an annual meeting
of shareholders shall not receive an Annual Grant until the next year's annual meeting. Annual Grants shall vest and become exercisable in two equal installments according to the schedule set forth in
Section 4. 



	4.
	Vesting and Exercisability




        Options
shall vest and become exercisable according to the following schedule: 



	(a)
	New Grants







	Period of Optionee's Continuous

Service as a Director From

the Date the Option Is Granted
	 	Portion of Grant

That Is Vested and Exercisable

	One year	 	50%
	

Two years	
 	

100%






	(b)
	Annual Grants







	Period of Optionee's Continuous

Service as a Director From

the Date the Option Is Granted
	 	Portion of Grant

That Is Vested and Exercisable

	Upon first annual meeting of

shareholders after grant	 	50%
	

Upon second annual meeting of

shareholders after grant	
 	

100%






Subject
to the exercisability schedule described above, each option may be exercised in whole or in part at any time; provided, however, that an option may not be exercised for less than a reasonable
number of shares at any one time, as determined by the Plan Administrator. 







 

	5.
	Option Exercise Price




        The
exercise price of an option shall be the fair market value of the Common Stock on the date of grant. 



	6.
	Manner of Option Exercise




        An
option shall be exercised by giving the required notice to the Company, stating the number of shares of Common Stock with respect to which the option is being exercised, accompanied
by payment in full for such Common Stock, which payment may be, to the extent permitted by applicable laws and regulations, in whole or in part (a) in cash or check, (b) in shares of
Common Stock owned by the Eligible Director for at least six months (or any shorter period necessary to avoid a charge to the Company's earnings for financial reporting purposes) having a fair market
value equal to the aggregate option exercise price, or (c) if and so long as the Common Stock is registered under the Exchange Act, by delivery of a properly executed exercise notice, together
with irrevocable instructions to a broker, to promptly deliver to the Company the amount of proceeds to pay the exercise price, all in accordance with the regulations of the Federal Reserve Board. 



	7.
	Term of Options




        Each
option shall expire upon the earlier of ten years from the date of grant or five years after an Eligible Director's termination of service as a director, as follows: 


        (a)   In
the event that an Eligible Director ceases to be a director of the Company for any reason other than the death of the Eligible Director, the unvested portion of any
option granted to such Eligible Director shall terminate immediately and the vested portion of the option may be exercised by the Eligible Director only within five years after the date he or she
ceases to be a director of the Company or prior to the date on which the option expires by its terms, whichever is earlier. 



        (b)   In
the event of the death of an Eligible Director, the unvested portion of any option granted to such Eligible Director shall terminate immediately and the vested
portion of the Option may be exercised only within five years after the date the Eligible Director ceases to be a director or prior to the date on which the option expires by its terms, whichever is
earlier, by the personal representative of the Eligible Director's estate, the person(s) to whom the Eligible Director's rights under the option have passed by will or the applicable laws of descent
and distribution or the beneficiary designated pursuant to Section 12 of the Plan. 



	8.
	Transferability






        During
an Eligible Director's lifetime, an option may be exercised only by the Eligible Director or a permitted assignee or transferee of the Eligible Director (as provided below). No
options granted under the Program may be sold, assigned, pledged or transferred by the Eligible Director or made subject to attachment or similar proceedings other than by (a) will or the
applicable laws of descent and distribution, (b) gift or other transfer to either (i) a spouse or other immediate family member or (ii) any trust, partnership or other entity in
which the Eligible Director or such Eligible Director's spouse or other immediate family member has a substantial beneficial interest; or (c) the designation by an Eligible Director in writing
during the Eligible Director's lifetime of a beneficiary to receive and exercise options in the event of the Eligible Director's death (as provided in Section 12 of the Plan); provided,
however, that any option so assigned or transferred shall be subject to the terms and conditions of the Plan and the instrument evidencing the option. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under the Plan or of any right or privilege conferred thereby, contrary to the provisions of the Plan, or the sale or levy or any attachment or similar
process upon the rights and privileges conferred hereby, shall be null and void. 


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	9.
	Amendment




        The
Board may amend the provisions contained herein in such respects as it deems advisable. Any such amendment shall not, without the consent of the Eligible Director, impair or diminish
any rights of an Eligible Director under an outstanding option. 



	10.
	Effective Date




        The
Program shall become effective on the date approved by the Company's Board. 


        Provisions
of the Plan (including any amendments) that are not discussed above, to the extent applicable to Eligible Directors, shall continue to govern the terms and conditions of
options granted to Eligible Directors. 


        Effective: May 18, 2004

        Section 2 amended: June 15, 2005

        Sections 2 and 3 amended: September 27, 2006 (to reflect one-for-six reverse
stock split effective September 22, 2006 and to reflect change of company name)

        Sections 2 and 3 amended: February 7, 2007 (to increase "New Grant" to 20,000 shares from 8,333 shares and "Annual Grant" to 10,000 shares from 3,333 shares)

        Sections 2 and 3 amended: June 14, 2007 (to increase "New Grant" to 30,000 shares from 20,000 shares and "Annual Grant" to 15,000 shares from 10,000
shares)


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Exhibit 10.5


STOCK OPTION GRANT PROGRAM FOR NONEMPLOYEE DIRECTORS UNDER THE PONIARD PHARMACEUTICALS, INC. 2004 INCENTIVE COMPENSATION PLAN (as amended June 15, 2005, September 27, 2006, February 7, 2007 and June 14,
2007)