**Exhibit 10.5**

**STOCK OPTION GRANT PROGRAM FORNONEMPLOYEE DIRECTORS UNDER THE PONIARD PHARMACEUTICALS, INC. 2004 INCENTIVE COMPENSATION PLAN**

**(as amended June 15, 2005, September 27, 2006 andFebruary 7, 2007)**

Thefollowing 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 intendedto supplement, not alter or change, the provisions of the Plan, and in theevent of any inconsistency between the terms contained herein and in the Plan,the Plan shall govern.  All capitalizedterms that are not defined herein shall be as defined in the Plan.

### **1.             Eligibility**

Eachdirector of the Company elected or appointed to the Board who is not otherwisean employee of the Company or any Related Corporation (an “Eligible Director”)shall be eligible to receive New Grants and Annual Grants under the Plan, asdiscussed below.

### **2.             NewGrants**

EachEligible Director shall receive a nonqualified stock option to purchase 20,000shares of Common Stock (“New Grant”) upon such Eligible Director’s initialelection or appointment to the Board. New Grants shall vest and become exercisable in two equal installmentsaccording to the schedule set forth in Section 4 below.

### **3.             AnnualGrants**

Beginningwith the 2004 annual meeting of shareholders, each Eligible Director shallautomatically receive a nonqualified stock option to purchase 10,000 shares ofCommon Stock immediately following each year’s annual meeting of shareholders(each, an “Annual Grant”); provided that any Eligible Director who received aNew Grant within five months prior to an annual meeting of shareholders shallnot receive an Annual Grant until the next year’s annual meeting.  Annual Grants shall vest and becomeexercisable in two equal installments according to the schedule set forth inSection 4.

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### **4.             Vestingand Exercisability**

Options shall vest andbecome exercisable according to the following schedule:

### **(a)           NewGrants**

 

 
| 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)           AnnualGrants**

** **

** **
| 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 theexercisability schedule described above, each option may be exercised in wholeor in part at any time; provided, however, that an option may not be exercisedfor less than a reasonable number of shares at any one time, as determined bythe Plan Administrator.

**5.             Option Exercise Price**

Theexercise price of an option shall be the fair market value of the Common Stockon the date of grant.

### **6.             Mannerof Option Exercise**

An option shall beexercised by giving the required notice to the Company, stating the number ofshares 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, tothe 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 theEligible Director for at least six months (or any shorter period necessary toavoid 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 ExchangeAct, by delivery of a properly executed 

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exercise notice,together with irrevocable instructions to a broker, to promptly deliver to theCompany the amount of proceeds to pay the exercise price, all in accordancewith the regulations of the Federal Reserve Board.

### **7.             Termof Options**

Eachoption shall expire upon the earlier of ten years from the date of grant orfive years after an Eligible Director’s termination of service as a director,as follows:

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

(b)           In the event of the death of anEligible Director, the unvested portion of any option granted to such EligibleDirector shall terminate immediately and the vested portion of the Option maybe exercised only within five years after the date the Eligible Director ceasesto 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’sestate, the person(s) to whom the Eligible Director’s rights under the optionhave passed by will or the applicable laws of descent and distribution or thebeneficiary designated pursuant to Section 12 of the Plan.

### **8.             Transferability**

During an Eligible Director’slifetime, an option may be exercised only by the Eligible Director or apermitted assignee or transferee of the Eligible Director (as providedbelow).  No options granted under theProgram may be sold, assigned, pledged or transferred by the Eligible Directoror made subject to attachment or similar proceedings other than by(a) will or the applicable laws of descent and distribution, (b) giftor other transfer to either (i) a spouse or other immediate family memberor (ii) any trust, partnership or other entity in which the EligibleDirector or such Eligible Director’s spouse or other immediate family memberhas a substantial beneficial interest; or (c) the designation by anEligible Director in writing during the Eligible Director’s lifetime of a beneficiaryto 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 soassigned or transferred shall be subject to the terms and conditions of the Plan and the instrument evidencing theoption.  Any attempt to transfer, assign,pledge, hypothecate or otherwise dispose of any option under the Plan or of anyright or privilege conferred thereby, contrary to the provisions of the Plan,or 

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the sale or levyor any attachment or similar process upon the rights and privileges conferredhereby, shall be null and void.

### **9.             Amendment**

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

**10.          Effective Date**

TheProgram shall become effective on the date approved by the Company’s Board.

Provisionsof the Plan (including any amendments) that are not discussed above, to theextent applicable to Eligible Directors, shall continue to govern the terms andconditions of options granted to Eligible Directors.

*Effective:  May 18, 2004*

*Section 2amended: June 15, 2005*

*Sections2 and 3 amended:  September 27, 2006 (toreflect one-for-six reverse stock split effective September 22, 2006 and to reflect change of company name)*

*Sections2 and 3 amended:  February 7, 2007 (toincrease "New Grant" to 20,000 shares from 8,333 shares and"Annual Grant" to 10,000 shares from 3,333 shares)*

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